Corporate Responsibility for Human Rights

The new corporate responsibility to respect human rights is one of the growing areas of international law. Proving an effective human rights due diligence process is becoming an increasingly important obligation for corporations, and has resulted in a shift in the relationship between businesses and human rights. As a result, there is now increased pressure on businesses to be accountable for their human rights impacts. Indeed, multinational corporations are now being required by various international and domestic legal frameworks to examine the human rights dimensions of their contractual relationships and global supply chains. However, as of today, only 250 of the world’s 80,000 multinational companies have developed public human rights positions, and local communities in many countries continue to experience human rights abuses as a result.

The United Nations’ Guiding Principles on Business and Human Rights (hereafter referred to as ‘Guiding Principles’) is currently the key international mechanism concerning this growing area of law. The United Nations endorsed the Guiding Principles in its resolution 17/4 of 16 June 2011. The Guiding Principles recognise the obligations of countries to respect, protect and fulfil human rights and fundamental freedoms; the role of business enterprises as specialised organs of society performing specialised functions, required to comply with all applicable laws and to protect human rights; and the need for rights and obligations to be matched to appropriate and effective remedies when breached (UN Guiding Principles on Business and Human Rights, 2011). The Guiding Principles note that one of the most important obligations of multinational corporations is to avoid causing or contributing to adverse human rights impacts through their own activities, and actively seek to prevent or mitigate human rights abuses that are directly linked to their supply chains or business relationships. Through creation of the Guiding Principles, the UN has taken strong action in holding multinational corporations to account for the impact of their operations on human rights.

Under the Guiding Principles, businesses are required to comply with all applicable laws and respect internationally recognised human rights (UN Global Compact, 2012). Companies are therefore encouraged to comply with the Guiding Principles, the International Bill of Human Rights, and the International Labour Organisation Conventions when implementing a human rights assessment framework and carrying on business operations. The UN Global Compact states that companies should consider three sets of factors when determining the scope of their responsibility to respect human rights. Firstly, corporations must consider the country and local context in which it is operating, and pay careful attention to local laws if they are operating in a country which is known to fall short of international human rights standards. Secondly, businesses should investigate as to whether there are any human rights abuses caused by their own business operations. Finally, companies are encouraged to analyse their own relationship with Governments and business partners, to consider whether they may pose a risk for the company in terms being complicit with human rights abuses (UN Global Compact, 2011).

However, despite the UN taking strong action to prevent human rights abuses by corporations, there have been instances when corporations exploit loopholes and weak domestic regulation in many countries; this exploitation has resulted in the destruction of communities in various countries. For instance, the construction of the Yadana gas pipeline project in 1996 by Unocal in Myanmar resulted in the infliction of emotional distress on residents, and damage to the local community. In September 1996, four Burmese villages commenced proceedings against Unocal under the Alien Tort Claims Act in response to the infringement of their human rights. The case was eventually settled out of court in March 2011, with Unocal agreeing to compensate the plaintiffs and provide funds enabling the plaintiffs to develop programs to improve living conditions. Furthermore, in Bodo Creek in Ogoniland, Nigeria, two oil spills in August and December 2008 resulted in the destruction of the livelihoods of thousands of people. Amnesty International collaborated with the Centre for Environment, Human Rights and Development to work with the local communities in Bodo Creek to clean up the destruction and ensure compensation was paid to those affected. In December 2014, the Bodo community won a victory when Shell paid out $55 million in compensation to those affected by the oil spills (Amnesty, 2014).

The collapse of the Bangladeshi garment factory in 2013 starkly demonstrates the fact that multinational corporations fail to protect the basic human rights of employees. A class action has been commenced against Canadian giant Loblaw in relation to the collapse of its Bangladesh garment factory which tragically killed over 1,000 employees. The statement of claim filed by the plaintiffs states ‘It was known to the defendants prior to April 24, 2013, that Bangladesh factories had an extremely poor record of workplace safety standards and industrial building standards including garment factories, that there had been a recent history of very serious accidents and collapses at garment factories in Bangladesh in the period immediately preceding the collapse at Rana Plaza.’ The proceedings, which are still ongoing, demonstrate the continuing exploitation of countries with weak regulation, despite the UN creating the Guiding Principles in 2011.

As a result of the creation of international mechanisms, there is now increased pressure on businesses to be accountable for their human rights impacts. However, communities are still being affected by the operations of companies who exploit countries with weak domestic regulation of multinational corporations. The importance of human rights must be enforced in the corporate world, and a tougher stance must be adopted by States in regards to corporations.