8 June 2017
Mr President, Excellencies, Distinguished Delegates,
I am honoured to present the reports of the Working Group on the issue of human rights and transnational corporations and other business enterprises to the Human Rights Council.
You have before you the four reports we present to this session of the Council (A/HRC/35/32; A/HRC/35/32/Add.1; A/HRC/35/32/Add.3; A/HRC/35/33). The two thematic reports focus on small and medium-sized enterprises and best practices and how to improve on the effectiveness of cross-border cooperation between States with respect to law enforcement on the issue of business and human rights. The addendum reports include our observations and recommendations from our 2016 country visits to the Republic of Korea and Mexico.
I would like to deliver to you a brief overview of each report, highlighting some of the major key themes and observations, and to also briefly update you on other activities of the Working Group.
Thematic report on small and medium-sized enterprises
Firstly, allow me to say a few words about the report that focuses on small and medium-sized enterprises (SMEs). This report aims to serve as a starting point for discussions on how these enterprises can scale up implementation of the Guiding Principles on Business and Human Rights. It represents an initial assessment of an important but complex subject, in the hope of prompting further discussions among stakeholders on ways of supporting and strengthening the ability that small and medium-sized enterprises have in meeting their responsibilities to implement the Guiding Principles.
After a general overview of SMEs, the economic environment in which they operate and their human rights responsibilities, the report underlines the observation that SMEs make up the large majority of business enterprises globally and are of paramount importance to inclusive economic development.
The report observes also that although small enterprises may have less capacity to exercise human rights due diligence, as compared to larger companies, yet simple steps can be taken by SMEs to respect human rights, and the Guiding Principles set out the path to follow.
The report explores some of the opportunities for SMEs to implement the Guiding Principles and provides an overview of existing tools and guidance, as well as of the roles of specific stakeholders, including business associations, trade unions, international organizations and Governments, and examples of good practice. The report also elaborates on SMEs’ roles within global supply chains and on how larger businesses may be in a position to assist smaller business in their supply chains with their business and human rights responsibilities.
Whilst identifying the actions that key stakeholders can make through the implementation of the Guiding Principles the report notes that there are certain strategic opportunities for SMEs. These include their ability to lift individuals, families and communities out of poverty, their greater understanding of local cultural and political contexts, their flexibility in reacting and adaptation to the social environment, and their ability to break down barriers to marginalized groups to enter labour markets who have traditionally been excluded from employment in large businesses in some States.
The Working Groups found, through undertaking this report, that there was a low level of awareness by SMEs of the Guiding Principles on Business and Human Rights and that there is a need for more accessible and user-friendly information and practical tools which are tailored to the realities faced by SMEs. There is also an urgent need for leadership, both from governmental institutions and agencies. Yet a main challenge is that awareness of the Guiding Principles Government remains low among the government agencies that support SMEs, while most larger business enterprises are still at an early stage of their journey to implement the Guiding Principles. Processes to develop a national action plan on business and human rights offer an opportunity to raise awareness of the Guiding Principles, to clarify that they apply to all business enterprises, and to stress the importance of also bringing on board SMEs – which constitute the majority of business and employs the majority of workers globally.
Thematic study on cross-border cooperation in law enforcement
I will now move on to the Working Groups other thematic report, which seeks to highlight best practices and how to improve on the effectiveness of cross-border cooperation between States with respect to law enforcement on the issue of business and human rights.
The UNGPs encourage States to set out the expectation that all business enterprises domiciled in their jurisdiction respect human rights “throughout their operations,” and recognize that one way of achieving this is through “criminal regimes that allow for prosecutions . . . no matter where the offence occurs,” so long as there is a “recognized jurisdictional basis1.” The report provides a road map of the key tools that could be used in instances where States are presented with cases of cross border crime generally. Such tools include the use of joint investigation teams, and the creation of informal professional networks of prosecutors.
The report examines how States have cooperated successfully in areas related to criminal law and human rights, as well as how States have worked together effectively to deal with international crimes more broadly. While the examples highlighted are few, existing models in this context could be deployed more proactively when economic actors are involved in international crimes and could also be used when businesses are implicated in general cross-border human rights abuses.
The report highlights areas involving transnational harm and economic actors where States have deployed best practices to successfully investigate and prosecute cross border cases. These cases centred around five key areas: trafficking in persons; environmental crimes, which included the unlawful movement and disposal of hazardous substances and wastes; wildlife and forestry crimes, which includes illegal logging; and transnational bribery and corruption.
The report highlights the need for willingness by law enforcement to explore all potential legal avenues for investigating and prosecuting misconduct by economic actors, be it through the lens of international crimes, domestic criminal or administrative offences, or the other types of crimes. For example, an international crime can also be prosecuted as a domestic crime involving murder or false imprisonment. The Working Group found that States should adopt an appropriate and enabling legal framework that not only prohibits misconduct by economic actors that infringe on human rights but also provides a basis for cooperation between States’ law enforcement agencies when violations occur in cross-border cases.
Furthermore, an underlining issue is that of mechanisms that allow for easy collaboration an exchange of information, such as online evidence sharing platforms, and the formation of regional networls. It is important for law enforcement agencies to exploit existing networks, such as the International Criminal Police Organization (INTERPOL), the European Police Office (Europol) and the Chiefs of Police of the Association of Southeast Asian Nations (ASEAN) or develop new regional networks with an aim to share information and best practices and build trust amongst agencies in different territories. The Working Group also notes the importance of sister UN organiations such as the UN Office of Drugs and Crime, which has developed useful tools and resources to facilities cross border cooperation between States.
Despite numerous allegations implicating business in classic human rights violations and international crimes, investigations and prosecutions against companies are almost non-existent. States are encouraged to look to the strong body of best practices emerging from the other cross border cases highlighted in the report, to devise strategies for addressing this topic. Another recommendation is that if cross-border business-related human rights abuses amount to international crimes, those should be treated the same as other international criminal cases and States should use the existing tools at their disposal to investigate them fully, within existing specialized units if they exist.
The Working Group now calls on States to demonstrate leadership. We look forward to cooperating further with those States wishing to embark on this path.
Let me now turn to the country visits carried out by the Working Group. This year, we have conducted a visit to Canada (23 May – 1 June 2017), and next month we will visit Peru (10-19 July 2017), and we will report to the Council on these visits in June next year.
At this session, we are presenting the report on visits to the Republic of Korea (23 May - 1 June 2016) and to Mexico (29 August – 7 September 2016), and I would like to first of all thank the Governments of these two countries for their support and cooperation.
While not going into details about the specific recommendations, which are set out in the reports, let me just highlight a few main observations.
During our visit to the Republic of Korea, we were encouraged by Government’s commitment to implementing the Guiding Principles and to addressing exiting protection gaps.
From the information gathered, one main observation is the need for larger companies to more effectively oversee their supply chains, and to avoid practices of outsourcing human rights risks. We also observed broad challenges related to workplace safety, gender discrimination in the workplace, and the situation of migrant workers.
Companies based in South Korea increasingly operate overseas, and we identified a need for further guidance and support from the Government, including through its embassies, to ensure that Korean companies respect human rights in their operations abroad.
One feature of the business landscape in South Korea is the way a few large conglomerates dominate the economy, while a striking 3.4 million small and medium-sized enterprises make up 99 per cent of all businesses and account for 88 per cent of employment. We learned about Government initiatives to address the asymmetrical relationship between large companies and their small and medium-sized suppliers, and encouraged the Government to integrate human rights criteria into those efforts.
Finally, the Working Group welcome initial steps taken, with the support of the National Human Rights Commission, towards developing a national action plan on business and human rights. We encourage the Government to pursue this path through inclusive multi-stakeholder dialogue.
Turning to our visit to Mexico, we also appreciated the Government’s commitment to implement the Guiding Principles.
One main observation made in the report relates to inadequate prior consultation with affected communities in the design and implementation of large-scale projects, often affecting indigenous communities.
The Working Group also identified a need to strengthen oversight and assessment of environmental and social impacts to avoid or mitigate adverse impacts of business activities on human rights.
Another issue was that of widespread cases of intimidation and harassment against community leaders who speak out against specific business operation and projects. Particularly striking was the silence of businesses in response to such attacks, even when directly linked to their operations.
Other main challenges related to the precarious situation of temporary contract workers and day labourer working on farms, persistence of child labour, and gender-based discrimination in employment.
These concerns are well known to the Government, and we learned about several initiatives to address them. In particular, we are encouraged by the ongoing process of developing a national action plan on business and human rights. The way the Government has involved civil society in preparing a baseline assessment is a good practice, and it will be critical to maintain the plan’s inclusive, multi-stakeholder nature moving forward.
Other main activities
Excellencies, ladies and gentlemen,
Apart from the four reports submitted to the Council, the Working Group has been undertaking several other activities over the past year in its efforts to scale and speed up implementation of the Guiding Principles on Business and Human Rights.
At the international level, the Working Group continues to promote convergence and coherence among global governance frameworks that address business conduct and sustainability of supply chains. We have been calling on the leaders of the G20 to explicitly commit to protecting human rights in global supply chains and align with the Guiding Principles in the declaration they will adopt next month. The declaration by G20 labour and employment ministers issued last month was a positive step in that regard. We have also welcomed the revised ILO MNE Declaration released in April, which aligns closely with the Guiding Principles. A key issue is the need to ensure that the private sector’s contribution to achieving the SDGs is founded on respect for human rights. The Guiding Principles provide a key reference, and we will continue to engage with other UN actors, states and the business sector to promote alignment.
At the national level, we have been calling on states to develop national action plans to implement the Guiding Principles, in line with Council resolution 26/22. We welcome the recently launched action plans in France, Luxembourg and Poland. Last week, we contributed to a regional conference organized by UNDP and others to promote national action plans in ASEAN, where the Government of Thailand committed to develop an action plan to implement the Guiding Principles. We are keeping track of such developments through a dedicated web page and invite states and all other stakeholders to submit information about relevant progress.
We have also been encouraging and welcoming policy and regulatory developments aimed at setting out the expectation that all businesses respect human rights and conduct appropriate human rights due diligence. For example, in 2017 we have seen regulatory developments in countries such as France and Indonesia that incorporate elements of the Guiding Principles. We are also awaiting the outcome of Australia’s inquiry into the establishment of a Modern Slavery Act; and we welcome ongoing efforts to develop an African Union Policy on Business and Human Rights, following up on a commitment made at the African Regional Forum on Business and Human Rights that the Working Group convened with the support of the African Union Commission in 2014.
In our work we have also given specific attention to some of the most pressing business and human rights challenges:
Access to remedy is a major issue, and the report before you on cross-border cooperation importantly addresses the need to ensure more effective access to remedy for victims of abuse. Our report to the General Assembly this year will look further into the elements of effective remedy, including by building on OHCHR’s policy recommendations for improving access to judicial remedy. The annual Forum this year will also have a key focus on access to remedy and seek to focus on practical solutions across the different types of mechanisms – both judicial and non-judicial – that are covered by the Guiding Principles.
Another major issue is the safety and security of human rights defenders who are addressing impacts of business operations and investments. The role of business has been called into question with respect to its role in contributing to attacks against human rights defenders, but also its role in helping to protect defenders and support human rights. The Working Group is now undertaking a project to consult with stakeholders and experts, including in cooperation with the Special Rapporteur on human rights defenders, ultimately aimed at developing guidance for business and identifying example of good corporate practice.
Other areas that we will be looking into over the next years are the needs for a stronger focus on gender in the business and human rights agenda, including by strengthening gender aspects in NAPs, corporate human rights due diligence and efforts to enhance access to remedy.
We are also monitoring efforts to apply the Guiding Principles in specific sectors. For example, we have been engaging with a group of major global banks that come together in the informal Thun Group, where we have been seeking to ensure that concepts and understandings of banks’ human rights responsibilities are aligned with the Guiding Principles. With regard to sectoral approaches, we have also taken note of the innovative efforts still evolving in the Netherlands through the multi-stakeholder sector agreement processes.
Another main activity, of course, was the 2016 annual Forum on Business and Human Rights, held in November.
The 2016 edition saw more than 2000 participants from over 130 countries, with higher participation from both business and capitals than in previous years. It is not possible to do justice to the breadth of the dialogue here, and I refer you to the overview of key messages available on the Forum web page. Also, a presentation on the Forum will be given by OHCHR next week.
In closing, we would like to thank the many thank the many States, private sector organizations, civil society organisations, human rights defenders and all individuals that support our efforts and work to advance the business and human rights agenda around the world.
I thank you for your attention and look forward to our discussion today.
1. A/HRC/17/31 (2011), annex, Guiding Principle 2 and commentary (emphasis added).