7 International initiatives and processes for social responsibility

Corporate social responsibility concerns what companies do beyond complying with applicable legislation in the countries where they operate. Moreover, in most areas where companies are expected to exercise social responsibility, efforts are being made to develop conventions and other more binding mechanisms. This applies in particular to human rights, working conditions, the environment and combating corruption. More binding frameworks in these areas impact the framework conditions for corporations and their social responsibility.

The Government seeks to be a driving force for the adoption of more binding frameworks for companies through the creation of instruments that oblige states to regulate their private sectors in relation to human rights, working conditions, the environment and combating corruption.

This work is being carried out in several arenas. The Special Representative of the UN Secretary-General on human rights and business plays a central role in efforts to devise a framework that has direct relevance for businesses. The ILO is working to implement its action plan The Decent Work Agenda. A number of processes are ongoing in relation to the environment, including the development of an international climate regime to follow up the Kyoto Protocol. The implementation of the UN Convention against Corruption is another important example.

7.1 Groundbreaking work in the UN on human rights and business

There have been extensive discussions in recent years about whether companies can be held legally liable for human rights violations. Since 2003, the UN has been endeavouring to map the private sector’s responsibility for human rights, including in relation to legal liability. Norway participates actively in this work.

In 2003, a working group under the UN Sub-Commission on the Promotion and Protection of Human Rights drafted the «Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights», which assumed that companies had legal obligations in relation to human rights. When the draft norms were submitted to the member states of the UN Human Rights Commission in 2004, they were rejected. Several of the member states opposed holding non-state entities directly accountable for human rights violations as they felt this would dilute state responsibility. The Human Rights Commission made it clear that the draft entailed no legal obligations. Several of the member states did, however, point out that the draft norms contained useful elements and ideas. It was against this backdrop, and following a resolution adopted by the UN Human Rights Commission, that the UN Secretary-General in 2005 appointed a Special Representative for human rights and business.

7.1.1 The Special Representative of the UN Secretary-General

The work being done by the UN Secretary-General’s Special Representative to clarify the private sector’s responsibility for human rights is groundbreaking. It is the first time a framework has been developed with the broad support and cooperation of the authorities, civil society and the private sector that holds non-state entities responsible for human rights violations. For Norway, it is important that norms are developed under the auspices of the UN, as this lends legitimacy to the process and shows that the UN can be innovative.

The Special Representative’s mandate in 2005 was five-fold. He was to identify and clarify standards of corporate responsibility and accountability with regard to human rights and to elaborate on the role of states. He was then to look more closely at concepts such as «complicity» and «spheres of influence». He was also to develop materials and methodologies for undertaking human rights impact assessments of business activities and provide examples of best practice.

The Special Representative held a number of consultations and conducted studies that resulted in several reports. Since the earlier draft norms had failed to obtain the broad support of the parties involved, the Special Representative concentrated on finding pragmatic solutions. A final report was submitted to the UN Human Rights Council in May 2008. The report outlines a three-pillar framework based on the key concepts «protect, respect and remedy»:

• The state duty to protect against human rights abuses by third parties, including business.

• The corporate responsibility to respect human rights.

• The need for more effective access to remedies.

Norway has supported this work, both politically and financially. Norway was responsible for processing the report and for extending the Special Representative’s mandate when the report was considered by the UN Human Rights Council in June 2008. In order to secure broad transregional support, Norway drafted a Human Rights Council resolution in collaboration with a core group consisting of Argentina, India, Nigeria and Russia. Norway also established close collaboration with the EU and Canada at an early stage in the process. After a lengthy negotiating process, the Human Rights Council adopted the resolution, which supports the conceptual framework and requests the Special Representative to operationalise it in the next three years by providing:

• Concrete and practical recommendations on ways to strengthen the fulfilment of the duty of the state to protect against human rights violations by business enterprises.

• Concrete guidance to business and other stakeholders on the content of the corporate responsibility to respect human rights («guiding principles»).

• Recommendations for enhancing access to effective remedies for those whose human rights are impacted by corporate activities.

Several civil society organisations have been driving forces for the UN’s work and have participated actively in the process to extend the Special Representative’s mandate. Many organisations find that the UN is moving too slowly. They have, among other things, expressed a wish for the mandate to include the right to make on-site visits to countries and to receive complaints. Nonetheless, the resolution enjoyed broad support, including from civil society organisations.

Continued involvement and participation on the part of civil society organisations is important. They are the principal spokespersons for victims of human rights violations. They can contribute both knowledge of local conditions and documentation of concrete violations to the UN process. The participation of civil society organisations confers relevance and legitimacy on the process.

Source Jan Speed. (c) Norad: Aid News.

With a renewed mandate and the backing of a unanimous Human Rights Council, the Special Representative now has good prospects of achieving greater normative clarity in the area. Consultations with governments, the private sector, international organisations, civil society and other actors will continue to be a central element. Together, we can work for better protection against corporate human rights violations.

The Government will

• continue to be a driving force in the ongoing work of the UN on business and human rights

• follow up the recommendations of the UN Special Representative;

• continue to support the Special Representative’s work both politically and financially;

• take concrete initiatives for consultations on corporate human rights responsibility and further develop cooperation with individual countries;

• raise the issue of corporate human rights responsibility in Norway’s human rights dialogues with China, Vietnam and Indonesia;

• continue to cooperate with NGOs;

• include information on corporate social responsibility in Norway’s report to the Human Rights Council as part of the Universal Periodic Review in 2009.

7.2 Global labour standards

Decent working conditions and respect for workers’ rights are prerequisites for a just society. The International Labour Organisation (ILO) is the main body responsible for drawing up core labour standards. The framework for safeguarding workers’ rights is expressed in ILO conventions, in particular its core conventions, cf. Box 3.5.

Source Fernando Moleres/Panos Pictures/Felix Features.

Norway has participated actively in the ILO since it was founded in 1919 and has traditionally been one of its largest voluntary contributors. Norway’s contribution to the ILO has largely been earmarked for combating child labour. Norway has also given priority to strengthening the social partners and cooperation between them, gender equality and women’s rights in the workplace, and combating other forms of discrimination.

As regards the social dimension of globalisation, the ILO points out that the poor have reaped few benefits from the major economic results of globalisation. This is because far too few countries have a socially just distribution policy, and in many places globalisation has not helped to create new jobs. The ILO has responded to this challenge with an action plan, The Decent Work Agenda.

The ILO Decent Work Agenda is based on the conviction that the fight against poverty must be part of a comprehensive change whereby people get decent and productive jobs, where fundamental labour standards are respected and where jobs deliver a fair income. Equality is a recurrent theme in the agenda, which rests on four main pillars:

• Full employment

• Social dialogue at work and strengthening the social partners and their role in designing economic policy

• Social insurance rights and standards at work

• Protection of workers’ rights as expressed in the ILO conventions, with an emphasis on the core conventions

An element in the agenda is what is known as «Decent Work Country Programmes», which the ILO is following up by advocating that they be mainstreamed in developing countries’ development strategies.

Norway participated in drawing up the ILO declaration of June 2008, Social Justice for a Fair Globalization. The declaration emphasises strengthening the connection between trade-related factors and workers’ rights, and places social justice on a par with economic efficiency. The declaration underlines that the violation of fundamental principles and rights at work cannot be invoked or otherwise used as a legitimate comparative advantage and that labour standards should not be used for protectionist trade purposes.

The declaration places full employment at the centre of economic policy, recommends an active social policy and calls for dialogue between the social partners. It stresses the importance of respecting and protecting the fundamental rights of workers. Freedom of association and the right to collective bargaining are especially important. By providing decent working conditions, the member states can promote development and social justice.

Labour standards have been a controversial issue in the WTO, and they were not included in the negotiating mandate for the current DOHA round. In February 2007, the ILO and WTO Secretariats submitted a joint report on trade and employment, which proposed possible ways of further developing cooperation between the organisations.

In September 2008, the Ministry of Foreign Affairs, in collaboration with the Norwegian Federation of Trade Unions and the Confederation of Norwegian Enterprise, organised an international conference in Oslo entitled Decent Work – a Key to Social Justice for a Fair Globalisation. The Directors General of the ILO and the WTO both took part, along with leaders of the international labour movement and the global business community. An important aim of the conference was to identify ways of safeguarding workers’ interests in the globalised economy. Strengthening the ILO and achieving better coordination of work of the ILO and the WTO are important in this context.

The need for greater coherence between the interests and attitudes of states in various international forums was discussed at the conference. Membership of both the ILO and the WTO entails a responsibility on the part of the authorities to be consistent. Proposals were put forward at the conference to set up international forums to discuss ways of achieving greater coherence between the authorities’ handling of workers’ rights and other important issues in international organisations.

The Government’s seven-point strategy for promoting workers’ rights globally (see Box 7.1) was presented at the conference. The ongoing Norwegian debate has revealed a need for stronger and more closely coordinated efforts in various policy areas and within the various ministries. The strategy will complement efforts to combat social dumping in Norway. In its continued efforts, the Government will engage in close dialogue with the social partners. The content of the strategy will therefore be concretised and further elaborated in the Norwegian ILO committee.

At its autumn session in 2008, the UN General Assembly adopted a resolution supporting the Social Justice for a Fair Globalization declaration. The resolution, for which Norway took the initiative, urges all relevant actors to contribute to implementation of the declaration. This was part of the follow-up of the Government’s strategy for promoting workers’ rights globally and a direct result of the Decent Work Conference in Oslo.

The Government will work for universal ratification of the ILO core conventions. Norway will also advocate that the national enforcement mechanisms in member states be strengthened. Many countries have ratified the ILO core conventions and adopted acceptable labour legislation, but lack the resources to implement and enforce them. Issues related to workers’ rights will also be raised in Norway’s human rights dialogue with China.

As a first step in the implementation of the strategy, Norway signed an agreement in September 2008 with the ILO in which it pledged NOK 100 million over a two-year period (2008–2009) to promote decent working conditions. Half of the Norwegian contribution will be devoted to promoting gender equality and women’s rights in the workplace, including measures to combat forced labour and human trafficking.

The Government

• sees the need for a more coherent policy for promoting workers’ rights globally;

• is of the view that further strengthening and protection of global labour standards and workers’ rights should primarily be carried out under the auspices of the ILO;

• will base these efforts on its strategy for strengthening and coordinating efforts for worker’s rights in other countries;

• assumes a special responsibility for following up and supporting the ILO Declaration on Social Justice;

• will work for the establishment of international forums where improved coherence of the work in various international organisations such as the ILO, the WTO and the OECD can be discussed;

• will promote the importance of workers’ rights in trade agreements.

7.3 Environmental and climate cooperation

One of the greatest challenges on the environmental front is halting the loss of biodiversity. Loss of biodiversity has been identified as an obstacle to achieving the UN Millennium Goals. Norway’s goal is to halt such loss by 2010. The Convention on Biological Diversity (CBD) is the central international framework for work towards this goal. The Convention has three objectives: the conservation of biological diversity, the sustainable use of its components, and the fair and equitable sharing of the benefits arising out of the utilisation of genetic resources. The deterioration of ecosystems and loss of ecosystem services also pose a risk to businesses.

In its efforts to strengthen the CBD, Norway will give priority to the following in the period leading up to the next Conference of the Parties (COP), to be held in 2010:

• developing a binding regime in the form of a protocol under the CBD for fair access to and equitable distribution of genetic resources;

• implementing decisions under the convention, with particular focus on the protection of both land and marine areas;

• enhancing the knowledge base in order to safeguard natural diversity;

• reporting in relation to the 2010 objective and developing new objectives and strategies for the CBD.

The situation as regards hazardous chemicals gives cause for international concern. Industrial effluents and emissions have been greatly reduced in Norway and other Western nations, and levels of known environmental toxins are falling. However, there are a large number of substances that are potentially harmful to health and the environment, and these substances are transported over long distances by atmospheric and ocean currents and in products. The challenges posed by new environmental toxins are increasing, while poor control of waste treatment and effluents and emissions is a serious problem in many countries undergoing rapid industrial development.

During the past 25 years, a number of global environmental conventions have been negotiated under the auspices of various UN bodies, dealing inter alia with biodiversity and natural resources, the climate, ozone, environmental toxins, chemicals, desertification and cultural heritage. A number of regional conventions have also been concluded, including some European conventions.

Climate change is the greatest transboundary challenge in the environmental field. Climate policy affects all countries and all sectors of society. The central framework for international climate cooperation is the UN Framework Convention on Climate Change. It is the basis for the Kyoto Protocol, and should be the basis for subsequent climate agreements. The Climate Change Convention was adopted in May 1992. It entered into force on 21 March 1994 and has been ratified by 192 countries.

Source Eduardo Martino/Panos Pictures /Felix Features.

The Kyoto Protocol to the Climate Change Convention involves a commitment by industrial countries to reduce their collective greenhouse gas (GHG) emissions during the period 2008–2012 by about 5 % in relation to the 1990 level. The Protocol contains stringent and far-reaching provisions concerning controls and sanctions. However, the countries that have made a quantitative commitment under the Kyoto Protocol only account for approximately 30 % of global GHG emissions. Some of the countries that have not ratified the Protocol (China, India and Brazil) have rapidly increasing emissions, while the USA is still responsible for the largest share of global greenhouse gas emissions.

Under the Kyoto Protocol, rules and institutions to facilitate the implementation of emission-reducing measures in developing countries have been adopted through the Clean Development Mechanism (CDM).

Due to their distinctive nature, emissions from international shipping and aviation have not been included in the quantitative commitments of the Kyoto Protocol. It is therefore very important that the International Maritime Organization (IMO) and the International Civil Aviation Organization (ICAO) follow up climate change issues related to international shipping and aviation, and that the ambitions here are in line with those set out in the Climate Change Convention.

In the run-up to the Copenhagen climate summit in 2009, efforts are being made to put in place an international climate change agreement. If it is to respond to today’s climate challenges, the new international agreement must be more ambitious than the Kyoto Protocol, and it must result in larger, more extensive emissions reductions and be binding on more countries. The developing countries in particular have argued that climate agreements should be based on the polluter pays principle. A system for emissions trading between countries can help to ensure that emissions reductions are made at the lowest possible cost, while sharing the burden fairly between countries. Norway has proposed auctioning some of the emissions allowances to raise money for climate measures in developing countries. The industrialised countries must also take particular responsibility for developing climate-friendly technology.

The Government

• intends that Norway should be a leading nation in environmental policy and play an active and constructive role in solving global and regional environmental problems;

• is working actively to promote ambitious and globally binding international environment agreements;

• is working to promote new and more ambitious commitments under the Convention on Biological Diversity;

• is working to promote a more comprehensive and ambitious international climate change agreement to follow the Kyoto Protocol;

• intends that Norway should be a driving force for more stringent international regulation of hazardous substances;

• is working to promote a more stringent environmental regime as part of its efforts to strengthen the UN;

• will seek to ensure that international framework conditions in areas other than the environment promote environmentally friendly development at the global, regional and international level.

7.4 Efforts to combat corruption

The Government’s aim is to promote universal adherence to the UN Convention against Corruption (UNCAC) and effective implementation of its provisions. The purpose of the anti-corruption efforts in the UN is to intensify efforts to establish a universal norm of zero tolerance of corruption and to strengthen international cooperation to prevent, investigate and prosecute corruption. There are many obstacles to this – not only differing jurisdictions and lack of knowledge and enforcement capacity, but also lack of transparency and willingness to cooperate.

The UN Convention against Corruption entered into force in 2005 and was ratified by Norway in 2006. The Convention enjoys wide support; as of September 2008 there were 122 parties and 140 signatories. It targets both the private and the public sectors. It contains provisions on preventive measures, criminalisation obligations, international cooperation on criminal matters, recovery of the proceeds of corruption, and technical assistance and follow-up.

Norway actively supports the efforts to design a mechanism to ensure the implementation of the UN Convention against Corruption. At the second session of the Conference of States Parties held in Indonesia in January 2008, a resolution was passed to work towards the adoption of terms of reference for an implementation mechanism at the third session in 2009. Norway is also a member of a working group that will propose measures that will make it practically possible to return the proceeds of corruption from one country to another. Norway also supports a joint UN and World Bank initiative to assist countries to recover identified stolen assets abroad – the Stolen Asset Recovery Initiative (StAR).

Norway is also participating in the development of international law against corruption in the OECD and the Council of Europe. The OECD Convention of 1997 on Combating Bribery of Foreign Public Officials in International Business Transactions has been important in the international fight against corruption. The Convention is binding on all the OECD countries, plus Argentina, Brazil, Bulgaria, Chile, Slovenia, Estonia and South Africa. A central objective in future work on the Convention will be to extend membership to include «new» major economic powers such as China, India and Russia.

Norway is a member of the working group under the OECD Convention on Combating Bribery of Foreign Officials. The group is currently revising anti-corruption instruments and designing a new phase in which member states’ national follow-up of the Convention will be further evaluated. Norway has ratified the Council of Europe Criminal Law and Civil Law Conventions on Corruption and is an active member of GRECO, the body that monitors the parties’ compliance with the Conventions. The GRECO member states evaluate each other. The second evaluation round is now in progress. The implementation and practice of criminal sanctions that are relevant to the Council of Europe Criminal Law Convention on Corruption, and transparency around the funding of political parties, are topics of the evaluation.

Through the EEA financial mechanisms, Norway supports projects and other activities aimed at promoting good governance and combating corruption. Good governance is an essential consideration that must be ensured in all projects that receive support. For example, the Office of the Auditor General of Norway has been allocated funds to organise networks with its contact points in beneficiary states. This work will be followed up by policy dialogues with beneficiary states linked to the EEA mechanisms.

Norway is one of the most active supporters of the development banks’ efforts to combat corruption and promote good governance. The multilateral banks have produced blacklists of companies charged with corruption, which will be excluded from future projects. The World Bank has set up a special programme for companies that wish to cooperate, known as the «Voluntary Disclosure Program». Companies that put all their cards on the table will avoid being blacklisted and can cooperate with the World Bank on combating corruption. Norway also supports measures to combat money laundering and the financing of terrorism through the International Monetary Fund (IMF).

7.4.1 Capital flight and secrecy jurisdictions

Norway has helped to put illegal capital flows and their consequences for developing countries on the agenda. Norway chairs an informal international working group under an initiative designed to identify innovative mechanisms to finance development assistance. The group is seeking to obtain knowledge about the mechanisms that contribute to illegal capital flight from developing countries, and will propose possible policy measures to reverse this development. The role played by secrecy jurisdictions (tax havens) is one of the issues it will consider.

In addition, the Government appointed an expert committee in March 2008 to examine the role of secrecy jurisdictions in relation to capital flight from developing countries and to evaluate Norway’s position as regards the investment of assets via secrecy jurisdictions. The committee is scheduled to submit its recommendation to the Minister of the Environment and International Development by 1 June 2009.

The Government

• is working to persuade more countries to adhere to and implement the UN Convention against Corruption and for the establishment of a mechanism to ensure implementation;

• will examine the role of secrecy jurisdictions as facilitators of illicit financial flows;

• is assisting developing countries, both bilaterally and through multilateral organisations, in establishing good governance and systems for combating corruption.

7.5 Trade and international cooperation

The international trade regime primarily consists of the WTO agreements, but also includes a large number of bilateral trade and cooperation agreements. The agreements constitute an important part of the international framework conditions for companies.

The authorities are working to strengthen the agreements concerning protection of human rights, workers’ rights, environmental protection and combating corruption in various international forums. It is important in this context to ensure that trade policy rules do not pose an obstacle to international solutions in these areas and that they contribute as far as possible to finding good solutions.

With this in view, the Government will raise issues relating to corporate social responsibility in negotiations and dialogues on trade-related issues with other countries.

The main aim of the World Trade Organisation (WTO) is to further develop a rule-based, open trading system that will create better conditions for economic growth and prosperity, not least in the developing countries. The Government considers it important to contribute to further developing the WTO rules into the best possible tool for a fair global trade regime, and ensuring the implementation of the rules. In the Government’s view, the conclusion of the negotiations in the Doha Development Round would be a positive step in addressing the difficult global economic situation we face today.

With a few indirect exceptions, the WTO rules contain no provisions on core labour standards. Nor are core labour standards or decent work part of the mandate for the current Doha Round negotiations. It will not be possible to raise the issue in the WTO until the ongoing negotiations have been concluded. Many developing countries fear that such provisions could be used for protectionist purposes and that they would discriminate against countries whose comparative advantage lies in low wage levels. The ILO declaration of June 2008 could be a step towards allaying this fear, cf. Chapter 7.2. The Government will seek to emphasise the importance of workers’ rights in the WTO agreements once the Doha Round has been concluded.

There is growing international debate about the extent to which environmental and climatic considerations should also be reflected in trade policy rules. Sustainable development is mentioned in the preamble to the 1994 Marrakesh Agreement that established the WTO in 1994 and in the general exception provisions of the WTO agreements. There is, however, still some international disagreement on the relationship between the WTO rules and multilateral environment agreements (MEAs). Norway is working actively to ensure that trade policies and environmental policies are mutually supportive in practice.

Norway’s bilateral trade agreements are primarily negotiated through EFTA. There is agreement among the EFTA states that environmental and sustainable development considerations should be included in the preambles to trade agreements. The environmental question is also touched on in the substantive provisions, such as those relating to SPS (sanitary and phytosanitary measures) and TBT (technical barriers to trade). The incorporation of environmental provisions into trade agreements is a rapidly growing area. Canada, the USA and the EU member states are among the countries that have incorporated the most comprehensive environmental provisions into recent trade agreements.

A working group has been set up under the auspices of EFTA to examine whether more binding environmental provisions can be included in future EFTA trade agreements and, if so, how this can be done. Such provisions could, for example, contain references to international cooperation, the implementation of national environmental legislation and closer bilateral cooperation on the environment. This work will continue in accordance with the Government’s fundamental approach, which is to promote an international trade regime in which decisive importance is attached to the environment, labour and social rights, food security and development in poor countries.

The Government considers it important that Norway stresses the significance both of corporate social responsibility and of the state’s responsibility for good public administration when concluding bilateral trade agreements. This has now been included in the preambles to several EFTA trade agreements and the provisions have legal significance as a basis for interpreting the agreements. Corporate social responsibility will also be an important element in connection with bilateral investment treaties (BITs).

The Government

• will advocate integrating CSR into international agreements and dialogues where this is appropriate;

• will cooperate bilaterally on training in and the transfer of expertise on CSR.

7.6 International frameworks and national guidelines

Some people in Norway have advocated introducing national guidelines for Norwegian companies’ operations abroad. In this and the previous chapter, a number of international guidelines, frame­works and processes have been discussed that help to concretise the Government’s expectations of the private sector and to establish clearer frameworks. In the Government’s view, the OECD Guidelines for Multinational Enterprises constitute highly significant rules for the transboundary activities of Norwegian companies. The Government expects Norwegian companies to familiarise themselves with these guidelines and apply them in their operations. This framework meets the need for national guidelines for Norwegian companies’ international activities.

The OECD Guidelines are voluntary as regards companies’ activities abroad, but they deal with many issues that have already been incorporated into legislation and agreements in Norway. In the debate about national guidelines for Norwegian companies, the question has also been raised of whether the guidelines should be legally binding on the companies as regards their activities abroad, i.e. whether violations of the guidelines can be pursued in the Norwegian courts. The question remains whether there are grounds for establishing further legal remedies or sanctions to follow this up within the framework of Norwegian legislation. This is discussed in greater detail in the next chapter.