No, says Arvind Ganesan, director of business and human rights at Human Rights Watch Yes, says Alexandra Guaqueta, public affairs advisor at Colombia’s Cerrejon Coal

Round one

Yet to deliver
Arvind Ganesan

Dear Alexandra,

Since their launch in 2000, the Voluntary Principles on Security and Human Rights (VPs) have become the industry standard for addressing human rights and security in the extractive industry. Many companies claim to endorse them.

Although they were designed to be voluntary, over time the VPs have helped shape the development of harder standards. Notably, institutions such as the International Finance Corporation have adapted them for their own policies that are enforceable against companies that receive IFC project lending.

However, as successful as the VPs have been at standard setting, they have been unsuccessful in ensuring that members actually implement them. Until 2007, there were no rules or procedures that addressed transgressions or required companies to implement the VPs once they joined the VPs plenary – the group of governments, companies, and NGOs that are formally members of the VPs process.

The new rules are geared towards individual cases. As a result, the VPs still cannot effectively answer the question of whether a company has implemented the principles consistently and throughout its operations. In order to do so, human rights organisations would have to expend substantial resources to track every company in every country in which it operates (more than 100 countries in some companies’ cases).

Nor have the VPs moved governments, particularly those in resource-rich countries that have poor human rights records, to create an enabling environment where the human rights addressed in the VPs are respected. That step is crucial for effective implementation of the VPs, especially since the initiative aims to grow by attracting new government members, including those in which the abuses that the VPs seek to address have been most severe and persistent, such as Nigeria.

The current rules and procedures, and even the VPs themselves, were intended to address the conduct of companies, especially in situations where governments are unwilling or unable to respect human rights. But with the addition of new governments or even new companies, the VPs need to ensure that all their members uphold the standards that they claim to support. Currently, the VPs fall short.

The first iteration of the VPs was the establishment of a basic standard; the VPs 2.0 was an effort to impose some rules; and the initiative is potentially moving towards VPs 3.0 to fix some problems that have arisen. A meaningful solution will include some challenging steps for governments and companies because it will require them to improve their human rights performance as part of their membership in the VPs. Hopefully, these efforts to develop VPs 3.0 will soon succeed.

Some believe that the heavy focus on new rules and procedures undermines the initiative’s real value: as a forum at the national and local level for companies, NGOs, and governments to discuss problems and find ways to implement the VPs standards. But when an initiative has international status as an effort to improve respect for human rights, it should be able to demonstrate concrete results. The best way to do so is for the initiative to have sufficient infrastructure – including meaningful rules, an effective governance structure, and adequate resources to ensure compliance with substantive human rights standards by all current and prospective members.

After all, the ultimate goal of the VPs is to provide the people affected by the problems that the VPs try to address a reasonable expectation that they are safer today than they were before their government or the companies operating in their vicinity joined the initiative. If achieving that goal requires some heavy lifting for stronger rules and procedures, then it is worth the investment.


Success in Colombia
Alexandra Guaqueta

Dear Arvind,

Undeniably, the VPs have had weaknesses. But I have seen the VPs in action on the ground, implemented by extractive multinational subsidiaries operating in conflict-ridden regions in Colombia, and they are a powerful instrument for protecting human rights. They can really work to disseminate liberal norms and values beyond company premises into society.

I fully agree that not all extractive companies have taken the VPs seriously or implemented them consistently around the globe and across their operations. Clear rules are needed. I understand that one of the underlying problems is that participants cannot agree on whether the initiative should be a “big tent” learning forum, with room for all, or a club for reputable members only, with a certification process and punishments for bad behaviour.

If conditions are too strict, companies (and governments) may choose not to join. Given that security-related information in the private sector is so hard to obtain, NGOs would miss out on a unique opportunity to influence businesses directly on this matter. On the other hand, if you lack “carrots and sticks” to reward good behaviour and punish bad, companies will have less incentive to improve and are more likely to abuse the initiative as free-riders.

There must be a way of ensuring that companies in trouble are given a chance to learn and change, but non-compliance over a period is punished by naming and shaming. Of course, this should not preclude victims of wrongful acts and human rights violations by companies from taking their cases to the courts where possible.

There’s another problem the VPs have that you don’t mention: the plenary process has been too inward looking. Your meetings are confidential. You’ve been stymied by politics and distrust. You’ve focused too much on internal governance, which, although important, has kept you from responding to practical issues faced by companies committed to implementing the guidelines on the ground. VPs 3.0 should fix this fracture between the plenary and reality on the ground.

In practice the VPs can be powerful. The risk and impact assessment section of the VPs drives companies to think critically about their operations not just with regards to their security policies, but in other areas too (environment, labour and transparency). That analysis is then translated into monitored action plans.

You see, the beauty of companies is that they have management systems, standardised procedures, internal auditing and bonuses for meeting goals. If companies are genuine about the VPs, all this organisational machinery works in favour of serious implementation.

In Colombia, I’ve seen companies train their employees on human rights; change their security departments to reduce the number of former military staff unsympathetic to human rights norms; adopt security protocols to protect union leaders; introduce VPs requirements to contractors including private security ones; install hotlines so that employees and communities can report irregular behaviour; and try out formulas so that guerrillas and paramilitaries (illegal right-wing armed groups) stop stealing royalties.

Some companies have even begun to analyse complex issues such as the peace and human rights concerns involved in reintegrating former combatants; how to help contractors avoid extortion by illegal armed groups; and ways to strengthen judicial authorities and promoting democratic culture. All this would not have been possible without the VPs.

Should the VPs process exercise influence on host governments that need to change their human rights record? Sure. At the local level in Colombia, for example, committed companies talk to military commanders, saying human rights are not just an idea to which they must pay lip service, and warn officials that VPs participants must speak about wrongdoing. This reduces the scope for bad behaviour.

However, you cannot expect companies to fully control the political and social environments in which they operate. Whether an armed conflict stops or a state improves its human rights record will depend on many variables. The VPs process and individual companies can help, but you cannot burden either with the responsibility of ending violence.


Round two

Be tough to be credible
Arvind Ganesan

Dear Alexandra,

You describe some very positive developments in Colombia. I don’t think anyone would dispute the value of companies training their employees, changing their security policies and procedures and undertaking other steps to safeguard human rights. Nor could anyone deny that management systems and procedures within companies can be very good at putting the VPs into practice. But for each company that does these things, how many do not?

Without stronger rules that require companies to publicly demonstrate what steps have been taken, how would someone who lives in neighbouring communities know for certain what steps companies have taken and how to hold them to account if they have not? As useful as it might be for you or me to see a progressive company in action, it is far better if that evidence is generally available to the public as a whole, which is part of what we are trying to do.

Strengthening the VPs has necessarily made its plenary inward looking. Focus on internal rules and procedures is important but should be accompanied by a corresponding focus on implementation and public transparency. Ultimately, the initial investment in rules, albeit inward looking in process, can only strengthen those rules.

In 2000 when the VPs were launched, it was a major achievement just to have a standard in place after such challenging negotiations. But it came at the cost of failing to adopt rules and procedures that would guide their implementation, ensure public accountability, make them credible, and help ensure their sustainability. Now, eight years later, the similarly challenging negotiation of rules attempting to address these shortcomings is under way. A good set of rules and procedures is worth this investment of time and resources, however, because it can only help enhance respect for human rights over time.

One problem the VPs (or any voluntary initiative) will not solve is the “free-rider” problem. Voluntary initiatives are constrained by the fact that institutions cannot be forced to join. But instead of arguing that the rules of voluntary initiatives should be weaker to accommodate more institutions (the “big tent”), I think it is better to have stronger rules for those that join. That approach not only gives the initiatives credibility as truly viable vehicles for promoting human rights but also ensures that those institutions that enter the fold are rightly understood as leaders in the field.

It is also important to acknowledge that the only effective way to solve the free-rider problem is to have enforceable standards that apply to everyone. Ideally, the VPs could be enshrined in law, much like the US Foreign Corrupt Practices Act. That approach would mean that companies must have policies and procedures in place to prevent abuses from occurring, including risk assessments and risk mitigation, and would be subject to meaningful penalties if the abuses actually occurred.

Lastly, you did not mention the responsibilities of governments within the VPs. I firmly believe that the VPs should not ask less of governments than what they are legally required to do under international and national human rights and humanitarian law. And with the VPs, this may be the most challenging aspect of the initiative, but potentially the most beneficial because real progress in this area would mean that governments were holding public and private forces accountable for human rights when they provide security for the extractive industries.


All members must do more
Alexandra Guaqueta

Dear Arvind,

I agree: let’s talk about governments. The VPs’ text was designed for companies. The fact is, however, that governments hold a crucial key to the puzzle. Unlike with private enterprises, states are legally bound to respect and protect human rights. Governments do get punished for breaching international human rights law. Maybe not as much as we would like, I admit. But on the concrete theme the VPs were designed to address – companies’ impact on human rights – governments could do a lot more.

The VPs process could encourage all governments to pass regulation on corporate complicity in human rights violations and create agencies to process complaints by local communities or employees. Home governments, which are better equipped than host governments with weak institutions, should also train their staff in embassies to provide concrete recommendations to companies operating in tough places. Situations on the ground are usually coloured in shades of grey and businesses do not always know what to do, even those with good intentions.

I would like to see a stronger role by the states. So far, it seems that only a handful of enlightened, committed individuals in the four participating countries, the US, the UK, the Netherlands and Norway, have done their homework. It has been eight years since the VPs got off the ground; the VPs should have already been fully internalised by state bureaucracies.

Would the VPs become redundant if governments adopted regulation? Clearly not. The VPs generate information on day-to-day, real-life problems that businesses and communities face, information that is often unavailable even when laws are in place. They solve co-ordination problems among several actors. And tell companies how to do things – again, something laws often simply don’t do.

One hard question is what to do with governments with weak governance structures. Should they be admitted into the VPs process? What if they free-ride too? Again, this is a strategic matter. How can the process influence host governments more effectively? The VPs could adopt a stage-based approach.

First, they could set basic requirements for governments to fulfil before they join, such as having laws to prosecute public security forces that violate human rights, working actively with participant companies and issuing a directive to public security forces asking them to collaborate with the VPs. After that, and once governments have joined, introduce further actions to be implemented within two to four years of joining.

We have talked about industries and governments. What about NGOs? I would have expected international NGOs to be more active in the VPs process. Specifically, working with local communities and organisations to disseminate the VPs, help them understand company challenges and teach them how to hold companies accountable. As you said, this effort takes time and money. Still, NGOs and governments could have collaborated more on this issue. I would have also expected NGOs to roll their sleeves up, tackle some the specific legal gaps in national legislations and come up with suggestions. I hope you consider these as next steps.

As much as rules are important, you cannot spend all those years focused on the plenary. Actually, in order to introduce rules that can truly hold companies accountable, you need to take into account much of the learning-by-doing that has taken place. For instance, this type of knowledge will give you better clues on how to design indicators that can measure company compliance.

The VPs are an excellent initiative, a powerful experiment worth holding on to. All pillars, business, governments and NGOs, need to move quickly towards the next stage.


A club worth joining?

The core aim of the Voluntary Principles is to guide companies in how to protect their staff and assets in potentially violent operating environments in a way that does not threaten the human rights of local people.

The VPs offer companies a chance to talk with governments, NGOs, labour unions and their peers on how to identify the risks of employing security personnel in certain countries, and to make sure those guards understand the importance of human rights.

Leading companies are now incorporating human rights requirements into private security contracts and agreements with governments and local police; using third parties to fund human rights training for security personnel; and setting up “whistleblower” hotlines for claims of human rights abuse.

How to join:

After months of bitter argument that at one point threatened the initiative’s entire future, and after much knocking of heads together by the US state department, VPs participants finally agreed in May 2007 to a set of seven basic participation criteria.

To join the VPs, participants must agree to:

Publicly promote the VPs.

Proactively implement or assist in the implementation of the VPs.

Attend plenary meetings and, as appropriate and commensurate with resource constraints, other sanctioned extraordinary and in-country meetings.

Communicate publicly on efforts to implement or assist in the implementation of the VPs at least annually.

Prepare and submit to the steering committee, one month prior to the annual plenary meeting, a report on efforts to implement or assist in the implementation of the VPs according to criteria agreed upon by the participants.

Participate in dialogue with other VP participants.

(Subject to legal, confidentiality, safety, and operational concerns) provide timely responses to reasonable requests for information from other participants with the aim of facilitating comprehensive understanding of the issues related to implementation or assistance in implementation of the VPs.

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