Corporate Social responsibility 2016

 “Our biggest challenge this century is to take an idea that seems abstract—sustainable development—and turn it into a reality for all the world’s peoples.” Kofi Annan, former UN Secretary General

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Carroll’s pyramid

Scholars Kenneth W. Abbott and Duncan Snidal  Obligations. Harder law will have a higher degree of legal obligation, while softer law will have weaker or no legal obligation.  Precision. International law may be written in more or less detailed and precise language. Harder law will have a higher degree of precision, while softer law will use more vague, general or abstract wording.  Delegation. Harder law is more likely to delegate interpretation or enforcement to an independent third party (like an international court or tribunal). Softer law is more likely to keep interpretation or enforcement within the parties.  agreements that are not considered legally binding at all are soft law.

About the regulatory environment 1. International conventions  Ratified by Russia / not ratified by Russia 2. Russian legislation (e.g. environmental legislation, legislation natural resources, on indigenous people) 3. International state soft law, e.g.  UN Declarations  OECD recommendations 4. International non-state soft law, e.g.  Requirements of International Financial Institutions, e.g. ERBD, World Bank (see at. 6:00 min)  Certification systems: ISO, Equitable Origin 5. Codes of conduct and policies of oil enterprises

Global standards  The International Labour Organization (ILO) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and Core Labour Standards;  The UN Global Compact Principles;  The Global Reporting Initiative (GRI) Sustainability Reporting Guidelines;  The International Organization for Standardization (ISO) standards;  The AccountAbility AA1000 Series; and  The Social Accountability International SA8000 standard  OECD 2000 Guidelines for Multinational Enteprises (2000);  EITI (Extractive Industries Transparency Initiative)  Guiding Principles for Business and Human Rights 2011

Instrument and RoleExamples International Conventions and Declarations. Reflect agreed international normative principles. Directed mainly to government for domestic implementation. These can help business understand what to do. Universal Declaration of Human Rights. UN Framework Convention on Climate Change. ILO Conventions. ILO Declaration on Fundamental Principles and Rights at Work. UN Millennium Development Goals. World Summit on Sustainable Development Plan of Implementation. OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions. Officially-agreed or recognized guidance. Offer authoritative guidance to the business sector on expectations of behavior. Also help understand what to do, and sometimes also how. OECD MNE Guidelines. UN Global Compact Principles. International Finance Corporation Performance Standards. Extractive Industries Transparency Initiative (EITI) Principles Privately developed principles. Offer business/civil society developed guidance on expectations of behavior. These sometimes also provide guidance on how to implement such standards. These may or may not be derived from international norms. GRI Sustainability Reporting Guidelines. Responsible Care Guidelines. ICMM Sustainable Development Principles. Electronic Industry Code of Conduct. ISO Standards

The Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises  Enterprises should, within the framework of laws, regulations and administrative practices in the countries in which they operate, and in consideration of relevant international agreements, principles, objectives, and standards, take due account of the need to protect the environment, public health and safety, and generally to conduct their activities in a manner contributing to the wider goal of sustainable development. In particular, enterprises should:

OECD - The Organization for Economic Cooperation and Development (OECD) is a unique forum where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity, and sustainable development. Finland, Spain and Germany are among current members34 democracies  employment employment  human rights human rights  environment environment  information disclosure  combating briberybribery  consumer interests consumer  science and technology  competition competition  taxation taxation The Guidelines are legally non- binding. Originally the Declaration and the Guidelines were adopted by the OECD in 1976 and revised in 1979, 1982, 1984, 1991, 2000 and [1] OECD [1]

The UN Global Compact Principles, 8,402 Companies 162 Countries 35,750 Public Reports Human Rights  Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 1  Principle 2: make sure that they are not complicit in human rights abuses. Principle 2  Labour  Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 3  Principle 4: the elimination of all forms of forced and compulsory labour; Principle 4  Principle 5: the effective abolition of child labour; and Principle 5  Principle 6: the elimination of discrimination in respect of employment and occupation. Principle 6  Environment  Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 7  Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 8  Principle 9: encourage the development and diffusion of environmentally friendly technologies. Principle 9  Anti-Corruption  Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Principle 10

Critics  The Global Compact Wrong Image: The UN's positive image is vulnerable to being sullied by corporate criminals, while companies get a chance to "bluewash" their image by wrapping themselves in the flag of the United Nations.  No Monitoring or Enforcement: Companies that sign-up get to declare their allegiance to UN principles without making a commitment to follow them. 

The GRI  ndards/Pages/default.aspx ndards/Pages/default.aspx  The Global Reporting Initiative (GRI) is a leading organization in the sustainability field. GRI promotes the use of sustainability reporting as a way for organizations to become more sustainable and contribute to sustainable development.  A sustainability report is a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities.

The GRI

EITI  The Extractive Industries Transparency Initiative (EITI) is a global Standard to promote open and accountable management of natural resources. It seeks to strengthen government and company systems, inform public debate, and enhance trust. In each implementing country it is supported by a coalition of governments, companies and civil society working together.  Countries implementing the EITI disclose information on tax payments, licences, contracts, production and other key elements around resource extraction.

The International Organization for Standardization (ISO) standards  A sustainability report also presents the organization's values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.  ISO Environmental management system (transportation, infrastructure, spills, worker’s behavior) continuous improvement process  ISO CSR Standard (no certification possible)  SOCK Puppets Explain: How ISO Develops Standards - =2er292LRvsw

UN soft law on Indigenous Peoples and Human Rights  The UN Declaration on Rights of Indigenous Peoples  Adopted by the General Assembly in 2007  4 votes against (Australia, Canada, New Zealand and the United States) and 11 abstentions (e.g. Russia).  Free, prior and informed consent (FPIC) highlighted  Akwé: Kon Guidelines Based on art. 8j of the Convention on Biological Diversity  Voluntary Guidelines for the conduct of Cultural, Environmental and Social Impact Assessment regarding developments on indigenous … lands.  UN Guiding Principles on Business and Human Rights  Endorsed in 2011 by UN HR Council

”The Ruggie principles”  2011 the United Nations Human Rights Council adopted the Guiding Principles for Business and Human Rights  the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity  not only states are responsible for protecting human rights  The guiding principles call for business enterprises to seek “to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts”. 

 Also, enterprises should have in place a human rights due-diligence process to identify, prevent, mitigate and account for how they address their impacts on human rights.  business/video/jo-confino-talks-to-john- ruggie-un-human-rights-video business/video/jo-confino-talks-to-john- ruggie-un-human-rights-video  Critics towards the principles: no participation of civil society: affected communities and NGOs /scholarship/melish-meidinger.pdf /scholarship/melish-meidinger.pdf

UN Guiding Principles on Business and Human Rights  States have a duty to respect, protect and fulfil  including duty to protect individuals from human rights abuses by third parties, incl. Business enterprises  … ”throughout their operations”  Also to prevent abuses abroad  States may influence e.g. through  State guidance (UK has Overseas Business Risk service)  Requiring reports of global operations  Export credit policies amazon/2013/dec/11/1http:// amazon/2013/dec/11/1  State procurement requirements  Invest / trade treaties

UN Guiding Principles on Business and Human Rights  GP is a ”global standard of expected conduct”  Concerns all internationally recognized HRs  GP: Enterprises have a duty to respect  To do no harm, but also  to be active: seek to prevent and mitigate HR abuses directly linked to their operations/products/services by their business relationships … even if they have not contributed to those impacts.  e.g. business partners, entities in their value chain

Due diligence  Due diligence exercises to identify legal, political, environmental or social risks related to e.g. projects or investments  HR due diligence  An ongoing management process 1. Identification/assessment of actual & potential HR impacts at an earliest feasible stage 2. Appropriate action 3. Tracking and reporting  Varies from case to case

A voluntary certification standard - the Equitable Origin Standard  The EO100 TM Standard was approved in  the first oil and gas operation certified in Colombia with the EO100 TM Standard in the end of 2013  The Standard includes 6 principles each including several provisions 1. Corporate governance, accountability and ethics, 2. Human Rights, Social Impact & Community Development, 3. Fair Labor & Working Conditions, 4. Indigenous People’s Rights, 5. Climate Change, Biodiversity and Environment, 6. Project Life Cycle Management.

 Principle 4 includes the following provisions:  4.1 Free, Prior & Informed Consent (FPIC),  4.2 Engagement and Participation,  4.3 Cultural Impacts,  4.4 Voluntary Isolation,  4.5 Use of Traditional Natural Resources,  4.6 Culture-Based Intelligence,  4.7 Transparency and Disclosure.  Free, prior, informed consent: Operator shall obtain the FPIC of the affected communities of Indigenous Peoples when the proposed project is on or may affect lands … under the customary use of Indigenous Peoples.”  The operator “shall undertake a process of fair representative and non- discriminatory engagement and consultation with potentially affected communities of Indigenous Peoples”  Not quite fulfilled in Russian legislation, but see:   Regional legislation? 

What is FPIC?  Free  Prior  Informed  Consent  Concerns e.g. relocation, project location, placing hazardous waste, intellectual property rights, law drafting, compensation,  E.g. art of the Declaration:  “States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources.

Lukoil   Global Compact gc/participants/6218-Lukoil gc/participants/6218-Lukoil  GRI w/29665

 The Commission defines corporate social responsibility as “the responsibility of enterprises for their impacts on society”.  To fully meet their social responsibility, enterprises “should have in place a process to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders”.  Some people think that it is better that Lukoil should invest in oil pipes instead of other things, bearing in mind the definition of CSR, what do you think?  Who has the responsibility of environmental and social problems that oil production causes?