The Necessity of Stakeholder Empowerment in Embedding Human Rights Due Diligence into Business Enterprises

The United Nations Guiding Principles on Business and Human Rights (UNGPs), finalized in 2011 under the leadership of John Ruggie, marked a significant step forward in the business and human rights debates. The UNGPs' human rights due diligence (HRDD) approach, in particular, has been hailed as a groundbreaking alternative in addressing human rights concerns in the context of globalized business activities, and indeed has led to significant differences in practice and academy as well. In the meantime, however, there is considerable skepticism as to whether these noisy changes have resulted in anticipated changes on the ground, or even whether they will do in the near future. This article, without denying the fact that the concept of HRDD has made some, if not very impressive, difference on the ground, aims to draw attention to probable causes of the slow progress and to suggest an alternative way forward to more tangible impacts of the concept. Among other possible causes, it points to a flaw inherent in the theory of John Ruggie, the founder of the UNGPs. His theory, commonly called “social constructivism” in the international relations discipline, is about how international norms are established in the face of the fact that there is no singular authoritative legislative body in the international community. A most prominent defect of the theory is, arguably, its over-reliance on persuasion in expanding and embedding new norms. This article observes that persuasion alone is not enough to embed HRDD practice in business corporations. This article argues that, for the successful working of HRDD, it is essential to empower stakeholders, especially those risking adverse human rights impacts of the companies concerned, through mandatory HRDD legislation. It invokes Teubner's theory of reflexive law as a theoretical framework to support its argument. While there are several distinct understandings of the reflexive law, It argues that the essence of reflexive law theory lies in its emphasis on the role of stakeholders and their empowerment, and consequently that, in designing HRDD legislation, the empowerment of stakeholders should be taken much more seriously than Ruggie imagined. Building on the theoretical analysis, this article explains why the so-called “human rights management of public enterprises” in Korea has not resulted in much-hoped changes on the ground and proposes policy alternatives to overcome it.