International Learning Lab on Public Procurement and Human Rights The State-Business nexus: “Leading by Example” on Business & Human Rights By Dante Pesce, Member of the United Nations Working Group on Business and Human Rights Pretoria SA, November 13, 2017

UN Framework on Business and Human Rights How can governance gaps and corporate human rights abuses be addressed? 2005 Special Representative appointed to ‘identify and clarify’ existing standards and practices with regard to business and human rights 2008 UN Protect, Respect and Remedy Framework 2011 UN Guiding Principles on Business and Human Rights articulating the corporate responsibility to respect human rights and human rights due diligence 2011 – 2017 UN Working Group on Business and Human Rights

UN Guiding Principles on Business and Human Rights 1: STATE 2: BUSINESS 3: VICTIM PILAR PROTECT RESPECT REMEDY NEED ACTORS Protect against human rights abuses by actors, including business Respect human rights throughout the value chain Ensure access to remedies in the case of human rights abuses ACTION Policies Legislation Regulation Adjudication Acting with due diligence Addressing adverse impacts Judicial remedies Non-judicial remedies UNGP: 1 - 10 UNGP: 11 - 24 UNGP: 25 - 31 Based on report to the Human Rights Council by John Ruggie, 2011

UN Working Group on Business and Human Rights Established by the Human Rights Council (2011) 5 members with regional representation Mandate to promote the Guiding Principles Dissemination Implementation Embedding Guiding Principles into global governance Working Methods Undertake country visits Prepare annual reports Guide Annual Forum and Regional Forum Support development of National Action Plans (NAPs) Support other interested parties in embedding business and human rights

“Harmonization and coherence” Key expectation from business “Harmonization and coherence”

International frameworks on business and human rights “Invites EU Member States to develop by the end of 2012 national plans for the implementation of the UN Guiding Principles” European Union Communication on CSR, 2011 “Business should respect human rights, which means to avoid infringing on the human rights of others and address adverse human rights impacts business may cause or contribute to” Performance Standards, International Finance Corporation, World Bank Group, 2012 “Responsible business conduct is an essential part of an open international investment climate” OECD Guidelines for Multinational Enterprises “We strongly support the UN Guiding Principles on Business and Human Rights and welcome the efforts to set up substantive National Action Plans” G7 Summit Leadersʼ Declaration, 7–8 June 2015 “The companies shall […] Observe the UN Guiding Principles on Business and Human Rights during the entire life-cycle of the mining project.” China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, 2014 “We will foster a dynamic and well-functioning business sector, while protecting labour rights and environmental and health standards in accordance with relevant international standards […] such as the Guiding Principles on Business and Human Rights” Transforming our world: the 2030 Agenda for Sustainable Development & Addis Ababa Action Agenda on Financing for Development

UNGP convergence with international standards ILO MNE declaration UN Guiding Principles UN Global Compact OCDE guidelines for MNE ISO26000 for Social Responsiibility G4

“There can be many entry points for Business & Human Rights”

NATIONAL ACTION PLANS (NAPs) Definition of NAP An evolving policy strategy to protect against adverse human rights impacts by business enterprises The Process of NAPs Coordinated and coherent government leadership Multi-stakeholder and transparent consultation A process of continuous monitoring of implementation The Content of NAPs Compatible with the UNGPs Context specific based on baseline assessment Smart mix of mandatory and voluntary measures Working Group portal: http://www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx

Guidance on the development of NAPs Encouraging all States to develop, enact and update a national action plan on B&HR as part of the State responsibility to disseminate and implement the Guiding Principles The final version of the Guidance was issued at the fifth annual forum, in November 2016. http://www.ohchr.org/Documents/Issues/Business/UNWG_NAPGuidance.pdf

Governance and political will MAIN CHALLENGES ON PUBLIC POLICY DEVELOPMENT ON BUSINESS AND HUMAN RIGHTS Governance and political will Policy coherence and capacity to implement Stakeholder engagement, including critical voices Long term shared vision and actions State as economic actor………

‘Leading by example’: The State, State-owned Enterprises, and Human Rights Report of the UN Working Group on Business and Human Rights to the UN Human Rights Council (32nd session, June 2016)

Taking additional steps: The starting point for action is Guiding Principle 4: «States should take additional steps to protect human rights abuses by business enterprises that are owned or controlled by the State, ... Including where appropiate, by requiring human rights due diligence.» Note: This framework for action is based on international guidelines on both human rights, responsible conduct, and corporate governance, as well as on selected national good practices Note limitations of research and geographic scope: Report is based on 20 States’ answers to a WG questionnaire sent in 2015 and desk research based on publicly available information, including existing NAPs on B&HR or RBC. States who answered: Brazil, Chile, Colombia, Cuba, Cyprus, Denmark, France, Georgia, Ghana, Italy, Kenya, Norway, Republic of Korea, Sweden, Switzerland, the Kyrgyz Republic, the Netherlands, the Russian Federation, UK, United States of America. All responses are available as received at: http://www.ohchr.org/EN/Issues/Business/Pages/ImplementationGP.aspx

Taking additional steps: Guiding Principle 5: «States should exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights. » Note: This framework for action is based on international guidelines on both human rights, responsible conduct, and corporate governance, as well as on selected national good practices Note limitations of research and geographic scope: Report is based on 20 States’ answers to a WG questionnaire sent in 2015 and desk research based on publicly available information, including existing NAPs on B&HR or RBC. States who answered: Brazil, Chile, Colombia, Cuba, Cyprus, Denmark, France, Georgia, Ghana, Italy, Kenya, Norway, Republic of Korea, Sweden, Switzerland, the Kyrgyz Republic, the Netherlands, the Russian Federation, UK, United States of America. All responses are available as received at: http://www.ohchr.org/EN/Issues/Business/Pages/ImplementationGP.aspx

Taking additional steps: Guiding Principle 6: «States should promote respect for human rights by business enterprises with which they conduct commercial transactions. Commentary States conduct a variety of commercial transactions with business enterprises, not least through their procurement activities. This provides States – individually and collectively – with unique opportunities to promote awareness of and respect for human rights by those enterprises, including through the terms of contracts, with due regard to States’ relevant obligations under national and international law.» Note: This framework for action is based on international guidelines on both human rights, responsible conduct, and corporate governance, as well as on selected national good practices Note limitations of research and geographic scope: Report is based on 20 States’ answers to a WG questionnaire sent in 2015 and desk research based on publicly available information, including existing NAPs on B&HR or RBC. States who answered: Brazil, Chile, Colombia, Cuba, Cyprus, Denmark, France, Georgia, Ghana, Italy, Kenya, Norway, Republic of Korea, Sweden, Switzerland, the Kyrgyz Republic, the Netherlands, the Russian Federation, UK, United States of America. All responses are available as received at: http://www.ohchr.org/EN/Issues/Business/Pages/ImplementationGP.aspx

Taking additional steps: compeling reasons The reasons include: Policiy coherence: Governmental departments exercising State ownership need to be able to act in a manner compatible with the overall human rights obligations of the State. States should implement international standards and guidelines in a coherente manner. A legal obligation: The State has a legal obligation to protect against human rights abuses. Legitimacy and credibility: The State should not ask less of companies that are closely associated with it than it asks of private business. Note: This framework for action is based on international guidelines on both human rights, responsible conduct, and corporate governance, as well as on selected national good practices Note limitations of research and geographic scope: Report is based on 20 States’ answers to a WG questionnaire sent in 2015 and desk research based on publicly available information, including existing NAPs on B&HR or RBC. States who answered: Brazil, Chile, Colombia, Cuba, Cyprus, Denmark, France, Georgia, Ghana, Italy, Kenya, Norway, Republic of Korea, Sweden, Switzerland, the Kyrgyz Republic, the Netherlands, the Russian Federation, UK, United States of America. All responses are available as received at: http://www.ohchr.org/EN/Issues/Business/Pages/ImplementationGP.aspx

Taking additional steps: menu of options What should States require of SOEs? Setting expectations: that SOEs respect human rights throughout their operations –even more, that they should be role models on human rights Requirement of human rights due diligence (at home and abroad) Requirements for systematic disclosure and reporting on ESG, including human rights Requirements on remedy: that SOEs cooperate fully with judicial and non-judicial grievance mechanisms, and that they provide remediation for abuses Engaging with boards, which are a key vehicle for States to manage their relationships with SOEs and the human rights requirements they set. Note: This framework for action is based on international guidelines on both human rights, responsible conduct, and corporate governance, as well as on selected national good practices Note limitations of research and geographic scope: Report is based on 20 States’ answers to a WG questionnaire sent in 2015 and desk research based on publicly available information, including existing NAPs on B&HR or RBC. States who answered: Brazil, Chile, Colombia, Cuba, Cyprus, Denmark, France, Georgia, Ghana, Italy, Kenya, Norway, Republic of Korea, Sweden, Switzerland, the Kyrgyz Republic, the Netherlands, the Russian Federation, UK, United States of America. All responses are available as received at: http://www.ohchr.org/EN/Issues/Business/Pages/ImplementationGP.aspx

Opportunities regarding Public Procurement and Business and Human Rights agenda UNWG on B&HR is deepening work on the State-Business nexus. Started by SOE Report to Human Rights Council (June 2016), followed by Report that will include chapter on Public Procurement (June 2018). Regional “races to the top” are including the State as economic actor as part of regular work. Ex Interamerican Public Procurement Network. Collaboration with OECD is being strengthen beyond RBC working party, including SOEs, economic diplomacy and public procurement.

Final remarks All business enterprises, have the responsibility to respect human rights States should lead by example and do their utmost to ensure full respect human rights and act as role models It is a matter of policy coherence, legal obligations, reputation and credibility. No guidelines will replace political will and local leadership.

Thank you! www.ohchr.org/EN/Issues/Business/Pages/WGHRandtransnationalcorporationsandotherbusiness.aspx wg-business@ohchr.org