Business Plan

HKS Magazine | Winter 2016 Business Plan
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Business Plan

Photo by Nicholas Adams

A lot has happened in the decade since John Ruggie was tapped to head the United Nations effort to monitor the difficult and volatile intersection of human rights and corporate responsibilities.

First came the six years of travel and the scores of consultations with multinationals, nonprofits, advocates, and, of course, governments. Then came the drafting of a document—a sort of charter of corporate responsibility—that addressed those contentious concerns for the very first time. In 2011 came the unanimous adoption by the UN itself. And in the period since has come the harder work of putting the United Nations Guiding Principles on Business and Human Rights (to give them their full name) into practice.

“The world has discovered that it’s not enough to rely on states and state-based institutions to advance respect and protection of human rights,” says Ruggie, the Beitz Professor in Human Rights and International Affairs at Harvard Kennedy School.

Traditionally, human rights were the responsibility of states and the business of NGOs, such as Amnesty International, which monitored state compliance and advocated for greater respect. But, spurred by the acceleration of globalization in the 1990s, attention shifted to the human rights implications of the operations of approximately 80,000 multinational corporations and their 800,000 subsidiaries. Mining and oil companies were coming under fire for practices that saw communities displaced and natural environments degraded. Through successful international campaigns, people began to connect the purchase of a T-shirt or soccer ball from their favorite apparel maker to the appalling conditions in the sweatshop where it was made, half a world away.

Ruggie had served as an assistant secretary-general at the UN and had worked on establishing ties between the business community and the world body. When he was tapped by then Secretary-General Kofi Annan to work on the guiding principles, Ruggie found a business community that had already begun to take heed. “It was clear that a community of practice was being built up, especially among the leading companies,” he says. “They increasingly realized that they needed to on-board the capacity to deal with some of the social and environmental consequences of their actions, if only to reduce reputational risk or the risk of being sued by somebody.”

Corporations also saw competitive advantages. “I remember one CEO visiting us in the secretary-general’s office,” Ruggie says. “He happened to be the CEO of one of the world’s biggest oil companies, and he said, ‘Look, we are basically an engineering business. Everybody can pay the same salary. What’s our competitive advantage vis-à-vis other people, other companies? We want to retain the best possible engineers. We want to make them feel good about where they work. We want them to feel committed to the company, and one way to make them feel committed is to ensure that the company does everything possible to do the right thing.’”

Corporations with long time horizons—those that expect to be in a community for decades—knew that getting off on the right foot would make all the difference.

The guiding principles have come under fire for their lack of teeth, especially from the advocacy community. That criticism is also perhaps commonly directed at the United Nations itself. Like the UN, however, the charter influences not by force but by its convening and normative power, Ruggie argues.

“When business associations would come up with their own set of standards, China would say, ‘Who are you? You’re the chemical industry, why should we be paying attention to you?’” Ruggie says. “But when the UN based recommendations on universally accepted principles that governments themselves had endorsed, China was fine with that, and India was fine with that, and Brazil was fine with that.”

Four years after the adoption of the guiding principles, the international community is indeed showing signs of falling into line. A recent case in point: FIFA. Beyond the scandals roiling its Swiss headquarters, the world governing body of soccer has been criticized for the dangerous conditions endured by laborers building the stadiums for the 2022 World Cup, which is scheduled to be held in Qatar. By some counts, more than 1,200 workers, mostly imported from South Asia, have died during construction. Together with Mary Robinson, the former president of Ireland and UN High Commissioner for Human Rights and now patron of a nonprofit in London called the Institute for Human Rights and Business, Ruggie reached out to FIFA offering to provide the organization with a blueprint for human rights reforms. In 2015 the global sports body announced that it would revise its bidding requirements and has asked for help in creating a system that will build respect for human rights into its contracts. The issue is now on the agenda of other mega sporting events, such as the Olympics, the Commonwealth Games, and Formula One racing.

“Today, there are large communities of practice in the private sector whose job it is to manage these issues,” Ruggie says. “So, in that sense, we’re certainly making progress. Are we where we should be? No. There’s lots more work to be done.”

Portrait by Martha Stewart

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