Can business uphold human rights without breaking the law?

Businesses have to comply with both national laws and international human rights standards – but when these are in direct conflict, what should they do?

New research by the British Institute of International and Comparative Law (BIICL) provides some answers, in the first in-depth analysis of this dilemma applicable across all industries.

The study is also the first to look at all types of such conflicts and across the range of human rights, including freedom of expression, privacy, LGBTI, working conditions and discrimination.

Commissioned by BIICL’s Business Network, the research brings together the international legal framework, existing guidance for specific issues or sectors – such as ICT, retail, agriculture and extractives – and practical examples of how businesses are managing these conflicts, taken from interviews with representatives of some companies already facing them.

The resulting report categorises different types of conflict – to help businesses recognise what kind of dilemma they are facing – and sets out a range of approaches that business can take, from the narrowest compliance with national laws to stopping operations in that country entirely.

Study lead Lise Smit, from BIICL, says: “There’s no single blueprint that companies can follow to help them manage this problem. It has to be on a case-by-case basis through a company’s human rights due diligence. Yet what the report provides is a framework for understanding the conflict and a number of options to consider, to assist businesses in choosing what is most appropriate for their situation.

“There is not much existing guidance for business, and what exists is sector-specific or very high level, when the reality on the ground is usually quite complex. Our aim is to help companies understand what others are doing and what their options are in any given situation.”

Where the local laws or practices contradict international human rights standards, the UN’s Guiding Principles on Business and Human Rights expect businesses to ‘seek ways to honour the principles of internationally recognized human rights’.

Sometimes the conflict is clear – as in countries where same sex relationships are illegal, or where demands are made of ICT companies to provide private information to Governments.

In other situations, national laws may fall short of the highest standards, such as when they expect consultation with people affected by land use or acquisition, but do not meet international standards of free, prior and informed consent. Similarly, laws may be vague and unclear, or not available in the public domain.

Another situation is where countries have laws prohibiting certain human rights violations, but these are not enforced in practice, which is a common situation with child labour laws.

The report lays out different approaches companies can take to handle conflicts between the UN Guiding Principles and national laws, ranging from limited compliance with the law to challenging it legally. This might include using the narrowest possible interpretation of national law, and collectively engaging with peers where one company is unlikely to make a difference.

The report also covers ways to push back against conflicting laws, such as allowing remote working for individuals in countries where they would not be allowed to hold management positions, to exiting from the jurisdiction.

The report’s recommendations are as follows:

  1. Companies should undertake comprehensive and ongoing human rights due diligence using a human rights lens.

  2. Companies should identify the nature of the conflict which arises between IHR standards and the national law or practice. 

  3. Companies should identify a suitable approach, or combination of approaches, by which the company could seek to adhere to domestic legal requirements whilst respecting IHR standards.

  4. Companies should publicly express their views, both individually and collectively.

  5. Companies should take some action and not ignore the conflict.

Smit said: “In these cases, the standard required by the UN Guiding Principles is not absolute. Companies facing conflicting legal requirement at country level must ‘seek to honour’ international human rights and demonstrate their best efforts. This is nevertheless a high standard to meet, and the law in this area is still developing. We hope this report will help companies to navigate these difficult questions.”

Mark Gregory, General Counsel at Rolls-Royce and member of the Business Network said: “Companies crave legal certainty when making business decisions. This report identifies the ambiguity surrounding the topic and helps frame a path forward out of these difficult situations. It will be really useful for companies as they look to draw up their own processes and codes of conduct.”