According to a 2007 survey by John Ruggie on Chinese companies’ human rights policies, state-owned enterprises (SOEs) “recognize human rights at a higher rate than non-SOEs.” SOEs also control a significant portion of China’s economy and could, therefore, play a crucial role in advancing the agenda of business and human rights in the country. Working with SOEs is an opportune space in which to make headway in this area. However, the Business and Human Rights Resource Centre claims that SOEs are “often less approachable” than private enterprises in China. Human rights practitioners, then, need creative and culturally specific approaches in order to make inroads with these companies.
The first window of opportunity here is that—contrasting regular corporations—profit making is not the only mission of SOEs. Instead, they are supposed to pursue non-economic goals beyond their self-interests, including human rights. Some concepts promoted by the Chinese government—such as the “sustainable development strategy”, which pursues balance among economic, social and environmental development—are political drivers for improving SOEs’ human rights performance. Arguably, promoting human rights obligations among SOEs serves the national interests of China, because it would help to improve domestic environment and social stability, as well as enhance China’s international reputation.
Second, human rights are important for SOEs in China’s “Going Global” strategy. A large number of overseas investments by Chinese SOEs have failed in recent years, and one reason is their involvement in human rights controversy. Indeed, various Chinese SOEs have been challenged by their local employees or criticized by the local community, press and Western countries because of their negative impacts on human rights. For example, after its Myitsone Dam project was halted by Myanmar in 2011, the State Power Investment Corporation publicly recognized that it needed to be more diligent about protecting human rights in its business dealings. Many SOEs have now realized that they must overcome human rights challenges and be more diligent in how they conduct their overseas investments.
