The Proposed Binding Business and Human Rights Treaty: Summary of the Fourth Session of the Working Group - By Shamistha Selvaratnam

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.

[1] This blog has been prepared based on the draft report of the fourth session (accessible here).

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