Better business with human rights

The promotion of business and the protection of human rights are mutually beneficial for solicitors, both in terms of corporate conscience and economically. Awareness of the need for greater corporate social responsibility is growing, as is the pressure to make human rights obligations binding.

As the guardians of the rule of law, the international legal profession has an obligation to encourage its members not only to protect human rights through the law, but also to ensure that firms operate to the highest of standards as businesses.

Guiding principles

The Law Society was the first Bar association in the world to look at how the legal services sector translates the United Nation's Guiding Principles on Business and Human Rights (UNGPs) into a practical standard. The centrality of the legal sector in the promotion of business and human rights is clear in the three pillars of the UNGPs:

• The state's duty to protect against human rights abuses by third parties, including businesses;
• A need for greater corporate responsibility and respect for human rights; and
• The need for greater access by victims to effective remedies, both judicial and non-judicial.

The legal sector is not alone in recognising the need for greater human rights protections in business. Various corporations from a range of industries have made commitments through the Global Business Initiative on Human Rights, including Coca-Cola, HP, GE, Motorola, and Shell. A number of banks, including Barclays and UBS, have also come together to explore the implications of the UNGPs for banking.

While the UNGPs do not create new law, they have done much to increase the number and type of binding commitments that companies must satisfy regarding managing human rights risks. In several jurisdictions around the world new laws have been passed, and the proliferation of new laws continues.

Additionally, states, financial institutions, and companies are increasingly making requirements of business enterprises with which they work to put in place due diligence procedures to manage human rights issues. The UK launched a National Action Plan (NAP), setting out how it will implement the UNGPs and the United Nations Human Rights Council has established a working group to 'elaborate an international legally binding instrument' to manage human rights in business.

Harmonising responsibilities

These binding commitments have a number of important implications for law firms, as well as for the legal profession more broadly. These include questions around how lawyers' advisory work will need to evolve to assist clients with business and human rights matters; the management of firms as business enterprises themselves; and how lawyers' professional responsibilities should be understood given the newly recognised role for business.

Solicitors and firms potentially have much to gain from getting up to speed on business and human rights issues. For those who represent and work with companies, new policy, legislation, and normative requirements will require new advice and guidance. Growing awareness among companies will drive an increase in requests for legal advice as part of their efforts to manage financial, legal, and reputational risks associated with human rights issues.

On the other hand, where clients are unaware of such risks, there is a growing role for lawyers to raise awareness regarding such exposure and to support clients to proactively manage human rights issues.

Importantly, not only multinational enterprises require advice on business and human rights-related issues. All business enterprises have a responsibility to respect human rights and, as larger companies work to manage human rights across their value chains, expectations of – and risks for – smaller and medium-sized enterprises increase.

The application of the UNGPs to firms undoubtedly raises many questions, not the least of which involve the need to harmonise a lawyer's professional responsibilities to their clients and respect for internationally recognised human rights.

While currently the UNGPs themselves do not impose legal obligations on companies, their principles are increasingly being reflected and referred to in law, regulation, bilateral contracts, loan covenants, and litigation, and the legal liabilities for businesses in relation to human rights are crystallising, with new cases being brought every day. SJ

Sarah Smith is human rights policy adviser at the Law Society

Copyright & permissions