Module 8

Explore the issues - business and human rights

Read the following scenarios, and then decide which is the best answer to the question posed. Click on the “Answer” button to see if you chose correctly, and why or why not.

SCENARIO 1

You are a small landowner in a poor country, with a weak and corrupt government. Soldiers in the pay of a national mining company seize your land, forcibly displacing you; although you are promised compensation it hasn’t yet been paid and wouldn’t be enough to buy new land. The company is a wholly-owned subsidiary of a major transnational mining conglomerate. Which of the following courses of action is likely to be the most effective and available recourse to challenge this injustice?

  1. Bringing a complaint against both the local company and its transnational owner to the United Nations.
  2. Bringing a civil action against the company in a domestic court.
  3. Bringing a civil action against the transnational mining conglomerate in the courts of the country in the developed world where it is headquartered.
  4. None of the above.

Answer: D
There is no mechanism for UN human rights bodies to receive complaints about corporate action; these bodies act vis-à-vis states. A local lawsuit might be available, but is very unlikely to be effective in a country where the army acts so arbitrarily and the government is weak. Suing the transnational in its home state might be effective, if the courts there are independent, but such lawsuits face enormous procedural and jurisdictional problems (of the hundreds launched, very few have succeeded).

SCENARIO 2

The UN Global Compact provides a list of ten principles regarding human rights, labour standards, environmental protection and against corruption. Companies around the world are invited to sign the Global Compact, pledging their support for these principles and to implement them throughout their operations. Approximately how many companies have joined the Global Compact since it launched in 2000?

  1. 1,000
  2. 12,000
  3. 25,000
  4. None of the above.

Answer: B
Over 12,100 companies have joined the Global Compact (GC). Companies joining the GC must submit regular reports to the GC secretariat on the efforts they are undertaking to comply with the principles; but there is no effort undertaken by the UN to monitor implementation. A much smaller (although growing) number of companies have adopted explicit, internal policies that commit them to abide by human rights principles in their operations.

SCENARIO 3

Allegations emerge that a Canadian mining company (listed on major Canadian stock exchange, and headquartered in Canada) is complicit in human rights abuses in another country. Its private security personnel have been involved in numerous assaults, including sexual assault and rape, against local people who live in the vicinity of the mine. The Canadian government investigates, finds the allegations credible, and that the efforts of the company to prevent such assaults and provide redress are inadequate. What course of action is open to the government under Canadian law?

  1. It can prevent any further public loans or risk insurance from being provided to the company by Export Development Canada.
  2. It can ensure that no investment of public funds, such as the Canada Pension Plan, be made in the company.  
  3. It can open a criminal investigation.
  4. None of the above.

Answer: Probably D.
No existing legislation or regulation explicitly permits the action in A or B, although a bill to give the government such authority (Bill c-300) was narrowly defeated in a vote in Parliament in 2010. As regards C, Canadian criminal law would permit such an investigation only if there were grounds to believe the abuses amounted to crimes against humanity – an international crime thus allowing prosecution in Canada (even though committed abroad). We don’t have enough information to reach that conclusion.

SCENARIO 4

In 2007, the Chinese government sought to enact legislation that would improve worker protection by increasing labour unions’ power (though modestly) and making clearer employer responsibilities in the workplace. Which of the following groups lobbied against these modest reforms to improve workers’ rights in China?

  1. Powerful Chinese business leaders.
  2. Associations representing American companies in China.
  3. Japanese electronics firms – many of their components are made in China.
  4. All of the above.

Answer: B
The New York Times and Washington Post reported that the US-China Business Council and the American Chamber of Commerce lobbied to weaken the legislation. When challenged, many individual US companies operating in China (though not all), disassociated themselves from these efforts.

Were you surprised – or confused – by any of the answers? The next sections will help you understand better the various ways in which a private business can can be persuaded or forced to respect human rights throughout its operations.