This week, the 9th Conference of States Parties (CSP9) to the Arms Trade Treaty (ATT) will consider two draft working papers ostensibly related to “responsible” business conduct in the arms trade.
The draft working paper produced by the CSP9 Presidency, the Republic of Korea, recognizes in a single footnote that businesses have human rights responsibilities, but the text focuses on how the industry enhanced the development of the ATT and suggests the ATT itself provides good guidance for businesses on what constitutes responsible conduct. The working paper’s action points include encouraging outreach to the arms industries by States Parties and the ATT Secretariat, inviting industry engagement with the ATT in turn, and voluntarily sharing best practices.
A supplemental draft working paper produced jointly by Austria, Ireland, and Mexico elaborates on the “synergies” between the ATT and the UN Guiding Principles on Business and Human Rights (UNGPs). It notes that the UNGPs recognize an independent responsibility for businesses to respect human rights through the development and employment of Human Rights Due Diligence (HRDD). The purpose of the UNGPs and HRDD is to prevent human rights violations and ensure businesses provide remedies when such violations occur. The UNGPs, according to the working paper, “allow for a clear delineation of the respective responsibilities of each actor without substituting companies’ responsibilities with States’ obligations or vice versa.”
The Austrian, Irish, and Mexico approach is a necessary complement to the Korean working paper. On its own, the Korean approach risks repeating the mistakes of Corporate Social Responsibility and setting back the responsible business conduct movement by over a decade. With a systemic integration of the ATT and UNGPs, however, the ATT could ensure a more cohesive approach for the industry, closing gaps in responsibilities that currently threaten state sovereignty and human rights.
Overreliance on Business-Led Initiatives Produces Bad Results
To understand why the Korean approach (on its own) is both limited and dangerous, it is necessary to briefly revisit the evolution of “corporate social responsibility.”
The “Corporate Social Responsibility” movement emerged from the writings of business scholars in response to the excesses of capitalism caused by U.S. and U.K. legal positions on “the corporate purpose.” Until then, courts and legal scholars in the two countries believed that the purpose of a corporation was solely or principally to make money for its shareholders. That position, hotly debated, seems to be at the heart of corporate involvement in serious and grave violations of human rights and humanitarian law—including the actual or attempted overthrow of democratically elected governments—when it facilitated greater profits.
Business management and ethics scholars, including the then-Dean of Harvard Business School, Donald K. David, argued that corporations could and should also contribute to the well-being of society. In 1949, David claimed that responsible business conduct was necessary for the protection and promotion of capitalism and would “demonstrate to the world that our way of life has vitality….” He argued that a business’s responsibility was first to make money for its shareholders, and second to conduct itself in a manner that increased social goods as a means of maximizing efficiency. David, and many of his contemporaries, treated responsible business conduct not as a means of ensuring accountable capitalism but of shoring up support for capitalist beliefs.
The work on responsible businesses in the decades that followed would closely follow David’s approach: protect the business first; do nice things if you can after to make your business more profitable. This approach to responsible business conduct allowed extremists like Milton Friedman to argue with some legitimacy that the only social responsibility for corporations was to make money for shareholders. Friedman) suggested that as long as a profitable action was lawful, the business should pursue it without concern for the right and interests of others or society.
Friedman’s doctrine, however, was not the only response to the emerging CSR movement. Also responding to the excesses of capitalism and its relationship to colonialism, the New International Economic Order (‘NIEO’) of the 1970s called for greater, binding accountability for transnational corporations. These efforts were followed by efforts in the 1980s to adopt and implement a transnational code of conduct, and then in the early 2000s to ascribe human rights obligations to transnational corporations. Unfortunately, each of these attempts at corporate accountability were left anaemic as capitalist-exporting states and businesses continued to insist that there was no need for transnational regulation. They promised self-regulation could address any deficiencies in their current practices.
Repeatedly, these promises proved hollow.
When given the power to set for themselves their own priorities, businesses rarely embraced human rights or international law; instead, as Anita Ramasastry deftly set out in 2015, businesses sought to enhance their public image without meeting basic respect for human rights. The lack of binding regulation and oversight by states meant that powerful corporations, like oil giant Shell, publicly pledged to take seriously their impact on human rights, situations of conflict, and the environment, even while they continued to take actions behind the scenes to the contrary.
In response, policymakers and activists shifted away from the business-led approach to corporate responsibility and sought to impose binding restrictions on businesses instead. The UNGPs—unanimously endorsed at the U.N. Human Rights Council and widely embraced by states and businesses – paved the way for this by recognizing that businesses have a responsibility to respect human rights even where a state is unable or unwilling to regulate the business.
In the 80 years since Donald David first articulated his understanding of responsible business conduct, voluntary corporate initiatives have not significantly changed the ways in which most corporations act. As Beate Sjåfjell and others have repeatedly argued, absent binding regulation, transnational businesses default to the traditional Anglo-American understanding of a “corporate purpose”—to maximize shareholder profit—foregoing corporate responsibilities that do not also generate profits. This default position serves as a significant barrier to socially responsible business conduct.
In the context of the arms trade, this is not just irresponsible. It’s deadly.
The Arms Industry Threatens Human Rights
The “arms trade” is made up of a series of public and private actors that design, develop, broker, sell, trade, transfer, or use weapons or component parts of weapons. It contains both single-use and dual-use products, meaning those whose only function is weaponry and those that can have other legitimate purposes. The ATT establishes a common framework for the sale, trade, export, and transfer of conventional weapons and their component parts.
The arms trade can facilitate lawful individual and collective self-defence in line with the UN Charter Article 51.
What is lawful, however, is not always safe or beneficial. In addition to the potential misuse of weapons by states’ militaries and police—including in war crimes, crimes against humanity, genocide, extrajudicial killings, and torture—the lawful trade of weapons often leads to their illicit purchasing and use as sales and diverted. According to the United Nations High Commissioner for Human Rights, “there were approximately 750 million diverted firearms in the hands of civilians in 2017.” As with states, these weapons can be used lawfully in self-defence but are also associated with murders, forced land displacements, and threats to other human rights ranging from the rights to participate in government and freedom from slavery to the right to practice one’s own religion to the rights to access education or healthcare.
Reconciling the Arms Trade with Human Rights
Despite the inherent danger of the arms trade, it is possible to reconcile it with human rights.
The text of the ATT (arts 5-7), and the intervention of Austria, Ireland, and Mexico, attempts to strike a balance between the interests of states in the arms trade—particularly to secure their right to self-defence—with respect for human rights. The ATT does this principally by introducing a system of arms export controls for conventional weapons and their component parts. Before issuing an export license, the ATT calls for states to investigate the likelihood that arms will be used in the commission of serious violations of international human rights law or international humanitarian law. When such a risk is present, the treaty requires states to mitigate that risk through measures such as training. In cases where risks cannot be mitigated, the treaty prohibits states from issuing the export license.
While the ATT puts the onus on states, the UNGPs recognize a complimentary and independent responsibility on businesses to assess the risk that arm sales will result in human rights violations, and to refuse to complete the sale when such risks are present. If businesses knowingly sell weapons to rights violators without adequate safeguards, they likely owe reparations to the victims.
As I detailed elsewhere, the responsibility for causing or contributing to human rights abuses is not a strict legal test. Instead, it is contextually specific. Sometimes portrayed as deeply complex, the expectations of the UNGPs in the context of the arms trade the question is often quite simple: do you expect your clients to misuse your product in a way that breaches human rights? If so, have you taken steps to stop their misuse (i.e., through contractual provisions that lead to the termination of subsequent sales and the levying of heavy contractual fines)?
For example, the risk that Sweden will use weapons to invade Norway is rather limited and the state has a strong record of compliance with human rights. A company could therefore easily sell weapons to Sweden with confidence in their legitimate use. Similarly, even though Ukraine is currently engaged in a conflict, it is acting in line with its rights and obligations under the U.N. Charter, and it has taken seriously allegations of abuse and war crimes. A business could therefore sell weapons to Ukraine with additional safeguards concerning training. In contrast, Russia is acting in violation of the U.N. Charter and has been unwilling to investigate, prosecute or punish allegations of war crimes. Its failure to take seriously human rights, humanitarian law, and the jus ad bellum implies those supplying weapons to Russia do so in breach of their responsibility under the UNGPs. In the United States, issues with police brutality means that companies need to investigate the history, training, and safeguards of a particular police force before selling it weapons.
Unfortunately, the Korean draft working paper focuses primarily on how businesses have been and could be good partners under the ATT, rather than providing an extensive treatment of the international legal considerations at stake. This shows a lack of understanding about how businesses understand their responsibility and are likely to respond to this invitation to be a part of the process. History shows businesses are likely to emphasize the aspects of the ATT that are beneficial to their bottom line, while ignoring other requests until they are legally obligated to comply.
Instead of hoping businesses play nice, the ATT should seek to secure respect for human rights in line with the UNGPs. While the examples I selected represent relatively easy applications of the UNGPs, the most difficult cases from the arms trade are not more difficult than complex cases in the agricultural, extractives, or textile industries. Businesses are often asked to identify in good faith the appropriate boundary within a set of complex relationships. The intervention by Austria, Ireland, and Mexico recognizes this reality and calls for greater investigation and understanding of the specifics of the industry while seeking to reconcile the ATT with human rights concerns.
Austria, Ireland and Mexico are showing initiative in learning the lessons of the last 80 years: businesses cannot simply be expected to voluntarily comply with the ATT when it does not suit their corporate interests. Instead, policymakers must identify corporate responsibilities clearly and enact appropriate regulation to ensure these standards are met.