Beyond Borders: Why was there a need for the Guiding Principles on Business and Human Rights?
John Ruggie: There was a need because there was no authoritative international standard on what the respective obligations of states and businesses were with regards to human rights. There were too many demands pulling in too many different directions, and companies did not know for certain whom they should listen to and what they should do. Every NGO [non-governmental organization] had their own demands, governments weren't very clear on what their expectations were, and so companies, particularly companies in very difficult environments, increasingly felt the need for an authoritative set of standards that would provide guidance to manage the stakeholder-related challenges that they faced.
Many businesses and governments have adopted the Guiding Principles since they were endorsed by the United Nations in 2011. Was there a turning point for the Principles to gain momentum and acceptance?
There were two or three things. First, the OECD [Organization for Economic Co-operation and Development] happened to be updating its guidelines for multinational enterprises around the time that we were finalizing the Guiding Principles, and the business community was concerned that the updated OECD guidelines not become a competing standard. So the business community said to the OECD, 'look, the UN has just gone through this very extensive exercise of developing the Guiding Principles. We will support the OECD's updated guidelines if they're aligned with the Guiding Principles, because we've been closely involved in the UN effort to develop them and we want one overall standard.' The OECD agreed and integrated the Guiding Principles into the updated OECD guidelines as a new chapter. They had never had a human rights chapter before.
A similar thing occurred when the European Union was updating its corporate social responsibility policy and when the IFC [International Finance Corporation] updated some of its safeguards. So right from the beginning the Guiding Principles were integrated by other international standards-setting bodies. I think that sent a strong signal to the business community that, for once, they have a single set of standards being presented to them, and that made a huge difference.
Has anything surprised you about the way the Guiding Principles are being implemented?
There were some ways of incorporating the Guiding Principles that I didn't foresee. For example, when the European Commission incorporated the Principles into its new corporate social responsibility policy, it asked member states to develop a national action plan for implementing them. I didn't expect that, but now all 28 countries of the European Union are developing national action plans, and it has spread to non-EU members. You have Colombia, you have Indonesia, you have other developing countries, plus the United States, putting out national action plans.
Another thing that I didn't foresee was how seriously the Guiding Principles would be taken by the legal community. The International Bar Association has endorsed the Principles and adopted a set of directives on what the Principles mean for the legal profession. I couldn't have anticipated that.
A third thing I couldn't have foreseen relates to FIFA [Fédération Internationale de Football Association, soccer's governing body]. They've been under enormous pressure on two grounds. One, of course, is the corruption scandal, but the other is that none of their contracts with host governments and stadium authorities make any reference to human rights. And yet, the impact of mega-sporting events on human rights is huge, as we've seen from the stories that have emerged about working conditions in Qatar, where construction is underway for the 2022 World Cup. So FIFA has asked for advice on how they can go about incorporating the Guiding Principles into the bundle of contracts that surround the World Cup and the games that lead up to it. If you had asked me in 2011, are you going to be working with FIFA to incorporate human rights standards into World Cup requirements, I would have laughed. But here we are.
What are some of the challenges that companies face as they endeavor to align themselves with the Guiding Principles?
When a company commits to implementing the Guiding Principles, it's a significant undertaking because they've never done anything like it before. Barrick, for example, spent a couple of years internalizing the Guiding Principles and figuring out how to implement them on the ground. The Guiding Principles provide high-level guidance, but when you're a company like Barrick with numerous operations around the world, you need to downscale that high-level guidance into very granular types of things that any mining engineer at any site will understand. So translating the commitments into various business functions that impact human rights, whether its human resources management, whether it's the operational folks, transport or security, that takes time. You don't just push a button and everything falls into place, and you can't have a one-size-fits-all toolkit because that would be meaningless.
What obstacles do governments face?
On the government side, the biggest challenge that we have encountered throughout is the degree to which governments are stove piped, and the degree to which the various stove pipes insist that they are almost autonomous from anyone else. I'll give an example. Under the OECD's updated guidelines, every member country must have a National Contact Point to which people can bring complaints about companies incorporated in that country. Canada's National Contact Point office is located in Ottawa. The problem with it was that it never had any connection to other government agencies that actually had leverage over business. So a complaint would come in to the National Contact Point office and the office might uphold the complaint and issue a report. But that was the end of it. There was no consequence to the company. So I began to agitate, saying, 'Look, you not only have a National Contact Point, you also have an Export Credit Agency, and at the moment the two ignore each other. So a company found to have violated OECD guidelines can turn around the next morning and ask for and obtain export credit from the same government that found the company to be in violation of OECD guidelines. That doesn't make any sense. Those two government agencies have to be linked up.' That's what I mean by stove piping.
So the Export Credit Agency said, 'Well, we're an independent agency, we're not responsible to the National Contact Point,' to which I said, 'yes, but you're both in the same government and your government has accepted these human rights obligations, and you're an agent of that government, so part of your role should be to help implement what your government has adopted.'
These were conversations that went on for at least three years and I was sort of banging my head against the wall. And finally I made a dent in the wall and Canada now has a policy — and I'm not picking on Canada, I'm just using it as an example — where, if a company is found to have violated OECD guidelines, which, as I said earlier reflects the Guiding Principles almost verbatim, and that company doesn't change its behavior, then the government can withdraw export credit or insurance the company is getting, and deny consular support. So companies are getting the message that there is a cost to not adhering to the human rights requirements that their government has put in place.
What would you say has been the biggest impact of the Guiding Principles on the way companies behave?
There are two elements of the Guiding Principles that have been picked up more rapidly than any others. One is what we call human rights due diligence. This is a process by which companies assess their actual and potential human rights impacts and then integrate those findings into various business functions to prevent or mitigate significant adverse impacts. This process also requires companies to share what they've done with affected communities. Human rights due diligence assessments have been the most widely-implemented element of the Guiding Principles.
Another widely adopted element of the Principles is grievance mechanisms. Companies are finding that grievance mechanisms can provide immediate remedy for certain kinds of human rights harms. They're also finding that grievance mechanisms provide instant feedback on how well they're doing in the increasingly critical area of community relations. If you're getting a thousand complaints about roughly the same thing, then you know you're not doing that thing right and that you had better change your policies or practices.
While the Guiding Principles have gained widespread adoption and acceptance, some civil society organizations have been critical of them. Can you share some of the criticisms that you've heard and how you've responded?
The main criticism, and I don't view it as a criticism because it is a statement of fact, is that the Guiding Principles in and of themselves do not create new international law obligations. I didn't set out to write new law. I set out to provide an authoritative interpretation of existing human rights obligations, and what those obligations mean for states and businesses. As part of a follow-up to the mandate, I actually did recommend that governments consider establishing or creating an international legal instrument that deals with the worst human rights abuses that companies might be involved in, such as extra-judicial killings, forced labor or crimes against humanity. So I'm well aware that they don't constitute international hard law, but at the same time I expected that elements of the Guiding Principles would be incorporated into national law, and that has happened in a number of instances. Besides, soft law standard can be every bit as binding as hard law.
In July, a United Nations Intergovernmental Working Group met to discuss a potential legally binding treaty concerning corporate human rights abuses. Do you think such a treaty is advisable and possible, and how might it impact the Guiding Principles?
Well, first, the vote to create this intergovernmental working group was deeply divided. In fact, the sponsors of the resolution didn't even get a majority of the votes, they got a plurality. Basically, the split was between countries that have multinational corporations and countries that don't, and the debate so far has yielded virtually nothing. There was nothing accomplished at the July meeting. I think what the debate will ultimately turn on is the idea that some of the original sponsors advanced, which is that, somehow, they're going to either turn the Guiding Principles into a single comprehensive treaty instrument, which I think is humanly impossible, or come up with a different formula that will shoehorn the entire scope of business and human rights into a single treaty. My view has always been that, even if you managed to do that, the resulting treaty would be cast at such a high level of abstraction that it would be meaningless. So my preference in the business and human rights space has always been for international law as "precision instruments."
Today, December 10, is UN Human Rights Day and the final day of the United Nations' annual 16 days of activism against gender-based violence. The hard reality is that one in three women worldwide has experienced physical or sexual violence. While the Guiding Principles in and of themselves aren't going to solve this egregious problem, do you think they have the potential to help change the way governments and businesses address the human rights of women?
Unilever recently put out a freestanding human rights report to help elevate the authenticity of its work in respecting human rights and to underscore its commitment to implementing the Guiding Principles. The report goes into a great deal of detail about, among other things, what the company has done in the area of empowering women, both in the supply chain and at the company itself. So companies certainly are looking to the Guiding Principles as a roadmap, if you will, to address whatever human rights challenges they face, and the role and treatment of women in the workforce is certainly one of those challenges.
What do you think we'll be talking about in 2020 vis-à-vis the Guiding Principles?
My hope is that many of the Guiding Principles by then will sort of seem like second nature and we won't need to talk about them at all. I was once asked what my definition of success was and I said, 'My definition of success is the equivalent of everybody on a construction site wearing safety gear including a hard hat without having to think twice.'