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21 Sep 2022

Jeffrey Vogt, Solidarity Center

A Draft Adrift: What next for the UN treaty?

© Stephen Wishart, Solidarity Center

Honduras, May Day 2015, Stephen Wishart, Solidarity Centre

The Eighth Session of the Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights (OEIGWG), scheduled for 25-29 October, is already off to a rough start. In a letter dated 7 September 2022, Ambassador Izquierdo, Permanent Representative of Ecuador, explained the “Friends of the Chair” Group, which would have normally gathered between sessions with the aim of preparing a new revised draft, was unable to meet as not all regional groups had put forward at least one representative. Without the participation of the Africa group, a fourth revised draft was not prepared and, as such, the OEIGWG will review once again the third revised draft, with a focus on Articles 6-12.

This setback takes place in the context of a recent push for an alternative text. Last year saw the participation of the United States Government in the treaty process for the first time. To the frustration of many - especially civil society organizations - the United States rejected outright the current draft’s “prescriptive approach” and announced it would instead explore “alternative instruments” such as a legally binding “framework agreement”. It also urged others in the Working Group to move in that direction. It is unclear how much support the US position has among other governments - although the US claims to be expressing concerns shared by other members - and therefore of the extent to which a possible competing proposal on the horizon will affect the progress of the treaty.

Another setback is the watered-down shape of the European Commission’s proposed directive on Corporate Sustainability Due Diligence, released on 23 February 2022. The long-delayed, proposed directive reflects the influence of the European business lobby, as can be seen in several articles that depart significantly from Pillar II of the UN Guiding Principles on Business and Human Rights. As I and colleagues explained in an earlier blog, “If not addressed fully in the legislative process, the proposed directive’s effectiveness as a tool to promote human rights, environmental sustainability, and corporate accountability will be certainly diminished.” These and similar concerns were expressed by trade unions and NGOs.

At the same time, civil society is pushing to further strengthen the current draft. As to labor, the Council of Global Unions put forward several pages of detailed amendments to the third draft text, including on articles under discussion in this upcoming session. These are important contributions and should be considered carefully. Experience with existing human rights due diligence (HRDD) legislation, such as in France, should also inform debates as to the potential efficacy of the HRDD approach as it pertains to labour rights. Space does not permit a detailed exposition, but a few points relevant to the issues being taken up at the upcoming session must be kept in mind.

First and foremost, labor violations will persist in global supply chains as long as inclusive and democratic trade unions are unable to exercise collective power at the workplace and at the sectoral level (which includes reaching collective agreements). In the 10+ years since the adoption of the UNGPs and the revised OECD Guidelines for Multinational Enterprises (incorporating the UNGPs) and the 5+ years since the adoption of the French Loi de Vigilance, it remains unclear how (if at all) these instruments have facilitated greater worker power along global supply chains. Many due diligence plans remain superficial, workers and trade unions are infrequently involved in the identification of risks, the development and implementation of plans and policies or the development of remedies once violations inevitably occur. Any treaty (and any laws transposed from said treaty) must put workers and trade unions at the center of the HRDD process, at least as it pertains to labor rights. Otherwise, HRDD runs the risk of giving cover to repackaged CSR policies and compliance audits. Notably, no current legislation centers workers in the HRDD process.

Aside from a few exceptional cases, lead firms are also not being held civilly liable for labor violations committed by subsidiaries and, so far, none for the acts of their contractual suppliers (although advocacy campaigns have been successful in getting some brands to pay up). Only one case, against Yves Rocher, has been filed under the French Loi de Vigilance for labor violations committed by a supplier to a French MNE. The case, filed this year, is ongoing and thus it is too soon to know its impact. However, while civil remedy provisions of HRDD laws might provide a remedy where damages are more easily monetized (e.g., unpaid wages and benefits, compensation for injury or death), such as in mass tort situations, it remains unclear what meaningful remedy is available for violations related to union busting, failure to bargain in good faith or strikebreaking, for example. Unless union activists are reinstated or agreements reached, no compensation a court could order a lead firm to pay (and calculated on what basis?) will lead to a rights-compatible remedy. To these concerns we would add issues around discovery, burden of proof, whether a due diligence plan may constitute a whole or partial defense to civil liability, the substantial costs and time associated with transnational litigation, among many others.

For workers and unions, these and many more issues not mentioned here must be addressed adequately if the UN Treaty is to facilitate enabling environments in which collective worker power can flourish.

by Jeffrey Vogt, Director, Rule of Law Department, Solidarity Center

Taking stock: Reflections on the progress of the UN Binding Treaty

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