Binding standards on human rights will minimise risk

The corporate world has responded favourably to calls for binding human rights clauses to corporate governance, according to Human Rights Watch.

by Human Rights Watch
Last Updated: 23 Jul 2013

At the launch of its annual report in Washington, the international watchdog said that companies were starting to question the practice of self-regulation and individual codes of conduct in favour of global, all encompassing and enforceable regulation. Corporations acknowledge that voluntary guidelines are not only ineffective but also detrimental to business.

The report, which contains information on human rights developments in over 60 countries, has a section called 'Private companies and the public interest. Why corporations should welcome global human rights rules'. Within it are chapters on 'The limitations of voluntary guidelines: the Congo gold example' and 'Towards binding CSR standards'. 

Human Rights Watch recommends that the Organisation for Economic Co-operation and Development (OECD) and the United Nations help with drawing up a universal treaty.

Rory Sullivan, a consultant for Insight Investment, an investment company focusing on socially responsible ventures, suggested that working with OECD regulations would provide a realistic start. "Human Rights Watch sets out what we should be aspiring to. But we don't live in an ideal world, and if the OECD guidelines are properly enforced, they would provide a good, intermediary process with implementation procedures already in place."

The regulations, which provide general guidance on corporate responsibility standards, would also provide a welcome standard to refer to. "The absence of agreed standards in terms of corporate conduct creates a risk for companies: if you don't know what is expected of you, how can you ever meet your expectations?"

This lack of universal standards explains partly why self-regulation has failed to deliver on stakeholders' and companies' aspirations. A global framework would hopefully clarify objectives for businesses to achieve, and provide guidance for governance at national level in resource-rich countries.

Source: Human Rights Watch

Review by Emilie Filou

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