Social responsibility is not the first issue for which
corporations have begun to recognize the advantage of enforceable standards
with broad reach. A similar dynamic emerged after the U.S. governments adoption in 1977 of the Foreign Corrupt Practices Act, which made it illegal for
companies operating in the United States to bribe foreign officials. The U.S.
law was adopted in the wake of a domestic corporate scandal but, once in place,
put U.S. companies at a competitive disadvantage because their foreign competitors
remained free to continue securing business through bribery. In response, U.S. firms pressed forand gota multilateral treaty to even out the competitive
OECD member countries, following on the anti-bribery effort, should move to make their CSR standards binding. They should adopt a treaty under which they agree to enact laws similar to the OECD Guidelines that would be enforceable under national criminal or civil codes, carrying penalties such as fines or, in extreme cases, imprisonment. Like anti-bribery laws, this national legislation would bind any company operating in that nations jurisdiction.
In addition, the United Nations, which has already drafted non-binding norms on corporate conduct, might provide a forum to negotiate a universally applicable treaty. U.N. discussions on business and human rights have tended to be highly polarized, but a new approach may emerge. In 2005 the United Nations human rights body launched a two-year process to examine these issues. The Commission on Human Rights created a mandate for a high-level expert, appointed in July 2005 by the U.N. Secretary-General, to raise awareness of the human rights responsibilities of companies, look at the tough issues that have blocked progress to date, and map a way forward. An advantage of this U.N.-led process is that it is explicitly focused on human rights and brings together governments, companies, and concerned civil society groups from around the world.
The U.N. mandateif focused appropriatelyhas the potential to move beyond a purely voluntary approach toward effective human rights protection that combines elements of voluntarism with enforcement potential on core rights issues. It carries risks as well. Unless human rights are taken as the point of departure, the process could degenerate into a consensus around weak standards that are lower than those derived from human rights law and principles.
Though any such agreements or treaties will take time, it is crucial to begin to move down that road. The next few years offer a valuable opportunity to break the current impasse on the corporate accountability debate. Already, many corporations are engaged with other stakeholders in various processes to debate and refine CSR standards. These companies are working on several fronts to develop CSR standards and widen their application within and across different industries.
Given the momentum behind the CSR movement, the continuing proliferation of different standards, and the problem of an unequal playing field, it is clear that business has a vital interest in helping to define human rights norms. By doing so, it can help ensure that the resulting requirements are clear, practicable, and fair. Industry also has a direct stake in seeing that these requirements are applied to all companies, regardless of where they are based, and that they are effectively implemented and enforced. Ultimately, that means making the rules universal and mandatory.
Sometimes it pays to take the initiative. For hard-headed businesspeople, the smart move is to face up to global human rights standards early and make them work by making them stick.
Lisa Misol is a researcher with the Business and Human Rights Program at Human Rights Watch.