Tuesday, June 24, 2008

To Embed Human Rights in Multinationals

Australia’s Parliament has agreed to a policy fostering the integration of human rights into the operations of Australian multinational enterprises. The Parliamentary motion to that effect, adopted on June 23, had the support of the government and all political parties, major and minor.

The United States would benefit from a similar initiative. Australia’s decision grows out of factors that also resonate in the United States: an increased awareness 1) that some multinationals are engaged in behavior overseas thatis not tolerated at home, and 2) that present international rules don’t cope with the problem. (See “Where business and human rights intersect” by Andrew Hewett, executive director of Oxfam Austratlia.)

In Canberra the policy calls for “the development of measures to prevent the involvement or complicity of Australian companies in activities that may result in the abuse of human rights.” In Washington, legislation calling for the same thing probably could not be enacted this year, but a bill, and hearings on it, would serve as a helpful preparation for action by Congress and the new Administration next year.

Australia’s decision follows in time, and in spirit, a report on a “Framework for Business and Human Rights” adopted on June 18 by the UN Human Rights Council. That report, authored by Professor John Ruggie of Harvard, outlines a three-pronged plan to realize the State duty to protect human rights, the business responsibility to respect human rights, and the joint obligation to establish better access to remedies for human rights violations.

Under this plan, the most difficult challenge arises from what Ruggie calls “weak governance zones,” the areas where the government is unable or unwilling to exercise its authority and in which multinationals have expanded and prospered. The Ruggie report, recognizing the importance of filling this vacuum, puts all options on the table, including home State regulation of the multinational corporation’s foreign operations.

Traditionally, that option – “exercising extraterritorial jurisdiction” of business -- is a No-No. After extensive study by experts, Ruggie identified this consensus: international law does not require home States to regulate corporations abroad, but does not flatly prohibit it (i.e., permits it under certain circumstances), and there is an increasing tendency to encourage it.

As a stakeholder in the global economy, the government of Australia is beginning to take advantage of the latitude it has to exercise a duty it has at home and abroad. The United States, with a much larger stake, should do likewise.

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