Guest post: Regulating the conduct of Irish businesses overseas

Hannah Grene, independent researcher in human rights and development, provides the latest guest contribution to the blog. Her recent work has included collaborating with Trócaire on their business and human rights policy position paper, available here.

One of the issues facing Ireland in preparing their National Action Plan on Business and Human Rights is the principle of extraterritoriality: the extent to which Ireland is prepared to regulate the conduct of Irish businesses in their activities overseas. There is a growing recognition that states have human rights obligations which extend beyond the borders of their own territories, particularly with regard to transnational corporations- the Maastricht Principles, drawn up in 2012 by a group of independent legal experts, gives a useful interpretation of states’ extraterritorial obligations with regard to economic, social and cultural rights.

States are making increasing efforts to understand and implement their extraterritorial obligations. The recently published Danish National Action Plan includes a promise to establish a working group on how to implement extraterritorial obligations. In the UK, the forthcoming Modern Slavery Bill will see a requirement for transparency in the overseas supply chains of UK companies– an approach supported by big multinational companies such as Amazon, IKEA, Marks & Spencer, Primark, Sainsbury’s and Tesco.

In Ireland, extraterritorial obligations apply in Ireland with regard to certain serious crimes, including the bribery of foreign officials. However, the actual implementation of such legislation in Ireland is weak. An OECD report in December 2013 raised serious concerns about Ireland’s failure to prosecute a single case in twelve years under the legislation arising from the OECD Anti-Bribery Convention, and the undue length of time it was taking to investigate those cases which are currently open. The report commended Ireland for certain actions, including the updating of the Prevention of Corruption Act in 2010, which now gives Ireland jurisdiction over foreign bribery offences committed abroad by Irish companies and nationals, and the report also commended DFAT for raising awareness amongst their staff of their obligation to report any potential infringement. However, the report also emphasised the importance of engaging more closely with the private sector on this issue, stating that:

They are also concerned by reports that many Irish business professionals may believe that some degree of unethical behaviour is permissible, if engagement in such activity helps them achieve business growth.

There is also cause for concern in Ireland’s engagement with non-judicial mechanisms with extraterritorial obligations. The OECD Guidelines for Multinational Enterprises apply transnationally, and cases of possible contravention of these Guidelines are addressed by National Contact Points in each OECD member states. National Contact Points will look at cases concerning businesses based in their countries, even where the possible violation occurred in a non-OECD state. The OECD Guidelines were updated in 2011 to include a full chapter on human rights, drawing extensively on the UN Guiding Principles.

Three of the National Action Plans published to date (UK, Denmark and the Netherlands) have made extensive reference to their OECD National Contact Points as part of their framework for providing remedy for victims of human rights abuse by business. However, all three NAPs are examples of particularly strong and effective NCPs. Indeed, Denmark is the first country to establish its NCP as an independent body by Act of Parliament, and has bestowed it with proactive investigatory powers. In their National Action Plan, the Netherlands has appointed a special representative for four years, to lead a proactive agenda on the OECD Guidelines.

By contrast, the role of NCP in Ireland is one part of a large portfolio of the Bilateral Trade Promotion Unit within the Department of Jobs, Enterprise and Innovation, as David Joyce from the Irish Congress of Trade Unions has highlighted previously on this blog. Quite apart from the lack of resources thus assigned to the NCP role, there is a potential conflict of interest in housing the NCP in this government department. To date, the NCP has considered just a handful of cases, the latest of which has been blocked for over three years with no resolution. The NCP has insufficient legal clarity as to its role, which is preventing it from moving forward with the case. The fact that so few cases have been raised with the NCP may also be a cause for concern. The UN Guiding Principles on business and human rights emphasise:

Ensuring access to remedy for business-related human rights requires also that States facilitate public awareness and understanding of these mechanisms, how they can be accessed and any support (financial or expert) for doing so.

The current commitment to develop an Irish National Action Plan on business and human rights presents a real opportunity for Ireland to reflect on its experiences in engaging with extraterritorial obligations to date. This should include commitments to strengthen instruments such as the Prevention of Corruption Act, and the OECD National Contact Point, but should also look further to how the concepts enshrined in the UN Guiding Principles can be put into place. A first step in regulating the conduct of Irish companies overseas is through requiring human rights due diligence processes, by state owned companies or companies receiving state funding. The most recent National Action Plan by Finland puts in place both human rights due diligence requirements for Finnish state owned companies, and a grievance mechanism for concerned stakeholders. It is an example that Ireland might do well to follow.

One response to “Guest post: Regulating the conduct of Irish businesses overseas

  1. Pingback: Guest Post: The Working Outline of Ireland’s National Action Plan on Business and Human Rights: a curate’s egg? | Business & Human Rights in Ireland·

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