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Theoretical Critique of the UN Guiding Principles: The Incompatibility of Business and Human Rights


In this article, I argue that the existing UN framework on business and Human Rights is inadequate to address Human Rights abuse and is merely a ‘blue-washing’ tool to reflect companies’ commitment to responsible social practices. This contributes to their popularity with consumers and can shield them from liability for human rights abuse.

I begin by analysing the theoretical foundations of the UN endeavours, specifically the United Nations Guiding Principles on Business and Human Rights (UNGP) that were formulated to give effect to the principles of ‘Protect, Respect and Remedy’. Using this analysis, I will critique the framework from a theoretical perspective and illustrate how such endeavours are largely defunct. The principles underlying the UNGP though noble, fail to ignore the historical trajectory of globalisation and capitalism that has failed to address social problems through free market economics. This framework also suffers from a lack of specificity and nuance which contributes to an absence of compliance with the UNGP. As illustrated through practical examples, it is evident that the UNGP have not achieved the desired outcome.

Keywords: UNGP, Neoliberalism, Human Rights abuse, TNC, Development, Business and Human Rights


Economic globalization, neoliberalism and free trade have created conditions under which developing countries engage in a race to the bottom by whittling down labour and environmental law protections to attract foreign investment and trade. This is worsened by the fact that corporations are complicit and often directly responsible for Human Rights abuse. This may be through using unethical labour practices such as child labour or by releasing harmful pollutants into local waterbodies. This led to a movement demanding accountability for corporations, which was first established by the creation of a voluntary framework called the UN Global Compact in the year 2000. Following this was the formulation of the ‘Norms’ which were subsequently rejected in 2004. The Norms comprised soft-law principles acknowledging the role that companies play in human rights abuse and implored companies to take on a pro-active role in addressing such issues. In 2008, the ‘Protect, Respect and Remedy’ guidelines were proposed that were then devised as the “UN Guiding Principles on Business and Human Rights” (UNGP). The UNGP are 31 principles which elaborate on how the ‘Protect, Respect and Remedy’ framework can be operationalised.

The UNGP is founded on 3 pillars that are interrelated. Under Pillar I of the framework, the State must prevent, punish, and address Human Rights abuse by strengthening laws and ensuring vigilance. Under Pillar II, businesses are required to prepare codes of conduct, practice Human Rights due diligence and take proactive measures to prevent Human Rights abuse within their operations. Under Pillar III, judicial and non-judicial forums must be created and strengthened to redress claims of Human Rights abuse. These seek to address the responsibilities that each stakeholder has and the critical function that they must perform.

Academic literature on the UN framework tends to focus on how these may be implemented and made binding on non-state actors. Existing literature does not focus on the philosophical basis of the guidelines which are, and will continue to be at odds with neoliberalism.

In this article, I argue that such guidelines will always be aspirational and are now used by corporations as “moral advertisements”

I. Principles underlying the UN Business and Human Rights Framework

In this section, I will look at the broad philosophies that form the foundation of the existing framework. These philosophies are: polycentric governance, shared political responsibility, and

state centrality. This provides crucial insight into the nature of the obligations that the UNGP recognises and how it allocates responsibility for Human Rights violations.

  • Polycentric Governance

The UNGP are based on the recognition that there are three governance systems that have the potential to regulate the activities of Trans-National Corporations (TNC’s). First, the domestic law which companies are subjected to when carrying out business operations. Second, the civil society and non-governmental bodies that interact with TNC’s under domestic law. And third, the internal corporate governance mechanisms that companies consciously chose to adopt.

Based on this, the UNGP advances the idea of ‘Polycentric Governance’. According to this, domestic law should incorporate Human Rights norms, while TNC’s should adopt autonomous systems of norms. Both, domestic authorities and TNC’s, will then create forums to address Human Rights violations yet their operations will not be integrated. This idea of Polycentric Governance stems from an emphasis on ‘principled pragmatism’. As it is currently impossible to create binding obligations for non-state actors, it is pragmatic to recognise their obligations as voluntary. Thus, the focus is on creating consensus around the fact that TNC’s are complicit in Human Rights abuse.

  • Shared Political Responsibility Model

By incorporating these principles, the UNGP advocates a movement from the current model of holding companies liable for their actions to the ‘shared political responsibility model’. According to this idea, Human Rights abuse is not just a consequence of the actions of a single actor, but a result of the participation of people in repressive or problematic institutions.

As a result of this idea, everyone must coordinate to achieve meaningful change, including market actors such as consumers. The success of these ideas in the UNGP hinges on the fact that consumer choices should ideally help regulate the activities of TNC’s as consumers also bear the political responsibility for their choices.

The UNGP in this manner are an attempt to create a model of ethical capitalism where market actors choose to ‘protect, respect and remedy’ Human Rights even if this may not lead to an optimal economic outcome. For instance, corporations under the UNGP framework undertake the responsibility to ensure safe work environments even if this may lead to a greater cost to companies.

  • State Centrality

These philosophies that seek to ascribe responsibility to, or find a role for corporations in Human Rights, are coexistent with the centrality of the State in ensuring that Human Rights abuse is managed by the legislature. The onus to protect and provide a remedy for human rights rests on the State, irrespective of the power exercised by corporations. The UNGP in this sense does not mark a departure from the perceived role of the State, nor does it seek to reimagine the same.

II. Critiquing the foundations of the UNGP

These ideas embodied in the UNGP have been heralded as the first step towards establishing a global platform for action to address Human Rights issues. However, the foundational principles of the UNGP are fundamentally at odds with political history and the context in which they are to be implemented.

  • Historical foundations of Business and Human Rights

Human Rights in a neoliberal economy, when viewed from a critical lens, is not just a path to seek relief from a tyrannical Government but is also reflective of a concerted effort to enforce a set of rights that are compatible with the market economy. The premise of neoliberalism is that a competitive market is essential for a free society. Furthermore, in accepting the free market, States were necessarily accepting a political and moral code. This code recognised individual civil and political rights, but broader social and economic rights that hinged upon state intervention were labelled as collectivist and totalitarian. This specific role of the state in a neoliberal economy led to the unprecedented growth of private actors. The fallacy of the UNGP is that it does not acknowledge this historical trajectory. As a consequence, there is an attempt to find the solution to human rights abuse within the free market based on voluntary commitments by those who benefit from such abuse. This also blunts criticism of deregulation that prevents redressal of such abuse.

  • Definitional and Practical Challenges

The UNGPs create several general obligations for corporations that they should comply with within their ‘sphere of influence’.

Broadly these obligations entail a duty to not contribute to or benefit from Human Rights abuse and undermine the rule of law. A broader obligation placed on corporations is that they should also ‘leverage’ their power to ensure the protection of Human Rights. These general obligations can be categorised as a duty to take active action to employ ethical supply chain practices and simultaneously take proactive action.

According to Baxi, in doing this, this idea is based on a “phenomenological approach to human suffering”. These principles require corporations to be aware of Human Rights abuse as well as ‘human abuse’ which is still an undefined concept. Human abuse is supposedly a broader idea that requires companies to not violate the rights of those who they are not directly liable to. An example of this is the duty of corporations to not release untreated pollutants into the environment even if there is no express obligation or liability to those living in the region.

The idea of contributing to human abuse through abstention allows companies to claim on a prima facie basis that they are unaware of the benefits accrued from such abuse. These benefits range from greater profits to lax compliance and disclosure requirements. The complex web of suppliers, licensees, distributors, business affiliates, and contractors allow TNC’s to claim ignorance while actively cooperating with domestic Governments to achieve specific business goals.

  • Identifying the Actual Impact of the UNGP

This critique reflects why the UNGP is merely a performative exercise and unlikely to bring about any material change in the condition of Human Rights. Firstly, the idea behind polycentric governance identifies corporations, governments, civil society organisations, and victims as different stakeholders that influence each other. This perception ignores that in most cases, corporations and governments pursue the same goals and represent a united axis of power in the conversation on Human Rights. In other cases, states are extremely powerful and these recognised stakeholders do not exercise the same bargaining power. For instance, corporations cannot exercise their ‘leverage’ when Human Rights abuse is perpetrated by the State. They may be extremely intertwined that the state and the TNCs become one. For instance, during Chevron’s operation in Nigeria, local youth groups sought to draw attention to the environmental damage being caused because of excessive extraction. In response to these efforts, 100 armed soldiers attacked residents of Opia and Ikenyan villages in Chevron-owned vessels.

Secondly, the shared political responsibility model looks at the threat of ethical market choices as a means through which the actions of TNC’s can be policed while ignoring the fact that such choices are not accessible to everyone. It also disregards changing dynamics wherein corporations have begun to occupy positions previously held by the government, which means that such choices cannot be exercised without severe repercussions. An example of this was seen where privatisation of water resources was pushed for by the World Bank. In Buenos Aires, the French firm, Suez, began supplying water at $600 per new user and later increased fees for all users. Here, the only option was to accept the charge levied by the corporation or forgo the use of water.

Lastly, the generality and the universality of the obligations as well as their definitions render these obligations defunct, yet label corporations that commit to following these, as Human Rights friendly. As a member of the UN Global Compact, the clothing company H&M, has made an overall commitment to the UNGP and won awards for its adherence to Human Rights and sustainability. However, in reality, its response towards crucial issues such as ensuring reasonable working hours, transparency, respecting and defending the rights of Human Rights activists, and creating channels for redressing Human Rights abuse are still ambiguous.


This examination has shown that the at the very core of it the UNGP as well as the UN Global Compact, there are significant theoretical gaps that have not been addressed. Primarily these texts continue the tradition of advocating that the free market comprises the solution to achieving a specific conception of human rights. In doing so the danger that a powerful transnational corporation can pose is masked. In trying to shift the burden to the market in order to protect human rights just creates a situation where texts such at the UNGP are nothing more than labels for multinational corporations to claim human rights friendly credentials.

This piece has been authored by Mugdha Mohapatra.

Mugdha Mohapatra is a fifth-year student at the National Law School of India University Bengaluru.

Image source: https://today.uconn.edu/2013/02/guiding-principles-for-business-and-human-rights-author-to-deliver-sackler-address/

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