Ruggie Rules: How the UN Can Foster Just Business

Current neoliberal capitalism, so defined by expansion and instability, is not easily reconciled with the concept of human rights. Many would argue that such extemporaneous considerations fall beyond the logic of the market and lie in the domain of the state. Of course, for the countless victims of the industrial disasters and abuses of capitalistic development – from starving peasants during the Industrial Revolution to the Bangladeshi wage-laborers crushed in the Rana Plaza collapse – state countermeasures against the excesses of unregulated search for profit have hardly sufficed as protective measures. Many of these problems were at least mitigated through evolving social policies and the establishment of welfare states, but in the era of globalization, who holds the power to regulate an increasingly supranational business sector?

In answering this question, Professor John Ruggie of Harvard’s Kennedy School of Government places his trust not only in traditional multilateral institutions like the UN, but also on the main actors of the world economic stage: multinational corporations.

Professor Ruggie, who presented his new book on the topic titled Just Business at the Watson Institute last week, literally wrote the rules when it comes to business and human rights considerations. A former advisor to UN Secretary-General Kofi Annan, Ruggie took on the task of creating a set of regulations that the UN Human Rights Council could recommend to international corporations from 2005 to 2011. His work resulted in the passing of the Guiding Principles and the establishment of the UN Global Compact, the world’s largest corporative citizenship initiative.

Ruggie’s work builds on a tradition of international attempts at regulating the increasingly powerful and volatile global business sector. Unlike the failed predecessors of the Guiding Principles, Ruggie’s plan was approved due to a deep and inclusive analysis of the forces at play at all levels of human economic interaction. By aligning the interests of businesses, states and civil society, the Principles attempt to establish a regulatory regime successfully grounded upon general agreement between these parties. The UN and other multilateral organizations are notorious for their inability to generate consensus around anything, but the Guiding Principles managed to find this sweet spot and gain overwhelming support from all those consulted.

The key, apparently, is the framing. The principles boil down to the assumption that states have a legal obligation to respect international human rights treaties and businesses have a rational incentive to develop efficient risk-management strategies and avoid adverse human rights impacts that may tarnish the name of the brand. This idea is developed within the “”Protect/Respect/Remedy” framework, which argues that states must protect their citizens, business must respect the rights of those affected by their operation, and judicial processes and adequate crisis-management mechanisms must be provided to aid those who suffer from human rights abuses due to multinational corporations.

Part of the argument also focused on the inclusion of new players in multilateral negotiations – for example, corporate lawyers were some of the most effective promoters of these global business standards. Another distinct characteristic of the Guiding Principles, and one of the reasons they have appealed to so many groups, is that their implementation is meant to be organized by distributed networks at local and regional levels. Ruggie chronicled his many meetings with regional economic bodies and industry representatives in order to convince them that following these human rights guidelines was tantamount to pursuing their best interests – not because the UN declared it to be so, but because the principles were crafted with the intention to reflect the current real-world worries that many of these groups constantly refer to.

All in all, John Ruggie’s contribution to global human rights appears substantial. Time will tell if these measures, crafted at the top of the international political power structure, will have a deep effect in business practices on the ground. However, by recognizing that conventional approaches are not sufficient for complex issues like human rights and business, the Guiding Principles are already a big step forward. As socially legitimated standards, they may not serve as a binding legal mechanism but have already inspired the creation of laws based on the concepts they embody, as well as the revision of best practices policies by business organizations.

Ruggie closed his speech at Watson by saying that the Guiding Principles may not be the final solution to human rights and business disputes, but that they do represent “the end of the beginning.” By re-embedding social, state and business institutions in order to promote a more socially responsible view of international capitalism, the “Ruggie Rules” may just be the game changer that this increasingly globalized world sorely needs.