Human rights in business contexts: an overview

AURORA VOICULESCU AND HELEN YANACOPULOS

The business and human rights nexus

The role and responsibility of business in issues of labour, environment and society has been a key point of discussion over the past few decades, and has led to such terms as 'corporate social responsibility' entering common parlance. Corporations have rushed to incorporate voluntary instruments into their business practices – frequently as a response to public criticism, but also frequently as a means of 'doing good'. Businesses have been encouraged to do this by international frameworks and declarations, and by pressure to ensure that they achieve some international standards. The framework of human rights has become an international social norm, to which many international businesses now subscribe.

Why has this been seen as necessary? First of all, large corporations have become increasingly international (some would say 'global') and, in terms of their supply chains, even more interconnected than before with medium-sized and smaller producers across the globe. In their primary aim of reducing costs (and consequently increasing their profit margins), corporations have fuelled what has been called the 'race to the bottom' – finding the cheapest labour to produce their products. Furthermore, in trying to maximise profits, some corporations have frequently cut corners, resulting in damage to the environment where products are produced or disposed of (typically not the same locations as where the products are consumed). This has inevitably generated harsh public criticism. The internationalisation and globalisation of business has also meant that, whereas in the past businesses have been linked to local communities via production and consumption, this link is now (with few exceptions) severed.

Second, frequently there is a disjuncture between the needs of individuals and societies, and the agencies – largely governmental – that can (or have the duty to) provide/protect/promote/fulfil these needs. This broken link may be detected with regard to instances of individual harm and the perpetrator agency (for instance a transnational corporation), as well as instances of harm and the compensatory agency (generally, national governments). However, aside from this severed link between needs and the duty-bearing agencies, there is also a perceived conceptual and legal dislocation of duties and responsibilities.

Corporate social responsibility

Businesses today are expected to conduct their operations responsibly and with accountability to wider society. The responsibility and accountability derived from these expectations have found their platform in the corporate social responsibility debate. The concept of corporate social responsibility itself is multifaceted. Zenisek (1979), for instance, spoke of corporate social responsibility as meaning 'something', but not always the same 'something' to everyone. To some it conveys the idea of legal responsibility or liability; to others it means socially responsible behaviour in an ethical sense; to still others the meaning transmitted is that of 'responsible for' in a causal mode; many simply equate it with 'charitable contributions'; many of those who embrace it see it as a mere synonym for 'legitimacy'; a few see it as a sort of fiduciary duty.

In a similar vein, Carroll (1979) suggested that the definition of corporate social responsibility (CSR) should encompass the range of social expectations placed on companies, including economic, legal, ethical and philanthropic responsibilities. From this perspective, he spoke of at least four types of corporate responsibility. First of all, of course, there is economic responsibility, which corresponds readily with a business's self-perception of its scope and role in society. This would imply the primary responsibility of a business organisation to produce goods and services in a way that is profitable for its owners.

Second, while assuming their fundamental economic role, companies are expected to comply with the laws and regulations that reflect society's values and norms. Legal expectations apply to companies as legal entities that can act as persons; but they also affect individuals in their role as employees. This represents the legal dimension of a business organisation's social responsibilities.

Third, business organisations are expected to abide by the ethical norms of society. Carroll argues that, because these norms are not written down in law, they are more ambiguous than legal requirements and therefore more difficult for companies to anticipate and follow. Nevertheless, as we shall see throughout this volume, there is an inherent link between legal and ethical responsibilities, because ethical expectations can be seen to underpin and predict the emergence of new laws and regulations. For example, social movements – including those that promote labour rights, women's rights and environmental protection - have advocated values that have later been codified into law. Moreover, the law has its own insidious ways of cross-pollinating what was initially regarded as the domain of voluntarism and philanthropy.

Philanthropy is the fourth dimension of the business responsibilities identified by Carroll. Businesses may, for instance, engage in activities that go beyond the expectations of society – through such activities as volunteer work, sponsorship of philanthropic projects and donations to public and non-profit organisations (such as sports clubs). Even though lack of engagement in discretionary activities is not perceived as irresponsible, it is quite common for companies to carry out such roles in society. Carroll's four-part model is useful in distinguishing and clarifying the motives and contradictions behind corporate behaviour (Griseri and Seppala 2010).

Stemming from the CSR debate, as well as from a host of complex factors related to globalisation processes, is the growing acknowledgement of international human rights as potential rules of a globally...