International Ethical Dilemmas: the Development of Professional Guidance

In this paper I trace recent attempts by international bodies to support the legal profession in dealing with international ethical dilemmas, in particular combating corruption/bribery and navigating business' role in respecting human rights. 

Despite there being many common values in legal ethical standards around the world, the differences in the detailed application of various codes of conduct often make them incompatible and therefore difficult to apply simultaneously. In some jurisdictions, the rules of professional conduct are handed down from generation to generation as some kind of ‘oral law,’ uncodified and restricted to prohibitions of the most obvious conflicts of interest. In other jurisdictions, legislation is being introduced which imposes criminal penalties for actions of lawyers which were previously regarded as ‘unethical’ and regulated only by professional bodies rather than the courts. 

Corruption & Bribery

Following a growing enforcement trend, combined with the rapid development of international anti-corruption instruments, and domestic anti-corruption legislation with extraterritorial application, professional bodies have come to appreciate that more can – and must – be done to equip the legal profession to face the challenges of this fast evolving and all-encompassing field of international law.

The Anti-corruption Strategy for the Legal Profession is a joint project of the International Bar Association (IBA), the Organisation for Economic Cooperation and Development (OECD) and the UN Office on Drugs and Crime (UNODC) which focuses on the role lawyers play in combatting international corruption, with particular attention on the relevance of international compliance (http://www.anticorruptionstrategy.org).[1]  The project focuses on:

  • methods to manage the risks of corruption in order to meet the demands and requirements of clients;
  • the role lawyers play in combatting international corruption; and
  • how international instruments and extraterritorial legislation apply to the legal practice.

The project focuses on the following main areas of action:

The IBA Anti-Corruption Guidance sets out seven key modes through which bar associations can support anti-corruption initiatives in their jurisdictions:

  • constructing an effective plan for implementation of an anti-corruption strategy;
  • providing information resources;
  • educating the legal profession;
  • adoption or adjustment of ethical codes or disciplinary policies;
  • capacity building and technical assistance for members of the legal profession;
  • recognition and incentives for proactive individuals and organisations; and
  • representing the legal profession in national and international anti-corruption forums.

The OECD, the IBA and the UNODC have also developed an Anti-Corruption Academic Initiative (ACAD) that provides freely available course design proposals and materials. Academics have sought to develop this content-driven initiative to help students develop the empathy, judgment and moral courage required for effective practice in a corrupt environment.[5]

Business & Human Rights

As a consequence of legal developments over the last few decades, human rights are becoming “an area of law which is fundamental to everyone and which permeates all legal activity, economic and social, in public law and in private”. [6]

As a consequence, attempts have been made to enable bar associations around the world to increase awareness and understanding of lawyers who advise business clients on the relevance of business and human rights.

In 2011, following six years of research and multi-stakeholder consultations, the UN Human Rights Council unanimously endorsed the UN Guiding Principles on Business and Human Rights authored by Harvard Kennedy School Professor John Ruggie (the former Special Representative of the UN Secretary-General on Business and Human Rights)[7] to provide a global standard for preventing and addressing the risk of adverse human impacts linked to business activity.[8]

The Guiding Principles set out the State’s duty to protect human rights, which includes the duty to: protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises.[9] They set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations.

The Guiding Principles then set out a range of operational principles that explain how a State should meet their duty to protect. These include: enforcing laws that are aimed at or have the effect of requiring business enterprises to respect human rights, and to assess whether there are any gaps in these laws and exercising adequate oversight in order to meet their international human rights obligations when they contract with or legislate for business enterprises to provide services that may impact upon the enjoyment of human rights. The Guiding Principles also contain specific principles relating to States’ duty to support business for human rights in conflict areas.

In a world in which transnational activity is increasingly becoming the norm, helping a client respect human rights may require lawyers to do more than simply advise on the application and implications of domestic and international law. Lawyers must also counsel clients on how to adopt and implement international human rights standards that are not mandated by local law. As the International Bar Association observes, general counsel must be prepared to act not only as technical expert, but also as wise counsellor, and sometimes, as the company’s leader on human rights.

The United Nations Office of the High Commissioner of Human Rights has argued that it is “the professional role and duty of judges, prosecutors and lawyers throughout the world to explore this potential, and at all times to use their respective competences to ensure that a just rule of law prevails, including respect for the rights of the individual”. This is said to be because “rules and principles have to be consistently and meticulously applied, since judges, prosecutors and lawyers perhaps have the single most important role to play in applying national and international human rights law. Their work constitutes the chief pillar of the effective legal protection of human rights, without which the noble principles aimed at protecting the individual against the abuse of power are likely to be sapped of much or even all of their significance.”[10]

The Guiding Principles provide a degree of clarity and consistency for lawyers engaged in this space, by focusing around the three-pillar UN ‘Protect, Respect and Remedy’ Framework:

  • states have a duty to protect against human rights abuses by third parties, including business, through appropriate policies, laws, regulation and adjudication.
  • all business enterprises have a responsibility to respect human rights, which means to avoid infringing on the rights of others and to address negative impacts with which they may be involved.
  • there is a need for access to effective remedy for victims of business-related human rights abuses.

In May 2016, the IBA adopted a ground-breaking IBA Practical Guide on Business and Human Rights for Business Lawyers[11] to supplement its existing resources to assist law societies and bar associations around the world in driving programs to help lawyers in their jurisdictions stimulate understanding.[12]

The IBA’s Practical Guide responds to growing recognition that the management of risks, including legal risks, means that lawyers need to take human rights into account in their advice and services.

It includes a table summarising the Ruggie Principles for Responsible Contracts. These principles include:

  • the parties should be adequately prepared and have the capacity to properly address the human rights implications of projects during negotiations;
  • responsibilities for the prevention and mitigation of human rights risks associated with the project and its activities should be clarified and agreed before the contract is finalised;
  • the laws, regulations and standards governing the execution of the project should facilitate the prevention, mitigation and remediation of any negative human rights impacts throughout the life cycle of the project;
  • the project should have an effective community engagement plan through its life cycle, starting at the earliest stages of the project; and
  • individuals and communities that are impacted by project activities, but not party to the contract, should have access to an effective non-judicial grievance mechanism.

In January 2016, the Law Council of Australia published a useful background paper to provide a summary of the concept of Business and Human Rights and its relevance to the Australian legal profession.

It notes that the UN Guiding Principles have been used as: a risk assessment tool; a mechanism to engage communities as stakeholders in business decisions; a platform for negotiating with other governments; a reporting framework; a basis for achieving regulatory compliance; and in the development and delivery of corporate social responsibility policies

The LCA, endorsing the view of the Law Society of England and Wales, argues that there are several other compelling reasons why the legal profession should take keen, proactive interest in understanding and promoting compliance with the UN Guiding Principles:

  • lawyers’ special role in upholding the rule of law, which is critical to the ability of companies to respect human rights;
  • the growing awareness among individual lawyers about the Guiding Principles and the need to identify and share best practice;
  • demand from clients to receive legal advice about how to comply with the Guiding Principles. There is increasing evidence that clients are ahead of their professional advisers in this area. Law firms cannot afford to be following their clients, particularly in an increasingly competitive and globalised legal business market;
  • while the Guiding Principles themselves do not impose legal obligations on companies, their principles are increasingly being reflected and referred to in law, regulation, bilateral contracts, and litigation;
  • the current public and political mood in relation to business and their interactions with society has shifted and scrutiny of business behaviour, including by law firms and lawyers, is likely to continue and intensify. Respect for human rights can help protect and enhance law firms’ and solicitors’ reputations; and
  • potential employees are increasingly seeking out employers with high ethical standards. Acknowledging their responsibility to respect human rights can help law firms attract and retain the best talent, contributing to lower rates of staff turnover and increased employee motivation.

The LCA observed that the benefit of raising awareness and encouraging the implementation of the Guiding Principles by Australian lawyers and law firms included that the Guiding Principles:[13]

  • can serve as an effective risk management tool for good corporate governance;
  • encourage law firms to adopt complete and rigorous due diligence processes;
  • align with and enhance internationally accepted professional conduct rules; and
  • lay the foundation for consultations with Australian parliaments for the enacting of legislative reforms
  • distributing guidance regarding the steps that firms should take to avoid being deemed complicit in any adverse human rights impacts of suppliers and clients. Guidance from the Global Compact also suggests adopting a systematic management approach to identifying and addressing human rights impacts that considers impacts and risks of impacts from the perspective of people affected and the environment impacted by the business’s operations and business relationships, as well as the business itself.

 

Dated: 16 July 2016

Dominique Hogan-Doran SC is the Australian Bar Association's representative on the Law Council of Australia's Future of the Legal Profession Committee and Chair of its Globalisation (Export of Legal Services) Working Group. She is also a member of the Bar Issues Commission and of the Anti-Corruption Committee of the International Bar Association. 

 

--------

[1] The OECD, the IBA and the UNODC have also developed an Anti-Corruption Academic Initiative (ACAD) that provides freely- available course design proposals and materials (see https://track.unodc.org/Education/Pages/ACAD.aspx).

[2] A global survey among legal professionals conducted from 15 June to 5 July 2010. The objective of this survey was the identification of the risks and threats of corruption that lawyers face in their practice around the world. Although survey results varied substantially from region to region, the main findings are as follows:

  • Nearly half of all respondents stated corruption was an issue in the legal profession in their own jurisdiction. The proportion was even higher – over 70 per cent – in the following regions: CIS, Africa, Latin America and Baltic & East Europe.
  • More than a fifth of respondents said they have or may have been approached to act as an agent or middleman in a transaction that could reasonably be suspected to involve international corruption. Nearly a third of respondents said a legal professional they know has been involved in international corruption offences.
  • Nearly 30 per cent of respondents said they had lost business to corrupt law firms or individuals who have engaged in international bribery and corruption.
  • Nearly 40 per cent of respondents had never heard of the major international instruments that make up the international anti-corruption regulatory framework, such as the OECD Anti-Bribery Convention and the UN Convention against Corruption.
  • The level of awareness of the existence of anti-corruption extraterritorial legislation is higher than that of the international legal instruments: 60 per cent of survey respondents were aware of the FCPA and its scope, while 30 per cent were aware of the UK Bribery Act and its scope.
  • A total of 42 per cent of respondents agreed that national anti-corruption laws and regulations were effective in preventing both inbound and outbound international corruption compared to five years ago.
  • Younger respondents (aged 20 to 30 years) were, on average, less aware of international anti-corruption laws and national legislation than older respondents.
  • Only 43 per cent of respondents recognised that their bar associations provide some kind of anti-corruption guidance for legal practitioners. Of these, only a third said that such guidance specifically addresses the issue of international corruption.
  • Less than 40 per cent of respondents said anti-corruption was a priority at their law firm and just under a third said that their firms do not have a clear and specific anti-corruption policy.
  • More than two-thirds of respondents said their law firms had not been subject to anti-corruption or anti-money laundering due diligence conducted by foreign clients.

[3] The IBA's global survey of 60 in-house legal and compliance officers on five continents during the first quarter of 2013 aimed to better understand how businesses were managing the corruption risks posed by engaging external legal counsel. The findings showed how clients are becoming the main driving force raising the standards of anti-corruption compliance among legal professionals. Although external legal counsel were not generally classified as high risk intermediaries by the companies surveyed, respondents recognised that lawyers still pose relevant integrity risks that need to be addressed. More than 60 per cent of respondents showed concern for the relationship legal professionals develop with the judiciary while a similar proportion extended this concern to a broader group of public authorities. The IBA Survey also found that as a result of these risks, companies have extended stricter compliance practices used with other intermediaries to lawyers. As evidence of this trend, almost two-thirds of respondents reported an increase in pre-retention due diligence during the last five years, while almost half revealed an increase in monitoring due diligence during the same period of time.

[4] Inspired by the ethos of the Guidance, the Canadian Bar Association created the Canadian Bar Association Anti-Corruption Team, a policy unit designed to focus and develop the Canadian legal profession’s anti-corruption efforts.

[5] https://track.unodc.org/Education/Pages/ACAD.aspxSee further e.g. N.J. Duncan Preparing for the Challenge of a Corrupt Environment (2012) European Journal of Legal Education, 7(1), 21; Duncan, N.J. and Kay, S., Addressing Lawyer Competence, Ethics, and Professionalism in Bloch, F.S. (Ed.), The Global Clinical Movement: Educating Lawyers for Social Justice (pp. 183-195) (2011). New York: Oxford Univ Press. ISBN: 0195381149.

[6] Editorial of Lord Goldsmith QC and Nicholas R. Cowdery QC, “The Role of the Lawyer in Human Rights”, in HRI News (Newsletter of the IBA Human Rights Institute), vol. 4, No. 2, 1999, p. 1.

[7] The UN Guiding Principles recognise that, while it is government that has the primary duty to protect and promote human rights, businesses have a separate and distinct responsibility in that area.

[8] The American Bar Association (‘ABA’) endorsed the Guiding Principles in 2012: See ABA Policy on the United Nations Framework and Guiding Principles and the OECD Guidelines (2012) available at: www.americanbar.org/groups/human_rights/projects/business_and_human_rights.html.

[9] This requires taking appropriate steps to prevent, investigate, punish and redress such abuse through effective policies, legislation, regulations and adjudication.

[10] Human Rights in the Administration of Justice: A Manual on Human Rights for Judges, Prosecutors and Lawyers. 25, available at http://www.ohchr.org/documents/publications/training9chapter1en.pdf

[11] This Guidance formed an Annex to the IBA Business and Human Rights Working Group ‘Guidance for bar associations and business lawyers on the implementation of the United Nations (UN) Guiding Principles on Business and Human Rights’ (23 October 2014). It was open for consultation and piloting by national bar associations through late 2015, during which time all comments to help nuance and further improve the contents were welcomed. The Guidance was revised and finalised by the IBA Business and Human Rights Working Group.

[12] The IBA Guidance for Bar Associations (8 October 2015) is an advisory and non-exhaustive set of steps for bar associations and law societies to develop and implement in an overall strategy for increasing awareness of the relevance of business and human rights for the legal profession through education, training, capacity-building and advocacy. Available at: http://www.ibanet.org/Document/Default.aspx?DocumentUid=B9719C7C-212B-4717-8C66-FD028ABD6C6A

[13] http://www.lawcouncil.asn.au/lawcouncil/images/Business_and_Human_Rights_Paper_-_Jan_2016.pdf at p20-2.