The Ethics of UK Trade Policy – 3 events in 24 hours add up to grave cause for concern

Three events in the last 24 hours deepened my worries about the degree to which the UK government will be held to account for the ethics of its future trade policy. Liam Fox in the Philippines, Theresa May in Saudi Arabia and the publication of a report by the Joint Committee on Human Rights of the UK Parliament together gave me grave cause for concern. Here is why.

Liam Fox managed to be pilloried by everyone from the Guardian to the Daily Mail yesterday for saying that the UK ‘shared values’ with the brutal regime of the Philippines’ President Rodrigo Duterte. Dr. Fox was in the Philippines to talk about a potential trade deal with a leader who has publicly encouraged his citizens to kill drug addicts and once bragged about throwing people out of a helicopter.

Meanwhile, Theresa May was being forced to defend her trip to Saudi Arabia (also being wooed for a post-Brexit trade deal) at a time when the Saudi regime, using UK-produced weapons, is causing a humanitarian disaster in neighbouring Yemen.  May’s foreign policy doctrine, she told a reporter, is “that everything we do is in our British national interest…It’s in our British national interest to have good relations around the world so we can trade around the world…it’s in our national interests to ensure that the values that underpin us as Britons are values that we promote around the world – and that’s what we’re doing.”

Talk of ‘British values’ as the ethical underpinning of our trade relationship is extremely dangerous. Even when teaching British values in British schools, the term is open to all kinds of worrying interpretations, as research by my colleague Dr. Ali Struthers has demonstrated. Those dangers are greatly exacerbated when the conversation becomes the bedrock of ethical discourse between entire countries. The term is so malleable that it is only when we are told we share the same values as one of the world’s most brutal political leaders that people sit up and take notice.

This is where terms like human rights can play a role. They create specificity. The Saudi regime regularly detains and imprisons critics, human rights defenders and minority rights activists on vaguely worded charges; women are faced with discrimination in both law and practice and are insufficiently protected against sexual and other violence; significant numbers of executions are carried out, including of juveniles. And of course there are Saudi actions in Yemen. These are all clear violations of human rights.  Using the term ‘human rights’ allows us to measure the ethical performance of the countries we want to trade with against internationally recognized standards. But what should we do when they fall short?

Both Liam Fox and Theresa May claim to be raising concerns with their interlocutors. But leaving the EU means that we have massively reduced the chances of our concerns being taken seriously. Instead of speaking on behalf of a potential market of more than 500 million consumers, we now speak as a market of 65 million. This diminishes our bargaining power. We need to very carefully scrutinize the claims that what remains of our influence will be used on ‘values’ rather than commercial interests.

The UK Parliament will be vital in that scrutiny process in the years to come. It was therefore disappointing to see the Parliament’s Joint Committee on Human Rights in their report published today on business and human rights, fail to show a detailed and nuanced understanding of trade and human rights issues (they were much better on pointing out the limitations of other government policy on business and human rights).

First, in their discussion of the EU’s trade policy (which, it is argued, could be a model for future UK trade agreements), they mix up human rights provisions, sustainable development provisions and labour provisions as if they are one and the same thing. They are not. Human rights and labour standards are handled very differently in different parts of EU agreements – UK parliamentarians need to understand how relevant mechanisms operate much better, if they are to evaluate their effectiveness.

Second, the report welcomed the UK government’s commitment to include human rights provisions, equivalent to those in EU trade agreements, in its own trade deals. There are limitations with the EU’s labour and human rights provisions (as I have previously discussed) which should be more thoroughly interrogated.* But, most fundamentally, this endorsement by the Joint Committee on Human Rights fails to recognize the complexity of translating human rights in law into human rights in practice.

One, relatively optimistic study of EU practice on trade and human rights concluded that “human rights conditionality seems to have some clear results with third countries over which the EU holds substantial economic leverage, which might … suggest that the latter is more important than legalisation for promoting compliance.”

We need a UK Parliament that recognizes our heavily reduced post-Brexit economic leverage, and in light of that, carefully scrutinizes our government’s efforts to strike trade deals with countries with very dubious human rights records. And we need human rights advocates within the UK Parliament who much more carefully interrogate what a truly ethical UK trade policy actually entails.

 

* The Joint Committee’s report also encourages the UK government to do better than the EU on enforcement (but the devil here is in the detail). It also encourages assessment of human rights impacts of trade agreements before entering into deals – the EU already does this, but rather superficially. Again more specificity is required about what a human rights impact process should entail.

An EU-UK trade deal; What role can it play in protecting rights?

A recent article in the Guardian, highlighted a letter signed by 50 leading human rights lawyers. It raises concerns about the threat of a UK human rights crisis post-Brexit and argues that the UK’s post-Brexit trade agreement with the EU might be part of the solution. This letter, and today’s triggering of the Brexit process, prompted me to think about the complex relationship between trade and rights, and how the UK’s post-Brexit trade deals might affect that situation (for better and worse). Some initial thoughts below…..

The current UK conservative government has for a long time flirted with abolishing the UK’s Human Rights Act. The letter by human rights supporters raises the concern that, once outside the EU, the UK is also free to leave the European Convention on Human Rights (all EU members must sign up to the ECHR, but once you leave, this isn’t an issue). The letter also raises concerns about the UK “trading away protections against torture for grubby trade deals with foreign tyrants.” Hence the crisis.

The signatories to the letter are right that our changing economic relationships with the EU and other nations can potentially have a great affect on rights protection. And their proposed solution tackles some of the problems.

The letter’s signatories call for “the EU to make Britain’s membership of the ECHR a legally binding requirement for any future free trade deal with the UK.” This is a very important step. It would potentially* lock in the UK’s ECHR commitments and ensure that the UK government cannot unilaterally decide at a later date to abandon the ECHR, a step which “could embolden populist leaders in countries such as Hungary and Poland to abandon domestic and international commitments to human rights.”

Using trade agreements to ensure against a human rights ‘race to the bottom’ across Europe is vital. But should we also be thinking beyond this about a range of other protections that the UK’s future trade deals should engage with? For instance, protection against the UK creating a more ‘competitive’ economy by eroding the rights of workers;  protection for the human rights of vulnerable individuals in countries with troubling human rights records which the UK now wants to create trade agreements with; and protection that ensures the UK’s future trade agreements become building blocks towards better working conditions for workers all over the world, rather than reinforcing existing problems of slavery, forced labour, discrimination, poverty pay etc. in global supply chains.

The current anti-globalization backlash in many western countries has intensified critical engagement with trade agreements and their impacts.  Populist political movements all over the globe are gaining political momentum based on the idea that trade policies (as part of bigger processes of globalisation) are not working for ordinary people. Proponents of EU trade agreements argue that they already take these concerns seriously. EU trade officials point to human rights and labour rights clauses in trade agreements as evidence of their commitment to making sure that trade produces good social outcomes. But are such clauses effective? There is an increasing amount of evidence that suggests current labour rights and human rights provisions in EU trade agreements have had very limited positive effects.

The Post-Brexit EU-UK trade negotiations present a (perhaps tragic) opportunity to revisit this situation and re-think what a rights agenda within trade agreements might achieve. Certainly provisions which ensure that the UK cannot make a unilateral decision to leave the ECHR are of vital importance to human rights supporters in the UK and across Europe. But a more expansive agenda is required if we are to address the wide range of rights issues alluded to above. I am trying to work out what this might look like. More detailed thoughts on these issues from me over the next few months……..

* I say ‘potentially’ because this depends on how the requirements are constructed. Most importantly, the penalties must be sufficiently serious to ensure the commitment is taken seriously.

To Benchmark or not to Benchmark? That is the question… which the Corporate Human Rights Benchmark project needs to answer.

Yesterday saw the launch of the inaugural results of the Corporate Human Rights Benchmark (CHRB) – an initiative that comparatively ranks the human rights performance of leading multinational corporations. On initial reading, it seems like a well-researched project which has some very interesting findings for anyone involved in business and human rights. But there are also limitations and assumptions to this benchmarking process that remain unchallenged, unexplored, un-problematized. The question I was left asking was this: under what conditions is benchmarking itself a progressive act which will drive better performance of those being benchmarked?

Steve Waygood, Chair of CHRB, in his forward to the key findings, says that key stakeholders (governments, ngos, the media etc.) can take action and use CHRB’s results to drive improved corporate human rights performance. I want to ask some more searching questions about that claim. But first, for the uninitiated, a few words about what CHRB is, and why its findings are important.

The CHRB project takes 98 leading companies in the agricultural, apparel and extractive industries and measures their comparative performance in implementing the UN Guiding Principles on Business and Human Rights (the UN’s flagship human rights and business initiative).

Reading the key findings, it reinforces my concern (which I have written about before) that the UN Guiding Principles may not be leading to a great deal of meaningful action by the vast majority of companies. As the report itself states:

“The 2017 results are significantly skewed toward the lower bands [of corporate human rights performance]. This reflects the relatively early stage that many companies are still at when implementing the UN Guiding Principles and other internationally recognised human rights and industry standards. Nearly six years on from the UN Guiding Principles’ endorsement, this is an important if uncomfortable finding.”

The results become more uncomfortable when we find out how the leading companies scored their points: “Companies tend to perform more strongly on policy commitments, high-level governance arrangements, and the early stages of human rights due diligence… Performance drops off however, even amongst leading companies, when it comes to acting on those risks, tracking responses, communicating effectiveness, remediating harms, and undertaking specific practices linked to preventing key industry risks.”

My interpretation of this is that even the leading companies are scoring most of their points for telling the world about how committed they are to human rights, and putting in place structures and procedural frameworks which could lead to their taking human rights issues seriously. But they are not scoring many points at all for detailed and specific human rights work to identify and tackle their own human rights problems, nor are they providing stakeholders with information that allows those stakeholders to verify that real and meaningful human rights work is going on. These findings very much chime with my own research in this field.

So back to the question ‘To benchmark or not to benchmark?’. A couple of years ago I was involved in a fascinating academic project which looked at international benchmarking practice across a range of different fields: from disaster management to global financial initiatives, from tackling climate change to achieving the millennium development goals. The project identified a recent explosion in the number of global benchmarking initiatives and argued the attractiveness of such initiatives comes, in part, from the power of benchmarking to “enable non-experts to make simplistic comparisons of relative performance regarding complex phenomena at a transnational level.”

The project’s directors (Andre Broome and Joel Quirk), in their introduction to a journal special issue on benchmarking, encouraged us to examine each benchmarking initiative very carefully because global benchmarks can be represented “as ‘evidence’ that can be used to establish a foundation for initiating particular kinds of political conversations as well as potentially influencing the design of policy interventions and reforms.”

What they are saying is that benchmarks set the terms of the debate, and they dictate what needs to be done to tackle the problems. CHRB’s use of benchmarking as a mechanism to drive action by key stakeholders is problematic in two very important ways.

First CHRB presents the issue as closing the gap between the laggards and the leaders. But the more fundamental question to ask is, six years on from their inception, what meaningful changes are the UNGPs driving? And is closing the gap between the laggards and the leaders in terms of UNGP performance (what CHRB encourages), the way to encourage more companies to do meaningful human rights work?

Second, and related to this, is what the CHRB measures. CHRB is caught in the same old paradigm whereby observers measure what companies say they are doing about human rights, rather than what they are actually doing in practice.

I will leave the last word to a good friend of mine who is much more knowledgeable than me about how corporations operate and had the following observation about the inherent limitations of this benchmarking exercise:

“To benchmark on what companies say rather than what they do allows companies to game benchmarks. Here, there is no real consideration of  “on the ground” action. There are policy commitments, which are fine and required by the UNGPs. But we know they do not, in themselves, mean anything.

The only almost action is the ‘putting in place structures and procedural frameworks.’ But structures and procedures do not necessarily have any meaning or value at all and can exist solely to send the signal to outsiders that something is being done when it is not.

Rankings fail as a matter of theory and practice when companies have the ability to game the rankings by saying what the rankers want to hear. Structures and procedures are only made real by verified outcomes, so benchmarking based on procedures as they are described and reported by the company is doubly meaningless.

Essentially, it is too early to benchmark because companies are not doing enough yet. This is a sad commentary on the UNGPs.”

 

 

How do we take the interests of workers more seriously in future trade agreements?

Trade policy appears to be under greater public scrutiny than ever before at the moment. Populist political movements all over the globe are gaining political momentum based on the idea that trade policies (as part of bigger processes of globalisation) are not working for ordinary people. Many, including China’s President, Xi Jinping, are warning that the backlash against globalization looks likely to take the form of widespread nationalist protectionism – i.e. greatly increased barriers to goods and services from foreign countries. Such policies, it is argued, would reek havoc on many of the biggest ‘losers from globalisation’ by making their lives more expensive and reducing their opportunities to trade the fruits of their labour on global markets.

Is there an alternative vision which remains global in outlook, but takes more seriously the impact of trade policies on ordinary people across the globe? An important starting point for such an approach is to scrutinize current trade policy, to look at the ways in which it attempts to address the social dimensions of trade policy, to understand the limitations and deficiencies in these efforts, and to think about how they can be overcome.

Over the last couple of years I have been working with colleagues to study efforts within EU trade agreements to address the social dimensions of trade policy. DG Trade (the part of the European Commission responsible for trade policy) recognises that its trade agreements have come under increased public and civil society scrutiny in recent years and that a key element of the response to this is improving ‘sustainable economic, social and environmental conditions’ in the EU and trade partner countries. At the centre of the EU’s policy response are the Trade and Sustainable Development Chapters that all EU trade agreements contain. On the social side, the key provisions in TSD chapters are labour standards provisions which commit the EU and its trading partners to monitoring the social effects of trade agreements, and to engaging in dialogue and co-operation in relation to the worst labour abuses.

Our initial research findings suggest there are serious limitations in the functioning of these labour provisions, and that we need to think seriously about how these limitations can be overcome. On 2 March in Brussels, myself and my colleagues involved in this project are holding a policy seminar to present our research findings and to discuss possible ways of overcoming the limitations which we have identified. To find out more about the seminar, and to register a place for yourself, please see our registration page. I hope that these kind of discussions are a building block towards thinking about a progressive trade policy that puts workers’ interests at the centre of future trade policy-making processes.

 

Business and human rights: A Lacuna Special Edition

This month, I edited a special issue of Lacuna Magazine on business and human rights. As I finalized the edition, I was reading about the world’s global business elite gathering in Davos for their annual get-together. They were being chastised by everyone from Theresa May and the Financial Times  to Oxfam for their “to share the gains of globalisation with its losers”. It seemed very fitting in this context that we were examining what companies are doing about their human rights responsibilities.

If you read one article from the special issue, read my interview with Kendyl Salcito. She talks about her work as a pioneer in the field of human rights and business, researching the human rights impacts of business operations in 12 countries on 4 continents.  She gives us an insight into what it means to properly examine the human rights impacts of corporate activity, and the challenges in seeking to change company behavior. She also voices her concerns that her work is the exception rather than the rule in the ‘human rights and business’ world. Kendyl fears that the United Nation’s flagship human rights initiative, the UN Guiding Principles on Business and Human Rights, is not helping here. She argues that “human rights due diligence [which the UN prescribes], has been so weakly defined that companies are using the term to mean whatever they want it to, diluting its value”.

Putting the edition together has made me reflect again on whether there is sufficient critical engagement with the deficiencies and limitations of initiatives like the UNGPs. And it also makes me more certain than ever that the human rights and business world should be paying more attention to the actions of inspirational individuals like Kendyl who are making change happen.

Sir Ivan Rogers’ Letter – Don’t trivialise the message on trade negotiations!

It never looks good for anyone involved when a senior civil servant’s critical resignation letter becomes public. When that man is the lead ambassador in the most toxic political negotiations in most of our life times, the reaction is bound to be polarized. Accusations and counter-accusations are currently flying around the newsrooms. Is this just sour grapes from an anti-Brexit civil servant with an axe to grind or do his views reflect genuine concern about the incoherence and naiveté of the British negotiating position?

ivan-rogers

There were two sections of the letter that caught my eye, as they reinforced existing concerns about the lack of knowledge and expertise about issues vital to the negotiating process in the British government. First there is a passage on the importance of the trade deals we make:

“Contrary to the beliefs of some, free trade does not just happen when it is not thwarted by authorities: increasing market access to other markets and consumer choice in our own, depends on the deals, multilateral, plurilateral and bilateral that we strike, and the terms that we agree.”

This seems to imply that some senior government officials/ministers are seriously underestimating the complexity of negotiating trade deals. As my post from yesterday discussed (watch the video), trade deals are not just about agreeing to reduce taxes on imports and exports (not itself easy). They are about rules of origin, quotas, subsidies, investment protection, intellectual property, sanitary standards and much, much more. And our relationship with the EU dictates the terms of trade we can then negotiate with other countries. Minsters must start to understand this complexity if they are to have any hope of having a coherent and competent negotiating position.

Sir Ivan goes on to say that “serious multilateral negotiating experience is in short supply in Whitehall.” The worry is that very complex issues are being discussed by people without a full understanding of that complexity, and they are not listening to advice from outside. Whatever the motivations of the messenger, the message needs to be taken very seriously.