Business, human rights and income inequality

What role does business have in addressing income inequality?

Does the way in which we now ask this question risk a gradual shift that wrongly pulls the focus away from its proper subject, which is the duties and policies of the regulatory state? 

How did I arrive at these remarks?

1. Very few reasonable people would dispute that income inequality (globally, and within various countries and cities) is a major issue of our time.

2. Very few business leaders would dispute the trend towards greater interest in / scrutiny of the social impact of business practices by social, consumer, market / investor and regulatory stakeholders.

Yet it is not particularly obvious, putting 1 and 2 together as issues, that one aspect of being a responsible business is to take steps to address income inequality -- a highly complex policy puzzle and socio-economic phenomenon (insofar as I understand it myself... ), one not easily fixed by simply appealing, for example, for greater bona fide corporate adherence to national taxation regimes.

At very least, is it not obvious that compliance by business with fundamental human rights standards (or even some fulsome embrace of these norms, beyond mere compliance) would necessarily have any real impact on income inequality.

Approached in terms of the legal standards that comprise the global human rights architecture, sure, there are perhaps some issues for example around wage levels that would differentiate 'employment' from 'servitude'.

I am sure that a case can be made that better performance by business actors on recognised human rights standards might materially improve (narrow) the income inequality margins.

I just do not think that case has been made yet, or properly, or fully.

At very least, I think arguments that put 'business and human rights' and 'income inequality' together are at risk of positioning human rights as some kind of magic policy fix-all, as is often the case. So that we get arguments (in effect) that if one just applied a human rights lens to climate change = fix! (see here). Or if one just looked at income inequality from a business-human rights perspective = fix!

These comments of mine are no doubt full of holes, but are prompted by the otherwise unobjectionable and agreeable remarks of a leading scholar on business and human rights in a recent post in The Conversation: here.

Academics can (and sometimes should) be advocates. Yet they can (and often should) also be nit-picking and devoted to accuracy. In this post I am probably at risk of being seen at best as overly nit-picking, or at worst as an apologist for business.

Instead my only point is the nit-picking one that it hardly seems self-evident that if more businesses ensured their operations did not violate human rights standards (as I understand these in terms of present international law), that this would affect income inequality in a meaningful way.

Income inequality matters -- no doubt. But human rights vocabularies, standards, strategies, lenses, frameworks, etc., are not necessarily the secret to addressing this endemic and worsening issue. Nor necessarily is it the role of business to address that issue, lest we let the state and policymakers off the hook (and inadvertently ascribe far greater social influence to business than is proper or prudent).

The current fashion of focusing on business's own responsibilities can sometimes have that effect. On income inequality, it is ultimately the state that matters, and while we must demand all sorts of things of 21st century business and finance, it is the state first and foremost that has the duties and powers to attempt to address the problem of income inequality.

Jo

See previous more practical, less nit-picking posts on this issue in 2014 and 2015 around the time of Davos with its focus on income inequality: here.

Human rights, business and end users

We focus on social impact integrity in corporate supply chains, but what about corporate 'responsibility' for the downstream end-use made of a product or service?

I use the term 'responsibility' very broadly -- mostly in relation to 'liability' in the court of public / consumer / market opinion, rather than in any legal sense.

One manifestation of the shifting expectations of business in society is that some brand-conscious firms are paying far more attention to the use to which their products are put, in human rights impact terms. This is in addition to the more familiar concept of the attention to the human rights footprint of the 'upstream' supply chain through which they source components and ingredients for their products.

The sensitivities on this issue vary greatly by sector and firm and context -- this is true of corporate human rights impact generally.

One sector of interest is the pharmaceutical sector in relation to the supply of drugs capable of being used in state-administered lethal injections pursuant to a death penalty order.

Last week global pharma giant Pfizer became the last major firm to announce that it was taking steps to ensure that its products would not be procured for use in lethal injections (at least in the US).

This fell from concerns about the morality, if not the legality, of administering cocktails of drugs that did not always ensure a relatively swift and painless execution.

I blogged on this long-building issue some four years ago in relation to an EU-based firm exporting to the US: see here.

The more interesting question is whether this growing 'end-user due diligence' is capable of wider analogy to other products, or is specific to this issue...

Jo

The Governance Gap: a treaty on business and human rights?

One can be interested in promoting human rights in practice, yet question in principle the idea of a treaty process in this field.

 

Would the negotiation of some kind of binding international instrument on the human rights responsibilities of business (mainly, on the duties of states relating to these issues) really address the 'governance gap' in protection, promotion and remedy for human rights in this field?

This blog and perhaps its author are undergoing transformation -- hence the paucity of posts in 2016!

Meantime, however, here is a link to a paper published this week in which I question in various ways the enthusiasm of some academics, activists and diplomats for a single comprehensive treaty in this field... with a few caveats about the possible utility of a negotiating process.

The paper's abstract is below:

This working paper is the first to analyse whether insights into problems of ‘regulatory ritualism’ might inform contemporary debate on the merits and content of any new treaty based mechanism on the human rights responsibilities of business and financial actors. In 2015 a controversial inter-governmental working group held its first meeting towards  negotiating a future treaty. However, treaty proponents have not tied their arguments to any theory of regulatory effectiveness, nor addressed empirical arguments questioning the effectiveness of human rights treaties. This is problematic since some treaty proposals raise the spectre of state ‘compliance’ patterns marked by formalistic, empty rituals of verification. 

In setting up that possibility, the paper explores the status of debate on the merits or viability of a ‘treaty path’, canvassing the range of treaty options being proposed. Treaty opponents may over-state aspects of their case, such as the opportunity costs of drawn-out negotiations. Yet even assuming consensus is possible, treaty proponents have not shown how state acceptance of binding treaty obligations would necessarily address the ‘governance gap’ here. Proponents may confuse regulatory aims with the means for achieving these, placing undue faith in the preventative and remedial potential of binding international legal instruments.

 

Here are some links to previous posts on this topic: here.

Jo

Private sector engagement: the new lazy?

Is there a chronic laziness among those who work on getting business more involved in pressing social issues?

Have we gone from largely neglecting the private sector as a development, peace and human rights actor (my 2015 book Regulating Business for Peace) to an opposite extreme, where one just adds 'engage business' and the agenda will take care of itself?

Moreover, in swinging to this position of often unreal, under-explored and under-theorised expectations, is there a tendency to avoid issues just when they become their most 'pointy' and practical?

What exactly is meant when we implore policymakers, civil society and others to 'engage' with business in meeting the sustainable development and corporate responsibility (etc) agenda?

The immediate prompt for this first blog for 2016 was my reaction to reviewing a draft article on engaging business in the prevention of mass atrocities. Like so many other participants in debates on the changing role and expectations of business in society, the author fell down (in my view) by glossing over things just as they become their most practical and important.

In that author's case, it was a repetitive, unhelpful and ultimately lazy tendency to exhort the private sector to 'contribute' to peacebuilding and conflict prevention -- but without spelling out what activities and approaches that might involve in practice (much less in specific contexts).

Now its all very well and good to invite constructive engagement by business actors (and encourage policymakers to facilitate this).

But what does it mean for a business to 'contribute' to the SDGs, to peace-making or peacebuilding, to human rights protection and promotion? What does it involve, what should they be doing more or less of, or do differently, with whom, and how? Where does the context matter so much that one cannot talk of 'engagement' or 'contribution' without couching it in the specifics of settings whose dynamics differ so much?

In a 2014 blog post I delivered a similar rant, suggesting (with apologies to EM Forster) that it is not enough to repeat the magic spell of 'engagement' as if by saying 'only connect' we will witness the flowering and flourishing of innovative, meaningful schemes and initiatives whereby business actors fulfil the roles now increasingly expected or hoped of them in relation to the sustainable development agenda.

That earlier rant is here.

Private sector engagement, partnerships for development etc are very hard. We seem afraid to be honest, as if merely repeating the exhortations to partner will do the trick. A less lazy approach that offers some concrete ideas rather than fluffy 'contributions' will help underpin the rhetoric with some more credible analysis -- and action.

Jo

Climate change, business and human rights

The Paris climate talks are underway. What does this mean for the 'business and human rights' field?

Does presenting climate issues as human rights issues necessarily increase the urgency, likelihood or comprehensiveness of corporate and financial activity and proactivity?

One assumption of advocacy in the BHR field is that framing the social responsibilities of business by reference to recognized, established human rights standards lends a certain urgency, persuasiveness, or imperative to businesses to act.

The assumption is that describing business conduct as having a human rights impact or potential human rights dimension brings some special galvanising force to the equation that other approaches do not.

(It is also thought that overlaying gives more virtuous businesses a stable framework of standards against which to plan their efforts to create social value and reduce negative enviro, social and governance impacts. Of course, business responsibilities are not just framed in rights terms for strategic reasons, but for reasons of principle: business activities can violate or at least impair, but also protect or enhance, various fundamental rights).

There are very sound reasons for believing that, in strategic terms, addressing the societal role and impact of business and financial activity in the lexicon and vocabulary of human rights may have some profound and positive effects.

But is it obvious and undeniable that this is so?

Are there some ways in which deploying human rights concepts and language might undermine the goal of more rights-aware, rights-based, rights-compliant business and finance?

For instance, could framing business-oriented campaigns in human rights terms sometimes lead to a defensive, litigatory mindset rather than a problem-solving, cooperative one? Could labeling something a 'Business and Human Rights' issue make some politicians and others less likely to champion it, for example in more conservative polities, than labeling something a 'responsible business issue' (the same norms still apply)?

I just do not think it is self-evident that invoking human rights on an issue necessarily makes everyone stop and say 'Oh OK, well in that case, lets all fix this!'

I do not think it is necessarily the case in relation to the nexus of business, human rights and climate change.

As the Paris talks proceed, this post simply refers to a guest blog I wrote this week where I developed these thoughts: here.

Jo