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

In July 2018, the UN Intergovt. Working Group on proposed treaty released the first official draft of the legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises ("Zero Draft"). This compilation of commentaries and statements on the Zero Draft by academics, professionals and civil society members reflects on the Zero Draft strengths and limitations.

For Business & Human Rights Resource Centre blog series on the Zero Draft click here.
More commentaries, opinions and statements on the proposed Treaty in general available here.

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Autor/in: Harris Gleckman, Open Democracy

…This autumn, Professor John Ruggie,…shared his concerns…that the zero draft has not adequately dealt with ‘scale’ and ‘liability’. 

I think Ruggie’s arguments…fail to recognize the historic opportunity offered by the Human Rights Council to create a human rights remedy system for corporate abuse across national boundaries…  

To be clear, my underlying difference with Ruggie and other supporters of the UNGP who disparage the complementary nature of a binding treaty is that times have changed...

Over time the approach has shifted to include that the state should have a positive obligation to use it power to protect the human right of individuals, citizens, and communities. 

What has now changed is that businesses with a transnational character have vastly greater power than states and individuals. 

And therefore it is wise to combine the power and authority of states, individuals, and community associations to establish clear and effective standards, rules and procedures to counterbalance those which have disproportionate power today.  

 

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Autor/in: Hogan Lovells on JD Supra

The UN intergovernmental working group tasked with developing a binding international treaty on business and human rights recently concluded its fourth round of negotiations in Geneva (15-19 October 2018).

In contrast to the third session,...delegations were provided with the “Zero Draft” treaty in July 2018..., giving them ample opportunity to consider the text in advance of the session...

A number of unresolved issues from previous negotiating rounds re-emerged and continued to be a sticking point in discussions...[among which:]

- the limited scope of the Treaty’s application to transnational businesses,...

- [the] lack of consensus on the scope of national courts’ exercise of adjudicative jurisdiction over human rights claims,...

- the proposed obligation of mandatory human rights due diligence...[an obligation] that will need to be further refined... 

The “Zero Draft” is merely the starting point, and it will be important to have continued engagement from all interested parties to develop and refine the document. Expect there to be further parsing of the language of the text in the upcoming rounds of negotiations.

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Autor/in: Makbule Sahan & Ruwan Subasinghe, Equal Times (India)

...[u]nions cautiously welcome the following key provisions of the Zero Draft:

  1. Coverage of international human rights law, including international labour standards
  2. Mutual legal assistance and international cooperation
  3. State obligation to adopt regulatory measures to:
  • Require businesses to adopt and apply human rights due diligence policies and procedures;
  • Ensure access to effective judicial recourse for victims of human rights violations...

However, in order to truly close the major gap that exists...it is imperative that the next draft of the Binding Treaty captures the following points:

  1. A re-statement of the business duty to respect human rights throughout their operations
  2. An explicit recognition of the primacy of human rights obligations over trade and investment agreements
  3. The need to overcome jurisdictional barriers by limiting the use of the doctrine of forum non conveniens
  4. Alignment of due diligence provisions with Pillar II of the UN Guiding Principles on Business and Human Rights to reduce some definitional and operational ambiguities
  5. The need for a strong international enforcement mechanism beyond the frameworks set out in the Zero Draft and the Optional Protocol...

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Autor/in: International Organisation of Employers, International Chamber of Commerce, Business at OECD (BIAC), International Chamber of Commerce, Business Europe

"Business response to the Zero Draft Legally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises ("Zero Draft Treaty") and the Draft Optional Protocol to the Legally Binding Instrument ("Draft Optional Protocol") Annex", Oct 2018

...This document provides their joint response to the Zero Draft Legally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises ("Zero Draft Treaty") and the Draft Optional Protocol to the Legally Binding Instrument ("Draft Optional Protocol"). These texts were released by the Chair of the IGWG - the Government of Ecuador - for States to negotiate on at the IGWG's fourth session (15-19 October 2018) and its fifth session scheduled for 2019.

The Zero Draft Treaty and the Draft Optional Protocol raise issues of significant and genuine concern to the international and regional business community and they do not provide a sound basis for a possible future standard on business and human rights. Both texts incorporate inconsistent provisions that would greatly undermine countries' development opportunities and they would create a lopsided global governance system that would result in significant gaps in human rights protection. Taken as a whole, the legal regime that the Zero Draft Treaty and Draft Optional Protocol would create is legally imprecise; divergent with established standards and laws; incompatible with the aim of promoting inclusive economic growth and investment; at risk of enabling politically-motivated prosecutions; and - crucially - not capable of serving all victims of human rights abuses.

Furthermore, the business community is profoundly concerned with the process that has led to the release of a Zero Draft Treaty and a Draft Optional Protocol. It has repeatedly stressed that it wishes to contribute meaningfully to the business and human rights debate. However, it is concerned that no real effort has been made to ensure a robust, transparent and open process that fully draws on the expertise and experience of all stakeholders. The way in which the UNGPs were developed highlights the overarching value of meaningful private sector engagement. The business community encourages all participants in the IGWG to enhance dialogue with business in tackling such complex human rights issues...

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Autor/in: Professor John G. Ruggie

"'Guiding Principles' for the Business & Human Rights Treaty Negotiations: An Open Letter to the Intergovernmental Working Group," 9 October 2018

When I presented the UNGPs to the Human Rights Council in 2011, I stated that their endorsement by the Council would not mark the end of business and human rights challenges... but it was the end of the beginning because at last an authoritative foundation would exist... I did not then and do not now see any contradiction between the UNGPs and further international legal developments... With intergovernmental deliberations to begin soon, allow me to suggest here some ‘guiding principles'... which I hope might assist the overall process...

... [G]reat care must be taken that a treaty text does not lock in standards lower than those embodied in the UNGPs, and that the definition of terms in the treaty are consistent with the same terms used in the UNGPs. Otherwise the treaty risks sowing confusion and disillusionment among those already striving to implement the UNGPs... [A] business and human rights treaty must strive for the same broad base of support that we saw for the UNGPs.  This includes both home and host states to companies whose businesses affect people’s human rights... The UNGPs do not draw lines between companies that are part of global supply chains and those that are not. They apply to all enterprises regardless of their size, sector, location, and ownership structure. An effective treaty should do the same or risk creating yet another gap in human rights protection... [I]n the interest of achieving broad support and ensuring effective implementation, it would be wise to define the jurisdictional scope of the treaty in these terms, as the first step in the international legalization of business and human rights standards.

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Autor/in: FIDH

Four years after the adoption of Resolution 26/9 which established the Open-ended intergovernmental working group (IGWG), with a mandate to elaborate an international binding instrument on transnational companies and other business enterprises with respect to human rights, the release of the “Zero Draft” of an international binding Convention on transnational companies and other business enterprises and human rights is certainly an important step towards more substantial debates. In this respect, it is expected that session IV of the IGWG, which will take place in Geneva next October 2018, will offer an opportunity to have a meaningful discussion between States’ delegations and should represent a concrete improvement in the negotiation process...This contribution summarises the position of the International Federation for Human Rights (FIDH) regarding the text released by Ecuador: it is a preliminary comment on the text as it has been presented. It follows the structure of the draft and focuses only on some of its articles; it draws on FIDH’s experience as an international federation of human rights organisations around the world: we hope that it can provide useful inputs and feed into the discussions during the negotiation process.

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Autor/in: Nadia Bernaz, Rights as Usual

...Under the Draft Protocol, states parties shall establish a National Implementation Mechanism (hereafter “the Mechanism”) to promote compliance with, monitor, and implement the future treaty...The Mechanism will be tasked with raising awareness of the business and human rights treaty, in cooperation with other national institutions, civil society organizations, and foreign Mechanisms...In many countries the Mechanism could be run within existing, domestic National Human Rights Institutions (NHRIs)...Article 4 purports to entrust the Mechanism with a role in the prevention of human rights violations by corporations...[I]t is expected that when undertaking due diligence, corporations produce and publish reports on non-financial matters...Article 4 of the Draft Protocol indicates that the Mechanism “shall, as a minimum, have competence to request all necessary information from the State Party in whose territory” that Mechanism operates...This assumes that states actually gather and somehow store or keep track of such information...

...Article 5 seemingly aims to address an important gap in the current legal framework on business and human rights...by giving the Mechanism the power to review corporate performance of their due diligence obligations...[I]t is going to be difficult to implement...[I]t is likely corporations will view this review process with suspicion, at the very least...How to ensure that the Mechanism is staffed with people with a good understanding of how corporations function?...

Article 6 sets up a non-judicial complaint mechanism relying on mediation...[T]his could really add value...One important point: in practice the potential for overlap between the work of the Mechanism in this area and the work of NCPs seems high.  If States go forward with the idea, it would perhaps make sense to explore ways to merge the two institutions...

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Autor/in: Antonella Angelini, Fair Observer

...[Z]ero draft marks a key milestone in the effort to bring about a UN treaty on business and human rights...In several aspects, the new text is likely to be more appealing than its infamous predecessor, the draft elements...

Access to remedy and due diligence are the focus of the new draft, and rightly so.  This choice zeroes in on the top priorities for victims and nudges...recalcitrant states to put more serious effort into negotiations...Victims, however, are still in a position of serious weakness and power imbalance when it comes to having access to remedy for human rights abuses involving multinational companies...

...To tackle the existing gaps...the working group chose to place its bet on the traditional international law pathway...Only states have legal obligations to make business legally accountable and provide victims with access to remedy...[C]oncerning the scope issue, the zero draft is only half a success.  Language-wise, the definition of its subject matter in terms of “all international human rights” will need some tweaking...clarify the conventional or customary source of such rights...

...[T]he new draft text strikes a mixed balance on two...themes... — due diligence and access to remedy...[W]ith respect to prevention, states are the immediate duty-bearers, but the actual addressee and target is business...Failure to abide by this obligation would become a source of liability under domestic law for the faulting enterprise...Also changed is the very content of due diligence...On access to remedy, the zero draft scores important points for its mission to be a “victim-oriented” text...

...Dropping the idea of establishing international remedy mechanisms...was perhaps a wise move.  Yet...the zero draft contains little novelty in the mechanisms that should inject life into the treaty.  This poverty of imagination or courage is also visible when it comes to monitoring and implementation...

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Autor/in: Flora Sapio via Law at the End of the Day

...The premises and logic behind the UNGPs marked a significant progress, bestowing on TNCs something very close to legal subjectivity in international law...The LBI [Legally Binding Instrument]...attributes the “primary responsibility” to promote, respect and fulfil human rights and fundamental freedoms to national States, and a duty to respect human rights to all business enterprises...While the Preamble perpetuates the spirit of the UNGPs, Articles 3 and 9 adopt a traditional perspective, whereby TNCs are no longer considered as autonomous non-state actors in international law...but as mere objects of state regulation and control...The attribution of the primary responsibility...to national States...seems to place an excessive burden on States vis á vis business enterprises. This drafting choice results in a reversal of the equilibrium reached by the United Nations Guiding Principles on Business and Human Rights...

...The mention in article 3.1 of business activities of a transnational character may be interpreted as excluding domestic business activities...from the scope of the State duty to protect human rights.

...The harm most commonly caused by any economic activity, be it transnational or domestic in nature, is a direct and often irreversible harm to health. Yet the right to health is not mentioned among the rights listed by Article 4...

While there is no general agreement on the definition of TNCs...[i]t is suggested that the definition of TNCs includes the entire supply chain of any TNC, and legal persons incorporated as not-for-profit entities...

Each one of the due diligence obligations in article 9 seem to be conceive of human rights as referring to aggregate of individuals.  It would otherwise be difficult to understand how due diligence obligations such as measuring and monitoring impact, identifying and assessing potential violations and preventing them could apply to individual cases...

...Establishing a hierarchy among human rights would not be entirely coherent with the principles of inter-relatedness, inter-dependence and indivisibility of human rights. It would potentially open up the way for TNCs to adopt selective...approaches to human rights due diligence. 

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Autor/in: Larry Catá Backer, Law at the End of the Day

...   

1.  The Zero-Draft is a marvelously drafted  articulation of a comprehensive vision...But it was not written to be adopted...

2.  ...The principal value of the Zero-Draft is for interpretation of the UNGP themselves...

3. The greatest failure of the Zero-Draft...is inherent in the reason for its genesis...[I]t continues to adhere to the notion that only law provides both legitimacy and the framework...[T]he assumption of a specific and peculiar relation between international law and norms, and domestic legal orders, may not accord with the realities of the positions of the most powerful states...

4.  There is a regrettable contradiction in the Zero-Draft...bound up in the decision to limit application of the provisions to "activities of a transnational character"...

5.  The emphasis on the state...produces another lacuna.  The State Owned Enterprise (SOE) occupies an ambiguous place within the construct of the Zero-Draft...Yet SOEs occupy an increasingly important place in the global economic order...  

6. Even more...regrettable, was the reactionary character of the scope of the application of the Zero-Draft to "for profit economic activity...

7. Also troublesome is what the Zero-Draft likely views as its key positive feature--the focus on victims...[T]he term, as defined, might cause some concern...[I]t appears to incapacitate this class of individual...These are not victims--these are rights holders...

8.  The Zero-Draft was especially disappointing for its failure to define "human rights."...[T]his could produce a regime where the law applicable along every production chain is fractured along national lines, substantially undermining the objectives of the Zero-Draft...

...[A]s an aspirational document, the Zero-Draft makes very useful contributions. Even if the treaty project itself does not succeed, many of the provisions...remain worthy of continued attention.  There is much to recommend in the Zero-Draft....But at least the Zero-Draft may keep those conversations going...  

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