The Importance of Human rights in Businesses and Corporate Law Firms

By Karolina Saladziute

In her first article, Karolina discusses the current state of human rights to businesses and legal corporations. Highlighting the beneficial trend towards greater acknowledgement and conformity but recognising the continued soft law status.

Human rights are fundamental freedoms that must be equally and fairly applied to every individual. This stems from the jurisprudential foundations of human rights themselves- being rights that are received purely from being human. As employees, customers, or just any person as part of the same society, we understand that businesses significantly impact the way we live and how we enjoy human rights. Therefore, enterprises must have a responsibility to respect those rights. In 2011 the UN Guiding Principles on Business and Human Rights (UNGPs) were developed, providing the first global standard ‘for preventing and addressing the risk of adverse impacts on human rights linked to business activity’. This delivered an internationally accepted framework and enhanced the standards of human rights compliance and protection within various corporations. The significance of civil rights has therefore continued to grow and expand, now including corporate law firms. In fact, in a survey conducted by the Business and Human Rights Resource Centre, 77% of the respondents said that ‘as business enterprises, law firms have a responsibility to respect human rights and should have a policy commitment to human rights and human rights due to diligence processes in place’.

However, businesses and lawyers have found it difficult to fully understand and effectively adopt the framework as it is not binding. This can be explained by the English dualistic legal system – if international treaties are not incorporated within domestic law, they fail to have domestic effect to ensure Parliament’s legislative supremacy. Despite being a member of the UN, the UK has so far failed to incorporate the principles into its domestic legal system. The only protection afforded currently lies within the Human Rights Act 1998; however, the legislation focuses on violations committed by public authorities rather than private individuals or businesses (s6 HRA 1998).  Lawyers, particularly, ‘have a tough time, generically, dealing with issues outside the boundaries of hard law’ as recognised by the Law Gazette. Thus, the International Bar Association (IBA) published the business and human rights guidance for bar associations and lawyers to encourage understanding of human rights principles’ applicability and relevance. The rectification marked the first step towards a broader discussion regarding lawyers’ role in protecting these rights and implementing them.

Success and Accountability

Businesses that effectively protect and apply human rights naturally build their brand as more successful and support the general societies’ well-being. Such benefits to the business incentivise companies to implement policies to adopt an approach that integrates human rights responsibilities in their day-to-day operations. While some corporations might see the implementation of human rights as a ‘box-ticking exercises’, more are starting to take it seriously as any violations can truly damage their financial and reputational interests. Furthermore, companies worldwide are increasingly held accountable for human rights performance in their daily operations, supply chains, and business relationships. The growing body of national laws and international standards globally ensure that businesses are constantly reminded of their obligations and encouraged to implement favourable rules to safeguard human rights. Nevertheless, as the private sector comes under increased scrutiny and pressure, it also moves towards protecting individuals’ rights involved in the function of their business.

An example of the effective incorporation of human rights standards within a company can be seen with FIFA. In 2015 the company announced that World Cup bids would have to meet the standards set out in the UNGP and particularly that all contractual partners and those within supply chains must also comply. Such a ground-breaking move has wide-ranging implications and significance:

1. The corporate landscape change can encourage businesses, including law firms, to implement new processes to ensure compliance with human rights. As this has direct implications for anyone involved with the company, it may create a new higher standard of compliance and protection.
2. The announcement highlighted the centrality of business and human rights provisions for all organisations internationally. It showed that at the core of each thriving enterprise lies respect for these rights.
3. The announcement indicates that there is a drive towards practical human rights application in all business activities. This may also have a knock-on effect of setting an example by a large organisation such as FIFA – it would most likely encourage other corporations to take human rights into account when carrying out their commercial activities.
4. Finally, the announcement may have a substantial reputational impact, specifically in the clothing and beauty industry. With consumers becoming more concerned with sustainability and ethical sourcing, they continue to move away from brands known to exploit workers, such as Boohoo, or brands that use other non-sustainable practices. This may have a considerable effect on the businesses’ profit and revenue margins.

Commercial law solicitors, specifically, will increasingly be linked with ‘business and human rights developments’. Nowadays, lawyers must report ‘suspicious client activity’ which may violate human rights. However, they are also increasingly under pressure from governments and society to advise their clients to respect and protect human rights. Law firms are expected to take proactive steps to learn how they may adversely impact people, whether that is their clients, employees, supply chain, or others affected by the firm’s advice. With this comes great responsibility, as law firms must spend more time and resources to understand how far-reaching their advice may be and minimise any harmful impact it may have.

Not only that, leading law firms have been progressively adopting new practices to integrate business and human rights – since 2016, this has been done through the Law Firm Business and Human Rights Peer Learning Process. Two main things can be seen. First, firms are starting to think more about their human rights responsibilities and their role in implementing and advocating in the organisation and beyond. Secondly, the prominent challenge law firms have faced thus far is raising awareness of corporate social responsibility and how it may protect human rights.

Overall, the growing importance of human rights in business conduct provides lawyers with both challenges and opportunities.

The importance of Human Rights to Law Firms

There are three main reasons why law firms should respect human rights:

1. A company’s failure to manage human rights risks can have severe consequences for the company itself. These may include legal, financial, social, and policy-based risks that may have adverse effects on the company’s reputation and success in general. Furthermore, lawyers make their living advising companies in risk avoidance and compliance with regulatory requirements or other voluntary corporate commitments. Therefore, to fulfil the client’s expectations and offer valuable advice, lawyers must consider various human rights standards to ensure broader management.
2. There are many situations where corporate lawyers can help companies prevent human rights problems. This may include advising businesses in their relationships with third parties or promoting driven action on human rights matters.
3. As international and national law continues to change and evolve, we see more legislation on human rights in business. Therefore, lawyers can play a crucial role in helping companies understand, address, and protect against possible human rights violations.

These reasons only touch the surface of the true importance of human rights. Thus, now more than ever, it is crucial to understand and encourage effective solutions within the corporate world for the successful application and respect of human rights.

The Future

Companies globally have used the UNGP standard to benchmark their corporate social responsibility policies, simultaneously expecting everyone from their supply chain to do so as well. The Modern Slavery Act 2015 has incorporated a soft law duty on specific businesses to produce a report on the existence of slavery and exploitation of labour in their supply chain. The legislation was passed as an effort for the UK to meet their art. 4 ECHR duties. However, as it is soft law, there have been problems with the implementation of the procedure both by businesses and courts. Nonetheless, it must be recognised that even the smallest requirements incorporated may contribute towards the growing importance of human rights in various enterprises.

Ultimately, it is to their advantage when it comes to law firms to be able to promote themselves as having implemented and respected human rights principles. This is because it is more attractive not only to current clients but to potential ones as well. However, everything comes down to the fact that if more companies understand the importance of human rights and its framework, then the practices adopted will be more meaningful and have a more far-reaching effect.