Harnessing corporations: lessons from the voluntary principles on security and human rights in Colombia and Indonesia

Abstract

New market forms embedded in certain liberal democratic norms, such as participation, transparency, accountability and human rights, are being promoted by a new generation of corporate conduct standards. These address a specific set of business practices and lock corporations into multi-stakeholder processes that contributes to socialize them, transforming their management systems and, at times, even their culture. This paper suggests that companies who follow these standards subsequently act as democratizing agents and global ‘co-governors’ because, among others, they begin to proactively hold governments, security forces and other stakeholders accountable. While certain market forces have undermined social justice and democracies, new market forms might be helping to disseminate norms that are key elements of democracy. The cases used to illustrate how companies become ‘democratizing agents’ of sorts are the implementation of the Voluntary Principles on Security and Human Rights (the VPs) in Colombia and Indonesia. The VPs are a multi-stakeholder initiative launched in 2000 involving major oil, gas and mining multinationals, governments and NGOs to guide the relationship between extractives and the public and private security providers that protect them from attacks, theft and extortion in weak governance and conflict zones. The analysis draws from extensive practical experience on the ground, and liberal and constructivist approaches on norms diffusion in International Relations and Political Science.

Keywords:

• business and human rights
• extractives
• public private partnerships
• corporate accountability
• voluntary principles on security and human rights
• corporate social responsibility
• norms diffusion

Acknowledgements

This paper was originally prepared for Phase 2 of the ‘Building Markets in Asia’ project by the Centre on Asia and Globalisation of the Lee Kuan Yew School of Public Policy at the National University of Singapore, and delivered at a workshop on 26–28 October 2011 for comments and discussion. It draws on work in progress: a research scoping trip to Indonesia in July 2011 funded by Flinders University; preliminary interviews; publically available information; and years of conversations in Colombia and other locations with experts and actors involved in the making of the business and human rights regime. All along I have had ample access to community leaders, NGOs, academics, business associations, government officials, UN officials, foreign donors, corporations and various types of public and private security providers and agents, including demobilized combatants. I have honoured commitments with Chatham House rules, private conversations and the confidentiality of documents. The terminology and analysis in this paper reflect my views as an academic and are not connected to my role as UN Special Procedures Mandate Holder on business and human rights (2011–2014).

Notes

1. 1. The term ‘global assemblages’ is introduced by Saskia Sassen to ‘detect the global at the sub-national levels’ through transboundary processes involving public and private actors. She declares to use it in its simplest ‘dictionary’ connotation. I have chosen it here in the same spirit to capture better the multi-stakeholder and global–local nature of the new governance initiatives, which tends to remain somewhat invisible in the mainstream ‘private authority’ and ‘global governance’ literature. The former portrays corporations as delinked from other actors whereas the latter fails to connect global rules and institutions to their local implementation spaces and dynamics.

2. 2. Ruggie authored the 2011 UN Guiding Principles and advised Annan on the creation of the UN Global Compact in 1999, as a first formula to start shaping business conduct.

3. 3. The literature on the emergence and strengthening of democracy and economic liberalization is large and has considered numerous causal relations between different variables associated to market economies and to political and social democracy, for example between trade, capital account and financial liberation, and democratic transition, wealth and equality. This paper does not seek to challenge or review this literature, but rather contribute to the discussion by providing new information on new forms of corporate regulation, which have not been traditionally documented by scholars in economy and political science engaged in the debate.

4. 4. Haufler recounts some of this process as the emergence of conflict prevention multi-stakeholder initiatives, the three main ones being the VPs; the Extractive Industry Transparency Initiative (EITI) meant to prevent misuse of oil, mining and gas revenues; and the Kimberley Process on blood diamonds.

5. 5. This was recognized by users and taken into account for the Colombia Guidelines in Security and Human Rights, an initiative for non-extractives modelled after the VPs. For information on the Colombian Guidelines, see http://www.ideaspaz.org.

6. 6. One dynamic is corporate change of preferences or identity through socialization.

7. 7. Abrahmsen and Williams (2011) also use Sassen’s concept to examine the emergence of a global private security sector, an example of which is the partnership and collaboration arrangements between extractive industries, host governments, local public security forces and private security contractors, precisely the type of complex relationship the VPs was set out to govern by introducing certain rules into them. The authors look at dynamics in several African countries, the case relevant to the VPs refers to Nigeria.

8. 8. The author attended the meetings to facilitate a workshop for OxyCol on behalf of Fundación Ideas para la Paz, Bogotá, 2005.

9. 9. Also confirmed by confidential interviews, Jakarta, July 2011.

10. 10. Interestingly, among the ‘best-practice’ examples one of the tool kits included is OxyCol’s experience in aligning the Colombian state-owned oil company Ecopetrol with the VPs through a year-long process of participatory security and human rights risk and impact assessment conducted with International Alert, one of the VPs Plenary NGOs.

11. 11. The decree, drafted with the help of the Indonesian Ethics Center, is still awaiting presidential approval.