A/HRC/8/5 page 3 Introduction 1. The international community is still in the early stages of adapting the human rights regime to provide more effective protection to individuals and communities against corporate-related human rights harm. This report to the Human Rights Council presents a principles-based conceptual and policy framework intended to help achieve this aim. 2. Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources. They constitute powerful forces capable of generating economic growth, reducing poverty, and increasing demand for the rule of law, thereby contributing to the realization of a broad spectrum of human rights. But markets work optimally only if they are embedded within rules, customs and institutions. Markets themselves require these to survive and thrive, while society needs them to manage the adverse effects of market dynamics and produce the public goods that markets undersupply. Indeed, history teaches us that markets pose the greatest risks - to society and business itself - when their scope and power far exceed the reach of the institutional underpinnings that allow them to function smoothly and ensure their political sustainability. This is such a time and escalating charges of corporate-related human rights abuses are the canary in the coal mine, signalling that all is not well. 3. The root cause of the business and human rights predicament today lies in the governance gaps created by globalization - between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation to human rights is our fundamental challenge. 4. The Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises was appointed in July 2005. To meet the demanding requirements of the mandate he has, since then, convened 14 multi-stakeholder consultations on five continents; conducted more than two dozen research projects, some with the assistance of global law firms and other legal experts, non-governmental organizations (NGOs), international institutions, and committed individuals; produced more than 1,000 pages of documents; received some 20 submissions; and reported twice to the Commission on Human Rights and the Human Rights Council.1 Previous reports have responded to the mandate provisions asking the Special Representative to identify, clarify and research key legal and policy dimensions of the business and human rights agenda.2 The present report, together with its 1 The mandate is contained in Commission on Human Rights resolution 2005/69. All documentation produced by and for the mandate is posted on the Business and Human Rights Resource Centre’s website: http://www.business-humanrights.org/Gettingstarted/ UNSpecialRepresentative. The Special Representative thanks all those who contributed to the mandate. 2 E/CN.4/2006/97; A/HRC/4/35 and addenda 1-4; A/HRC/4/74.