2007 is a watershed year for voluntary initiatives on business and human rights. Their evolution and other developments will largely determine whether voluntary initiatives will be the prime vehicle to improve practices or whether pressure for new legislation and regulatory measures will supersede them.
Four signature voluntary multistakeholder initiatives are currently in flux:
- The Fair Labor Association (FLA), now in its tenth year, is designed to monitor and improve working conditions in the footwear and apparel industries. It is the most evolved effort to improve human rights in the workplace.
- The Voluntary Principles on Security and Human Rights are in their sixth year and are widely recognized as the baseline standard for extractives companies dealing with public or private security forces. However, the Voluntary Principles process is going through a troubled transition as leaders try to adopt a more robust governance structure and develop reporting criteria to ensure minimum standards of implementation.
- The Extractive Industries Transparency Initiative (EITI), launched by British Prime Minister Tony Blair in 2002, focuses on disclosure and monitoring of the revenues of natural resource-rich governments to prevent corruption and mismanagement. EITI helps citizens to hold governments accountable over the use of public funds and can help to contain kleptocratic rule that fuels human rights abuses and undermines development.
- Finally, Internet and media companies, NGOs, academics, socially responsible investors and others are currently negotiating an effort to set standards on freedom of expression and user privacy on the Internet.
Challenges for the Initiatives
Each of these initiatives has the potential to advance the protection of internationally recognized human rights, but each has limitations and faces some controversy. As voluntary initiatives, they are wholly dependent on the willingness of companies or governments to adopt their standards. Many companies and governments do not subscribe to these efforts, and existing incentives -- such as preferential treatment by financiers -- are not strong enough to compel others to join.
Even when parties sign on to the initiatives, it can be difficult for the initiatives to maintain rules that ensure compliance. The Voluntary Principles are struggling to get governance and reporting criteria in place primarily because NGOs and some companies are at odds about those standards.
The FLA and other workplace initiatives have a different problem: in some sectors, working conditions may not be improving at the expected rate even after longstanding efforts to address them through voluntary codes of conduct and auditing because some subcontractors are undermining the system to the detriment of workers. For example, subcontractors in China realize that workplace standards are a key criterion for keeping business, but many have decided to falsify or circumvent audits with the help of specialists in order to create an appearance of compliance.
EITI needs to encourage repressive governments most in need of transparency to participate but must also ensure that those governments do not penalize or silence civil society for promoting good governance. For example, Christian Mounzéo , a leading anticorruption campaigner in the Republic of Congo (Congo-Brazzaville) and a member of the first EITI board, was arrested by his own country in November 2006. Human Rights Watch believes that the arrests and charges are a pretext to harass him because of his outspoken criticism of the government's mismanagement of oil revenue. EITI is in the spotlight because the incident involved a board member who was abroad to attend EITI-related meetings and because the government who arrested him claims membership in the initiative.
The Internet initiative needs to develop strong standards, reporting on implementation by companies and strong compliance mechanisms in order to be credible. But after the problems the industry has had in China, where authorities pressured corporations into censoring searches and blogs and turning over user information that led to the imprisonment of activists, it is not clear that a voluntary initiative alone can solve the problem. Some NGOs are looking at regulation and voluntary standards as complementary efforts to protect human rights in this industry.
Looking Ahead to 2007
If voluntary initiatives falter in 2007, relationships between government, industry and NGOs could fray. NGOs might abandon some multi-stakeholder initiatives and exclusively pursue regulatory and other measures. The interested public would likely believe companies are abandoning meaningful standards in favor of the status quo, and this would further increase pressure on companies and some governments. Even quasi-regulatory measures, such as the Kimberly Process to address the problems with "blood diamonds," may not be enough to stave off bad publicity or calls for more rules.
The UN Norms, a draft document for corporate responsibility standards adopted in 2003 by the UN Sub-Commission on the Promotion and Protection of Human Rights, represented a promising step towards universal recognition of the human rights responsibilities of companies. Some governments and businesses viewed the Norms as threatening and worked to limit the Norms' traction outside UN corridors. The harsh critique of Dr. John Ruggie, the United Nations Special Representative to the Secretary-General for Business and Human Rights, further undermined the Norms. Paradoxically, efforts to sideline the Norms may contribute to increased pressure for legislative and regulatory approaches starting in 2007 because of a perceived need to fill the vacuum with comprehensive standards.
Another important development that could signal an opening for regulatory measures is the victory by Democrats over Republicans in the U.S. Congress. Over the last decade, some voluntary initiatives had executive branch support, but there was little interest from Congress to regulate. The appetite for hearings and regulation may change under a Democratic legislature.
Arvind Ganesan is the director of the Business and Human Rights Program at Human Rights Watch
