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A Toothless Tool? First impressions on the Draft Optional Protocol to the Legally Binding Instrument on Business and Human Rights

Gabriela Kletzel & Andrés López Cabello, Centro de Estudios Legales y Sociales (CELS) & Daniel Cerqueira, Due Process of Law Foundation (DPLF) - members of ESCR-Net

This blog is part of the Reflections on the Zero Draft blog series on the proposed binding treaty on business and human rights. We present this series as part of our work to highlight key developments and opportunities for change, with the aim of empowering advocates in civil society, governments and businesses with the evidence and guidance to help define their position and engagement in the treaty process. We believe this initiative is complementary to the implementation of the UN Guiding Principles, and that an inclusive and open debate is crucial to ensure these initiatives deliver for everyone, and that the business & human rights movement continues its 'unity in diversity'.

                                                                                                                                                                             

At first glance, the zero drafts of the Legally Binding Instrument (LBI) and Optional Protocol (OP) raise serious doubts as to whether they add value to the effort of making business enterprises accountable for human rights abuses. The draft LBI establishes the “effective access to justice and remedy to victims of human rights violations in the context of business activities” as one of its main purposes. However, the OP addresses enforcement mostly through national implementation mechanisms and an international committee of experts, both of which have weak oversight and monitoring powers. 

Although this piece is focused on the OP, we cannot ignore how the LBI affects the possibility of improving corporate accountability, particularly in relation to effective access to justice and remedy. We must voice once again our disagreement with the limited scope of the draft treaty. The current text excludes corporations that act solely within the confines of the jurisdiction of the State where they operate. Our experience in Argentina and in other Latin American countries indicates that these kinds of corporations can also be involved in human rights violations. Therefore, it is of utmost importance to expand the scope of the LBI to go beyond business activities of a transnational character.

Even when dealing with transnational corporations, the LBI allows for corporate impunity in its article 11.10. that establishes exemptions from the enforcement of judgments at the request of the defending corporation in certain scenarios. Some of the exemptions are based on extraordinarily vague criteria, such as situations “contrary to the public policy” of the State in which the judgment enforcement is sought.

Furthermore, the LBI does not adequately address States’ extraterritorial obligations. Although it mentions the obligation to provide remedies and to comply with due diligence duties for both home and host states of offending companies, the LBI falls short in establishing concrete obligations. For instance, it does not address the issue of forum non conveniens (power to dismiss a case where another forum may more conveniently hear the case) nor the corporate veil doctrine. These are frequently used to avoid liability and other forms of responsibility of “parent companies” and shareholders of transnational enterprises involved in human rights violations.

Unfortunately, the recent release of the OP only added to our concerns about the substance and procedural aspects of the current draft treaty. The enforcement framework of the OP relies on the National Implementation Mechanism (NIM) to promote compliance with, monitor and implement the LBI, as well as on a committee of experts (Committee), established in the LBI under Article 14, which would have the competence to receive and consider individual complaints.

Most of the OP text regulates the establishment and functions of the NIM. However, this mechanism does not provide an effective venue for monitoring and redressing corporate abuses. According to the draft, the NIM will act as a mediator among contesting parties to bring together opposing positions in a so-called amicable solution process. It is highly problematic for NIMs to focus their mandate on this kind of mediation process. Experience shows that States often use these instances as delay tactics. Such processes only work properly when extreme asymmetries between involved parties are balanced with adequate institutional arrangements. At a minimum, it is fundamental to create a public office staffed with specialized lawyers to represent victims’ interests in this context.

The NIMs' oversight capacities established in the OP are contingent upon the achievement of an amicable settlement. There are no provisions addressing cases in which solutions are not amicably reached. And in cases in which the amicable settlements are breached (OP Art. 6), the purpose of NIMs sending information to the Committee is left unclear.

It is crucial for NIMs to have standing before national courts in civil, criminal and administrative proceedings. They should also be able to lodge class actions and collective claims in defense of diffuse interests. These functions could represent an important step towards ensuring access to justice, especially considering that NIMs are supposed to be specialized agencies, well trained in business liability.

While the OP’s Art. 2 asserts that States Parties “shall consider the Principles Relating to the Status of National Institutions for the Protection and Promotion of Human Rights (Paris Principles) when designating or establishing the [NIM],” the draft focuses almost exclusively on conciliation and mediation functions. It makes no mention of other functions contained in the Principles relating to the Status of National Institutions (Paris Principles), especially the possibility of issuing binding decisions, hearing complaints or petitions of human rights violations, and transmitting them to the competent administrative and judicial national authorities.

There is also deficient elaboration of the NIMs’ powers to demand information from companies and state agencies. NIMs should have a clear and effective mandate to request or even requisition relevant information for analyzing concrete cases of human rights abuses, and not just regular data and reports that companies are already required to produce to comply with legal requirements at the national level. It is essential to develop clear criteria and guidelines on what and how information should be produced and delivered to the NIMs.

Likewise, it is unclear what kind of remedies the Committee and the NIMs can make available. Although the draft LBI refers to States’ obligation to establish diverse remedies, the OP´s text is silent on this matter.

Furthermore, it is important for the LBI and the OP to include strict and transparent requirements for the appointment of members and composition of the NIMs and the Committee. It is especially important to establish clear rules to prevent conflicts of interest and to ensure impartiality and independence of said organs and their members.

It is also necessary to strengthen the prevention of retaliation against those who interact with NIMs or the Committee, with provisions addressing, for example, anti-union actions by companies and governments. Article 21 of the OPCAT  might be helpful in this regard. The Committee should be able to grant interim or provisional measures and accept third-party interventions and amici curiae, as other international human rights bodies frequently do. Moreover, it is important that the Committee has stronger oversight and monitoring powers. This should include the ability to follow up with states on Committee recommendations in the context of individual complaints, which is in line with other human rights human rights instruments, such as the Optional Protocol to the International Covenant on Economic, Social and Cultural Rights.

Finally, in order for the LBI and its OP to make any meaningful contribution to the field of business and human rights, it is crucial that civil society organizations and victims are at the heart of the ongoing negotiations around these new instruments.