Since World War II and the founding of the United Nations, the established human rights framework under international law has focused on the responsibility of states to protect the rights of their citizens. This was first articulated in a comprehensive way in 1948 when the UN General Assembly adopted the Universal Declaration of Human Rights, establishing the universality of human rights, asserting the universality of human rights, asserting that these rights belong to everyone by virtue of their humanity. It also internationalized this debate, stating that all nations bear a joint responsibility to protect rights when individual states commit gross violations.
Unfortunately many governments are either unwilling or unable to provide adequate protection and non-state actors–including global corporations–increasingly are being pressed to protect human rights. Traditionally global companies have assumed that their obligations with regard to human rights required only that they abide by local laws in the places where they operate. But in today’s globalized economy, this framework is no longer enough.
Look, for example, at the pressure put on Apple when labor practices became an issue at Foxconn, its main sub-contractor in China. Or on Nike in the 1990s when the news media made its labor practices a focal point of a public debate on sweatshop practices in the garment industry worldwide. And consider the pressures on Google and other internet firms to protect users privacy in the face of the National Security Agency demands for access to data. In each of these situations there is a debate about what the concrete responsibilities of these companies should be. Who decides? What labor standards should they apply?
An ethical business environment for human rights means that there is a clear standard for human rights performance in a given industry and that companies can be evaluated against this standard. The presence of a clear and enforced standard reduces the competitive advantage that any company can reap over its competitors by violating human rights. Companies need internal processes for improving human rights performance and should engage with outside stakeholders to test their own assumptions and findings about human rights.
Businesses have a beneficial role to play in promoting human rights and this page outlines how human rights is part of an ethical system.
IDEAS TO APPLY (Based on research covered below)
- Human rights challenges are industry-specific. Human rights challenges are rarely unique to individual companies, but they are typically similar for an entire sector. Identifying the most critical human rights risks per sector ensures that each company works on the most material human rights issues through their core business operations. For example, companies in the manufacturing sector need to focus on ensuring compliance with labor standards in their global supply chains, while Information Communications Technology (ICT) companies need to discuss how they ensure the rights to freedom of expression and privacy through (or despite) their core business models.
- Standards are a prerequisite for measuring and reporting human rights progress. Without a clearly defined human rights standard, “measuring” and reporting human rights progress produces meaningless data. A commonly accepted standard prevents companies from picking easy and marginal human rights topics while ignoring critical ones. It ensures comparability and enables public accountability. Defining a human rights standard and operationalizing this standard into measurable indicators thus needs to be the first step of any serious corporate commitment to human rights.
- Collective efforts drive better outcomes. Practically speaking, addressing human rights means setting substantive human rights standards in a given industry, supported by a common framework for implementation. Companies in the same industry are more effective when they work together. Common standards ensure a level playing field that makes it more difficult for free riders. Such collaboration also increases each individual company’s leverage in the supply chain, improves accountability with respect to implementation efforts, and allows companies to share and pool resources and experiences. This standard-setting process should be inclusive and integrate the perspectives of all stakeholders that are relevant for addressing a specific human rights challenge. Some recently developed multi-stakeholder initiatives (MSIs) provide models from which we can learn, such as the Fair Labor Association, Global Network Initiative, the Voluntary Principles on Security and Human Rights, and the International Code of Conduct for Private Security Service Providers.
- Industry-specific human rights standards defined and enforced through MSIs create an enabling environment within which the business case for human rights becomes easy to make. Industry-specific human rights standards create a level-playing field for all actors in one industry and aligns them around long-term objectives. Companies that disrespect the standards will be subject to scrutiny from industry-peers and the public. Companies that excel at human rights implementation over time are then able to communicate their successes and gain trust with consumers and investors. In contrast to a business case that is based upon an individual differentiation strategy, a business case within an MSI framework is systematic because it sets incentives for all players to raise the bar. It also gives industry participants greater leverage to shape regulatory reform (see, for example, the efforts of the Global Network Initiative on surveillance reform).
- Business and human rights is distinct from the broadly defined CSR concept. A business and human rights approach focuses on aligning core business activities with human rights standards. Corporate social responsibility typically focuses on enhancing brand value through marketing a broad range of activities such as community development, environmental protection, corporate philanthropy, and perhaps attention to human rights. CSR is thus broader and less specific than a business and human rights framework.
AREAS OF RESEARCH
- The “governance gaps” that exist in many countries put new pressures on private companies to develop human rights standards relating to their core businesses and operating plans to implement these standards. In each industry it is imperative for companies to assess the risks they face and then to play a key role in deciding what are realistic and credible industry-specific standards to respond to these risks. See Auret van Heerden’s TED Talk, “Making Global Labor Fair,” July 2010; Justine Nolan ‘Refining the Rules of the Game: The Corporate Responsibility to Respect Human Rights’ Utrecht Journal of International and European Law (2014) 30(78) 7-23.
- Analyzing business and human rights challenges through a business lens is critical for understanding the root causes and drivers of systematic human rights risks. See, for example, the report of NYU’s Center for Business and Human Rights on Bangladesh’s ready-made garment industry “Business as Usual is not an Option: Supply Chains and Sourcing After Rana Plaza”
- Companies that are seriously committed to respecting human rights are in it for the long-haul. They learn over time how to implement their commitment to human rights within their organizations and in collaboration with external stakeholders. See, for example, the longitudinal studies of Nike, such as: Zadek, Simon (2004). The Path to Corporate Responsibility, Harvard Business Review, Dec. 2004: 125-132; Harvard Business Review Case, Carroll, G., Schifrin, D., Brody, D. (August 13, 2013). “Nike Sustainability and Labor Practices 2008-2013”; Richard Locke The Promise and Limits of Private Power, Cambridge 2013.
- Companies that are serious about systematically implementing respect for human rights through their business conduct make efforts to align their organizational structures and procedures with such a commitment. They design systems with aligned incentives structures, specialized training programs, new reporting lines and innovative discussion fora, grievance procedures and complaints mechanisms. Only if such organizational systems are in place, human rights risks are identified and addressed on a routine-basis, through core business processes. See, for example, Baumann, D., Scherer A. and Palazzo, G. (2012). “Organizational Implications of Managing Corporate Legitimacy in Complex Environments–a Longitudinal Study of Puma.” and Baumann-Pauly, D. and Scherer, A. (2012). “The Organizational Implementation of Corporate Citizenship: An Assessment Tool and its Application at Un Global Compact Participants”
1. Companies that commit to sustainable business practices on human rights have more reliable work environments and greater consistency in production. Longitudinal studies of Nike and Puma could be used as teaching tools, to show how their human rights programs have given these companies more sustainable business models and made them better prepared to tackle new business challenges:
- Locke, R. (2013), “The Promise and Limits of Private Power: Promoting Labor Standards in a Global Economy”.
- Harvard Business Review Case, Carroll, G., Schifrin, D., Brody, D. (August 13, 2013). “Nike Sustainability and Labor Practices 2008-2013.”
- Baumann, D., Scherer A. and Palazzo, G. (2012). “Organizational Implications of Managing Corporate Legitimacy in Complex Environments–a Longitudinal Study of Puma.”
2. Companies that are working together with others in their industry are helping to define industry standards, metrics to evaluate compliance with these standards and practical ways to implement these standards successfully, for example:
- Nolan, J. and van Heerden, A. (2013): “Engaging Business in the Business of Human RIghts” in Pedersen, M. and Kinley, D. (eds): Principled Engagement: Negotiating Human RIghts in Repressive States, Ashgate, 2013, pp. 153-170.
3. By setting ambitious objectives an industry leader can raise the bar for an entire industry–see H&M’s living wage project:
- Labowitz, S. (2013): “H&M Just Handed Suppliers a Major Incentive to Actually Pay Workers More.” Atlantic Quartz, Dec. 4, 2013.
4. Competitors that collaborate to address human rights challenges are more effective in making a difference:
- Nolan., J., Labowitz, S. and Posner, M. (2014): “Beyond Kiobel; Alternative Remedies for Sustained Human Rights Protection.” The American Journal of International Law.
5. Establishing a multi-dimensional understanding of “business sustainability” that fully integrates human rights
- What can be done to strengthen the process for engaging companies and their stakeholders in particular industries to develop practical, substantive standards for advancing human rights? What is a credible and realistic framework for establishing these standards to generate the support of a critical mass of companies in a particular industry, and at the same time gains the support of other key external constituencies?
- How does this human rights framework tie into broader notions of sustainability?
- What are success factors of multi-stakeholder initiatives; what are their limitations?
- How can a corporate commitment to respect human rights be implemented in a corporation’s daily business conduct? What kind of organizational structures and procedures facilitate this kind of implementation?
- What is the business case for adopting a human rights program? Recognizing the possibilities and the limitations of litigation, what are other avenues to enhance business’ commitment for respecting human rights? What are the incentives for a company to enhance its human rights performance?
TO LEARN MORE
The Center for Business and Human Rights will soon have many relevant resources posted. We plan to examine specific efforts by businesses and their stakeholders to develop practical metrics to measure and help in the implementation of these standards. How do such metrics take into account differences within specific industries and places? What are appropriate remedial steps companies should take when these standards are not met? How do these conform with each company’s business model? We hope to develop models that will encourage businesses to consider their actions in the sphere of human rights in terms of sustainability and long-term profitability. As we develop case stories of successful efforts to integrate human rights standards into business operations, we will aim to chart best practices in each industry. And finally we hope to develop added teaching materials, both for stand-alone courses and teaching modules that can and should be integrated in the core curriculum of business schools.
- Nolan, Justine & van Heerden, Auret (2013). “Engaging Business in the Business of Human Rights” in M Pedersen and D Kinley (eds) Principled Engagement: Negotiating Human Rights in Grossly Repressive States, Ashgate (2013). (public library)
- Nolan , J ‘Refining the Rules of the Game: The Corporate Responsibility to Respect Human Rights’ Utrecht Journal of International and European Law (2014) 30(78) 7-23.
- Posner, Michael (2012). “The Four Freedoms Turn 70,” the American Society of International Law’s 105th Annual Meeting, March 24, 2011, Washington, D.C.
- Posner, Michael (2012). Summary Remarks by the Assistant Secretary Posner to the Robert F. Kennedy Compass Conference, June 26, 2012. Hyannis Port, Massachusetts.
- Scherer, A. & Palazzo, G. (2011). The New Political Role of Business in a Globalized World: A Review of a New Perspective on CSR and its Implications for the Firm, Governance, and Democracy. Journal of Management Studies, 48(4), 899-931.
- Wettstein, Florian (2012). CSR and the debate on Business and Human Rights: Bridging the Great Divide. Business Ethics Quarterly 22(4), 739-770.
- Zadek, Simon (2004). The Path to Corporate Responsibility, Harvard Business Review, Dec. 2004: 125-132.
- Michael Posner delivers a speech at the University of Michigan (Oct. 10, 2014) that examines the economic role of universities in licensing, purchasing and investment policies and practices (transcript only).
Relevant Images and Videos
Michael Posner discusses the governance gap, and with whom the responsibility for human rights lies:
Michael Posner talks about the impact business schools can have on improving human rights:
Michael Posner goes over ways for companies to improve their human rights efforts:
Michael Posner explains why companies should pay attention to human rights:
Michael Posner, Keynote Speech at the 3rd Annual Workshop of Columbia University’s Business and Human Rights Teaching Network, May 29, 2013 (link to video only).
Michael Posner discusses further human rights challenges and opportunities at the Roosevelt House Public Policy Institute at Hunter College:
Professor John Ruggie of Harvard’s Kennedy School presents the UN’s Guiding Principles on Business and Human Rights:
Eleanor Roosevelt addresses the UN upon the ratification of the UDHR:
- Michael Posner delivers the 4th Annual Louis Henkin Lecture on Human Rights at the University of Miami School of Law (Sept. 15, 2015):
- See more from Michael Posner, John Ruggie, and additional discussions of business and human rights, as well as documentaries covering Apple, Nike, Shell, and others on our Human Rights playlist at the Ethical Systems YouTube channel.
This page is edited by Michael Posner, Sarah Labowitz, and Dorothée Baumann-Pauly. Other researchers may have contributed content.
Miscellaneous Links & References
- Center for Business and Human Rights, at New York University, Stern School of Business