UCL’s Centre for Ethics and Law is tonight hosting Professor John Ruggie, leading light on business and human rights and the driving force behind the UNs Guiding Principles on Business and Human Rights. His work provides a fascinating insight into corporate change and the difficulties of globalising international order.
I want to concentrate here on the implication of his work for lawyers. The IBA has produced a working draft of Business and Human Rights Guidance for Bar Associations, 2014. It is the product of 8 lawyers from around the globe and provides an excellent introduction to area for the uninitiated and teases out some of the very interesting issues that face lawyers. Those issues are posed as legal advisers to businesses . They are also posed to lawyers as owners, managers of businesses in their own right. In particular two of the three pillars of the Guiding Principles on business and human rights apply:
(2) all business enterprises have a responsibility to respect human rights, which means to avoid infringing on the rights of others and to address negative impacts with which they may be involved, and
(3) there is a need for access to effective remedy for victims of business-‐related human rights abuses.
The IBA seeks to “encourage bar associations and law societies around the world to take affirmative steps to develop an overall strategy for integrating the Guiding Principles into their work for the legal profession”. In this country the Law Society have taken up the cudgels in their own working party report. It might be thought that the Bar, and the regulators would also take an interest. The IBA suggests Bar Associations (which I would read as including the regulators in this country), should adopt organisational structures for managing business and human rights activity; consider programmes of comprehensive education; review ethical codes of conduct in the light of the Guiding Principles and provide guidance and technical assistance on how lawyers should implement the principles.
What should lawyers be doing?
The UN Guiding Principles do not, in and of themselves, create new rights though they can influence States and others (e.g. influencing or being incorporated into contracts, joint venture agreements, and the like).
And yet :
The responsibility to respect human rights is the baseline expectation of all business enterprises. The Guiding Principles do not, and cannot, impose legal obligations on companies directly but neither are they voluntary; businesses (and others) do not have to ‘sign-‐up’ to them for them to apply. Aspects of the responsibility to respect human rights may be, and often are, compelled by national law (for example, through health and safety, non-‐discrimination, environmental or criminal laws). However, the responsibility exists over and above compliance with national laws and regulations and – importantly – it exists independently of the state’s ability to meet its own duty to protect human rights. That is, national law does not limit the responsibility to respect human rights.
The responsibility to respect means that businesses should avoid infringing on the human rights of others, and should address negative human rights impacts with which they may be involved (Guiding Principle 11). Companies are expected to take appropriate action to avoid causing or contributing to adverse human rights impacts, and to seek to prevent or mitigate impacts that are directly linked to their operations, products or service by their business relationships, even if the company itself did not cause or contribute to the impact (Guiding Principle 13). ‘Business relationships’ refer to those relationships a company has with business partners, entities in its value chain, and any other non-‐state or state entity directly linked to its business operations, products or services. They include indirect business relationships in an enterprise’s value chain, beyond the first tier, and minority as well as majority shareholding positions in joint ventures.
The Guidance sets out the kind of international human right obligations which the Principles seek to govern. The (non-exaustive) list is:
Right to Life , Right not to be subjected to Torture, Cruel, Inhuman and/or Degrading Treatment or Punishment, Right to Liberty and Security of Person, Right to be Free from Slavery, Servitude and Forced Labour Right to Freedom of Movement Right to Privacy , Right to Freedom of Thought, Conscience and Religion Rights to Freedom of Opinion and Expression Right to an Adequate Standard of Living , Right to Work Right to Freedom of Association and rights to Collective Bargaining , Right to Enjoy Just and Favourable Conditions of Work , Right to Freedom of Assembly Right to Participate in Public Life Right to Take Part in Cultural Life , Right to Health Right to Water and Sanitation Right to Education , Right to a Family Life, Right to Non-‐Discrimination Rights of Minorities , Rights of Protection for the Child Right of Self-‐Determination, Rights to freedom from war propaganda and freedom from incitement to racial, religious or national hatred, Right to social security, Right of detained persons to humane treatment, Right to recognition as a person before the law, Right to a fair trial (and aliens’ rights to due process when facing expulsion), Right to be free from retroactive criminal law, Right not to be imprisoned for inability to fulfil a (private) contract.
Furthermore gross human rights breaches should be treated as ‘a legal compliance issue’.
What is expected of businesses?
The guidance suggests each business, however large or small, should have:
A high-‐level policy commitment to respect human rights, supported by operational-‐ level policies, training, and incentives that embed the commitment throughout the organisation (Guiding Principle 16).
Human rights due diligence processes through which the business: (i) assesses the actual and potential impacts on human rights arising from its own activities and through its business relationships, (ii) integrates the findings from these assessments and takes action to prevent or mitigate adverse impacts, (iii) tracks the effectiveness of its efforts to address human rights impacts, and (iv) is prepared to communicate these efforts to affected stakeholders and others. (Guiding Principles 17–21).
The provision of or cooperation in legitimate processes to remediate human rights harms that the business has caused or contributed to, which may include non-‐ judicial operational-‐level grievance mechanisms (Guiding Principles 22, 29 and 31).
The guidance distinguishes between human rights harms caused, contributed to, or liked to the business. Importantly for lawyers, advising or assisting clients may well constitute linkage, contribution or (more rarely) cause. Depending on which point on this scale the ‘linkage’ falls action may be expected to stop, prevent, mitigate and/or remediate the harms.
It is when the guidance turns specifically to lawyers and legal business that things get particularly interesting. Advice ot clients on the law applicable to them in any jurisdiction may not be enough to comply with the principles. National law may be at odds with international human rights standards and the lawyer may need to help the client look at ways of meeting international standards in spite of such laws. Companies specific policy commitments, membership of (say) industry based associations may mean they have already signed up to broader commitments. The guidance claims:
…corporate in-‐house legal leaders are now challenging their outside counsel to proactively advise them on human rights risks
Reputational risk and the possibility of law changing to bring more formal sanctions or remedies for human rights violations also may drive lawyers to providing more rounded, human rights sensitive advice, as may corporate reporting requirements.
The reach of the guidance goes beyond advice to clients though. Particularly of note is the warning that:
a company’s litigation strategy and tactics has recently been raised as a topic to explore under the responsibility to respect human rights. As Professor Ruggie has said, business lawyers may wish to consider ‘laying out for their client the entire range of risks entailed by the litigation strategy and tactics, including concern for their client’s commitments, reputation, and the collateral damage to a wide range of third parties’ as part of helping their client understand the full implications of any proposed approach to responding to claims of human rights harms.
It seems to me that there is a plausible argument that lawyers will need to consider the implications not just for the client’s risk but also for their own conduct risk. Judges voice anxiety from time to time about litigation tactics (evidence polishing for instance); abuse of process, wasted costs, as well as general ethical principles demand a degree of independence in the execution of litigation and advocacy standards, with a view on the lawyers obligations to protect the rule of law and the administration of justice.
The IBAs draft already emphasises the interplay between duties of candour and independence in the provision of advice. It also tackles, “potential tensions between a lawyer’s responsibilities under applicable codes of conduct and the Guiding Principles.” This is one of the reasons it recommends Bar Associations [or regulators] review their codes.
There is also an expectation that, “firms might be expected to exercise leverage in order to influence their clients to respect human rights” and how they might do that. What might leverage look like?
There are a number of ways in which a law firm may be able to increase its leverage either alone or with others, for example:
- It could emphasise to all its clients up-‐front that it intends to advise on the ‘big picture’, which includes human rights risks, in order to provide greatest value to clients, particularly those operating in risky environments.
- It could tactfully raise with a client, in anonymised form, the kinds of problems that other companies have faced when they have not fully addressed human rights issues associated with a similar transaction, and offer to advise on how to avoid those problems.
- It could offer to provide capacity-‐building to clients and their legal departments on human rights issues, either by itself or with outside experts as appropriate.
- It could provide advice and services on business and human rights on a pro bono basis to clients.
- It could issue client briefings and alert bulletins on specific human rights issues related to its individual practice groups that highlight the kinds of legal and regulatory developments outlined in Part 2 of this Guidance.
- It could participate in multistakeholder dialogues or fora where the firm can champion business and human rights issues
- It could support the efforts of law societies and bar associations to provide training and guidance for member lawyers on business and human rights issues.
Some of this leverage is very gentle indeed, but the softly softly approach is consistent (perhaps) with Ruggie’s principled pragmatism. The IBA clearly are very conscious of the business interests of legal businesses here.
There is an expectation that (proportionate to the risks) human rights due diligence is done by law firms on clients and transactions.
…In assessing impacts, a firm will want to consider: (1) the stakeholders whose rights may be affected by the activity or project for which legal advice or services are being sought (eg, factory workers in a major supplier; local communities around a mining project); (2) the severity of potential impacts (eg, a major factory accident; excessive violence by security forces protecting the mine); and (3) the likelihood of potential impacts, based on the client’s operating context, business relationship context, and management system context
There is a definite sense of a real capacity problem here. That structurally lawyers are not always well placed to conduct such due diligence and may not always have the skills to do so:
a lawyer’s limited knowledge of the underlying facts, and constraints on his or her ability to learn more, may prevent a full assessment of the likelihood of an impact. Compared to in-‐house counsel, a law firm may not understand the full scope of the client plans but may only be called in to address a narrow legal issue, and the client may not be willing to pay to let the firm dig more deeply. Absent client permission, the law firm will be precluded from engaging with potentially affected stakeholders, and may not have the capacity or expertise to do so in any event. In such cases, the firm will have to make reasonable assumptions based on what it knows about the matter, what it can learn from third party experts, and what is publicly available.
The idea that clients should pay for law firms to do due diligence on them is an interesting one; though of course all clients ultimately pay indirectly for this kind of work how many businesses would ask the clients to pay directly, I wonder.
How might we expect law firms to respond to this draft guidance? We might get some clues from the earlier document from The Law Society’s Business and Human Rights Advisory Group January 2014 document. The recommendations were a bit more tentative and less detailed than the IBA’s guidance. A point worth noting is that the professional principle which gets the most attention is the duty to act in the client‘s best interests.
Acting in the client‘s best interests and advising on the prevention and mitigation of adverse human rights impacts should go hand in hand. Providing information and advice on human rights risks does not require the lawyer or client to agree on what is ethically right or wrong but provides important context and improves legal advice.
This is a view which emphasises the non-bindingness of the Guiding Principles and does not address the extent to which serious breaches of international human rights obligations should be treated as legal compliance issues. It also (I think) avoids the tricky issue of the extent to which lawyers are linked or contribute to the harm inflicted by their client assisted by legal advice and other work. This emphasis on one principle is particularly curious given that professional obligations perhaps more consistent with the Guiding Principles are not mentioned at all. Hence the first (and pre-eminent) principle that binds solicitors is the obligation to, “uphold the rule of law and the proper administration of justice; and the third principle is to “not allow your independence to be compromised;”. Now I can understand why the Law Society working group might be keener to emphasise the client friendly aspects of the proposals. And I can also see the argument that it is not clear whether and how the Guiding Principles inform the solicitors’ promotion of these principles. But there is an at least as plausible argument that the obligation to promote the rule of law and the administration of justice is engaged and that the Society’s commitment to and promotion of the Guiding Principles is both more convincing and more meaningful if all the relevant professional principles are at least discussed and, preferably, also seen as engaged.