Evolving Relationship of Enterprise and Human Rights
Recognized international human rights have traditionally been framed in terms of the duties and obligations of states under treaties and other instruments and elements of international human rights law. The main concern of human rights activists has generally been vertical protection, which refers to ensuring that individuals and groups get protection and required services and resources from the state. In the past, relatively little or no attention was paid to businesses’ responsibility for human rights. Many business ethicists were skeptical about whether businesses had any ethical responsibilities, and they noted that it was difficult and unfair to identify responsibilities in this area when the concept of human rights was so difficult to describe. Others clung to the traditional argument that states had exclusive responsibility with regard to human rights and that the role of businesses should be confined to complying with the laws and regulations promulgated by states with respect to workplace conduct, use of natural resources, and the like.
In recent years, however, the criticism of businesses that accompanied the globalization that dominated the last decades of the twentieth century has shifted more and more attention to horizontal protection, which refers to individuals obtaining protection or services from nonstate actors such as businesses, nonstate armed groups, the media, and other people, groups, or institutions. For example, protecting women and children from violence in their homes; improving conditions for workers in factories, offices, and other workplaces; and reducing pollution from operations damaging the health of people living in surrounding communities must be addressed by strengthening horizontal protections and imposing higher human rights duties and responsibilities on businesses. These duties go beyond simply complying with the domestic laws and regulations of the countries in which businesses have made an affirmative choice to operate. The pressure to hold businesses, as well as states, accountable for human rights duties and obligations was exacerbated by highly publicized events such as the chemical gas leak at Union Carbide’s Bhopal pesticide plant in 1984 that killed thousands in India, the catastrophic Exxon Valdez oil spill in 1989, disclosures of child labor abuses among the supply chains of well-known global apparel and footwear companies, and the complicity of Western mining, oil, and gas companies in the violence perpetrated by governmental security forces in developing countries.
The day-to-day operational activities and strategic decisions of businesses inevitably have an impact, both positive and negative, on one or more universally recognized human rights. On the positive side, businesses create jobs that provide workers and their families with a higher standard of living and give them the financial resources to pursue education and leisure. These businesses, having direct control over their operations, can take steps to make progress on fundamental human rights topics such as discrimination, sexual harassment, health and safety, and privacy. The philanthropic activities of businesses can also support the efforts of states and other nonstate actors such as nongovernmental organizations (NGOs) to alleviate poverty and improve education and housing conditions. Many businesses have been acknowledged and praised for the unique role they play in society as the creators of wealth, sources of employment, deliverers of new technologies, and providers of basic needs.
At the same time, businesses, fixated on profits as their main and often seemingly exclusive goal and purpose, have repeatedly treated their workers poorly, engaged in dangerous or corrupt business activities, polluted the environment, developed and marketed products and services that harm consumers, and overseen development projects that have displaced or marginalized communities. Concern over these negative impacts of business activities has increased as corporations themselves have grown in size to the point where many of them are larger than some nation states. Moreover, as states struggle to balance their own budgets and provide their citizens with services that are part of basic human rights, they are turning to business for assistance. This trend has raised further concerns about whether companies can assume and carry out these responsibilities in an ethical fashion with due respect for human rights.
In this scenario, three key questions have emerged and are being hotly debated by a wide range of stakeholders around the world in a variety of forums: (1) What should be the appropriate scope of human rights duties and obligations for businesses and other nonstate actors; (2) how should those duties and obligations be formalized; and (3) what role should the state take in enforcing the human rights duties and obligations imposed on businesses and nonstate actors, and how should that role be integrated into the existing international human rights framework (e.g., a treaty)? It is certainly true that some businesses have no interest in being held accountable for the human rights impacts of their activities and will never voluntarily participate in formulating laws, regulations, and standards that might hold them responsible for their violations of human rights. It is also likely, however, that progress toward viable formulations of the duties and responsibilities of businesses with respect to human rights is being hampered by a lack of consensus among states, businesses, multigovernmental organizations, NGOs, community groups, human rights activists, and other interested parties on how to frame and address key fundamental questions. Chief among such questions are what are human rights; who should be responsible for human rights; which human rights, if any, should businesses be responsible for; and what should be the scope of that responsibility?
Articles 29 and 30 of the UN Declaration of Human Rights specify that no state, group, or person (presumably including business enterprises such as corporations) can infringe upon human rights. Building on that basic concept, it seems easy to arrive at the position that businesses should not knowingly expose their workers to dangerous working conditions or rely on forced labor, but even in these areas progress has been slow. However, looking at business activities through a human rights lens has raised novel and challenging questions when those activities bring into play rights that have traditionally been assigned to and carried out by the state:
- Social media businesses have been allowed to make their own decisions regarding the communications activities of visitors to their sites and can remove those communications if they violate policies created and enforced solely by the business. When a social media business removes a communication, does it violate the user’s freedom of expression, and should the business have a legal duty not to infringe on users’ freedom of expression?
- Does a restaurant that fails to provide food to a homeless person who comes into the restaurant and asks for food infringe on the homeless person’s human right to be free from hunger, and should restaurants have an affirmative legal duty to provide food in such situations?
- Does a utility company that provides electricity or water to households have a duty and obligation, based on human rights principles, to continue providing services to households that are unable or unwilling to pay? Similarly, do hospitals have a duty to provide emergency medical services to patients without insurance or other means to pay for such services?
In each of these situations, the question is whether human rights duties imposed on states should also be applied to nonstate actors such as businesses. In some cases, the first steps have been left to the businesses themselves. Such has been the case with social media businesses that make their own decisions regarding political advertising on their sites and how they can use data collected from visitors to the site within the business and shared with outside parties. Some states, pushed by a range of stakeholders, including consumers and human rights activists, are now beginning to realize that leaving these issues to businesses is untenable. It may be too early, however, to reliably predict the ultimate resolution. An obvious problem in several cases is whether and how imposing human rights obligations on businesses will impact their ability to remain in business and create positive human rights impacts for their stakeholders. (For example, a restaurant required to fulfill the unmet needs of homeless people in its community for food may eventually be unable to achieve the minimum level of profitability necessary to remain in business. This will cause workers to lose their jobs, reduce the revenues of their suppliers, and deprive governments of tax revenues that could be used to provide other support and assistance to the homeless community.)
The International Organization for Standardization (ISO), a worldwide federation of national standards bodies, developed ISO 26000 Guidance on Social Responsibility to serve as a guide for organizations based on principles of social responsibility. ISO 26000 highlights the social responsibility and engagement of stakeholders; the seven core subjects and issues pertaining to social responsibility, the second of which is human rights; and ways to integrate socially responsible behavior into the organization. ISO 26000 maintains that states have a duty and responsibility to respect, protect, and fulfill human rights and that organizations have the responsibility to respect human rights by identifying and responding to members of vulnerable groups within their sphere of influence. This guideline points out that the responsibilities of organizations with respect to human rights are independent of the duties and obligations of the state, which means that organizations must act regardless of whether the state is unable or unwilling to fulfill its duty to protect. At a minimum, organizations should avoid passively accepting or actively participating in the infringement of the rights of others, a duty that can only be discharged by undertaking due diligence. Moreover, while the baseline responsibility for businesses and other nonstate organizations is to respect human rights, they need to take into account stakeholder expectations that go beyond respect. They may also want to make affirmative contributions to the fulfillment of human rights for their own sake.
The overall landscape relating to business and human rights has been transformed over the last few decades. Businesses now have access to specialized groups formed to provide assistance to companies in operationalizing human rights (e.g., the Business and Human Rights Resource Centre, the Global Business Initiative on Human Rights, Business for Social Responsibility, the Danish Institute for Human Rights, the Institute for Human Rights and Business, and Shift). States have responded to calls to strengthen their actions relating to human rights protection by developing and adopting national action plans on business and human rights. In addition, national human rights institutions (NHRIs), such as national human rights commissions, have shifted more of their attention toward business and human rights and are providing platforms for discussions among the key players, including businesses, government officials, and representatives of civil society. NGOs, community groups, and human rights activists around the world continue to monitor the conduct of businesses relating to human rights, publicizing abuses, organizing consumer boycotts, initiating lawsuits, and participating in complaint mechanisms established in various human rights standards to facilitate the resolution of disputes.
This article is an excerpt from the author’s new book, Business and Human Rights: Advising Clients on Respecting and Fulfilling Human Rights, published by the ABA Section of Business Law. More information on the book is available here.
 Alan S. Gutterman is a business counselor and prolific author of practical guidance and tools for legal and financial professionals, managers, entrepreneurs,, and investors on topics including sustainable entrepreneurship, leadership and management, business law and transactions, international law, and business and technology management. He is the co-editor and contributing author of several books published by the ABA Business Law Section, including The Lawyer’s Corporate Social Responsibility Deskbook, Emerging Companies Guide (3rd Edition), and Business and Human Rights: A Practitioner’s Guide for Legal Professionals. Alan is also currently a partner of GCA Law Partners LLP in Mountain View, California (www.gcalaw.com). More information about Alan and his work is available at his personal website at www.alangutterman.com.
 G. Brenkert, Business Ethics and Human Rights: An Overview, Business and Human Rights Journal 1, 277 (2016).
 The movement to focus attention on the impact of businesses on the environment and people actually has its roots earlier, in the 1960s and 1970s, with the formation of new activist organizations such as the World Wildlife Foundation (1961), Friends of the Earth (1971), and Greenpeace (1971). K. Earley, From Reaction to Purpose: The Evolution of Business Action on Sustainability, The Guardian (October 31, 2017).
 C. Mayer, Prosperity: Better Business Makes the Greater Good (2019).
 1 An Introduction to Human Rights in Southeast Asia 17–18 (A. Sharom, J. Purnama, M. Mullen, M. Asuncion, and M Hayes eds., 2018).
 Brenkert, supra note 2, at 277.
 1 An Introduction to Human Rights in Southeast Asia, supra note 5, at, 161.
 ISO 26000 Guidance on Social Responsibility v–vi (2010).
 Id. (noting availability on information on a number of leading business and human rights lawsuits on the Corporate Legal Accountability Portal of the Business and Human Rights Resource Centre).