Larry Catá BackerW. Richard and Mary Eshelman Faculty Scholar and Professor of Law ; Professor of International Affairs, Pennsylvania State University

lcb911@gmail.com

Privatisation of Ssocial, Cultural and Economic Rights in Southeast Asia—A tale of Two Approaches to Business and Human Rights

Business and Human Rights—Networks of Transnational Governance, International Workshop, Hebrew University, Jerusalem, Israel; February 19-20 2014

Regimes of Human Rights• Traditionally a state centered enterprise• Assumed current form with the establishment of

the U.N. system• Grounded in language of law and rights

I

From One Many• Universal Declaration of Human Rights

– Aspirational; principles

• Fracture– Division of catalogue of rights

• International Covenant on Civil and Political Rights (ICCPR) • International Covenant on Economic, Social and Cultural Rights

(ICESCR )– Proliferation of silo rights regimes (gender, trafficking, etc.)

• Consequences– Hierarchy of rights?– Universalism vs. Localism: Not all states embrace either– North – South divide

From Centric to Polycentric Order

• Traditional analytical framework looks only to the state– FOCUS: regulatory incoherence and systemic coordination

• Globalization complicates human rights fracture – Adds element of multiple systems– domestic , international and private regulatory systems

• Overlap but do not mesh• Autonomy and communication

– polycentricity in human rights regimes challenges the order of regulation and its self referencing logic

• Systemic Incoherence – Distinct regulatory systems provide parallel remedial frameworks

4

Fracture Within Fracture: Asian Values?

• The role of social and economic rights in Asia is marked by – an embrace of the general proposition of international human

rights,– inclination to carve out an Asian values perspective on these

universal rights, and– a sense that such an Asian values framework is itself contestable

• because of the wide differences in values among Asian states.

• The critical distinction within the Asian values camp is the focus on development versus democracy.

5

China and India• China: Rights as Obligations of the State

– framing “human rights” within the concept of socio-economic rights (SER). – Social construction: ensure social harmony and sustainable development

• Social construction under the concept of “Scientific Development” ; embodies core idea human rights because it serves to promote citizens’ SER.

– Chinese values• Resistance to attempt to universalize Western-style democratic practices; • Soft law is important as administrative device

• India: Rights as Constraints against the State– Focus on articulation and enforcement through the state apparatus– Public litigation; the role of Supreme Court and constitution– Social and economic rights a joint public law project—national and international

• Civil/political rights the prism through which SER embodied• Soft law important as remedial tool in courts

Roadmap:• Part II sets the context, considering the contours of

emerging polycentric governance, and focusing on the way in which social and economic rights are understood within India and China.

• Part III tests the theoretical differences in approaches to business and human rights against two cases, one from India and one from China.

• Part IV concludes with some general observations about globalization, privatization and the advancement of human rights regimes.

PolycentricityAnarchy versus order in transnational space

I

Enter Globalization• Globalization

– has undermined settled (if contentious) framework of development centered on the state;

– Non-State actors burdened directly by international obligations• Also willing to directly incorporate normative frameworks within their own

operations

– Rise of autonomous regulatory systems that implement human rights• Systems are transnational in character• May not reflect the political choices made by any state in choosing

among civil/political and social/economic rights– Key for implementation is privatization

• non-governmental entities now drive human systems structures – But private actors tend to replicate human rights fracture

Polycentric Systems

• Definition—simultaneous application of law and public/private governance to an enterprise or transaction

• A form of decentralization• But now fitted within a DIS-orderly system

– Not just order among a community of states – But now comprising intermeshed systems among regulatory communities

• Three important forms for business and human rights in Asia– Supplier Codes of Conduct and 3rd party certifier organizations – SWFs– “Soft law”

Polycentricity Tamed?• OECD Guiding Principles for Multinational Enterprises

– Voluntary principles addressed by governments to MNCs, but OECD member states bound to provide a complaint (National Contact Point) process

– Focus on key areas: disclosure, human rights, employment and industrial relations, environment, bribery, consumer interests, science and technology, competition and taxation

– Provide a basis for creating regulatory and behavior coherence at the international level for transposition to domestic legal orders

• U.N. Guiding Principles for Business and Human Rights– Three Pillar framework for elaborating system of human rights

consequences of economic activity• State duty to protect• Corporate Responsibility to respect • Obligation to provide remedies

• No independent enforcement mechanism

The Untamed: From Public to Private

• Private Governance Systems– Third Party standards creators/disclosure systems organizations

• ISO; Equator Principles; – Supplier Codes of Conduct

• MNC as a self regulating entity– Third Party Verification Organizations

• Create, enforce and monitor standards• Fair Labor Organization is an example

– Investor entities• Sovereign wealth funds

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India and China Within the Web of Governance

India• In India, human rights are constructed within a law-based

discourse. – Those obligations are vindicated through judicial or quasi-judicial

processes connected to each level of law or governance system. – Self-constituted organs—indigenous groups, provincial and national

legislatures, international organizations and enterprises—generate rules.

– These developments are connected to a rights discourse that is tied to political action by the state, a state that responds to its obligations as a stakeholder in supra-national and private global governance systems.

– Formally, it is tied only loosely to international public and private governance

Judicial Rights• In India, the state Supreme Court, its government and

parliament, played an important role in interaction with sovereign organization with a private or transactional character. – Judicialization within networks of public governance– “Good governance” model construed from the Indian constitution

• good governance model is affected by a variety of factors that tend to open the doors to alternative governance structures beyond the state. These include – distrust of the policing structures of the state,– the persistent issue of caste, and – the problem of gender rights.

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Limitations of the Judicial Model?

• National law may be ineffectively where remedies and claims flow out of India within global supply chains– International law only to the extent transposed; limited connection

through National Human Rights Commission

• Limited scope of judicial “law” – a variant of the U.S. problem of common law in the interpretation of

constitutional authority

• Difficult to empower the poor– easier to manage them through interventions on their behalf

• Internal policy coherence compromised – Contests between national parliament, states and courts and private

bodies

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Chinese Constitutional Values

• Separation of powers—Administrative and political spheres– Administrative sphere: government,

• charged with implementation of political policy. – Political sphere: Chinese Communist Party

• Charged with leading the state and people along Marxist Leninist lines– Human rights is understood as an obligation of the state for the

benefit of the individual • As a consequence individuals are expected to rely more on the state

rather than to seek to constrain the state. – Chinese values

• Focus is on whether officials complied with their obligations• Not with whether an individual can act against the state to preserve a right.

The Chinese Path• Compare China

– framing “human rights” within the concept of socio-economic rights (SER).

– Social construction: ensure social harmony and sustainable development—the framework is administrative and collective rather than individual and rights oriented

– Social construction under the concept of “Scientific Development” • embodies core idea human rights because it serves to promote citizens’

SER. – Chinese values

• existence of “grey areas” of debate on human rights between the West and China, “including criminal law, family law, social and economic rights, the rights of indigenous people, and the attempt to universalize Western-style democratic practices.

• Soft law is important

The Case Studies

Vedanta

http://www.guardian.co.uk/business/2009/aug/05/vedantaresources-india

--Niyamgiri Hills--Dongria Kondh; indigenous group--2005 Vedanta bauxite refinery at Lanjigarh--2007 Indian Supreme Court denies permission to mine area without a permit----2008 Sterlite (joint venture subsidiary) applies for license--2009 permission granted, Supreme Court OK

Niyam Dongar hill is the holiest of the holy, It is the seat of their god, Niyam Raja.

“To be a Dongria Kondh is to live in the Niyamgiri Hills in Orissa state, India – they do not live anywhere else.”

Vedanta Cont.• Norway Sovereign Wealth Fund:

– The Ethics Council determined, on the basis of its investigation, that “it is highly probable that Vedanta’s mining operations in the states of Chhattisgarh and Orissa have led to the expulsion of local farmers, and, in particular, tribals, from their homes and land. This constitutes a serious violation of fundamental human rights.”

• Investor Community and Amnesty– Divestment and reports– protests

• OECD UK NCP complaint– Survival International (standing issues overcome)– Violations; failures to consult

• Vedanta failed to respond (on basis that these proceedings had no legal effect)

• Investor Divestment• Political Repercussions

– Anger; sovereignty; support– Project pulled Indian Ministry of Environment and Forests; refinery operations

modified

Unilever-India and Pakistan• International Food, Agricultural, Hotel, Restaurant, Catering, Tobacco

and Allied Workers’ Association (IUF) complained about factory closure– Hindustan Lever Ltd (Sewri factory) sale and closure– Proceeded despite parallel Indian judicial proceedings– Settlement reached

• IUF complained about similar practices in two Pakistani factories– Unilever Pakistan Ltd. (Khanewal factory)– Unilever Pakistan (Rahim Yar Khan factory)

• Employment system based on firing permanent and hiring temporary workers challenged– Unilever defense—complying with local law; hired independent service providers– Parallel proceedings in Pakistani courts– Settlement reached

Some Others• Doom Dooma Factory (Assam 2010)

– IUF against Hindustan Unilever Ltd. For forcing workers to abandon one union in favor of another

– Case suspended while Indian High Court considered; – Taken up again after High Court declared no jurisdiction; – Settlement reached

• Ms Z against X (2012) – Complaint rejected; OECD not proper forum for bringing personal injury claims even if

claimant sought to use the OECD process to illustrate the difficult of bringing any claim under national law.

• GCM Resources (Bangladesh)– Complaint raised by two civil society actors, International Accountability Project

(California) and World Development Movement UK() against GCM resources over proposed coal mine in Dinajpur region

– NCP has taken up complaint based on violations of Universal Declaraiton of Human Rights

China—Foxconn/Apple

• incorporation of social and economic rights within global supply chains generally subsumed within the corporate social responsibility aspects of corporate governance

• Actors– Foxconn (Han Hai Precision Industry Company, Ltd )– Apple– Fair Labor Association

Foxconn/Apple• Factories/Operations• Systems

• While states memorialize their norms through law, contract serves a similar purpose for regulating the behavior among non-state parties

– Foxconn: Supply Chain Management System– Apple: Code of Conduct

• Stressing the Systems: Suicides• Aftermath– Enter FLA

Privatization and SER Systems

• Two case studies suggest similarities and divergences being taken by China and India with respect to the implementation of social and economic rights in their respective states. – Those similarities and differences mark the parallel development,

within both public and private spheres, of distinct approaches to human rights.

• Carry over the bifurcation of human rights discourse between civil-political rights on the one hand and social and economic rights on the other. – That bifurcation, when operationalized by private actors, as in the

case studies, produces substantially different approaches to the way in which social and economic rights are understood and implemented.

The two approaches are becoming institutionalized

• Vedanta model:– Similar complaints have just been filed by a coalition of

Indian, South Korean, Dutch and Norwegian civil society organisations with the South Korean, Dutch and Norwegian NCPs concerning the Korean multinational POSCO .

• Foxconn– FLA-enterprise partnerships extending beyond Apple– Supply chain governance assuming more character of law system

through contract

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A Winding Path

The Big Picture• Looking at Vedanta and Foxconn/Apple together, it

is apparent that the development of systems of social and economic rights based governance systems within the private sphere can follow substantially different routes.

• Successful implementation of human rights systems for corporations depends on adapting to these distinct approaches.

Country Specific Human Rights

• Two case studies suggest similarities and divergences being taken by China and India with respect to the implementation of social and economic rights in their respective states. – Those similarities and differences mark the parallel development,

within both public and private spheres, of distinct approaches to human rights.

• Carry over the bifurcation of human rights discourse focus civil-political rights VERSUS social and economic rights– That bifurcation, when operationalized by private actors, as in the

case studies, produces substantially different approaches to the way in which social and economic rights are understood and implemented.

China• Within China, the development is bounded up in the

development of multinational systems of norms that can be used by groups of multinational corporations. The focus is on economic conditions and rule systems. Language is social and markets based.– The Chinese state and private spheres look to the ICESCR

as a framework within which national notions of social harmony within institutional and governance parameters may be operationalized. Custom and culture rather than rights and remedies, appear privileged.

India• Within India, the development of social and economic

based rights regimes are grounded in a sometimes contentious three way relationship between international organizations creating normative frameworks, the apparatus of the domestic legal order and international civil society. The language is rights based NOT markets based. – Indian state and private spheres still speak the language

of law and rights—founded on the privileging of the premises of the ICCPR.

Thank You!!!