BUSINESS AND HUMAN RIGHTS

Transcription

1 BUSINESS AND HUMAN RIGHTS WHAT DOES IT MEAN FOR MY COMPANY? 19 APRIL 2016 Donald Robertson, Partner, , Alex Newton, Consultant, ,

2 OVERVIEW The economic context: Globalisation 2.0 A principled approach: Guiding Principles on Business and Human Rights Sources of law or rules of law What does this mean for me/my company? What steps should my company take? 2

3 THE ECONOMIC CONTEXT GLOBALISATION 2.0

4 ECONOMIC CONTEXT & GLOBALISATION Corporations make up 50 of the top 100 economies in the world today significant potential to impact human rights. Complex array of rules of law and state law calling for a nuanced response from the corporate world. Australia as an intertwined economy: new forms of globalisation competition in tasks not goods. global value chains: factory-less products? clusters: the A-P region is a cluster, factory economies/headquarter economies. mega-regional trade deals a new form of economic constitution. new paradigms of contract: relational vs. discrete contracting. corporate social responsibility issues being built into the institutions. 4

5 THE GREAT UNBUNDLING Globalisation 2.0: the great unbundling Baldwin,

6 A GLOBAL VALUE CHAIN IN ACTION 6

7 A PRINCIPLED APPROACH GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS

8 GUIDING PRINCIPLES ON BUSINESS & HUMAN RIGHTS Background The UN Norms on the Responsibilities of Transnational Corporations 2003: intended to be binding? The UN Special Representative (John Ruggie): consultation. UN Guiding Principles on Business and Human Rights. unanimously endorsed by the UN Human Rights Council in A principled rather than prescriptive approach. 8

9 THE UNGP FRAMEWORK: PROTECT, RESPECT, REMEDY States have a duty to protect Against human rights abuses within their territory and/or jurisdiction by third parties. Requires states to investigate, punish and redress abuses through effective policies, legislation, regulation and adjudication. Corporations have a responsibility to respect human rights Avoid infringing on human rights of others and address adverse human rights impacts. States must take appropriate action to ensure there is a remedy for a breach Through judicial, administrative, legislative or other appropriate means ensure that, when a breach of human rights occurs within their territory and/or jurisdiction, those affected have access to an effective remedy. Grievance mechanisms: state-based (judicial and non-judicial); non state-based. 9

10 KEY FEATURES OF THE GUIDING PRINCIPLES The Guiding Principles apply to all states and all companies. confirm business capacity to impact on all human rights. clarify that human rights cannot be offset, ie doing good in one place cannot compensate for doing harm elsewhere. require the meaningful engagement of all sectors in respecting human rights. do not create any new international law obligations for states or business. do not undermine or limit any existing legal obligations. 10

11 SOURCES OF LAW OR RULES OF LAW

12 DOMESTIC LAWS: SOME EXAMPLES Corporations Act 2001 (Cth). disclosure obligations (not always labelled human rights ). Privacy Act 1988 (Cth). Criminal Code Act 1995 (Cth): Part 2.5 extends liability for all offences within the Act to corporations. anti-discrimination legislation (sex, age, race, disability). employment legislation. anti-corruption provisions. 12

13 FOREIGN/TRANSNATIONAL Bribery Act 2010 (UK) Modern Slavery Act 2015 (UK). Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 (US) relating to conflict minerals. Alien Tort Claims Act 1789 (US): impact of SCOTUS in Kiobel: presumption against extraterritorial application of US laws; unless ATS claims touch upon and concern US territory sufficiently to displace that presumption. International criminal law: currently only company officials (not entities) can be prosecuted. 13

14 RULES OF LAW APPLY? Standards: the role of rules of law OECD Guidelines for Multinational Enterprises UN Global Compact. ISO Standards Guidance on social responsibility. Sector specific initiatives Equator Principles (banking and finance) Extractive Industries Transparency Initiative (extractives) Electronics Industry Citizenship Coalition (electronics and ICT) Regional initiatives: European Commission Guides Regional action plans. 14

15 WHAT DOES THIS MEAN FOR ME / MY COMPANY

16 SOME IMPLICATIONS Legal Issues Domestic liability. Extra-territorial liability: through which countries does your global value chain wind? Corporate complicity in human rights violations: the role of corporate culture? Due diligence: not just what affects the interests of the company but what affects the interests of others. ongoing audit responsibilities. Non-legal issues Reputation: impact of social media, 24-hour news cycle Financial issues: shareholder activism, divestment, costs to rectify Human rights is not just a matter of public, community or government relationships. The core issue is a legal issue. 16

17 WHAT STEPS SHOULD A COMPANY TAKE?

18 HOW A COMPANY CAN BE MORE PRO-ACTIVE Develop a human rights policy or statement. Undertake human rights due diligence. This includes integrating and acting upon the findings, tracking responses, and communicating how impacts are addressed. Due diligence now looks not just to the interests of the company but of third parties. Ensure adequate access to remedy within the organisation for example, through an operational level grievance mechanism. effectiveness criteria: legitimate, accessible, predictable, equitable, transparent, rights compatible, a source of continuous learning, and based on engagement/dialogue. When a conflict arises between domestic laws and international law, business should comply with the principles of internationally recognized human rights. a peremptory norm of international law (takes precedence over other laws). Treat the risk of causing or contributing to gross human rights abuses as a legal compliance issue wherever you operate. 18

19 A HUMAN RIGHTS POLICY Positives A human rights policy may go towards establishing the existence of a corporate culture supporting human rights protection. Will assist in refuting liability for human rights offences: shows that the corporation has an intention to respect human rights and provides a framework for doing so. Negatives A human rights policy that is not followed lays out the framework for how liability is to be established. A human rights policy could give rise to the expectation, or is the adoption, of a duty of care. However: a duty of care most probably already exists in some form. Cost: No excuse. 19

20 THE SPECIAL ROLE OF DUE DILIGENCE Issue Risk Benefit May uncover existing or potential breaches of human rights. Knowledge of a breach increases obligation to act. Breach can be prevented or addressed asap. In legal proceedings, corporate intention may arguably be determined by evidence of a corporate culture of compliance with human rights. 1. Lack of human rights DD may support corporate liability for offences. 2. DD will not automatically and fully absolve a company from liability for causing or contributing to human rights abuses. Human rights DD may refute corporate liability for offences. 20

21 CASE STUDY Bank A is the part-financier of a cocoa plantation complex in country X. The cocoa plantation has been implicated in child labour, food shortages and forced evictions of hundreds of families. The loan by Bank A, three years earlier, took place amid what could be described as a land rights crisis in country X. During the three years since issuing the loan, Bank A had many warnings that the cocoa plantation was involved in human rights violations and land grabs. Bank A has only recently ended its relationship with the cocoa plantation, but has retained the profits from the deal. Affected communities are calling for Bank A to return its profits to them, noting its initial and ongoing due diligence failure, and their ongoing dispossession from their land. 21

22 SPEAKERS Donald Robertson Direct Mobile donald.robertson@hsf.com Alex Newton Direct Mobile alex.newton@hsf.com Donald is a Partner in the Disputes group of Herbert Smith Freehills. He is Adjunct Professor of Law at the University of Sydney Law School and a Fellow of the Australian Academy of Law. Alex is a Consultant in the Disputes group of Herbert Smith Freehills, in the field of human rights law. She is an Adjunct Lecturer in Business and Human Rights in ANU s College of Law. The contents of this publication, current at the date of publication set out in this document, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication. Herbert Smith Freehills LLP and its affiliated and subsidiary businesses and firms and Herbert Smith Freehills, an Australian Partnership, are separate member firms of the international legal practice known as Herbert Smith Freehills. Herbert Smith Freehills

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