Deconstructing “Adverse Human Rights Impact”

This entry provides a synopsis of Chapter 3, “Rights” from Business and Human Rights as Law: Towards Justiciability of Rights, Involvement, and Remedy (LexisNexis 2019).

TRANSLATING HUMAN RIGHTS FROM PUBLIC TO PRIVATE CONTEXTS

Human rights are the raison d’être of the Guiding Principles on Business and Human Rights, the authoritative standard on corporate “S” responsibility. But rights are not self-evident concepts. Their practical meaning lies not only in international instruments but in the interpretive universe built around them. These instruments and interpretive universe that most rights are subject to limitations. The Guiding Principles add another critical variable to this evolving universe. By identifying businesses as direct duty-bearers for individuals’ human rights, the Guiding Principles implicitly invoke an even more elusive dimension of the meaning of rights themselves: the application of human rights as between private actors.

This chapter explores how to translate human rights from their public-sector origins into private-sector obligations.

DEFINING RIGHTS

Human rights are defined by three structural features: rights-holder, interest, and duty-bearer. These three elements are related: the specific interest binds the rights-holder and the duty-bearer in a relationship of claim and obligation. The practical implication is that, where the duty-bearer changes, so too does the nature of the right.

The practical challenge is that human rights under international law have traditionally been state-centric concepts. The duty-bearer is the state, with critical institutional differences from private actors like businesses. First, states have the power to compel compliance with their dictates through law and a monopoly on the legitimate use of violence. Second, states serve a public purpose. Businesses are private institutions conceived to serve private ends. Management legitimacy and, ideally, accountability are contingent on serving those private ends. Third, businesses are themselves rights-holders with enforceable claims against government and other private actors. Their responsibilities should accordingly be cognizant of their rights.

International human rights law has yet to explore the nature and scope human rights when applied horizontally to private actors like companies. Nonetheless, for human rights due diligence and remedy to have any justiciable meaning, we will need, at a bare minimum, an objective basis to understand what constitutes a wrong. That is, when might a business adversely impact a human right even though it is complying with all national law? As we explore in this chapter, the concept of abuse of rightmay be the readiest vessel to transport public law human rights to the private law shore in a principled way. It will enable businesses, courts, and stakeholders to develop reasonable and objective metrics of adverse human rights impact for due diligence and remedy against a backdrop of legality.

To illustrate the practical implications of such an approach, we consider two examples with complex rights: freedom of expression and the right to health. In this entry, we restrict ourselves to a summary of a case study involving the right to health.

RIGHT TO HEALTH: A CASE STUDY

LiquorCo is a company that owns several high-end spirit brands. Given scientific studies indicating likely adverse health effects of alcohol consumption, LiquorCo wants to understand how its product and operations might adversely impact the right to health of its consumers.

We describe in Chapter 3 a method for companies to translate the right to health as it is defined in international law into practical indicators of adverse impact that a business can apply for its human rights governance, particularly due diligence. The approach naturally begins with an analysis of the contours of the right to health under international law. What that reveals is that the right to health is fundamentally distinct from health outcomes: “The right to health is not to be understood as a right to be healthy.”[2]

Rather, the right to health is comprised of four interests, reflecting measures expected of states to (i) ensure healthy birth and child development; (ii) improve environmental and industrial hygiene; (iii) prevent, treat and control disease; and (iv) provide access to medical service. These interests are subject to the overarching expectation/limitation of “progressive realization”. The right is not violated by failing to implement all available measures; it is violated by a state’s failure to take steps to ensure its progressive realization.

APPLYING RIGHT TO HEALTH TO LIQUORCO

LiquorCo could not reasonably be tasked with providing the measures expected of states without transforming the company into a public actor. To the extent LiquorCo adversely impacts consumers’ right to health, it is by “reducing or removing” the state’s ability to take the measures expected of it to provide “a variety of facilities, goods, services and conditions necessary for the realization of the highest attainable standard of health”.[1] Adapting that right to the private context requires analyzing (i) how LiquorCo may limit a state’s ability to meet its obligations, (ii) how LiquorCo may limit individuals’ ability to benefit from state measures, and (iii) which of these (legal) acts or omissions by LiquorCo may be considered an abuse of its rights so as to constitute an adverse impact on, rather than a mere interference with, the right to health?

Applying this lens, LiquorCo could adversely impact consumers’ right to health in four ways: product, marketing, lobbying and litigation, and tax policy. First, LiquorCo could adversely impact consumers’ right to health through its product to the extent the health effects place marginal burdens on the public health infrastructure. That is, the rights impact is not a health impact but an institutional one.

Second, the company’s marketing could adversely impact the right to health by encouraging alcohol abuse; misleading consumers about the health risks of drinking; or targeting vulnerable groups, particularly minors or the socio-economically disadvantaged, based on their vulnerability. Such marketing efforts, even if legal, would undermine state measures to discourage the abuse of alcohol or provide health-related education.

Third, LiquorCo may adversely impact the right to health by lobbying or litigating in bad faith against measures designed to meet the state’s right to health obligations. As we detail in the text, litigating or lobbying against nominal health measures would not necessarily constitute adverse impacts, as such activities may be legitimate exercises of the business’s rights. Bad faith would be necessary for interference to become adverse impact. Examples of such behaviour might include: (1) corrupting the legislative or judicial process through bribery or undue influence; (2) bringing frivolous actions simply to exhaust state resources; (3) advancing claims that the company knew or ought to have known were false regarding the effects of particular measures; or (4) contesting measures that the company knew or ought to have known would reasonably advance the right to health.

Fourth, LiquorCo could adversely impact the consumer right to health by evading its tax responsibility unreasonably or in bad faith. As with lobbying and litigation, the question is shaped by abuse, not mere exercise, of rights. Directors and officers have a fiduciary duty to pursue shareholder interest, including through seeking tax advantages. But practices such as bribery or tax fraud or even negligent record-keeping, failure to monitor trafficked or counterfeit goods, and lax supervision of vendors and distributors may constitute adverse impacts on the right to health if they deprive the government of legitimately expected revenue.

Understanding how international human rights apply specifically, reasonably, and in a principled fashion to businesses as private actors is critical to any justiciable application of the Guiding Principles. The meaning of those rights is logically prior to any understanding of relevant adverse impacts, the cornerstone of human rights governance.

CONCLUSION

The aim of this analysis is not to ground a free-standing legal right. Rather, it is to give more precise meaning to guide human rights due diligence, stakeholder engagement, and disclosure. Such precision, in method if not in outcome, becomes all the more critical as expectations regarding human rights due diligence and disclosure become entrenched in law.

[1] United Nations Committee on Economic, Social and Cultural Rights, General Comment №14 (2000): The right to the highest attainable standard of health (article 12 of the International Covenant on Economic, Social and Cultural Rights), U.N. Doc. E/C.12/2000/4 (2000) at para. 9.

[2] United Nations Committee on Economic, Social and Cultural Rights, General Comment №14 (2000): The right to the highest attainable standard of health (article 12 of the International Covenant on Economic, Social and Cultural Rights), U.N. Doc. E/C.12/2000/4 (2000) at para. 8 [emphasis in original].