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Commentary: New Binding Treaty draft provides companies a glimpse into the future of legal liability for human rights abuses

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"Draft Business & Human Rights Treaty, Take 3", 20 August 2020.

With little fanfare, an Intergovernmental Working Group (IGWG) released the Second Revised Draft of a proposed binding treaty on business and human rights.  This is third iteration of the proposed treaty...it still maintains a handful of provisions that...may cause great alarm for companies and many prospective states who might become party to the treaty in the distant future once it is finalized, adopted and ratified.  For example,

  • It includes within the definition of “Human rights abuse” environmental issues...
  • It also precludes defenses in civil cases based on forum non conveniens, commonly asserted in transnational tort cases...
  • It largely dismisses the corporate form and creates exposure for acts in a company’s supply chain...
  • It requires that companies conduct human rights due diligence to identify potential human rights risks and impacts, take steps to prevent and mitigate those risks and impacts, monitor the effectiveness of those steps, and report publicly on how they address actual or potential abuses.  The draft also includes a penalty provision for failing to meet these requirements, regardless of whether they are related to a human rights violation,but when a company does conduct relevant diligence, it does necessarily create a defense to liability...
  • And perhaps most significantly, it mandates that states create laws providing for criminal liability against companies “for human rights abuses that amount to criminal offences under international human rights law binding on the State Party, customary international law, or their domestic law.”...

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