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18 Sep 2021

Lauren Chaplin, Leigh Day

Commentary: Third draft of UN business and human rights treaty launched on 17 August 2021

The text has been prepared by the open-ended intergovernmental working group (‘OEIGWG’) on transnational corporations and other business enterprises, established...to develop a binding legal instrument to build on the soft law foundation laid over the past decade by the UN Guiding Principles on Business and Human Rights (‘UNGPs’).

…[T]he treaty’s remit is far-reaching, requiring that all businesses, irrespective of size, are human rights compliant …

…[It] makes clear that responsibility for business activities lies with both private and public actors…[requiring] States to ‘take all necessary legislative, administrative and other action […] to ensure effective implementation…

The drafters ... [called] for HRDD costs to be integrated into business contracts … [requiring] that States make sure that businesses ‘establish and maintain financial security … to cover potential claims of compensation’ … [also] that States establish an international fund for victims, to provide legal and financial aid to those who would otherwise not be able to access remedy.

…[It] seeks public and periodic reporting on non-financial matters…necessary to both evidence claims and identify the correct defendant(s).

…[Regarding] access to remedy, [it] calls on States to remove legal obstacles, including the principle of forum non conveniens … to allow judges to reverse the burden of proof where such reversal is necessary to ensure victims’ access to remedy.

[I]t mandates that States shall ensure that their domestic law provides for the criminal or functionally equivalent liability of legal persons for human rights abuses that amount to criminal offences under international human rights law, customary international law (‘CIL’), or domestic law.

…EU delegates…maintained that the text required much work to ‘become a basis for a legally sound, implementable, and enforceable instrument'...