Congressional Human Rights Caucus Corporate Social Responsibility: Human Rights and Transnational Companies
November 22, 2004Remarks by Alexandra Arriaga Director of Government Relations
Introduction
Over the last decade, changes in the structure of world trade and investment have increased the exposure of the US business community to human rights issues. Foreign direct investment by US companies in manufacturing operations in China, Southeast Asia, Central America and East Africa has grown exponentially. As a result, companies increasingly are publicly being held accountable for labor rights abuses in factories that make their products. Corporations like Nike (NIK), Liz Claiborne (LIZ), Disney (DIS) and Wal-Mart (WMT) have faced damaging media reports, external pressure from activists, and internal pressure from investors demanding that companies acknowledge responsibility to uphold labor and other human rights.The end of the Cold War brought access to new markets but also a rise in regional conflicts with human rights implications for corporations. This is particularly evident for companies operating in the extraction industries. For example:
- De Beers has had to defend against the possibility that it may have sold diamonds smuggled out of Sierra Leone by individuals who used profits to fund civil war there and in neighboring Liberia.
- Talisman Oil and Lundin Oil pulled out of Sudan last year, following the intensification of the crisis in Darfur. Amnesty International has reported on the complicity of oil companies in the commission of human rights violations in the civil war in southern Sudan. For example, companies built roads, bridges and airstrips that were used by armed groups to launch attacks on civilians.
- In Nigeria, Shell Oil is still recovering from damage to its global reputation nine years ago after it stood silent at the execution of Ken Saro-Wiwa and eight other Ogoni activists who protested Shell’s incursion onto their lands. Amnesty International just released a report on the adverse affect of oil extraction on the economic, social and cultural rights of indigenous communities in the Niger Delta.
- The global market demands appropriate guidelines and policies on the responsibilities of corporations. Should a shoe company be responsible for workers in its subcontracting factories who are poisoned by the glue they use? Should an oil company be responsible if troops protecting its wells or pipeline detain, torture or kill local villagers?
Voluntary Initiatives
Seeking to clarify their policies, many multinational companies and some industry sectors have drawn up their own codes of conduct. In some cases, they have drawn from international human rights law and standards, including the Universal Declaration of Human Rights and core conventions of the International Labor Organization (ILO). The Universal Declaration calls upon every individual and every organ of society, which includes companies and business operations in general, to promote and protect human rights and to strive "to secure their universal and effective recognition and observance."Some oil and mining companies have maintained their investments in conflict zones but have tried to institute policies that minimize their complicity in further violations, such as through the Voluntary Principles on Security and Human Rights, which many of the largest US oil and mining companies, including ExxonMobil (XOM) and ChevronTexaco (CVX), have joined. Amnesty International has been involved in and supported the Voluntary Principles process since its founding but we are concerned that the US government should put adequate resources toward supporting this process. Congress should press the State Department to give more support to the Voluntary Principles process.
Internationally, the United Nations set up the Global Compact, which consists of nine principles for companies, and the Organization for Economic Cooperation and Development established guidelines for multi-national enterprises that include social and environmental considerations. However, the principles remain general and abstract: the Global Compact and the OECD guidelines state that companies should respect human rights, but do not explain what this means.
The UN Norms
US companies looking for clarity may benefit from the UN Norms for Business, officially titled the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights.The Norms were drafted over several years by a working group at the UN Sub-Commission on Human Rights in Geneva, and involved extensive consultations with businesses, unions, and non-governmental organizations, including Amnesty International. Last summer, the UN Norms were passed unanimously by this expert body of the UN, and they are currently being considered by the UN High Commissioner for Human Rights as part of a report on the human rights responsibilities of companies.
The Norms distill in one place the human rights principles applicable to businesses – referencing the Universal Declaration , Convention of the Rights of the Child, ILO conventions and many other existing international laws and standards, and clarify in operational terms what corporate social responsibility means for a company.
Despite their comprehensive nature, the Norms do not represent a radical new regulatory regime. They do not prevent companies from investing in countries where there are human rights violations – provided companies ensure that they themselves do no harm, and are not complicit. But the Norms do recognize that transnational and local companies carry responsibilities as well as States.
The Bush Administration opposed the UN Norms at the UN Commission on Human Rights earlier this year. Congress should support the development of an internationally agreed-upon set of human rights principles for companies, such as the UN Norms.
The Alien Tort Claims Act
Transnational business operates across boundaries in a manner that can exceed the regulatory capacity of national systems or create disincentives for governments to regulate those companies. The government of India, for example, appeared hesitant to take action in the case of Bhopal, in the wake of the Union Carbide spill for fear of discouraging further investment. As we mark the 20th anniversary of the Bhopal spill, Amnesty International has a new report highlighting that survivors still await just compensation, adequate medical assistance and treatment, and economic and social rehabilitation. The plant site has still not been cleaned up and toxic waste continues to contaminate the environment and water that the local community relies upon. No one has been held accountable for the leak and its consequences.The Alien Tort Claims Act (ATCA) provides a venue for remedy in the most extreme cases. It allows victims to sue for violations of international human rights norms that are “specific, universal and obligatory,” such as torture, war crimes and genocide. Earlier this year, the Supreme Court upheld the ATCA and its fundamental principles. ATCA cases seek to hold corporations accountable when they play a role in serious violations of international law and standards. The ATCA provides closure to victims and helps deter future abuses. The cases allow plaintiffs to tell their stories, confront their abusers, and, in some instances, receive monetary compensation for injuries. ATCA also serves to reinforce universal human rights principles. When courts uphold that companies are liable for their role in serious violations of human rights, multinational corporations are more likely to prioritize human rights principles within their day-to-day business operations.
The Bush Administration, however, has argued that ATCA could lead to unpredictable results and spark a flood of frivolous litigation against corporations. These assertions are dubious at best. Of the approximately two-dozen cases filed against corporations since the early 1990’s, none have reached trial. Moreover, the government position fails to recognize that US companies should not be involved in the commission of atrocities nor should they weigh human rights abuses against the bottom line for profits. The Bush Administration also argues that ATCA cases interfere with implementation of US foreign policy, including the “War on Terror.” In Doe v. ExxonMobil, eleven Indonesian villagers alleged that ExxonMobil (XOM) knowingly supported Indonesia’s military in return for protection of its operations there. The plaintiffs believed that Exxon knew that the military was committing murder, torture and other human rights violations. Asked by the courts for its opinion, the State Department deviated from the position of four previous presidential administrations and argued against the villagers, claiming that such a lawsuit could lead to the loss of Indonesia’s help in the war against terror and result in greater instability by triggering an exodus of foreign investment. The United States should be seen as a leader in promoting accountability, rather than a power that allows individuals, governments, and corporations to act with impunity. The Supreme Court decision provides a pragmatic approach. We urge Congress not to act to exempt companies from liability under the ATCA. Congress should support efforts to pursue justice through ATCA and other means, and ensure that human rights disasters and abuses are prevented.
International Right to Know Legislation
Amnesty International supports efforts by US companies to begin reporting on the environmental, social and labor practices in their operations overseas, and we support legislative efforts to require companies to provide the same reporting on their international operations as is required for domestic operations. Specifically, we favor an International Right to Know law that would mirror US Community Right to Know legislation. This would give local residents the same rights as Americans to obtain information about corporate practices that affect both their lives and their human rights. We urge Congress to push for accountability through the International Right to Know legislation.Corporations and Gender Equality
Corporations also should take steps to address abuses that typically affect women. In the more than forty years since Amnesty International has advocated on human rights issues around the world, we have repeatedly found that a root cause of abuse is discrimination.Amnesty International recognizes the increasingly influential role of corporations in affecting human rights around the world and calls on corporations to recognize the often underestimated but vital role of women in economies worldwide, and successfully link these issues in a way that helps advance human rights for all. As many know, women are 51% of the world’s population and perform two-thirds of the world’s work, and yet women generate only 10% of the world’s income and own 1% of property. As women’s role in the workforce increases, many continue to face violence in the home, as targets in armed conflict, but also as victims of violence in the workplace.
Amnesty International has many examples of the devastating consequences of failed policies when it comes to protecting rights of women. The private sector has a growing role to play in stopping these abuses and should focus on gender equality as a human right. Corporations should implement policies, principles and guidelines that set a high and enforceable standard for protecting the human rights and labor rights of women.
