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A solution for business and human rights disputes

Martyn Day of Leigh Day and Co, a leading firm on business and human rights disputes, says: “I am convinced that an international mediation system, perhaps combined with arbitration, would be of great benefit”, in this article published on Ethicalcorp.com.

So if an international mediation and arbitration system could be put together, who could do it, and how might it work?

Let’s consider our options here.

The obvious candidate is the UN. But there are some problems here.

Namely that US companies, lobby groups, politicians and lawyers are suspicious of the UN.

Critics say it is bureaucratic, politicised and any work is likely to be slowed down by NGOs demanding a return to the days of the UN Norms (UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights).

So let’s put the UN aside for the moment. Perhaps a model could be proven elsewhere and then UN involvement later considered, for example.

What are the other alternatives?

One might be a business-led group setting up a voluntary system. But being business-led this would lack credibility, as would one set up by say, Amnesty International.

Let’s look at a hybrid plan. One that would be multi-stakeholder, albeit in a limited way (so things can actually get done!)

Which stakeholders are relevant and might be included in a voluntary, credible arrangement? Here’s those I can think of:

Independent foundations with a remit to encourage progressive action. Say, the Open Society Institute, the Ford Foundation, Rockefeller brothers foundation, etc. They would be needed for funding.

Key human rights groups, such as Amnesty, Human Rights Watch, etc. But not all the niche groups, particularly those focused on international corporate human rights regulation a la the Norms, over settling disputes for particular, affected stakeholders.

Relevant, independent-minded institutes, such as the Institute for Human Rights and Business.

Multi-stakeholder initiative representatives. I mean key figures from proven initiatives, such as the Kimberly Process or Extractive Industry Transparency Initiative.

Business lobby groups that recognise the value of mediation and arbitration. So those who are not reliant on slowing down UN processes or advocate using corporate lawyers to tie things up in court for years.

Law firms, such as Leigh Day & Co, who also believe in negotiation over court cases.

Government agencies, such as DFID in the UK, or GTZ in Germany, for example, who have experience of engaging in human rights matters and initiatives, such as the Voluntary Principles on Security and Human Rights.

Dispute resolution experts, relevant folks from various national or international agencies who have some related experience. And perhaps the odd experienced consultant.

And of course, large companies who are at the forefront of the issues. BP, Shell, Nike, Tesco, Gap, HP, etc etc.

A strong chairman would be needed to bash heads together, an engaged figurehead people would have a hard time refusing a call from.

Such a chairman, with a board made up of representatives from each group, could set out a clear mandate for a voluntary organisation that created space for negotiation, mediation, arbitration and settlement on specific cases.

Now such a group might annoy those who believe more in the value of National Contact Points for the OECD Guidelines for Multinational Enterprises, within specific governments. But these need not be sidelined by such an idea. This merely creates an alternative to go to first.

Membership would be voluntary, and a clear process could be set out, which voluntary members of the yet unnamed group would agree to adhere to, perhaps with an appeals process too, that might use retired judges, or other experts.

The devil, of course, would be in the detail of how it worked. And I am not the person to work those out, there are others better qualified.

But I’d suggest that if companies felt they would get a fair deal, and NGOs felt that settlement in the interest of those affected by the particular case was more important than international legislation or court settlements featuring hefty fees, then it might work.

It would need an energetic, collaborative driving force behind it, and a chairperson who could put serious time and effort in, whilst balancing the various players.

But surely it would not be beyond imagination to get it done.

It wouldn’t solve all the problems of course. The companies that didn’t sign up and generally remain untouched by governments in home or host countries, for example.

But if more and more of these firms could see the benefits of being part of a credible mediation, arbitration and settlement process, I believe many under-the-radar companies could be cajoled and persuaded to join the process.

It would be a slow hard road at first, but one well worth travelling.

Tell me I’m wrong…

(I was part of a group that suggested a similar structure for problem solving to the Conservative Party a couple of years ago. More at this link)

4 Comments

  1. what happened to OmCED (the ombudsman Center for Environment and Development) that was established at the University for Peace in Costa Rica? Its purpose was environmental mediation.

  2. Jason – OmCED is an interesting case. It died. I have tried to find out exactly why – it seems to have been very much the brainchild of one Dutch individual and to have lacked real institutional and political buy-in as well as funding. It is unclear whether it ever actually mediated any cases.

    Toby – your suggestions are interesting and the logic compelling. We are starting a scoping project at the CSR Initiative at Harvard Kennedy School to look at both the market for, and the potential shape of, just such a mechanism. I'd be jumping ahead of our process to suggest a clear position on your ideas, though they should rightly be part of the mix we consider. First we have to answer the question 'if you build it, will anyone come?' OmCED is not the only example where the answer has been a clear 'no'. So we are starting by trying to understand the drivers for various actors to think about turning to such a mechanism. And our work to date in this field also suggests that any viable mechanism would have to be more network than bricks and mortar. Effective, sustainable solutions to disputes tend to come at the local level not from remote institutions. That suggests some kind of hub and spoke approach.

    At present we are starting a range of interviews with stakeholders to try to answer some basic questions. Later in the year, I hope we'll have a clearer vision – and it may indeed include some of your ideas.

  3. Toby – your comments are well made. The Institute is starting to look at the issue of mediation but in discrete ways. This year, the focus will be on mediation in the context of land and water-related business and human rights disputes, as well as its role in relation to business in conflict areas (as part of the 'green flags' work). This should give us a good grounding for 2011 when we hope to take a deeper interest.

  4. A key challenge – which I think was very much alive for the OmCED, and which Caroline has flagged – is how can the mediation mechanism be both fully accessible to project-affected (disadvantaged) communities and maintain credibility with the corporate sector? Budget, working languages, perception of bias, all play an important role. Also important is the credible threat of Alien Tort, NCP or other action in the event of major human rights violations.

    A (decentralized) alternative would be to require as part of Export Credit and Multilateral loans relating to megaprojects in med/high-risk areas, that the company establish dispute resolution mechanism(s) at the project level.

    Whether this would be financially-viable for smaller projects would be an interesting question. At a national level in a country with many smaller extractive projects like, say, Colombia or Ghana, this could look something like the the Advisory Centre on WTO Law. http://www.acwl.ch/e/index.html

    Is this the direction others are headed in their thinking?

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