WASHINGTON, Sep 30 2014 (IPS) — The United States will begin developing a national action plan on responsible business practices, following on several years of related advocacy from civil society.

The plan will detail how the United States will implement landmark U.N. guidelines outlining the responsibility of multinational businesses to respect human rights. While the United Nations has urged participating governments to draft concrete plans for putting into practice the guidelines, known as the Guiding Principles on Business and Human Rights, thus far only three countries have done so – Denmark, the Netherlands and the United Kingdom.“What we’ll expect is what we’ve seen in the past, where industry is not going to want anything that’s binding.” -- Human Rights Watch’s Arvind Ganesan

Yet on the sidelines of last week’s U.N. General Assembly, President Barack Obama for the first time announced that his administration would begin formulating such a plan.

“[W]e intend to partner with American businesses to develop a national plan to promote responsible and transparent business conduct overseas,” the president stated. “We already have laws in place; they’re significantly stronger than the laws of many other countries. But we think we can do better.”

Obama suggested that clarity around responsible business practices is good for all involved, including industry and local communities.

“Because when [companies] know there’s a rule of law, when they don’t have to pay a bribe to ship their goods or to finalise a contract, that means they’re more likely to invest, and that means more jobs and prosperity for everybody,” the president said.

A White House fact sheet noted that the plan would aim to “promote and incentivize responsible business conduct, including with respect to transparency and anticorruption.” It also stated that the plan would be “consistent” with the U.N. Guiding Principles and similar guidelines from the OECD grouping of rich countries.

Additional details on the formulation process are not yet available, though observers expect a draft next year. For now, however, advocacy groups are applauding the president’s announcement as preliminary but significant.

“This could end up being a very important step, but now we’ll be looking to see how the U.S. articulates how it expects companies to respect rights at home and abroad,” Arvind Ganesan, the director of the business and human rights programme at Human Rights Watch, told IPS.

“More importantly, we’ll be looking to see whether this process results in any teeth – mechanisms to ensure that companies act responsibly everywhere.”

Task of implementation

In 2011, the U.N. Human Rights Council unanimously backed the Guiding Principles, which are meant to apply to all countries and companies operating both domestically and internationally.

Yet thus far, formal adherence to the Guiding Principles has been only stuttering. In late June, the council called on governments to step up the process of drafting national action plans.

The United States – which endorsed the June resolution – has been a key focus for many in this process, given the overwhelming size of its economy and the number of multinational companies that it hosts.

Further, U.S. companies have stood accused of a broad spectrum of rights abuse, from extractives companies poisoning local water supplies to private security companies killing unarmed civilians. Often, of course, such problems impact most directly on poor and marginalised communities in developing countries.

The Guiding Principles mandate that governments take on the responsibility to prevent rights abuses by corporations and other third parties. States are also required to provide judicial “remedy” for any such abuse.

This is powerful language, but it remains up to governments to decide how exactly to implement the guidelines. Here, watchdog groups are less optimistic.

While Ganesan welcomes the actions by the three European countries that have developed implementation plans, he has reservations as to how substantive they are.

“Few of them have any real strength,” he says. “While they ask their companies to adopt the Guiding Principles, none of them have put together any kind of mechanism aimed at ensuring that happens.”

In the context of the U.S. announcement, then, there is a sense of caution around whether the United States will be able to put in place rules that require action from corporations.

“We are thrilled to see the United States take on this important initiative,” Sara Blackwell, a legal and policy associate with the International Corporate Accountability Roundtable (ICAR), said in a statement.

Yet Blackwell notes that her office will continue to advocate for a U.S. action plan that goes beyond concerns merely around transparency and corruption.

Rather, she says, any plan needs to include “clear action on important issues such as access to effective remedy for victims of business-related human rights harms and the incorporation of human rights considerations into the U.S. federal government’s enormous influence on the marketplace through its public procurement activities.”

Voluntary initiatives

ICAR has been at the forefront of civil society engagement around the call for the development of national action plans on responsible business practice, including by the United States.

In June, the group, along with the Danish Institute for Human Rights, published a toolkit to guide government officials intent on formulating such plans. Among other points, the toolkit urges the participation of all stakeholders, including those who have been “disempowered”.

In his announcement, President Obama appeared to suggest that the drafting of a U.S. plan would rest on participation from business entities, though it is not yet clear how companies will react. (Three major industry lobby groups contacted for comment by IPS failed to respond.)

At the outset, though, rights advocates are worried by the examples coming out Europe, where governments appear to be relying on voluntary rather than rule-based initiatives.

“What we’ll expect is what we’ve seen in the past, where industry is not going to want anything that’s binding,” Human Rights Watch’s Ganesan says.

“They’ll be happy to agree to accepting human rights in rhetorical or aspirational terms, but they will not want any rules that say they must take certain actions or, for instance, risk losing government contracts. Nonetheless, there is now a real opportunity for the U.S. government to mandate certain actions – though how the administration articulates that will be a critical test.”

Meanwhile, concerns around the potential laxity of the Guiding Principles have already led to a division among rights advocates as to whether a new international mechanism is needed. In a landmark decision at the end of June, the U.N. Human Rights Council voted to begin negotiations towards a binding international treaty around transnational companies and their human rights obligations.

Yet this move remains highly controversial, even among supporters. Some are worried that the treaty idea remains unworkably broad, while others warn that the new push will divert attention from the Guiding Principles.

Edited by Kitty Stapp

The writer can be reached at cbiron@ips.org