The publication of the "Zero Draft" documents is positive news, but it calls for much further discussion

Maddalena Neglia, PhD, Head of the Globalisation and Human Rights Desk, International Federation for Human Rights (FIDH)

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'.

______________________________________________________________________

The publication of the "Zero Draft" of the proposed legally binding Treaty on business and human rights and its optional protocol is undoubtedly positive news for the parties involved in the negotiation process. It provides a valuable opportunity to have a substantive and constructive debate this month in Geneva, at the fourth session of the Open-ended Intergovernmental Working Group and beyond. Moreover, not only was the draft recognized as a serious base for discussion by several experts, it also provides steps forward in the push to improve business accountability and access to justice in the cases of corporate violations of human rights. The centrality of victims' rights, the obligation to adopt mandatory due diligence, and the focus on liability all constitute interesting features of the text. Nevertheless, many discussions and clarifications are still needed, on nearly all facets for it to be a valuable addition to the existing international framework on business and human rights.

Scope

After heated debates over which corporations were to be covered by the treaty, the draft seeks to find a solution defining « business activities of transnational character » as the specific scope of the treaty. As a result, the preamble is the only part of the text formulating a straightforward, general provision for all businesses to respect human rights. Because all types of companies can potentially commit human rights violations, this provision should beset in the operational part of the text as the basic duty that businesses have to comply with and that has already been affirmed by several existing authoritative international documents.[1].Moreover, the treaty would benefit from the introduction of a more specific reference to the necessity to avoid differences of treatment between corporations, as did for example the OECD Guidelines on Multinational Enterprises.[2]

Furthermore, there is a real concern that some parts of the text may exclude certain types of corporations from the scope of the treaty, such as state-owned enterprises, as rightly noted by Prof. John Ruggie.We need a clear definition of "economic activities," which should include State-owned enterprises. While it is critical that the definition of the subjective scope of the treaty broadly captures the activities of transnational corporations, it must also include national businesses whose structures or activities have a transnational element and as such have the same potential to cause human rights harms as transnational corporations.

Jurisdiction

Given the difficulty to hold companies accountable for human rights violations in courts, the dispositions on jurisdiction in the text are of crucial importance.The draft needs to offer further avenues to allow for successful adjudication of violations of human rights by businesses.

The article on jurisdiction sets four alternative criteria to define the domicile of a corporation.Yet, it is not clear from the proposed draft if this expansive understanding of the "domicile" of legal persons will be sufficient to establish the liability of the companysince other obstacles will remain in this respect such as the application of the ‘corporate veil’ doctrine in the event of abuses committed by subsidiaries.[3]It is therefore essential for article 5 to be directly linked and recalled by Article 10 on liability. 

Rights of victims and human rights defenders

While the draft has a specific focus on the rights of victims, it does not contain any specific reference to human rights defenders; moreover, the section on rights of victims repeatedly refers to the primacy of ‘domestic law’. Defenders are essential to ensure corporate accountability, but are also often the first victims of abuse and repression. This is particularly true of land rights defenders - who fight against land grabbing by businesses and states - and women, who are victims of differential, disproportionate, and often gender-specific forms of violence. The draft needs clauses that protect human rights defenders from criminalization and obstruction of their work, from abuses of rights by corporations, and from ambiguous or repressive laws being passed by States to hinder their action. The draft should recognize the work of human rights defenders as critical for ensuring victim’s access to justice and corporate accountability.

Prevention

The draft sets out the obligation on States to adopt mandatory Human Rights Due Diligence (HRDD)legislation for companies domiciled in their territory and/or jurisdiction. Nonetheless, it fails to incorporate a remedial mechanism in its definition of Due Diligence. While the obligation to "identify" and "prevent" actual or potential human rights violations is a positive step in the right direction, it is only a starting point. Due diligence provisions should also include obligations for companies tomitigate and take immediate remedial action against violations, without excluding the State’s obligation to hold the company accountable for such violations through civil and criminal liabilityThese are fundamental and complementary steps of corporate accountability and should be a necessary part of a HRDD.

Moreover, history shows that during situations of conflict, corporate actors tend to take advantage of grim realities for people on the ground as an opportunity for business. States have often used corporations to perpetuate their violations of international law as well. It is a positive element that after FIDH's repeated calls, the present draft addresses the link between corporate human rights abuses and conflict-affected situations in Article 15 on Final Provisions. However, the mere calls for ‘special attention’ by States without further defining the perimeters of this obligation are too weak. The future instrument needs operational procedures to identify and prevent the risks of violations of international law in conflict affected areas. More specifically, article 9 on Prevention should require States to impose an “enhanced due diligence” of companies in conflict-affected situations.

The draft optional protocol

To complement the draft treaty, a draft optional protocol was released, which provides for the creation of an international remedial mechanism. This optional protocol fills a critical gap that has been pointed out by several commentators since the release of the Zero Draft treaty. However, including these provisions in an optional document – as opposed to the actual draft treaty - runs the risk of weakening these remedial mechanisms.

Moreover, the provisions of the protocol need to be further clarified. For example, articles 8 to 12 give the international Committee the power to receive communications (complaints) by individuals or groups. However, these provisions barely provide for any follow-up after reception of such a complaint, except to demand that businesses and States provide the experts "written explanations or statements clarifying the matter and the remedy" within 6 months. Then, the committee "may"designate members to make a "confidential inquiry and to report to the Committee urgently" on the situation, and transmit its findings to the State and to the business. Later, the committee "may" decide to include a summary of the inquiry in the annual report on its activities to the General Assembly. No obligations to publish these findings or even to communicate them to the individual plaintiff are featured in the text, contrary to other existing treaty bodies. The optional protocol undeniablyneeds to be reinforced if the Committee is to be perceived as a trusted and efficient mechanism to remedy corporate human rights violations.

Conclusion

While the way towards a treaty is still long and complex, this draft constitutes a valuable opportunity to have a meaningful and constructive debate at the upcoming 4thsession of the IGWG in Geneva. Delegations, especially those who have repeatedly called for substantial discussions to take place, are now expected to engage and comment on the content of the draft, to improve the existing text and to make the protection of human rights more effective when faced with corporate abuse. 

It is a call that all those who have an interest in an economic development that is respectful of people and of the planet cannot miss. 

 

FIDH will regularly inform readers with news and analyses during the fourth session of the OEIGWG in Geneva from October 15 to 19thwith its “News from the negotiation” newsletter. To sign up: http://urlz.fr/7Rdx


[1] Such as the General Comment No. 16 of the Committee on the Rights of the Child, by the General Comments No. 23 and 24 of the Committee on Economic, Social and Cultural Rights, and by the UN Guiding Principles on Business and Human Rights

[2] OECD Guidelines for multinational enterprises, 2011 ed;, I.5 “The Guidelines are not aimed at introducing differences of treatment between multinational and domestic enterprises; they reflect good practice for all. Accordingly, multinational and domestic enterprises are subject to the same expectations in respect of their conduct wherever the Guidelines are relevant to both.”

[3] O. De Schutter in P. Alston, Human Rights and Non-State Actors, OUP (2005), p. 276.