Ruggie's Rules - The End of the Beginning

Ask the CEO of a multinational corporation “does your company respect and protect human rights?” and the answer is unlikely to be negative. But go on to ask another question “how do you know?” and you’ll probably get a much less confident response. The truth is that, until very recently, they didn't have to know. What’s more, if a problem or an accusation was filed against them, there was no international legal framework against which they could be brought to justice - existing national frameworks were inadequate or simply not relevant.

This was the challenge given to John Ruggie, Berthold Beitz Professor of International Affairs at the Kennedy School of Government and an Affiliated Professor in International Legal Studies at Harvard Law School, by the United Nations Human Rights Council – to bridge the gap between national public governance frameworks and the governance of global businesses.

Last night, I went to a talk by John Ruggie at the Harvard Bookstore, to mark the launch of his book Just Business. He talked about his approach to the challenge and his experiences of working with governments and corporations all over the world to agree a set of guiding principles, perhaps better known as Ruggie’s Rules. It became clear to him very early on that there was no silver bullet - it wasn't about creating a legal instrument and expecting everyone to adhere to it because, as we saw with the Kyoto Protocol, this would be far too easy to ignore. What was required was a ‘building block approach’, establishing a common platform (i.e. the guiding principles) and then gradually bringing organisations on-board. For example, having agreed the guiding principles, John Ruggie and his team approached national export agencies and persuaded them that, when promoting companies overseas, there should be some due diligence built into the process to ensure that they are not promoting companies who do not respect or protect human rights. This has proved to be a clever and successful means of pushing the guiding principles out into the global corporate network and a start towards changing the status quo.

As you’d expect, the guidelines have received mixed reactions. Activist organisations don’t think they go far enough with the organization Human Rights Watch saying that the UN Human Rights Council “squandered an opportunity to take meaningful action to curtail business-related human rights abuses.” Other commentators, such as John Braithwaite, Corporate Criminologist at the Australian National University, are more encouraged by the steps taken: “I’m a strong supporter of progressive UN framework agreements that seem pretty wishy-washy at first…“ in the long run they can make a huge contribution from limited beginnings.”

Whilst, I don’t believe that extensive regulation is the answer to making companies more sustainable, it is helpful to have some frameworks in place to ensure a minimum standard of practice. As John Ruggie put it last night “it’s the end of the beginning”; in other words, Ruggie’s Rules are not going to eliminate abuses of human rights by global companies over-night but they create a baseline to support companies to start answering the question “how do you know?” with confidence.

What good can come of Horsegate?

The new arrival

There was a rather strange new arrival at Boston’s Logan Airport this weekend – a giant red cow. It was shipped in from Switzerland by the owners of family-run Massachusetts bakery Swissbäkers, who are opening up a new bakery in Boston and will be adorning the new location with this bovine statue. The best bit is that they’re running a competition to name the animal – surely, in the wake of the horse meat scandal, this is a chance to have a bit of fun - you might opt for Red Beauty, or Red Stallion or even Skydancer? Although I have a feeling this might be lost on most Americans.

Perhaps not so much in Europe where controversy about Horsegate continues to grow… Just today Ikea pulled meatballs from its UK stores as a precautionary measure and Nestlé faced further questions about its involvement with the scandal. The food industry is firmly back in the spotlight and the whole situation raises a huge number of questions about supply chain management, food sourcing, and, most of all, about trust.

Whilst child labor scandals associated with fashion brands such as GAP or H&M have led to boycotts, the food industry is in an even more precarious position because of the nature of the consumer's relationship with food. It’s linked to survival, nourishment and, even, comfort; the fact that consumers have been duped about what exactly they're eating feels like a much bigger violation than finding out the truth about how their t.shirts are made. It’s not even the fact that we’re talking about horse meat, although admittedly for some this is a real sticking point, it’s really the fact that consumers feel they've been tricked by the brands they thought they could trust.

So how is this going to play out? What can the food industry do to win back consumer trust? To be honest, it’s a bit too soon to tell as we’ve yet to understand the full extent of the problem. At the very least, this should serve as a wake-up call to companies who are not taking steps to address responsible business practices across their supply chain. There are good examples of what can be done to inspire and support supply chain partners to take a more responsible approach to the way they do business, e.g. Walmart, who selects its suppliers based on whether or not they adhere to the same social and environmental standards, rather than purely on price, and who has opened up a dialogue to “learn, connect, inspire and drive sustainability through collaboration”; or GAP, which is helping its suppliers to improve their human resource capabilities to prevent problems, such as underage workers, becoming an issue in the first place. However, there is still a way to go and many more companies that need to act.

In the longer term, perhaps this controversy will prove enough of a disruption to accelerate a number of companies – not just the food industry – to think differently about the way they do business. In Corporate Citizenship’s report, Future Business – the four mega-trends that every company needs to prepare for, which was published today, there is clear evidence that the period of choice is over. By that, I mean that the era when businesses could decide whether or not to do business in a more sustainable way is coming to a close; in the future, and as we’re already starting to see today, rapid population growth, increasingly limited resources, emerging markets becoming more powerful, as well as changing consumer demands and increased scrutiny via social media, will force private companies to adapt or risk going bust. Wouldn’t it be easier to take action now? That would be a positive outcome from Horsegate.

A Brief Coffee Update

The values are on the wall - literally!

One of my first blog posts after moving to Boston was about my frustration at being given disposal coffee cups, regardless of whether I was drinking in or taking away. I'm happy to say that I have since been shown that there are exceptions! The Thinking Cup serves you great coffee in a non-disposable cup, as does Render Coffee Bar, which also has yummy chocolate and macadamia cookies. However, en route to explore Charleston today, I discovered the Equal Exchange Cafe. This sells products from Equal Exchange, a co-op founded in New England, which has an inspiring vision: "We invite you to share in our vision of a better world — a vision that connects us more closely to the food we eat and to the farmers who grow it". Over its 20-year lifespan, the co-operative has worked tirelessly to bring consumers fairly traded coffee as well as other products such as tea, sugar, chocolate and bananas. In the beginning, the idea of more equitable relationships with farmers was written off by the specialty coffee industry as absurd; however today, Equal Exchange believes there are "400 coffee companies purchasing at least a small portion of their coffee under Fair Trade terms". A great success story, although the co-op is clear that it still has a long way to go.

The cafe near the Charleston Bridge in Boston is a place where Equal Exchange can engage consumers in the importance of fair trade and the great tasting results - and the results are good! What's more, they give you a discount if you use your own cup: