What new opportunities are arising for advocates working to prevent businesses from doing harm overseas and provide remedy when abuses do occur? What promising, new initiatives are in the works--both domestically and internationally--to support this objective, and what obstacles do they face?Share your ideas, questions, experiences and resources below by adding new comments or replying to existing comments!
What new opportunities and new initiatives are arising for advocates?
Tue, 02/22/2011 - 4:15pm
#1
What new opportunities and new initiatives are arising for advocates?
On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. This complex reform seeks to promote the financial stability of the United States by improving accountability and transparency in the financial system through empowering the government with the power to break up companies, oversee financial markets and create a new agency to guard consumers in their financial transactions.
Buried within the Act is a provision that was supported by human rights groups, including most actively the Enough Project. The provision, Section 1502 of the Act states:
SEC. 1502. CONFLICT MINERALS
The provision essentially requires publicly traded companies to submit annual reports to the Securities and Exchange Commission disclosing whether their products contain minerals from Congo or adjacent countries. If so, these companies must explain the actions taken to trace the origin of the minerals and whether they come from mines that help fund armed conflict. Although no sanctions are contemplated in the Act, the disclosures are required to be made public on the company website, and a product may be labeled as “DRC Conflict Free” if they do not contain conflict materials that directly or indirectly finance or benefit armed groups.
In a statement of support for this provision, Secretary of State Clinton remarked:
Across the pond, the United Kingdom is being sued by Global Witness, a London-based campaign group, for failure to name companies and individuals trading in “conflict minerals” from the DRC for UN Sanctions. A UN resolution on the issue passed in 2008 and renewed in 2009 requires a travel ban and asset freeze to be imposed on all individuals and entities supporting illegal armed groups in eastern Congo through the illicit trading of natural resources. The group alleges that the UK government has failed to adequately investigate companies and individuals that are linked to illicit mineral trade, thus breaching its international legal obligations.
Although the value in regulating the trade of these minerals has been questioned by some, the reality is that the provision in the Financial Reform bill is a starting point for ending the violence in the DRC by limiting some of the funding coming to the groups responsible. Still, as the suit by Global Witness indicates, active monitoring and oversight must be taken by regulatory agencies for any of these provisions to have value.
Hi Amol,
Thanks for posting this and for your work on this issue. The bill that Djibril and I are working on in CA seeks to build on the conflict minerals provision in Dodd/Frank, by restricting access to CA state procurement contracts to companies that are in good standing with the SEC. The bill was introduced last Friday and is authored by CA Senate Majority Leader Ellen Corbett. The legislation is CA Senate Bill 861. We'd really appreciate the thoughts and support of the groups participating in this dialogue!
Chris Miller
GDC Partners
Chris,
This is very interesting. Have similar efforts been made in other states? If not, is California a test case for this? In other words, are there plans to roll out similar provisions?
Amol,
According to the press release that will be issued by the Enough Project, the "CA legislation is the first state bill dealing with Congo conflict minerals." I've been in touch with an aide to the Lt. Governor of MN about trying to get something similar done there. The problem with MN is that the legislature probably won't be receptive to a bill that can be characterized as "anti-business," so I'm exploring whether or not it'd be possible to do it through an Executive Order to the appropriate state agency. On the other hand, the Enough release mentions that "dozens of college campuses and local governments hae passed resolutions pledging to buy only conflict-free products." Unfortunately, I don't know what local governments have done this. As for campuses, I know that Stanford was the first, and that Cornell was looking at it recently.
Chris
Amol and Chris,
Thanks for sharing more information on the conflict minerals legislation, at the federal and now CA state level. Two questions: 1) You mention Amol that there are no sanctions envisioned in the legislation. Do you see this as a serious obstacle? If so, how could it be overcome? 2) Do either of you know if there are efforts at the state or national level to build on the foundation of this legislation to require companies to report on sourcing outside of the important but limited context of the DRC? What are the obstacles you see towards expanding the scope?
Last April, Center for Constitutional Rights, EarthRights International, the Western Shoshone Project and ESCR-Net presented a submission to the Human Rights Council on the occasion of the United States' first-ever Universal Periodic Review. It examined the degree to which the U.S. is upholding its duties to respect, protect and remedy human rights abuses involving business actors both domestically and abroad, and suggested concrete legal and policy measures toward that aim, such as the conflict mineral legislation. We recommend that one concrete way to do live up to its commitment to protect human rights would be to require under law that regular, effective and independently-monitored reporting of information bearing on risks of human rights abuses by U.S.-registered companies take place. This is one first step to increase transparency, with potentially powerful consequences for advocates worldwide, especially if that information could be leveraged in ongoing litigation and advocacy efforts.
Thanks all for this exchange about minerals from DRC. The CA state legislation should be seen as an effort actually to put in place the economic incentives (carrots and sticks) that the national legislation, which carries the actual sanctions, envisions. It is a two-step process. First, the Dodd-Frank Act provision, which Djibril described, requires companies to publicly disclose information about their due diligence efforts -- companies that don't comply may be subject to sanctions under Sarbanes-Oxley. Step two: consumers can wield another stick, perhaps as effective, against companies who don't comply, or whose publicly-filed due diligence reports reveal that they are not taking credible steps to clean up their supply chains. The CA legislation attempts to implement that second step -- CA is a big consumer that is committing not to buy from the non-compliant company.
However, since the CA purchasing decisions under the new bill are based on SEC determinations, the bill's effectiveness will depend on how well the SEC implements the new law. That's why a number of anti-slavery groups have sent comments to the SEC demanding that companies' "due diligence" be explicitly defined to include monitoring mining sites for forms of modern slavery and other extreme violations of human rights. The SEC's draft regulation (still open for comment) contains no definition of due diligence.
I recently returned from a trip to eastern Congo, where Free the Slaves has been working with local groups to document the extent of slavery in mining and talking with communities about needed solutions.
Meanwhile, you asked about broader efforts that go beyond Congo. At the end of 2010, Congresswoman Carolyn Maloney (D-NY) announced her intention to introduce a bill in Congress that would require transparency about efforts to end slavery across the board. This followed on the 2010 passage of a (again, California!) state law requiring companies with over $100 million in receipts to post information on their websites about their anti-slavery policies. Some groups are working on merging the best of that CA law and the SEC conflict minerals law to require all U.S.-based companies to report transparently on their efforts to remove slavery from their supply chains.
Hi Niko and others,
I'm glad that you mentioned that a group of human rights groups in the US submitted a report to the Human Rights Council during the United States' Universal Periodic Review. I just wanted to share a little more information about this approach, and share other ways of utilizing international human rights mechanisms.
I pulled the following information on the Universal Periodic Review process from the OHCHR website:
The Universal Periodic Review (UPR) is a unique process which involves a review of the human rights records of all 192 UN Member States once every four years. The UPR is a State-driven process, under the auspices of the Human Rights Council, which provides the opportunity for each State to declare what actions they have taken to improve the human rights situations in their countries and to fulfil their human rights obligations. As one of the main features of the Council, the UPR is designed to ensure equal treatment for every country when their human rights situations are assessed.
The UPR was created through the UN General Assembly on 15 March 2006 by resolution 60/251, which established the Human Rights Council itself. It is a cooperative process which, by 2011, will have reviewed the human rights records of every country. Currently, no other universal mechanism of this kind exists. The UPR is one of the key elements of the new Council which reminds States of their responsibility to fully respect and implement all human rights and fundamental freedoms. The ultimate aim of this new mechanism is to improve the human rights situation in all countries and address human rights violations wherever they occur.
The Universal Periodic Review is a new mechanism that is worth exploring. Have other groups utilized this mechanism in efforts to hold corporations accountable for business-related human rights abuses abroad?
Another way (similar to that of the Universal Periodic Review) to submit reports to international human rights monitoring bodies is through the submission of Shadow Reports. Shadow Reports are written by nongovernmental organizations to "shadow" the official government reports that are required to be submitted to international monitoring bodies. The limitation with this approach is that your country had to have ratified the proper international treaty in order to be able to submit a report. You can find lots of information on this process, examples of Shadow Reports and their impact, and resources/guides for writing your own Shadow Report on our past online dialogue on "Using Shadow Reports for Advocacy."
Have groups used Shadow Reports to hold corporations (via governments) for their business-related human rights abuses? Please share your stories! What was the impact?
Hi Kristin,
Several groups have begun using the international human rights treaty bodies and special procedures to hold companies to account --through shadow reporting as well as individual communications, early action, urgent action and other procedures. Check out the resources thread below, where I will add some guides which help chart all this out.
In one of the most relevant cases related to holding governments to account for regulating their companies acting abroad, the Western Shoshone people from the western United States took their demands for justice to the United Nations Committee on the Elimination of Racial Discrimination (CERD). CERD became the first international body to recognize a state’s obligation to regulate the extraterritorial acts of its companies. In its Concluding Observations to Canada’s 2007 State Report, CERD took note of the role of mining companies registered in Canada in adversely affecting human rights in countries outside Canada, and recommended that Canada “explore ways to hold transnational corporations registered in Canada accountable.” The Committee encouraged Canada “to take appropriate legislative or administrative measures to prevent acts of transnational corporations registered in Canada which negatively impact on the enjoyment of rights of indigenous peoples in territories outside Canada.”
Perhaps Julie from the Western Shoshone Defense Project could jump in here to share more about the domestic impacts of this important victory at the international level.
Amol - thank you so much for sharing this great tactic used by the Enough Project and other human rights groups in the US! It is an interesting approach to putting in place ways to hold corporations accountable for their business in one specific country - the DRC. It's great to hear (via Chris Miller in his reply to your comment) that this tactic is already being utilized by human rights groups in specific states in the US - specifically, California.
Amol, you also mentioned that there already exists some international standards on holding governments accountable for holding corporations accountable with regard to the trade of "conflict minerals" from the DRC (I know that sounds really complicated!).
Could someone share more about this UN Resolution? Does this Resolution only relate to abuses in the DRC? If so, are there other UN Resolutions for abuses in other countries?
Is this UN Resolution being utilized in other countries besides the United Kingdom? How are other human rights groups using this Resolution to hold their governments accountable for business-related abuses abroad?
Thank you for starting this fascinating conversation, Amol! I look forward to hearing more examples!
As I understand it, the UN Resolution to which Amol referred is the "Renewing Arms Embargo on Democratic Republic of Congo," in which case it is specific to the DRC. The good news on this resolution is that it was renewed again in November for another year.
The UN report on the "Implementation of the recommendations contained in thereport of the Secretary-General on the causes of conflict andpromotion of durable peace and sustainable development in Africa" in 2004 emphasized the need to address the issue of natural resources and conflict by "utilizing a range of instruments to limit the trade in conflict resources, including targeted sanctions against persons,products or regimes, certification schemes and the creation of expert panels to investigate illicit commercial activities in conflict zones as has been done in Liberia and Sierra."
This indepent report by The Stimson Center goes into some analytical depth about the success and failures of UN Sanctions. It also summarizes the sanctions used by the UN in regions of conflict over the years, stating:
"Somalia became the first country in this region to receive sanctions when the SecurityCouncil imposed an arms embargo on the nation in January 1992, after factional conflict there eruptedinto civil war.19 An arms embargo against Liberia followed in November of that same year. TheCouncil went on to impose similar arms embargoes on Angola (1993), Rwanda (1994), Sierra Leone(1997), Ethiopia and Eritrea (1999),20 the DRC (2003), Côte d’Ivoire (2004) and Sudan (2004). TheCouncil has also been willing to impose sanctions against the transfer of high-value natural resources toor from nations suffering from resource-related conflict: timber products in Liberia; petroleum productsin Liberia and Angola; and diamonds in Liberia, Angola, and Sierra Leone. Selective travel bans havebeen imposed on specified individuals in Liberia, Angola, Sierra Leone, and Côte d’Ivoire. Financialassets freezes have accompanied the travel restrictions in all nations but Sierra Leone."
In the UN report, it specifically addresses cases of sanctions, suggesting ways in which they might be tailored to better impact relevant parties. The report is a bit out of date though, so perhaps someone else has updates on how effective these have been in the long term?
This is what the UN had to say:
"18. Since 1997, the Security Council has continued to focus sanctions by targeting the decision makers and, in some instances, their families. The travel and diplomatic sanctions applied for the first time to senior officials of the União Nacional para aIndependência Total de Angola (UNITA) and their immediate families were subsequently applied to leading members of the former military junta and the Revolutionary United Front. These selective sanctions were also applied to seniormembers of the Government of Liberia and its armed forces and to their spouses andother individuals providing financial and military support to armed rebel groups innearby countries. The Security Council also learned that freezing the assets of seniorofficials in rebel groups violating peace agreements could play a catalytic role in theresolution of conflicts. The sanctions applied to the Liberian leadership included funds and other financial and economic resources owned or controlled directly orindirectly by the then President and his children.
19. Targeted sanctions seek to minimize the adverse effects on local populationsdependent upon trade with the sanctioned parties. In resolution 1295 (2000), theSecurity Council decided that the Angola sanctions committee should, inconsultation with the Government of Angola, update the list of UNITA officials andadult members of their immediate families who are subject to travel restrictions. The Liberia sanctions committee reviews its travel ban list through a quarterly process.Requests to be removed from the lists are also considered during these processes,which allows those who consider that they have been wrongly listed recourse to the Committee.
20. Over the past several years, the Security Council has established a number ofexpert groups to monitor the implementation of sanctions applied by it and toinvestigate and report on alleged violations. These groups have included the Panelof Experts and the Monitoring Mechanism on sanctions against UNITA, the panelsof experts appointed in relation to Sierra Leone and Liberia, the Panel of Experts and the Monitoring Group on Somalia, and the Group of Experts on the Democratic Republic of the Congo. The reports of these independent groups have helped toidentify and expose through public scrutiny the activities of international arms merchants and their delivery networks. Through these measures, the Security Council is ensuring that sanctions regimes are being used more effectively."
Obviously, most of the issues that these sanctions have sought to address are still ongoing, so it seems as though they aren't the most effective means of breaking the chain between resource exploitation and violence.
On the subject of UN Resolutions, I know that the UN, along with NGOs such as Global Witness and AI, created the Kimberly Process, which seeks to address the human rights violations now so famously associated with "blood diamonds." The Process requires participating governments to ensure that each shipment of rough diamonds be exported/imported in a secure container, accompanied by a uniquely numbered, government-validated certificate stating that the diamonds are from sources free of conflict.
This seems to have been a rather successful example of regulation, although I'm by no means an expert in this field. A thorough examination of the topic can be found here.
There have also been a series of (in my opinion) rather impactful ads, some of which can be found here. For those with more campaign experience, are these types of ad campaigns succesful in changing consumer habits and inspiring boycotts?
Is anyone else more familiar with the nuances of this campaign or other comparable efforts either by the UN or NGOs to establish regulatory standards that are systematically enforced?
Hi Kaija,
The current Kimberely Process scheme requires member governments to implement import/export control regimes and to adopt control systems overseeing their private sectors so as to create a documentary record of rough diamonds as they travel from mine to polished form. The KP system requires diamonds to be shipped in sealed containers and for exporting agencies to certify that parcels are free from conflict diamonds. Members agree to prohibit entry of uncut stones arriving unsealed or without proper certification.
Although the United Nations Security Council hailed the Kimberly Process as an important step toward “bringing transparency to a murky and violent trade,” the organization’s shortcomings have become increasingly difficult to ignore. First, the KP’s narrow definition of what it calls “conflict diamonds” fails to target those gems mined in countries overwhelmed by simple lawlessness or run by governments with appalling human-rights records. According to an independent commissioned review of the process, Kimberley considers only gems from Côte d’Ivoire, where a rebel army is in control of the northern part of the country, to be conflict diamonds, thereby neglecting regions like Zimbabwe, with newer diamond trades and massive human rights violations.
The second major problem with Kimberly is the fact that although the agreement is grounded in principles of international law, the system is a wholly voluntary system of industry self-regulation. Specifically, the most overt criticism of the scheme lies in the uneven adoption and enforcement of specific measures that each country must develop and implement in order to track the origin of diamonds and ensure that no conflict diamonds are being exported or entering the formal trade. In addition, the Kimberley technical document is silent as to compliance or expulsion procedures when a country fails to adhere to standards.
In a recent Fast Times article, author Joshua Hammer chronicled the work of former research director of Partnership Africa Canada, Ian Smillie to investigate reports of abuse in Zimbabwe as a part of the Kimberley process. After receiving the government tour of the diamond facilities, four members of the Kimberley group broke away and traveled independently through the diamond fields. What they found was horrific: “In addition to evidence of rampant smuggling, ‘we saw victims of dog bites. We saw slave laborers digging diamonds. We saw soldiers guarding panners washing gravel in the water.’” One observer described: “I was so emotional, so disturbed. I broke down.”
As a result of the visit, the Kimberley team’s report condemned the Zimbabwean army for carrying out “horrific violence” citing that there was “direct involvement of the military in illegal mining,” and recommended that Zimbabwe receive a six-month suspension from Kimberley. Immediately, Kimberley faced resistance from Zimbabwean politicians and Namibian leaders, leaving the organization powerless to remedy the problem. In fact, according to the Kimberley Process’s own review, Smillie says, half a dozen governments in Africa — including the DRC, Angola, Sierra Leone, and Guinea — “don’t know where at least half their diamonds come from. Their internal controls are terrible.”
Thus, there is still much room for improvement in the KP, bot in terms of strengthening the technical elements needed to determine origin of diamonds and to ensure that the process is shielded from the political realm and focused on the stated goal of stemming the flow of conflict diamonds.
In Brazil, a number of businesses, the NGO Reporter Brasil, ILO, Ethos Institute of Corporate and Social Responsibility, and anti-slavery community activists created a National Pact to Eradicate Slave Labour in May 2005. The Pact harnesses the power of consumers and businesses that are willing to commit not to buy products from suppliers that have abused people in slavery. The idea is simple, and the beauty is that it pinpoints tainted suppliers that are exploiting slaves without painting entire industries -- or even countries! -- with one brush. This prevents boycotts that may plunge local communities into greater economic desperation that could create more vulnerability to slavery and human trafficking.
Of course, simple ideas can be very challenging to implement. How do you know what suppliers are using slavery? The Brazilian government has had to investigate and verify a credible number of reported slavery crimes across its vast territory. This is being accomplished partly with the assistance of NGOs like CPT - the Pastoral Land Commission. And how do you get companies to sign on? More than 130 companies and organizations in Brazil have signed on to the National Pact -- and some have been kicked off for violations, proving that some monitoring and accountability for supply chain decisions is possible.
Ultimately, how do you get companies that are all the way at the other end of long supply chains, in places like the U.S., to pressure their suppliers for better compliance? The newest tactic of anti-slavery advocates like Free the Slaves, ILO, and Reporter Brasil is to create an "Addendum" to the National Pact, so that U.S.-based companies can sign on, committing not to purchase from suppliers in Brazil that use slavery. This will create an opportunity for U.S. consumers -- and U.S.-based advocates -- to make a direct link between purchasing decisions here and slavery in Brazil.
When Vodafone blocked Facebook and Twitter on its networks, cut SMS, slowed Google services, and ultimately cut Internet, they were joined by all other mobile networks in Egypt – but they were the only company with a base in Europe. When Vodafone Egypt reported that the government had forcibly used its mobile networks to send out SMSs to Egyptians encouraging them to leave protests, obey curfews, and reflect on national pride it was a refusal to accept responsibility mixed with a strange sort of apology. Not an apology for the way they spinelessly cowed to Emergency Law but an apology for their image being even more threatened than when they released customer data and communication content to the government during demonstrations in 2005. This betrayal of consumers and markets affects the bottom line particularly when a people are atypically (and unprecedentedly) organized, networked, angry, and are looking for symbols of injustice.
A nasty paradigm surfaced, as Vodafone Corporate stepped back from its affiliate at the very moment when transnational corporate norms and laws could have prevented total media shutdown and rights violations. Affiliates and satellites operate in response to a least common denominator of legal structures and rights’ expectations instead of setting new standards in developing countries. This is not meant to be an unstructured rant about the transnational treachery of globalization or the disappointing lack of realization of standardizing global and universal rights. This is to propose a solution or at least a course of action that should be considered by corporations seeking to cleanse themselves of their support for ousted regimes and use their resources in efficient ways to enhance the very context in which they work.
2011 will undoubtedly be a hallmark year for Egypt. And if things fall into place and the concept of free and fair elections transitions from an abstract pipe dream into a practical reality there will be many bureaucratic hurdles (faced by every country in the world) to carry out elections and simultaneously maximize participation. The lack of centralized data and the intentionally poorly run elections of the past are obstacles that can be overcome with the help of the most well-connected and well-informed central “authority” in the country: the mobile phone companies. Registering a SIM card requires address confirmation. Though Orwellian in intention, this step (in place in countries around the world) can be used for good. What if Vodafone used its SMS power to send a text message in support for democracy and good governance for every text message it sent in support of autocracy.
Picture this tech work: a network of NGOs compiles a list of voter precincts (which, to date has not been compiled but is currently being designed) and Vodafone Egypt uses its networks to cross check mobile numbers with addresses. You receive a text that tells you where your precinct is, when you are supposed to vote, and what you need to bring. Your address has changed since you registered your phone? No problem. Here is a hyperlink that will provide you with information on how to find out where to vote.
It may sound crazy, but if companies are not going to stop using their influence and infrastructure to empower dictators, then maybe this moment is one in which a company seeking to regain the respect of an angry population threatening boycotts can do so by actually using those infrastructures in for innovative solutions to the challenging obstacles of democratic transformation.