business and human rights in conflict
TRANSCRIPT
Business and Human Rights inConflictOlga Martin-Ortega*
With respect to the social role of business, companies were traditionally
held to be responsible only to their shareholders. Their duty was to
generate profit while complying with the laws of the countries in
which they operate. A given company may contribute to the well-being of individ-
uals or groups, or even prevent harm, but such deeds were generally interpreted as
acts of charity. Under the maxim that a good business minimizes costs and maxi-
mizes profits, inevitably businesses have been portrayed as being ‘‘in conflict’’ with
human rights. The challenge of how to balance the pursuit of profit and the protec-
tion of human rights is particularly formidable in the context of wars and other
armed conflicts.
Over the last couple of decades the question of the responsibilities of busi-
nesses operating in conflict environments has risen to greater prominence, both
in academic and policy circles and in the wider public discussion. On the one
hand, the political economy of internal armed conflicts has become central to
analyses of the causes of conflict and to the design of prevention and resolution
policies. On the other, the impact of business activities and working methods on
human rights has become a new focus of widespread discussion—not only
within companies, but also within and among NGOs, states, and international
bodies—following a series of highly publicized campaigns and lawsuits against
companies, such as Unocal and Freeport McMoRan. These two developments
have encouraged a broad examination of the ways in which businesses can aggra-
vate or even perpetuate armed conflict and thereby contribute to human suffer-
ing, as well as of what businesses might do to contribute to conflict resolution
and thus of mitigate that suffering. Can current policy and legal responses make
businesses part of the solution rather than part of the problem? And can
* I am grateful to Chandra Lekha Sriram and Johanna Herman for their invaluable comments.
� 2008 Carnegie Council for Ethics in International Affairs
273
companies be held accountable—socially, legally, or by some other means—for
whatever negative actions they might have taken in situations of armed conflict?1
The Economic Dimension
Many of today’s armed conflicts have close links to the exploitation and trade of
natural resources. Combatant activities are increasingly self-financed through the
exploitation and trade of locally available assets, such as coltan and casseterite in
the Democratic Republic of Congo (DRC), diamonds in Sierra Leone and
Angola, timber in Liberia, and coca in Colombia.
Although the majority of modern conflicts are not fought over natural resour-
ces, once the fighting starts all parties tend to consolidate their positions by ex-
ploiting the financial opportunities that resource access provides. War generates
dynamics that become ‘‘economies’’—in which the majority of the economic
activities spin around the financing of war—based on the savage exploitation of
resources and their quick placement in the marketplace to obtain immediate
returns. These dynamics have been referred to as ‘‘the business of war.’’2
Different resources require different levels of expertise and infrastructure to be
extracted and channeled into the marketplace. Some primary goods, such as
agricultural crops (including drugs), easy-access minerals, and rough gemstones
are more readily extractable and traded, requiring a relatively unskilled labor
force. Others, such as oil, gas, and deep shaft materials require expertise, infra-
structure, and a large commercial network of support. This is where private
foreign investors enter into the dynamics of conflicts. A range of businesses—
including multinational financial institutions, private lenders, and insurers—
become key actors in specific conflicts.
Companies that operate in conflict zones may contribute, directly or indi-
rectly, to the aggravation and perpetuation of hostilities through the financing of
oppressive regimes or armed groups, through the provision of infrastructure or
materials, through taxes or royalty payments, or even through such corrupt
practices as bribery to maintain or protect their business operations. They can
also participate, intentionally or not, in actual abuses of human rights.
In order to guarantee their investments, companies, especially those whose
business is based on the extraction of natural resources or agricultural produc-
tion, need open access and stable conditions to operate in a particular territory.
In situations of instability and conflict, some companies opt to negotiate access
274 Olga Martin-Ortega
with whomever happens to have control over a particular territory—be it the
government or a rebel or militia group—while ignoring the political repercus-
sions of their commercial ties. Such disregard for the political consequences of
their decisions suggests that companies behaving in this manner ought to be im-
plicated in the activities of their local partners, whatever these actors’ level of
legitimacy. Some high-profile cases have helped to publicize allegations of
human and environmental rights violations, including the forced displacement
of people, abusive labor practices, and the pollution of land and water resources.
These have included allegations of complicity with state militias and other armed
groups in forced disappearances, extrajudicial killings, and the torture of politi-
cal dissidents or those opposed to certain corporate investments.
In the Unocal case, for example, the oil company was accused of colluding
with the repressive Burmese military regime in acts of murder, torture, and rape;
and, moreover, of benefiting from forced labor provided by the government for
the laying out of the Yadana pipeline.3
Similarly, it is commonly acknowledged
that the relationship of the diamonds trader De Beers with UNITA rebel groups
in Angola contributed to the perpetuation of that country’s twenty-seven-year
civil war, and was directly linked to atrocities and civilian deaths. Coca-Cola,4
Drummond,5
and Chiquita6
face lawsuits in the United States on accusations
of colluding with the Colombian paramilitary—the Autodefensas Unidas de
Colombia—to gain access to resource-rich land. These companies are accused of
taking measures to maintain the security of their infrastructure against pressures
from local populations, human rights activists, and trade unions; specifically,
they are accused of colluding in acts of intimidation, forced displacement, and
even torture and assassination.
Managing security arrangements is a priority for firms doing business in con-
flict situations. In this regard certain companies have been accused of providing
equipment and even training to governmental security forces to protect their in-
frastructure and interests—in effect providing support for the persecution of po-
litical opponents or communities critical of government policies or of their
investment. The operations of petroleum industries in the Niger Delta are salient
examples of this problem, with companies such as Chevron and Shell facing law-
suits for alleged collusion with the Nigerian police in the suppression of political
opposition.7
Freeport McMoRan, one of the world’s largest copper and gold
producers, allegedly employed security forces that performed surveillance oper-
ations, applied mental torture, issued death threats, and made house arrests,
business and human rights in conflict 275
a range of acts that harmed the interests and well-being of Indonesia’s Amungme
people. The plaintiffs in the case also claim that the company was complicit in
the government’s attempt to destroy the indigenous environment and habitat,
which amounted, they claim, to ‘‘cultural genocide.’’8
Ethical Dilemmas
The ‘‘business of war’’ raises important ethical dilemmas for a variety of agents.
For consumers, the moral question relates to how our choices contribute to the
perpetuation of violence. For NGOs and human rights campaigners, the ques-
tion is whether the best way to help local populations is by pressuring companies
to pull out or by working with them to improve human rights standards. At the
beginning of this decade, for example, a considerable number of Western com-
panies disinvested in Burma due to a vocal campaign of ‘‘naming and shaming,’’
only to witness less scrupulous companies move in, with little or no net benefit
for the local population.
Of course, companies and their directors also face ethical dilemmas in this
context. Multinationals operating in conflict zones are not necessarily evil enti-
ties, in it for the money regardless of the consequences. Business leaders do face
important management decisions, for which they are provided with insufficient
guidance regarding the social and legal consequences. As will be argued later, the
legal thresholds affecting such decisions are not entirely clear, and they are being
continuously shaped by international and national practices—often through law-
suits that prove to be lengthy, costly, and painful in terms of businesses’ reputa-
tions. Companies, therefore, have to make hard choices in conditions of
incomplete information, choices that might jeopardize their competitiveness or
even their existence. In making these difficult decisions, companies not only have
to determine the extent to which they can or should benefit from war economies
and war resources, but also how to deal with repressive governments or militias;
moreover, they have to manage their own security to protect workers and invest-
ments. In balancing business priorities and the protection of human rights, evi-
dence suggests that business leaders do not always make the right choices.
The old argument that a company’s primary responsibility is to produce
wealth is increasingly being challenged. The fact that the private sector can have
an impact on the enjoyment of human rights and contribute to their abuse raises
the question of what sort of responsibility comes attached to corporate power.
276 Olga Martin-Ortega
Today demands for responsible corporate behavior are not only the domain of
human rights organizations but also of the informed public and consumers.
Policy Responses
Currently the constraints on corporate behavior are mainly voluntary. Voluntary
approaches are based on the premise that businesses’ responsibility toward indi-
viduals other than their employees and consumers is a social rather than a legal
form of constraint. Voluntary initiatives have been favored by governments and
intergovernmental organizations, and have been shaped particularly by corporate
priorities, as companies have fiercely lobbied for self-regulation in order to avoid
tighter normative standards. NGOs have also supported such initiatives in an at-
tempt to push forward the corporate responsibility debate and to change the
practices of businesses in ways that alleviate their impact on human rights.
For a significant period, voluntary schemes were designed and implemented
nearly exclusively by companies themselves. During the 1990s a plethora of cor-
porate codes of conduct, social reporting schemes, and corporate labeling initia-
tives flourished, and by the end of the decade governments and international
institutions did publicly acknowledge a general link between business and hu-
man rights. This acknowledgment amounted to the acceptance at the interna-
tional level of companies’ ethical responsibility for their actions; that is, the
existence of a ‘‘corporate social responsibility,’’ even if the content of the concept
was not agreed upon.
A sign of the changing normative environment was the inclusion of a refer-
ence to the role of the private sector in the United Nations’ goals for the new
millennium, as stated in the 2000 Millennium Declaration. UN Secretary-
General Kofi Annan engineered the Global Compact, the world’s largest global
corporate citizen initiative, which was launched in 1999; and in 2005 he ap-
pointed Professor John Ruggie as Special Representative on the Issue of Human
Rights and Transnational Corporations and other Business Enterprises.
As corporate behavior started to attract more critical attention, the role of
multinationals in armed conflicts became a subject of intense scrutiny. Various
issues, such as the participation of companies in the illegal exploitation of natu-
ral resources in the DRC, or the impact of the Liberian diamond trade in fueling
the conflict in Sierra Leone, have been considered at the UN Security Council
level. Different organizations have developed different policy instruments to
business and human rights in conflict 277
deal with this issue. Since 2001 the UN Global Compact has hosted a policy dia-
logue on ‘‘The Role of the Private Sector in Conflict Zones’’; as important as the
dialogue is, it does not provide specific measures for changing corporate prac-
tice, nor does it establish common-ground principles for corporate behavior.
In June 2006 the Organisation for Economic Co-operation and Development
(OECD) launched its ‘‘Risk Awareness Tool for Multinational Enterprises in
Weak Governance Zones’’ as a complement to the general Guidelines on Multi-
national Enterprises (1976, revised 2000). A lack of implementation and moni-
toring mechanisms, however, means that the success of the OECD scheme
depends on what individual companies make of it.
Certain multi-stakeholder initiatives developed for specific sectors have shown
more promise. They have different rates of success and degrees of legitimacy, but
some such programs have in fact been able to shape standards of business behav-
ior. Multi-stakeholder initiatives are hybrid schemes in which states (home and
host), companies, and NGOs work together in the framework of an agreed set of
principles, with specific implementation and accountability mechanisms. Such
initiatives as the Kimberley Process for the certification of rough diamonds, the
Extractive Industries Transparency Initiative (EITI), and the Voluntary Princi-
ples on Security and Human Rights are opening important avenues for stand-
ard-setting and monitoring in very sensitive areas directly related to the way
business is conducted in conflict-prone zones.
Collectively, these policies and initiatives play an important role in raising
awareness and contributing to the general acceptance of a social responsibility to-
ward human rights. Most important, they help change business sensibilities and
corporate culture, and have a real impact on the actual human rights situations of
those affected by the activities of business enterprises. These policy initiatives also
contribute to the creation of regulatory frameworks that shape practice and con-
strain harmful action. In fact, it can be argued that by defining specific obligations,
their content and scope, and by shaping international practice, voluntary and
multi-stakeholder initiatives are the first step toward the development of norma-
tive standards that can define a common legal framework. It is important to bear
in mind, however, that these instruments focus on the promotion of good practi-
ces but not on accountability mechanisms, nor on mechanisms through which
victims of human rights abuses may seek redress. Existing policy frameworks do
not sanction wrongdoing in a way that brings justice to the victims of corporate
participation in human rights abuses. This means that those companies less
278 Olga Martin-Ortega
affected by public opinion, less interested in public image, or whose home coun-
tries put little or no pressure on them, will continue to operate with impunity.
Legal Accountability
The international legal framework that governs the relationship between business
and human rights has been explored by legal scholars for over a decade now.
However, the framework that governs this relationship in the specific context of
armed conflict is a relatively new focus for academic specialists. Scholars working
in this field have tended to draw a strong distinction between the moral and legal
obligations of businesses active in conflict zones. It is now commonly accepted
that businesses have a moral responsibility not to engage in human rights viola-
tions and to avoid benefiting from situations in which other actors conduct or
collude in abuses. Moral obligation, however, is difficult to delimit, compliance is
difficult to measure, and sanctions for noncompliance normally rely on informed
and responsive public opinion, which in turn depends upon concerted cam-
paigns by NGOs or the media. Determining clearly specified and enforceable
legal obligations under international law is therefore a necessary next step in
holding businesses to account.
The majority of the companies involved in war economies conduct legitimate
business. Further, in itself, investing and carrying out business in conflict coun-
tries is not an illegal activity. Nonetheless, certain provisions in international law
may be applicable to situations in which doing business in a conflict zone results
in the violation of human rights. Their precise application, however, is a matter
of disagreement among legal scholars.
As a formal legal matter, defining obligations for nonstate actors in general
and companies in particular encounters the challenge that, with certain excep-
tions, states are the only subjects of international legal obligations. For some time
the debate over the legal responsibilities of corporations and other nonstate actors
in relation to human rights stagnated in the technical debate over international
legal personality. This hurdle seems to be surmountable if we limit our considera-
tion of businesses as ‘‘participants’’ in international life, able to be recipients of in-
ternational legal norms without the need to be classed as ‘‘subjects’’—with full
international legal personality, as states have—in the international legal order.
This being said, we cannot avoid first discussing state obligations. Under in-
ternational law, states have the obligation to respect, protect, and promote
business and human rights in conflict 279
human rights. This means that they have a negative duty not to violate human
rights and a positive duty to take all appropriate measures to guarantee that
others do not do so. If other actors do violate human rights, states are obligated
by international law to ensure that they are appropriately and adequately sanc-
tioned. This duty to protect extends to abuses perpetrated by companies, as has
been acknowledged by several UN treaty bodies.
There are, however, a number of specific challenges to creating and imple-
menting strong legal regulations for corporate behavior in conflict zones. The
main difficulty is to identify which state is responsible for protecting a given set
of individuals. On the one hand, an obligation relying on the home state of a
corporation would require an extraterritorial application of the international in-
strument containing the obligation—a move that is still controversial in inter-
national law, even in theoretical terms. On the other hand, relying on the obligation
of host states to protect their own populations presents two problems: first,
whether the state in question actually has such an obligation—that is, whether or
not it has signed the relevant instruments—except when the violations relate to
ius cogens norms; and second, the fact that the adoption of protection measures,
including sanctions of corporate actors, may be impeded by (a) the host state’s
lack of will (for instance, its economy might depend on the corporate activities
and revenues); (b) a lack of capacity, whether due to deficient legal systems and
means of enforcement or because of a de facto lack of control over the relevant
zone (more likely to be the case in conflict situations); and (c) the fact that the
host state itself may be the actual perpetrator of the abuses.
Therefore, relying exclusively on the obligations of states proves insufficient
and leaves a lacuna that only contributes to the confusion over how to allocate
responsibility for rights violations.
It has been far more difficult to define the direct obligations of businesses.
As mentioned above, it is not illegal for companies to do business in war zones,
or to profit from war zone trade and production. It is true that international
sanctions regimes prohibit trade in several commodities that directly relate to
the fueling of conflicts, and these regimes therefore imply an obligation for busi-
nesses not to engage in such trade. Yet there is no international instrument that
actually defines direct obligations for multinational corporations not to engage
in human rights abuses or contribute to the perpetration of conflicts. In the draft
document ‘‘UN Norms on the Responsibilities of Transnational Corporations
and Other Business Enterprises with Regard to Human Rights’’ (2003), the UN
280 Olga Martin-Ortega
Sub-Commission on the Promotion and Protection of Human Rights attempted
to draw direct obligations for companies, including in the context of armed con-
flicts, but was ultimately unsuccessful. The Sub-Commission sought to establish
direct obligations on companies, within their respective spheres of activity and
influence, to respect, protect, and promote human rights, and to make compa-
nies accountable for failing to do so. The draft stated that corporations must not
engage in or benefit from violations of international humanitarian law (IHL), in-
cluding war crimes, crimes against humanity, genocide, torture, forced disap-
pearance, forced or compulsory labor, hostage-taking, or extrajudicial, summary,
or arbitrary executions. However, the document was ultimately abandoned due
both to important technical difficulties and strong opposition from the business
community (and even some NGOs), as well as Ruggie’s decision not to consider
this instrument as a basis for his work.9
The available international legal instruments that do address the responsibil-
ities of companies are primarily soft law, lacking appropriate implementation
mechanisms. They generally approach the issue of human rights from a labor-
rights perspective. The two principal legal instruments are the International
Labor Organization (ILO) Tripartite Declaration of Principles Concerning Mul-
tinational Enterprises and Social Policy (1976) and the already mentioned OECD
Guidelines on Multinational Enterprises. The former does not make any specific
reference to conflicts, not even in a provision that enterprises are not to benefit
from forced labor, a common occurrence in conflict zones. And the latter instru-
ment, as has been pointed out, has approached the issue of ‘‘weak governance
zones’’ only through an ‘‘assessment tool.’’
If international human rights law does not prove to provide a satisfactory nor-
mative framework for the regulation of businesses’ conduct, can international
criminal law help? Not only does this body of international law apply to entities
other than states, but some of the offenses that amount to war crimes, such as
pillage and plunder, are economic by definition and have been condemned by
customary international law for centuries. On the other hand, the notion of
‘‘complicity’’ in international crimes, which entails criminal responsibility, is po-
tentially a useful and still underused instrument for determining the responsibil-
ity of corporations when their actions enable international crimes.
The International Committee of the Red Cross (ICRC) supports the idea of
developing a definition of the direct human rights obligations of businesses en-
gaged in conflict zones. In its report Business and International Humanitarian
business and human rights in conflict 281
Law (2006), the ICRC makes it clear that ‘‘business enterprises carrying out ac-
tivities that are closely linked to an armed conflict must also respect applicable
rules of IHL.’’ The ICRC considers that IHL applies to businesses in such sit-
uations as: their response to attacks by parties to an armed conflict; the behav-
ior of their security forces when they engage in surrounding conflicts; the
acquisitions of assets without the freely given consent of the owner (which
amounts to pillage in IHL); benefiting from the labor of civilians, prisoners of
war, or concentration camp detainees; displacement of civilian populations
when gaining access to resources and establishing transport routes; their in-
volvement in forms of warfare that may be expected to cause widespread, long-
term, and severe damage to the environment; and, last, the ICRC holds that
businesses have obligations under IHL not to develop, produce, or transfer spe-
cific types of weapons.
These are wide-ranging statements, which are not likely to go down well with
purist interpreters of international law; indeed, ultimately they have insufficient
grounding in common international practice to support consensus. In addition,
even if we could define and agree on international legal obligations for corpora-
tions, there are no relevant enforcement mechanisms at the international level.
The initial threats of the International Criminal Court (ICC) prosecutor to open
the door of the Rome Statute to crimes involving economic entities have not
been reflected by the first indictments by the Court. Nor have the rest of the
international tribunals shown particular interest in this path.
Some national courts have been more proactive in their consideration of
companies’ responsibilities for human rights abuses, as demonstrated by the
cases in the United States under the Alien Tort Claims Act. This domestic route
is of considerable importance for the attempt to identify the legal sources of
responsibility, and therefore to define such obligations. So far, however, juris-
prudence is not consistent among, or even within, countries; and courts are in
the situation of having to navigate with little guidance on what the responsibil-
ities of their states or their companies are, and what international laws are
applicable.
Conclusion
If policy responses cover only part of the spectrum, and international law is
inadequate, is the answer in a new international legal instrument, such as an
282 Olga Martin-Ortega
international treaty? And should such an instrument be addressed to companies,
to states, or to both? UN Special Representative John Ruggie, in a report
submitted to the Human Rights Council in 2008, draws a framework for business
and human rights based on three core principles: the duty of states to protect
against human rights abuses by third parties; the responsibility of corporations to
protect human rights; and the need for more effective access to remedies. An in-
ternational instrument comprising these three dimensions would not only clarify
the scope of responsibilities and provide a clear sense of who needs to do what, but
would also provide victims with adequate tools for vindicating their rights in the ap-
propriate forum. The main obstacle remains political will rather than the capability
of international law.
Other related international issues, such as environmental protection and fight-
ing corruption, have already overcome the barrier of political will, and have been
promoted from the level of policy documents to that of international law, with
states assuming obligations to establish national legal and administrative meas-
ures to regulate and sanction corporate behavior, or even to criminalize it. The
development of international discussion on business, human rights, and conflict,
and the inclusion of all concerned actors, is moving the debate forward. We are
now past arguments over whether businesses should regard the safeguarding of
human rights as a cost on the balance sheet or as a minimum requirement for
action. The question now is not so much whether to regulate the behavior of
businesses in conflict zones, but rather how to regulate it.
NOTES1
This essay does not deal with the rise in the use of private military and security companies as combat-ants in internal conflicts. These companies are not only operating within war zones, but their businessis war; therefore their case demands a specialized and dedicated debate as well as an urgent policy re-sponse. For a similar reason I have preferred not to include arms producers and traders in this analysis.
2
William Reno adopted this term in the early 1990s; see in particular William Reno, Warlord Politics andAfrican States (Boulder, Colo.: Lynne Rienner, 1999).
3
Doe v. Unocal Corp., 395 F 3d 93d (9th Cir. 2002).4
The case against Coca-Cola, Sinaltrainal v. Coca Cola Co., 256 F. Supp. 2d 1345, 1358-59 (S.D. Fla. 2003),was dismissed in 2006 and is awaiting appeal.
5
For the cases against Drummond, see Romero v. Drummond Company, Inc., 430 F.3d 1234, 1243 (11 Cir.2007); and Estate of Rodriguez v. Drummond, 256 F Supp 2d 1250, 1257 (N.D. Ala. 2003).
6
In the case of Chiquita, three lawsuits were filed in 2007 in Colombia and the District Courts of Floridaand New York. In 2008 they were consolidated to be filed only in New York; see In re: Chiquita BrandsInternational, Inc., Alien Tort Statute and Shareholders Derivative Litigation, Transfer Order, Feb. 20, 2008.
7
Bowoto v. Chevron Corp., 557 F Supp 2d 108c (N. D. Cal. 2008); Wiwa v. Royal Dutch Petroleum Co.,226 F 3d 88 (2nd Cir. 2000).
8
Baenal v. Freeport McMoRan, Inc., 197 F 3d 161 (5th Cir. 1999).9
In his Interim Report, John Ruggie expressed the view that the norms did more harm than good,maintaining that ‘‘the Norms exercise became engulfed by its own doctrinal excess’’ and that ‘‘its ex-aggerated legal claims and conceptual ambiguities created confusion and doubt’’; UN Doc. E/CN.4/2006/97, February 22, 2006, para. 60.
business and human rights in conflict 283