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14 Aug 2018

Surya Deva, Associate Professor, School of Law, City University of Hong Kong

The Zero Draft of the Proposed Business and Human Rights Treaty, Part II: On the Right Track, but Not Ready Yet

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'.

In this second part of the blog, I assess the extent to which the zero draft is geared towards achieving the four objectives of the proposed BHR treaty outlined earlier.

Nudging collective state action

The zero draft defines “business activities of a transnational character” as any “for-profit economic activity ... that take[s] place or involve[s] actions, persons or impact in two or more national jurisdictions”. This definition would capture a huge range of businesses and their activities, which could not be regulated effectively by each state acting alone. The treaty should, therefore, nudge states to take collective action: this can take the form of joint action as well as individual action in pursuance of a collective goal.

In this context, advancing “international cooperation with a view towards fulfilling States’ obligations under international human rights law” as one of the purposes of the treaty makes sense. Article 11 requires state parties to “cooperate in good faith” and “afford one another the widest measure of mutual legal assistance in initiating and carrying out investigations, prosecutions and judicial proceedings in relation to the cases covered by this Convention”. Implementing this provision would require states signing new bilateral or multilateral agreements, or amending exiting ones. To ensure some broad consistency, it may be desirable to develop a few standard templates of such agreements. Moreover, it would be crucial to secure mutual legal assistance, under other existing arrangements, even from non-state parties to the BHR treaty. 

Multi-facet international cooperation envisaged by Article 12 should also facilitate collective action, as not all states would be equally-equipped to implement the proposed treaty. Building capacity, sharing challenges as well as good practices with peers, and collaborating with civil society will prepare the groundwork for states to take necessary measures to achieve collective goals.

Article 9 of the zero draft expects state parties to introduce domestic legislation requiring mandatory human rights due diligence (HRDD) as a preventive measure. This is a step in the right direction. However, the “minimum” due diligence steps proposed in Article 9 should be aligned with the four-step HRDD process under the GPs and be also informed by evolving good practice recommendations in this area. Otherwise, there would be a risk of different state parties enacting uneven and/or hollow HRDD legislation, which might prove either too costly for businesses or illusory in terms of impact.           

The zero draft relies exclusively on sanctions to ensure that business activities of a transnational character are consistent with human rights norms. While disincentives are critical, equally vital would be for state parties to create economic incentives for responsible businesses, not merely in domestic public procurement policies but also in all commercial dealings (e.g., contracts, loans, export credits) of a transnational nature.         

Addressing asymmetry between rights and obligations

The zero draft of the treaty tries to address the asymmetry between the rights and obligations of businesses by proposing to attach legal consequences for human rights violations. Article 10 provides that “State Parties shall ensure through their domestic law that natural and legal persons may be held criminally, civil or administratively liable for violations of human rights”. Legal liability presupposes breach of an obligation. However, it is odd that the zero draft does not explicitly impose an obligation on businesses of a transnational character to respect human rights. The closet it comes to doing so is in the Preamble, which underlines that “all business enterprises, regardless of their size, sector, operational context, ownership and structure shall respect all human rights”.

The current formulation will not work. The proposed treaty should state explicitly the obligation of businesses to respect all internationally recognised human rights. Doing so would be a “logical extension” of the GPs, as businesses already have a responsibility to respect human rights, the breach of which triggers an access to effective remedy. The BHR treaty would also need to specify with some precision the contours of this corporate obligation. For example, what does “all international human rights” actually mean under Article 3? Is the obligation merely to respect human rights, or would this also include an obligation to protect against violation by other entities which a business controls or has a sufficiently close relation?      

It is worth noting that this preambular declaration relates to all business enterprises, while the substantive treaty provisions focus only on the “business activities of a transnational character”. There are two elements of this creative approach, which tries to overcome the stalemate around the controversial footnote of Resolution 26/9. The first element is adopting a “soft hybrid” approach: whereas most of the treaty provisions focus on transnational activities of companies, the Preamble acknowledges that all business enterprises have an obligation to respect human rights. The second element is to shift the focus of regulation from “actors” to “activities” – all business enterprises are covered so long as their for-profit activities have a transnational character.

Article 13(6)/(7) of the zero draft requires states to address an asymmetrical nature of existing trade and international investment agreements (IIAs). Future IIAs that states negotiate “shall not contain any provisions that conflict with the implementation of this Convention and shall ensure upholding human rights in the context of business activities by parties benefiting from such agreements”. Moreover, states should also ensure “that all existing and future trade and investment agreements shall be interpreted in a way that is least restrictive on their ability to respect and ensure their obligations under this Convention”. These provisions, which are in line with Principle 9 of the Guiding Principles on Business and Human Rights (GPs), do not go far enough or in precise details as to what is needed to humanise IIAs. Nevertheless, these provisions could push states to reform their IIAs to ensure that investors do not castrate governments from taking necessary steps to protect human rights. In addition, the Committee envisaged under Article 14 of the zero draft could unpack what upholding human rights would entail for investors seeking protection of IIAs.  

The proposed BHR treaty should also try to address another asymmetry: protect human rights defenders (HRDs) from persecution by businesses directly or in connivance with state agencies. Article 8 outlines at length the rights of victims, but does not make any explicit reference to the rights of HRDs. Similarly, while the definition of “victims” in Article 4 is quite wide, it may not capture the full range of HRDs, e.g., those who are assisting affected communities. These gaps should be addressed. Moreover, the treaty should require both states and businesses to ensure that domestic legal processes are not used to target legitimate activities of HRDs.     

Responding to governance gaps in “hard cases”

The zero draft should be alive to the sad reality that some states and/or some businesses are unlikely to do what is expected of them. In such situations, the victims should not be without any remedial recourse. Apart from effectiveness concerns related to the working of a potential international body, establishing such a body – even for egregious corporate human abuses – may not be politically feasible at this stage. The zero draft does well not to include such a proposal, but at the same time leaves open the possibility of “any further development needed” to implement the treaty (Article 14(5)). The proposal to establish a Committee of Experts is welcome. It is disappointing, however, to see that the Committee is not given a mandate to accept complaints, at least in selected emblematic cases or subject to the requirement of exhausting local remedies. Accepting selected cases would allow the Committee to develop concrete guidance for similar futures cases or situations.

Extraterritorial regulation is a “necessary evil” in today’s world, including to deal with hard cases in the BHR field. The zero draft tries to strike a compromise (at least on paper) on this front: while provisions related to prevention and legal liability under Articles 9 and 10 are expected to go beyond one’s territory, Article 13(1) reminds state parties to operate “in a manner consistent with the principles of sovereign equality and territorial integrity of States and that of non-intervention in the domestic affairs of other States”. A similar balancing attempt is visible between liberal criteria for jurisdiction under Article 5 and a declaration under Article 13(2) that nothing in this treaty “entitles a State Party to undertake in the territory of another State the exercise of jurisdiction and performance of functions that are reserved exclusively for the authorities of that other State by its domestic law”. The crucial oiling to manage unavoidable tension in exterritorial regulation could be provided by provisions on mutual assistance and international cooperation and the Committee clarifying rules of engagement to guide state behaviour. The proposed BHR treaty should, however, have a provision to manage multiplicity of proceedings in cases where several state parties could have jurisdiction over a dispute.           

Removing barriers in access to effective remedy

Ensuring “an effective access to justice and remedy to victims of human rights violations” is one of the declared purposes of the proposed BHR treaty. Article 8 of the zero draft acknowledges various rights of victims, including “the right to fair, effective and prompt access to justice and remedies in accordance with international law”. This provision also requires state parties to guarantee these rights and overcome various barriers that prevent victims from seeking access to effective remedies. Provisions related to jurisdiction (Article 5), statute of limitations (Article 6), applicable law (Article 7), legal liability (Article 10), mutual legal assistance (Article 11), and international cooperation (Article 12) are also aimed at facilitating victims’ access to effective remedies.

It is, however, odd that state obligations to remove barriers are clubbed together with “rights of victims” under Article 8. This is perhaps a result of the zero draft not containing any general provision on the obligations of states or businesses: individuals have rights and that is why both states and businesses have obligations. This is a major gap that should be fixed in future drafts of the BHR treaty. It also seems that the zero draft does not give adequate weight to preventive remedies like injunctions (though it mentions guarantees of non-repetition) despite its focus on prevention through HRDD. As no single remedy could prove to be effective, a “bouquet of remedies”, including a meaningful apology, should be available to victims to achieve full reparation.

Moreover, the proposed treaty should make use of the potential of non-judicial remedial mechanisms (including national human rights institutions) in providing or facilitating access to effective remedy in business-related human rights abuses. It should also pay greater attention to dealing with corporate human rights abuses experienced differently and often disproportionately by marginalised or vulnerable groups.

The key to operationalise the treaty provisions strengthening access to effective remedy would be states making far-reaching changes to their legislation to remove barriers. The treaty could not possibly go into specific details as to how these barriers should be removed. Therefore, drawing inspiration from the OHCHR’s Accountability and Remedy Project and recommendations from others such as Amnesty International and the EU Agency for Fundamental Rights, model laws should be developed to provide states concrete guidance which takes into account their specific circumstances. The Committee of Experts under the proposed BHR treaty may be given this task.

In short, despite gaps, ambiguities and structural incoherence, the zero draft of the proposed BHR treaty is a step in the right direction to obligate businesses to respect human rights. No instrument is perfect or self-sufficient to regulate effectively the conduct of globally-connected business enterprises. The proposed treaty would be a much-needed addition to reinforce existing regulatory tools.


Reflections on the Zero Draft Treaty


New business and human rights treaty takes shape

Maysa Zorob, Business & Human Rights Resource Centre 11 Dec 2018


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 13 Nov 2018


Observations on the Zero Draft - A Detailed Proposal for a System of Arbitration

Klentiana Mahmutaj, Barrister at Red Lion Chambers 29 Oct 2018

View Full Series