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Analysis: Major changes introduced by the Second Revised Draft

"Ongoing discussions at UN level on a draft international treaty binding businesses on Human Rights related due diligence and obligations: Major changes introduced by the Second Revised Draft", 14 October 2020.

The Second Revised Draft...is a step forward before the adoption of a UN Legally Binding Instrument in the field of business and human rights...

A broader scope

The Second Revised Draft includes State-owned enterprises in the definition of legal entities undertaking business activities which clarifies that domestic business activity is covered by the Draft Treaty. It also refers to “business relationship” instead of “contractual relationship”...

Due diligence and prevention

...Article 6(2) provides that business enterprises need to take appropriate actions not only to prevent, but also to effectively mitigate actual or potential identified human rights abuses in the context of business activities, including in their business relationships.

Legal liability

New Article 8 clarifies the system of purported legal liability for legal entities and individuals carrying out business activities that might lead to human rights abuses. Both home and host States shall ensure that their domestic law provides for criminal or a functionally equivalent liability where legal entities or individuals carrying out business activities have caused or contributed to human rights abuses. This is a major change, since many States Parties such as Argentina and Russia do not recognise the criminal liability of legal entities.

New jurisdiction rules

...Business enterprises can now be sued under the Second Revised Draft Treaty where “an act or omission contributing to the human rights abuses occurred” provides a logical connection between the forum and the abuse. Most importantly, courts cannot use the doctrine of forum non conveniens to decline jurisdiction...

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