Policy Coherence is defined by the OECD as the systematic promotion of mutually reinforcing policy actions across government departments and agencies creating synergies towards achieving the agreed objectives.
The UN Guiding Principles on Business and Human Rights (Principles 8-10) recognise policy coherence as fundamental to efforts to ensure business respect for human rights, which includes. States should:
- ensure policy coherence between governmental departments, agencies and other State-based institutions that shape business practices
- maintain coherence between human rights obligations and business-related agreements with other States and businesses (e.g. trade agreements and investment treaties)
- act through multi-national institutions to ensure they do not restrain but promote business respect for human rights and share understanding
The UN Working Group on Business and Human Rights in its Guidance on National Action Plans on Business and Human Rights points to National Action Plans as being a key to ensuring “greater coordination and coherence within Government on the range of public policy areas that relate to business and human rights”.
All of a NAP can contribute toward policy coherence, so a breakdown of specific actions is not provided for this issue.
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Policy coherence within a State
- Vertical policy coherence
A crucial step to achieve policy coherence is to ensure that a smart mix of policies, laws and processes are in place to implement a State’s international human rights law obligations at the national level. This smart mix forms the regulatory system to advance business respect for human rights.
- Horizontal policy coherence
Different departments and agencies are responsible for implementing the policies, laws and processes that shape business respect for human rights. The OHCHR has noted that:
“All institutions that shape business conduct—for example, the departments responsible for employment and labour conditions, business registration, export promotion, international trade, environmental protection, and State-based export credit agencies, while very different in their mandates, should all be aware of and observe the State’s human rights obligations with respect to protecting against negative impact from business activities.”
UNGP 8 clarifies that “States should ensure that governmental departments, agencies and other State-based institutions that shape business practices are aware of and observe the State’s human rights obligations when fulfilling their respective mandates, including by providing them with relevant information, training and support”.
Trade and investment
International trade and investment agreements can be bilateral, regional, and multilateral between States and includes:
- Free trade agreements (FTAs)
- Bilateral investment treaties (BITs)
Contracts for investment projects can also be agreed between States and businesses.
Trade can foster economic growth and poverty reduction; help achieve development goals and promote the realisation of human rights. However, international trade and investment agreements solely focused on economic growth which constrain States legislating on human rights and the environment can have severe adverse human rights impacts.
The UNGPs provide that “States should maintain adequate domestic policy space to meet their human rights obligations when pursuing business-related policy objectives with other States or business enterprises, for instance through investment treaties or contracts.” UNGP 9.
In recent years, there has been an increase in the number of agreements which contain a chapters detailing the parties’ commitments to human rights, the environment, and responsible business conduct.
Some agreements include investor-state dispute resolution mechanisms, which permit businesses to litigate against States for strengthening human rights and environmental protections. States from the Global South may lack the resources to adequately defend themselves. The UNGPs clarify that “States should ensure that they retain adequate policy and regulatory ability to protect human rights under the terms of such agreements, while providing the necessary investor protection.” UNGP 9, Commentary
When a State acts through an intergovernmental organisation
States may be members of regional and intergovernmental organisations which develop and/ or implement human rights and responsible business conduct standards. This includes international trade and financial institutions (including multi-national DFIs), for example, the UN, the EU, and the OECD).
As members, States should to
- Seek to ensure that the organisations do not “restrain the ability of their member States to meet their duty to protect nor hinder business enterprises from respecting human rights.”
- Promote business respect for human rights through dialogue and sharing experiences and support other States, “including through technical assistance, capacity-building and awareness-raising”
- Ensure the UNGPs and human rights due diligence are the common reference point for all approaches to ensure business respect for human rights
Sustainable development and policy coherence
Policy and institutional coherence is addressed SDG targets 17.13, 17.14 and 17.15. As the 2019 Global Sustainable Development Report highlights, “governments will need to prioritize policy coherence, overcome sectoral silos and align existing rules and regulations towards achieving the SDGs that are interlinked across sectors”, introducing integrated approaches and mechanisms that consider systemic interactions and causal relationships between SDGs and policies, harnessing the multiple co-benefits, increasing effectiveness and saving costs. States are urged to collaborate with multiple stakeholders, including businesses, to support them in SDG implementation and to establish projects and initiatives for a holistic advancement of the 2030 Agenda.
References
UN Working Group on Business and Human Rights in its Guidance on National Action Plans on Business and Human Rights
