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23 Jul 2018

Carlos Lopez, Senior Legal Advisor at the International Commission of Jurists via Opinio Juris

Towards an International Convention on Business and Human Rights (Part II)

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The draft treaty takes a somewhat sweeping approach to the issue of preventative measures to be required by States from business enterprises (article 9).  What States are asked to require from businesses is framed as a sort of (human rights) due diligence...The draft treaty...adds “meaningful consultation” with affected groups, the requirement of financial security to cover potential compensation claims, and the incorporation of some measures into businesses’ transnational contracts...The draft makes a positive point by providing for “effective national procedures” to “enforce compliance”...

The core of the draft treaty is perhaps its provisions on legal liability for transnational corporations and the rights of victims to remedy and reparation...[R]eferences to “environmental remediation” and “ecological restoration” are also in need of clarification...[T]he sweeping provision that “in no case shall victims be required to reimburse any legal expenses of the other party to the claim” stands out as potentially controversial...The draft treaty also makes provision for the establishment of a Fund for Victims..A key issue...is the parent-subsidiary company relationship and the corresponding legal responsibilities...The various grounds under which the liability of parent companies may be established in relation to wrongs by their subsidiaries are remarkable for their flexible definition and their alternative application...[T]his is going to be one of the treaty sections that will attract heightened attention...[A] special provision on corporate criminal liability is a step forward..., but the language needs serious work to address difficulties in precision and feasibility of objectives...

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Experts reflect on the Zero Draft of the legally binding treaty on business and human rights

Commentary: UN Draft Treaty on business & human rights needs further clarifications to guarantee legal accountability of corporations and effective remedies