The Human Rights Auditing Standards and Procedures Project
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The Human Rights Auditing Standards and Procedures Project is the centerpiece of an innovative human rights and business program at the International League for Human Rights. The League's concept is simple: major transnational corporations prepare financial statements audited by accounting firms pursuant to the auditing and accounting standards promulgated in their home countries or international accounting standards. Part of the auditing process already includes valuing contingent liabilities, such as pending and threatened litigation and liability for environmental damage. Adding measurable and quantifiable human rights standards to the accounting and auditing procedures will protect public companies from contingent punitive liabilities and other potential associated costs by providing them with both processes to inhibit or mitigate human rights abuses and annual feedback on their effectiveness.
The timeliness of this initiative is demonstrated by the wide press coverage of such violations of international human rights standards as the use of child labor in the textile industries and the increase in employee discrimination and harassment litigation. Additionally, a number of proposals have been advanced by leading nonprofit organizations in the field, such as Business for Social Responsibility and the Council on Economic Priorities, in an effort to develop model codes of conduct and systems for independent monitoring. Many socially responsible corporations have also already introduced voluntarily codes of conduct.
Greater efforts to enhance human rights practices of corporations reflect the values of corporate management and shareholders whose sensitivity to human rights has been fostered by both the development of international human rights law in this century and comprehensive media coverage of violations. The League has conducted preliminary work, funded in part by a grant from the European Human Rights Foundation, to establish that a company's value is impaired by human rights abuses. The converse is also true -- shareholder value is maximized by observation of the norms of international human rights.
To date, transnational corporations and non-governmental organizations committed to fostering favorable human rights conditions have focused on establishing codes of conduct. The League's approach is to tap into the accounting/auditing cycle to develop an approach to independent monitoring, making codes of conduct more universal and enforceable because they will be performed internally by those most motivated -- the auditors.
In the process of promoting business compliance with human rights standards, there are legitimate concerns of corporate management's that must be addressed. These include confidentiality of proprietary information and the objectivity of the monitoring apparatus. However, by using the existing structure of internal accounting for contingent liabilities and audits by independent professionals, these concerns can be overcome and the deadlock over compliance broken.
The League seeks to promote new strategies for management and auditors. The Project proposes to develop accounting and auditing standards that can be adopted as part of the international accounting standards or the Generally Accepted Accounting Principles of particular countries. Prepared by a team of professionals from business, accounting, and law, and tested in "real world" situations, the proposed Human Rights Auditing Standards and Procedures Project represents a unique approach to objectifying the liability of corporations for violations of human rights and enables investors to reward responsible management. The League project will focus on basic core rights, for which an international consensus already exists in enforceable treaties, broadly encompassed by the following principles: 1) non-discrimination, 2) free association, 3) security of person, 4) security of property, and 5) rights of children.
Each category of core rights will include a range of issues. Divergent matters such as sexual harassment and worker safety, for instance, would both fall under the category of security of person. Likewise, access to education and compliance with child labor laws would be within the purview of the rights of children.
International treaties and covenants do not, however, create a code of international law. Rather, it is up to signatory states to enact legislation enforcing the international principles of justice embodies in the international agreements. The Project will thus derive more specific human rights standards from such existing domestic laws, and other domestic laws when necessary, in the geographical areas in which most transnational corporations are headquartered, namely, the European Union, the United States and Japan.
I. Introduction
A. Corporate Impacts on Government and Society
In preparing the Project, the League has drawn its core principles from the extensive body of international human rights law reflected in international treaties, declarations, and platforms for action. These principles are broadly encompassed in the following (SEE ALSO APPENDIX FOR SELECTED ARTICLES):
II. Project Overview
IV. Work to Date
APPENDIX
(Select sections of International Agreements) Universal Declaration of Human Rights -- Selected Articles: Convention on the Elimination of All Forms of Discrimination against Women Selected Articles:
International Convention on the Elimination of All Forms of Racial Discrimination -- Selected Articles:
Declaration on the Rights of Persons Belonging to National or Ethnic, Religiousand Linguistic Minorities -- Selected Articles:
International Convention on Civil and Political Rights -- Selected Articles:
Free Association
Universal Declaration of Human Rights -- Selected Articles:
Declaration on the Rights of Persons Belonging to National or Ethnic, Religiousand Linguistic Minorities-- Selected Article:
ILO Convention (no. 87) Concerning Freedom of Association and Protection of the Right to Organise -- Selected Articles:
ILO Convention (no. 98) Concerning the Application of the Principles of TheRight to Organise and to Bargain Collectively-- Selected Articles:
International Covenant on Civil and Political Rights -- Selected Articles:
International Covenant on Economic, Social and Cultural Rights-- SelectedArticle:
Security of Person
Universal Declaration of Human Rights -- Selected Articles:
International Covenant on Civil and Political Rights -- Selected Articles:
ILO Convention (no. 105) Concerning the Abolition of Forced Labor:
Rights of Children
Convention on the Rights of the Child -- Selected Article:
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