Can the new US National Action Plan encourage responsible business under Trump?
Gregory Regaignon, North America Researcher & Research Director, Business & Human Rights Resource Centre
The new US National Action Plan is a welcome step toward corporate accountability, even if it could be stronger. The key now is real implementation by the next administration.
On Friday, the US Government released its long-awaited National Action Plan on Responsible Business Conduct, with commitments from across the government including the Departments of State, Labor, Treasury and seven other cabinet-level agencies, as well as USAID, export credit agencies, the Securities & Exchange Commission, and others. While the plan could be stronger, it is a welcome move towards greater corporate accountability. The key now will be effective implementation by the next administration.
As International Corporate Accountability Roundtable has already noted, much of the National Action Plan reflects existing federal policies and guidance, with few new actions announced. This is unfortunately no different from many of the 10 other NAPs already issued, mostly by European governments. The primary focus of the plan is on US companies’ international operations and sourcing, despite recommendations from many in civil society including Business & Human Rights Resource Centre that it include a domestic focus – and even though many companies operating in the US have been criticised on issues such as workplace safety, trade union rights, living wage, discrimination, environmental justice, climate change, modern slavery, abuses in private prisons, and internet privacy. Business at any cost – abroad or at home – that exploits workers and marginalised communities, heightens inequality, and sacrifices the planet for profit, has sown seeds of revolt against our dominant economic model. The recent US election and the Standing Rock Sioux’s protest of the Dakota Access Pipeline – and the worldwide attention that both garnered – are but two vivid aspects of this revolt.
Yet dismissing this plan as insufficiently bold, inadequately focused on domestic issues, and too narrow in the human rights concerns that it addresses, would be a mistake. It does include many commitments to promote voluntary good practice – including important steps to help companies avoid land rights abuses in Africa – but it also commits the government to accountability measures. These measures, for example, exclude companies that do not exercise human rights due diligence from Federal procurement, such as private security companies that have not committed to a globally accepted code of responsible conduct. And the plan solidifies recent policy to bar some imports produced with modern slave labour. It recognises the need to strengthen remedy for abuses involving business, including through a peer review of the government office that hears claims of violations of the OECD Guidelines for Multinational Enterprises, and through more robust review mechanisms at both US export credit agencies and international bodies. And it creates much-needed space for the massive funds invested in retirement plans to consider the environmental and social records of companies in their portfolios; these investors will therefore be able to make decisions using sustainability metrics such as the forthcoming Corporate Human Rights Benchmark.
Looking back to how the National Action Plan was prepared, the US Government and other stakeholders organised broad-based consultations, with participation in these events by a wide range of government agencies. This approach provides a model for how the US and other governments should include civil society, corporate leaders and other stakeholders in developing action plans, strengthening them after their launch, and monitoring their implementation.
Looking ahead, and most importantly, the National Action Plan provides a clear roadmap of how the US Government intends to address certain issues across agencies. As Adewale Adeyemo of the National Economic Council stressed at the launch event for the NAP, “In order to make sure that we execute against the plan that we have developed, it's going to require not only feedback, but also accountability...from all of us who consider ourselves stakeholders in this process... Responsible business conduct isn't only the responsibility of business or of government, but it is the responsibility of labor and other stakeholders as well, to make sure that we're acting in a manner that's consistent with our values” and implementing the plan's commitments, on the issues that it does address. (Its silence on other issues also provides advocates a clear statement of gaps in policy that need urgently to be filled.) As Deputy Secretary of Commerce Bruce Andrews said at the same event, responsible business conduct and good corporate citizenship are key reasons why some US-headquartered companies succeed internationally. Where companies fail to act responsibly, the National Action Plan shows a way forward for accountability on certain important issues.
Certain steps by the incoming Trump Administration, such as the nomination of Andrew Puzder as Secretary of Labor – the CEO of fast food chains Carl’s Jr. and Hardee’s, who opposes raising the minimum wage to a living wage and whose restaurants have frequently been cited for labour law violations – do not raise hopes that the next administration will prioritise human rights in business. But if it is smart about global competition and protecting American companies’ operations and reputations from human rights risks, it will take seriously the obligation to carry out this National Action Plan, and build on its commitments with additional much-needed steps. We and others in civil society and among responsible business leaders – in the United States and around the world – will be watching.
For further information & commentary on the US National Action Plan, click here.