WASHINGTON (IPS) — The United States will begin developing a national action plan on responsible business practices, following on several years of related advocacy from civil society.
The plan will detail how the United States will implement landmark U.N. guidelines outlining the responsibility of multinational businesses to respect human rights. While the United Nations has urged participating governments to draft concrete plans for putting into practice the guidelines, known as the Guiding Principles on Business and Human Rights, thus far only three countries have done so – Denmark, the Netherlands and the United Kingdom.
“What we’ll expect is what we’ve seen in the past, where industry is not going to want anything that’s binding.” — Human Rights Watch’s Arvind Ganesan
Yet on the sidelines of last week’s U.N. General Assembly, President Barack Obama for the first time announced that his administration would begin formulating such a plan.
“[W]e intend to partner with American businesses to develop a national plan to promote responsible and transparent business conduct overseas,” the president stated. “We already have laws in place; they’re significantly stronger than the laws of many other countries. But we think we can do better.”
Obama suggested that clarity around responsible business practices is good for all involved, including industry and local communities.
“Because when [companies] know there’s a rule of law, when they don’t have to pay a bribe to ship their goods or to finalize a contract, that means they’re more likely to invest, and that means more jobs and prosperity for everybody,” the president said.
A White House fact sheet noted that the plan would aim to “promote and incentivize responsible business conduct, including with respect to transparency and anticorruption.” It also stated that the plan would be “consistent” with the U.N. Guiding Principles and similar guidelines from the OECD grouping of rich countries.
Additional details on the formulation process are not yet available, though observers expect a draft next year. For now, however, advocacy groups are applauding the president’s announcement as preliminary but significant.
“This could end up being a very important step, but now we’ll be looking to see how the U.S. articulates how it expects companies to respect rights at home and abroad,” Arvind Ganesan, the director of the business and human rights program at Human Rights Watch, told IPS.
“More importantly, we’ll be looking to see whether this process results in any teeth – mechanisms to ensure that companies act responsibly everywhere.”
In 2011, the U.N. Human Rights Council unanimously backed the Guiding Principles, which are meant to apply to all countries and companies operating both domestically and internationally.
Yet thus far, formal adherence to the Guiding Principles has been only stuttering. In late June, the council called on governments to step up the process of drafting national action plans.
The United States – which endorsed the June resolution – has been a key focus for many in this process, given the overwhelming size of its economy and the number of multinational companies that it hosts.
Further, U.S. companies have stood accused of a broad spectrum of rights abuse, from extractives companies poisoning local water supplies to private security companies killing unarmed civilians. Often, of course, such problems impact most directly on poor and marginalized communities in developing countries.
The Guiding Principles mandate that governments take on the responsibility to prevent rights abuses by corporations and other third parties. States are also required to provide judicial “remedy” for any such abuse.
This is powerful language, but it remains up to governments to decide how exactly to implement the guidelines. Here, watchdog groups are less optimistic.
While Ganesan welcomes the actions by the three European countries that have developed implementation plans, he has reservations as to how substantive they are.
“Few of them have any real strength,” he says. “While they ask their companies to adopt the Guiding Principles, none of them have put together any kind of mechanism aimed at ensuring that happens.”
In the context of the U.S. announcement, then, there is a sense of caution around whether the United States will be able to put in place rules that require action from corporations.
