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.”

 

 

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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.

Should we feel sorry for Liam Fox?

I spoke on a panel at the end of last year about post-Brexit trade policy and I told the audience I would try to tackle three really tough challenges. The first challenge was to make them feel sorry for the UK’s Secretary of State for International Trade, Liam Fox.

OK, so it was a silly challenge, aimed partly at waking the audience up and giving them something to laugh about. But I was also trying to make a more serious point about the massive problems facing those in charge of developing UK trade policy. Below is a video of my talk, so you can see if it makes you feel compassionate.  You can also judge for yourself whether I managed to tackle my other two challenges (saying something intelligible about the UK’s post-Brexit trade policy, and inspiring the audience to become involved in the debate about what that trade policy should look like).

Crucially, I end by arguing that we need to start thinking now about how the UK’s trade policy can work to effectively protect a broader social and environmental agenda. Working on that is my biggest New year’s resolution!

Theresa May in Bahrain: How should human rights influence post-Brexit trade policy?

Theresa May is today in Bahrain to attend the the Gulf Cooperation Council (GCC) annual summit. She will sit down with the leaders of  Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emrates and discuss, among other things, a potential new trade deal with the region.

Saying anything concrete and specific in these discussions will be difficult, for exactly the same reasons I discussed in a recent post about Theresa May’s visit to India for trade discussions.  Until potential trade partners know what the UK’s post-Brexit trade relationship is with the EU, it is difficult to negotiate. Most importantly, unless the UK leaves the Customs Union,  the UK government won’t be doing a trade deal with the GCC because it will not be able to offer reductions in tariffs and all the other goodies that such countries want from the UK.

But putting these concerns aside, the trip to Bahrain raises questions about the ethics of the UK’s post-Brexit trade policy. Human rights groups have raised concerns that commercial interests are what is driving the trip, and that Theresa May will fail to speak out about human rights abuses, particularly in Bahrain. In a statement, the groups reported that “[s]ince June 2016, the Government of Bahrain has dissolved the largest political party in the country, stripped the citizenship of the country’s most senior Shia cleric, prosecuted human rights activists and prevented them from travel, and placed an entire community under constant police blockade.”

Theresa May said before she left for the Gulf that “There will be some people in the UK who say we shouldn’t seek stronger trade and security ties with these countries because of their record on human rights. But we don’t uphold our values and human rights by turning our back on this issue. We achieve far more by stepping up, engaging with these countries and working with them.”

Since 2012, the UK has been providing technical assistance to Bahrain to work towards the reform of the police and judiciary. But the human rights situation seems to have got worse and not better over that period. And we should be wary about signing a trade deal with countries like Bahrain while at the same time ‘engaging’  over human rights issues. There are serious dangers that commercial concerns will then be prioritized over human rights abuses. My own research into processes of dialogue in EU trade agreements on social and environmental issues within trade agreements shows that these dialogues are under-resourced and ineffective.

We are at a crucial point in the development of our post-Brexit trade policy. For leaders of countries in the GCC to take the UK seriously in trade negotiations, Theresa May would have to tell them that she plans to leave the Customs Union. It seems wrong that they might know this before the UK population does. It also seems deeply worrying that our trading relationships may be shifting fundamentally away from Europe and towards regions like the Gulf, without any discussion about the underlying values that trade policy should be based on.