Remarks at the U.S. Government Implementation Workshop on UN Guiding Principles on Business and Human Rights

Jose W. Fernandez
Assistant Secretary, Bureau of Economic and Business Affairs
George C. Marshall Auditorium
Washington, DC
April 30, 2012

Thank you, Michael, for your introduction and Maria, for your opening remarks. I also would like to thank all of you for attending this workshop. Our purpose is to share ideas about how corporations can engage more fully as partners with government to promote sustainable economic development and respect for human rights. We want to discuss and to hear your views about incorporating the UN Guiding Principles on Business and Human Rights into your business practices.

At the Global Business Conference a few weeks ago, Secretary of State Clinton pointed out: "The reach of our corporations extends far beyond where even our most aggressive diplomats and development workers hope to goThe idea that business, on the one hand, and government, on the other hand, can simply operate in parallel worlds just doesn’t cut it. We have to work together."1  The Secretary’s Economic Statecraft agenda recognizes that "economic forces are transforming foreign policy realities," in ways beyond what might have been imagined only a few decades ago.

In today’s globalized world, more than one-third of the 100 largest economic actors are private companies, not countries. When comparing gross revenue to GDP, ExxonMobil would be the 28th biggest economy in the world—larger than that of countries such as Nigeria, Venezuela and Peru.

So, corporations are playing an unprecedented role in the world. American businesses, by exemplifying our country’s culture of entrepreneurship and promoting the values of free markets, respect for human rights, the rule of law and the free exchange of ideas, can foster a positive image of America abroad, and advance America's security and foreign policy objectives.

The core tenets of Corporate Social Responsibility underscore the importance of effective cooperation and partnership between government and American businesses operating overseas. Your work helps to complement the U.S. government's diplomatic and development efforts.

The State Department’s strong commitment to a comprehensive approach to CSR encompasses a broad range of initiatives in partnership with the private sector, focusing on transparency, the environment, human rights, labor, supply chains, and public-private partnerships. The Department and our embassies worldwide are committed to partnering with America's private sector to promote, recognize, and support exemplary CSR practices to improve lives at home and abroad.

As Maria noted a few minutes ago, we seek to promote the contributions of companies in meeting global challenges. One way we promote and recognize outstanding CSR achievements by U.S. businesses operating overseas is through recognizing your work with Secretary of State's annual Award for Corporate Excellence. This past year's recipients were Sahlman Seafoods in Nicaragua, and Procter and Gamble in Nigeria and Pakistan.

The discourse about corporate social responsibility has gone on for more than two decades. But in our increasingly interconnected world, information transmitted almost instantaneously by social media can have a major impact on multinational enterprises, even those operating in the most remote corners of the planet. Public expectations and perceptions about how businesses conduct themselves, particularly in the communities where they operate, can greatly impact corporate image, reputation, risk management, profitability, integrity, and identity.

This situation poses a major challenge and opportunity for companies and governments.

Thanks to John Ruggie and his team in creating the Guiding Principles on Business and Human Rights, we now share a common language in addressing business and human rights challenges. I'll let John go into more detail on the Guiding Principles. But, it is clear that John’s work has been critical in building a dialogue among business, government, and civil society about the respective roles of government and business regarding human rights.

We welcome that the human rights chapter of the 2011 Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises, draws upon and is in line with the UN Guiding Principles. My Bureau implements the OECD Guidelines through the U.S. National Contact Point. The U.S. NCP works to further business' respect for human rights. It does this through its outreach and promotion, its alternative dispute resolution mechanisms, and its problem solving activities that involve multinational enterprises and their stakeholders. The UN Guiding Principles and the OECD Guidelines recognize that stakeholders need to work together because no single set of actors has all the necessary tools to address these challenges on its own.

In the past it was assumed that corporate responsibility lay solely within the purview of the private sector. The recognition that governments have a core role to play is distinctive in the Guiding Principles, and our government acknowledges this significant shift.

As the Guiding Principles remind us, it is important for States to govern justly and effectively, such that individuals are protected not only from misconduct by the State but also from non-State actors, including business enterprises. Our conviction regarding the State "duty to protect" is grounded in States' moral and political imperative to engage in good governance, including by addressing properly acts of abuse by private actors.

Also, from a purely pragmatic standpoint, by protecting human rights and ensuring respect for the rule of law and democratic freedoms, governments enhance their foreign investment opportunities by creating climates of security, predictability and stability.

The UN Guiding Principles provide guidance on how companies can work to ensure their operations are conducted in a manner that maintains respect for human rights, namely through building human rights-based due diligence into their standard operations.

The UN Guiding Principles:

  • Establish broad parameters, such as what a company should consider when undertaking human rights due diligence, to help businesses approach the responsibility to respect in terms of overall good business practices and enlightened self-interest.
  • Assist companies to see the importance of having the appropriate due diligence processes in place, and what those processes should look like.

One does not have to look hard at the news to appreciate that consumers everywhere pay attention to how companies treat their workers, the environment and local communities. The State Department wants to collaborate with you to put the UN Guiding Principles into practice.

At this time, I’d like to invite our colleague John Ruggie, former Special Representative of the UN Secretary-General for Business and Human Rights and author of the Guiding Principles to give remarks.

1 This quote is taken from the remarks delivered to the Global Business Conference by Deputy Secretary for Management and Resources Thomas Nides.