Some Observations and Opinions on the “Zero” Version of the Draft Treaty on Business and Human Rights (Part I)

[Nicolás Carrillo-Santarelli is a Professor of Law at La Sabana University. This is Part I of a two-part post.]

As developments in the ‘Chevron’ saga have recently confirmed, there is a present imbalance when it comes to the position of corporations vis-à-vis international law. Indeed, businesses benefit from access to remedies and substantive guarantees under the regime of the protection of foreign investors, but apart from the Guiding Principles –which are insufficient insofar their second pillar on corporate responsibility is, in its own words, “distinct from issues of legal liability and enforcement, which remain defined largely by national law provisions in relevant jurisdictions”— there is a dearth of developments that indicate that corporations are also liable when they are complicit in or perpetrate human rights abuses. Curiously, some claim that corporations should be consulted on whether obligations of theirs in the field can be regulated, a –to me— baffling idea, considering that human rights ought to be respected by any actor that has the factual power to violate them, and asking an actor whether it ‘accepts’ to respect human rights is actually contrary to logic and article 30 of the Universal Declaration of Human Rights, as I have argued elsewhere.

Desiring to fill gaps and strengthen the protection of human dignity from corporations, and facing the opposition of industrialized states, the Human Rights Council adopted a resolution in 2014 in which it was decided “to establish an open-ended intergovernmental working group on a legally binding instrument on transnational corporations and other business enterprises with respect to human rights, the mandate of which shall be to elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises”. Finally, the first draft (entitled ‘zero’) of such an instrument has been recently published. To my mind, it has many shortcomings and certain promises, and discussion on its content is important to suggest aspects in regards to which improvements can be made.

I will explore such aspects in two consecutive posts, the first of which will largely focus on the notion of direct international human rights obligations of businesses. To my mind, they are important because codes of conduct and other voluntary initiatives, while certainly important insofar as they can impact corporate culture, are not enough, since they fail to grant victims ‘hard law’ entitlements and bases of action. Furthermore, direct obligations are not contrary, but rather complementary to, state obligations, and may actually strengthen their capacity to investigate and respond to human rights abuses.

The very fact that the recently-published draft treaty “to regulate, in international human rights law, the activities of transnational corporations and other business enterprises” is expressly referred to as the “zero draft” is a testament to its embryonic character. Still, its very existence, however preliminary and uncertain its content, is a victory in itself, and the publicity of such content permits discussions from civil society and different stakeholders that can provide interesting inputs for negotiators. That being said, as Nadia Bernaz has argued, in some regards aspects as those on direct international obligations are rather conservative and refrain from alternatives that some describe as ‘idealistic’. Even if such were the definite content of a final agreement, that treatment of issues as that of direct obligations or others would not foreclose future –or even simultaneous— developments at all, insofar as business and human rights issues may well be regulated by other sources of international law, customary law and general principles of law included, as Surya Deva and Humberto Cantú have well expressed. Furthermore, the United States Court of Appeals for the Second Circuit acknowledged in the Kiobel v. Royal Dutch Petroleum case that corporate liability may well “gradually ripen [] into a rule of international law” –in spite of considering –wrongly, to my mind— that corporations had no responsibility under lex lata –needless to say, international law can and has addressed non-state actors whenever logical and normative conditions are observed, as doctrines on capacities of such actors have explained.

From the very outset of the instrument, at the Preamble –mysteriously under the heading of “Article 1”, which certainly catches attention in addition to a few typos found throughout the text— it is stressed that States have the primary responsibilities and obligations in the field in their territories and jurisdiction, which is a reasonable traditional rationale that coincides with other instruments. Flowing from this logic, also as other instruments that embody the status quo of international human rights law, article 9 indicates that States are under an obligation to adapt their domestic legislation in ways that conform to the purposes of the treaty, in this case in terms of ensuring “in their domestic legislation that all persons with business activities of transnational character within such State Parties’ territory or otherwise under their jurisdiction or control shall undertake due diligence obligations”. Additionally, it is noteworthy that, according to article 10, other things States must do is enshrine the potential criminal, civil and administrative responsibility of businesses that violate human rights “in the context of business activities of transnational carácter”. Disappointing as the restriction to transnational activities is –more on that later—, this approach coincides with the archetype of international law dealing with non-state conduct indirectly, through the mediation of required domestic law and State action, which is yet but one of the possible ways in which international law can address the aforementioned conduct –including direct obligations and supervision, as John H. Knox has so well explained. While this approach permits harmonization, from a comparative legal perspective, it still has some shortcomings, such as the fact that, depending on how many States consent to the treaty in the end and how they end up handling the certain margin of implementation of its provisions, the goal of generating a lowest common normative denominator across borders that prevents forum shopping and race to the bottom regulatory dynamics may not be fully and satisfactorily achieved. Being aware that the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights ended up failing in terms of their reception, I cannot help but wonder if the latter’s approach, which recognized primary State duties as well yet conceived them as complementary to obligations of businesses “[w]ithin their respective spheres of activity and influence” was not preferable –and that, perhaps, the same economic interests that may lie behind those Norms’ failure may have exerted some ‘cautious’ influence on the decision refrain from being a more courageous initiative in a legal framework in which corporations do enjoy access to international fora to protect their rights even from State regulatory power –why are some interests attached more importance than the others? And not precisely the ones that should matter the most, in my humble opinion. Being this a ‘zero’ draft, things can improve –hope is not lost… yet.

On a more positive note, the Preamble of the draft does indicate that “all business enterprises, regardless of their size, sector, operational context, ownership and structure shall respect all human rights, including by avoiding causing or contributing to adverse human rights impacts through their own activities and addressing such impacts when they occur” (emphasis added). That sentence, in conjunction with other elements of the draft, are quite interesting. Firstly, as Andrew Clapham has so well explained, the word shall in the international legal context has a strong obligation connotation –therefore, it could be read as saying that in spite of the treaty not dealing with direct corporate obligations, they exist! On the other hand, it is also positive to read that all corporations –note the absence of a transnational business or activity qualification— are under binding responsibilities to respect human rights. Additionally, the fact that article 10 requires States to “ensure through their domestic law that natural and legal persons may be held criminally, civil or administratively liable for violations of human rights…” (emphasis added) is noteworthy for abstaining from the use of euphemisms as non-state ‘abuses’ or ‘destruction of rights’ that are sometimes construed by some as indicating that such actors do not violate human rights. Well, in practice they sometimes do, and this recognition is a victory of common sense –as victims and an environmental perspective will likely confirm. Hence, in addition to entailing a possible recognition of direct obligations under other sources, not precluded at all, those passages can have a potential expressive effect, empowering the claims of activists and civil society and so probably having the potential to generate acculturation, pressure, socialization and other dynamics –in addition, of course, to making State authorities aware that they can and ought to do more to protect from corporate abuses and rein in businesses when so required. As can be seen, asking for the recognition or regulation of direct obligations does not imply weakening or denying State ones, quite the contrary. Not everything is so positive, though, and the indication that the required responsibilization of corporations under article 10 is related to violations “undertaken in the context of business activities of transnational character” seems disappointing to me. I agree with the European Union and others that have criticized such narrowness, and cannot help but wonder if there are double standards at play, with the intention of some of controlling foreign corporations without being required to do the same in regards to local “strategic” businesses. As to the fact that the Preamble is the only one possibly expressly referring to direct obligations –although reference to violations below cannot be ignored— without further clauses enshrining or recognizing them, it can be said that in addition to its systemic relevance in light of article 31 of the Vienna Convention on the Law of nations, it may also be considered to reflect, as happens with the Rome Statute concerning combat against impunity, one of an object and purpose of the treaty –also relevant in terms of the general rule of interpretation—, leading to understand the treaty provisions, which focus on the first pillar of the Framework and the Guiding Principles, as but one concretion of some of the business and human rights field demands, not excluding others and understood as requiring States to act precisely to address corporate violations, with domestic action being one of the ways in which they ought to be prevented and responded to. Additionally, participation in the treaty with such a Preamble and related provisions could be deemed by some as an expression of certain opinio juris on the existence of corporate duties that are implicitly and indirectly treated in the instrument but nevertheless exist. As a Colombian saying goes, certain things don’t exist, yet they are there.

As to corporate responsibility, in the draft it is indicated that liable businesses must repair victims “or compensate the State” if the latter already provided reparation to victims, echoing an idea found in Principle 15 of the Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law. Additionally, concerning responsibility it is positive to note that the instrument confirms that civil liability “shall not be made contingent upon finding of criminal liability or its equivalent for the same actor”; and that criminal responsibility arises when corporations, through “transnational” activities –disappointing requirement, as discussed above, since violations are violations, whether committed through domestic or transnational acts—, “directly or through intermediaries “commit human rights violations that amount to a criminal offence, including crimes recognized under international law, international human rights instruments, or domestic legislation” (emphasis added), text that lends support to the idea that implied recognition of some direct corporate obligations may exist. In this regard, I venture to say that just like other non-state actors (namely, international organizations) have implied powers and their legal capacities depend “upon the needs of the community”, as indicated by the International Court of Justice in its 1949 Reparation for Injuries suffered in the Service of the United Nations advisory opinion, businesses and other non-state entities may also have implied duties, as others have posited in doctrine –there are social and human needs at stake indeed. Another interesting aspect is that States are required, “where applicable” –enigmatic phrasing that may render this potentially groundbreaking provision meaningless in practice or not, depending on interpretation— to “incorporate or otherwise implement within their domestic law appropriate provisions for universal jurisdiction over human rights violations that amount to crimes” (art. 10.11).