At the tail end of the 1990s, a decade marked by intractable civil wars and horrific violence in many corners of the globe, an unexpected issue began to bedevil foreign policy decision-makers. In places as disparate as Colombia and Liberia, critics implicated foreign companies in the bloodshed because of how security forces worked closely with corporate representatives against the interests of local communities. Repressive host governments provided troops to protect the mines, plantations and oil sites that funneled wealth to the regime, too-often leading to violent conflicts with the poor and oppressed. In places like Nigeria, military and police forces appropriated corporate-owned helicopters, jeeps and other resources to launch attacks on civilian protesters and opposition groups. Hiring private security companies—seemingly a way to avoid complicity with government forces—backfired when overly-enthusiastic protection forces harassed and abused local neighbors, engaged in corruption and committed unwarranted acts of violence, most famously in Iraq. Making payoffs to different sides in a conflict to protect corporate property, as Chiquita did in Colombia, simply prolonged the violence and undermined peace efforts. All of these garnered significant media attention and citizen protests. Ultimately, how corporations in conflict zones provided security for their people and facilities entailed significant blowback for the foreign policy interests of their home governments.
In response, some policymakers in the U.S. and U.K. began to recognize the need to do something —about the conflict and repression itself, and about the role of their companies in the violence. Working with representatives in the human rights advocacy community, they eventually negotiated an agreement that they viewed as a way to align the actions of American and British companies with the foreign policy interests of their governments in the realm of human rights. Although they did not label it as such, what they produced was a significant initiative in corporate public diplomacy—what is known today as the Voluntary Principles on Human Rights and Security.
The Voluntary Principles and Corporate Social Responsibility
The Voluntary Principles (VP) were negotiated in 2000 among representatives of oil, gas and mining firms—the industries most likely to face conflict—and human rights NGOs, facilitated by American and British diplomats.[i] As Bennett Freeman, former Deputy Assistant Secretary of State and a lead facilitator of the negotiations, described in the dialogue, “We shared an economic and political stake in ensuring that those companies continued to operate in countries such as Nigeria, Indonesia, and Colombia. But we also shared an interest in encouraging corporate responsibility to help rebuild the fractured post-Seattle political consensus for globalization.”[ii] The VPs established guidelines for risk assessment, and relations between companies and both public and private security forces. When investing in unstable areas, companies are asked to assess the likelihood of violence and human rights abuse that might affect or implicate their operations. In their relations with host governments, the Voluntary Principles call on companies to uphold the rule of law, monitor and record abuses, and promote the protection of human rights by public security forces. Companies that hire private security firms are asked to conduct due diligence on the companies and ensure that they uphold human rights and the rule of law.[iii]
The VPs were initially negotiated among a relatively small group of actors, but they now involve seven governments, nine NGOs, and 17 extractive sector firms.[iv] The VP have become more institutionalized over the ten years of their existence, with a Secretariat and regular plenary meetings. They now include a process for admission of new government participants, guidelines for multi-stakeholder implementation within host societies, and various guidance documents to assist in implementation.
Despite progress, the VPs are not widely adopted, most host governments are reluctant to participate, and there are few strict requirements for members. However, even without official membership, aspects of the VPs—and sometimes the Principles themselves—have been incorporated into some security contracts. Risk assessments that address conflict and human rights risks, which have been widely promoted by the United Nations Global Compact and the conflict prevention NGO International Alert, are becoming more widely known. Other organizations, including the World Bank and IFC, are considering how to implement the VPs in projects. More significantly, the VPs are now embedded within a larger framework of attention to the link between company actions, human rights, and conflict.
The UN Special Representative for Business and Human Rights, John Ruggie, was given the task of developing a framework for understanding how international human rights obligations affect companies. After extensive fact-finding and consultation, in 2008 he announced what he called “Protect, Respect, Remedy” as the basis for understanding business and human rights.[v] Governments have the primary responsibility for ensuring the protection of human rights from abuse by third parties. Companies have the responsibility to respect human rights, conducting due diligence to avoid abuse themselves and acting to prevent it where it occurs. Finally, victims have a right to remedies, both judicial and non-judicial.
Both the VPs and the UN Special Representative’s work are one piece of a larger corporate social responsibility movement. Across a wide range of issue areas—conflict, corruption, environment—there is a lot of heated criticism about corporate behavior, especially in the developing world. There has been particular criticism of the impact of oil, gas and mining firms in weakly governed areas of the world, where the competition to control natural resource revenues often exacerbates and inflames conflicts. One result of the backlash against companies has been the adoption of corporate codes of conduct, more transparency about company operations, and numerous multi-stakeholder negotiations to establish expectations and norms for how companies operate in local communities. These efforts generally promote transparency and engagement with local and international partners, drawing companies into more social and political relationships with a wider range of people than in the past. This has the potential (not always realized, admittedly) of creating better conditions, opening up channels for dialogue and establishing better corporate community relations. If it works, it may also create the conditions for better relations with the home country too.
Corporate Social Responsibility and Corporate Public Diplomacy
Traditional public diplomacy perspectives do not include a role for private actors. “Public” means government, period. If other actors are part of a public diplomacy initiative it is in an instrumental fashion—government agencies make use of private resources and contacts to pursue their own agenda. A broader perspective on diplomacy, however, takes a more contextual approach that acknowledges the wide array of actors that impinge on government interests in both positive and negative ways when they engage with publics in foreign countries. Those activities can be viewed as public diplomacy on multiple levels to the degree they contribute to a more positive environment for the local community. In the case of corporations, this means refraining from the kind of illegitimate behavior for which these firms are too often known.
The broader corporate social responsibility movement should be integrated into public diplomacy initiatives. Corporate social responsibility (CSR) is generally defined as going beyond compliance with law and regulation in the areas of social, environmental and other issue areas when conducting core business operations. It is not the same thing as philanthropy, marketing or lobbying—although these can sometimes be difficult to distinguish. Various activist campaigns that span the globe bring attention to corporate misdeeds abroad, publicize them to consumers and investors who care about the reputation of the firms they patronize, and litigate significant issues. Much of the CSR agenda has been incorporated into larger institutional initiatives, such as the United Nations Global Compact, which is a partnership between the UN and companies based on upholding core UN principles.
In an ideal world, linking corporate social responsibility with public diplomacy should be a win-win-win situation for local communities, foreign companies, and home government foreign policy. Unfortunately, there exist many significant barriers to this outcome. Companies are too reluctant to change their behavior, often because the host governments on which they rely are not interested in or capable of improving human rights performance. Despite this, through the efforts of a variety of activists, diplomats, and institutions, efforts such as the Voluntary Principles reflect changes in society’s expectations of corporate behavior. Those expectations may in turn support a better integration of corporate activities into official public diplomacy.
[ii] Bennett Freeman, “Drilling for Common Ground,” Foreign Policy July 1, 2001.
[iv] The participating governments are Canada, Netherlands, Norway, Colombia, Switzerland, the UK and US. The NGOs are Amnesty International, The Fund for Peace, Human Rights Watch, Human Rights First, International Alert, IKV Pax Christi, Oxfam, Pact, and Search for Common Ground. Corporate participants are AngloGold Ashanti, Anglo American, BG Group, BHP Billiton, BP, Chevron, ConocoPhillips, ExxonMobil, Freeport McMoRan, Hess, Marathan Oil, Newmont Mining, Occidental Petroleum, Rio Tinto, Shell, Statoil and Talisman Energy. Three observer groups are the ICRC, International Council on Mining and Minerals, and the International Petroleum Industry Environmental Conservation Association.
[v] For complete information, see the special website set up for Ruggie’s work: http://www.business-humanrights.org/SpecialRepPortal/Home
Virginia Haufler is an Associate Professor in the Department of Government and Politics at the University of Maryland, College Park. She specializes in the role of the private sector in global governance, the global regulation of industry, and the rise of industry self-regulation and corporate social responsibility. Her current work includes a book project examining the governance of corporations in conflict zones, a co-authored project on non-state actors and security, and research on the financial sector and the environment.