Topmost business and human rights challenge for 2010

What is the No. 1 priority among the human rights challenges that business and governments must address next year?

The London-based Institute for Human Rights and Business says that governments face this challenge as the topmost among 10: “clarifying responsibilities ‘beyond borders.’” The Institute explains why:

“Pressure is mounting to lift the ‘corporate veil’which shields parent companies from liability for activities of their subsidiaries through stronger national and extraterritorial legal mechanisms. How should governments exercise jurisdiction beyond their borders when companies based in their countries or their subsidiaries transgress internationally recognized human rights standards abroad? How should companies operate in countries with weaker protection of human rights?”

I agree with the Institute’s position and said so in the following comment I posted on the Institute’s Website today:

“This is indeed the topmost challenge. Specifically, for example, the U.S. government, as part of its duty to protect human rights, needs to determine what that duty means in the case of U.S. corporations operating abroad. Those global corporations have the right to the protection of the United States in their extraterritorial operations. At present that right has no matching legal responsibilities. It is time to correct that anomaly. Doing so would end the risks that the present vacuum now poses to the corporation itself.”

On Human Rights Day, December 10, the Institute launched a “top 10 for 2010” campaign “as a reminder of the ongoing and emerging governance gaps and operational challenges requiring action by governments, business leaders, and civil society,” says Mary Robinson, former UN High Commissioner for Human Rights and chair of the Institute’s advisory board. (For the full list of 10 challenges, see the Institute’s Website at http://www.instittehrb.org.)

“Extraterritorial jurisdiction” stands out in the No. 1 challenge. John G. Ruggie, UN Senior Representative for Business and Human Rights, calls extraterritorial jurisdiction “the elephant in the room that polite people prefer not to talk about.” Talk about it he did last month in Stockholm, where he gave the keynote presentation at the European Union Presidency conference.

In his lengthy analysis, Professor Ruggie made an important distinction between
-- “true extraterritorial jurisdiction,” such as criminal legislation on child sex tourism, which has a clear nationality link to the perpetrator as the basis of jurisdiction, and
-- “domestic measures that have extraterritorial implications,” such as a human rights reporting requirement for the corporate parent and its foreign subsidiaries as well, the jurisdictional basis for which is territorial.

In the expanding global economy, governments have increasingly relied on both types, but have been delinquent in applying either to the area of business and human rights -- even when governments are supporting a business enterprise, such as providers of export credit or investment insurance.

“And so we have the oddity of home states promoting investments abroad – extraterritorially, if you will – often in conflict affected zones where bad things are known to happen,” Ruggie pointed out, “but not requiring due diligence from companies because doing so may be perceived as exercising extraterritorial jurisdiction.”

The European Commission has launched its study of the issue. So has the Netherlands. Ruggie, as part of his UN mandate, hopes “to promote an honest and non-doctrinal discussion.”

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