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
on 26 June 2014 the UN Human Rights Council adopted Ecuador’s proposal to
establish an inter-governmental working group mandated ‘to elaborate an
international legally binding instrument to regulate, in international human
rights law, the activities of transnational corporations and other business
enterprises’. The proposal was adopted by 20 to 14 votes, with 13 abstentions,
and four years later, in July this year, the working group published the first
draft of the treaty (from herein referred to as the ‘treaty’). Shortly after, the draft
Optional Protocol to the draft treaty was released. The Optional Protocol
focuses on access to remedy for victims of human rights abuses by businesses.
This first blog of a series of articles
dedicated to the proposed BHR Treaty provides an overview of the main elements
of the draft. It will be followed by a review of the reactions to the Draft,
and a final piece outlining some recommendations for the upcoming negotiations.
of the Treaty
Preamble (Treaty, Article 1)
The preamble of the treaty makes it clear
that it is the primary responsibility of the States to ‘promote, respect and
fulfill human rights and fundamental freedoms’, including human rights abuses
committed by businesses. Accordingly, the treaty seeks to indirectly impose
obligations on businesses by calling on State Parties to adopt legislation that
is consistent with the treaty requirements.
Purpose (Treaty, Article 2)
The purpose of the treaty is to ‘strengthen
the respect, promotion, protection and fulfillment of human rights’ and to
‘ensure effective access to justice and remedy to victims of human rights
violations’ in the context of business activities of transnational character,
and to ‘advance international cooperation’ so that States fulfill their
obligations under international human rights law.
Scope and jurisdiction (Treaty, Articles
3 to 5)
The treaty will apply to ‘human rights
violations in the context of any business activities of a transnational
character’. ‘Business activities of a transnational character’ is defined
to mean ‘any for-profit economic activity … undertaken by a natural or legal
person … that take place or involve actions, persons or impact in two or more
natural jurisdictions’. Accordingly, unlike the UN Guiding Principles on
Business and Human Rights, the treaty does not apply to and bind businesses
that only have domestic activities.
Jurisdiction for acts or omissions arising
under the treaty vests in the court of the State where the acts or omissions
occurred or where the alleged perpetrator (whether a natural or legal person)
is domiciled. The alleged person is considered to be domiciled at the place
where it has its: ‘(a) statutory seat; (b) central administration; (c)
substantial business interest; or (d) subsidiary, agency, instrumentality,
branch, representative office or the like.’
Rights of victims (Treaty, Article 8)
‘Victims’ are defined to mean persons who
individually or collectively alleged to have suffered harm, including physical
or mental injury. The treaty recognises that victims have the right to ‘fair,
effective and prompt access to justice and remedies in accordance with
international law’, including restitution, compensation and environmental
remediation. It also imposes a number of obligations on State Parties to the
treaty, namely, State Parties must:
Guarantee the rights of victims
to present claims to their court.
- Investigate all human rights
violations effectively, promptly, thoroughly and impartially and take action
against alleged perpetrators.
- Ensure their laws do not unduly
limit the right of victims to appropriate access to information relevant to the
pursuit of remedies.
- Provide proper and effective
legal assistance to victims throughout the legal process (for example, by
informing victims of their procedural rights).
- Assist victims in overcoming
financial barriers to commencing proceedings.
- Establish an International Fund
for Victims to provide legal and financial aid to victims.
- Provide effective mechanisms
for the enforcement of remedies.
- Protect victims, their representatives, families and witnesses from
with their privacy, and from intimidation and retaliation.
The treaty also provides that in no case
will victims be required to pay the legal expenses of the other party to a
Human rights due diligence (Treaty, Article
A key article of the treaty requires State
Parties to ensure that their domestic legislation requires all businesses to
which the treaty applies to undertake due diligence throughout their business
activities. The due diligence must take into account ‘the potential impact of
human rights resulting from the size, nature, context of and risk associated
with the business activities’ (including the activities of its subsidiaries and
The due diligence undertaken by businesses
human rights violations within the context of its business activities.
b) Monitoring the human rights impact of its business activities.
and assessing any actual or potential human rights violations that may arise
through its activities.
Reporting publicly and periodically on
non-financial matters (for example, environmental and human rights matters).
pre and post-environmental and human rights impact assessments covering its
the requirements set out in a) to e) above in its contractual relationships.
out ‘meaningful consultations with groups whose human rights are potentially
affected by the business activities and other relevant stakeholders’.
and maintaining financial security, if required.
Failure to comply with the above
requirements will result in commensurate liability and compensation. However, the treaty provides
that State Parties can exempt certain small and medium-sized businesses from selected
due diligence obligations to avoid imposing undue administrative burdens on
Legal liability (Treaty, Article 10)
The treaty requires State Parties to ensure
that both natural and legal persons can be held criminally, civilly or
administratively liable for human rights violations undertaken in the context
of business activities through their domestic law.
The treaty also sets out the principles for
civil and criminal liability. With respect to civil liability, businesses to
which the treaty applies will be liable for harm caused by human rights
violations in the context of their business activities in various circumstances,
the extent it exercises control over the operations; or
the extent it exhibits a sufficiently close relation with its subsidiary or
entity in its supply chain and where there is strong and direct connection
between its conduct and the wrong suffered by the victim; or
the extent risk have been foreseen or should have been foreseen of human rights
violations within its chain of economic activity.
With respect to criminal liability, States
are required to ‘provide measures under domestic law to establish criminal liability for all persons with
business activities of a transnational character that intentionally, whether
directly or through intermediaries, commit human rights violations that amount
to a criminal offence’. Where criminal responsibility is not applicable to
legal persons in the legal system of a State Party, that Party must ensure that
legal persons are subject to ‘effective, proportionate and dissuasive
non-criminal sanctions, including monetary sanctions or other administrative
Mutual legal assistance and
international cooperation (Treaty, Articles 11 and 12)
must ‘cooperate in good faith to enable the implementation of commitments'
under the treaty and the fulfilment of the treaty’s purposes. They must afford
one another the widest measure of mutual legal assistance in initiating and
carrying out investigations, prosecutions and judicial proceedings’. This
includes taking evidence from persons, executing searches and seizures and
facilitating the freezing and recovery of assets. However, a narrow exception
to mutual legal assistance is also provided.
With respect to international cooperation,
State Parties must undertake ‘appropriate and effective measures’ to allow for
international cooperation among the States. This may include sharing
experiences, good practices and challenges.
Enforcement and remedies (Treaty, Article
14; Optional Protocol, Articles 1, 3 to 8, 10 and 11)
The treaty does not contemplate any
international enforcement or complaint mechanism. Instead, it establishes a monitoring
and oversight mechanism – a Committee of experts. The Committee will perform a
number of functions including making general comments on the treaty,
considering and providing concluding observations and recommendations on
reports submitted by State Parties and providing support to State Parties in
order to allow for the implementation of the treaty.
In contrast, State Parties that ratify the
Optional Protocol recognise ‘the competence of the Committee … to receive and
consider communications from or on behalf of individuals or groups of
individuals’. If the Committee receives a communication, it must bring it to
the attention of the State Party concern and the involved person conducting business activities
who can then submit written explanations or statements clarifying the matter
and the remedy within six months. The Committee can then designate its members
to carry out a confidential inquiry into the matter and report to the Committee
urgently. The findings of the inquiry will then be provided to the State Party
and the involved person conducting business activities, together with comments
Further, pursuant to the Optional Protocol,
State Parties are required to establish a National Implementation Mechanism (NIM)
‘to promote compliance with, monitor and implement’ the treaty within two
years. The functions of the NIM are to: (a) make the treaty content known to
the general public, business and victims; (b) cooperation with other national
institutions, foreign NIMs and civil society organisations ‘to raise awareness
on the implementation’ of the treaty; and (c) make recommendations to a State
Party’s competent authorities.
As such, NIMs will have the power to:
- request necessary information
from a State Party in relation to the implementation of the treaty, including
financial and non-financial information. It also has the power to request
information from other State Parties;
- conduct reviews on the
implementation of a State Party’s due diligence obligations when requested by
‘victims, natural or legal persons conducting business activities of a
transnational character or all other persons with a legitimate interest’, or
where the NIM deems it necessary;
- where non-compliance is
identified, provide recommendations to natural or legal persons conducting
business activities in order for it ‘to bring its operation into compliance,
[or] inform the competent authorities about such conduct or omission’;
- receive, consider and investigate complaints of human rights
violations alleged to
have been committed by natural or legal persons conducting business activities
brought by victims or a group of victims, their representatives or other
interested parties’, and assist parties to reach an amicable settlement; and
- monitor the compliance of parties
that have reached an amicable settlement, and, in the event of any
non-compliance, communicate the non-compliance to the Committee of experts, ‘without
prejudice to the right to institute appropriate judicial or administrative
procedures against the non-complying party.’
Implementation (Treaty, Article 15)
In order to implement the treaty, State
Parties are required to, inter alia, ‘take all necessary legislative, administrative or other
action’ to ensure the effective implementation of the treaty. The treaty does
not elaborate on how State Parties are to do this in practice.
So where to from here? The working group’s
next session is scheduled for 15 to 19 October 2018 in Geneva during which it
will discuss the treaty and Optional Protocol. While the treaty and Optional
Protocol are a step in the right direction to imposing human rights obligations
on businesses there are still gaps that it needs to address, which will be
explored in the next blog post.