CSR Norms: From Principle to Practice

Dr. John Ruggie spearheaded the UN's effort to transform the relationship between business and human rights. OpenCanada spoke to Ruggie about the evolution of global CSR norms and the road ahead.
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November 26, 2013
Global Journalism Fellow at the Munk School of Global Affairs at the University of Toronto

Canadian academic Dr. John Ruggie doesn’t shy away from big challenges. In 1997, he began a 4-year stint as the UN Assistant Secretary-General for Strategic Planning. During his term, he oversaw the establishment of the UN Global Compact and the Millennium Development Goals. Between 2005 and 2011, he served as the UN Secretary General’s Special Representative for Business and Human Rights, where he spearheaded the development of the UN Guiding Principles on Business and Human Rights. Endorsed by the UN Human Rights Council in 2011, the Guiding Principles are considered the authoritative global guidelines on the subject. OpenCanada Reporter Alia Dharssi asked Ruggie, currently teaching at Harvard, about the challenges involved in turning the growing consensus around corporate social responsibility into concrete action.

Through your work at the UN you’ve built a reputation as somebody who can tackle and build consensus on big global challenges. What is the most important thing you’ve learned about consensus-building in the course of your career?

That’s a big question. I think in terms of a general approach, it’s to play things straight – to listen more than you talk and to stay with the facts. You need to listen in order to see where there are areas of overlap between perspectives that you can build on.

During my time as the UN Secretary General’s Special Representative for Business and Human Rights, we produced several thousand pages of research reports on a whole variety of issues and posted it all on the internet for people to see. We convened nearly 50 multi-stakeholder international consultations on five continents. But before we proposed anything, we carried out pilot projects to make sure that things would work. And we kept in touch with the governments on the human rights council on an informal basis to make sure there were no surprises.

Lets focus in on your work  as Special Representative for Business and Human Rights. How challenging was it to move ahead with your mandate?

It was one challenge after another – it was six years of non-stop challenges. Some of these were conceptual challenges. Generally, international law doesn’t apply directly to businesses, it applies to states. States are obligated to apply domestically whatever they’ve committed to.

How does one expand the sense of corporate responsibility in that kind of a context? That’s a big challenge. There had never been an authoritative statement that enjoyed any kind of broad consensus on what the corporate responsibility to respect human rights is. That had to be sort of done from scratch. And it involved the kinds of complex processes, studies, consultations and so forth that I mentioned.

There were also challenges relating to countries that want to encourage investment on the one hand, but that want to limit the harm that corporations do on the other hand. They don’t always know how to reconcile those kinds of things.

And yet you managed to overcome these challenges – the Guiding Principles were ultimately endorsed by the UN Human Rights Council and have now been adopted by many countries and international organizations, not to mention winning support from corporations like Coca-Cola and GE. How confident are you now that your efforts are translating into changes on the ground?

You can’t push a button and change the world. People have to follow through on what they’ve committed themselves to. In part, that is a matter of governments and inter-governmental organizations acting on what they’ve committed themselves to doing. So, for example, the Organization for Economic Co-operation and Development (OECD) incorporated the Basic Principles of the corporate responsibility to respect human rights. The OECD guidelines themselves have a complaints process, which means that member governments are now dealing with issues that are raised by communities and individuals and have to follow through on them.

The International Finance Corporation also incorporated parts of the Basic Concepts. They have performance standards that are required of companies that they co-invest with or lend funds to. They now have to follow-up on making sure that those performance standards are met and so on, down the line.

The European Union also endorsed the guiding principles. Now, all EU member states are required to develop national implementation strategies and so on and so forth. That is on the governmental side.

Similarly, companies, quite apart from what governments require them to do, are subject to an independent responsibility to respect human rights. And the guiding principles lay out the kinds of due diligence processes and grievance mechanisms that are required in order to meet that responsibility to respect rights.

The UN itself can only sort of lay out the authoritative guidance. It doesn’t have an army to parachute into countries to enforce things in countries. In this case, companies have to do that and other international institutions that have greater leverage have to do that.

What are the strengths and weaknesses of the UN as a forum for promoting corporate social responsibility?

Well, I think that its major strength is that it is the one global entity that is regarded to be a legitimate forum for developing new norms – there isn’t another organization in the world that is like it in this respect. So I think its greatest strength in this area is a normative strength. Its weakness is that it has no direct leverage over anyone and it has to rely on other actors – whether states or other international institutions, companies, domestic courts, whoever – to actually implement things that the UN or some UN process has generated.

Are you concerned that certain countries or organizations are lagging behind when it comes to implementation?

Well, I’m always concerned when things don’t change as fast as I would like them to. But we also have to consider that in many cases, there are capacity issues, as well. You can’t expect a small company or a small and poor country to have the same capacity to change things overnight as a country or a company with significant capacity, so that has to be taken into account.

A global company, whether it’s a Shell or Nike or Wal-mart or whatever it is – they have significant resources, both in terms of funds and personnel, to do the kinds of impact assessment that is called for. A small- and medium-sized company doesn’t have a thousand people to throw at the problem because they may only have fifty employees. And so, the process of assessing your impact on human rights is bound to be different. And a small- and medium-sized enterprise may operate transnationally in a more arms-length way. So, it might not have direct influence over its business partners, but that doesn’t get it out of having to meet its responsibility. It simply means that it can’t happen in exactly the same way.

I think the Bangladesh example is a perfect illustration of how we need to have sort of a multi-stakeholder approach to implementing the Guiding Principles. The Bangladesh government has to play its role. The international brands have to play their role. The local factories have to play their role. The home governments of the international brands have considerable leverage in the equation. The whole idea of the guiding principles is to make sure that the different actors have guidance that is complementary and, on the basis of which, they can work together to solve these kinds of problems.

I’d like to talk bit more about the global supply chain. What challenges do you think global supply chains pose for implementing the guiding principles?

Well, I think the biggest challenge is that in many industries supply chains have become so fragmented and so complex that they’re hard to keep track of. When a company has thousands of suppliers, as major global companies may, just keeping track of who is in your supply chain can itself be a significant challenge.

How do you think companies can address that?

Well, essentially what to do is to try to identify particular areas of risk, whether the risk is related to a country of operation or a particular product. So, if you’re sourcing minerals for making cellphones or computers and you’re sourcing in Central Africa, there’s a good chance that they come from the Democratic Republic of Congo and, therefore, there’s a good chance that they’re involved in a conflict situation. So, by identifying sources of risk, you’re able to set priorities in terms of what you pay the most attention to and make sure that your supply chains in that area are not part of networks that finance human rights abuses in a particular country of operation.

Not an easy task. Final question - how do you explain the greater efforts to comply with human rights norms in the extractive sector?

Companies in the extractive sector have learned that there’s a difference between having a legal license to operate, which you get from the government, and having a social license to operate, which you get from the communities that surround you. And they’ve learned over the course of time that it’s wiser to treat the communities respectfully as neighbours, irrespective of what their legal license to operate requires. For if they can’t find ways to develop a sustainable relationship with the communities around the, they don’t have a sustainable investment. While not all companies have learned that at the same speed, and not all companies from all countries have learned that lesson fully, it certainly is becoming better-understood in the extractive industry than it was a few years ago. When a community organizes protests against a world-class mining operation, shutting it down so that it starts losing $20-25 million a week, it gets the attention of senior management every time.

This interview was edited for length and clarity.