Business and human rights revitalized: a new UN framework meets Texaco in the Amazon.

• Author: Jochnick, Chris

1. INTRODUCTION

   Human rights activists have long lamented the failure of international human rights law to address widespread abuses by the private sector. As multinational corporations (MNCs) have reached ever further into poorly regulated markets, the resulting human rights violations have drawn increasing public attention. Initial responses to human rights concerns have resulted in a patchwork of disconnected, toothless initiatives. Five years ago, the Secretary General of the United Nations designated John Ruggie as Special Representative on Business and Human rights (SRSG) to bring new focus and energy to human rights efforts. The framework proposed by John Ruggie (the Ruggie Framework) represents a milestone in the business and human rights debate.

   A great deal of literature has been generated over the course of the five-year mandate of the SRSG, but the major innovation, the Ruggie Framework, has yet to be explored in any real detail. This article describes the evolution of the business and human rights debate leading up to the Ruggie Framework and then takes the concrete case of Texaco in Ecuador--the impact of its operations and the struggle to hold the company accountable--to illustrate the emerging consensus around business and human rights and its implications. Texaco's history in Ecuador provides a fertile case study that involves the sector (extractive industries) that draws the most human rights attention; brings a range of issues and actors to the forefront; and is live, heated, and pertinent. This "dry run" with the Framework is intended to highlight the utility of having a common baseline--even in its incipient state--to consider concrete cases of corporate human rights abuses, with an eye to the eventual development of global standards on business and human rights.

2. BACKGROUND ON BUSINESS AND HUMAN RIGHTS

   International human rights law was conceived and enshrined in the post-World War II era of powerful nation states. (1) Human rights treaties, in line with international law generally, were aimed squarely at states and took little account of other actors. It was assumed that state governments constituted the gravest threat to human rights, and held the capacity to protect and ensure human rights. Accordingly, with narrow exceptions, (2) the legal obligations imposed by human rights treaties were understood to fall exclusively on states. (3) Corporations, like private citizens, were accountable only to domestic law. (4)

   This legal system has failed to keep pace with the changes brought by globalization. The number of MNCs has risen exponentially over the past forty years, increasing five-fold from 1975 to 2001, to reach more than 80,000 today. (5) These MNCs have pushed their way into the far reaches of emerging markets, many with governments lacking either the capacity or willingness to exercise oversight. (6) To the extent that international law has addressed this phenomenon, it has largely served to fuel it through an elaborate network of investment treaties aimed at protecting corporate rights and placing restraints on sovereign prerogatives. (7) These trends have produced a yawning "governance gap."

   The mainstream human rights movement, rooted firmly in liberal Western legal ideology, was slow to pick up on the human rights implications of this gap. (8) Through the 1970s and 1980s human rights groups like Amnesty International, Human Rights Watch and the International Federation of Human Rights were narrowly focused on state actors and civil and political rights. (9) The sort of issues that occupied these groups--torture, extrajudicial killings, freedom of expression--were dominated by government action, and there was little need or incentive to address corporate actors directly.

   The first significant effort to apply human rights to MNCs came instead from newly independent, developing countries. (10) Many of these governments viewed MNCs as a threat to their sovereignty and independence. Corporate interference in political affairs, which was linked to the overthrow of several democratically elected governments, provided an impetus to reign in MNCs. (11) Following the high profile involvement of the telephone company ITT in the violent overthrow of Chilean President Salvadore Allende in the early 1970s, the United Nations established the Commission on Transnational Corporations to draft a U.N. Code of Conduct on Transnational Corporations. (12) Shortly thereafter, the Organization for Economic Cooperation and Development (OECD) issued the OECD Guidelines for Multinational Enterprises, (13) and the

   Governing Body of the International Labour Office (ILO) adopted The Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, (14) which laid out recommendations to enterprises, governments, and employers' and workers' organizations. (15) The efforts to regulate MNCs, however, competed against much stronger political and economic pressures to increase investment and trade. (16) The OECD and ILO documents represented a step forward, but neither succeeded in clearly defining human rights responsibilities of corporations. (17) In 1992, the UN Draft Code of Conduct was officially abandoned. (18) Meanwhile, foreign investment, trade, and the number of MNCs continued to grow. (19)

   While efforts to define a global standard fell short, the pressure on corporations intensified. Globalization and new post-Cold War political freedoms spawned a wave of non-governmental organizations (NGOs) with the capacity to draw attention to corporate abuses. (20) These groups injected vitality into the mainstream human rights movement and challenged the traditional reluctance to address economic and social rights as well as the direct human rights obligations of corporations. (21) A handful of high profile corporate scandals gave momentum to this movement, including the 1984 chemical leak in Bhopal that killed at least seven thousand people within three days, (22) the labor conditions in Gap and Nike supply chains, (23) and the hanging of Ken Saro Wiwa and eight others in Nigeria for protesting Royal Dutch Shell operations. (24) NGOs were not the only entities that took notice: shareholders, banks, employees, local communities, governments, and consumers began to ask questions about human rights. Corporate reputation, access to capital, access to resources, recruitment and retention were all potentially at stake. A rediscovered U.S. federal law, the Alien Tort Statute, opened the door to lawsuits in U.S. courts against MNCs for human rights violations abroad. (25) Companies facing the greatest exposure--consumer-based, high profile and high impact companies--took the initiative of voluntarily committing to respect human rights and adopting corporate codes of conduct for their operations, and in some cases, for the operations of their suppliers. (26) These efforts led to broader, industry-wide standard-setting initiatives, sometimes including additional stakeholders (multistakeholder initiatives). In lieu of stronger laws and enforcement, (27) these endeavors kept the debate alive, opened an improbable dialogue between diverse actors, and offered hope for improved conduct, but they all shared important short-comings in being strictly voluntary, limited in scope, and lacking effective oversight. (28)

   At the start of the twenty-first century a new push at the United Nations brought hope for a global standard. The U.N. Global Compact, launched in 2000, included respect for human rights among its ten principles applicable to corporations, and drew adherents from many industry leaders on a loose and voluntary basis. (29) At the same time, the United Nations Sub-Commission on the Promotion and Protection of Human Rights set up a working group to examine issues of business and human rights, (30) and in 2003, the Sub-Commission adopted the draft Norms on the Responsibilities of Transnational and Other Business Enterprises with Regard to Human Rights (the Norms) (31) While recognizing the primary duty of states in guaranteeing human rights, the Norms imposed direct legal duties on corporate enterprises "within their respective spheres of business activity and influence." (32) They also required monitoring of companies by national and international agencies and effective remedies for victims. (33) The Norms provided the long-awaited universal mandatory standards with a U.N. imprimatur, causing the human rights movement to cheer their appearance and lobby for formal adoption. (34) This enthusiasm, however, was met with strong opposition from the business community and apprehension among governments. The parent body of the Sub-Commission, the U.N. Commission for Human Rights, refused to approve the Norms. (35)

   Instead, the Commission requested the Secretary-General to appoint a special representative (SRSG) on the issue of business and human rights, launching--perhaps inadvertently--the most comprehensive push yet to define corporate human rights responsibilities. (36) In April 2005, Kofi Annan's Special Representative designate, Professor John Ruggie, entered this charged debate with a mandate to "identify and clarify standards of corporate responsibility and accountability," and to "elaborate on the role of States...." (37) In his initial report, the SRSG emphasized the governance gap resulting from a "misalignment between economic forces and governance capacity." (38) To the consternation of much of the human rights community, he dismissed the Norms, asserting that their "exaggerated legal claims and conceptual ambiguities created confusion and doubt...." (39) Although acknowledging the current trend toward more business accountability with respect to human rights, the SRSG stressed that these changes did not support the claim that "the broad array of international human rights attach direct legal obligations to corporations...." (40) Over the next two years, John Ruggie laid...