Tag Archives: UN Guiding Principles on Business and Human Rights

U.S. Government Releases First National Action Plan on Responsible Business Conduct

On Friday, the U.S. government released its first National Action Plan (NAP) on Responsible Business Conduct. The NAP is the culmination of a two year process launched by President Obama in 2014 to create a plan consistent with the U.S. commitment to the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Over that time period, four stakeholder consultations were conducted across the country and numerous written submissions received. The U.S. now joins the ranks of eleven other countries that have completed NAPs on business and human rights, with the UK being the first to publish one in 2013.

With the National Security Council at the helm, the NAP was developed through the interagency process. The NAP provides a very positive perspective of U.S. companies’ leadership role around the world in following the rule of law, upholding human rights, and strengthening the communities in which they operate. It builds on the idea that “businesses can perform well while doing good and that governments should facilitate the conditions for RBC [responsible business conduct] to take place.”

The NAP contains a comprehensive (although not exhaustive) list of various ongoing and new initiatives that reflect the U.S. government’s commitment to fostering responsible business conduct, with the preponderance of the list focused to ongoing efforts. The initiatives are broken down into five categories that evidence or establish efforts to lead by example, collaborate in multi-stakeholder initiatives, facilitate responsible conduct, recognize positive performance, and provide access to remedy. A number of new action items stand out, although details are sparse. For example, readers of this blog that operate in complex environments may be interested in learning that there will be enhanced enforcement of U.S. laws related to forced labor, new research and tools on preventing trafficking in supply chains, a number of efforts related to responsible land use and reducing land conflict, greater stakeholder engagement in the extractives industry in East Africa, as well as efforts to promote corporate reporting and to consult with stakeholders on improving access to remedy, among other things.

Readers of the NAP should not expect to find: a critical assessment of the effectiveness of existing U.S. laws and regulations, multi-stakeholder initiatives, and various other efforts to promote responsible business conduct; a stock-taking of the greatest human rights challenges faced by U.S. companies in various sectors operating domestically and abroad; an appraisal of the success with which those challenges are identified and addressed and victims of abuses provided access to redress; or benchmarks against which to measure implementation, progress, and accountability to the ongoing and new initiatives identified. Despite recommendations by the International Corporate Accountability Roundtable (ICAR) and other civil society organizations and academics, the NAP process did not begin with a comprehensive National Baseline Assessment. (See here for a “shadow” National Baseline Assessment.)

That being said, the NAP does set the stage for continued advancement of responsible conduct by U.S. companies as they operate here and around the world. It enables businesses and civil society to hold the U.S. government to its commitments and provides some interesting new avenues for collaboration. Although a detailed road map is not laid out, stakeholders are encouraged to continue to provide feedback and suggestions to the Department of State via a dedicated NAP email. Ongoing engagement will be important as a new administration enters office, which as of now has not made commitments to protecting human rights from infringement by economic actors and has promised to engage in extensive deregulation.

Analyses and reactions from various stakeholders to the NAP will be appearing in the coming days and weeks, and can be found on ICAR’s dedicated U.S. NAP webpage. For those readers located in the Washington, D.C. area who are interested in hearing U.S. government and other stakeholders’ perspectives on the NAP and its development process, an event – The U.S. National Action Plan on Responsible Business Conduct: Reflections on the Way Here and the Road Ahead – will be held at the American University Washington College of Law on January 12 from 9am-12pm. The event is free and open to the public, although registration is required.

New Standards for CBs Certifying Private Security Companies to ANSI/ASIS PSC.1 and ISO 18788 Open for Public Comment

Readers, who have been closely following standard setting for private security companies (PSCs), may be interested in opportunities to comment on two new standards for Certification Bodies (CBs) certifying PSCs to ANSI/ASIS PSC.1-2012 and ISO 18788-2015 – the two leading management system standards for PSC operations. The United Kingdom Accreditation Service (UKAS), the British organization responsible for accrediting CBs, has opened a public comment period until August 31 for the UKAS Guidance for Certification Bodies Certifying the Management Systems of Private Security Companies against ANSI/ASIS PSC.1: 2012 or ISO 18788: 2015. Its American equivalent ANAB (ANSI-ASQ National Accreditation Board) has released Accreditation Rule 40 (AR 40).* The Guidance and AR 40 apply to CBs seeking accreditation to assess and certify PSCs’ security operations management systems built on ANSI/ASIS PSC.1-2012 and/or ISO 18788. ANAB’s public comment period is open until September 5.

Although serving similar purposes, it is interesting to note the differences in approach taken by UKAS and ANAB. UKAS states that it will accredit CBs to certify to ANSI/ASIS PSC.1-2012 and/or ISO 18788 using ISO 17021-1. ISO 17021 is the International Organization for Standardization’s generic Conformity Assessment standard for CBs providing audit and certification of management systems. The Guidance does note that it provides guidance on ISO 17021-1 and ANSI/ASIS PSC.2-2012, but it does not explicitly state that it requires CBs to adhere to ANSI/ASIS PSC.2 for accreditation purposes. By way of reminder to readers, ANSI/ASIS PSC.2-2012: Conformity Assessment and Auditing Management Systems for Quality of Private Security Company Operations provides requirements and guidance for conducting conformity assessment of ANSI/ASIS PSC.1-2012. It is a sector specific standard based on ISO 17021. In contrast, ANAB’s AR 40 states that ANSI/ASIS PSC.2-2012 is a required document. The length of UKAS’s Guidance, in particular the extensive detailing of auditor/audit team competences, is likely a result of failing to explicitly make ANSI/ASIS PSC.2 a required document. ANSI/ASIS PSC.2 already covers in depth required competences, and unlike the Guidance also discusses the needed training and experience of auditors as well as requirements for screening and vetting auditors. One thing is certain, all three documents make it clear that auditors must have a wide variety of skills relevant to assessing the responsible provision of security services in complex environments, to include human rights expertise.

Another strong point of ANAB’s AR 40 is the useful Annex at the end, which compares and contrasts the requirements of ANSI/ASIS PSC.1-2012 and ISO 18788. While the two management system standards are very similar, there are differences of which auditors need to be aware. ISO 18788 cites the UN Guiding Principles on Business and Human Rights as a normative reference. This has resulted in some stronger human rights provisions in ISO 18788. For example, human rights risk analysis is now a clearly articulated requirement. In addition, there are a few new requirements that were not in ANSI/ASIS PSC.1-2012 related to apprehension and search and operations in support of law enforcement. That being said, the Annex is a surface comparison of requirements, and auditors will need to do a comparative deep-dive to capture the nuances in terms of improvements to ANSI/ASIS PSC.1-2012 that found their way into ISO 18788.

While perhaps not the most exciting reading material, both the Guidance and AR 40 are key documents not only for CBs and their auditors, but also for PSCs seeking certification to ANSI/ASIS PSC.1-2012 and/or ISO 18788. They can assist PSCs with grasping the certification process, understanding what elements of a management system auditors will assess, and providing a sense of the type of competences to look for in a CB.

* For purposes of disclosure, Human Analytics’ Rebecca DeWinter-Schmitt served on the Committee of Experts that drafted AR 40.

REMINDER: Register for Corporate Responsibility for Federal Contractors June 9 Webinar

The Society of American Military Engineers is hosting a webinar, entitled Corporate Responsibility for Federal Contractors, on Thursday, June 9 from 1:00pm-2:30pm. Human Analytics’ Rebecca DeWinter-Schmitt will discuss procurement requirements related to the responsible provision of security services. Foley Hoag’s Sarah Altschuller will address new requirements to combat trafficking in persons.

Federal contractors impacted by requirements related to the prevention of human trafficking and the provision of private security services, and who want to familiarize themselves with these new regulations and develop the needed policies and systems to implement them, will benefit from participation in this webinar.

The U.S. Government (USG) is the world’s single largest purchaser of a wide range of goods and services. Increasingly, the USG recognizes that its procurement power can be used to promote responsible business conduct by its contractors. Two recent developments in federal acquisition regulations exemplify this trend, namely new requirements related to combating trafficking in persons and to promoting the responsible provision of private security services.

These changes in federal acquisition regulations reflect a commitment by the USG to observing international standards for responsible business conduct. These requirements are consistent with the USG’s current effort to develop a National Action Plan on Responsible Business Conduct, which will outline its efforts to implement the provisions of the OECD Guidelines for Multinational Enterprises and the U.N. Guiding Principles on Business and Human Rights. As part of that process, the USG sees its procurement policy as one way to fulfill its obligation to protect people from human rights infringements linked to business activities.

This webinar should be of particular interest to contracting and compliance representatives, in-house counsel, and government relations staff. To register, click here.

WEBINAR: Corporate Responsibility for Federal Contractors

The Society of American Military Engineers is hosting a webinar, entitled Corporate Responsibility for Federal Contractors, on Thursday, June 9 from 1:00pm-2:30pm. Human Analytics’ Rebecca DeWinter-Schmitt will discuss procurement requirements related to the responsible provision of security services. Foley Hoag’s Sara Altschuller will address new requirements to combat trafficking in persons.

Federal contractors impacted by requirements related to the prevention of human trafficking and the provision of private security services, and who want to familiarize themselves with these new regulations and develop the needed policies and systems to implement them, will benefit from participation in this webinar.

The U.S. Government (USG) is the world’s single largest purchaser of a wide range of goods and services. Increasingly, the USG recognizes that its procurement power can be used to promote responsible business conduct by its contractors. Two recent developments in federal acquisition regulations exemplify this trend, namely new requirements related to combating trafficking in persons and to promoting the responsible provision of private security services.

These changes in federal acquisition regulations reflect a commitment by the USG to observing international standards for responsible business conduct. These requirements are consistent with the USG’s current effort to develop a National Action Plan on Responsible Business Conduct, which will outline its efforts to implement the provisions of the OECD Guidelines for Multinational Enterprises and the U.N. Guiding Principles on Business and Human Rights. As part of that process, the USG sees its procurement policy as one way to fulfill its obligation to protect people from human rights infringements linked to business activities.

This webinar should be of particular interest to contracting and compliance representatives, in-house counsel, and government relations staff. To register, click here.

New Report on Implementing the UN Guiding Principles in the Maritime Sector

HRs at Sea coverThe Human Rights at Sea initiative has released a new report, An Introduction and Commentary to the 2011 UN Guiding Principles on Business and Human Rights and their Implementation in the Maritime Environment. The report provides a simple introduction to the UN Guiding Principles (UN GPs), makes the business case for companies in the maritime sector to implement their responsibility to respect human rights and warns of the commercial, legal, reputational, and operational risks of not doing so, and provides some examples of human rights abuses associated with the maritime sector. The report also discusses the uptake of the UN GPs through the development of National Actions Plans, such as that of the UK government, and their incorporation into various soft law instruments.

All of these issues have been addressed in more depth in other publications. But as Business and Human Rights Resource Center’s Executive Director Phil Bloomer suggests in the foreword, what makes this report stand out is that it is the first effort to launch a more comprehensive discussion in the maritime sector about its human rights responsibilities and how to meet them. This discussion has been happening in bits and pieces and mostly in response to reports of severe abuses.

For example, the New York Time series, The Outlaw Ocean, drew attention to lawlessness on the high seas and in particular the impunity for gross human rights abuses such as the use of forced and slave labor in the fishing industry. In February, President Obama signed a law closing a loophole in the 1930 Tariff Act that allowed the importation of goods made with slave labor, to include seafood caught using forced labor in south-east Asia.

As noted in a previous blog, concerns about the use of private armed security personnel on board ships in response to piracy threats resulted in the development of an ISO standard (ISO 28007-1: 2015), which explicitly references the UN GPs in the introduction and requires that companies develop human rights policies. Maritime security providers certified to ISO 28007-1 will soon have the opportunity to solicit certification to the International Code of Conduct for Private Security Service Providers (ICoC) if they provide some additional information on their human rights due diligence efforts, as foreseen in the draft recognition statement released by the ICoC Association.

Recently Maersk Group released its 2015 Sustainability Report detailing how it had undertaken a human rights due diligence process based on the UN GPs for all the business activities of the Group, thereby becoming the first large shipping line to undertake such a process. Although, as pointed out in the Human Rights at Sea report, Maersk is still plagued by human rights issues, such as using ship breaking facilities in India with a record of labor rights abuses.

The maritime environment as defined in the report is complex and encompasses multiple business actors, including those designing and manufacturing ships, operating shipping, cruise, and fishing fleets, brokerage services, ship yards, dry-docks, port construction, freight-forwarding, insurance, seafarer recruitment, and maritime security services. Most businesses in the maritime sector have not begun to consider the significance of the UN GPs or recognized their responsibility to respect human rights in their own business activities and throughout their supply chains. Hopefully, the Human Rights at Sea report will contribute to furthering that discussion throughout the sector.

ICoCA Releases Draft Statement Recognizing Private Maritime Security Companies Standard

The International Code of Conduct Association (ICoCA) has announced the release of a draft recognition statement in accordance with its certification procedure for ISO 28007-1: 2015 Ships and marine technology – Guidelines for Private Maritime Security Companies (PMSC) providing privately contracted armed security personnel (PCASP) on board ships (and pro forma contract) – or ISO 28007 in short. What is the significance? PMSCs that are members of the ICoCA now have a chance to become ICoCA certified. They will need to evidence their certification by an accredited certification body to ISO 28000 Specification for security management systems for the supply chain, using the additional guidance provided in ISO 28007, as well as provide some additional human rights related information derived from the International Code of Conduct for Private Security Service Providers (ICoC).

As noted in a blog post Human Analytics wrote after the release of ISO 28007 last year, New ISO Standard for Private Maritime Security Companies Reflects Some Progress on Human Rights, the new standard contains some improvements relative to the previous ISO/PAS 28007 (PAS = Publicly Available Specification), which was nearly devoid of any reference to the corporate responsibility to respect human rights. One marked improvement is the insertion of a reference to the UN Guiding Principles on Business and Human Rights (UN GPs) in the introduction, as well as the need for an explicit human rights policy. But the blog also noted that there remain a number of human rights shortcomings in ISO 28007, certainly relative to the expectations of companies laid out in the UN GPs, including the need to undertake a human rights due diligence process, prioritize human rights risks identified though a risk assessment process based on their scope and severity, and remediate negative human rights impacts.

The gaps between the human rights and humanitarian law principles of the ICoC and the requirements and guidelines of the ISO 28000/ ISO 28007 are evidenced in the rather extensive additional human rights related information requirements for ICoCA certification detailed in Annex B to the draft recognition statement. In addition to the failure of ISO 28007 to include human rights in the company’s risk assessment process, four areas evidence the greatest number of gaps, namely requirements regarding employment policies, reporting practices, training programs, and grievance mechanisms. Among some of the key gaps are failures to require an anti-discriminatory employment policy; ensure that passports, travel documents, and identification materials of personnel are only held as long as reasonably necessary; ensure that all employment documents are in writing and in a language understood by personnel; include relevant international and human rights law provisions in reporting requirements; require training on international human rights law; and ensure that grievance mechanisms are publicly available and operate in a fair, prompt, impartial, and confidential fashion. Annex B contains a complete list of gaps.

Topics not mentioned in Annex B, where the ICoCA may want to push for additional information are:

1) ensuring that, in line with the UN GPs, when PMSCs evaluate and prioritize risk controls, management, mitigation, and treatments that they prioritize addressing human rights risks based on their scope and severity;

2) including indications of prior involvement in human rights violations, which in some countries may not be captured in criminal background checks, employment histories, and military and law enforcement service records, in the selection and vetting criteria for personnel and subcontractors, as required in ICoC paragraphs 48 and 51;

3) evidencing that personnel receive mandatory training in reporting requirements related to the types of crimes and human rights violations laid out in ICoC paragraph 22; and

4) ensuring that grievance mechanisms offer effective remedies to victims of negative human rights impacts as foreseen in ICoC paragraph 67 a). The remediation of harms caused by PMSCs’ activities is not addressed anywhere in ISO 28007.

While certainly an opportunity for PMSCs to improve their human rights performance, it will be interesting to see how many of them actually seek ICoCA certification. While nearly half of the original ICoC signatories were PMSCs, at this point many no longer exist – having closed shop after the decline in piracy off the coast of Somalia – or chose not to become transitional members of the ICoCA once it was formed in late 2013. ICoC paragraph 7 foresaw “the development of additional principles and standards for related services, such as… the provision of maritime security services.” The review of ISO 28007 was carried out based on a comparison to the ICoC’s current provisions, and not after consideration of developments in the maritime security industry which may require additional principles and standards to capture the unique nature of the industry’s security operations and human rights impacts. Furthermore, the development of additional principles by the ICoCA for the provision of maritime security was to happen after the establishment of “objective and measurable standards for providing Security Services based upon this Code” and the development of “external independent mechanisms for effective governance and oversight” (to include certification, auditing, monitoring, reporting, and grievance procedures). It is interesting that the ICoCA chose to prioritize reviewing ISO 28007 as a pathway to ICoCA certification ahead of reviewing ISO 18788 (the new ISO standard for private security operations based on the ICoCA recognized ANSI/ASIS PSC.1) and ahead of completing the development of key procedures, such as monitoring and grievance procedures. What remains unclear is whether PMSCs will seek ICoCA certification, or if their clients will require it, without the ICoCA having finalized all of its procedures.

Two developments in the maritime industry, however, do bode well. First, ISO 28007 no longer contains a note that appeared in the previous ISO/PAS 28007, which stated that the International Maritime Organization does not view the ICoC as “directly applicable to the peculiarities of deploying armed guards at sea to protect against piracy since it is written in the context of self-regulation for land companies only.” The ICoC is now referenced in the bibliography. Second, Maersk Group, which includes one of the world’s largest shipping lines, announced in its recent 2015 Sustainability Report that it had undertaken a human rights due diligence process based on the UN GPs for all the business activities of the Group. One area identified as a priority human rights issue for 2016-2017 is the use of security services. The imminent recognition of ISO 28007 provides an opportunity for the ICoCA to lobby the shipping industry and other clients of PMSCs, as well as flag, coastal, and port states, to require that PMSCs adhere to the principles of the ICoC. To be impactful on the larger security industry, the ICoCA must foster compliance with the ICoC principles by all security providers, whether maritime or land-based and whether employed by private or public sector clients.

MNCs are moving to greater accountability – are business schools meeting the demand?

global businessBusiness school programs are designed to produce skilled managers who can lead enterprises and maximize stakeholder value both now and in the future. Core business disciplines such as entrepreneurship, marketing, cost accounting, finance, and program management remain constant to a manager’s professional education, but MBA programs must always adapt to the changing business conditions. For example, after the fall of the Berlin Wall, business education curriculum rapidly evolved in response to growing globalization with the opening up of new markets and international businesses opportunities facilitated by new transportation and communication technologies.

Today, however, multinational corporations (MNCs) must manage and operate with greater accountability and expectations in a hyper-globalized economy.  MNCs have increasingly complex global supply chains that reach into states with weak governance, instability, and at times active conflict. In such areas, states may not be able to fulfill their obligations to protect against human rights abuses by third parties, to include private actors such as businesses.

As a result, companies are increasingly adopting policies and practices to meet new business and human rights standards and disclosure requirements to identify and address adverse impacts on human rights caused by their business activities or supply chain relationships anywhere in the word, and regardless if the host state is able or willing to meet its human rights obligations.  The scale of this shift in company operating requirements for MNCs has created new management needs for business schools to consider. Are they doing all they can do to prepare future managers to lead in these companies?

Increasing international and state mandates for business and human rights

International framework initiatives for human rights due diligence and good management practices have been gathering momentum since the 1990s. The 2011 United Nations Guiding Principles on Business and Human Rights (UNGPs) require companies to identify, prevent, mitigate and address adverse impacts on human rights caused by either their own activities or as a result of their business relationships. Several industry sector-specific initiatives are also in place, to include frameworks for the apparel manufacturing, extractives, private security, and information technology industries.

The number of business and human rights-related mandatory disclosure requirements for MNCs is also increasing. From 2013 to 2015, a number of non-discretionary company disclosure requirements involving human rights and business activities and/or supply chains abroad have been implemented at the state level, to include the United States and the United Kingdom.

Another example is the California Transparency in Supply Chains Act of 2010 (CA-TISCA), the first of its kind in the United States.  Every retail seller and manufacturer doing business in California with annual revenues exceeding $100 million is now required to release an annual statement detailing efforts to eliminate slavery and human trafficking from their direct supply chains. California’s positon as the largest state economy in the U.S. and the world’s 8th largest economy makes this recent legislation particularly relevant.

Beginning in 2014, Section 1502 of the Dodd-Frank Act required public company “conflict mineral” disclosures to the SEC to disclose whether certain minerals used in the manufacture of various products is sourced from the Democratic Republic of the Congo or neighboring countries.

Likewise, in 2013 the U.S. Government stipulated that any U.S. person who invests $500,000 or more in Burma (Myanmar), or invests in Burma’s oil and gas sector, is required to complete and submit Department of State reporting requirements as set forth in the Department of State’s Reporting Requirements on Responsible Investment in Burma.

MNCs are also paying close attention to recently released relevant National Action Plans on Business and Human Rights.  Since 2013, 10 states have developed national action plans on business and human rights as part of the state responsibility to disseminate and implement the UNGPs. Nineteen other states, to include the United States, have national action plans currently under development. The U.S government is expected to publish its National Action Plan on Responsible Business Conduct in 2016.  The plan is expected to detail efforts to implement the U.S. government’s commitment to the UNGPs.

The corporate challenge – moving from commitment to practice in business operations and relationships  

It’s not only that states are increasing business disclosure requirements, MNCs themselves have increasingly committed to business and human rights principles.

Over 8000 company chief executives (part of 12,000 + total signatories in 170 countries worldwide) have signed Letters of Commitment expressing their commitment to the United Nations Global Compact Ten Principles on human rights, labor, environment and anti-corruption. Principle 2 states that businesses should make sure that they are not complicit in human rights abuses.

Many MNCs have also endorsed the UNGPs, the first authoritative global framework to establish the responsibility to identify and address human rights risks related to business activities, and the OECD Guidelines for Multinational Enterprises which, while non-binding,  provide principles and standards for responsible business conduct in a global context, to include how corporate due diligence should be observed in a conflict region. The OECD Guidelines were updated to comport with the UNGPs.

The adoption rate of management practices to implement business and human rights policies differ by industry sector and risk exposure – companies with previous human rights incidents or that operated in a high risk industry were the earliest adopters. Many of these early adopters participated in  multi-stakeholder initiatives involving academics, civil society, governments, industry, and international organizations to develop business and human rights frameworks specific to their industry, to include the Voluntary Principles on Security and Human Rights for the extractive sector, the International Code of Conduct for Private Security Providers for the international security sector, the Fair Labor Association for the apparel sector, and the  Global Network Initiative for the information technology sector.

Individual companies have also demonstrated their commitment to business and human rights practices when investing in new markets.  When Ball Corporation, a U.S.-based can and tin company decided to enter Burma (Myanmar) to manufacture beverage cans for locally produced Coca Cola products, they conducted due diligence on how their products would impact local populations.  In Ball’s July 2015 Responsible Investment in Burma report, they described their approach to stakeholder engagement which was further elaborated on during an interview with company leadership on National Public Radio.

However, while companies are increasingly showing the commitment to adopting business and human rights policies and practices, it is far more difficult to translate these same corporate commitments to actual management practices and metrics at the operational and supply chain levels.

Consider the recent  article by Harvard Business Review (HBR) on an Amnesty International report on major global technology and automobile brands with reported human rights abuses in their extensive global cobalt supply chains. The Harvard article concludes that the implicated global brands cited in the report do want to make their supply chains more ethical and would not willingly tolerate human rights abuses in their supply chains. Instead, HBR points out that failure to address ongoing abuses may more revolve around “willful ignorance”.  Meaning that while companies do care about the ethics of their operations, they’re not actively investigating their supply chains to seek out this information. HBR feels that a reason for this may be that company decision makers may be wired or have “psychological mechanisms” to make them want to avoid difficult issues, such as initiating internal investigations.

Recent first hand reports such as this suggests that even the most respected of MNCs can still unknowingly fall short of their responsibility to respect human rights within their supply chains, regardless of the commitment of the company. Accordingly, MNCs need business managers familiar with business and human rights standards and able to identify and rectify gaps in their human rights management practices as it applies to their specific business operations and supplies chains throughout the world.

The global business environment has changed. The business school mission to prepare future business leaders has not.

It is not yet clear if business schools, with some notable exceptions, are sufficiently adapting their own programs to prepare future business leaders to apply and integrate human rights management practices into company operations sufficiently to responsibly lead and grow their businesses in today’s far more globalized and connected business environment.

The establishment of the Center for Business and Human Rights (CBHR) at New York University’s Stern School of Business in 2013 is certainly one indicator that business schools are adapting their programs to prepare MBA candidates for the human rights in business needs of MNCs in the 21st century. NYU Stern is the first business school to establish a specific center for business and human rights and sets the example for other business schools to follow.

However, several other indicators suggest that there is still a very long way to go for professional business education to sufficiently adapt to fully preparing future managers for the changing needs and challenges of companies operating in today’s global market.

The UN Global Compact Office and the Secretariat of the UN Principles for Responsible Management Education (PRME) maintains an open letter to academic institutions to make the case that demand for multidisciplinary business and human rights education is growing worldwide and that companies are looking to hire graduates with the skills to manage the human rights risks and opportunities of business activities and relationships.

In 2014, the Financial Times published an Op-ed by Professor Ken McPhail detailing his view that business schools are ignoring the emergent role of companies in modern society, rightly pointing out that the power relationship between states and MNCs has shifted dramatically over the past 40 years.  In 2016, Professor Dorothée Baumann-Pauly of NYU Stern and HEC Lausanne, expanded on the view that business schools could be more innovative when she  articulated a number of current challenges of teaching business and human rights at a business school.

Business schools must be responsive to the needs of businesses operating in a hyperglobal economy where both conditions and stakeholder expectations have evolved significantly.  Business schools can, and should, prepare their MBA candidates to integrate human rights due diligence and good management practices into company operations and supply chain relationships. Not doing so fails to support the full development of management talent now required for multinational firms to competitively operate.

Until this happens, companies are well advised to seek outside human rights management expertise as needed to meet their human rights due diligence requirements.  There are cost-savings and efficiencies in drawing on such expertise to identify means to mitigate potential reputational, legal, operational, and financial liabilities.  An outside perspective can provide a valuable independent, critical analysis of companies’ existing policies and practices.  Furthermore, the expertise of third parties with experience in assisting companies in meeting their human rights commitments can be leveraged to assist with developing the needed in-house capacities.

Business schools have played a crucial role in preparing leaders to maximize value in their organizations for nearly two hundred years. It is no less essential that they continue to do so in the 21st century.

Second Edition of Briefing Paper “Private Security Standards”

Security standards jpeg

The Human Analytics team is pleased to offer an updated briefing paper comparing and contrasting standards for the provision of private security services. This is the second edition of the briefing paper, “Standards for Private Security Services,” and it contains additional information related to the recently released ISO 18788: 2015 Management System for Private Security Company Operations. The paper also examines three other standards – the Voluntary Principles on Security and Human Rights, the International Code of Conduct for Private Security Service Providers, and ANSI/ASIS PSC.1-2010 Management System for Quality of Private Security Company Operations. Among the issues discussed are the origins of the standards, their relationship to each other, implementation efforts, and recent developments. A chart compares all four standards in terms of their content, scope, assurance mechanisms, and governance. The briefing paper can be downloaded for free here, and is a useful resource for understanding the evolving standards landscape for private security services.

New ISO Standard for Private Maritime Security Companies Reflects Some Progress on Human Rights

In a previous Human Rights in Complex Environments blog, we argued that the ISO/PAS 28007:2012 Ships and marine technology – Guidelines for Private Maritime Security Companies (PMSC) providing privately contracted armed security personnel (PCASP) on board ships (and pro forma contract) – ISO/PAS 28007 in short – could not be described as a “security and human rights” standard. At the time, the Publicly Available Specification was being developed into a full ISO standard. That standard, ISO 28007-1: 2015, is now completed and available. While some improvements have been made in terms of clarifying the human rights responsibilities of PMSCs providing armed security on board ships, shortcomings remain.

What ISO-28007-1 is and is not

ISO 28007-1 suffers from a bit of an identity crisis. It is a set of informative guidelines for organizations implementing ISO 28000: Specification for security management systems for the supply chain. In other words, it is additional guidance for organizations wanting to assure security in their supply chains, which is different from the management of private security operations and the responsible provision of armed security services – something that standards like ANSI/ASIS PSC.1:2012 Management system for quality of private security company operations – Requirements with guidance (PSC.1) and its accompanying guidance specific to private maritime security, ANSI/ASIS PSC.4-2013: Quality Assurance and Security Management for Maritime Private Security Companies – Guidance (PSC.4), do explicitly address. While the Introduction to ISO 28007-1 states that, “[i]n effect, ISO 28000 is a risk-based quality management system for the security of operations and activities conducted by organizations,” in reality ISO 28000 is not a quality management system and the word quality appears nowhere in the main body of ISO 28000.

Furthermore, it should be noted that ISO 28007-1 is specific to the provision of security services on board ships. The evolving industry is largely unaddressed by the standard, and it does not cover newer activities, such as offshore installation protection, littoral work, and seismic survey work, which are more likely to put PMSCs in a position where human rights might become an issue.

Improved human rights provisions

As noted in our previous blog, human rights were almost wholly absent from the ISO/PAS 28007. The Universal Declaration of Human Rights (UDHR) was not listed as an informative document in the bibliography, and in the entire standard human rights were only correctly referenced twice: once in conjunction with health and safety stating that the organization should have guidelines for disciplinary offenses involving human rights abuses, and the second time to state that the organization should develop procedures to identify applicable international law to include human rights obligations. While the UDHR still is not referenced in the bibliography and the term international human rights law appears nowhere in the ISO 28007-1, the Introduction now explicitly references the UN Guiding Principles on Business and Human Rights (UNGPs), which reflect the current international norm for responsible business conduct with relation to the human rights impacts of companies. Specifically, the Introduction states: “Organisations seeking to be certified to this International Standard should respect the human rights of those affected by the organisations [sic] operations within the scope of this International Standard, including by conforming with relevant legal and regulatory obligations and the UN Guiding Principles on Business and Human Rights.” This is a marked improvement over the ISO/PAS 28007. However, choosing to reference the UNGPs only in the Introduction and not integrating them and elaborating on their relevant provisions in the main body of the guidance weakens the expectation that companies conform to the UNGPs. The drafters could have cited the UNGPs as a normative reference, as was done with the ISO 18788 Management system for private security operations – which is the international standard based on PSC.1 – but that path was not taken. Furthermore, the definition provided of the UNGPs is incomplete and only discusses the human rights responsibilities of companies, i.e. Pillar II, and not the accompanying human rights obligations of States and the need for both States and companies to provide effective access to remedy for victims of human rights abuses linked to economic activities.

That being said, referencing the UNGPs is not the only improvement in the ISO 28007-1’s human rights provisions. Noteworthy are the following additions:

  • The term stakeholders is now used and impacted communities have been added as a relevant stakeholder.
  • As part of the risk assessment process, organizations are advised to carry out meaningful consultation with relevant stakeholders, including those directly affected by their operations.
  • Organizations should have a human rights policy, alongside a Code of Ethics.
  • In addition to minimum age requirements for PCASPs, there is also now a commitment not to employ child labor and referencing of relevant ILO conventions.
  • The provisions on complaints and grievance procedures have been improved and now reference protection of whistle-blowers, procedures to assess effectiveness of complaints and grievance mechanisms, and procedures to protect complainants from retribution.

 

It is also noteworthy that remarks in the definitions section which stated that the International Maritime Organization does not believe that the International Code of Conduct for Private Security Service Providers (ICoC) or the Montreux Document are applicable to maritime security operations were removed. The ICoC and Montreux Document have been added to the bibliography.

Still room for more improvement

While these additions warrant recognition, there is still room for strengthening the human rights provisions of the IS0 28007-1 if it is to truly reflect the UNGPs. Additional improvements should entail:

  • Recommending that organizations carry out a human rights due diligence process, to include conducting a human rights risk and impact assessment to identify, address, and mitigate actual and potential negative human rights impacts.
  • Clarifying that when organizations systematically evaluate and prioritize risk controls, management, mitigation, and treatments that they should prioritize addressing human rights risks based on their scope and severity. Not addressing actual or potential severe human rights risks raises legal liability concerns, and not just considerations of reputation and cost effectiveness. Severe human rights risks linked to an organizations’ operations must be addressed even if risk treatment is not cost effective per se.
  • Adding provisions that explicitly state that negative human rights impacts should be remediated.
  • Using past involvement in human rights violations as a screen for vetting PCASPs.
  • Requiring that PCASPs receive relevant human rights training.

 

Thankfully ISO standards are reviewed on a regular basis, so there will be opportunities in the future to include human rights experts in the review process and address these shortcomings.

Human Analytics Makes Recommendations for the U.S. National Action Plan on Responsible Business Conduct

Human Analytics has submitted the following recommendations to the State Department, which is overseeing the process to develop a U.S. National Action Plan (NAP) on responsible business conduct. The recommendations focus to security and human rights, which was a theme of the NAP consultation held in Norman, OK at the University of Oklahoma on April 9. Human Analytics participated in the consultation. The below recommendations, as well as those submitted by other organizations and individuals, can be found at the International Accountability Roundtable’s website dedicated to the NAP process.

Human Analytics Recommendations for the U.S. National Action Plan on Responsible Business Conduct with regard to Private Security

April 22, 2015

Human Analytics welcomed the chance to participate in the recent April 2 National Action Plan (NAP) consultation held at the University of Oklahoma in Norman, OK, which had as one focus security and human rights. Human Analytics is a consultancy specializing in helping public and private organizations, in particular private security providers, address human rights risks associated with operating in complex environments. We would like to offer the following recommendations related to the private security industry for consideration as the U.S. government proceeds with developing its NAP on responsible business conduct.

Require Enhanced Human Rights Due Diligence:

The private security industry frequently operates in high-risk, conflict-affected areas. As Guiding Principle 7 of the United Nations Guiding Principles on Business and Human Rights indicates, the risks of human rights abuses are heightened in such areas, and States must help ensure that business enterprises operating in those contexts are not involved in abuses. As the Commentary to Guiding Principle 7 notes, States “should review whether their policies, legislation, regulations and enforcement measures effectively address this heightened risk, including through provisions for human rights due diligence by business.” Human Analytics recommends that the U.S. government mandate at a minimum for its contracted private security service providers that they undertake an enhanced human rights due diligence process and disclose their findings, to include a company’s human rights due diligence policies and procedures, risks and impacts identified, and measures taken to prevent, mitigate and address them throughout their operations. The U.S. government should also encourage, for example through its participation in the Voluntary Principles on Security and Human Rights, private sector clients of the security industry, such as oil, gas, and mining companies, to undertake and disclose information about their human rights due diligence processes. Legislative precedent for such a requirement already exists, for example the mandatory disclosure of due diligence measures relating to conflict mineral supply chains under Dodd-Frank 1502. Other organizations, such as Amnesty International USA and NomoGaia, have made similar recommendations.

Assist the Private Security Industry with the Development of a Human Rights Risk and Impact Assessment Tool:

Guiding Principle 7 states that States should engage “at the earliest stage possible with business enterprises to help them identify, prevent and mitigate the human rights-related risks of their activities and business relationships” as well as provide “adequate assistance to business enterprises to assess and address the heightened risks of abuses.” One means through which the U.S. government could further efforts of the industry to engage in an effective, enhanced human rights due diligence process is to assist with the development of a security industry specific human rights risk and impact assessment tool. A venue already exists to do this, namely the International Code of Conduct Association (ICoCA). The U.S. is a founding member of the State pillar of the ICoCA. According to the ICoCA Articles of Association, one purpose of the Association is to serve as a central agency for the promotion of industry best practice. The U.S. government should provide funding to the ICoCA to develop a human rights risk and impact assessment tool. Despite promises otherwise, to date the U.S. government, unlike other member States, has not provided monetary or in-kind assistance to the ICoCA.

Ensure Policy Coherence:

Guiding Principle 8 recommends vertical and horizontal policy coherence to “ensure that governmental departments, agencies and other State-based institutions that shape business practices are aware of and observe the State’s human rights obligations when fulfilling their respective mandates.” Furthermore, Guiding Principle 6 states that “States should promote respect for human rights by business enterprises with which they conduct commercial transactions,” for example through procurement policies and practices. With respect to the U.S. government’s role as both a regulator and user of private security services, greater policy coherence entails ensuring that the Department of Defense (DoD) and Department of State (DoS) undertake similarly rigorous measures in procuring, overseeing, and regulating contracted private security providers. In particular, there is inconsistency in the level of commitment to more privatized forms of governance, such as the International Code of Conduct/ICoCA and the ANSI/ASIS PSC.1-2012 Management System for Quality of Private Security Company Operations – Requirements with Guidance (PSC.1). While the DoS has announced that it will require its security providers to be members in good standing of the ICoCA and to certify compliance to PSC.1, the DoD has thus far only required compliance to PSC.1 in the DFARS.

Perhaps more significantly, the U.S. Agency for International Development (USAID) has been largely absent from both initiatives. While USAID does not directly contract for private security services to the same extent, the organizations it partners with do utilize and subcontract with private security providers. USAID should require its implementing partner organizations to place similar requirements on their security providers.

These recommendations are in keeping with those made by Amnesty International USA, namely that “[g]overnment procurement contracts with private companies should include requirements that they carry out human rights due diligence and report on their due diligence policies and practices. They should also include clauses providing for the suspension or termination of contracts based on non-compliance. Companies that are directly or indirectly linked to human rights abuses should become ineligible for public procurement contracts.” The U.S. government has the opportunity to use the power of its purse strings to ensure corporate respect for human rights and greater accountability for companies complicit in the commission of human rights abuses.

Improve Accountability by Closing Gaps in U.S. Laws:

While the recent convictions of four Blackwater security contractors involved in the 2007 shooting deaths of Iraqi citizens in Nisour Square demonstrated that U.S. laws can reach extraterritorially to address human rights abuses committed overseas, news reports indicate that an appeal of the verdicts is likely based on the fact that the Blackwater contractors were operating on behalf of the DoS at the time, and thus did not fall under the jurisdiction of the Military Extraterritorial Jurisdiction Act. The U.S. Congress must pass the Civilian Extraterritorial Jurisdiction Act to close gaps in the law by extending federal criminal jurisdiction over all U.S. government contractors. As the International Corporate Accountability Roundtable elaborates in its “Shadow” U.S. National Baseline Assessment for Pillar 1 of the UN Guiding Principles,

“The Military Extraterritorial Jurisdiction Act of 2000 (MEJA)… includes criminal liability for people who are “employed by or accompanying the armed forces” abroad. However, this includes contractors and sub-contractors hired by the Department of Defense only. The proposed Civilian Extraterritorial Jurisdiction Act of 2011 (CEJA) aimed to address this gap by amending Title 18 of the United States Code to clarify and expand federal criminal jurisdiction over federal contractors and employees who commit certain crimes outside of the United States while employed by or accompanying any agency of the United States other than the Department of Defense (DOD). The CEJA bill was introduced on 3 June 2011, in a previous session of Congress, but was not enacted.”

The private security industry has in the past expressed support for legislative proposals that would close the gaps in MEJA.

We thank the Department of State for coordination of the NAP consultations and hope these recommendations are of use. We look forward to continued engagement throughout the process of developing the NAP.

Register Now – Managing Human Rights Risks in Complex Environments – April 9 (Washington, D.C.)

Sponsored by the International Stability Operations Association (ISOA)

Co-sponsored by Fund for Peace/Facilitated by Human Analytics

MANAGING HUMAN RIGHTS RISKS IN COMPLEX ENVIRONMENTS

ISOA Members are leaders in the stability operations industry. They provide vital services in complex environments around the world. Their activities support peace building, stabilization and reconstruction efforts, security sector reform, humanitarian aid and disaster relief operations, and long-term development projects.

However, the fragile nature of the operating environments in which these services are provided pose potential risks to service providers and their public and private sector clients. In particular, the management of human rights related risks has been the focal point of various international initiatives to set standards applicable to service providers and their clients.

Beyond standards specific to particular sectors, such as private security, oil, gas, and mining, and humanitarian assistance, the UN has developed a broader framework – the UN Guiding Principles on Business and Human Rights – to assist all business enterprises, in partnership with governments, with ensuring respect for human rights.

This one-day forum will provide updates on a number of standard setting initiatives to address risks associated with operating in complex environments. Case studies will explore how various organizations have converted principles into management practice. Private sector clients will discuss the incorporation of standards into contracts, and U.S. government officials will offer insights into recent policy and procurement related developments. Legal, management consulting, and auditing experts will offer perspectives on standards compliance.

Thursday, April 9, 2015

9:00am – 5:30pm

LOCATION:

Hosted by the law offices of Foley Hoag – 1717 K. St, NW, Washington, D.C.

TO REGISTER:

http://www.stability-operations.org/events/event_details.asp?id=617493

(Open to the public and no cost to attend. Space is limited.)

AGENDA:

9:00am-9:10am                 Welcoming remarks                      

Ado Machida, President, International Stability Operations Association

Gare Smith, Partner, Foley Hoag Corporate Social Responsibility Practice

9:10am-9:30am                 Keynote address: The business case for managing human rights related risks

Representative from Unilever, TBD

9:30am-10:45am               Governments as clients: Key human rights concerns from the perspective of state actors

Moderator: Doug Brooks, President Emeritus, International Stability Operations Association

Jason Pielemeier, Special Advisor & Team Lead, Internet Freedom, Business, and Human Rights, U.S. Department of State

Christopher Mayer, Program Support, Acquisition, Technology and Logistics, U.S. Department of Defense

Donald “Larry” Sampler, Assistant to the Administrator, USAID

Representative from British Embassy, TBD

10:45am-11:15am            Coffee break

11:15am-12:30pm            Recent developments in standards for complex environments

Moderator: Dr. Rebecca DeWinter-Schmitt, Senior Managing Director, Human Analytics

The Voluntary Principles for Security and Human Rights

J.J. Messner, Executive Director, Fund for Peace

International Code of Conduct Association

Chuck Tucker, Executive Director, World Engagement Institute and Board Member ICoCA

ANSI/ASIS PSC.1 Management System for Quality of Private Security Company Operations and the Draft International Standard 18788 Management System for Private Security Operations

Dr. Marc Siegel, Commissioner, ASIS Global Standards Initiative

Standards in the Humanitarian Space

Laky Pissalidis, Security Director, InterAction

Trevor Hughes, Director of Risk Management & Global Security, International Relief & Development; Board Member, International NGO Security and Safety Association

12:30pm-1:30pm              Lunch

1:30pm-2:45pm Ensuring the implementation of standards

Moderator: Dr. Ian Ralby, Founder and Executive Director, I.R. Consilium

Legal considerations

Gare Smith, Partner, Foley Hoag Corporate Social Responsibility Practice

Implementing management system standards

Lisa DuBrock, Managing Partner, Radian Compliance

Third party certification

Tony Chattin, Director, MSS Global

2:45pm-3:15pm Coffee break

3:15pm-4:30pm Due diligence in the field: Case studies of standards implementation

Moderator: Clements Worldwide, TBD

Erik Quist, Vice President and General Counsel, Sterling Global Operations (invited)

Nick Welch, Director International Relations, Noble Energy (invited)

Dr. Kateri Carmola, Director, Carmola Consulting Group

Rafael Khusnutdinov, Director Global Safety and Security, Save the Children

4:30pm                                 Reception

New Report from The Economist Provides Insights into Corporate Leaders’ Perspectives on Human Rights

There is no doubt that business and human rights has gone mainstream when The Economist Intelligence Unit writes a report on the subject. The Road from Principles to Practice: Today’s Challenges for Business in Respecting Human Rightssponsored by a number of governments, business groups, non-governmental organizations, multinational companies, and law and auditing firms – explores businesses’ perspectives on their human rights responsibilities and the steps being taken to implement them. Based on a survey of 853 senior corporate executive from companies around the world as well as nine in-depth interviews of thought leaders, the report provides interesting insights into the state of the art in the field of business and human rights in terms of thinking and practice.

Some of the outcomes are somewhat unexpected. The “business case” for companies to respect human rights, in other words the economic benefits to the corporate bottom-line, has been the primary selling point through which the business world has been lobbied to take up its responsibilities. Eight three percent of the executives surveyed agreed that human rights are a matter for business as well as governments. Furthermore, and naturally with some sector specificity, most executives recognize that their corporate activities can impact on myriad human rights categories. But when asked about the biggest drivers for their companies’ commitment to respect human rights, the top driver (48%) was “building sustainable relationships with local communities.” The other top three answers were “protect company’s brand and reputation” and tying for third place “moral-ethical considerations” and “employees’ expectations about company values and actions.” Coming in at seventh place (21%) was “there is a clear business case for doing so.” While no doubt some of the top responses can be read as economic justifications for respecting human rights, i.e. mitigating risks linked to dissatisfied local communities, protecting the value of the brand, and attracting and retaining top employees, the survey seems to indicate that we may be starting to see a shift away from purely instrumental, short term thinking, to more holistic, mid- to long-term considerations of human rights responsibilities and impacts.

But is this recognition of human rights responsibilities also translating into action? Here the survey results are less satisfactory. Pillar two of the UN Guiding Principles on Business on Business and Human Rights lays out the corporate responsibility to respect human rights. (For an introduction, see Human Analytics Business and Human Rights 101 Prezi.) Looking at two key requirements in pillar two, the survey results evidence that there is still work to be done.

Guiding Principle 16 details the need to develop a publicly available statement of policy committing to respect human rights, which stipulates the expectations of personnel, business partners, and other parties linked to a company’s operations. Only 22% of corporate executives state that their firms have a publicly available human rights policy in some form. Of those, only 37% consulted with external stakeholders, although the Guiding Principles recommend that relevant external expertise inform human rights policies. On the upside, 66% of companies with a public human rights policy train and provide guidance to their employees on it, and 62% communicate the policy across all business relationships.

Guiding Principle 21 states that companies must “know and show” that they address their human rights impacts in practice through formal communications. While 42% of respondents communicate to internal stakeholders on human rights issues, only 27% communicate to external stakeholders. Only 11% publish an annual report on human rights related issues, and a mere 10% report on assessments of human rights impacts for parts of their operations.

The survey did not attempt to tackle two other key requirements of the corporate responsibility to respect human rights, namely a due diligence process to identify, mitigate, and account for how human rights impacts are addressed and a process to remedy adverse human rights impacts. Clearly, questions posed on those matters likely would have made the road ahead seem much longer.

So what is to learn from industry leaders in terms of best practices on that journey? First and foremost, the commitment to respect human rights has to come from the C-suite. Leading companies are much more likely to have their CEOs involved in developing and implementing their human rights policy commitment (59% of the leaders compared with 39% among the rest). Second, leaders display a shift in corporate culture, where the driver for respecting human rights is as much a moral/ethical one as a business one.  Finally, leaders integrate human rights throughout their operations. Seventy eight percent of leaders have at least one department tasked with leading on human rights issues, and on average leaders have nine functional teams that are either leading or actively involved on human rights policy and practice.

What are the most common barriers – both among leaders and the rest – in understanding and implementing the requirement to respect human rights? Thirty two percent cite a lack of understanding of the company’s human rights responsibilities, 27% point to the lack of available company resources, and 25% note the lack of training and education for employees. Seeking dialogue and advice from external stakeholders is key to overcoming these barriers. From non-governmental organizations, local communities, government actors, to consultancies and law firms, a range of interlocutors are emerging who can help educate companies and their personnel, raise awareness on human rights issues, develop policies, and create tools to operationalize and implement them into management practices.

Framework or fragmentation of standards for private security providers?

IRAQ-US-SECURITY-BLACKWATER

 

 

 

 

 

 

 

 

A recent article in the Fletcher Security Review entitled “Accountability for Armed Contractors” by Dr. Ian Ralby provides an excellent, concise summary of what he terms “accountability initiatives” for private armed contractors. The key declarations, codes, and management standards he highlights include the following:

 

Ralby expresses a number of concerns about the ability of these initiatives to ensure effective governance and accountability. Many of them, he argues, are a legacy of the Iraq and Afghanistan wars and may be ill-suited to addressing future challenges the industry may face as it moves into new areas of work. This is reminiscent of Sara Percy’s argument that efforts to regulate the private security industry have been a matter of “regulating the last war,” rather than dealing with current and emerging trends. Furthermore, even though these initiatives are backward looking, they have gaps and do not address all the issues that have arisen to date, which could result in a loss of confidence. Ralby also notes that there is not a consistent approach across all U.S. government agencies in how security contractors are procured and to which initiatives armed security providers are expected to adhere.

Emerging convergence

The latter is indicative of what Ralby sees as the larger problem with accountability initiatives to date, namely that “the resulting collection forms a patchwork, rather than a framework for governing the conduct of armed contractors.” However, this concern may be overstated in light of developments in the past year within the landscape of initiatives for armed security services, which have trended away from fragmentation towards signs of convergence. Ralby makes the sensible recommendation that initiatives be revisited in light of the changing nature of industry operations, and one should add evolving normative and practical understandings of appropriate corporate behavior. Yet, this is exactly what is happening and contributing to a more coherent framework. For example, the ICoCA’s proposed additional human rights-related information requirements for certification (beyond what certification to PSC.1 already requires) are grounded in the human rights risk and impact assessment language of the UN GPs – something which cannot be found in the ICoC itself, which was completed in 2010 before the finalization of the UN GPs. While PSC.1 makes reference to the UN GPs, they were released just before completion of the management standard in 2012, and implementation of the UN GPs’ human rights due diligence requirements had not yet been put into practice by companies. With expected release of the ISO 18788 mid-this year, one finds in the draft international standard more thorough due diligence requirements than explicated in either the ICoC or PSC.1, to include human rights risk analysis as part of the risk assessment and management process.

Voluntary and mandatory regulation: Two sides of a coin

The three pillars of the UN GPs – the state responsibility to protect human rights, the corporate responsibility to respect human rights, and the right of victims to access remedy – clarify that mandatory State regulation of companies and voluntary corporate commitments to respect human rights are two sides of a coin rather than a dichotomy. The Montreux Document, which is largely directed at States, and the multi-stakeholder ICoC/ICoCA were conceived from the outset as two interconnected parts of the Swiss initiative – an effort to find international consensus on appropriate regulation of armed security services. This recognition of the interconnected nature of State-based regulation and corporate self-regulation is reflected in recent efforts to further link the Montreux Document and the ICoCA. The Montreux Document Forum was established this past December to support national implementation of the Montreux Document’s legal obligations and good practices, develop implementation tools, and to encourage greater state support of it. The Forum will offer a venue for interstate dialogue on better regulation of armed security providers, and will support the functions of the ICoCA’s Advisory Forum of Montreux Document participants. The Advisory Forum, as foreseen in the ICoCA’s Articles of Association, is to provide advice on national and international policy and regulatory matters to the ICoCA.

Closing gaps

The blurring of the line between voluntary and mandatory regulation is further evidenced by the fact that governments, to include the U.S. government’s Departments of Defense and State, have included or are planning to include conformance with accountability initiatives in procurement decisions. Ralby expresses concern that differential requirements – with the DoD procurement regulations referencing PSC.1 and the DoS security contracts, in particular the Worldwide Protective Services contract, likely to require PSC.1 and ICoC conformance – exacerbate fragmentation. However, with the ICoCA soon likely to decide to accept certification to PSC.1, with some additional informational requirements, as the basis for receiving certification to the ICoCA, the “gaps” between the two becomes less of an issue. The DoD continues to be actively involved in the ICoCA as well as funding management standards development. The PSC Series standards were created to operationalize and embed the ICoC’s requirements into a management system process. The DoD and other stakeholders involved in drafting ISO 18788 have further worked to reduce gaps with the ICoC and the UN GPs.

The road to “best value” and respect for human rights

As Ralby rightfully points out, these accountability initiatives when embedded into procurement processes work to the advantage of private security contractors. Government contractors have long asked for contract awards to be made on “best value” rather than “lowest price technically acceptable.” Accountability initiatives can serve as a “best value” differentiator for those willing to respect the human rights and humanitarian law requirements at the heart of these initiatives. From the perspective of affected communities that live in the areas where these companies operate, such initiatives offer an opportunity for greater respect of their human rights and access to remedy for negative impacts associated with security operations.

Human Rights Impact Assessments – a critical tool for gauging human rights risk

HRIA 28 AUGSince the endorsement of the United Nations Guiding Principles on Business and Human Rights (UN GPs) in 2011, corporations have increasingly embraced the UN GPs to include the responsibility to “identify and assess any actual or potential adverse human rights impacts with which they may be involved either through their own activities or as a result of their business relationships” (Guiding Principle 18).

Principle 18 of the UN Guiding Principles further states that in order to gauge human rights risks, this human rights due diligence process should:

“(a) Draw on internal and/or independent external human rights expertise;

(b) Involve meaningful consultation with potentially affected groups and other relevant stakeholders, as appropriate to the size of the business enterprise                and the nature and context of the operation.”

This is especially critical for businesses operating in environments with weak or low levels of governance, diminished rule of law, and historically inadequate access to remedies for rights-holders experiencing adverse human rights impacts. A human rights risk assessment process in alignment with the UN GPs is of particular relevance to the extractives and private security sectors where engagement with the local population is the norm rather than the exception.

But how do companies, particularly within these industries and in these types of operating environments, “identify and assess” the potential and actual human rights impacts of their projects as called for in the UN GPs? To meet these responsibilities companies typically conduct Human Rights Impact Assessments (HRIAs) as part of their human rights due diligence process, and as a means to demonstrably “know and show” how their policies and procedures respect human rights. HRIAs should be an integral and on-going component of their business operations.

A HRIA, if properly conducted, allows a company to know definitively if, and how, their project impacts human rights, both positively and adversely. The HRIA methodology involves several distinct, but linked, iterative data-gathering and analytical phases, to include substantial and meaningful engagement with local rights-holders. Project supply chain and subcontractor relationships also must be considered, as well as project and community touch points, to include with NGOs and local government and security forces. All factors are assessed from the contextual aspects of the local environment and the project activity itself. The HRIA differs from Environmental and Social Impact Assessments (though can leverage data from these sources) and has a specific scope to identify and assess human rights risks posed by the project from the perspective of internationally recognized human rights norms.

Confirmed human rights impacts that are identified from the HRIA process are used to adjust or modify a project’s operating procedures to eliminate any adverse impacts to rights-holders. Additionally, a successful community engagement process also facilitates the building of trust and communication between the local community and the business project and lays the groundwork for future feedback – a key element for the establishment of grievance mechanisms for the community to utilize in any future instances of real or perceived adverse human rights impact.

Identifying and addressing human rights impacts is not only the right thing to do; it is the business smart thing to do. Failure to manage risk, including human rights risks, can be costly to a company, potentially resulting in disruption of commercial operations, reputational damage, and legal liability – and ultimately the loss of a company’s social license to operate.

Human Analytics provides the needed external human rights expertise and offers customized and cost effective solutions to our clients seeking to manage the risks of operating in complex environments. Working in close partnership with our clients, we bring our team’s expertise and experience to bear to ensure that we develop solutions that fit our clients’ needs, are appropriate to the size of their enterprise, are fitting to the nature and context of their operations, and evolve with changes in the operating environment.

New Human Rights at Sea Initiative Contributes to the German Government’s “Charter of the Future – One World – Our Responsibility”

HRASAn important new initiative, Human Rights at Sea, was launched this past April. In the words of its founder, David Hammond, Human rights apply at sea, as equally as they do on land. The HRAS initiative aims to raise awareness of human rights issues relevant to the maritime industry, and to ensure implementation and accountability for human rights protections. The initiative is of particular interest to those working on business and human rights as one of HRAS’s projects is to encourage the uptake of the UN Guiding Principles on Business and Human Rights in the maritime industry, as well as to develop a model maritime human rights impact assessment.

In a recent blog posting, re-posted below, HRAS announced that it contributed to the German government’s efforts to develop a “Charter of the Future – One World – Our Responsibility”. The Charter when completed will reflect multi-stakeholder input and feed into Germany’s efforts to contribute to the further development of the UN Millennium Development Goals. HRAS in its contribution stressed the importance of good governance as furthered by the development and promotion of human rights policies applicable in the maritime environment.

The Human Rights at Sea international initiative contributes to the German Federal Government’s initiative “Charter of the Future – One World – Our Responsibility” by invitation as part of the United Nations Millennium Development Goals.

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The HRAS international initiative is strongly represented in Germany. Its engagement with and by the German Federal Government has been a leading example of direct European engagement on the international issue of promoting human rights at sea, associated good governance and best practice for human rights in the maritime environment.

BUND-image-ver-1398327986144The crucial importance of the protection of human rights at sea for the effective promotion of good governance has been highlighted and discussed in a recent HRAS article which was recently published on the German Federal Government’s initiative of the “Charter of the Future – One World – Our Responsibility” lead by the German Federal Ministry for Economic Cooperation and Development (BMZ).

 

Charter for the future - logo_zukunftscharta_enHRAS joined the initiative on 29 July 2014 by initially participating in two online forums for the development goals; namely Forum 1 on ‘Human Rights’ and Forum 2 on ‘Business, Human Rights and Sustainability’. The article, written by the Head of HRAS in Germany, Jens Dieckmann, and HRAS supporter Christina Kerll both Attorneys at Law in Germany, presented the vision of HRAS on good governance in the maritime environment. This further contributed to Forum 4, which serves to identify challenges in the area of good governance for the post-2015 development agenda led by the German Federal Government.

The article submits that; “good governance can only be promoted sustainably if Human Rights at the High Seas are effectively respected, protected and safeguarded.”

Taking into account the long-term challenges in international waters, such as the fight against piracy and the protection of boat people, migrants and refugees, HRAS calls for directing future attention to the development and human rights policies, particularly in respect of their use in international waters.

HRAS Founder, David Hammond said: “I am absolutely delighted with the response from the Federal German Government to HRAS and which has only been in existence since 3 April 2014. The positive Federal engagement and support shown to date has been a result of an international platform that fulfils the need for overt discussion and representation of human rights in the maritime environment and also, due to the continuous hard work of the HRAS German team led by Jens Dieckmann“.

Minister Gerd Muller imageThe German “Charter of the Future” has been initiated by the German Federal Minister for Economic Cooperation and Development, Dr. Gerd Müller, and it will be drafted up until November 2014. The Minister is currently engaged in a debate with the public about universally binding development goals. This process involves numerous events at the Federal level, the level of Federal states (Länder) and the municipal level.

The drafting process started in April 2014 and will end on 24 November 2014, when Federal Chancellor Merkel and Development Minister Müller will jointly present the Charter to the German public. In addition to the large number of national thematic fora and discussion rounds, all citizens have an opportunity to voice their views online on the German website .

The Ministry is developing the Charter together with the civil society, academia, churches and the private sector. Germany intends the Charter to be a special contribution to the further development of the United Nations Millennium Development Goals, referred to as the post-2015 process.

The German version of the HRAS article is available at: https://www.zukunftscharta.de/ecm-politik/zukunftscharta/de/journal/44335/post/27

Free Webinar – Human Rights Due Diligence in the Private Security Industry

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Join us on Tuesday, September 9, 2014 at 12:00 EDT for an educational webinar: “Human Rights Due Diligence in the Private Security Industry.” This online event, co-sponsored with INSSA is free to the public. For more information and to register for this event, click here.

 

With the unanimous endorsement of the UN Guiding Principles on Business and Human Rights by the UN Human Rights Council in 2011, companies are increasingly being encouraged through laws, regulations, and voluntary commitments to ensure respect for human rights throughout their operations. This webinar will explore one key element of the corporate responsibility to respect human rights, the need to conduct human rights due diligence. Through a human rights due diligence process companies can identify, prevent, mitigate, and account for how they address their human rights impacts. An adequate human rights due diligence process is particularly important for the security industry which operates in complex environments where human rights risks are greater due to lack of governance. A number of recently developed standards specifically applicable to security providers include human rights due diligence requirements. This webinar will examine those requirements and offer a case study of a corporate human rights risk assessment.

 

New Human Analytics Briefing Paper on Designing a Human Rights Policy

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Human Analytics is pleased to offer a new briefing paper on human rights policy design. This briefing paper discusses the reasons for developing a human rights policy, including the commercial benefits of putting a human rights policy in place. It details appropriate content for a human rights policy, as well as the steps in designing and implementing it. Creating a human rights policy is the essential first step in an effective human rights due diligence process, as outlined in the UN Guiding Principles on Business and Human Rights. To download the free briefing paper, click here.

Proposed Binding Business and Human Rights Treaty Stirs Controversy

Three years after the unanimous endorsement of the UN Guiding Principles on Business and Human Rights by the UN Human Rights Council (UNHRC), the UNHRC passed a resolution on June 26 to begin the process of developing an international legally binding treaty to regulate the activities of transnational corporations and other business enterprises with respect to human rights. The resolution, sponsored by Bolivia, Cuba, Ecuador, South Africa, and Venezuela, revealed rifts between governments in the North and South, and among civil society organizations. Companies and their associations were unanimous in their opposition to the resolution.

The resolution was voted against by all the Western industrialized states on the UNHRC, including the U.S. and EU member states. The U.S. representative to the UNHRC warned: “We have not given states adequate time and space to implement the Guiding Principles… The proposed Intergovernmental Working Group will create a competing initiative, which will undermine efforts to implement the Guiding Principles.”

Past efforts at creating a binding treaty for business and human rights at the UN have failed. In the 1970s attempts to create a Code of Conduct for transnational corporations never came to fruition. More recently in 2003, the United Nations Sub-Commission on the Promotion and Protection of Human Rights pursued a treaty strategy with its drafting of the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights. The Norms were framed in mandatory terms, setting forth corporate obligations with respect to human rights, and would have paved the way for a treaty. But the Norms were rejected by the UN Human Rights Commission (which would later become the UNHRC), and set the stage for the creation of the mandate for a Special Rapporteur on Business and Human Rights. The position was held by John Ruggie, who led efforts to draft the UN Guiding Principles. It appears that the collective political will for a treaty is no greater this time around, leading John Ruggie to ask: “Will this latest attempt to impose binding international law obligations on transnational corporations turn out to be another instance of the classic dysfunction of doing the same thing over and over again and expecting a different result?”

In contrast, a second resolution passed by the UNHRC and sponsored by Norway and a number of other states encourages, among other things, a strengthening of the process to implement the UN Guiding Principles, extends the mandate of the UN Working Group on Business and Human Rights for another three years, and calls on the Working Group to launch a transparent, multi-stakeholder consultative process “to explore and facilitate the sharing of legal and practical measures to improve access to remedy, judicial and non-judicial, for victims of business-related abuses, including the benefits and limitations of a legally binding instrument, and to prepare a report.”

In a statement, the International Chamber of Commerce expressed “deep concern that the adoption of a resolution for a binding human rights treaty on multinational corporations will undermine progress already made by the widely supported UN Guiding Principles on Business and Human Rights.”

Various stakeholders have different perspectives on the value of a binding business and human rights treaty.

Some opponents of a treaty fear that a treaty process could undermine the consensus that was built among stakeholders around the UN Guiding Principles and could hamper ongoing implementation efforts. They question how a treaty can succeed if the key states that are headquarters to the majority of multinational companies refuse to participate and support the treaty process. As with any human rights treaty, it would likely take decades to negotiate and only be binding to states that choose to become party to it and implement their treaty obligations in national law. Human Rights Watch and Amnesty International expressed concern that Ecuador’s resolution fails to address the operations of domestic companies and focuses exclusively on transnational corporations.

John Ruggie noted the impossibility of one single treaty covering the complex issues at the nexus of business and human rights. In a recent opinion, he noted: “The crux of the challenge is that business and human rights is not so discrete an issue-area as to lend itself to a single set of detailed treaty obligations…  It encompasses too many complex areas of national and international law for a single treaty instrument to resolve across the full range of human rights. Any attempt to do so would have to be pitched at such a high level of abstraction that it would be devoid of substance.”

Supporters, including a coalition of over 500 NGOs and social movements, point to the voluntary nature of the UN Guiding Principles and inadequate implementation of them to date by states and companies alike. They are seeking greater corporate accountability for rights abuses and better access to remedy for victims of abuses. Friends of the Earth Europe has argued that implementation of the UN Guiding Principles and a treaty negotiation process can proceed on parallel tracks. Supporters also note that a treaty could create a globally more level playing field for businesses currently operating in jurisdictions with differential laws on human rights enforcement.

As things currently stand, it appears that efforts to negotiate a treaty with widespread support will likely fail due to the lack of consensus and political will for a treaty process. Best case scenario is a treaty that enjoys little support, but that might set the stage for more scoped efforts to do such things as strengthen domestic legislation, elaborate on states’ extraterritorial obligations for their multinational corporations’ conduct, and improve mechanisms of remedy for victims of corporate abuses. In a worst case scenario, disagreements over the treaty negotiations will undermine the careful consensus that John Ruggie built among states, business, and civil society around the UN Guiding Principles, and will distract from further efforts to implement these norms.

UN Working Group Survey of Companies Reveals Some Counterintuitive Results

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The UN Working Group on Business and Human Rights, which was tasked by the UN Human Rights Council with promoting dissemination and implementation of the UN Guiding Principles on Business and Human Rights, recently released a draft report with results from a survey of 153 companies. The survey is meant to help the UN Working Group: 1. understand progress in the dissemination of the UNGPs; 2. highlight implementation motivations and challenges; and 3. understand the support companies need to meet their responsibility to respect rights. While the survey used a snowball sampling method based on the existing networks of the business associations involved in the survey (rather than a representative sample of companies), a wide range of small and large companies from 39 countries and an array of sectors were represented.

Interestingly, some of the findings run counter to conventional wisdom about companies’ commitment to respect human rights. One often hears that many companies are unaware of the GPs, with the exception of large, brand name companies in high profile sectors, such as extractives, ICT, apparel, and food and beverage. However, the survey found that three quarters of the respondents had heard of the Guiding Principles and that three out of five have a public policy statement on human rights. This result may be linked in part to the sampling methodology – and disappointingly only a little more than half of the companies had engaged in any effort to actively respect human rights. While three quarters of respondents have dedicated corporate responsibility/sustainability departments responsible for implementation of their human rights policies, nearly one in two companies indicated that moving from policy to practice remains a challenge.

Counter to popular belief that companies require a business case to respect human rights, when asked what motivates them to address human rights, “it is the right thing to do” – an ethical justification – ranked in the top three answers. Equally as interesting, and contrary to the idea that companies only act in response to public scandals, few respondents selected a negative issue in the company’s past as a driver of behavior. Finally, contrary to the popular belief that companies shun mandatory regulation in favor of voluntary regulation, over 45% of respondents indicated that government enforcement of local laws would support their efforts to respect rights, and one out of five indicated that legally mandated human rights due diligence requirements would be of value. Four respondents even indicated they would find value in a binding international treaty.

The bottom-line is that despite methodological shortcomings this survey assists in the development of a more nuanced understanding of what motivates companies to respect human rights and what challenges they face when attempting to do so. Relying on conventional wisdom will not get us far in fostering the dissemination and implementation of the Guiding Principles.