All of our business: why the rule of law is fundamental to human rights

4 December 2015 | Professor Gillian Triggs, President, Australian Human Rights Commission


Many Australian businesses now recognise that respect for human rights is not only the right thing to do, it is also beneficial for business. With enhanced innovation and productivity linked to the respect and promotion of human rights, businesses are increasingly taking proactive steps to support human rights: revamping their bullying, harassment and discrimination policies, ensuring there are robust internal grievance processes in place, openly reporting on their ways of working and reviewing their supply chains, and integrating human rights policies into their workplaces. However, there is growing recognition that business has a role to play not only in promoting human rights at an organizational level, but also at a higher institutional level. Respecting the significance of law, and particularly the rule of law, as a mechanism for promoting and enforcing rights is inextricably linked to the way companies engage in business.

While there is no single, universal definition of the rule of law, it is understood, at a basic level, to be the notion that a nation's government and citizens know and obey the law.(1) However, it is also much broader and more complex than this and can have significant implications for rights promotion. With widespread human rights violations continuing to be committed across the globe, the rule of law is directly related to the implementation and enforcement of rights, especially where laws are created to address injustices.(2)  Importantly, it is also a way of spreading a culture of respect for human rights. This means that when businesses make upholding the rule of law a priority, they are, by extension, making rights a priority. This filters outwards in a range of directions - towards government as well as society - by indicating that it is a principle worth respecting.

There are few bodies who are as well positioned as businesses to play a leadership role in promoting and protecting the rule of law. Global corporations have a revenue that rivals the entire GDP of many countries. Of the 100 largest economies, 51 are global corporations while 49 are countries.(3) The combined sales of the world's top 200 corporations are far greater than a quarter of the world's economic activity. Indeed, sales of the top 200 corporations combined surpass the combined economies of 182 countries.(4) At an organisational level the figures illustrate the same issue. Microsoft's revenue in 2010 amounted to $62 billion, more than Croatia's GDP of $60b, while GE's revenue of $150b surpasses New Zealand's $140b of GDP.  This commercial power gives businesses an important opportunity to ensure the rule of law is respected.

However, this power means more than mere opportunity. Rather, it demands obligation. From a human rights law perspective, it is government that bears the legal duty of promoting the rule of law and enforcing human rights, but the scope and impact of the economy mean business wields power and influence over communities and political bodies and the knowledge and information they receive and prioritise. With such power comes great responsibility. Across the globe, and even among our neighbours in the Asia Pacific, the power of corporations is not always balanced by a government or society that is able to prevent and manage adverse consequences. This creates an even greater necessity for businesses to act ethically and in line with the rule of law.

Last year the Australian Human Rights Commission received 19,688 enquiries and 2,223 formal complaints about breaches of human rights.(5) The majority of these complaints involved businesses in their role as an employer or service provider. The outcomes of the complaints process repeatedly show that businesses are keen to proactively take steps to support human rights and in particular to create diverse and inclusive workplaces. Indeed, a common outcome that respondents and complaints seek is a change in organisational culture. Specifically, a culture of respect, justice and equality; one supported by the rule of law.

As the global economy expands and becomes more interconnected, it is crucial that businesses step up as ethical actors to promote this culture. This involves the promotion of four key trends: accountability, transparency, interest and scope. These are principles of the rule of law that go towards human rights promotion. First, greater accountability will see both government and business play a more vigorous role in setting the legal and policy agenda to make human rights a legal and political priority. Second, greater transparency will mean businesses 'know and show' their human rights impacts either through disclosure frameworks or in response to consumer and community pressure. Given that government accountability is not possible without transparency, this also encourages open government. Third, greater interest in the rule of law and human rights requires key business stakeholders, including investors, financiers and directors, to take a more active role in understanding the impact of human rights and linking this with risk management. Finally, greater scope will expand the issues and activities where businesses play a role in ensuring human rights.

During the last decade there has been a global movement promoting the role business can play in supporting and protecting human rights. This has resulted in the United Nations Guiding Principles on Business and Human Rights, which have provided further clarification of the responsibility of business at an international level. The Principles have a three-pillar framework: Protect, Respect, Remedy.(6) Although this is outside the realm of the rule of law as it does not create legal obligations for companies, the Guiding Principles promote its central tenets of transparency, accountability and respect. Not only does this further evidence the link between human rights and the rule of law, it also demonstrates how promoting the values associated with the rule of law can encourage respect for the values underlying human rights.

With businesses playing an increasingly powerful economic, social and political role, it is essential that they ensure they are meeting high standards of good governance, transparency and ethical practices within the communities that they operate. Promotion of the rule of law goes beyond mere adherence and demands a demonstrated commitment to the principles of human rights. This not only separates firms from their competition, but also ensures businesses are acting as responsible global citizens.(7)

(1) Rule of Law Institute of Australia, What Is The Rule Of Law? (2015)

(2) Randall Peerenboom, "Rights and Rule Of Law: What's The Relationship?" (2005) 36 Georgetown Journal of International Law 1.

(3) Sarah Anderson and John Cavanaugh, 'Top 200: The Rise of Global Corporate Power' (2000. Corporate Watch) 3.

(4) Ibid

(5) Australian Human Rights Commission, Annual Report 2013-2014 (2015) 8.

(6) Human Rights Council, Guiding Principles on Business and Human Rights: Implementing the United Nations "Protect, Respect and Remedy" Framework, UN GAOR, 17th sess, Agenda Item 3, UN Doc A/HRC/17/31 (21 March 2011) para 1.

(7) Rajendra Sisodia, David B Wolfe and Jagdish N Sheth, Firms Of Endearment (Wharton School Pub., 2007).<

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