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Responsible risk-taking in conflict-affected countries: the need for due diligence and the importance of collective approaches

Published online by Cambridge University Press:  06 November 2013

John Bray  and
Antony Crockett
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Abstract

This article discusses some of the challenges that may be encountered by companies seeking to adhere to the Voluntary Principles on Security and Human Rights and the United Nations Guiding Principles on Business and Human Rights when operating in conflict-affected countries. The authors argue that corporate respect for human rights may not be sufficient to correct or compensate for state failure and also suggest that the leverage or influence enjoyed by individual companies in relation to the conduct of security forces and host governments may be limited, particularly in times of crisis. There is therefore a need for a collective approach to human rights risks in conflict-affected countries, and this should focus on public security sector reform and good governance as well as on corporate due diligence.

Keywords

risk assessmentdue diligenceprivate sectorconflict-affected areascorporate responsibilityhuman rightsVoluntary PrinciplesGuiding Principlescase studies
Type
The Practice
Information
International Review of the Red Cross , Volume 94 , Issue 887: Business, violence and conflict , September 2012 , pp. 1069 - 1087
Copyright
Copyright © International Committee of the Red Cross 2013 

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References

1 Hugo Slim, ‘Business actors in armed conflict: towards a new humanitarian agenda’, in this issue.

2 For an earlier discussion of related arguments, see Bray, John, ‘The role of private sector actors in post-conflict recovery’, in Conflict, Security and Development, Vol. 9, No. 1, 2009, pp. 1–26CrossRefGoogle Scholar.

3 The current participants in the Voluntary Principles process include eight governments (Canada, the Netherlands, Norway, Colombia, Switzerland, the United Kingdom, the United States, and Australia), twenty-two oil, gas, and mining companies, and eleven human rights non-governmental organisations. The text of the Voluntary Principles is available at: www.voluntaryprinciples.org/principles/introduction. All internet references were accessed on 29 May 2013 unless otherwise stated.

4 See Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, Guiding Principles on Business and Human Rights: Implementing the United Nations ‘Protect, Respect and Remedy’ Framework, UN Doc. A/HRC/17/31, 21 March 2011, unanimously endorsed by the United Nations Human Rights Council on 16 June 2011. Individual Guiding Principles in this article are referred to as GP 1, GP 2, etc.

5 Organization for Economic Co-operation and Development (OECD), OECD Guidelines for Multinational Enterprises, OECD Publishing, 2011Google Scholar.

6 International Finance Corporation (IFC), IFC Performance Standards on Environmental and Social Sustainability, 2011, available at: www.ifc.org/performancestandards.

7 Bank, World, World Development Report 2011: Conflict, Security and Development, Washington D.C., 2011, p. 2CrossRefGoogle Scholar (and accompanying fn. 3).

8 See the case studies in Banfield, Jessie, Gündüz, Canan, and Killick, Nick (eds), Local Business, Local Peace: the Peacebuilding Potential of the Domestic Private Sector, International Alert, London, 2006Google Scholar. See also Ghimire, Safal and Raj Upreti, Bishnu, ‘Corporate engagement for conflict transformation: conceptualising the business-peace interface’, in Journal of Conflict Transformation and Security, Vol. 2, No. 1, 2012, pp. 77–100Google Scholar.

9 On this point, see United Nations Development Programme (UNDP), Post-Conflict Economic Recovery: Engaging Local Ingenuity. Crisis Prevention and Recovery Report 2008, UNDP Bureau for Crisis Prevention and Recovery, New York, 2008Google Scholar, especially pp. 53–57 and 117–120.

10 Voluntary Principles, above note 3.

11 Ibid.

12 Guiding Principles, above note 4, p. 21.

13 Ibid., p. 14.

14 Ibid., p. 21.

15 Ibid., p. 13.

16 Ibid.

17 Ibid., p. 15.

18 Ibid. The Guiding Principles also refer (at pp. 15–16) to the adoption of a human rights policy commitment by business enterprises as ‘the basis for embedding their responsibility to respect human rights’.

19 Ibid., p. 16.

20 Guiding Principles, above note 4, p. 17.

21 Ibid., p. 17.

22 Ibid.

23 Guiding Principles, above note 4, p. 16.

24 International Council on Mining and Metals, Human Rights in the Mining and Metals Industry: Integrating Human Rights Due Diligence into Corporate Risk Management Processes, London, March 2012Google Scholar, available at: www.icmm.com/page/75929/human-rights-in-the-mining-and-metals-industry-integrating-human-rights-due-diligence-into-corporate-risk-management-processes.

25 United Nations Office of the High Commissioner for Human Rights (OHCHR), The Corporate Responsibility to Respect Human Rights: an Interpretive Guide, 2012, p. 80, available at: www.ohchr.org/Documents/Issues/Business/RtRInterpretativeGuide.pdf.

26 Ibid., p. 79. The Interpretive Guide also explains (at p. 6) that ‘[t]here is no uniform definition of gross human rights violations in international law, but the following practices would generally be included: genocide, slavery and slavery-like practices, summary or arbitrary executions, torture, enforced disappearances, arbitrary and prolonged detention, and systematic discrimination. Other kinds of human rights violations, including of economic, social and cultural rights, can also count as gross violations if they are grave and systematic in scope and nature, for example violations taking place at a large scale or targeted at particular population groups.’

27 See, for example, Drimmer, Jonathan C., ‘Human rights and the extractive industries: litigation and compliance trends’, in Journal of World Energy Law and Business, Vol. 3, No. 2, 2010, pp. 121–139CrossRefGoogle Scholar. Arguments in favour of a ‘legal compliance’ approach often point to the risk of civil suits in the US or UK courts. It is less clear that corporations headquartered in other jurisdictions are exposed to liability. See, for example, Muchlinski, Peter, ‘The provision of private law remedies against multinational enterprises: a comparative law perspective’, in Journal of Comparative Law, Vol. 4, No. 2, 2009, pp. 148–170Google Scholar.

28 For example, plaintiffs have sought to sue corporate defendants for ‘aiding and abetting’ human rights abuses perpetrated by foreign governments or other third parties under the US Alien Tort Claims Act, 28 USC § 1350 (“ATS”) which provides that ‘[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States’. Courts in the United States have disagreed as to whether the ATS establishes jurisdiction over corporations, a question which the US Court of Appeals for the Second Circuit answered in the negative in 2010 in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010) (“Kiobel”). On appeal, although the US Supreme Court appeared poised to answer this question, its long-awaited decision issued on 17 April 2013, addressed instead the broader issue of whether the ATS applies extraterritorially; that is, whether US courts have jurisdiction under the ATS over claims involving foreign plaintiffs, foreign defendants, and conduct occurring outside the US. A majority of the Court held that a presumption against extraterritoriality applies to the ATS and that the presumption is not displaced in circumstances where all the relevant conduct took place outside the United States (see Kiobel v. Royal Dutch Petroleum Co., 569 U.S. (2013)). The Court did not reach the question for which permission to appeal was initially granted: i.e. whether corporations can be liable under the ATS at all.

29 See, Farrell, Norman, ‘Attributing criminal liability to corporate actors: some lessons from international tribunals’, in Journal of International Criminal Justice, Vol. 8, No. 3, 2010, pp. 873CrossRefGoogle Scholar, 877–878, 883, and 889–891.

30 Of course, part of the reason for the Guiding Principles advocating a legal compliance approach is the grave nature of abuses that may occur in conflict-affected countries. The message is that companies should take the risk of gross human rights abuses very seriously, even if there is no immediately obvious link with their operations or proposed operations.

31 Voluntary Principles, above note 3.

32 Ibid.

33 Ibid.

34 Ibid.

35 Guiding Principles, above note 4, p. 18: ‘Where a business enterprise contributes or may contribute to an adverse human rights impact, it should take the necessary steps to cease or prevent its contribution and use its leverage to mitigate any remaining impact to the greatest extent possible. Leverage is considered to exist where the enterprise has the ability to effect change in the wrongful practices of an entity that causes a harm.’

36 See United Nations Rule of Law, Basic Principles on the Use of Force and Firearms by Law Enforcement Officials: Adopted by the Eighth United Nations Congress on the Prevention of Crime and the Treatment of Offenders, Havana, Cuba, 27 August to 7 September 1990, available at: http://fr.unrol.org/files/BASICP∼3.PDF (last visited 14 June 2012).

37 The events referred to in this case study took place prior to the publication of the Guiding Principles. A company seeking to implement the Guiding Principles in a similar context might also decide that establishing some form of grievance mechanism to allow stakeholders to raise issues regarding the conduct of security forces would also assist to mitigate risk.

38 IFC, Performance Standards, above note 6.

39 International Labour Organization (ILO), Convention concerning Forced or Compulsory Labour, Art. 4, adopted on 28 June 1930.

40 OECD, Guidelines for Multinational Enterprises, above note 5, p. 35.

41 An enquiry by the United Nations Peacekeeping Mission in the Democratic Republic of Congo and local human rights groups estimated the death toll at more than 100. See International Crisis Group (ICG), Katanga: The Congo's Forgotten Crisis, Africa Report No. 103, 9 January 2006, p. 10.

42 Ibid. See also World Bank Office of the Compliance Advisor/Ombudsman (CAO), CAO Audit of MIGA's Due Diligence of the Dikulushi Copper-Silver Mining Project in The Democratic Republic of the Congo, 2005, available at: www.cao-ombudsman.org/cases/case_detail.aspx?id=94. The CAO report (at p. 4) notes that ‘the broad facts of Anvil Mining's involvement in the October 2004 Kilwa incident, in terms of the provision of logistical support to the Armed Forces of the DRC, are not in dispute’.

43 Ibid.

44 Ibid., p. 5.

45 Ibid., p. 6.

46 CAO, above note 42, p. 20.

47 Ibid., p. 20.

48 Ibid., p. 21.

49 Ibid., p. 51. In 2007 a Congolese military court acquitted three Anvil employees of complicity in war crimes. However, a group of NGOs who joined together to form the Canadian Association Against Impunity launched a class action suit against Anvil in the Canadian courts. On 1 November 2012 the Supreme Court of Canada turned down an appeal against an earlier judgment ruling that it was inappropriate to hear the case in Canada, see Association canadienne contre l'impunité c. Anvil Mining Limited, 2012 CanLII 66221 (SCC), available at: http://canlii.ca/t/ftlpg. See also ‘Supreme Court won't hear appeal in Congo massacre case’, in CBC News, 1 November 2012, available at: www.cbc.ca/news/canada/montreal/story/2012/11/01/quebec-anvil-mining-appeal-refused-supreme-court.html.

50 MIGA/Anvil Mining, The Voluntary Principles on Security and Human Rights: an Implementation Toolkit for Major Project Sites, July 2008, available at: www.miga.org/documents/VPSHR_Toolkit_v3.pdf.

51 Ibid., p. II–17.

52 ICG, Security Sector Reform in the Congo, February 2006, p. 1.

53 Ibid., p. 2.

54 The importance of addressing concerns with respect to human rights when contracts with host governments are being negotiated is also emphasised in an Addendum to the Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises. See John Ruggie, ‘Addendum – principles for responsible contracts: integrating the management of human rights risks into State-investor contract negotiations: guidance for negotiators’, UN Doc. A/HRC/17/31/Add.3, 2011.

55 A similar dynamic may exist with respect to the balance of bargaining power over purely commercial issues.

56 Interview with John Bray, November 2002.

57 Institute for Human Rights and Business, From Red to Green Flags: The Corporate Responsibility to Respect Human Rights in High-Risk Countries, 2011, p. 81, available at: www.ihrb.org/pdf/from_red_to_green_flags/complete_report.pdf.

58 See Voluntary Principles on Security and Human Rights, Voluntary Principles: Colombia Case Study, available at: http://voluntaryprinciples.org/files/vp_columbia_case_study.pdf. Colombia's participation in the Voluntary Principles began with a meeting at the US embassy in Bogota in 2003. Following this meeting, the Asociación Colombiana del Petróleo established a working group whose activities included improving information-sharing, coordinating responses to human rights abuses, drafting performance indicators, and organising risk assessment guidelines and workshops. The outcomes of this process have included greatly improved coordination between companies and government officials and a general improvement in company standards.

59 See Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie, UN Doc. A/HRC/8/5, 7 April 2008, p. 3.

60 Bannon, Ian and Collier, Paul (eds), Natural Resources and Violent Conflict: Options and Actions, World Bank, Washington D.C., 2003CrossRefGoogle Scholar, available at: http://go.worldbank.org/MSS8O5RVN0.

61 John Bray, ‘Attracting reputable companies to risky environments: petroleum and mining companies’, in I. Bannon and P. Collier, above note 60, pp. 287–352.

62 Ibid., p. 291.

63 For a discussion of this and related points, see World Bank, World Development Report 2005: a Better Investment Climate for Everyone, Washington DC, 2004Google Scholar.

64 World Bank, above note 7, p. 10.