Five ways the new draft treaty on business and human rights can be strengthened
9/9/19 - Doug Cassel, Emeritus Professor of Law, University of Notre Dame
In the second of a two-part article, Doug Cassel outlines the five areas that need addressing to deliver on the promise of the new draft treaty.
This commentary is part of the Reflections on the Revised Draft Treaty blog series. Our Debate the Treaty Blog highlights a diverse range of voices from across the globe on the proposed legally binding treaty on business and human rights, which we believe is complementary to the implementation of the UN Guiding Principles.
This post is co-published by the Business and Human Rights Journal Blog as part of its symposium on the revised draft of a binding treaty on business and human rights. You can read part 1 of this piece here.
Diverse stakeholders will raise many points for further negotiation in the revised draft of 22 articles and numerous sub-articles. Here I will flag only five concerns, all of which can be resolved with modest revisions to the text: definition of human rights, supply chain, complicity, burden of proof, and State-owned enterprises.
1. Definition of Human Rights
The revised draft contains no definition of human rights. While defining human rights for purposes of the treaty may be challenging and contentious, the task probably cannot be avoided. States and businesses will want a level playing field and legal certainty. Victims will not want to leave the scope of human rights protected by the treaty to the vagaries of national politics and legislation. Many definitions have been proposed by commentators. Although none is perfect, defensible lines can and do need to be drawn.
2. Supply Chain
The revised draft (article 5.2) provides that states shall take measures necessary to ensure that all businesses conduct human rights due diligence, with regard to actual or potential human rights violations or abuses that may arise from their own business activities, or from their “contractual relationships”. Limiting due diligence to contractual ties is too narrow and is inconsistent with the UN Guiding Principles.
Principle 13 of the Guiding Principles requires enterprises to seek to prevent or mitigate adverse impacts to which they are directly linked by their “business relationships”. These relationships include not only contractual relationships, but also those with “business partners, entities in its value chain, and any other non-State or State entity directly linked to its business operations, products or services.” (Principle 13 Commentary.)
The revised draft (article 6.9) requires states to establish “legal liability” for businesses which engage in “complicity” in certain international crimes or in crimes defined by a state’s domestic law. However, nothing in the draft explicitly requires “civil liability” for businesses which are complicit in human rights violations committed by states, such as by funding or otherwise aiding and abetting the principal violators – an all too common scenario.
Nor is civil liability expressly provided for complicity in human rights violations which may have serious impacts, but which are not among the international crimes listed in article 6.7 and may not be crimes under domestic law. Civil liability for complicity may well be included in the phrase “legal liability” (article 6.9).
Civil liability for complicity is also consistent with the requirement that states establish a “comprehensive and adequate system of legal liability” (article 6.1). However, the issue is too important to leave to debatable interpretations. Civil liability for complicity in human rights violations should be made explicit.
4. Burden of Proof
Like the zero draft (article 10.4), the revised draft (article 4.16) provides for reversal of the burden of proof as follows:
“Subject to domestic law, courts asserting jurisdiction under this (Legally Binding Instrument) may require, where needed, reversal of the burden of proof for the purpose of fulfilling the victim’s access to justice and remedies.”
Reversal of the burden of proof is allowed in certain situations by both international human rights law (e.g. on exhaustion of domestic remedies) and domestic law (e.g. UK Bribery Act). However, as drafted, this treaty provision is too vague and open-ended.
At minimum, in criminal cases, any reversal of the burden of proof should be made subject to the presumption of innocence in the International Covenant on Civil and Political Rights (article 14.2).
Authoritative guidance from the Human Rights Committee instructs that the presumption of innocence “imposes on the prosecution the burden of proving the charge, guarantees that no guilt can be presumed until the charge has been proved beyond reasonable doubt, ensures that the accused has the benefit of doubt, and requires that persons accused of a criminal act must be treated in accordance with this principle” (General Comment 32, par. 30).
Even in civil cases, greater clarity should be required. For example, the burden of proof might be reversed only after a threshold showing of an adverse human rights impact and causation is made by a claimant, and then only with regard to evidence within the unique possession of a defendant enterprise, such as its internal communications and controls, provided that the information is not otherwise reasonably accessible by the claimant.
5. State-owned Enterprises
There remains a possible ambiguity as to whether the revised draft covers State owned enterprises (SOEs). SOEs are not explicitly mentioned in the revised draft, either as included or as excluded.
Arguably SOEs are implicitly included in the definition of “business activities” covered by the treaty: “’Business activities’ means any economic activity of transnational corporations or other business enterprises, including but not limited to productive or commercial activity, undertaken by a natural or legal person, including activities undertaken by electronic means.” (Article 1.3.)
This reading is supported by the deletion of the words “for profit,” which appeared before “economic activity” in the zero draft (article. 4.2).
To remove any doubt, however, it would seem sensible in further negotiations to pursue an explicit inclusion of SOEs. They are too important in the global economy not to be covered by the treaty. As of 2013, ten percent of all corporations on the Forbes 2,000 list were majority owned by states; the figure rose to 20 percent if corporations that were minority owned by states were included.
(European Commission, State-owned Enterprises in the EU (2016).) SOEs accounted for nearly 90 percent of Norway’s GDP in 2012, and about a quarter of China’s GDP in 2018. The gross revenues of State oil companies alone accounted for over 40 percent of Saudi Arabia’s GDP in 2018, about a third of Colombia’s, and about seven percent of Mexico’s. The exports alone of Ecuador’s State oil company were about seven percent of the country’s GDP in 2018.
The New Draft in Brief
A comprehensive UN treaty, with effective provisions for prevention and remediation of adverse human rights impacts in the context of business activities, could make a potentially important contribution to the protection of human rights. The revised draft represents a significant improvement on the zero draft. It provides a serious and substantial basis for further negotiations.
Active participation in the negotiations by states committed to human rights could advance the objective of achieving an effective and broadly endorsed treaty.
You can read part 1 of this piece here.
Doug Cassel is Emeritus Professor of Law, University of Notre Dame, USA