Although NHRIs have traditionally focused on improving state compliance with national and international human rights standards, they are increasingly engaging in activities to promote and protect human rights in the private sector. Indeed, the growing number of examples of “good practice” illustrates the significant potential of NHRIs to tackle corporate human rights abuse and operationalize the UNGPs, for instance, by providing advice and guidance to both state and non-state actors, monitoring laws and policies, launching inquiries and investigations, resolving complaints or remedying business-related human rights abuse (for overviews of NHRI practice, see Haász 2013; McGrath 2019; Cantú Rivera 2020). So far, however, evidence of NHRI ‘good practice’ in the area of business and human rights is scattered and unsystematic, making it difficult to draw generalizable conclusions for the conditions of their effectiveness. Moreover, while the broad range of activities and the diversity of institutional mandates, powers, and local contexts present well-known problems for NHRI scholars, analyzing the conditions for effective engagement with corporate human rights abuse raises various additional challenges. These include vague responsibilities and legal obligations of business firms, especially of transnational corporations (TNCs); weak accountability mechanisms; the difficulty to formulate a positive business case for greater human rights compliance in many industries; and a reluctance to cooperate with state actors and regulatory bodies (e.g., see Ruggie 2013; Bernaz 2017; Götzmann and Lorion 2020). This section seeks to address these issues: first, by conceptualizing NHRI effectiveness in terms of the institution’s impact and, second, by examining the structural conditions that enable NHRIs to effectively contribute to the promotion and protection of human rights by business actors.
Conceptualizing NHRI Effectiveness as Impact
With the proliferation of NHRIs since the 1990s, the question of their effectiveness in the promotion and protection of human rights has gained increasing attention by scholars and activists alike. NHRIs are inherently paradoxical organizations: They are established and funded through the state yet are expected to function as independent institutions monitoring, preventing and regulating rights abuses, mostly by actors associated with the state (Brodie 2015: 1217). The tension arising from their positionality between government and civil society, and the inherent tendency to create political opposition through their work, renders NHRIs particularly vulnerable to manipulation by the government (Mertus 2009: 3). In light of that structural vulnerability, scholars have noted that “[w]hat is surprising is that many of them have functioned, nonetheless” (Rosenblum 2012: 322). But what is an effective, a “functioning,” NHRI?
As the aim of this article is to analyze the conditions which enhance the capability of NHRIs to contribute to improving respect for, and compliance with, human rights norms and standards in the private sector, it makes sense to conceptualize organizational effectiveness first and foremost in terms of the institution’s impact. An impact-based approach measures the organizational effectiveness of an NHRI according to the extent to which it has “positively improved and alleviated the human rights situation of individuals and groups in a given society” (Linos and Pegram 2017: 644; see also Mertus 2012: 83-87). This may involve assessing whether an NHRI has directly contributed to the reduction, ending, or remedy of concrete instances of human rights abuse through investigating and resolving complaints or by lobbying or pressurizing state and non-state actors into compliance with national and international human rights norms through legal or policy reforms. Although this is often more difficult to assess, it may also involve the evaluation of an NHRI’s contribution to cultural change through the provision of training and education for key actors, through the ‘naming and shaming’ of perpetrators, and by engaging in promotional and awareness raising activities.
The impact-based approach to organizational effectiveness has the significant advantage of prioritizing the core purpose of NHRIs: to improve respect for, and the protection of, human rights norms and standards in one form or another, for “[t]here is clearly little point establishing a NHRI unless it can effect some positive change” (Murray 2007: 210). Although an evaluation of NHRI performance according to the fulfillment of its specific mandate may be the most straight-forward and perhaps the more realistic approach, it also represents a rather minimalist benchmark because it does not allow for evaluating an institution’s actual contribution to human rights change, nor for criticizing its limited focus or its operation on a sub-standard mandate (Mertus 2012: 80-82). Similarly, an approach assessing an NHRI solely according to its ability to address the gravest human rights violations in a country and the needs of its most vulnerable groups (e.g., Rosenblum 2012) has only limited regard to the overall change an NHRI has brought while potentially setting the bar for effective performance too high if the most critical human rights issues fall outside the body’s sphere of influence. While it is important to consider its structural constraints and the needs of the most vulnerable groups in society, prioritizing the impact of an institution is more suitable for analyzing the conditions under which NHRIs can effectively contribute to improving respect for, and protection of, human rights by corporate actors. But which factors influence the effectiveness of NHRIs and, more specifically, their ability to contribute to the reduction, prevention, or remedy of human rights abuses by corporate actors?
Conditions for Effective NHRI Engagement with Business and Human Rights
Scholars agree that there is no single factor which alone determines the effectiveness of an institution, but that its impact and performance is influenced by a range of factors: every NHRI “operates within an environment of constraints and opportunities, some of which the [institution] has greater capacity to influence than others” (Harvey and Spencer 2012: 1685; see also Kumar 2003; Murray 2007; Linos and Pegram 2017). Factors that are largely outside of an NHRI’s control, but which have significant impact on its performance concern the political, economic and societal environment in which an NHRI is established and in which it operates. These contextual factors comprise the potential for violence in a country, the regime type,Footnote 7 the existence or absence of a functioning judicial system and of a strong civil society (see Wolfsteller and Gregg 2017; Wolfsteller 2017), but also the structural conditions of the institution’s operation, such as the NHRI’s mandate and powers, funding, independence, and accountability arrangements (Mertus 2009; 2012). Factors that are largely within the body’s control include efficient management and leadership, staff expertise, a clear strategic plan and vision, as well as accessible and transparent communication with stakeholders (Harvey and Spencer 2012: 1685; Murray 2007: 207, 214-219).
While all of these factors are important for the effective operation of NHRIs in general, two of them are critical for an institution’s ability to engage with corporate human rights abuse in a meaningful way: legitimacy, defined here as the mandate of an NHRI according to national and international law, and competences, understood as the body’s specific, legally codified powers to put its mandate into practice. In the following section, I argue that (1) a broad mandate and (2) the combination of strong promotional and investigative powers, both of which extend to state and non-state actors, constitute essential structural conditions for NHRIs to make an effective contribution to the specific issue-area of corporate human rights abuse.
The mandate of an NHRI defines the body’s legal status and relationship to other actors and institutions, such as the government, parliament, the judicial system, public administration, and civil society. Scholars agree that a legally formalized mandate—ideally, through the constitution or a legislative act—ensures a degree of stability and autonomy over time, rendering the institution less vulnerable to attempts to abolish it, to change its structure or powers, or to otherwise interfere with its effective operation (Smith 2006: 913-914; Murray 2007: 194-195; Linos and Pegram 2017: 633). But the mandate also defines the boundaries of the institution’s jurisdiction, its functions, and powers. It thereby critically shapes the ability of the organization to engage with corporate human rights abuse, in four specific ways.
First, the mandate determines whether an NHRI is allowed to investigate, monitor, and report on, human rights violations committed by any actor or only those caused by actors associated with the state (which is often the case in NHRIs with complaints handling powers, see Reif 2017). It thus prescribes which types of actors the NHRI can regulate and collaborate with, for instance, in providing advice and training or investigating a complaint. In order to realize the full potential of NHRIs in tackling corporate human rights abuse, however, their mandate needs to go beyond state-owned enterprises and allow them to engage with state as well as non-state actors, and to monitor and report on any incident of human rights abuse, irrespective of the perpetrator.
Second, by defining the geographical boundaries of an NHRI’s jurisdiction, the statutory mandate regulates the extent to which an NHRI is legally authorized to operate inside and outside national borders. It thereby enables or disables the institution to participate in transnational networks or mechanisms (e.g., the UN treaty monitoring system), but also to collaborate with organizations abroad, such as other NHRIs, in monitoring and capacity-building activities or in the coordination of transnational investigations. The geographical boundaries of an NHRI’s mandate are of particular relevance to the field of business and human rights because the rise of multinational corporations, and the global diffusion of supply chains has created responsibility and accountability gaps which are difficult to close for nationally oriented human rights protection systems—often due to a lack of state capacity and/or willingness to regulate the private sector. If equipped with an adequate statutory mandate for transnational collaboration, NHRIs as a network can play an important role in monitoring business-related human rights abuse across national borders and in holding corporate actors accountable through the naming and shaming of perpetrators who have otherwise no sanctions to fear in their home states (Schuller and Utlu 2014: 8, 24-25; McGrath 2019: 84).
Third, the mandate defines the range of rights norms and standards an NHRI is allowed to promote and protect. Usually, this includes the rights recognized in the constitution and national law, but it may also extend to the norms set out in the international human rights instruments to which the state is party. For the effective promotion and protection of human rights in the private sector, however, it is of vital importance that the rights focus of an NHRI is as broad as possible; in particular, that its mandate covers not only civil and political rights but also economic, social, and cultural rights (Murray 2007: 201; Kumar 2006: 779). This is because incidents of corporate human rights abuse often involve the infringement of economic and social rights, such as the right to freedom from slavery and forced labour, the right to fair wages, to safe and healthy working conditions, to form and join trade unions, and to enjoy the highest attainable standard of physical and mental health.Footnote 8
Fourth, the mandate defines the functions and powers of an NHRI. It prescribes whether an institution is vested with investigative (or protective) powersFootnote 9 to perform a regulatory role or with promotive powers to operate as an agent of cultural change or—as is often the case—with a combination of both. Yet irrespective of how the balance is struck between different types of powers, their formal definition and authorization by statute make it more likely that actors cooperate and comply with the NHRI’s requests and recommendations. If its powers are not legally defined or lack clarity, actors are unlikely to accept the use of the powers invoked as legitimate and will refuse to cooperate, especially if the NHRI is operating in a hostile environment or if the targeted actors have rather weak obligations to respect and comply with human rights, such as business firms.
Apart from the statutory remit, the effectiveness of NHRIs and especially their impact in the area of corporate human rights abuse critically depends on the powers available to the body. NHRI scholars suggest that “NHRIs should have both promotional and protective powers” (Murray 2007: 201) to provide them with flexibility in the means to achieve their objectives. I argue that the combination of strong promotional and investigative powers applicable to both state and non-state actors significantly enhances the capability of NHRIs to make an effective contribution to the prevention and protection of human rights by business firms.
Promotional powers typically comprize the power to provide education and training for key actors, such as police and other officials, to educate the wider public about their rights safeguards but also to propose policy changes and new laws to the government in order to end or prevent rights abuse and enhance compliance with national or international standards. Through promotional and advocacy work, NHRIs may be able to “draw extensive publicity to human rights concerns” and get these “onto the national agenda” (Linos and Pegram 2017: 680, 685). If their promotional powers extend to both state and non-state actors, NHRIs can play an important role “in driving positive industry practice and also generating rights respecting cultural change within the private sector” (McGrath 2019: 81) through persuasion and socialization. For instance, the activities of the Danish Institute for Human Rights are considered hugely influential across national boundaries in building both NHRI and private sector capacity to address corporate human rights abuse by providing training and guidance, and by conducting human rights impact assessments for multinational corporations such as Nestlé, Norsk Hydro, and Total (Haász 2013: 181; see DIHR 2013; 2017; 2019). Moreover, many NHRIs have contributed to the development and implementation of National Action Plans on Business and Human Rights (NAPs) through advocacy work, advice and National Baseline Assessments (e.g., the NHRIs of Germany, South Africa, and Zambia; see McGrath 2019: 81-82).
Yet promotional powers alone are unlikely to bring about sustainable change in hostile environments, when there are weak accountability mechanisms in place or where actors are reluctant to cooperate with NHRIs. Scholarship on corporate social responsibility (CSR) and on business and human rights suggests that business firms are highly strategic and selective in the form and extent of their commitment to CSR norms (Perez et al. 2019; LeBaron et al. 2021) and that they are especially reluctant to accept broad responsibility for the realization of human rights in their operation, as Favotto and Kollman (2021: 25; this issue) demonstrate in a study of the 50 largest British TNCs: “By refraining from ‘showing’ their human rights impacts and future commitments, firms actively resist the scrutiny NGOs, international organizations and actors populating the CSR field demand, as well as the accountability practices promoted [by the UN Guiding Principles on Business and Human Rights].” According to Favotto and Kollman, a major reason for this resistance is the difficulty to formulate a positive business case for greater human rights compliance, which results from the underlying tension between the different logics of corporate profit-seeking and human rights: “Profit-seeking pursues the seeker’s own economic welfare,” whereas the idea of human rights is “a moral interest in the welfare of others” (Gregg 2021: 68, this issue). Scholars thus argue for external checks and more stringent legislation which “would likely do more to change corporate culture and increase corporate monitoring of their supply chains” (Favotto and Kollman 2021: 24; see also Schilling-Vacaflor 2021, both in this issue) than voluntary commitments and promotional efforts by state and civil society organizations alone.
It is therefore desirable that NHRIs are vested not only with promotional powers but also with strong investigative powers extending to the private sector, so that they are able to pressurize uncooperative perpetrators, including business firms, into collaboration and (eventually) into human rights compliance. Indeed, NHRI scholarship suggests that national institutions with strong investigative powers are generally more effective than those without them (Linos and Pegram 2017; Smith 2006: 917; Kumar 2003: 280). Investigative (or protection) powers include the capability to launch public inquiries and investigations into specific or systemic rights issues, to receive and resolve complaints, to make legal interventions in court cases or bring a case in its own right, to subpoena evidence and to issue and enforce compliance orders or recommendations. In a seminal study combining comprehensive quantitative and qualitative data from NHRIs across the globe, Linos and Pegram (2017: 680) have demonstrated that “one institutional safeguard above all, the power to initiate, execute, and complete investigations on receipt of complaints, stands out as particularly important in enabling NHRI effectiveness.” This positive influence applies to NHRIs in developed democracies, as well as to those in developing and authoritarian settings with weak rule of law (Linos and Pegram 2017: 684). The capability to investigate complaints generates a number of direct and indirect positive effects: In the short term, it provides justice and (ideally) remedies to individuals who fell victim to human rights abuse. In the longer term, it helps NHRIs build credibility and public legitimacy which raises hurdles for political interventions and budget cuts by the government (Linos and Pegram 2017: 633, 684).
The ability to deploy both promotional and investigative powers in relation to state and non-state actors allows NHRIs to build up credible normative pressure vis-á-vis duty bearers and potential perpetrators by making them aware of their human rights responsibilities and obligations, advising them on how to identify and mitigate human rights risks in their operation and, if necessary, by launching inquiries or legal proceedings if the human rights risks or violations continue to persist and the NHRI’s recommendations are being ignored. While a broad statutory mandate extending the NHRI’s jurisdiction to the private sector constitutes a necessary structural condition, the sine qua non, for effective NHRI engagement with corporate human rights abuse, the ability to deploy a combination of promotional and investigative powers constitutes a second essential feature, as it represents the most promising route to bring about lasting behavioral change in different settings.