Business, human rights, and the promise of polycentricity.

Author:Prenkert, Jamie Darin
Position::Polycentric governance
 
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Abstract

Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises (SRSG) John Ruggie referred to the "Protect, Respect, and Remedy" Framework (PRR Framework) and the UN Guiding Principles on Business and Human Rights (Guiding Principles) as a polycentric governance system. However, the exact meaning of this phrase has not been very carefully elucidated. This Article analyzes that description in the context of the deep and varied body of literature on polycentric governance and evaluates the PRR Framework in that light. In particular, this Article uses a case-study approach, analyzing the emerging polycentric governance system in the context of the sourcing of certain minerals from conflict-affected countries in the African Great Lakes region to explore these issues. The conflict minerals regulatory regime incorporates a notable number of the concerns and opportunities SRSG Ruggie highlighted and promoted in the PRR Framework and Guiding Principles. This Article then recommends further study of the concepts explored herein as applied to the business and human rights sector generally and conflict minerals regulation specifically. Ultimately, this Article argues that, given the relative paucity of binding international law regulating the human rights aspects of business and the unlikelihood of substantial multilateral progress in the near future, the success of the PRR Framework and Guiding Principles may well depend on whether the promise of their polycentric nature can be fully realized.

TABLE OF CONTENTS I. INTRODUCTION II. BACKGROUND ON POLYCENTRIC GOVERNANCE SYSTEMS A. The Study of Regimes B. The Evolution of Poly centric Analysis C. Applying Polycentricity to Business and Human Rights III. CONFLICT MINERALS AND POLYCENTRIC GOVERNANCE A. Background on the Conflict Minerals Issue B. Independent Actors and Decision-Making Centers Affecting Conflict Minerals 1. National-Level State Actor: U.S. Conflict Minerals Legislation and SEC Regulation i. Due Diligence, Reporting, and Disclosure. ii. Government Information Gathering iii. Relation to PRR Framework 2. Subnational-Level State Actors: State and Municipal Enactments 3. National-Level State Actors: Other National Laws 4. Intergovernmental Actors: OECD Guidance. 5. Global, Industry-Level Nonstate Actors: GeSI/EICC Conflict-Free Smelter Program and IPC Due Diligence Guidance. i. Conflict-Free Smelter Program ii. IPC Due Diligence Guidance 6. Civil-Society-Level Nonstate Actors: On-the-Ground Initiatives in the DRC and the Enough Project's Conflict-Free Campus Initiative IV. SUMMARIZING THE POTENTIAL OF POLYCENTRIC GOVERNANCE TO PROMOTE HUMAN RIGHTS IN BUSINESS A. Defined Boundaries B. Proportionality C. Collective Choice Arrangements and Minimal Recognition of Rights D. Monitoring E. Graduated Sanctions and Dispute Resolution F. Nested Enterprises V. CONCLUSION I. INTRODUCTION

In an era defined by globalization and the attendant rise of multinational corporations, (1) businesses are increasingly influencing human rights practices around the world. (2) From recent disasters in the Bangladeshi textile industry, in which more than 1,200 garment workers died making clothing for Western firms, (3) to alleged human rights abuses by subsidiaries of Canadian mining firms, (4) the impact of business on human rights cannot be underestimated. However, given the relative lack of binding international law governing labor

practices in these industries, (5) the international community has struggled to enforce human rights best practices. This absence of an international legal framework has led to the development of novel governance systems, an effort spearheaded by John Ruggie, special representative of the secretary-general on the issue of human rights and transnational corporations and other business enterprises (SRSG).

During his mandate and after, SRSG Ruggie referred to the "Protect, Respect and Remedy" Framework (PRR Framework) and the Guiding Principles on Business and Human Rights (Guiding Principles) as a polycentric governance system. (6) However, the exact meaning of this phrase has not been very carefully elucidated. This Article analyzes that description in the context of a deep and varied body of literature on polycentric governance and evaluates the PRR Framework in that light. In particular, this Article uses a case-study approach, analyzing the emerging polycentric governance system related to the sourcing of certain minerals from conflict-affected countries in the African Great Lakes region to explore these issues. The conflict minerals regulatory regime incorporates a notable number of the concerns and opportunities SRSG Ruggie highlighted and promoted in the PRR Framework and Guiding Principles. This Article then recommends further study of the concepts explored herein as applied to the business and human rights sector generally and conflict minerals regulation specifically. Ultimately, this Article argues that, given the relative paucity of binding international law regulating the human rights aspects of business and the unlikelihood of substantial multilateral progress in the near future, the success of the PRR Framework and Guiding Principles may well depend on whether the promise of their polycentric nature can be fully realized.

The Article is structured as follows. Part I introduces the literature on polycentric governance to provide a framework for analysis. Part II applies the conceptual framework of polycentric governance to the policy problem of conflict mineral regulation. Part III concludes this Article with a discussion of the promise and pitfalls of polycentric governance in advancing human rights in business.

  1. Background on Polycentric Governance Systems

    Mapping the current state of a regulatory regime is a difficult proposition, especially with the presence of many rapidly changing variables. For example, in the context of cyber law, commentators such as Professor Andrew Murray have argued for adopting dynamic regulatory models, such as symbiotic regulation, to help better understand this complex legal environment. (7) Other scholars have turned to systems theory, which was first developed in the field of biology to describe the relationships between parts of a system, such as the human body. (8) Even under these approaches, however, changing one element of the system can have "ripple effects" throughout, (9) a phenomenon also noted by Professor Lon Fuller, who advocated for a polycentric approach to conceptualize and manage complex regulatory schemes. (10)

    A critical aspect of understanding polycentric regulation is that neither states nor any other entities enjoy sole rulemaking powers in a given context, be it internet governance or multinational business regulation. (11) For example, most definitions of law, including Professor Fuller's description of law as "the enterprise of subjecting human conduct to the governance of rules," (12) allow for overlapping regulatory systems. Professor Fuller himself noted: "Multiple systems do exist and have in history been more common than unitary systems." (13) Some commentators define polycentric governance as analogous to "non-statist law." (14) However, such definitions miss some of the unique aspects of polycentric governance, including its emphases on self-organization and the notion that "diverse organizations" and governments working at "multiple levels" can create policies that "increase levels of cooperation ... [and] compliance." (15) This Article defines polycentric governance generally as a regulatory system-sometimes referred to as a regime complex (16) -that consists of "a collective of partially overlapping and nonhierarchical regimes." (17) In order to understand the benefits and drawbacks of a polycentric approach, it is first necessary to briefly review the literature on regimes.

    1. The Study of Regimes

      According to Professor Oran Young, "Regimes are social institutions governing the actions of those involved in specifiable activities or sets of activities.... [T]hey are practices consisting of recognized roles linked together by clusters of rules or conventions governing relations among the occupants of these roles." (18) Regimes have two primary effects. First, they constrain the policy options of actors. (19) Second, they create rights. (20) Nations respond to the concerns of domestic politics when deciding the composition of a new regime. (21) Yet even with a high degree of scientific and political agreement, regulatory action may still be delayed as a result of differing incentive structures among diverse stakeholders including states, nongovernmental organizations (NGOs), and "epistemic communities," which "are policy networks formed by [experts] specializing in a particular policy area." (22) This can lead to deadlock, and even if these diverse groups can agree on a new regime, the result may still be suboptimal due to issues of consensus decision making, ratification, and enforcement. (23) Various strategies may be employed to address these problems, such as negotiating treaties with incentive structures or sanctions to promote compliance, but often such strategies are politically unpopular or prove insufficient. (24) Instead, regime complexes are formed as interim responses to help manage complex global problems, such as promoting human rights. (25) Regime complexes are created when several different regimes "coexist in the same issue area without clear hierarchy," which can be caused by different and continuously evolving political coalitions. (26) Given the multipolar state of international relations, (27) "loosely coupled" regime complexes have significant advantages over unitary regimes such as some UN consensus-driven multilateral treaties. (28) Building institutions is costly, and thus, leaders who invest in such efforts often find it easier to work in smaller "clubs,"...

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