What to Serve the 'Devil'? John Ruggie's Contribution to the Advancement of Corporate Citizenship

UCL's Faculty of Law was rightly proud to welcome a scholar of world renown for this year's 'Centre for Ethics & Law Annual Lecture' (2 March 2015): Professor John Ruggie. As someone who has made a seminal contribution not only to scholarship on international relations, globalisation and emerging modes of rule making, but also to the practice of soft law rule-compliance, Ruggie serves as an important point of reference for human rights practitioners and scholars alike.

Ruggie reflected on a journey spanning 15 years which culminated in one of the most successful corporate citizenship initiatives to date: the Guiding Principles on Business and Human Rights, widely known as the 'Ruggie Principles', preceded by the UN Global Compact of which he was also one of the architects. Ruggie elaborated upon both instruments in an analysis which effectively transcended the boundaries between law and politics. A number of key claims are reflected upon here.

A rapidly changing international context demands attention. Recent decades have witnessed the global economy, in the form of trade liberalisation and deregulation experiencing unprecedented expansion into new regulatory spaces, not least among former communist and hybrid regime states. For many observers, the massive capabilities of contemporary transnational corporate actors to act globally (as opposed to 'internationally') and to shape global regulatory politics has not been matched by institutional mechanisms willing and able to address the resulting negative externalities. On the contrary, institution and regulatory capacity has lagged behind, all too often at the expense of global public goods such as human rights, especially in lower income countries at the bottom of global supply chains.

Judging from Ruggie's thoughtful commentary, there appear to be (at least) three principal options for tackling this global regulation deficit. First, the establishment of a single overarching regulatory framework remains on the agenda in the form of a proposed binding treaty on business and human rights. However, history is littered with such initiatives which have failed in the face of concerted opposition and interest misalignment. Second, extraterritorial jurisdiction by home states over corporate conduct is another possibility. However, this would likely open up a Pandora's box of clashing regulatory norms and protracted legal disputes. The approach Ruggie subscribes to is some form of responsive or self-regulation, whereby the targets of regulation are encouraged to improve their performance through both material incentives and persuasion.

When former UN Secretary General Kofi Annan announced the Global Compact in Davos in 1999, few would have anticipated that this would trigger a concerted norm mobilisation over the following years. Conceived as a tool 'to embrace, support and enact a set of core values in the areas of human rights, labour standards, and environmental practices', the compact today counts among its membership 8000 businesses, 4000 non-business actors, and is active in 160 states and throughout emerging markets.

Reflecting growing traction, Ruggie was appointed in 2005 as the UN Secretary General Special Representative for Business and Human Rights. His initial mandate was narrow, to 'identify and clarify' applicable standards and best practices. The result was the 'Protect, Respect & Remedy' Framework presented by Ruggie before the UN Human Rights Council in 2008. This initiative received unanimous support and resulted in his mandate being renewed under a more ambitious mandate: to operationalise the framework. The intervening years saw considerable engagement with stakeholders from across the public and private divide, culminating in 2011 with the endorsement of the 'Guiding Principles on Business and Human Rights' by the Human Rights Council.

Listening to Ruggie, a logical progression from the UN Global Compact to the Guiding Principles is discernible. The Global Compact's principle function were to serve as a learning forum, to promote public-private partnerships, and to generate spinoffs such as the Principles for Responsible Investment. This latter outcome comes closest to being emulated in the Guiding Principles' pioneering focus on standard-setting. In this way, the Compact laid the groundwork for the Guiding Principles by, in Ruggie's own words, "expanding cognitive and institutional horizons" and helping to "normalise" a corporate responsibility discourse.

Once the groundwork was in place, it became possible to formulate a set of Guiding Principles responsive to the diverse, but converging, actor discourses encountered across public, civil and corporate governance spheres. By doing so, Ruggie skilfully navigated and fused the social identities, values and norms across the relevant stakeholders: the idea of legal obligation in the public arena, empowerment and remedy in the civil domain, and risk management in corporate governance. In so doing, Ruggie exposed already existing standards of conduct, but reformulated them in light of a new policy goal. In this reworking, corporations become subject to non-binding international human rights law and active agents in giving regard to human rights as an "authoritative list of rights they may harm".

Critics have been quick to emphasise that the Guiding Principles have no enforcement teeth, perpetuating the flaws of the Global Compact. Arvind Ganesan from Human Rights Watch has stated that 'in effect, the council endorsed the status quo - a world where companies are encouraged, but not obliged, to respect human rights. Guidance isn't enough - we need a mechanism to scrutinize how companies and governments apply these principles'.

However valid this standard critique may be at first glance, it is also a 'standard error', for it applies an orthodox understanding of regulation which Ruggie explicitly seeks to transcend. According to Ruggie, this is the crux of the matter. Being "better at describing the problem than at fixing it", the Guiding Principles' underlying goal was a "thick consensus" rather than a "thin consent". They are not a watchdog but a guidedog. The implementation of the Guiding Principles will not proceed via conventional sanctions and retaliation, but rather through what Ruggie describes as "distributive networks". Alongside many corporations, intergovernmental and private actors, such as the Organisation of Economic Cooperation and Development, the European Union and the International Organization for Standardization, have all incorporated these standards, building upon them in the process and contributing to their dissemination. NGOs have also played their part in monitoring compliance. The Guiding Principles provide a platform for a multiplying array of mobilisation strategies by diverse stakeholders in an organic "regulatory ecosystem for HR", with cascading effects through which - and this is a crucial point - the UN gradually cedes authority within a pluralising agenda-setting process.

After unsuccessfully searching for a suitable metaphor, this last point reminded me of the orchestration framework we studied in my Global Governance class. For the UN at least, the division of labour is clear: while others occupy the rows of musicians, the UN, its Secretary General or, in this case, the Human Rights Council, is engaged in conducting, or perhaps just providing the critical impulse which initiates a norm cascade.

Ironically, however, the Human Rights Council has recently adopted a resolution calling for the negotiation of an overarching legal instrument on business and human rights, which would effectively close the loop and bring us back into the realm of international law. However, this ambitious project is premature. It confronts serious challenges in terms of actor inclusiveness and would require a political will among UN Member States which is unlikely to materialise in the near future. Not least, the project confronts the increasingly forthright voice of emerging markets.

Taking this into account, can (or should) a para-regulatory mechanism such as the 'Ruggie Principles' be conceived as an end in itself? This question is particularly pertinent in light of variation in terms of application, interpretation and the transparency deficits which still plague this regulatory domain. What can we learn in this regard from the life story and modest beginnings of the Montreal Protocol on Substances that Deplete the Ozone Layer? Will enhanced auditing facilitate a compliance trickle-down effect to contractors via supply chains? If our understanding of regulation is to be redefined, retuned (and legally defanged), I suggest that we will also need comparably radical innovation in the monitoring and sanction of violations to ensure the effectiveness of this new regulatory reality.

As for what to serve the devil? This is just the entree.