"Highlighting the inadequacies of the way in which the earthquakes of 2010-2012 were handled by the insurance industry! "

The Ruggie Principles, Human Rights and the Insurance Industry?

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Is the insurance Industry aware of its duties to the people of Canterbury under The Guiding Principles on Business and Human Rights? These principles, known as the Ruggie Principles are  endorsed by the UN Human Rights Council and later incorporated into OECD Guidelines for Multinational Enterprises (2011), ISO 26000, the new Sustainability Policy of the International Finance Corporation, and the European Commissions’ new Corporate Social Responsibility Strategy. The principles are designed to ensure that insurers do not violate human rights in the course of business transactions and the principles provide redress when infringements occur.

Under the Ruggie Principles the State has a “duty to protect against abuse by third parties i.e. insurers through appropriate policies, regulation, and adjudication. The second is the corporate responsibility to respect human rights, which means that business enterprises should act with due diligence to avoid infringing on the rights of others and to address adverse impacts with which they are involved. The third is the need for greater access by victims to effective remedy, both judicial and non-judicial“. A typical example of this would be the establishment of a mediation programme in Canterbury.  “Each pillar is an essential component in an inter-related and dynamic system of preventative and remedial measures: the State duty to protect because it lies at the very core of the international human rights regime; the corporate responsibility to respect because it is the basic expectation society has of business in relation to human rights; and access to remedy because even the most concerted efforts cannot prevent all abuse”.

The Ruggie principles establish standards of behaviour with which States are expected to conform. And though the State may not be directly responsible for human rights abuses of private actors, they may be held to have breached their human rights obligations if they fail to take appropriate steps to prevent, investigate or punish such abuse.

According to the Human Rights Commissioner David Rutherford in a recent speech (The IASC Operational Guidelines and other tools and learning that can assist Ombudsmen to respond constructively to a natural disaster) delivered to the 10th World Conference of the International Ombudsmen’s Institute in Wellington, 12-14 November 2012, if insurance companies “engage in ‘blue-washing’ (put simply, committing to human rights standards for publicity value but not backing that up in business operations) risk punishment by both capital markets and consumer markets”.  He goes on to say that “human rights compliance is seen as a non-negotiable pre-condition for investment in reinsurance or insurance markets by many government, or government-related, funds and by many privately held funds. Many of these funds will withdraw capital from downstream companies that breach human rights. Social media also makes it possible for customers to expose and highlight human rights hypocrisy“. Presumably so should mainstream media.

David Rutherford goes on to say that “The New Zealand Human Rights Commission is watching the activities of insurance companies involved in the Christchurch recovery. If it emerges that claims management practices are exacerbating psycho-social harm beyond the normal levels experienced in earthquakes, then there is potential for human rights abuse. International human rights law requires that everyone has the right to the highest attainable level of health and to adequate housing as a component of the right to an adequate standard of living.

The United Nations Environment Programme (UNEP), Finance Initiative Principles for Responsible Investment (PRI) was signed up in Rio de Janeiro, 19 June 2012. Almost 30 leading companies from the insurance industry, worth over USD 5 trillion in total assets,  representing over 10 per cent of world premium volume, together with insurance associations from different regions around the world, joined a UN-backed process to promote a set of Principles for Sustainable Insurance that aim to green the sector and provide insurance tools for risk management in support of environmental, social and economic sustainability. This group was initially co-chaired by AXA and Insurance Australia Group (IAG) and is currently chaired by Munich Re. Most NZ insurance companies have not signed up to the Un Global Compact and the PSI, though many of the reinsurers operating in New Zealand are signatories. The insurers IAG and Sovereign have signed. Here are some of their promises relating to their participation:

Michael Wilkins, CEO and Managing Director of Insurance Australia Group, said: “IAG is delighted to be a founding signatory of the Principles for Sustainable Insurance. The insurance industry plays an important role in the economy and it is critical that we take account of the changing and complex risks that we and our communities face. Through education, sharing insights, working with government, regulators and through community partnerships, we will continue to focus on the proactive management of risk. At IAG risk matters; it doesn’t just matter to our business, it matters to our economy, to our communities and it matters to our way of life. That’s why it is at the heart of why we exist and is core to our purpose.”

Charles Anderson, CEO of Sovereign, said: “Sovereign routinely protects people’s lives with policies that will remain in-force for 50+ years and a long term view is critical if we are to deliver on the promise we make to our policyholders. By adopting the Principles of Sustainable Insurance, we aim to embed sustainability throughout our business – from core operations to engagement with civil society. We believe that the Principles for Sustainable Insurance establishes a framework for establishing a global insurance industry that will be stronger, healthier, better adapted to the needs of society and the environment, and which will make a more positive difference to people’s lives.”

Robert Whelan, Executive Director and CEO of the Insurance Council of Australia, said: “After a year in which the world has experienced an unprecedented number of natural disasters and where ever increasing numbers of communities are exposed to these unpredictable and devastating events the importance of a sustainable insurance industry has never been more relevant. So it is for these reasons that the Insurance Council of Australia is in full support of the Principles for Sustainable Insurance as the foundation towards a more engaged and socially relevant insurance industry.” (See

I don’t know whether to laugh or cry when I compare these statements with the actual situation in Canterbury. We really need to be aware of the difference between ‘fact’ and ‘spin’. Cantabrians need to ensure that the statements above are not simply hollow promises but that we hold them to account. Not only is the rest of New Zealand watching but the world is also watching.


John Ruggie, Report of the Special Representative of the Secretary-General on the issue of human rights and transactional corporations and other business enterprises.

John Ruggie: The Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework”.

Author: Sarah-Alice Miles

Love to write, create and watch the clouds move across the sky - these days in the Netherlands. 'Art allows us to find ourselves and lose ourselves at the same time'.

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