United States: The Advent Of Privately Developed Corporate Human Rights Reporting Frameworks

Last Updated: September 10 2015
Article by John Kloosterman, Stefan Marculewicz and Michael G. Congiu

The United Nations adoption in 2011 of the UN Guiding Principles on Business and Human Rights ("Guiding Principles") signified a growing consensus that corporate entities have a responsibility to account for their operations' impact on human rights. In the time since the Guiding Principles' adoption, there has been a flurry of activity within civil society, and at government and company levels, regarding appropriate implementation.

One product of this activity has been the development and marketing of various potentially competing reporting frameworks to measure companies' commitment to implementing the Guiding Principles. However, these frameworks present challenges for companies.

Two examples are the UNGP Reporting Framework that was recently launched by the Human Rights Reporting and Assurance Frameworks Initiative (also known by the acronym "RAFI")1 and the Corporate Human Rights Benchmark (the "Human Rights Benchmark").2 The UNGP Reporting Framework and the Human Rights Benchmark are in relatively nascent stages of implementation and development. Both have expanded upon commonly known reporting frameworks such as the Global Reporting Initiative ("GRI"). Further, they each present some competing requirements.

Nevertheless, the frameworks, and the broader extension of formal reporting compliance with the Guiding Principles, present challenges regarding whether "human rights" or "performance" under the Guiding Principles can be meaningfully measured and reported. These questions, in context, illustrate just one facet of a growing discussion regarding the appropriate scope of business responsibility for human rights concerns.

Setting the Stage -- The Guiding Principles

The Guiding Principles3 comprise three pillars: (1) clarifying the existing role of states to protect human rights; (2) ensuring that business entities respect human rights; and (3) ensuring the proper access to remedies for human rights violations. The UNGP Reporting Framework and the Human Rights Benchmark focus on the second and third pillars, and may ultimately be used to measure a particular company's compliance with them.

Though the Guiding Principles may be adopted by any entity, they qualify that compliance can and should vary by the size and complexity of a particular entity's operations.4 Within that context, the Guiding Principles instruct that all adopting entities should implement a "statement of policy" demonstrating commitment to respecting human rights and developing transparent "due diligence" mechanisms to ensure that human rights are properly respected throughout the entity's operations.5 Such mechanisms, like a statement of policy, should be prepared with the involvement of the entity's internal personnel, with assistance from external experts, and with "meaningful consultation with potentially affected groups and other relevant stakeholders."6

Additionally, under the third pillar of the Guiding Principles, entities are instructed to effectively and timely remediate any "severe human rights impacts" to which they have caused or contributed.7

The Advent of Privately Developed Corporate Human Rights Reporting Frameworks

RAFI's UNGP Reporting Framework

RAFI was jointly developed by the non-profit organization Shift, which focuses on issues related to the Guiding Principles, and the global accounting firm Mazars.8 RAFI launched the UNGP Reporting Framework in 2015 that has gained some acceptance among some larger multinational companies, which have begun using it to report on their human rights commitments.

RAFI, however, has not escaped criticism. The International Organisation of Employers ("IOE"), for example, while expressing its commitment to support the Guiding Principles' implementation, expressed legitimate concerns when RAFI was initially introduced. The IOE expressed, for example, that formally reporting "compliance" with the deliberately flexible and subjective Guiding Principles – and then "verifying" compliance as financial data can be measured – may be problematic and counterproductive.9

The Human Rights Benchmark

The Human Rights Benchmark was developed recently by a number of investment groups in combination with certain civil society organizations, and with the financial backing of the United Kingdom10 and Dutch governments.11 A work in progress that has not been finalized, it proposes metrics that go well beyond those contained in the UNGP Reporting Framework. Further, the Human Rights Benchmark focuses only on the 500 largest companies in the world, in contrast to the Guiding Principles' application to all business entities. The Human Rights Benchmark, most fundamentally, calls into question the sufficiency and efficacy of RAFI's UNGP Reporting Framework by presenting companies with a potentially competing set of reporting guidelines.

Significant concerns also exist concerning the substance of its proposed guidelines, including the following:

  • The Human Rights Benchmark measures whether an employer remains "neutral" with respect to union organizing campaigns. Neutrality is a uniquely U.S. phenomenon, and can be interpreted as requiring silence on the part of employers in the context of union organizing efforts. That concept, though, is inconsistent with the principles of freedom of association as they are defined and understood at the international level. Indeed, it is widely believed that the free exchange of ideas, information and opinions are fundamental to the existence of a free-trade union movement. This "neutrality" metric therefore eschews the notion that principles of freedom of association, as defined at the international level, promote the free exchange of information and ideas regardless of their source or affinity. The Human Rights Benchmark thus encourages freedom of expression and opinion at the international level so long as its manifestation does not interfere with an employee's free choice to be represented, or not represented, by a union.
  • The Human Rights Benchmark also includes a metric measuring whether the company "faces criticism or negative news stories related to Labour and Human Rights" or has responded to similar reports. However, a report, and even more cryptically, a "criticism," does not necessarily equate to an actual adverse human rights impact contemplated by the Guiding Principles, and allowing unsubstantiated reports to affect a company's "rating" does not appear to further the Guiding Principles' effective implementation.
  • Similarly, the requirement that a company report every claim relating to certain International Labour Organization conventions, as well as accompanying reports on "corrective actions taken," presupposes the legitimacy of every claim that is raised and that every claim requires some corrective action.12 Again, questions remain regarding whether this metric furthers the Guiding Principles.

Looking Forward

Increasingly, companies will need to be aware of different reporting guidelines, and they must prepare to field inquiries from investors and other groups regarding the company's position on, and commitment to, human rights and those guidelines.

RAFI, its UNGP Reporting Framework, and the Human Rights Benchmark, and perhaps future initiatives or frameworks, may be designed to help employers with these important issues. Companies trying to fulfill their legitimate obligations in this important arena need to carefully and thoughtfully parse these differing guidelines and protocols to ensure that they do not incur unintended conflict and expense.

Footnotes

1. See Shift, Human Rights Reporting and Assurance Frameworks Initiative - RAFI.

2. See The Corporate Human Rights Benchmark (June 2015).

3. United Nations, Human Rights Office of the High Commissioner, Guiding Principles on Business and Human Rights (2011).

4. Guiding Principle 16.

5. Guiding Principle 17, 21.

6. Guiding Principles 18, 20.

7. Guiding Principle 22.

8. See Human Rights Reporting and Assurance Frameworks Initiative – RAFI, supra note 1.

9. IOE Comments On The Mazars And Shift Discussion Paper On A Global Reporting And Assurance Standard On The Un Guiding Principles On Business And Human Rights (June 28, 2013). In 2013, the IPIECA, for its part, also noted that: "[d]eveloping a 'Standard' on Human Rights is inconsistent with the spirit of the UNGPs. It suggests a prescriptive approach, which was explicitly not the intention of the UNGPs." See, e.g., Developing Global Standards for the Reporting and Assurance of Company Alignment with the UN Guiding Principles on Business and Human Rights: IPIECA Feedback on SHIFT/Mazars discussion paper.

10. The DailyMail.com, Government backing rights project, (Dec. 17, 2014).

11. See The Corporate Human Rights Benchmark, supra note 2.

12. See id., also raising concerns about the CHRB's land use, living wage, and other metrics.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
John Kloosterman
Michael G. Congiu
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions