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Developments & Progress in the Regulation of Business and Human Rights found in the Elements for the Draft Treaty

This blog is part of the debate blog series on the proposed treaty and its complementarity with the UN Guiding Principles. We believe that an inclusive and open debate is crucial to make sure these initiatives deliver for everyone, and that the business & human rights movement continues its "unity in diversity".

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On 29 September 2017, document HRC Res. A/HRC/RES/26/9, "Elements for the Draft Legally Binding Instrument on Transnational Corporations and other Business Enterprises with respect to Human Rights" was published on the High Commissioner for Human Rights website. I concur with Claire Methven O'Brien in the sense that the text is better than I expected. This is due, on the one hand, to the fact that none of the three basic pillars found in the UN Guiding Principles on Business and Human Rights (UNGPs) has been neglected – for instance, it is stressed that States have duties they cannot ignore, while also mentioning that corporations must respect internationally-recognized human rights – ; and on the other hand, to the fact that the Draft is neither lukewarm in relation to, nor avoids developing standards in areas that have proven to be controversial, yet whose regulation is necessary to diminish the risk of impunity of corporate abuses and the lack of protection of victims, as happens in relation to extraterritorial obligations or the direct responsibility of corporations.

In that regard, firstly, it is worth noting that the Draft is concerned with transnational business conduct, regardless of the type of company to which it is attributable – local or otherwise –, as noted in point 2.2 on the scope of application of the proposed treaty, which sets forth that the acts subject to it are those "Violations or abuses of human rights resulting from any business activity that has a transnational character […] irrespective of the mode of creation or control or ownership". This formula permits to deal with the conduct of any corporation, provided that it has a transnational character (the Palermo Convention may help to illuminate this), thus opting to potentially encompass all corporations. This is something I agree with, since all businesses may have a negative impact on human rights, and may allay the fears of those who opposed the proposal that the treaty only covers transnational corporations. Yet, it cannot be overlooked that local action may have a detrimental impact on the enjoyment of human rights and that it would be convenient to directly regulate State duties and corporate responsibilities in such events.

As to States, it is stressed that they have a “primary responsibility” (point 3), which underscores that the existing edifice of State human rights obligations will not be undermined by addressing corporate misdeeds. In fact, domestic action is required instead of being neglected, so much so that the proposal mentions that there must be accessible domestic remedies – which makes sense since they have often greater likelihood of success, akin to what John H. Knox, has argued. In this regard, the Draft says that "States should strengthen administrative and civil penalties in cases of human rights violations or abuses carried out by TNCs and OBEs. States which do not yet have regulations on criminal legal liability on legal persons are invited to adopt them in order to fight impunity and protect the rights of victims".

Notwithstanding, as judge Antonio Cançado has said, there must be international action when victims have found no solution domestically, to give them hope. Thus, I applaud that the Draft envisages the possibility of complementary international action, when in point b.2 it says that: "State Parties may decide to establish a Committee on the issue of Business and Human Rights, which will have, among others, the following duties […] Assess, investigate and monitor the conduct and operations of TNCs". The possibility of supranational examination of corporate conduct in relation to human rights is not unheard of, being there for instance proposals of arbitration, as those of Claes Cronstedt.

On direct corporate responsibility, a debated and insufficient point under the UNGPs, I welcome the notion that it is based on legal obligations, as revealed by the use of the word “shall”, which, as noted by Andrew Clapham, hints to strong obligations –"Some states wishing to see a stronger legal obligation preferred the word "shall' instead of "should". In this regard, the Draft stipulates that corporations "shall comply with all applicable laws and respect internationally recognized human rights [...] shall prevent human rights impacts of their activities and provide redress [...] shall design, adopt and implement internal policies consistent with internationally recognized human rights standards".

As to extraterritorial obligations, it is a relief to read that the Draft authors show to have been aware of the risk of corporate circumvention of the control of the host State and the need of preventing risks of race to the bottom and forum shopping by setting forth a harmonization of standards. In this regard, the document mentions how: "TNCs and OBEs “under the jurisdiction” of the State Party could be understood as any TNC and OBE which has its center of activity, is registered or domiciled, or is headquartered or has substantial activities in the State concerned, or whose parent or controlling company presents such a connection to the State concerned. Particularly, it has been considered that the legally binding instrument has an enormous potential to avoid TNCs and other OBEs from making use of limitations established by territorial jurisdiction in order to escape from potential prosecution in the host States where they operate. The inclusion of a broad concept of jurisdiction will also allow victims of such abuse by transnational corporations to have access to justice and obtain remediation".

Altogether, the proposal is a manifestation of the idea that the UNGPs can (must, given some shortcomings) be complemented with other strategies – including cultural ones, among others, as noted by Ruggie himself and Amartya Sen –, reason why I hope political and economic interests do not derail it and victims are attached the central importance they deserve. The UNGPs are certainly a landmark, but “key challenges remain”, as the Holy See once mentioned.


Nicolás Carrillo Santarelli is a Professor of International Law at La Sabana University (Colombia).