abusesaffiliationarrow-downarrow-leftarrow-rightarrow-upattack-typeburgerchevron-downchevron-leftchevron-rightchevron-upClock iconclosedeletedevelopment-povertydiscriminationdollardownloademailenvironmentexternal-linkfacebookfiltergenderglobegroupshealthC4067174-3DD9-4B9E-AD64-284FDAAE6338@1xinformation-outlineinformationinstagraminvestment-trade-globalisationissueslabourlanguagesShapeCombined Shapeline, chart, up, arrow, graphLinkedInlocationmap-pinminusnewsorganisationotheroverviewpluspreviewArtboard 185profilerefreshIconnewssearchsecurityPathStock downStock steadyStock uptagticktooltiptwitteruniversalityweb

26 Sep 2022

Doug Cassel, Emeritus Professor of Law, Notre Dame University, USA

Friends of the Chair: New Impetus for the UN Business & Human Treaty Process?

Victor Barro, FINA (International 4.0 Recognition)

In the final report on the 2021 session of the UN Human Rights Council working group to draft a treaty on business and human rights, the Ecuadorian Chair proposed to invite a group of ambassadors in Geneva, reflecting a balanced regional representation, to act as “friends of the Chair”. Under his guidance and in light of previous suggestions made by States, the friends would engage in intersessional consultations to advance work on the draft, aiming for “the broadest possible cross-regional support”.

The Chair’s announcement this month of five of the “friends” signals that the process to negotiate a treaty may finally be on a serious diplomatic track. Still, the process to agree on a text faces daunting hurdles. Among others, the lack of African representation in the group of friends is a critical concern.

Until now, Ecuador has led the process, with minimal - and too often contradictory - diplomatic input from dozens of States. By itself, Ecuador lacks the diplomatic heft to achieve broad consensus. In contrast, a reasonably constituted group of diverse States could in theory produce a draft acceptable to many other States.

The five friends announced to date are Azerbaijan, France, Indonesia, Portugal and Uruguay. These seemingly odd bedfellows may prove to be a diplomatically astute combination. Wisely not included are stridently anti-capitalist States such as Cuba and Venezuela, which have been cheerleaders for a treaty, but whose records and rhetoric cause moderate governments to shy away.

The friends are a geographically, economically and politically smart mix. Geographically, they come from distinct UN regions. An exception is the inclusion of both France and Portugal from Europe. The exception makes sense: France has pioneered business and human rights law with its Loi de Vigilance since 2017; Portugal has a moderate socialist government and is the home State of UN Secretary-General António Guterres.

France is also a major global exporter of foreign direct investment (FDI). Its net outflow of over US$50 billion in recent World Bank data dwarfs that of Ecuador and the other friends. Its active participation in negotiations may comfort other States whose transnational corporations could be significantly affected by a treaty. Even France, however, is not in the top rank of FDI exporters. The USA has more than US$300 billion in net FDI outflows, and China, Germany and Japan each have well over US$100 billion.

The other friends may also be clever economic and political choices. Among States in the global South, Indonesia is both a major recipient of FDI (nearly US$20 billion) and a non-trivial exporter (US$5 billion). It has incentives to scrutinize the impacts of treaty provisions, both on foreign companies investing in Indonesia and on its own companies investing abroad, as well as on its citizens.

Politically, Azerbaijan and Uruguay somewhat balance each other: Azerbaijan’s Government is corrupt and authoritarian, whereas Uruguay is a democratic, rule-of-law State. Azerbaijan is also a recipient of major investments by foreign oil companies. Uruguay has long been known as a supporter of international law.

Many civil society advocates may find this line-up distressing. However, at the end of the day, votes at the UN are taken by States, not NGOs – even if NGOs were instrumental to launch the process, keep it going, set the agenda, and provide victim perspectives and expert input. NGOs should continue their catalytic and humanitarian role.

Still, unless a sufficient core of credible States ultimately supports a draft treaty, it may never go into effect, or only in States with little leverage over transnational corporations. A treaty strong in some provisions but scant in diplomatic support would do little for victims worldwide.

That makes the absence of any African State in the friends of the Chair a serious problem. South Africa has been Ecuador’s purported partner in the drafting process since it began in 2014. Why is not South Africa or any African State among the friends?

The reasons may be substantive, diplomatic or political. Substantively, South Africa and Ecuador have long differed over the treaty’s coverage. South Africa has insisted that the treaty cover only transnational corporations. Ecuador, facing pressure from most other stakeholders, has proposed various textual formulations to make the treaty cover at least some domestic companies.

Diplomatically, although the two countries were initially said to be partners, Ecuador's Ambassador has always chaired the process, producing draft texts only in her or his own name, and occupying the podium at annual sessions, where South Africa had no greater role than any other State, and often appeared to take issue with the chair's drafts.

Politically, both countries have recently transitioned from leftist to pro-business leaders. President Guillermo Lasso of Ecuador has been a Coca Cola executive and bank CEO. President Cyril Ramaphosa of South Africa has been executive chair of one company, director of several others, and in a joint venture with Glencore. Could Ecuador’s delay in releasing a new draft this year, and South Africa’s absence (to date) from the friends, reflect a lack of enthusiasm in both States due to the change in political leadership and competing priorities?

The votes of African States were crucial to launch the treaty process. Their support will be no less important to finish it. A critical gauge of the future of the process may be whether South Africa, or another African State with its support, joins the friends of the Chair.

By Doug Cassel, Emeritus Professor of Law, Notre Dame University, Indiana, USA

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

View Full Series