"Giving a Human Face to the Global Market: The Business Case for Human Rights", Statement by the High Commissioner for Human Rights

WinConference ‘99

10 June 1999, Interlaken, Switzerland



I am very pleased to have been invited to address this prestigious gathering on the topic of Business and Human Rights.

Some of you may be asking yourselves: what do these two have in common?

The aim of business is readily understood. It is to get the best possible return for investors and shareholders.

But what is the relationship between human rights and business?

I would guess that there are still misapprehensions in the business community about human rights. I think some people would regard them as, at best, irrelevant as far as the business community is concerned or, at worst, as something which could interfere with business goals.

The main theme of my remarks today is that human rights are the concern of business men and women, whether working in small businesses or for large corporations.

The good news is that more and more business leaders are coming to accept this. A few years ago it would have been difficult to imagine a conference of business leaders giving attention to human rights. Today, more and more business leaders and their companies are incorporating human rights into their business strategies.

They know that there can be clear benefits for businesses which play an active role in respecting human rights.

Human Rights in the World

Firstly, I should explain a little about the Office I hold, that of High Commissioner for Human Rights.

The Office has only been in existence for 5 years and is the most recently created position at Under Secretary General level in the United Nations system. The creation of the post of High Commissioner for Human Rights arose from a growing appreciation of the central role that human rights play in international affairs. I took on this responsibility in September, 1997.

We are very familiar with one set of human rights, described as civil and political rights. Unfortunately these are probably the best known rights because abuses are so blatant. An example is Kosovo. I spent eleven days last month in the former Yugoslavia and its neighboring countries and heard many terrible reports from refugees from the conflict. Indeed, for most of the decade, the Balkans have been the scene of some of the most brutal violations of human rights in memory.

Of course, Yugoslavia is not the only example. Genocide has taken place again in the past decades in Rwanda and Cambodia. There are many serious conflicts occurring and human rights violations being committed, even as we meet, in different parts of the globe.

Every day my Office receives hundreds of appeals from victims of serious violations around the world. These include appeals relating to executions, torture, disappearances, violence against women, racial discrimination, detention without trial. We respond as best we can to these cases, both by monitoring Governments’ performances in the field of human rights and, increasingly, by preventive measures such as supporting the establishment of effective national human rights institutions and promoting regional cooperation.

One of the big changes over the past fifty years is that human rights legislation is now extensive and firmly established, starting with the Universal Declaration of Human Rights which was adopted 50 years ago, and on through more than 60 different international agreements. Few Governments would try to argue today that human rights are a purely internal affair.

The principal problem we face is the gap between theory and practice. Governments now feel it incumbent on them to sign up to international human rights treaties but many continue to flaunt their provisions. The hope is that, as monitoring and enforcement mechanisms improve, there will be a strong deterrent to Governments and individuals contemplating carrying out human rights abuses and a clear message that they will be answerable if they do.

I turn now to the second set of human rights, known as economic, social and cultural rights. Like civil and political rights, these are enshrined in the basic human rights document, the Universal Declaration of Human Rights. They include the right to work, the right to equal pay for equal work, the right to an adequate standard of living, the right to education, to food, clothing, housing and medical care. Violations of these rights take the form of hunger, poverty, exclusion, discrimination, lack of access to health care, education, clean water.

We can see how far away we are from realizing these rights if we look at some statistics regarding the plight of children. UNICEF reported at the last session of the Commission on Human Rights that every year some 12 million children under the age of five die from preventable diseases. In poor societies, children are the most desperately vulnerable with some 250 million children working at a brutally young age, while 130 million children - mostly girls - are not receiving education.

One of the objectives I have set myself since I took on this office is to place greater emphasis on economic, social and cultural rights which have tended to be neglected in the past. The abuse of social and economic rights can have as bad an effect on countries and peoples as assaults on civil and political rights. In some respects, the damage can be even more long lasting. We cannot expect civil and political rights to thrive if people have no access to the basic necessities of life. The two sets of rights are complimentary. They should both be vigorously championed and defended.

Notwithstanding the fact that our knowledge of what is happening in every part of the world has been greatly increased by the information revolution, the record is the same for economic, social and cultural rights as it is for civil and political rights: there is a huge difference between what the international community says and what it does. The gap between rich and poor both within and between societies grows ever larger. The World Bank estimates that the number of people living on a dollar a day will reach 1.5 billion this year. One third of the population of sub-Saharan Africa will not live past the age of forty. In Southern Asia half of all children under five are malnourished while two thirds of women cannot read or write.

There is a real danger of the world dividing into two, between those who enjoy standards of living that could only be dreamed of a generation ago, and those who go to bed hungry each night. We could be heading for a world made up of over-developed and never-to-be-developed States.

Role of Business

What can business do to improve the situation?

The first aspect I would draw attention to is the enhanced role which business plays in modern society. Governments do, of course, still possess wide powers over - and primary responsibility for - the well-being of their citizens. But their role is not as strong as it was half a century, or even 20 years, ago. We live in an age of mergers and giant corporations, of multinational companies which dominate whole segments of the global market. The phenomenon of globalization has shifted many of the vital decisions that affect peoples’ lives from the Cabinet room to the boardroom. The actions of companies, often taken far away, can have a huge impact on national economies, particularly those in the developing world. Business leaders wield more power than ever before.

With power comes responsibility.

Secondly, globalization has not only affected business trends. There is a globalization of knowledge which has, in turn, led to a globalization of concern. Civil society, through non-governmental organizations and their networks, making use of the freedoms of democratic societies, is taking up the human rights causes of individuals and groups from all over the world. Entering into concerted action, they can change the course of events. Witness the successful anti-land mine campaign, campaigns against the use of child labour in the manufacture of consumer goods and the mobilization of public opinion against the proposed multilateral investment agreement.

Thirdly, a cursory reading of the Universal Declaration of Human Rights shows that the relationship between human rights and business is extremely close, even in the day-to-day activities of a company. The right to own property, the right to equal protection of the law, the right to privacy, to freedom of movement - all are fundamental to doing business. You understand, better than anyone, the value of being able to do business in a society where all are equal before the law. Some of you have experienced situations where all are not guaranteed this fundamental right and have discovered how difficult it is to operate in such circumstances.

Or take the right to be free from arbitrary arrest or detention. Can business flourish in the long term in a country where staff are at risk of being imprisoned or deported for no apparent reason?

And what about the right of authors to protection of their scientific, literary or artistic productions?

In fact, business is rooted in law and it is not surprising that business law is a sophisticated science that attracts some of the best and the brightest minds.

I should say that I regard the business community as key partners in the drive to consolidate social and economic rights and I want to champion those rights to the best of my ability.

But business has responsibilities that extend beyond the priority task of protecting a company’s own interests. Business, as I have said, is a more powerful player on the international stage than ever before. The collapse of Communism and the liberalization of world markets have contributed to raising the private sector to a preeminent position, not only in commercial circles but in society as a whole. Business is at the heart of the contemporary world economic system of open markets and free trade. It is the principal generator of wealth and an important beneficiary of the returns generated.

Business can be a powerful force for good - or the opposite. The bad stories make depressing reading. Mistreatment of indigenous populations, illegal transportation and dumping of toxic waste, support for Governments that abuse their citizens’ rights - such abuses and many others have, unfortunately, been only too common.

Two abuses by big business that deserve particular mention are child labour and destruction of the environment. Surely the exploitation of children is one of the worst human rights abuses. The consumer has woken up to this and there is a growing resistance to buying goods produced by child labour. Yet some companies still sell goods made by children in circumstances not far removed from slavery. Companies have the power and the duty to clean up their act in this area. If business presents a united front, the exploitation of children can be curbed.

Businesses also have the capacity to cause terrible damage to the environment. This is not a new issue but the scale of the problem is. There is a growing awareness that unless we stop our profligate ways the damage to the earth’s environment will be irreparable and there will not be sufficient unpolluted resources to pass on to the next generation.

The positive side of the picture is the tremendous benefits which business can bring to societies if they go about it the right way. Corporations which are responsible, which respect the cultures they work in, which are not exploitative, which listen to environmental concerns can make a great difference to a country’s economy while at the same time achieving their primary goal of giving investors a good return for their investment.

Some business leaders may think that the political and social environment of the country they are doing business in is none of their affair and that whether or not there are human rights abuses is irrelevant. That is a short-sighted attitude and one that is not borne out by experience. The rights in the Universal Declaration contribute, both directly and indirectly, to the social and political conditions conducive to business. The payoff for observation of these rights is a stable business climate and a reliable workforce. Violations of human rights, on the other hand, represent obstacles to business. You can do business in situations were human rights are violated, but without knowing the risks, and taking action to mitigate these risks in the longer term, will it be sustainable? This is the essence of the ‘business case for human rights’.

Growing Interest of Business in Human Rights

In recent years the interest of business leadership in human rights has grown tremendously. Corporations and business associations contact my office asking for information and cooperation. Human rights in business is flourishing, through internal ethical statements, corporate codes of conduct, sectoral agreements on issues such as child labour in the clothing industry, or wider codes such as Social Accountability 8000, the International Code of Ethics for Canadian Business and the new Sullivan principles. And all the evidence points to the fact that the issue of human rights and business is increasingly business driven.

Diverse reasons bring business leaders to become active in human rights. Some because of bitter experiences when unacceptable conduct directly affected the bottom line. For civil society is scrutinizing corporate conduct much as it has watched the behavior of Governments in the past.

Others understand that the long term viability of their corporate activities and the future protection of shareholder value will be enhanced if the countries they are involved with respect human rights. And internally within a business, the feeling of employees that they are operating in an ethically sound environment enhances employee loyalty.

I welcome the upsurge of interest in human rights on the part of business leaders; I believe that it is a trend that is here to stay. There are signs all around us that companies are realizing the truth of the saying that “good ethics mean good business”.

Recently I noticed a newspaper advertisement for a company that handles the accounts of many major brand names. It read, in part

“The success of our brands rests on the long-term prosperity of the communities where they are enjoyed. We strive to play an active part in their social, economic and environmental well-being and to make corporate responsibility a mainstream activity throughout our businesses.”

I could not have written the script better myself!


But it must be more than a script. Businesses should integrate human rights concerns into every aspect of their activities and they should do so in a meaningful way. Human rights are not an “add on”, they should be central to companies’ approach to investment and doing business.


Compact for the new century

Against the background I have described, the United Nations Secretary-General, Kofi Annan, proposed to the world business leaders assembled in Davos last January a global compact of shared values and principles, to give a human face to the global market.

To underpin the global economy, he called on business leaders, through individual firms and through business associations, to embrace, support and enact a set of core values in three areas: human rights, labour standards and the environment. The values on which the compact would be based are contained in three international agreements; the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on fundamental principles and rights at work, and the Rio Declaration of the United Nations Conference on Environment and Development.


The proposed compact is built around a series of principles emanating from these documents: For human rights there are two:

- to support and respect the protection of international human rights within their sphere of influence; and
- to make sure their own corporations are not complicit in human rights abuses.


For labour there are four:

- freedom of association and the effective recognition of the right to collective bargaining;
- the elimination of all forms of forced and compulsory labour;
- the effective abolition of child labour;
- the elimination of discrimination in respect of employment and occupation.

And for the environment three;

- to support a precautionary approach to environmental challenges;
- to undertake initiatives to promote greater environmental responsibility;
- to encourage the development and diffusion of environmentally friendly technologies.

The immediate goal in implementing the compact is to challenge the international business community to incorporate in their mission statements universal values; to change management practices to achieve these goals; and to share their learning experiences.

My Office, and the other UN agencies concerned, will be happy to assist the private sector in incorporating the agreed values and principles into mission statements and corporate practices. We are also ready to facilitate a dialogue between your business and other social groups to help find viable solutions to the genuine concerns that they have raised.

We must be clear on what the compact is not. It is not a call on corporations to replace Governments in their legitimate areas of responsibilities. It is, rather, a framework of reference to guide business when devising mission statements and guidelines for practical operations. And it is not dictated by special interest groups, but carries the consensus of the world community.

Internalizing human rights principles in corporate business practices will not be easy. It must be addressed with care and sensitivity. The variables are many.

The type of firm, its activities, how it is structured, its history and past experience with ethics and social values.

The challenge is one directed to corporations. I would like to ask each business leader here to review his or her company’s values in light of the Universal Declaration to see how far they coincide and what must be done to make progress. A high level commitment of senior leadership will be needed, coupled with focussed work throughout the organization. The essential elements are a statement of values and a system of internal implementation and review.

Some companies have already succeeded, with detailed statements of principles and developed monitoring systems which provide good examples. Others, just beginning, should aim for deliberate and measurable progress. You may know of the project of the World Business Council for Sustainable Development to enable social responsibility issues to be incorporated in corporate strategic planning.

My Office stands ready to support your initiatives. The approach we have adopted is a catalytic one. We seek to encourage, stimulate and support corporate initiatives in this area. We are establishing cooperative relationships with business associations such as Business for Social Responsibility, the Prince of Wales Business Leaders Forum, The World Business Council for Sustainable Development, and others. This should provide a network of support for businesses interested in strengthening their social responsibility.

Our approach is an open one; we are involving not only business leaders and business associations in our work, but also trade unions and non-governmental organizations.

Statements of principle, ethical commitments and, human rights policies are first steps. Next, comes effective implementation. Monitoring systems are crucial because civil society will insist that corporations which make promises, keep those promises.

I believe my Office could prove to be a rich source of information for business. We receive a large quantity of information about the situation in various countries and many human rights practices. That information is analyzed and gives rise to country human rights profiles, indications of progress and of areas of danger and suggestions for improvement.

Converging interests and mutually supporting activities are leading to new forms of cooperation. Recently, an agreement was reached with the International Chamber of Commerce under which regular meetings take place between the ICC and the United Nations secretariat. Next month in Geneva, I will participate in a working meeting with the International Chamber of Commerce and the International Employers Organizations. And within the framework of the annual meeting of the World Economic Forum at Davos, a Business Consultative Group has been established to ensure high level contacts between business and the United Nations.

Conclusion

Business leaders should not underestimate the role they can play in shaping human rights as we approach the new millenium. We know that the 100 biggest companies have a combined annual revenue larger than the GDP of half the world’s nations; that General Motors, for example, has the same revenue as Austria, that industries such as textiles, food and the media and significant sectors of world trade are in the hands of a few corporations. And we know of the very direct impact of corporate policies on the lives of literally millions of employees situated in many parts of the world.

At Davos last January, I identified five “Do”s for companies in order to strengthen human rights. I will repeat them here as I think they are relevant:

_ Do increase your awareness of the responsibilities that come with business success and the globalised economy.

_ Do listen to the human rights concerns of shareholders and consumers.

_ Do join with other corporations in implementing meaningful, verifiable systems of business ethics.

_ Do respect the rights of your workers.

_ Do respect the rights and culture of the societies in which you work and those affected by your business activities.

I believe that the challenge of strengthening the links between business and human rights is formidable but that the trend in its favour is strong. To meet the challenge successfully will require that all of us work together and to the same agenda. I invite each one of you to join me in building a real partnership for human rights.

Thank you.