For most readers, bribery or corruption aren’t part of your everyday experience — though they should be part of due diligence processes on your business partners and supply chain. However, the danger that one department says one thing and another does something different and inconsistent is clear in every company.
There was a time when companies were lambasted for wielding their power to obstruct outcomes at international summits on social and environmental goals; now, if businesses don’t turn up in these arenas, they are castigated for lack of commitment.
However, one of the most interesting discussions at this year’s UN Forum on Business and Human Rights was on the UN report — produced in October and debated here in Geneva for the first time — on rules in corporate political engagement against what has been called “corporate capture.”
Beyond that dramatic title lies the charge that some businesses exercise undue influence in their lobbying, political donations, interference in judicial or legislative systems, or in manipulating scientific evidence and even public consultation — in a way that is incompatible with their human rights obligations.
The Forum heard testimony of examples from the Global South. The Philippines’ national human rights institution reported that companies were undertaking activities in contravention of commitments to combat climate change, it was said.
Corporate Political Responsibility in an Environment of Distrust
As US politics become increasingly polarized, brands are left wondering whether and how to engage. How can they simultaneously challenge the status quo, align their influences with brand values and commitments, and avoid the risks of retribution? Join us for an interactive workshop to explore putting the Erb Principles for Corporate Political Responsibility into practice, review new research from Porter Novelli on stakeholder perceptions, and hear how practitioners are using non-partisan principles to connect in this challenging environment — Monday, Oct. 16 at SB'23 San Diego.
Emilie Pradichit from the Manushya Foundation alleged that Thailand’s electricity company had deliberately misrepresented its own public relations as providing community consent for a new coal-fired power station — which she called “fake consultation.”
In apt wordplay at a Forum where there is much talk about governmental National Action Plans to implement business and human rights, Pradijit said: “NAPS will never control corporate capture — governments are napping when they should be passing laws.”
Former Attorney General of Guatemala, Claudia Paz, described how the country’s Commission against Impunity had discovered what she said were “illegal corporate pay-offs to key politicians, subsequently paid back in the award of future public works.” The practice was said to extend to paying judges to avoid corruption cases — a finding endorsed in the US Supreme Court, she said. Paz told how she was one of 30 judges and magistrates driven out of the country, threatened because they refused to accept the payments.
The issue has impacted companies in developed countries, too — according to corporate lawyer Suzanne Spears from US firm, Praxus LLP. She referred to prosecutions against US consultancies thought to be implicated in what is widely acknowledged corporate capture in the South African government and against UK consultancies said to have breached democratic norms in seeking concessions for international mining companies in Zambia and in the Democratic Republic of Congo.
Matthias Thorns, Deputy Secretary-General at the International Organisation of Employers (IOE), put up a steadfast defence of companies in the face of the UN report’s findings. Pointing out that rules for responsible lobbying had been drawn up by the UN Global Compact in 2005 and in the Organisation for Economic Cooperation and Development last year, he appealed for the UN to build on the existing rules rather than “reinvent the wheel.”
Referring to acceptance of the legitimate role for companies to pursue policies to combat hunger, poverty and climate change, he said activists had actively demanded for business to speak out on political issues — including on visas to enable entry to the United States, on abortion rights, and in favour of LGBTQ+ rights.
The IOE, like other employers’ federations, accepted its responsibility to raise awareness of human rights issues with members, to organise peer learning and to provide a ‘safe space’ where companies can address difficult issues, he added.
Companies fully support the need for independent judiciaries; policies for good corporate governance and transparency, and to combat corruption and the right of civil society to criticise business.
Freedom of expression
However, Thorns criticised some aspects of the report, suggesting that the right for companies to lobby could not exist only where there is agreement with civil society positions. He even suggested that the report might impinge on the right of free expression for companies themselves.
Spears disagreed with this claim, arguing that the right to free expression could not be used by companies “as a shield to hide the deleterious effects of corporate activity.”
She emphasised that “the report doesn’t call for a ban on lobbying, electioneering or ask companies to stay silent. Instead, it seeks to ensure that when they do so, there must be no willful obfuscation that their products or services may cause harm in violation of their human rights obligations or undertake activities which obstruct public policies in favour of human rights.”
Spears called on governments to use due diligence and conflict-of-interest laws to regulate companies’ lobbying and political activities. Lawsuits that seek to silence victims, whistleblowers and human rights defenders — the infamous Strategic Lawsuits Against Public Participation — should be outlawed, she added.
“Corporate capture is the most extreme form of corruption,” Spears argued.
Public policy was represented by Chief of Staff to the European Union Ombudsman, Aidan O’Sullivan, who described how corporate activity that extended to capture had been addressed in the EU. He cited how the Ombudsman had rejected sustainability impact assessments for trade agreements as insufficient on human rights grounds; had insisted on a change to the EU’s financial regulation when a major financial player had been selected to help prepare EU banking rules, despite conflict of interest; and an official finding that Europe’s provision of surveillance equipment to help control migration movements in African countries had failed to give due consideration to its human rights implications.
O’Sullivan suggested more work needed to be done to avoid the ‘revolving door’ between senior public officials working in companies they had regulated; the Ombudsman’s failure to require communications between the President of the European Commission and the Chief Executive of a major pharmaceutical company to be published; and the need for the EU to develop its own ‘complaints portal,’ to enable better access on grievances.
One final area where there was common agreement in the debate was in the need to ‘join the dots.’
“I’ve met company sustainability officers who say they want to do human rights due diligence, but say Government Relations doesn’t like it and Legal won’t let them do it,” Chair of the UN Working Group Fernanda Hopenhaym told the Forum, with firsthand experience as advisor to the Corporate Capture Project run by the NGO coalition, ESCR-Net.
The IOE’s Thorns agreed that sometimes these different functions within the company don’t even talk to each other.
For most readers of this article, overt issues of bribery or corruption will be a long way away from your everyday experience — although not so far away that they should not be part of due diligence processes on your business partners and supply chain. However, the danger that one part of the company says one thing and another part does something different and inconsistent is clear in every company.
The recommendations for responsible lobbying and political activity in the UN report will be subject to further consultation externally; perhaps this can also be an opportunity internal to companies: to consult whether on human rights — in the words of this series — they really do ‘walk the talk.’