Interview with Professor John Ruggie, Special Representative of the UN Secretary-General on business & human rights - film

Prof. John G. Ruggie, Special Representative of the UN Secretary General on Business and Human Rights, interviewed by John F. Sherman, III, Co-Chair of the IBA CSR Committee

1. UN Mandate

John F. Sherman, III (JS): [1:00] When you came onto the scene in 2005, there was apparently no consensus at the UN on the relationship between business and human rights. How did your mandate come about, and why were you selected for this role?

Prof. John G. Ruggie(JR): The mandate originated from deep divisiveness between human rights advocates and the business community. The previous approach through the Norms would have imposed the same human rights obligations on business that states carry—a distinction that would have been merely symbolic, separated only by a slippery slope of sphere of influence. In that framework, companies had secondary responsibility while governments had primary responsibility. Because there was no consensus, after a year of stalemate, the matter was referred to me.

JS: [2:47] In your initial report to the UN Human Rights Council in 2008, you discussed the concept of "global governance gaps created by globalization." How did this idea inform your assessment of the scope and scale of the problem?

JR:As the debate stood at that point, we couldn't move forward without recognizing these regulatory gaps. An exclusive focus on corporate impunity—which human rights advocates were urging—was too narrow. We needed to involve many different actors: states, laws, voluntary initiatives, and others. It's a much bigger puzzle to assemble than simply attributing blame to companies.

JS: [4:30] You have resisted the idea of prioritizing certain types of human rights that companies need to worry about. Why is that?

JR:Many businesses want a definitive list—a clear checklist of rights they must respect. But we can't provide that. Consider the Norms: when they assembled a legally binding code, it included sixteen rights. But just the day after the Norms were completed, internet privacy was discovered as a critical issue, and it wasn't on the original list of sixteen. We found that there are no human rights that a company cannot impact in some way. Therefore, companies should conduct due diligence on all rights, even though in particular sectors—like mining—the focus will be on specific rights most material to that industry.

Even within mining, there are surprises. For example, when a mining company digs a hole in the ground, fifty thousand people may migrate to the site. This creates unanticipated social programs and needs. It's a very dynamic situation.

JS: [6:31] What is the current focus of your work on the mandate?

JR: We have taken a phased approach. The first phase was fact-finding: what are the major problems? Where do they most likely occur? What existing standards and best practices are already in place? We've conducted thirty consultations to gather information.

In the second phase, we proposed a framework in 2008 to structure the debate. That framework is "Protect, Respect, Remedy." The Human Rights Council endorsed it and then asked me to operationalize it—to come back with more specific recommendations for how it would actually work.

2. Lawyer in business and human rights

JS: [8:08] Before we delve into the substance of your mandate, let's discuss the role that lawyers play in the business and human rights space. When you first engaged with this topic, what were your initial thoughts about the impact that lawyers advising business have on human rights?

JR:Lawyers were on the same learning curve as I was. This was a new area for most of them. What struck me was the impact of lawyers in shaping different corporate cultures. I encountered a broad spectrum of views: some firms believed in litigating certain issues until hell freezes over, while others believed there must be a better way than litigation. There was genuine diversity of thinking.

JS: [9:32] Do you see lawyers as having a different role under your mandate?

JR:The legal community is much more up to speed now. Business and human rights is essentially where environmental law was twenty years ago—there's a learning curve. Lawyers are much better equipped than they were five years ago, and there's been great collaboration between the mandate and the legal profession.

JS: [10:13] I understand that law firms have advised you on your mandate work. How did you select them, and what specific contributions did they make?

JR:Initially, two law firms volunteered to help me. More recently, we conducted a major consultation on the impact of corporate law and securities law on business and human rights across forty jurisdictions. We examined issues like directors' duties, reporting requirements, and other legal mechanisms.

JS: [11:22] Your framework is called "Protect, Respect, Remedy." Can you walk us through the three pillars?

It consists of three pillars. The first is the State Duty to Protect. This is based on established international law. The specific state obligations depend on the type of right involved, but a common element across all rights is that states have a duty to ensure the enjoyment of human rights by people within their jurisdiction. This means states must protect people from abuse by the state itself and by third parties. States generally acknowledge they have this duty, but they haven't fully thought through all the implications.

[13:00] The second pillar is Corporate Responsibility to Respect. I should note that responsibility is different from legal duty. Under current international human rights law, companies do not have direct legal duties imposed on them. However, the responsibility to respect is a norm that exists everywhere; it means not interfering with rights. All voluntary corporate initiatives recognize this principle. But how do companies demonstrate that they actually respect human rights? We've established that companies should maintain a human rights due diligence process that incorporates human rights considerations into their decision-making.

[14:30] The third pillar is Access to Remedy. When things go wrong, there must be mechanisms for remedy. Importantly, most major human rights violations start out very small; they begin as minor infractions that are ignored. If companies can prevent this escalation through early grievance mechanisms, that's tremendously important. You don't want situations to reach crisis levels. We're also concerned about access to judicial systems. This is a particularly difficult problem for workers who have no state inspector or authority to complain to, and for poor communities that lack access to law firms and the legal system.

JS: [16:24] Some argue that your framework imposes new responsibilities on business that could slow economic recovery from the recession. How do you respond to that?

JR: There's no evidence to support that concern. In fact, prevention is better and cheaper than cure. Costs for companies are already rising rapidly due to stakeholder risks—community opposition, litigation, reputational damage. Goldman Sachs has studied this. The meter is ticking on the costs of inaction. The responsibility to respect offers a double benefit: it benefits both the company and society.

3. Impact of the framework on the legal profession

JS: [18:34] Law firms are large entities that have a significant impact on society. Do they themselves have a responsibility to respect human rights? Should they conduct human rights due diligence on their own operations?

JR:Yes. Law firms must keep up with the latest developments in this area. They can't fall back on old methods and assumptions.

JS: [19:40] Let's discuss the first pillar of your framework in more detail. You've said that governments can do a much better job in addressing and preventing corporate-related human rights abuses. You've pointed to a specific example: arbitration by European investors against South Africa. In that case, the investors argued that South Africa's Black Economic Empowerment Act effectively expropriates their investment. What concerns you about this from the perspective of your mandate?

JR: It demonstrates how poorly governments connect the dots. States need to be aware of the human rights impact of every contract they sign and legislation they enact. I'm not blaming the company in that case—I'm pointing to the country for failing to conduct its own due diligence before signing the investment treaty.

JS: [22:00] Another area you've identified is business-related human rights abuses in conflict zones, such as the Democratic Republic of the Congo, where mining of minerals fuels warfare by rival armed groups. What is your mandate doing in this area?

JR: Conflict zones present the most difficult context for business and human rights work. Many companies treat them as law-free zones, and voluntary initiatives are problematic in these settings. It's clear that we need stronger involvement by governments. If a company is making a high-risk investment, there's often an export credit agency involved—a government entity supporting the investment. What kind of due diligence was required of the company? We also need to examine the impact of neighboring countries that transship minerals and fuels.

I once asked the CEO of Anglo American whether there's anywhere on earth a company like his wouldn't go. He said, "We won't go where we can't live up to our own business principles." As a result, they didn't operate in the DRC at that time.

JS: [24:32] You've also said that states need to incentivize companies to develop cultures that respect human rights. What haven't states done, and what do you think they can do?

JR: Demanding human rights oversight and control systems is one effective approach. Examples include the US Federal Sentencing Guidelines and the Australian Criminal Code. This kind of incentivization actually works for companies because it brings the company into the task of regulating itself while maintaining external oversight of internal control mechanisms.

5. Responsibility to respect human rights: the second pillar

JS: [25:55] The second pillar of your framework is the business responsibility to respect human rights. You've made clear that this is a responsibility, not a legal duty. Yet you've also said it's not a "law-free zone." How do you reconcile these two statements?

JR: Companies are not currently subjects of international human rights law. However, some aspects of international human rights law are incorporated into the domestic laws of many countries. We're reaching the point of near universal jurisdiction with respect to complicity in certain international crimes. For example, the Alien Tort Statute in the United States has established this principle. Beyond that, in any country that has ratified the Rome Statute and incorporated it into domestic law, the theory would allow for bringing a complaint against a company for violation of international human rights law. For these reasons, it's prudent for companies to treat complicity in international human rights violations as a legal compliance issue.

JS: [28:32] You've also said that the responsibility to respect means not infringing on human rights. Is this merely a passive duty—simply refraining from harm?

JR:No. It's active. If a company has an anti-discrimination policy, it cannot simply publish it and consider the matter closed. The company must conduct training seminars, establish monitoring mechanisms, and create dispute resolution mechanisms. Active implementation and oversight are required.

JS: [29:32] You've said that companies demonstrate their responsibility to respect human rights through due diligence. To many M&A lawyers, due diligence is typically a one-time activity to assess the risks of a particular transaction. Is human rights due diligence what you mean?

JR: No, it's quite different. Human rights due diligence is an ongoing, dynamic process. When a mining company enters an area, for example, that creates major changes in the community. It has an ongoing effect that needs to be assessed in real time throughout the project. It's not a snapshot—it's a movie.

JS: [31:30] What's the role of NGOs in this framework?

JR: Several roles. NGOs contribute through research, advocacy, and community engagement strategies.

JS: [31:50] Some have suggested that the formulation of a business responsibility to respect human rights doesn't go far enough—that you should have included a responsibility to promote human rights. What's your response?

JR: It's fine for companies to promote human rights if they choose to do so. However, there should be a universal baseline below which companies should not fall. That baseline is the responsibility to respect. It's already quite complex in itself. The question of promoting human rights is contingent on many factors: What rights does the host country allow a company to promote? What constraints do companies face in promoting rights? What does it do to the state's own capacity to promote rights? Does it enable the state or cause it to step back? The responsibility to respect is the appropriate universal baseline for all companies globally. Everything beyond that is contingent on specific circumstances.

6. Access to remedy: the third pillar

JS: [33:45] Now we come to the third and final pillar of your framework: the need for greater access to remedy. In recent years, there's been significant litigation against multinational companies under the Alien Tort Statute, which permits aliens to sue in US courts for violations of the law of nations that occur outside the US. There have been major settlements and some jury losses for plaintiffs in cases alleging that companies aided and abetted human rights crimes by third parties. The US Supreme Court has not yet ruled squarely on this issue. How has the ATS influenced your thinking about judicial remedies for human rights violations?

JR:The Alien Tort Statute has clearly raised the visibility of these issues and gotten the attention of companies. However, the ATS isn't a complete solution and can't carry the entire world's burden. It's a quirky statute that is unique to the United States. In countries that have ratified the ICC statute and incorporated it into domestic law, the door is theoretically open to bringing criminal sanctions against companies for violation of international human rights law, although that hasn't happened in practice yet.

JS: [36:09] Let's discuss complicity. What state of mind is necessary to establish complicity? You've been quoted on this in legal briefs.

JR: We surveyed most legal authorities on this question. The prevailing view is that knowledge that your act substantially assists a criminal act is sufficient to satisfy aiding and abetting standards.

JS: How do the responsibility to respect and complicity play out in connection with a company's relationships with third parties?

JR: The majority of cases brought under the Alien Tort Statute involve third parties. For example, security forces might use violence to clear land so a company can operate, or security forces might prevent villagers from accessing their land. If a company knows this is happening and contributes to it—for instance, by lending equipment to drive out villagers—they could be complicit. This principle also applies to suppliers and other third parties.

JS: [39:00] Many people who claim to have suffered business-related human rights abuse lack access to legal services or cannot afford them. What does your mandate have to say about this issue?

JR: We're exploring solutions, but in most situations, judicial trials and punishment remain a small part of the overall solution. In many countries, judicial systems are weak, not fully functional, and will take decades to fix. So we must work harder on non-judicial grievance mechanisms, which can be implemented and improved in the short term while we build up judicial systems and remedies over the longer term.

JS: [40:30] I'd like to turn now to the OECD Guidelines for Multinational Enterprises, which apply to the thirty countries with the largest economies in the world. As you know, the OECD has a country-based, non-judicial dispute resolution procedure called the National Contact Points for allegations that companies have violated the Guidelines. The UK Contact Point has used your framework in resolving allegations, and you and others have called for improvements in the process. What would you like to see changed?

JR: Two major improvements are needed. First, there are no common performance requirements across National Contact Points. Some work well, while others are virtually invisible—you can't even find them. We need common performance standards across all NCPs. Second, there's no consequence to adverse decisions. For instance, Afrimex was found by the UK National Contact Point to have contributed to child labor. In theory, the company could have returned to an export credit agency the next day to request financial support. There should be at least a probationary period during which a company must demonstrate that it has put in place systems to prevent the recurrence of the abuse.

JS: [42:47] Finally, you've said that companies need to support access to non-judicial grievance mechanisms. Some people worry that this will simply open the floodgates to frivolous complaints. How would you respond to that?

JR:The actual experience tells a different story. When a company first adopts a grievance mechanism and holds its first meeting with the community, they can't fit everyone into the room. At the second meeting, they can still fit everyone. By the third meeting, room is half full. At the fourth meeting, only a few people attend. Once a point of legitimacy is reached and people's concerns are being taken seriously, people stop filing complaints.

JS: [44:39] What's in it for the company, besides just letting people vent their frustrations?

JR:Grievance mechanisms prevent escalation, which is very much in the company's interest because escalation is bad. The worst cases have begun as small ones that were simply ignored. I spoke with a Jesuit priest in Peru who successfully pressured a company to close a mine. He told me, "I kept coming to the company with small problems, which they ignored. So I had to escalate—I had to create a bigger one." That's a perverse incentive structure to create, and grievance mechanisms prevent it.

That said, being open isn't without risk. For instance, there's the concern of harvesting unflattering information for use by adversaries.

[46:22] Life is inherently risky. It's all relative. Companies that are relatively open and deal with risks they discover are in much better shape. Consider Gap in India. When a child labor problem surfaced in their Indian operations, Mary Robinson came to the company's rescue. Nothing is perfect, but they didn't hide the problem—they had a system in place, and they were addressing it.

7. Reaction to the framework

JS: [48:10] Some NGOs have suggested that the mandate ought to have a complaint investigation function. What is your response?

JR: My job is to devise a generally agreed roadmap that enjoys broad consensus among all parties. That role doesn't mix well with finger-pointing at particular companies and countries. Additionally, I simply couldn't handle enough complaints to make a meaningful difference.

JS: [49:30] Why not pursue a treaty instead?

JR:I wanted to identify the forest, not the trees. The debate needed to start with a common understanding. There was no shared knowledge base or common vocabulary for the debate. My sole recommendation to the Human Rights Council was to endorse the framework, which they did.

JS: [50:32] Will the Human Rights Council be working with the ILO regarding forced labor and indebted migrant labor issues?

JR: Even as we operationalize the framework, we've worked closely with other international organizations—ISO 26000, the OECD Guidelines, the IFC Performance Standards. The ILO is interested in grievance mechanisms in contexts where unions are absent. We are expanding both horizontally and vertically. These other organizations are force multipliers because they have their own constituencies and policy instruments.

8. Overall reaction to the framework

JS: [52:00] What has been the overall reaction to your framework?

JR: It's been heartening because there was such a vacuum in the field. Companies, business associations, human rights organizations (eventually), individual countries, and the EU declaration have all been very supportive.

9. Changing the game: from naming and shaming to knowing and showing

JS: [53:00] What do you mean by changing the game to "knowing and showing"?

JR: The prevailing game in the activist community is naming and shaming—identifying wrongdoers and publicizing their failures. My framework offers a better game for companies. Companies should establish internal systems that enable them to know what's happening on the ground and show that they're addressing problems. By doing so, companies take ownership of the game and stop being merely reactive to external pressure.

10. BASESwiki

JS: [54:00] What is BASESwiki?

JR: It's a very important mechanism—a wiki-based collection of available grievance mechanisms, advice, and resources for companies implementing the framework.

11. What's next?

JS: [55:00] What's next for your mandate?

JR: First, we'll continue the horizontal effort of pushing the framework out to all the actors who will do the work—companies, governments, and institutions.

Second, we'll deepen and drill down into operationalization. The final product will be a set of guiding principles for the Human Rights Council to indicate what's expected of whom and when.

I signed up for a two-year mandate in 2005. It's now going to end in 2011. That's it for me. I gave at the office.