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What are Business and Human Rights Issues?

BY JOSHUA P. FERSHEE

I promised a follow up post a while back about how I might distinguish between what is a “business and human rights issue” and what is a “human rights issue that happens to intersect with the business world.” At this point, I want to add again my disclaimer that my research is linked to business law, and not human rights law, so to the extent I am using loose language or am otherwise off in my descriptions, I beg patience and forgiveness at the outset.

In my prior post, I explained that

I would draw a distinction between a “business and human rights” issue and human rights issues that happen to intersect with the business world. These latter issues are not less significant than business and human rights issues. Instead, they are broader human rights issues that are not unique to businesses or how they operate on a global stage. 

I recognize the risk that narrowing the scope can marginalize, or at least minimize, concerns about the issue raised. On the flip side, though, one can go in the other direction by being over inclusive and convert business and human rights issues into what amounts to issues related to the human condition. A holistic view has its merits, but I am of the view that narrowing the field to more business-specific concerns is more likely to lead to significant improvements in the nearer term.

Perhaps more to the point, I believe that an overly broad definition of what constitutes business and human rights issues runs the risk of asking businesses to solve problems that they cannot. That is, that the solutions necessary to solve the problem raised are not reasonably linked to businesses or regulations related to businesses (as businesses).

Thus, my working definition (which is admittedly in its infancy) for determining what is a “business and human rights issue” is as follows:

A business and human rights issues is an issue that can be addressed both by: (1) direct action and commitment from the business entity at issue, and (2) by an action of a legislative or regulatory body that directly impacts the operation of the business in the area of concern.

The reason the issue must satisfy both prongs is that it is not enough that a business could choose to be a good actor and fix the problem; there must be a mechanism to force that change through legislative or regulatory action for the issue to fir firmly in my view of a business and human rights issue.

With that, I’ll return to the examples that I used to illustrate my point in my previous post. In this analysis I will note some possible options to of legislative or regulatory action that could address the issue raised, but I am not saying the proposals I am rather casually proposing are a good idea. I am using them for categorization purposes only at this point. I’ll note also that my initial assessments of some issues have changed now that I have my working definition. Here we go:

A. A Dutch multinational company hires off-duty military personnel to act as security in an unstable community. The security officers assault, torture, and intimidate a number of people in the community.
Initial and current Assessment: Business and human rights issue.

Rule application

  1. Direct action and commitment from the business entity at issue: This is can be addressed by having the company adopt (and actively enforce) stringent rules about how security personnel act, along with company-enforced penalties for violations (including reporting violators to authorities).
  2. Action of a legislative or regulatory body that directly impacts the operation of the business in the area of concern: This, too, can be addressed via direct legislative action creating agency liability for the business and its executives. (Again, this is not saying the solution is the right choice, but it is an oft-proposed option for categorization purposes.)

B. A small U.S. corporate board has appointed mainly white males to act as directors for the company.
Initial and current Assessment: Human rights issues that happen to intersect with the business world.

Rule application

  1. Direct action and commitment from the business entity at issue: The shareholders of the business can obviously choose to change the make up of its board if it wishes.
  2. Action of a legislative or regulatory body that directly impacts the operation of the business in the area of concern: Although the law can require anti-discrimination in all employment contexts, it is not appropriate (at least using a U.S. law filter) to state the makeup of a board specifically through legislative or regulatory action. There are a number of actions that can be taken to address the societal issue, but not the issue company to company or board to board.

C. A Canadian multinational corporation creates tax shelters in the Bahamas to avoid paying taxes at its headquarters in the United Kingdom.
Initial Assessment: Human rights issues that happen to intersect with the business world.
Current Assessment: Business and human rights issue.

Rule application

  1. Direct action and commitment from the business entity at issue: Again, the business could choose not to do so or could opt to pay anyway (as some have done.
  2. Action of a legislative or regulatory body that directly impacts the operation of the business in the area of concern: This issue can be addressed by the U.K. by changing the law to require that taxes be paid regardless of the location of tax shelters. This a close call, because such legislation could trigger tax treaty problems and require working with other jurisdictions in a way that would arguably be beyond the scope of the issue. Still, under my definition it is probably proper to say it is a business and human rights issue. The fact that it raises political issues and the solutions could run the risk of losing significant business presence in the country must be considered before acting, but not before categorizing the issue.

D. A French mineral company regularly dumps hazardous material into a nearby stream, polluting the water and endangering the neighboring community’s health.
Initial and current Assessment: Business and human rights issue

  1. Direct action and commitment from the business entity at issue: This is can be addressed by the company creating stringent environmental rules about hazardous materials and pollution and actively following them.
  2. Action of a legislative or regulatory body that directly impacts the operation of the business in the area of concern: This can be addressed via direct legislative action outlawing the behavior raising the concern.

Obviously there are questions about whether any of my solutions would actually work, whether the resources needed to do so would be available, and whether they make sense. But they do help in trying to categorize these issues, which I think might be useful.

As I noted earlier, this is not my area of expertise, but I do care about business and human rights, so I wanted to put some time into further thinking this through. I again welcome comments and criticisms.

[Author’s Note: For all of the examples, I have presumed that there is a human rights concern of some sort, which is a threshold question. That is not plainly true in all of the examples. For instance, it is not clear to me that the following example raises human rights issues at all: “A Canadian multinational corporation creates tax shelters in the Bahamas to avoid paying taxes at its headquarters in the United Kingdom.” It’s arguable, but one can also make a reasonable argument that the tax avoidance in questions provides other benefits to the U.K. making it better policy. The varying layers of economic activity and related policies implicated here make it a difficult question. Still, if the issue were deemed a human rights violation, I think the above analysis holds true.]

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