GLOBAL. What does it mean for a business to be “complicit?” Ever since the times of World War II, corporate participation in business complicity in human rights abuses continue to be reported. These reports include extraction companies that have provided funds and technical support to governments or regional rebels in return for certain concessions or investment security involved in transporting dissidents across borders. This includes the infamous across-border rendition of terrorist suspects after 9/11. The reports also include the construction and administration of prison camps where suspects were tortured in collaboration with government agencies.

Gross human rights violations such as the KBR lawsuit and the Amesys lawsuit in volatile regions like Iraq, Jordan and Libya give examples of companies providing high-tech IT equipment to governments to track rebels, or providing financial support by buying blood diamonds and recycling the money in the international market on behalf of such rogue governments, despite the fact that such diamonds are extracted using child labor. Although these abuses are unfortunately not new, what has changed is the new-found insistence by victims and their representatives on accountability when companies are found complicit. Well then, what can be the consequences of such complicity? How can businesses avoid becoming complicit? With current global interconnectivity and reporting, rogue firms can now be reported and prosecuted much faster than before.

In an exclusive interview, ROOSTERGNN spoke with Ms. Andrea Shemberg, common law and international human rights lawyer, currently working in the area of business and human rights who has focused on investment for 12 years. She has also spent four years as a Legal Advisor to the UN Secretary-General’s Special Representative on Business and Human Rights, John Ruggie (SRSG). During that mandate the SRSG achieved a unanimous endorsement by the Human Rights Council of the UN Guiding Principles for Business and Human Rights. Since 2011, she has served as adviser to the Global Business Initiative, a group of 16 multinationals working to implement these Guiding Principles. Aside from this and teaching a masters course on business and human rights law at the Center for Energy, Petroleum and Mineral Law and Policy at the University of Dundee, her main day job is running a project at the London School of Economics on investment and human rights.

We asked Ms. Shemberg to shed light on interconnectivity between business and human rights in relation to her research through London School of Economics (LSE) International Human Rights Project Hub launched on 10 April 2014.

Could you tell us about yourself and LSE’s Human Rights Project?

Ms. Shemberg: The idea for this project came out of our collective experiences in our different fields. We were both seeing the impacts of international investment on human rights (both positive and negative), but we were also observing that few people are paying attention to bettering the shape of international rules and market practices in order to reduce the negative impacts of investment on peoples’ lives. When I talk about positive impacts, I mean, for example, employment opportunities, training, improved technological know-how, the introduction of clean technologies and revenue generation, which can help states to provide and maintain public services. Negative impacts mean, for example, damage to existing livelihoods, physical or economical displacement without either proper consultation or remediation, environmental degradation that reduces food and water sources, and damage to culturally significant locations or resources.

International normative developments over the last few years, including the UN Guiding Principles on Business and Human Rights (UNGPs), specify that government and market actors have respective duties and responsibilities to safeguard human rights in the context of all business activity, including investment. And we have witnessed a flurry of activity directed towards improving company practices in line with these recent normative standards. However, consistent with our experience over the last decade, few efforts, if any, consider what these new norms imply for international, governmental and commercial structures, rules, policies and practices that finance, facilitate, support, insure and protect international investment. For example, there is an urgent need to understand what these new norms imply for the negotiation and interpretation of international investment agreements and State-investor contracts.

We established the IHR Project to do just this. The first year was dedicated to designing and creating the Investment & Human Rights Learning Hub –a dynamic, free, online learning tool for a range of practitioners, including lawyers, institutional investors, lenders, investment consultants and advisors, government and civil society. Our Action Hub, which will catalyse and carry out research and host policy and practitioner dialogues will begin this coming year.

Here is a video that gives a feel for what we are doing.

How is business and human rights interconnected? How is it different from corporate social responsibility?

There was a debate on whether companies had such a responsibility because international human rights law only provides direct obligations to states. In 2011, this debate effectively ended when the Human Rights Council formally recognized that ensuring the protection of and respect for human rights in the context of business activities involves both duties of states and the responsibility of business enterprises. This recognition came in the form of its endorsement of the UNGP. The UNGPs themselves do not create new international law. However, they reflect existing international legal obligations of States, provide policy guidance to States and provide an articulation of the global standard of expected conduct for business enterprises regarding human rights.

The Principles are based on a tripartite framework: the state duty to protect human rights, the corporate responsibility to respect human rights and the need to ensure access to remedy.

The state duty to protect human rights means that “States must protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises. This requires taking appropriate steps to prevent, investigate, punish and redress such abuse through effective policies, legislation, regulations and adjudication.”

For business enterprises, the UNGPs outline the corporate responsibility to respect human rights, which applies to all companies operating in any context and requires that they act with due diligence to avoid infringing on the rights of others, and address harms that do occur. The responsibility to respect applies across all business activities, including investment-related activities and business relationships with third parties connected with those activities — such as with business partners, entities in its value chain and State agents.

The UNGPs further direct companies to integrate human rights due diligence across all business activities, including most core business processes related to investment, where these pose potential or actual adverse human rights impacts. Indeed, along with the UNGPs, John Ruggie (SRSG), issued a guide addressing how States and commercial investment negotiators should integrate human rights risk management into State-investor contract negotiations. For businesses, the UNGPs invite a range of investment-related questions about the adequacy of due diligence in the context of mergers and acquisitions, for example, and about how companies approach building and managing relationships within an investment project.

At the international level, the UNGPs address the proactive role that States should play when acting as members of multilateral institutions that deal with business-related issues. This would include organisations that determine rules, guidelines and policies related to investment.

Many confuse business and human rights with Corporate Social Reponsiblity (CSR). As I see it, if we are asked to differentiate, there are at least 3 major differences to the fields of business and human (BHR) rights and CSR.

1. BHR has a starting point which is State duties under international human rights law. BHR involves company responsibilities but this is one piece of the puzzle, together with State duties. This is fundamental because BHR discussions are often about how States should regulate or legislate better company behaviour. CSR primarily focuses on companies and perhaps on multistakeholder initiatives or voluntary initiatives to improve behaviour.

2. BHR focuses on the companies core business and ensuring this is done without infringing on the rights of people. There is no definition of CSR per se, many people define and use the term differently. Some interpretations are about philanthropy. Some deal with companies bringing positive impacts to people — and may not even look at the negative impacts caused by core business activities. BHR on the other hand starts with eliminating the bad impacts. There are no trade-offs in BHR. You cannot pollute a river but make up for it by building a soccer field and giving scholarships.

3. BHR has international human rights as its universal and authoritative reference point. CSR does not have a universal reference point around which initiatives are built. Some CSR has to do with climate change, some with empowering women, some with sustainable development, etc… So CSR is potentially wider in scope than BHR. However, BHR can more easily apply globally because of its common global reference point in human rights.

What are the some of the growing concerns with multinationals operating in conflict-affected regions?

There are many themes of issues. Some of them are:

1. Private Security Military Companies themselves. There is a lot of work on this being done at the international level because we see a rise in use of private militaries in conflicts. How can you regulate these companies and how should employees of these companies be punished if they commit international crimes? Which country regulates them? The sending country or the country of conflict or both? Are they tried as civilians or military personnel?

2. Companies fueling the conflict either through exacerbating existing conflicts or financing indirectly the continuation of conflict. The work on ‘conflict minerals’ has to do with this theme such as the Kimberley Process and the Dodd Frank Act in the United States. This is particularly the case with mineral extraction or natural resources (timber or other) as this was in the past the way that conflicts were financed, and many post-conflict or areas affected by conflict are rich in natural resources. The lack of clarity of ownership and control of natural resources (especially oil) is at the heart of many conflicts we are seeing today of an internal nature (Libya and Iraq for e.g.). When an MNC steps into a project where the ownership and control of the resources is not clear, they can potentially ignite conflict or make it more difficult for agreement to be reached.

3. Post-conflict areas, or areas that are labeled as such, often present heightened risk to return to conflict. Companies need to understand this and act accordingly. This also means understanding the efforts being made for a transitional justice and ensuring business activities respect those processes and do not work at cross purposes. For example, in Colombia part of the transitional justice program is to give back land to previously internally displaced people (IDPs). Colombia has a huge population of about 5 million people who are displaced internally. However, some of the land being given back to people is also land where the government wants to encourage foreign investment for natural resource exploration. How should States and companies avert this disaster waiting to happen?

4. Whats solutions does LSE Project Human Rights offer to businesses?

Ms. Shemberg: The LSE IHR Project is not aimed just at businesses, and our major target audiences also include lawyers who advise business, government policy makers, NGOs and academics. Indeed, in line with business and human rights, the project looks at state and commercial actors and global public policy institutions to think about how all these actors may have a role to play in improving investment outcomes for people and reducing the risks. For business in particular the Learning Hub offers materials that build awareness about how international investment relates to both positive and negative impacts on human rights. For example, the Learning Hub offers:

Toolboxes offering a dynamic repository of selected reference materials for practice, while drawing attention to emerging issues;

Expert articles offering analysis and insights from practitioners and leading experts on investment and human rights, highlighting key issues for practice; and

Learning videos offering basic explanations of essential topics and providing expert views on investment and human rights issues.
For example, our first three expert articles have discussed human rights risks when investing in Afghanistan and Myanmar and how companies may think of integrating human rights requirements into commercial contracts.

Business practitioners can use the Learning Hub also to learn the basics about human rights and the UN Guiding Principles. Additionally, the project’s Action Hub will create constructive spaces for learning, research, discussion, and the sharing of practical tools in the area of investment and human rights. In the future we will also facilitate and carry out training and capacity building activities for civil society, representatives of governments, practitioners and other relevant groups on the relationship between investment and human rights.