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March 19, 2007

Ruggie Report Says Voluntary Human Rights Initiatives Set Stage for Binding Global Standards
    by Bill Baue

While the report finds significant flaws with voluntary collaborations between corporations and civil society, they currently fill the gap created by nation-states failing to protect human rights. -- Harvard Professor John Ruggie recently released the much-anticipated report that he will present to the United Nations Human Rights Council later this month in fulfillment of his two-year mandate as Special Representative to the Secretary-General on business and human rights. Prof. Ruggie expresses some frustration (felt more sharply by victims of human rights abuses and those in the human rights advocacy community) over failing to find legally binding international human rights standards that apply directly to corporations. However, international law does require national governments to hold corporations accountable for human rights abuses, an area Prof. Ruggie finds lacking.

Visit the
Prospectus Ordering Center"The report is huge because it's the first evidence-based analysis and survey compiling what business and governments are doing on human rights," said Susan Aaronson, a professor at the George Washington University School of Business and author of the upcoming book Trade Imbalance: The Struggle to Weigh Human Rights Concerns in Policymaking. "One of the most shocking findings in Ruggie's report is that states have not met their duty to regulate corporations to protect human rights."

"Companies are going to increasingly understand that they need to lobby states to set more clear regulation on human rights--they did it on corruption, and more recently on climate change and greenhouse gas emissions," Prof. Aaronson told "The best way to have stable economic growth is to have clear international standards."

In addition to assessing "hard law" requirements, Prof. Ruggie also examines so-called "soft law" mechanisms, or those that "derive normative force through recognition of social expectations." Foremost among these are what Prof. Ruggie characterizes as "hybrid" multi-stakeholder voluntary initiatives.

Prof. Ruggies cites three as representing best practice: the Extractive Industries Transparency Initiative (EITI) whereby companies disclose payments to host governments, the Kimberley Process that seeks to stem the flow of conflict diamonds, and the Voluntary Principles on Security and Human Rights that promotes human rights impact assessments (HRIAs) in the extractive sector. However, Prof. Ruggie finds these self-regulation schemes lacking in accountability.

"John's report got the balance about right on voluntary initiatives, which represent a double-edged sword," said Bennett Freeman, senior vice president for social research and policy at the Calvert Group, a socially responsible investing (SRI) firm. Mr. Freeman was instrumental in creating the Voluntary Principles when he serves as deputy assistant Secretary of State for the Bureau of Democracy, Human Rights and Labor (DRL.) "We've got to push national governments to further codify and enforce laws related to business responsibility for human rights, but that can't be an excuse for slacking on hardening these voluntary initiatives on accountability mechanisms on the one hand or substituting for international binding standards on the other."

Prof. Ruggie suggests that voluntary initiatives are drawing a blueprint of the architecture for binding standards.

"As they strengthen their accountability mechanisms, they also begin to blur the lines between the strictly voluntary and mandatory spheres for participants," Prof. Ruggie writes. "Once in, exiting can be costly."

Just as participation can be self-reinforcing, so too can accountability be self-imposed. Prof. Ruggie cites the efficacy of human rights impact assessments.

"Several SRI funds strongly promote human rights impact assessments coupled with community engagement and dialogue," Prof. Ruggie writes, referring to a letter submitted to him by faith-based institutional investors and SRI members of the Interfaith Coalition on Corporate Responsibility (ICCR.) "However, relatively few firms conduct these assessments routinely--and only a handful seem ever to have done a fully fledged human rights impact assessment (HRIA), in contrast to including selected human rights criteria in broader social/environmental assessments."

"And apparently only one company--BP--has ever made public even a summary of an HRIA," writes Prof. Ruggie, referring to a document co-authored by Mr. Bennett assessing the Tangguh LNG Project for BP Indonesia. "No single measure would yield more immediate results in the human rights performance of firms than conducting such assessments where appropriate."

If HRIAs are so effective, why are they so rare?

"There aren't more HRIA's happening because not enough of a fire has been lit under companies in industries where they are particularly necessary," Mr. Freeman told "I would like to think HRIAs will become standard operating procedure over the next decade not only for extractive industries but even in beverage industries, for example."

Voluntary initiatives exhibit four additional blind spots, according to Prof. Ruggie: they currently do not apply to small and medium-sized enterprises, or to developing country firms, or to state-owned enterprises in emerging economies, and determined laggards find ways to avoid scrutiny. Despite these problems with voluntary initiatives, he still sees his mandate as pushing society toward the tipping point where voluntary initiatives blur into becoming standard practice.

"His comment about getting to the tipping point I think reveals his thinking about the strategic question, How do we secure better compliance with global human rights standards affecting business?" states Mort Winston, chair of the department of philosophy and religion and director of the Center for the Study of Social Justice at The College of New Jersey, and former chair of Amnesty International USA. "His view, which I share, is that it is necessary to get to a critical mass of companies that have adopted and are practicing voluntary CSR before one has any hope of generating the political will among nation states to enact global legal obligations that are directly binding on corporations."

Prof. Ruggie ends the report by not-so-coyly noting he "would welcome a one-year extension to complete the assignment" by submitting "recommendations in his next (and final) report to the Council," a sentiment almost universally shared in the human rights advocacy community.

"In the likely and hopeful event that his mandate is extended, there will be an expectation that he will outline broadly applicable standards that will address what he calls the protection gaps for victims and predictability gaps for companies," states Mr. Freeman.

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