24 Sep Some Observations and Opinions on the “Zero” Version of the Draft Treaty on Business and Human Rights (Part II)
[Nicolás Carrillo-Santarelli is a Professor of Law at La Sabana University. This is Part II of a two-part post. The first can be found here.]
In part 1 of my analysis of ‘draft zero’ of a treaty on business and human rights I focused on the analysis of whether that version supports in any way the possibility of direct corporate human rights obligations under international law. While I will briefly refer to that aspect in this part as well, it will address other interesting proposals and elements of the draft. Thus, moving on to another noteworthy aspect, it is commendable that the draft indicates in article 3, regarding scope, that the “Convention shall cover all international human rights and those rights recognized under domestic law” (emphasis added). Reference to domestic law can be interpreted as giving prevalence to it when it is more favourable, according to the pro personae principle so developed in the Inter-American Human Rights system. And the allusion to all human rights is a welcome endorsement of Ruggie’s idea, expressed in his “Protect, Respect and Remedy” Framework that “business can affect virtually all internationally recognized rights. Therefore, any limited list will almost certainly miss one or more rights that may turn out to be significant in a particular instance, thereby providing misleading guidance”.
Another interesting element is the one concerning jurisdiction, which is of the utmost importance considering that States must protect victims from violations taking place within them. In that regard, article 5 states that States have jurisdiction in regards to acts of omissions within their territory or also have them in connection with natural or legal persons or associations “domiciled” in them, being it considered that businesses –and the other subjects referred to— are domiciled “at the place” where they have their “statutory seat, or central administration, or substantial business interest”, or other relevant connection. Much will depend on whether reference to jurisdiction “vested” in any of the two options –territorial or domicile— are understood as being mandatory or whether the latter is regarded as only conferring optional jurisdiction. Still, any of those alternatives are interesting (one evidently stronger) and permit litigation initiatives when territorial States prove weak or unable to hold corporations accountable despite their best efforts, thus reducing the impunity.
Article 6, on the other hand, begins by confirming that “[s]tatutes of limitations shall not apply to violations of international human rights law which constitute crimes under international law”, which echoes ICTY and Inter-American case law, among others, apart from instruments as the Convention on the Non-Applicability of Statutory Limitations to War Crimes and Crimes Against Humanity or the very Rome Statute of the International Criminal Court in article 29. Now, quite interestingly, article 6 goes on to add that “Domestic statutes of limitations for other types of violations that do not constitute crimes under international law, including those time limitations applicable to civil claims and other procedures, should not be unduly restrictive and shall allow an adequate period of time for the investigation and prosecution of the violation, particularly in cases where the violations occurred abroad” (emphasis added). This addition is very important for victims and their representatives, among others in light of the importance of providing remedies with prospects of effectiveness in relation to every violation, not just those which amount to international crimes. Such a pro-victim approach is also present in article 8, on the rights of victims, which include but are “not limited to” (important clarification) “[r]estitution, compensation, rehabilitation, satisfaction and guarantees of non-repetition” and also “[e]nvironmental remediation and ecological restoration where applicable, including covering of expenses for relocation of victims, and replacement of community facilities”, components that reflect contemporary developments in international human rights law, in which the recognition of the protection of environmental and other aspects has increased, as revealed by the recent advisory opinion OC-23/17 of the Inter-American Court of Human Rights.
The same article 8 adds that States “shall investigate all human rights violations effectively, promptly, thoroughly and impartially and, where appropriate, take action against those natural or legal persons allegedly responsible, in accordance with domestic and international law” (emphasis added). Reference to the observance of domestic and international law may be understood as referring to the conditions of a proper and due process-respectful investigation and action or as to the bases of such investigation and action (or both), which could be understood as further endorsement of the possible implied recognition of existing or future corporate responsibility under international law. Moreover, States are to establish a Fund to provide “legal and financial aid to victims”, something positive considering that resources are often a constraint for victims that may lead to lack of action; and States are also are required to guarantee and provide rights to present claims, access to information, assistance with procedural requirements, and other factors. Yet, controversially, it is indicated that in “no case shall victims be required to reimburse any legal expenses of the other party to the claim”, which, as Carlos López well pointed out, “stands out as potentially controversial since it may be seen as an incentive to frivolous litigation”. That aspect, along with the idea that “States shall not require victims to provide a warranty as a condition for commencing proceedings”, could be taken advantage of to smear the reputation of some corporations when there are no grounds.
Being due diligence such an important aspect of the ‘respect’ pillar of business and human rights, it comes as no surprise that the draft treaty expressly refers to it. Concerning it, article 9.2 indicates that such diligence includes, among others, but is not limited to, monitoring the impact of their activities, including those of their subsidiaries and “entities under its direct or indirect control or directly linked to its operations, products or services”; identifying potential violations; preventing such violations from taking place, even in connection with “financial contribution” they provide –an important aspect, as highlighted by discussions on financial complicity and the economic support certain dictatorships and non-state armed groups have received from some economic groups; and presenting public and periodic reports on non-financial matters that include, at the very least, environmental and human rights aspects related to risks and indicators –not related to financial or profit considerations of shareholders or business. Moreover, businesses would be –indirectly, through domestic action, as discussed above— required to conduct environmental and human rights impact assessments, and should reflect all due diligence requirements “in all contractual relationships”, which is important considering the potential internalization aspect and how reiteration and assumption of human rights considerations when preparing reports and thinking on how to embed them into operations may be conducive to a more proactive –or respectful, at least— corporate culture, which is crucial in order to make a change in the field, since normative considerations alone are not sufficient. Conversely, the interaction of norms, practice and supervision may yield much more positive results. Ignoring the former due diligence considerations can engage corporate responsibility under domestic law and entitle everyone “having a legitimate interest, in accordance with national law, [to] ensur[e] that” they are respected. Notwithstanding the potential beneficial impact those aspects may have, it is regrettable that draft zero mentions that “States Parties may elect to exempt certain small and medium-sized undertakings from the purview of selected obligations under this article with the aim of not causing undue additional administrative burdens.” I am afraid that this clause, if –hopefully not— it ends up remaining in the eventual final version of the instrument, may be abusively taken advantage of by developing or other States in order to favor the “impunity” of abuses perpetrated or assisted by ‘strategic’ corporations or in ‘strategic sectors’.
The draft version of the treaty being examined later addresses mutual cooperation requirements aimed at enabling the effective implementation of the treaty commitments, being that cooperation important indeed in an interdependent world in which isolated action against non-state and transnational abuses are often doomed to being ineffective, as the late Kofi Annan well pointed out. Mutual cooperation aspects mentioned in the draft include some related to evidence; freezing and recovery of assets; protection of witnesses, representatives and direct and indirect victims; or interpretation and implementation of International Human Rights Law, among others (art. 11). It is remarkable that the text mentions that States parties “shall designate a central authority that shall have the responsibility and power to receive requests for mutual legal assistance and either to execute them or to transmit them to the competent authorities for execution”, and that the recognition and enforcement of foreign judgments on treaty matters may only be refused if due process aspects were breached, if there is contradiction with a prior local judgment, or if public policy is compromised. The exceptional nature of refusal can potentially make the enforcement of corporate liability more likely. Concerning refusal of cooperation in criminal matters it is set forth that bank secrecy is no admissible ground for that refusal, as happens in other instruments on law enforcement instruments, according to Jan Klabbers.
Other noteworthy aspects include the mention in article 13 that the articles do not affect other international rights and obligations of the parties, being it still possible to add in future versions that they do not prejudge on neither affect obligations that corporations may have under international law, which can serve to stress that the article only partly addresses the first and third pillars –speaking with the jargon of the 2011 Guiding Principles—, being there also a missed opportunity to deal with arbitration and alternative dispute settlement mechanisms and their legitimacy conditions, especially considering that foreign investors do have access international remedies and there is an imbalance when it comes to their responsibilities. In connection with this, and in a move that may counter fragmentation tendencies and risks of the erosion of State regulatory powers in light of certain international economic law decisions –there are good exceptions—, article 13 states that Parties to the treaty commit to ensuring that “future trade and investment agreements they negotiate, whether amongst themselves or with third parties, shall not contain any provisions that conflict with the implementation of this Convention and shall ensure upholding human rights in the context of business activities by parties benefiting from such agreements”. Furthermore, it is also indicated that “existing and future trade and investment agreements shall be interpreted in a way that is least restrictive on their ability to respect and ensure their obligations under this Convention”. Such considerations are not to be underestimated, and can be relevant, among others, in terms of the systemic interpretation of the fair and equitable treatment in foreign investment law, considering that such standard is based on reasonable and legitimate expectations and, thus, State actions –provided they are not discriminatory or arbitrary— will be regarded as pursuing a legitimate objective and foreseeable when they aim to achieve objectives as those found in the treaty on business and human rights.
Another remarkable aspect is the proposed constitution of a Committee that, as with other Committees of the universal human rights system, can adopt general comments and review reports of the Parties. A positive development is the indication in article 14.4 that the adoption of such comments can be based on only on the examination of received reports and information received from Parties but also from “other stakeholders”, which opens up the door to a certain democratization and indirect access of victims and those affected by corporate misdeeds in the institutional development of the field. Such action and other initiatives of victims, representatives and civil society are indispensable in order to counter economic-motivated pressure and reaction of businesses and States –as attested by the shameless bully pressure of the Trump administration against Ecuador for the ‘sin’ it had when promoting a General Assembly resolution on breastfeeding, likely opposed by formula manufacturers, which is problematic in regions with no drinkable or safe water. On the other hand, doubling down on the narrow focus on State responsibilities, it is mentioned that the Committee will act in relation to “measures [States Parties] have taken to give effect to the undertakings under this Convention”.
On the other hand, if the treaty were to be adopted and authenticated as it is in the zero draft, States would also be required to have supervision mechanisms to ensure the effective implementation of the agreement, which clearly demands monitoring corporate conduct –which can have an impact on corporate culture. It is said that States must protect the agreement’s policies “from commercial and other vested interests of the [business sector]” (art. 15.3). The recognition of likely pressure based on profit and economic interests is brave, and highlights the necessity of attaching more importance to the protection of human dignity. It is also mentioned that special and intense care must be taken when there is proximity to risk in conflict zones, even in regards to “business relationships” (art. 15.4), reflecting some similarities to Global Compact considerations.
As to the subjects that can become parties to the treaty, just as it happens with the Convention on the Rights of Persons with Disabilities and its protocol, in a treaty dealing with problems posed by non-state actors another type of non-state actor is permitted to consent to being bound by the instrument, namely regional international organizations with “competence in respect of matters governed by [the] Convention […] within the limits of their competence” (arts. 15.10 and 15.11), based on their functional nature. Such organizations may formally confirm or accede to the treaty, depending on whether they were signatories to their authentication, and their voting power would amount to the number of its members parties to the treaty, although they would not be allowed to vote if its members already did, and vice versa.
The brackets in article 15.12 demonstrate that the minimum number of acceptances to being bound by the treaty has not even been provisionally ascertained, perhaps due to the tension between a desire for a fast entry into force, preventing the treaty from taking too long, if ever, to achieve such status, versus the consideration that a wide participation would make the treaty’s impact more meaningful and legitimate. On the other hand, it is noted that, unlike other human rights instruments –at least according to the Human Rights Committee—, the treaty admits withdrawals or denunciations (art. 15.19). Likewise, provided that the object and purpose of the Convention are respected, reservations are permissible under this treaty, echoing the general formula of the Vienna Convention on the Law of Treaties (art. 19) and unlike what the drafters of the Rome Statute of the International Criminal Court decided art. 120). As to authentic languages, the six official languages of the United Nations are considered as “equally authentic” (art. 15.20), choice that may be telling in symbolic ways, considering struggles of the ‘global south’ against actors from the ‘global north’ when it comes to corporate considerations, or perhaps in terms of the loss of soft power of the United States in the ‘Trump era’, taking into account how some Western States have far from supported the business and human rights treaty initiatives.
As a way of concluding, the aspects discussed herein, and others, make me consider some aspects of the draft as positive, others as requiring further work, and others as negative. Still, the treaty, whatever the outcome or content, should neither prevent nor stop potential developments in other regions and for a, as in the Inter-American human rights system, just as the Guiding Principles did not stop other initiatives, as the one being examined. Moreover, rather than covert economic and diplomatic pressure, the goal of negotiators, and the international community for that matter –being the international society one in which corporations have certainly power and can be deemed as true participants— should attach more importance to human rights than to economic interests. But alas, litigation and lex lata seem to suggest the opposite, when they easily permit the filing of economic claims but seem largely silent on the protection of other interests. Perhaps developments in the field of human rights and businesses –a more appropriate name than the usual business and human rights one— may help to change course, as needed.
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