Sean Molloy is a Principal’s Scholar in Law, reading for a PhD at Edinburgh Law School. Sean researches the relationship between business and human rights, and contributes to the LLM in Human Rights as a guest lecturer. In this post, he considers what a Trump presidency might mean for human rights and how this applies to businesses in the USA.
As the world comes to terms with the shock election of Donald Trump, our thoughts quickly turn to the implications of the choice of the American people (or more precisely the electoral colleges). From issues such as US foreign policy in Syria to US relations with Russia, the rights of Muslims and Mexicans, to abortion and the rights of women, both America and the world are left in a state of unease and uncertainty as to what the next four (or possibly even eight) years hold. As the dust settles, further potential consequences on other thus far unmentioned rights-related issues become the topics of thought. One such issue is that of Business and Human Rights (BHR) and in particular what Trump’s election might mean for the protection of rights in respect of the actions of businesses both in America and in regards to American companies operating abroad (see generally Business and Human Rights Resource Centre).
To understand the importance of this issue we must first briefly touch upon the current state of business and human rights under international human rights law (IHRL). As a subset of international law, and notwithstanding developments under other branches, IHRL postulates that States are the primary and arguably only duty bearers. From the perspective of BHR this effectively means that States are required to protect individuals within their territories against the actions of business with protection encompassing both the need to prevent rights violations from occurring and remedying them when they do (See UNGP 2011). There exists no world court on human rights, regional judicial bodies enact judgements against states not businesses, and states do generally not possess extraterritorial obligations to regulate the activities of their overseas companies. In other words, (host) domestic states such as the US are more or less solely responsible for regulating BHR. Against this state-centric backdrop what might the implications of a Trump presidency be for BHR both home and abroad?
BHR in America
Firstly, Trumps election campaign has hinged partially on his discontent with free trade agreements such as NAFTA. This has translated to a language of ‘bringing American businesses and jobs back to America.’ As Trump noted on the campaign trail, for example, ‘“we’re going get Apple to start building their damn computers and things in this country, instead of in other countries.” While somewhat of a maverick politician and notwithstanding his position on protectionism, Trump is particularly Republican in his approach to (de)regulation for American business. With the primary goal of bringing American jobs home, it is likely that any perceived impediments facing American businesses will be removed so as to create a ‘conducive business environments’ (otherwise known as a race to the bottom). For example, the Obama administration brought regulations and enforcement actions intended to increase the leverage of workers. This included, as an illustration, a regulation raising the salary threshold below which workers automatically become eligible for time-and-a-half overtime pay, to $47,476 from $23,660.
While the protection of labour rights is, from a rights-based perspective, a fundamental prerequisite for BHR, viewed through a business lens increased costs of labour reduce business profitability and make the US a less ‘attractive business environment.’ The same logic could be applied in the area of the environment, climate change, tax, and broader human rights issues. Trump’s rhetoric of bringing American jobs back says little about the rights of workers and communities once they return and could mean a regression in the protection of human rights with a prioritisation of business interests over individual rights.
Secondly, and more generally, Trump’s position (or lack thereof) on rights is abundantly clear not only from allegations around his own exploitation of workers, but also from his rhetoric on ‘Mexican rapists’, on the (lack of) rights of women on the issue of abortion and on his endorsement of torturous techniques such as, for example, waterboarding, to name a few. If the blatant disregard for rights evident throughout his election campaign continues through to his presidential term it is highly likely that BHR as a subset of the broader HR movement is in risk of being subverted in the name of ‘making America great again.’
Perhaps more significantly, however, will be the effects of deregulation on American companies operating abroad. In what is increasingly referred to as a post-national constellation and for a litany of reasons the state-centric approach to human rights, particularly in developing countries, has been repeatedly challenged. From state incapacity to political unwillingness, economic dependency to the absence of human rights protections more generally, scholars and practitioners alike have drawn attention to the multiple ways in which the current system of regulation is failing. At their core, these arguments suggest that the power and influence of Multinationals create regulatory dilemmas in which business interests are often pitted against state obligations to protect, with the latter giving way to the former. It against the backdrop of the inadequacies of state-centricism and tensions between economic and political areas that the United States has been somewhat of a flag bearer in regulating the activities of US and even non-US companies operating overseas.
For example, the Alien Tort Statute has permitted numerous victims of corporate human rights violations to bring cases before US District Courts against corporations operating outside of the US. While often settled out of court and notwithstanding both difficulties of law and forum, along with a number of Supreme Court cases that have significantly curtailed the reach of the statute (See Sosa v. Alvarez-Machain and Kiobel v. Royal Dutch Petroleum), it remains a beacon of hope for victims of corporate human rights violations. Under trump, Justice Antonin Scalia’s seat, vacant since he died in February, will without question be filled by a conservative nominee. This effectively signals the death of the ATS for the foreseeable future and with it the hope of many victims of corporate human rights violations.
Extraterritorial regulation is not, however, limited solely to extra-territorial liability, and in the broader area of extra-territorial accountability the US has again been a shining light. For example, Section 1502 of The Dodd Frank Wall Street Reform and Consumer Protection Act contains a disclosure requirement that calls on companies to determine whether their products contain conflict minerals – by carrying out supply chain due diligence – and to report this to the Securities and Exchange Commission (SEC). It is a response to the trade in conflict minerals that has fuelled human rights abuses and promoted insecurity in eastern Democratic Republic of the Congo (DRC). S 1502 seeks to require through a combination of both hard law and more reflexive processes that US companies take effective steps to ensuring that they are not helping to support conflict in the DRC.
Similarly, and akin to initiatives such as the Extractive Industries Transparency Initiative, EU Directives, and Canada’s Extractive Sector Transparency Measures Act, Section 1504 of Dodd Frank also requires resource extractive issuers, and their subsidiaries, to report the type and total amount of payments for each project and type and total payments made to each government (See EYGM 2016). The requirement attempts to improve transparency and limit corruption. From a rights-based perspective, this initiatives like the aforementioned attempts to curtail business relationships which often lead to violations being occurred in numerous ways.
As a final example, while on September 14th, 2016, President Obama announced his intention to terminate U.S. sanctions on Myanmar, the State Department also required that companies investing over $500,000 report on how they are attempting to ensure that US companies are not adversely affecting the enjoyment of human rights in Myanmar. The US reporting requirements cover key areas of business including land acquisition, labour rights, grievance mechanisms, stakeholder engagement, anti-corruption, communications with the military, and environmental policies and procedures. Companies are due to submit reports 180 days after meeting the $500,000 investment threshold, and annually thereafter.
These initiatives do not match up to a system of binding obligations under IHRL on TNCs and the intention is not to suggest here that these approaches are without fault, far from it. Indeed, numerous reports have highlighted the limitations of initiatives such as Dodd Frank while many of these efforts only ever touch upon human rights issues is indirect ways. Similarly, the US Secretary of State has recently moved to increase the reporting requirement threshold in Myanmar from $500,000 to $5,000,000. However, when assessing these initiatives we are required to situate these seemingly insignificant developments within the broader context of IHRL. In the absence of binding obligations on TNCs or extraterritorial duties on states, and coupled with both the often unwillingness and inability of host states to regulate and the weakness of soft law initiatives in deterring harms and remedying victims, American initiatives have at least attempted to fill regulatory gaps. Moreover, as illustrated in initiatives in Denmark’s CSR reporting requirements and the UK’s Modern Slavery Act, they have the potential to inspire others to follow suit. The pro-business Trump and the Republican majority in the Senate could well support business oppositions to these extra-territorial accountability mechanisms.
Precisely what the election of Trump will mean for the issue of BHR is wholly uncertain. However, while some in the US have welcomed Trump as a ‘non-politician’, the BHR sphere is populated by contestation between economic elites and human rights supporters. If the ill-fated UN Norms are anything to go by, the BHR dilemma is often sorted by abstaining from binding approaches to regulation in favour of softer, usually less effective methods of regulation. Business interests tend to outweigh even fundamental human rights. The same dilemmas will face the US but with a businessman at the helm human rights are likely to be subordinated to economic interests. This comes at a time when states should be attempting to integrate human rights into trade agreements rather than demanding further concessions. The election of a businessman could signal a serious regression in the regulation of BHR where business interests ‘Trump’ the BHR agenda.