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24 Okt 2017

Manoela Carneiro Roland & Luiz Carlos Silva Faria Junior, Homa - Human Rights and Business Centre

A Legally Binding Instrument on Business & Human Rights - A Necessary Step in the Long Run

Introductory Remarks

We are living an unprecedented historical moment with the beginning of the Third Session of the Open-Ended Intergovernmental Working Group (OEIGWG) on transnational corporations and other business enterprises with respect to human rights, between October 23rd and 27th 2017, bringing to the table the “Elements for a Legally Binding Instrument on Transnational Corporations (TNCs) and Other Business Enterprises (OBEs) with Respect to Human Rights”[1], document proposed by the Chairmanship of the OEIGWG, resulting from the mandate established by Resolution 26/9 of the Human Rights Council[2] and the discussions of the first two sessions[3].

In this brief text we propose to comment about 3 important questions of the “OEIGWG Elements” pointing out some advances and some subjects that need more discussion and improvement for the elaboration of an effective framework for protecting human rights against abuses committed by TNCs, being a crucial step in the long run to stop corporate impunity and protect human rights.

For a more detailed analysis of the Elements and a comparative perspective with the Proposal that will be presented by the Campaign to Dismantle Corporate Power and Stop Impunity, we produced a comparative analysis available in Homa's website[4].

Comments on the OEIGWG Elements

1. Primacy of Human Rights Obligations over Trade and Investment Agreements - In the first part of the “OEIGWG Elements”, in point 1.2, it is displayed as a principle the “Recognition of the primacy of human rights obligations over trade and investment agreements”, being reaffirmed in point 1.4. The insertion of this principle in the Chairmanship document proposes a change in the current interpretation of the international human rights framework, making more difficult the prosecution of States by TNCs in the International Centre for Settlement of Investment Disputes (ICSID)[5] for taking the necessary measures for the protection of human rights in the national level. We believe this provision from the OEIGWG is a normative deployment of the displayed in General Comment N. 24 on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities[6] adopted by the Committee on Economic, Social and Cultural Rights in this year of 2017. The mentioned comment stated that "The interpretation of trade and investment treaties currently in force should take into account the human rights obligations of the State, consistent with Article 103 of the Charter of the United Nations and with the specific nature of human rights obligations".

2. The transnational character of the business activity subjected to its application - The OEIGWG Elements solve very well the problem of the actors who can be subject to the jurisdiction of the proposed treaty, and the solution is the absence of definition. The polemic created around the footnote of Resolution 26/9[7] only served to divert the debate from its real focus which is the scope of acts, violations and abuses that can be subject to the legally binding instrument. The focal point in this matter is the transnational nature of the activity and not the transnational nature of the corporation in itself. Regarding this, the OEIGWG Proposal explains in point 2 that “with regard to the subjective scope, the present instrument does not require a legal definition of the TNCs and OBEs that are subject to its implementation, since the determinant factor is the activity undertaken by TNCs and OBEs, particularly if such activity has a transnational character”[8].

3. Extraterritorial obligations of States - The OEIGWG Elements does not state the terms of extraterritorial obligations of States in a very clear and specific way. The document reaffirms in point 1.3 that “State Parties’ obligations regarding the protection of human rights do not stop at their territorial borders”, mentioning the obligation of States to “adopt measures to ensure that TNCs and OBEs under their jurisdiction adopt adequate mechanisms to prevent and avoid human rights violations or abuses throughout their supply chains” (3.1.) and have a general obligation of international cooperation. When the Elements mention Access to Justice, point 6, they state that “State Parties shall adopt adequate mechanisms to reduce regulatory, procedural and financial obstacles which prevent victims from having access to effective remedy”, complementing that States should limit the use of the forum non conveniens doctrine. The absence of a more detailed normative proposal about this question represents a retrocession, considering that the international human rights framework clearly recognizes these obligations, mainly since the Optional Protocol to the Convention on the Rights of the Child on the sale of children, child prostitution and child pornography[9]. The Committee on Economic, Social and Cultural Rights recognized in some occasions the existence of extraterritorial obligations of States concerning business activities[10], and the Committee on the Rights of the Children[11], through the General Comment N.16, from 2013, addressed this question dedicating various paragraphs to this discussion recognizing the difficulties in making TNCs liable for the abuses committed[12] and affirming that the primary responsibility to protect children’s rights lies with the host state’s jurisdiction, but the home state of the TNCs also has obligations regarding the activities of corporations based in its territory. The demonstration of a “reasonable link” between the home state and the abusive conduct abroad is sufficient[13]. Considering all the advances in the Rights of Children Framework, we expected a more elaborated normative proposal in the OEIGWG Elements.

Final Remarks

In this moment of great opportunities to advance the international human rights law framework and of great pressure from the international civil society, represented mainly by the Treaty Alliance and the Campaign to Dismantle Corporate Power and Stop Impunity,[14] which are bringing a civil society proposal for a legally binding instrument that is going to be launched this week during the Third Session, the OEIGWG Elements sets a good starting point for the debate.

As stated before, the Third Session and the OEIGWG Elements are a necessary step in the long run giving continuity to this process that has already been at the UN for over 40 years and creating a dynamic of possible progress and negotiations.

However, there are more points to address regarding the OEIGWG Proposal, such as the way due diligence is portrayed by the document, the need for more discussion about direct obligations for TNCs or the need for insertion of more specific provisions about international cooperation, but these questions can be addressed in the future, after the debates of the Third Session and as a preparation for the next sessions of the OEIGWG.

[1] The document “Elements for a Legally Binding Instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights” is going to be named “OEIGWG Elements” or “OEIGWG Proposal” for the purpose of this paper. To access the document: < http://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session3/LegallyBindingInstrumentT NCs_OBEs.pdf>.

[2] To access Resolution 26/9: <https://documents-dds-ny.un.org/doc/UNDOC/GEN/G14/082/52/PDF/G1408252.pdf?OpenElement>.

[3] The First Session was held on 6-10 July 2015, and the second session in on 24-28 October 2016.

[4] To access the document "The Campaign Draft 'Treaty on Human Rights and Transnational Corporations and Supply Chain' and The OEIGWG Chairmanship Elements for a Legally Binding Instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights: a Comparative Analysis", go to: <http://homacdhe.com/wp-content/uploads/2017/10/COMPARATIVE-ANALYSIS.pdf>.

[5] As examples of the primacy of the Lex Mercatoria over the Human Rights International Framework, we can mention several cases of lawsuits brought by TNCs against States before the ICSID, such as the Occidental Petroleum vs. Republic of Ecuador, Vivendi Universal S.A. vs. Argentine Republic, among others.

[6] The General Comment N. 24, from 2017, on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities is available for consultation here: <http://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=E/C.12/GC/24&Lang=en>.

[7] The text of the polemic footnote of Resolution 26/9 is as follows: "'Other business enterprises' denotes all business enterprises that have a transnational character in their operational activities, and does not apply to local businesses registered in terms of relevant domestic law."

[8] This explanation guides to the point where the OEIGWG Elements exposes which acts should be subject to its application (2.2.): “Violations or abuses of human rights resulting from any business activity that has a transnational character, including by firms, partnerships, corporations, companies, other associations, natural or juridical persons, or any combination thereof, irrespective of the mode of creation or control or ownership, and includes their branches, subsidiaries, affiliates, or other entities directly or indirectly controlled by them”.

[9] The Optional Protocol to the Convention on the Rights of the Child on the sale of children, child prostitution and child pornography in its article 3, paragraph 1 states that “Each State Party shall ensure that, as a minimum, the following acts and activities are fully covered under its criminal or penal law, whether such offences are committed domestically or transnationally or on an individual or organized basis”. To access the document: <http://www.ohchr.org/EN/ProfessionalInterest/Pages/OPSCCRC.aspx>.

[10] The Committee on Economic, Social and Cultural Rights recognized the existence of extraterritorial obligations of States concerning business activities in the General Comment N. 15 relating to the right to water; the GC N. 19 relating to the right to social security; and in the GC N. 18 relating to the right to work.

[11] To access the document: <http://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=CRC%2fC%2fGC%2f16&Lang=en>.

[12] This recognition appears in Paragraph 38: “Business enterprises increasingly operate on a global scale through complex networks of subsidiaries, contractors, suppliers and joint ventures. (…) There are particular difficulties for States in discharging their obligations to respect, protect and fulfill the rights of the child in this context owing, among other reasons, to the fact that business enterprises are often legally separated entities located in different jurisdictions even when they operate as an economic unit which has its center of activity, registration and/or domicile in one country (the home State) and its operational in another (the host State)”.

In Paragraph 39 of the General Comment displays that “the Convention does not limit a State’s jurisdiction to ‘territory’”.

[13] The definition of “Reasonable link” used by the General Comment is displayed in Paragraph 43: “A reasonable link exists when a business enterprise has its center of activity, is registered or domiciled or has its main place of business or substantial business activities in the State concerned”. This definition comes from the Maastricht Principles on Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights, from 2011, in its article 25. To access the document: <http://www.etoconsortium.org/nc/en/main-navigation/library/maastricht-principles/?tx_drblob_pi1%5BdownloadUid%5D=23>.

[14] The Treaty Alliance and the Campaign to Dismantle Corporate Power and Stop Impunity gather hundreds of national, regional and international NGOs, social movements, trade unions and academic centers. To access the latest Treaty Alliance Declaration, go to: <http://www.treatymovement.com/statement>; and to access the Campaign website: <https://www.stopcorporateimpunity.org>.


Manoela Carneiro Roland is Coordinator of Homa - Human Rights and Business Centre; Adjunct Professor at Federal University of Juiz de Fora (Brazil).

Luiz Carlos Silva Faria Junior is Homa Associate Researcher and a PhD Student at the Pontifical Catholic University of Rio de Janeiro (Brazil).