Editor’s
note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of
European and International Human Rights Law at Leiden University in the
Netherlands. Prior to commencing the LLM, she worked as a business and human
rights solicitor in Australia where she specialised in promoting business respect for human rights through engagement with
policy, law and practice.
From 15 to 19 October 2018, the fourth session of the open-ended
intergovernmental working group on transnational corporations and other
business enterprises with respect to human rights took place in Geneva. 92 UN States
participated in the session along with a range of stakeholders, including
intergovernmental organisations, business organisations, special procedures of
the Human Rights Council and national human rights institutions. The focus of
the session was on the zero draft of the proposed binding business and human
rights treaty (from herein referred to as the
‘treaty’).
This blog sets out the key views and
suggestions made by those in attendance with respect to the treaty during the
session.[1]
Issues and areas of concern raised at the session generally aligned with the critiques
raised by commentators on the first draft of the treaty (which are set out in a
previous
blog).
Key Comments
on the Treaty
The UN Deputy Commissioner, Kate Gilmore, opened
the session by welcoming the treaty and noting that the draft would form the
basis of substantial negotiations. She stated that the ‘treaty should focus on
the needs of people affected by business-related human rights abuses and should
take into account the differential impacts such abuses have on different groups
of rights-holders.’
Both states and business organisations
raised the importance of the treaty aligning with the UN Guiding Principles on
Business and Human Rights (UNGPs). While the influence of the UNGPs on the
treaty was recognised, some states argued that the treaty undermines the UNGPS
because ‘provisions of the draft diverged from the accepted approach of the
UNGPs.’ For example, with respect to article 9 which imposes obligations on
companies to undertake due diligence, it was noted that the article ‘departs
from the UNGPs’ as it focuses on ‘results rather than conduct’. Some states
further noted that the treaty misses or alters some of the steps in the due
diligence process set out in the UNGPs and adds new elements. Accordingly,
there were several calls for the treaty to more closely align with the ‘UNGPs
and, in particular, for article 9 to align with the ‘concepts and terminology’
of the UNGPs.
With respect to the imposition of human
rights obligations on businesses, many states appreciated that the treaty does
not impose obligations directly on businesses, but rather recognises that the
‘primary responsibility to promote, respect, protect and fulfill human rights
and fundamental freedoms lies with States’. Interestingly, one state and
several NGOs considered that it would be ‘unproblematic’ to directly impose
obligations on businesses under international law.
The scope of businesses covered by the
treaty was subject to scrutiny by many in attendance at the session. The scope
was criticised for being ‘too narrow’ in its focus on business activities of a
transnational character. It was proposed that all businesses should be covered
by the treaty as this would be consistent with the UNGPs and because ‘the
structure or nature of a company is irrelevant to victims’ and ‘they should be
entitled to access to remedy regardless of the company committing the abuse’. It
was also noted that ‘many multinational companies own or have relationships
with strictly domestic companies, and that, in practice, it is difficult to
differentiate between transnational and national companies’. The issue noted by
Professor John Ruggie with the restriction to “for-profit” economic activity
arguably excluding state-owned enterprises was also raised by some states.
With respect to the provision on legal
liability, there were divergent views raised during the session. Some states
and particularly NGOs welcomed the inclusion of civil, criminal and
administrative liability in the treaty. Other states raised concerns with the
impossibility of criminal liability on businesses in circumstances where such
liability was not possible in their jurisdictions. There were several calls for
greater clarity of the legal liability provision. For example, as noted in a previous
blog, the use of the words
and phrases ‘control’, ‘sufficiently close’, ‘strong and direct connection’ and
‘foreseen’ are not defined in the treaty and therefore the meaning of these
terms is unclear. Also, there were calls for a clear distinction to be made on
aspects of corporate law, such as the notion of separate legal personality, and
when the corporate veil can be pierced.
Differing views were raised in relation to
the treaty’s interaction with future trade and investment agreements. The
report notes that one delegation ‘stressed the importance of affirming the primacy of human
rights over such agreements’. The current draft of the treaty requires states
to agree that any future trade and investment agreements not contain provisions
that conflict with the implementation of the treaty and be interpreted in a
manner that is ‘least restrictive on their ability to respect and ensure their
obligations under the treaty’ (see sub-articles 13(6) and (7) of the treaty). Some
NGOs requested that the primacy of human rights over these agreements be explicitly
stated in the statement of purpose of the treaty. However, some states
expressed concern that ‘such an affirmation would prioritize one branch of
international law over another and could restrict States’ negotiating
positions.’
While much of the discussion during the
session focused on the specific provisions of the treaty, at a more general
level, those in attendance called for ‘more clarity and precision in the
language’ of the treaty. Particular attention was given to the lack of clarity
of the articles covering scope, definitions, jurisdiction, applicable law,
rights of victims, legal liability and international cooperation.
Next
Steps
So where to from here? States and other
stakeholders have been invited to submit their comments and proposals on the
treaty by the end of February 2019. The Chair-Rapporteur will prepare a revised
draft of the treaty on the basis of the discussions during the session by the
end of December 2018 and present the text by the end of June 2019. Negotiations
on the next draft of the treaty will take place during the fifth session of the
working group in October 2019 (the dates of the fifth session have not been
announced as at the date of this blog). The Asser Institute will continue to
report on developments of the treaty as information becomes available.