2012 Report of the U.S. Government for Voluntary Principles on Security and Human Rights Initiative

Bureau of Democracy, Human Rights, and Labor
March 12, 2013


This is the first public U.S. Government report on the Voluntary Principles on Security and Human Rights (VPs) Initiative. Each member of the VPs Initiative is required to report to VPs Initiative participants annually on their efforts to implement the VPs. The U.S. Government has prepared this public report in line with our commitment to make our participation in the VPs Initiative as transparent as possible.

The VPs Initiative is a multi-stakeholder initiative made up of governments, companies, and non-governmental organizations (NGOs) that promotes implementation of a set of principles that guide oil, gas, and mining companies in providing security for their operations in a manner that respects human rights. Specifically, the VPs guide companies in conducting a comprehensive human rights risk assessment in their engagement with public and private security providers to ensure human rights are respected in the protection of company facilities and premises.

More information about the VPs can be found at www.voluntaryprinciples.org

Commitment to the Voluntary Principles

2012 was an important year for the VPs Initiative, as participants formed an association based in The Hague, The Netherlands, to provide administrative functions for the Initiative. Along with the approval of governance rules in 2011 (rules of procedure for how the Initiative makes decisions), the new association greatly strengthened the VPs Initiative as it starts its second decade. Throughout the year, VPs participants focused both on implementation of the principles and outreach to governments that are home to large extractives industries and/or companies. In addition, several members of the corporate pillar participating in the assurance pilot project group – a group dedicated to developing a set of key performance indicators (KPIs) to validate commitments to and implementation of the VPs Initiative – made significant progress in their work.

The U.S. Government is a founding member of the VPs Initiative, has served on the Steering Committee for the last four years, and was Government Chair of the Initiative from March 2010 to March 2011. We aspire to set a standard for excellence for government participation in the Initiative. We have sought to strengthen implementation of and accountability under the Initiative, and to expand its reach by increasing the number of participants. In 2012, we made progress on all fronts – strengthening implementation through cooperation with partners in countries where extractives industries are present, investing programmatic funds, broadening the Initiative’s participant base, and seeking more opportunities to expand dialogue and shared learning among participants.

The U.S. Government was able to achieve many of our goals for 2012 and refocus our energy on others:

  • Outreach and Implementation: Implementation of the VPs is a core priority for all participants and concrete improvements on the ground are the reason the VPs exist. To support implementation by host governments, we have strengthened our outreach efforts and are funding programs to promote implementation of the VPs in various countries. Specifically, the Bureau of Democracy, Human Rights, and Labor (DRL) has dedicated $600,000 in programmatic funding to support VPs implementation by local stakeholders in Ghana and Nigeria. DRL has also dedicated $650,000 in programmatic funds to improve the consultative process among marginalized communities and stakeholders in Panama, Peru, and Guatemala on issues related to natural resource extraction; the VPs is a fundamental element of the program. We have also created and enhanced outreach documents to strengthen U.S. embassies’ efforts in recruiting new governments to join.
  • Legal Entity: At the 2012 Annual Plenary Meeting, VPs participants approved the creation of a new legal entity in the Netherlands – the VPs Association. The VPs Association was created to provide administrative functions for the VPs Initiative, including opening and managing a bank account and the contracting of third parties. Creation of the VPs Association was a priority for the U.S. Government, because a sound organizational structure is instrumental to support, amplify and carry out the core functions of VPs country-based implementation efforts. We spent considerable time over the past year working with VPs participants to finalize the VPs Articles of Association. The VPs Association was formed on November 21, 2012; the U.S. Government is a member and served on the Board of Directors this past year.
  • Accountability: All VPs participants take seriously their commitment to human rights. As the VPs provide guidance to companies on how to secure their operations in a manner that respects human rights, corporate pillar participants pledge to uphold an agreed standard of conduct in their business practices. At the 2011 Extraordinary Plenary Meeting, several corporate pillar participants (“the Volunteer Group”) committed to participating in an assurance pilot project to develop KPIs to validate their commitments to the VPs. Since that time, the Volunteer Group has grown to 14 of the 20 companies in the corporate pillar. The KPIs are being piloted by companies for the first time this year. This undertaking is a major step toward strengthening the VPs Initiative. The U.S. Government has provided input to the Volunteer Group upon consultation, and is eager to continue working to develop a credible, practical system to validate VPs corporate participants’ effective implementation of the VPs, and to find the right formula to communicate their findings with all stakeholders. The U.S. Government believes that developing an assurance process enhances transparency and credibility, and helps ensure that new VPs participants abide by their commitments.

    The Volunteer Group consists of: Anglo American, AngloGold Ashanti, Barrick Gold Corporation, BG Group, BHP Billiton, BP, Freeport-McMoRan Copper & Gold, Inmet Mining Corporation, Newmont Mining Corporation, Rio Tinto, Shell, Statoil, Talisman Energy, and Total.

U.S. Government Participation in the VPs Initiative

U.S. Government team

The Bureau of Democracy, Human Rights and Labor (DRL) at the U.S. Department of State leads U.S. Government engagement in the VPs Initiative, in cooperation with the Bureau of Economic and Business Affairs, and the Bureau of Energy Resources. Our VPs team also includes representatives of the Department’s Office of the Legal Adviser, relevant regional bureau colleagues, the Bureau of Diplomatic Security, officers at U.S. embassies around the world, and officers at other U.S. agencies such as the Department of Commerce, Department of Labor, Department of Defense, and Overseas Private Investment Corporation.

The U.S. Government has engaged vigorously in the VPs Initiative through participation in VPs working groups, government pillar meetings and in-country meetings, and programmatic funding.

For the last four years, the U.S. Government served on the VPs Initiative Steering Committee. DRL’s Deputy Assistant Secretary has also served on the VPs Association Board of Directors, since its formation in November 2012.

Promoting the VPs

The U.S. Government pursued opportunities to promote the VPs publicly in a variety of international forums, meetings, and public statements, including but not limited to:

1) On March 30, 2012 DRL issued a press release immediately following the 2012 Annual Plenary Meeting in Ottawa, communicating the important reforms that occurred there and reaffirming the U.S. Government’s commitment to the Initiative. http://www.humanrights.gov/2012/03/30/new-organization-will-strengthen-human-rights-protection-efforts-in-extractive-industries/

2) The Under Secretary for Civilian Security, Democracy, and Human Rights raised the VPs in her opening remarks on April 30, 2012 during the U.S. Government UN Guiding Principles on Business and Human Rights (GPs) implementation workshop with companies. Under Secretary Otero touted the good work being done by several corporate pillar participants to develop a set of key performance indicators. http://www.humanrights.gov/2012/05/02/under-secretary-otero-on-guiding-principles-on-business-and-human-rights/

3) As 2012 Chair of the Kimberley Process, the United States invited the VPs Secretariat to attend the Intersessional meeting in June 2012 as a Guest of the U.S. Chair and to join a panel informing Intersessional attendees about multi-stakeholder initiatives in the extractives sector; other panelists included the Extractive Industries Transparency Initiative (“EITI”) and the Organization for Economic Co-operation and Development (“OECD”). The VPs Secretariat attended and made a presentation to more than 275 attendees from 35 countries.

4) On June 26, 2012, the DRL Assistant Secretary raised the VPs in his keynote address at the Robert F. Kennedy Compass Conference. He noted the importance of the VPs to improving conditions on the ground in challenging environments like Libya. http://www.humanrights.gov/2012/09/10/summary-of-remarks-by-assistant-secretary-posner-to-the-rfk-compass-conference/

5) The DRL Assistant Secretary raised the VPs in his opening remarks on July 30, 2012, during the U.S. Government UN GPs implementation workshop with civil society organizations.

6) The DRL Assistant Secretary held roundtable discussions on the VPs in Tripoli, Libya on May 30, 2012 and in Abuja, Nigeria on November 13, 2012.

7) On November 15, 2012, Secretary of State Hillary Clinton publicly welcomed the Government of Australia’s announcement that it will apply for membership to the VPs Initiative. //2009-2017.state.gov/secretary/20092013clinton/rm/2012/11/200574.htm

8) On December 4, 2012 at the UN Human Rights Council’s Annual Business and Human Rights Forum, the DRL Assistant Secretary delivered a keynote address to an audience of 1,000 people from companies, civil society, and governments, where he highlighted the VPs Initiative as an example of a multi-stakeholder initiative working to raise the bar for human rights practices within an industry. http://www.humanrights.gov/2012/12/04/summary-of-assistant-secretary-posners-remarks-at-the-un-forum-on-business-and-human-rights/

9) On December 5, 2012, the DRL Deputy Assistant Secretary raised the VPs while on a panel on states and conflict-affected regions at the UN Business and Human Rights Annual Forum.

10) On December 12, 2012, the U.S. Embassy in Jakarta, Indonesia held a public side event on the VPs on the margins of the VPs implementation guidance tool workshop, attended by 100 individuals from civil society, companies, and governments.

11) In response to a request from the UN Business and Human Rights Working Group soliciting information on state practices in the sphere of business and human rights, the U.S. Government submitted a letter explaining laws, regulations, and policies that implement and or are relevant to the GPs. The VPs were listed as a key multi-stakeholder mechanism related to implementation of the GPs in the extractives industry. This letter is publicly posted on humanrights.gov and was circulated widely to all of the Business and Human Rights teams’ contacts. http://www.humanrights.gov/2012/12/10/u-s-government-on-business-and-human-rights-letter-to-the-un-working-group/

12) DRL has updated the VPs fact sheet. http://www.humanrights.gov/2012/12/03/the-voluntary-principles-on-security-and-human-rights/ and //2009-2017.state.gov/j/drl/rls/fs/2012/202314.htm; DRL mentions the VPs as a key priority for DRL’s Business and Human Rights team in its Business and Human Rights Fact Sheet. This fact sheet has been provided to all participants at the three UN Guiding Principles on Business and Human Rights (GPs), roundtables hosted by the U.S. Government, and is provided to the Business and Human Rights teams’ contacts regularly during meetings. http://www.humanrights.gov/2012/12/03/fact-sheet-business-and-human-rights/

13) The U.S. Government’s Reporting Requirements on Responsible Investment in Burma, which are designed to encourage responsible investment upon easing of sanctions, cite the VPs as an important guidance tool for due diligence policies and practices in arrangements with security service providers. http://www.humanrights.gov/wp-content/uploads/2013/02/Burma-Reporting-Requirements.pdf

Policies, procedures, and guidelines to implement the VPs

Our implementation of the VPs is complemented by a variety of activities we have undertaken on business and human rights. We are party to relevant human rights conventions, such as the International Covenant on Civil and Political Rights, and a member of the UN Human Rights Council (“HRC”), the primary UN forum for addressing human rights. In June 2011, we co-sponsored the HRC resolution that endorsed the GPs. The GPs provide global guidance regarding business and human rights, providing that states have a duty to protect human rights, corporations have a responsibility to respect human rights, and there is a need for greater access to remedies. The VPs Initiative is the only mechanism implementing aspects of the GPs in the area of security-related human rights issues in the extractives industry.

With regard to GPs implementation, we continue to meet with external stakeholders to identify and discuss best practices and challenges in order to best frame our policies and practices. To this end, we hosted three implementation workshops in 2012. The first workshop, held in April, targeted the general business community and focused on respecting human rights in business operations. The second was held in July, and targeted members of civil society, academia, and think tanks. Its focus was on strategies and priority-setting with regard to U.S. Government implementation of the GPs. The third workshop in October was with investors, and focused on strategies for investment firms to incorporate the GPs into their regular business practices as well as the use of non-financial factors in decision-making.

We also support the Montreux Document on Pertinent International Legal Obligations and Good Practices for States related to Operations of Private Military and Security Companies during Armed Conflict (“Montreux Document”), and the International Code of Conduct for Private Security Service Providers (“ICoC”), both of which complement the VPs. The U.S. Government has been deeply involved in developing the governance and oversight mechanism for this process, having actively participated on the temporary steering committee, which was tasked with moving the process forward. The U.S. Government has also participated in the establishment of standards based on the Code through the American National Standards Institute.

Overview of In-Country VPs Processes

U.S. embassies facilitate VPs outreach and implementation through various mechanisms, including by: assessing which VPs participants are operating in country; identifying and building relationships with host government officials and local partners; convening multi-stakeholder meetings with VPs participants, local communities, and host government officials; and communicating regularly with DRL officers to report developments and identify opportunities.

In addition to outreach by U.S. embassy officials, the DRL Assistant Secretary led multi-stakeholder meetings in Nigeria and Libya to identify challenges and opportunities for VPs implementation, and to encourage the Governments of each country to engage with VPs participants and join the VPs Initiative.

Conclusion and Looking Ahead to 2013

The VPs Initiative has been considerably strengthened over the last three years. In order to build accountability, credibility and effectiveness of the VPs Initiative, we should continue to focus on the assurance pilot project in 2013. Assurance is important to verify to the satisfaction of both VPs Initiative participants and the public that companies are meeting their commitments under the VPs. It is also a key component of VPs implementation, and ensures that new participants that join the VPs Initiative abide by their commitments. Continuing the conversation around assurance is critical to making the VPs Initiative sustainable long-term. We encourage all corporate pillar participants to be involved in developing and piloting key performance indicators in the coming year.

We continue to be encouraged by the advancement of dialogue and trust-building across pillars. While we have faced some challenges, we have made enormous strides in communicating with one another. Through our outreach, on phone calls, and in our meetings in Washington and abroad, we continue to emphasize that the VPs Initiative is not a “gotcha” system. We will keep reiterating this message.

The U.S. Government remains deeply committed to the VPs Initiative. We are energized by the work we did this year to enhance the effectiveness of the VPs Initiative, and look forward to continued success and collaboration with all Participants.