Do businesses have human rights obligations? The answer must be an unqualified yes, but the reality is otherwise. Nowhere is this clearer than in the illegal Israeli settlements.
In a recently published report, Don't Buy Into Occupation (DBIO), a coalition of 25 Middle Eastern and European organisations, said close to 700 European financial institutions — some of them are big brands in the industry — have business ties with 50 companies in illegal Israeli settlements in the occupied Palestinian territories.
It is clear that Israel is in breach of international law. So are the illegal 50 settler companies. But the legal waters get muddied somewhat when it comes to the nearly 700 European companies. Complicity in war crimes under the Rome Statute is a possibility the companies should be worried about.
Be that as it may, the naming and shaming of the European companies by DBIO and the United Nations previously are sure to damage the companies' reputation in great measure. And the nations which host the companies, too, will have to bear a similar hurt. Reputation is money. Well-governed companies will know this.
Warren Buffett, a man who knows a thing or two about money, said it best: "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." But at least three things must change before companies start behaving themselves.
Firstly, international law, be it civil or criminal, has an enforceability problem. Secondly, the UN 2011 Guiding Principles on Business and Human Rights are just that. Guiding principles don't take companies to moral high grounds. Laws do. Finally, nations must pass municipal laws that impose heavy penalties on companies that breach human rights law at home and abroad.
Begin with enforceability, the Achilles heel of international law. Israel has been building illegal settlements in occupied Palestinian territories since 1967 in flagrant violation of the Fourth Geneva Convention of 1949.
"They are also a presumptive war crime under the 1998 Rome Statute of the International Criminal Court," says Professor S. Michael Lynk, the UN's special rapporteur on the situation of human rights in the Palestinian territories. Yet neither the UN Security Council nor the International Criminal Court has acted against the Zionist regime of Israel nor the 50 settler companies.
This doesn't speak well of the United States, Russia, France, the United Kingdom or China, the five permanent members of the world body. Or the ICC. A human rights treaty on business conduct is the second change that must happen. For some strange reason, the UN is still stuck in the business principles and responsibility mode. Is it listening too much to naysayer corporations which are stalling global efforts at developing a business conduct treaty?
The UN must be told we need a law, which a treaty is, that compels companies, not guiding principles that only cajole them. Perhaps, the best bet is extraterritorial municipal laws that compel companies into good behaviour at home and abroad. Companies behave badly when they are far from home as European companies are doing in the occupied Palestinian territories.
Extraterritorial municipal laws will take care of such errancy as they come with the sting of enforceability. Besides, there isn't a need for an ICC-like international commercial court to punish errant companies. National courts will do.
