Overview of the OGEL-CEPMLP Database of Voluntary Guidelines and Related Primary Soft-Law Material

27 October 2004

by Aminu Kabir

Voluntary codes dates back to the beginning of the twentieth century and have multiplied in greater numbers over the last twenty years. They originally emerged due to shareholder and consumer interest in corporate behaviour, but have more recently proliferated with special focus on socioeconomic and environmental issues particularly in the extractive industries sector. They have now become an integrated aspect of the international drive towards transparency and accountability of business activities and a way of monitoring how businesses perform against benign environmental, ethical and social indices. At present voluntary codes are seen as the main instruments and necessary components of corporate social responsibility and good corporate governance campaign that business must face up to the challenge that they offer.

What seemed initially as an industry initiative has now attracted the attention and proactive response of international organisations- the United nations, regional organisations like European Union, OECD and their like; international institutions- the World Bank; reputable Non governmental Organisations and National governments have in various ways made immense contributions seeking to regulate international corporate business and instil social responsibility and ethical behaviour to the business world.

Since the introduction of codes of conduct to business, they have been held as guidelines voluntarily incorporated into corporate policies. They have gone along way in changing corporate behaviour and are gradually assuming legal weight- soft law status, which companies cannot simply wish away or disregard the business and operational standards prescribed. Compliant companies are already attesting to the business and social benefits realisable, and the value added to their business and general profitability.

Most codes use aspirational language ("strive", "seek", "work towards", "try to minimise", "give proper regard to") or set out broad values, such as business integrity, openness, enriching the community, treating people with dignity and respect, or conducting business responsibly. A few codes, however, also express clear, blanket commitments to implement some prescribed obligation or responsibility. Most contain at least some quite specific commitments about the company's conduct towards groups with which it has a direct connection, such as employees, sub-contractors, suppliers and host governments. By and large, the following are some of the major sources and areas covered by the codes:

It is common knowledge that some business practices have environmental implications. Mining, logging, oil drilling, chemical production and waste disposal projects all have potential to disrupt or harm ecosystems and the natural environment. By damaging the environment, such activities often negatively affect the rights of people particularly in the areas of their culture, the nature of their economy or their socio-economic status. International human rights instruments contain few specific provisions relating to the environment, but often leaves a lot of gaps and voluntary codes have been used to block up such gaps.

OECD Guidelines set out standards of practice for multinationals covering disclosure of information, workers' rights and industrial relations, environmental protection, bribery, consumer interests, science and technology, ensuring competition and payment of taxation Including the addition introduced in 2000 revision that added a general statement that said that multinationals should respect human rights.

Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy directed at multinationals, as well as governments and employers' and workers' organisations. The Declaration covers employment issues such as non-discrimination, security of employment, training, wages, benefits and working conditions, health and safety, freedom of association and the right to organise aimed at guiding labour relations i the conduct of business

There are similarly a set of UN-endorsed norms or principles for businesses, clearly and unambiguously worded, recognising the benefits that companies bring, but also the harm they can do if such norms or principles are disregarded in practice, would be of immense value to companies themselves, to investors, and also to the wider public and market forces which would have a measure against which to judge and influence.

Industry initiated corporate social responsibility guidelines set out to instill ethical behaviour in business applicable to companies, employees, suppliers and all other stakeholders in business.

INTER-GOVERNMENTAL CODES

Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
The OECD Guidelines for Multinational Enterprises: Text, Commentary and Clarifications
OECD Principles of Corporate Governance - (Draft revised text, January 2004)
Convention (No. 169) concerning Indigenous and Tribal Peoples in Independent Countries
Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy
ILO DECLARATION OF FUNDAMENTAL PRINCIPLES AND RIGHTS AT WORK (1998)
ICFTU/ITS BASIC CODE OF LABOR PRACTICE (BRUSSELS DECEMBER 1997)
THE INTER AMERICAN (OAS) CONVENTION AGAINST BRIBERY (March 29 1996)
THE ASIAN PACIFIC ECONOMIC COOPERATION FORUM BUSINESS CODE OF CONDUCT (1999)

EU INITIATIVES

Report on EU standards for European Enterprises operating in developing countries: towards a European Code of Conduct
Promoting a European framework for Corporate Social Responsibility - EC Green Paper
Convention for the Protection of Human Rights and Fundamental Freedoms as amended by Protocol No. 11

UN Initiatives

The Johannesburg Declaration on Sustainable Development
Draft Commentary on the Norms of Responsibility of Transnational Corporations and Other Business Enterprises with Regard to Human Rights
Draft United Nations Code of Conduct on Transnational Corporations
Draft Commentary on the Norms of Responsibility of Transnational Corporations and Other Business Enterprises with Regard to Human Rights
Revised United Nations Model Double Taxation Convention Between Developed and Developing Countries
The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices and Resolution Adopted By the Conference Strengthening the Implementation of the Set
United Nations Code of Conduct for Law Enforcement Officials
UN Declaration on Human Rights Defenders
Global Compact's nine principles
Guidelines on Cooperation between the United Nations and the Business Community
The UN Human Rights Norms for Business: Towards Legal Accountability
New draft UN Norms provide guidelines for business - The human rights responsibilities of companies
Draft UN Convention against corruption (May 2003)
Draft United Nations declaration on the rights of indigenous peoples
Draft Universal Human Rights guidelines for companies

NON-GOVERNMENTAL CODES (NGOa)

Human Rights Principles for Companies
Principles for the Conduct of Company Operations Within the Oil and Gas Industry
Business Principles for Countering Bribery
Social Accountability 8000
Assurance Standard AA1000
AccountAbility 1000 (AA1000) framework - Standards, guidelines and professional qualification
The Global Sullivan Principles of Social Responsibility
THE SOCIAL VENTURE NETWORK STANDARDS OF CORPORATE SOCIAL REPONSIBILTY (1999)

INDUSTRY INITIATIVE

Petroleum Industry Guidelines for Reporting Greenhouse Gas Emissions
IPIECA Human Rights Status Report - May 2004
FAIR LABOR ASSOCIATION WORKSHOP CODE OF CONDUCT (1990)

MULTILATERAL INSTITUTIONS

A Guidelines on the Treatment of Foreign Direct Investment (Shortened version)
The World Bank Operation Manual - Operational Directive
World Bank Group Indigenous Peoples Draft Operational Policies

BUSINESS CHARTERS

International Conference for Renewable Energies - Political Declaration
Doing Business with the Poor: A Field Guide
The CERES Principles
The Caux Round Table Principles for Business
The Business Charter for Sustainable Development
ICC's Rules on Extortion and Bribery in International Business Transactions 1977 (Revised 1999)

MULTI-STAKEHOLDER INITIATIVES

Sustainability Reporting Guidelines 2002
The 'Equator Principles'

THE ETHICAL TRADING INITIATIVES (ETI)

Revised Draft Reporting Guidelines Extractive Industries Transparency Initiative 23 May 2003

OTHER INITIATIVES

THE CLARKSON PRINCIPLES OF STAKEHOLDER MANAGEMENT
AN INTERFAITH DECLARATION 1993 (a code of ethics on international business for Christians, Muslims and Jews)
THE TASK FORCE ON THE CHURCHES AND CORPORATE RESPONSIBILITY PRINCIPLES FOR GLOBAL CORPORATE RESPONSIBILTY 1995 (REVISED 1998)

Corporate Social Responsibility

These voluntary codes are published in OGEL 4 (2004), which has a comprehensive special issue on "soft" regulation of oil, gas and energy activities focusing on corporate social responsibility, codes, guidelines, standards and authoritative and influential soft-law rules. Lawyers and regulators in the field have to know the applicable law; but moreover, they now have to be familiar with the emerging, and sometimes difficult to identify, soft-law rules emerging from international organisations, professional associations, "civil society", industry self-regulation and other relevant sources of authority.

These have sometimes a direct legal effect - if incorporated or referred to in "hard" legal instruments such as laws, regulations, treaties and contracts. They also can have an indirect legal effect - such as when they define standards of liability or help to interpret open-ended formulations in international treaties, contracts of regulation. Lastly, they also define the expectations against which companies are measured - expectations that play a role in negotiations with governments, local communities, financing institutions, NGOs or that define the ambiguous concept of the "social license to operate".

This special issue was prepared by Christine Batruch, Vice President, Corporate Responsibility, Lundin Petroleum AB and Ayesha Dias, Consultant on Human Rights and Access to Justice (Bureau of Development Policy, UNDP, New York) and Course Director on Human Rights and Natural Resources Industry (CEPMLP), University of Dundee.

SPECIAL FEATURE: CORPORATE SOCIAL RESPONSIBILITY

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Overview of the OGEL-CEPMLP Database of Voluntary Guidelines and Related Primary Soft-Law Material