Experts reflect on the Zero Draft of the legally binding treaty on business and human rights

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Auteur: Luis Yanes, Opinion Juris

[N]either the draft, nor any posts regarding it, have addressed one of the mayor risks that all UN human rights instruments have historically presented, this is, the vulnerability to human rights counter-diplomatic tactics...

The draft zero repeats many of the mistakes... we have seen with the current human rights treaties. It repeats the language used by other treaties...in regards to reservations. Hence, it needs to develop a more sophisticated approach, whereas a clear mechanism to object incompatible reservations is in place, or, whereas the Committee is provided with the authority to determine incompatibilities.

The risk of non-compliance is ultimately unavoidable with the current draft zero. Thus, it is essential that the treaty contains clear provisions that require state parties to incorporate into domestic law the set of rights and obligations enshrined in the instrument. It is also essential that its Committee is given sufficient teeth to be able to ensure that non-complying states are held accountable.

Civil society, academia and those states that champion human rights must be ready to use their knowledge and skills to make sure that a treaty on B&HR rights is less vulnerable to counter-diplomatic tactics...

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Auteur: Sudden Chakravarti, LiveMint

The formal name for the work-in-progress treaty is: "Legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises."...[A major issue] is containment of the treaty to transnational businesses...

This logic may be untenable in a world in which definitions of transnational and national are increasingly fuzzy with confounding webs of holding companies, joint ventures and subsidiaries. Moreover, "this restrictive approach risks creating an uneven playing field for domestic and transnational enterprises..." write Julianne Hughes-Jennett, Peter Hood and Alison Berthet of Hogan Lovells' Business and Human Rights practice. "It may also deprive victims of a means to access a remedy against a domestic enterprise..."

The other key concern is of a watered-down treaty, more “face” than substance, as developed countries and business lobby groups undermine it as they have from the inception of the treaty process. All it might do is supplement current practice: nudge litigants to demand greater remedial action, and for businesses to be more vigilant about rights violations, supply chain management and potential liability. But even that will have been productive. Reducing bent corporate behaviour is its own virtue.

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Auteur: Rene E. Ofreneo, Business Mirror

Under globalization, big corporations operating across borders have lost their soul...The above complaints are not new and have been aired by trade unions and CSOs in numerous global, regional and national forums for at least half a century...One notable outcome from the early campaign for rules was the adoption in 1977 by the International Labor Organization of the "Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy"...The 1977 ILO Declaration is fairly comprehensive in scope. The problem is that the Tripartite recommendations are non-binding...Meanwhile, the trade unions, CSOs, Church and consumer groups in the developed countries have joined the global campaign to curb TNC abuses by pressuring their own home-grown TNCs to stop violating labor, human and environmental standards in countries where the TNCs operate...It is against the above historical backdrop that a number of TNCs began adopting their respective Codes of Conduct...However, these individual Codes of Conduct cannot substitute for a global binding standard to govern TNC behavior...And now, the latest news: The UN is debating a proposed UN treaty on TNCs and human rights. The proposal, originally submitted in 2014 by Ecuador and South Africa, seeks to elaborate an international binding instrument to regulate the activities of TNCs and "other business enterprises" (OBEs). Will the UN be able to adopt this?...Or will everyone wait for another half a century before a binding one is finally adopted?

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Auteur: Doug Cassel, Letters Blogatory

...The draft treaty text...zeroes in on what victims need most.  To prevent human rights violations, states parties must commit to require their companies to exercise human rights due diligence...[B]oth home and host states of companies engaged in “business activities of a transnational character” will be required to provide remedies and to cooperate in their enforcement...The new text also addresses the practical realities of access to justice...[T]he treaty will be implemented and enforced by States parties.  State laws are to mandate human rights due diligence by business and to afford victims access to judicial remedies...

[T]he new text contemplates no binding international enforcement mechanism...International oversight will...combine the self-reporting and non-binding review characteristic of early human rights treaties governing states, with the more recent innovation of a conference of states parties...States should find the draft treaty text appealing in concept...Global business organizations are not likely to welcome any treaty that imposes mandatory human rights due diligence and remedial obligations. Still,...[t]he preamble of the new text makes explicit...that the “primary responsibility” for human rights...remains with states. Gone is the reference in the “elements” to direct imposition of international law obligations on business...The new text drops the claim in the “elements” that this treaty overrides trade and investment treaties...

Overall, the new text seeks to strike a balanced compromise among the interests of human rights claimants, states and business...[I]t will likely provoke significant objections...from human rights NGO’s. ..[A]lthough some provisions need to be clarified, the proposed text shows a degree of sensitivity to avoiding the imposition of unreasonable obligations on business. The proposed treaty’s coming into force...would accelerate existing momentum for states to take more seriously their legal obligations to protect human rights from business abuse, and would encourage business to strengthen their human rights due diligence procedures...

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Auteur: Alison Berthet, Peter Hood, Julianne Hughes-Jennett, Hogan Lovells

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Would the treaty apply to all businesses or just those of a “transnational” character?
...The draft treaty adopts the more restrictive approach, limiting the scope of its application to “business activities of a transnational character”...This restrictive approach risks creating an uneven playing field for domestic and transnational enterprises...It may also deprive victims of a means to access a remedy against a domestic enterprise...

How would the treaty bind companies?
...[T]he treaty is intended to be signed by States and envisages that the provisions regulating business activity will be enforced by the State Parties...[P]rivate persons (natural or legal) would not be directly bound by the provisions of the treaty...

What is the nature and extent of corporate liability?
The draft instrument requires State Parties to provide...for criminal, civil and administrative liability for violations of human rights in the context of transnational business activities and for effective criminal and non-criminal sanctions...

Due diligence requirements
...[D]raft Article 9 defines due diligence as including monitoring, identifying, assessing, preventing and reporting on the human rights impacts of business activities...The draft instrument requires states to ensure that businesses incorporate these due diligence requirements in “all contractual relationships which involve business activities of transnational character“...

Where can claims be brought?
...[T]he draft instrument vests jurisdiction in the courts of the State where either (1) the alleged acts or omissions occurred or (2) the natural or legal person(s) alleged to have committed the acts or omissions are domiciled (Article 5). It also requires states to incorporate...appropriate provisions for universal jurisdiction over human rights violations which amount to crimes...[T]he draft treaty also includes provisions requiring State Parties to mutually recognise and enforce domestic judgments made in another State Party...

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Auteur: Public Services International

...Although the draft release is good news for campaigners, the path towards the application of a legally binding instrument remains very difficult.  Major nations including the USA and many EU states, have actively worked against efforts by countries such as Ecuador to advance the debate.  The text, which will be debated in the 4th session of the Working Group, highlights many of the substantive issues discussed in previous sessions and represents a good starting point for the next phase of the debate...PSI [Public Services Intl.] hopes that in the forthcoming discussions the consensus to retain the fundamental principles in the final text – such as the primacy of human rights obligations over trade and investment agreements, protection of all human rights recognized in international instruments, access to justice and effective remedy for the victims – will prevail...The success...in this process for the adoption of a binding treaty on human rights also depends on the moral authority of the main supporters and promoters of the instrument...

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Auteur: Carlos Lopez, Senior Legal Advisor at the International Commission of Jurists via Opinio Juris

The first draft of one of the most important international human rights treaties of recent years, and instrument addressing on business and human rights has just been released in Geneva by Ecuador’s Ambassador acting as Chair of the process.  The “zero draft” strongly focuses on the key issue of access to justice and remedy for those who allege harm by a business enterprise...At the moment...business human rights obligations are only recognized as such in the preamble...Although the proposed treaty would create obligations only for States to take legislative and other measures to make business legally accountable and for victims to have access to remedy, the State role and the need of legal accountability and remedies also in the context of State commercial activity is generally overlooked...Regrettably the draft treaty pays scant attention to the role of the State and the need for accountability and remedy in that context...

...[T]he draft fails to provide clarity on what rights are to be covered under the treaty...[T]he zero draft addresses only the conduct of transnational corporations and other business enterprises that have “transnational activities”.  Actions or omissions by businesses acting only within domestic jurisdictions are omitted...Under the current scope and definitions only criminal conduct...that occurs in more than jurisdiction may be punishable...[T]he draft treaty, while clearly deficient here, will reassure those concerned that the operations of transnational corporations may not be properly addressed if they were to be embedded within broad and vague norms...

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Auteur: Carlos Lopez, Senior Legal Advisor at the International Commission of Jurists via Opinio Juris

The draft treaty takes a somewhat sweeping approach to the issue of preventative measures to be required by States from business enterprises (article 9).  What States are asked to require from businesses is framed as a sort of (human rights) due diligence...The draft treaty...adds “meaningful consultation” with affected groups, the requirement of financial security to cover potential compensation claims, and the incorporation of some measures into businesses’ transnational contracts...The draft makes a positive point by providing for “effective national procedures” to “enforce compliance”...

The core of the draft treaty is perhaps its provisions on legal liability for transnational corporations and the rights of victims to remedy and reparation...[R]eferences to “environmental remediation” and “ecological restoration” are also in need of clarification...[T]he sweeping provision that “in no case shall victims be required to reimburse any legal expenses of the other party to the claim” stands out as potentially controversial...The draft treaty also makes provision for the establishment of a Fund for Victims..A key issue...is the parent-subsidiary company relationship and the corresponding legal responsibilities...The various grounds under which the liability of parent companies may be established in relation to wrongs by their subsidiaries are remarkable for their flexible definition and their alternative application...[T]his is going to be one of the treaty sections that will attract heightened attention...[A] special provision on corporate criminal liability is a step forward..., but the language needs serious work to address difficulties in precision and feasibility of objectives...

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