Expert commentaries on Jul 2019 Revised Draft of proposed treaty on business & human rights

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19 September 2019

A progressing approach on conflict-affected settings and situations of occupation in the revised draft of the legally binding instrument, more needed

Author: Maha Abdallah, Al-Haq

On 16 July 2019, the revised draft of the legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises (hereinafter, legally binding instrument) was released.

The legally binding instrument, in its current draft, attempts to provide better established rights for affected individuals and communities, including human rights defenders and protected persons and populations, among other groups that are at high risk in the context of corporate activities. It is important that the legally binding instrument continues to be developed in a way that more closely resembles the language of the UN Guiding Principles on Business and Human Rights (UNGPs) and rights guaranteed under international law.

Paragraph 3(b) of article 5 on carrying out meaningful consultations with groups whose human rights can be affected by business activities or relationships is of high importance. The addition of protected populations under occupation or conflict areas as part of the categories of stakeholders requiring special attention is welcome, especially considering the heightened risks of violations in the context of business activities. However, it remains insufficient and in practice may be unrealistic, given the situation of armed conflict, hostilities, and/or a foreign occupation and authority.

In the same article, paragraph 2, human rights due diligence should be presented more explicitly in line with the UNGPs and relevant obligations and responsibilities set forth under international law. It remains unclear what ‘appropriate actions’ are needed, notably by business enterprises, in order to prevent human rights violations and abuses in the context of their activities and contractual relationships.



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11 September 2019

Legal Liability for Business Human Rights Abuses under the Revised Treaty on Business and Human Rights

Author: Carlos Lopez, International Commission of Jurists

The revised draft of an international treaty on the issue of business and human rights, released on 16 July 2019, represents a huge step forward in relation to the so-called “zero draft” published in 2018.  The revised draft makes crucial choices that may constitute a turning point in the process. One significant change is the definition of the scope of the proposed treaty, which has been expanded to encompass all business enterprises, while still having a heightened focus on businesses with transnational activities.  

Article 6 in itself represents a major development in the area of legal liability for business enterprises. The article aims at promoting a “comprehensive” system of legal liability for human rights abuses committed by business enterprises or with their participation.

Article 6.6 posits a standard of legal responsibility of one company in relation to the harm caused by another company, no matter where the latter is located, when the former company controls or supervises the activities that caused the harm. This norm that would potentially cover the responsibility of parent companies in relation to subsidiaries’ wrongs, and similar situations, is seemingly limited by the reference to the “contractual relationship” between the two companies involved. 

Article 6.7 refers to the legal responsibility of business legal persons for some of the atrocities commonly known as crimes under international law. In this context, the new revised draft treaty proposes a flexible approach to give States the choice between criminal, civil or administrative liability even for the most serious crimes. Practice shows that in the implementation of this flexible approach States tend to enact criminal liability or an equivalent form when serious offences are at stake, or at least, to apply the most severe sanctions against the culprits, to reflect the serious nature of the offence committed. 

Article 6 will surely generate some controversy in relation to the list of offences included, their definitions, or even the convenience of having a separate provision for serious offences . . . It will also be useful to guide States that already recognize the criminal liability of legal entities, such as business corporations, to expand the list of criminal offences attributable to those entities. . . In this regard, this treaty provides a minimum threshold, and each State may decide on the upper limits of its laws.



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6 August 2019

A step in the right direction: corporate responsibility under the 2019 revised draft. Part II: the recongnition of corporate violations and its implications

Author: Nicolás Carrillo Santarelli, La Sabana University, on Business and Human Rights Journal

I turn now to address the question of whether the reference to both corporate abuses and violations in the draft is an improvement over prior initiatives on non-state actors and human rights...

...[U]nlike the ‘zero’ draft, which expressly said that corporations ‘shall respect all human rights’ (a very strong indication given the verb that was chosen, but still a confusing one considering that no direct obligations were enshrined in it), the 2019 version says instead, in a somewhat analogous way in the Preamble, that all businesses ‘have the responsibility to respect all human rights’ (emphasis added). As Bernaz also pointed out, this may seem to tie the draft to the Guiding Principles –perhaps in the sense of recognizing that such respect they must have has already been enshrined therein. But, perhaps, the idea of ‘recognition’ implicit in the wording of businesses as ‘having’ responsibility ought to be interpreted as going beyond the Guiding Principles...

one can interpret that the treaty acknowledges that corporations may have even direct human rights obligations and responsibility recognized outside of it, in an express or implied manner, as has been argued by Jordan J. Paust or was even mentioned by an ICSID Tribunal in the Urbaser case. Thus, the treaty strategies would be complementary to those of other sources of international and domestic law.

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5 August 2019

A step in the right direction: corporate responsibility under the 2019 revised draft. Part I: beyond transnational conduct and corporations by means of non-reductionist approaches

Author: Nicolás Carrillo Santarelli, La Sabana University, on Business and Human Rights Journal

At the outset, I would like to mention that there are at least two aspects that, in my opinion, strengthen the newest version of the proposed treaty: its applicability to all businesses and corporate operations, transnational or not, explored in Part I; and the clear recognition that businesses do have the capacity to violate human rights, thus getting rid of the euphemisms that some authors have employed when studying non-state actors...

...[T]he latest version [of the draft] seeks to strengthen the protection of human rights from all corporate abuses, regardless of whether they are generated by means of transnational conduct or can be attributable to transnational businesses...

...[T]he content of the draft can be seen as an improvement in strategic and political terms over the previous draft ‘zero’ by means of its aligning with a position that coincides with the one held by European Union States –thus potentially generating greater favorability towards the instrument...

the drafters seriously intend to protect victims from all corporate violations, considering that around the world many violations are attributable to small businesses and to corporations operating locally, it would have been a mistake to miss the opportunity of requiring States to do something in order to prevent and respond to non-transnational corporate violations...

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29 July 2019

Commentary on scope, prevention & legal liability provisions of Revised Draft of proposed binding treaty on business & human rights

Author: Peter Hood & Julianne Hughes-Jennett, Hogan Lovells, on JD Supra

"UN Working Group publishes revised draft of business and human rights treaty: commentary on scope, prevention and legal liability", 26 Jul 2019

On 16 July, a UN working group published a revised draft of its business and human rights treaty (following the “Zero” Draft published in July last year). Our post looks at some of the key developments, with a particular focus on its scope and the provisions on prevention and legal liability. We conclude by asking what happens next and providing some practical guidance to business...

The Revised Draft adopts a different, albeit ambiguous, formulation. Article 3 provides that it shall apply to “all business activities, including particularly but not limited to those of a transnational character”, suggesting that the scope of the treaty has been expanded to cover all business activity. However, “business activities” is defined in Article 1 as “any economic activity of transnational corporations and other business enterprises, including but not limited to productive or commercial activity […]”, suggesting that purely domestic business activity remains out of scope...

Article 6 of the Revised Draft introduces a new provision which would require States to establish liability for failing to prevent another person with which it has a contractual relationship from causing harm to third parties, irrespective of where such harm takes place. Such liability would only arise where there is either control over the contract counter-party or where the human rights violation or abuse is reasonably foreseeable...

Like the Zero Draft, the Revised Draft requires that States take certain steps to establish criminal liability for involvement in human rights abuses which amount to criminal offences...



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22 July 2019

Commentary: Clearer, Stronger, Better? – Unpacking the 2019 Draft Business and Human Rights Treaty

Author: Nadia Bernaz, Right as Usual

"Clearer, Stronger, Better? – Unpacking the 2019 Draft Business and Human Rights Treaty", 19 Jul 2019

The Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights has just published a new draft business and human rights treaty. This post focuses on a few selected points, many of which I consider improvements compared to the 2018 Zero Draft. The new draft is clearer, stronger, and arguably better than the 2018 version.

(1) Clearer language and structure

Overall, the 2019 draft is clearer and more precise than the previous version. I have picked a few examples but a close reading of the text should reveal many more. Drafters fleshed out the definitions article, and polished up the language. For instance, under Article 8 on Statute of Limitations, the previous text stated that “[d]omestic statutes of limitations (…) should not be unduly restrictive and shall allow an adequate period of time for the investigation and prosecution of the violation” (Article 6, 2018 Zero Draft). In the new text, this becomes: those statutes of limitation “shall allow for a reasonable period of time for investigation and prosecution of the violation”. “Unduly restrictive”, a subjective requirement likely to cause problems, was dropped; and “adequate” was replaced by a more precise term, “reasonable”. Similarly, the necessity for States Parties to “protect the[...] policies and actions” they adopt/take “from commercial and other vested interests of the [business sector]” (Article 15(3), Zero Draft), which was likely to antagonize certain states, is now gone...

(2) Stronger provisions

The new text also contains stronger provisions from a human rights perspective, as well as key additions. In the preamble, a new paragraph recognizes “the distinctive and disproportionate impact of certain business-related human rights abuses on women and girls, children, indigenous peoples, persons with disabilities, migrants and refugees, and the need for a perspective that takes into account their specific circumstances and vulnerabilities.” Under Article 31(2) of the Vienna Convention on the Law of Treaties, preambles may be used to provide context in treaty interpretation. Therefore, this paragraph could have important consequences on how operative provisions of the treaty are interpreted in the future...

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