The UN Secretary General’s July 2012 report on Business and Human Rights provides a critical insight on the need for enhanced corporate accountability and financial regulation. Governance gaps at many levels are blamed in the report for creating a “permissive environment for wrongful acts by economic actors of all kinds, without adequate sanctioning or reparation.”
Closely linked to the business and human rights agenda is the role of dominant economic policies in spurring inequality which is threatening global political, social and economic stability. A 2011 study by UNICEF estimates that the top 20% of the world’s population accounts for 70% of global income. Civil society group Oxfam estimates that the top 100 billionaires of the world earned enough money in 2012 to “make extreme poverty history four times over.” Yet, we find increasing talk about privatisation and advancement of the same neo-liberal agenda which has spurred inequality by governments around the world. Public-private partnerships are becoming the new mantra at international conferences on development as civil society groups lament the failure of states to fulfil their social contract to citizens. More and more governments are outsourcing basic services which are their responsibility to provide such as health, education, mass transport and even policing to private players as politicians and business leaders collude.
Decision-makers seem to have forgotten that it was the reckless behaviour of few banks considered ‘too big to fail’ that precipitated the financial crash of 2008, the after effects of which are still being felt today. Hardly a day goes by without more news about wrongdoing and bungling in financial markets yet the calls for accountability are muted. In its 2013 World Report, Human Rights Watch laments the ‘failed approach to corporate accountability.’ But the push to privatise natural resources and public goods to serve elite interests is continuing at a rapid pace even as large numbers of people particularly in developing countries are being displaced and subjected to human rights violations by mammoth agricultural, construction and extractive industries.
Some progress has been made on corporate accountability through the UN Convention Against Corruption and the OECD guidelines for multinational enterprises . The recently adopted UN Guiding Principles on Business and Human Rights are a welcome starting point but they remain heavily criticised by civil society for their voluntary nature and soft language.
In today’s interlinked world ensuring adherence to the business and human rights framework requires a three-tiered approach. First, governments must actively protect their populations against rights violations by businesses committed within their jurisdiction by using the full force of the law. Second, they must ensure that businesses domiciled in their jurisdiction do not commit violations when operating outside it and adequately legislate protections. Third, international mechanisms need to be strengthened to ensure violators are duly prosecuted in instances where states are unwilling or unable to take offenders to task.
As problems caused by corporate excesses continue to mount, civil society groups need to redouble their efforts to push for universal and legally binding accountability standards. In a recent paper, the Stakeholder Forum makes a convincing argument for a future Convention on Corporate Social Responsibility and Accountability which includes powers for the UN to investigate and monitor violations, receive complaints from individuals and states and ensure action on recommendations to states and companies through regular reporting to the UN General Assembly.
Making such a convention a reality will not be easy given that the interests of the political and economic elite closely overlap. In many instances, the political elite are the economic elite as the lines between business and politics blur. We are increasingly seeing this in discussions on the post 2015 agenda to replace the Millennium Development Goals and in debates on sustainable development. Arguments to spur economic growth are overshadowing demands for social, political and economic justice particularly for the vulnerable and marginalised.
The power of some corporations dwarfs today that of many governments. Progressive civil society will have to redouble its efforts to create people’s networks of solidarity to pressure decision makers into advancing the agenda of making business accountable to human rights.
Mandeep Tiwana is Policy and Advocacy Manager at CIVICUS: World Alliance for Citizen Participation.