Shell has built a hard-won reputation for taking human rights seriously. But activists want to know why the company resisted the U.N.'s proposed "Norms on Business and Human Rights." GreenBiz follows up last month's book excerpt, “What Matters Most: Shell Oil's CSR Crisis in the North Sea,” with John Elkington's recent interview of Shell VP Robin Aram.
It's not hard to see why human rights activists and NGOs might feel a little frustrated. As the number of corporate responsibility and sustainability-focused codes explodes, business people often respond with calls for consolidation. Simplify, they say. Fine, the activists retort, but what then happens when a U.N. Commission of Human Rights (UNCHR) sub-commission boils down a whole raft of human rights standards into a single clear statement of the agenda for business? Answer, they say, business refuses to play ball.
Their frustration boiled over recently in an extraordinary press release from the Corporate Europe Observatory (CEO). Unusually, the release spotlighted one man, alleging that he had led the International Chamber of Commerce (ICC)’s “efforts to sideline the U.N. Norms.” The man in the hot seat: Robin Aram, Shell’s Vice-President of External Relations, Policy and Social Responsibility, who chairs the ICC Commission on Business in Society.
When the CEO people asked Aram about his company’s position, he replied: “From a Shell perspective, we don’t find the Norms helpful.” A key risk, he argued, is that the Norms potentially transfer responsibility for human rights under international law from states to business. Worse, he said, the process by which the Norms were drafted is “driving a wedge between companies and human rights organizations, and undermining voluntary initiatives like the U.N. Global Compact.”
An interesting counter-blast came from Sir Geoffrey Chandler, a long-standing member of SustainAbility’s Council. He called the statement issued by the ICC and the International Organization of Employers “an extraordinary attack on international human rights standards,” with which “the ICC and IOE bring discredit to their own organizations and do a disservice to their members.”
What made Sir Geoffrey’s attack even more significant was that he used to work for Shell. He also developed the first round of the company’s Business Principles, a model of how to distill complex issues into actionable guidance, although formal mention of human rights would come later, on Robin’s watch, after the 1995 controversies.
No Legal Standing
But the fact is that the business view has prevailed, to a degree. The UNCHR decided in April that the Norms have “no legal standing” and asked the Office of the High Commissioner for Human Rights to prepare a report on the scope and legal status of existing initiatives and standards relating to the human rights responsibilities of transnational corporations. The process will run into 2005 and involve fairly extensive stakeholder consultation. The aim: to identify ways to strengthen relevant standards.
So, given this hiatus, why bother to rake over the coals in relation to the role the ICC and Shell played in all of this? The reason is that the debate became extremely heated and the risk of reputational damage to both organizations -- and perhaps even to business generally -- is not insignificant.
While Shell had kept quiet on the U.N. Norms, CEO claimed that “Aram’s lobbying campaign against the Norms happens under the banner of the ICC’s Commission on Business in Society.” So, given that SustainAbility has an ongoing relationship with Shell, we obviously wanted to know what was going on. Was Robin Aram, we wondered, set on becoming the Darth Vader of the human rights world? In a word, no, but first some background.
Two Sharp Sticks
The man that I interviewed on the 23rd floor of Shell International’s London HQ is a self-declared “oddball,” in that he entered the company in mid-career. Having started off as a parasitologist in Ethiopia, Robin began to mutate into a Whitehall mandarin. He was in the Cabinet Office during the Thatcher years, had a spell in the Department of Trade and Industry, was asked by Shell UK to help with a project on management development and then to join them to work on government relations. Later he “crossed the river” to Shell International, to work on international relations.
And it’s very clear that he isn’t an automatic champion of government intervention. “The wrong sort of government at the wrong time can cramp the style of the free enterprise system,” he says. “There’s a natural suspicion about what government is going to lay on you next.” And the same, it appears, is true of lawyers, some of whom helped draft the Norms.
But Robin would be the first to admit that different realities can intrude on free enterprise. When he joined Shell, the company was profoundly insular. It was woken up in 1995, he says, by “two sharp sticks, the
Brent Spar and Nigeria.”
This spurred many things, among them the further evolution of Shell’s Business Principles. “At the time, social and environmental issues were still something of an add-on, just as safety had been 20-30 years earlier. The challenge now was not just to get new words into the Business Principles, but to drive the necessary thinking and actions down to the cutting edge of where we do business.”
A company like Shell faces “a multitude of issues, all the time.” The question for Robin and his staff is which issues to manage directly and which to farm out to industry federations and similar bodies? For issues that are clearly international, two obvious choices are the ICC, which plays a defensive game, and the more proactive World Business Council for Sustainable Development (WBCSD).
“The ICC is as close as you can get to a world business organization,” Robin explains, though he accepts that the sheer size and diversity of its corporate membership means that it is inevitably conservative. He describes the ICC as a “bigger lake,” which makes it much harder to raise the overall “water level” in terms of standards and performance. But, he stresses, this task is just as important as that of convening the corporate leaders in groups like WBCSD.
Robin sees the Norms furore as “an unfortunate episode,” drawing parallels with the Multilateral Agreement on Investment (MAI), which went down in flames a few years ago. Had it been adopted, the MAI would have had a profound impact on the way governments treat foreign investment in all 29 developed country-members of the OECD. This, he says, was another well-intentioned attempt to distil a whole host of rules into a single framework helpful to both governments and business. “But what started out as a good idea ended up poisoning the debate about investment rules for over a decade.”
Once again, Robin suggests, the U.N. Norms have “slightly poisoned the waters.” But if governments and business were bruised during the MAI furor, he sees NGOs and human rights lawyers as having been bruised this time. Robin allows that he was “slightly surprised” by the vehemence of the reactions on the draft Norms, but stresses that business did not ask for any consolidation of human rights standards. Indeed, he notes, the ICC and Shell “see no problem with a range of offerings.”
Substance or Style?
So we ask whether this latest controversy is a matter of substance or of style and packaging? Does business really dispute the need for clarification of the human rights agenda? And does Shell genuinely think that the Norms are a hazard to free enterprise? Our questions coax a mandarin-like smile. “It’s the packaging that business doesn’t like,” Robin offers. OK, but can we be a bit more specific? “The problem is the legalistic form that has been used in drafting the Norms,” he says. “We didn’t like the look of it. It contained too many
whereases“ -- the implication being that the Norms are designed to impose legal requirements.
Now that the dice have fallen and the UNCHR review is under way, we wonder whether the ICC or Shell would be happier to sign a fairly similar distillation a year hence, once the dust has settled and an even wider process of dialogue been undertaken? And perhaps it would help reduce business sensitivities if someone took the draft Norms and did a search-and-delete operation for
whereas?
Another smile. “The ICC and IOE will take a positive role in pushing things forward,” Robin stresses.
But the “proof of the pudding,” he concludes, will be whether what emerges in a year’s time can be made more business-friendly. “This episode,” he accepts, “has not been without damage to business. It has linked business with a perception of hostility to human rights.” At the same time, he stresses, “the upside of all of this is that people are learning more about human rights and what they mean in a business context.”
An early test of how things are going to play out will be whether the ICC and Shell get involved constructively. Companies like Novartis and Reebok engaged in the first round consultation on the draft Norms, but Shell (“like the large majority of companies,” Robin notes) didn’t.
Speaking with campaigners, we sense a grudging acknowledgement that it is better to have an ongoing, constructive debate than either the routine adoption of a set of Norms that no-one paid any attention to or, worse, the total abandonment of the principle of Norms. But there is also a strong conviction that voluntary initiatives are simply not going to be enough to address the scale of the challenge. So the next year will be challenging for all involved in shaping the human rights agenda for business. And some hot seats may well get hotter.
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This article has been reprinted courtesy of SustainAbility RADAR. It was first published in the June/July 2004 issue of that publication.
