15 Aug The Revised Draft of a Treaty on Business and Human Rights: A Big Leap Forward
Carlos Lopez is a Senior Legal Adviser at the International Commission of Jurists
The new revised draft of an international treaty on the issue of business and human rights released on 16 July 2019, presents important changes and much needed improvement in relation to the so-called “zero draft” published in 2018. The revised version, elaborated by the chairperson of the Open-ended Intergovernmental Working Group (OEIGWG) which was mandated by the UN Human Rights Council resolution 26/9 to elaborate such a treaty. Unlike, the “zero” draft, the new draft will form the basis for negotiations at the textual level, beginning with the fifth session of the OEGWG to be held from 14 to 18 October 2019.
The new draft is far more coherent, well-constructed and mature text than its predecessor. Building on the debate of thefourth session of the IGWG (October 2018) and subsequent consultations, it inevitably integrates elements of various delegations’ interventions. Most importantly, the revised draft makes crucial choices aimed at resolving contentious questions that have bedevilled negotiations and hopefully will constitute a turning point in the process.
Among the most important changes operated in the revised draft is that it affirms that the scope of the proposed treaty encompasses all business enterprises, not just transnational companies, while still adding emphasis to businesses with transnational activities. In addition, it aligns much of the provisions on prevention and due diligence with the UN Guiding Principles on Business and Human Rights (UNGP) and proposes a comprehensive article on legal liability of business enterprises that is more in line with prevailing international law and national practice than the respective provisions in the “zero draft”. The revised draft also brings some novelties such as new articles on implementation (art 15) and settlement of disputes (art 16).
These changes, particularly those relating to the scope of the treaty and the incorporation of the UNGPs, directly address the stated concerns of a substantial block of players that have so far been reluctant to participate meaningfully in the process, especially the European Union and its Member States. With these major obstacles removed, all eyes will be on these States to see the extent of movement on their part. Serious engagement by the EU and similarly situated States would strongly signal their commitment to human rights in this field and brighten the prospects for an ultimately successful outcome.
A broad scope
The “zero draft” was built on the presumption that the scope of the proposed treaty would be limited to regulate the transnational activities of business enterprises. This understanding was based on a footnote to one paragraph in the preamble of Human Rights Council resolution 26/9 of 2014, which created the IGWG, referring to the prior work of the UN Human Rights Commission. Such footnote purported to define “other business enterprises” as those who have transnational activities, excluding those that have only domestic activities. The revised draft, breaks that understanding by clarifying that the scope of the proposed treaty will cover all business enterprises and all their activities, but emphasizes that it addresses particularly those with transnational activities.
Article 3.1 “This (Legally binding instrument) shall apply, except as stated otherwise, to all business activities, including particularly but not limited to those of a transnational character”.
In this way, the revised draft attempts to bring a balanced focus on the transnational (or cross border) activities of business enterprises while also applying its substantive provisions to other businesses that do not have cross border activities. Many delegates and observers requested this balanced approach during the IGWG sessions and some States, including EU members, had even justified their absence from the debates on account of the limited scope proposed in the “zero draft” and its predecessor documents. The revised draft takes away this objection, if it was a sincere one, paving the way to a negotiation focused on the substance of the treaty provisions, leaving behind issues and arguments mostly of a political character.
Another aspect of the scope is its coverage of all human rights or even all kinds of human rights abuses and violations. New Article 3.3 states that the treaty shall cover all human rights, but without precision as to which, and whether or not they are internationally recognized or not. This probably remains one weakness in the text- it is simply too open-ended a formulation for a treaty containing legal obligations for States, and will almost certainly be the subject of heavy discussion.
Rights of victims
The provisions on the rights of victims (now article 4) have been streamlined and reorganized, while preserving most of the content of the “zero draft”. This article is vital because it tackles many of the procedural barriers to access to justice and remedy and reparation that victims of business human rights abuse face. Although much of that content will surely be subject to heated debate, the provisions are much clearer and full-fledged, although sometimes still insufficient to effectively tackle the many obstacles to justice that victims of corporate abuse face. For instance, the revised draft does not propose an adequate formula to address the evidentiary hurdles in civil litigation which have led to demands civil society groups for the reversal of the burden of proof in this context.
By contrast, the revised draft presents welcome developments in relation to human rights defenders. Stands out the provisions on human rights defenders in the preamble, but also in current article 4:
4.9: States parties shall take adequate and effective measures to guarantee a safe and enabling environment for persons, groups and organizations that promote and defend human rights and the environment, so that they are able to act free from threat, restriction and insecurity
4.15: “take adequate ad effective measures to recognize, protect and promote the rights recognized in this (LBI) to persons, groups and organizations that promote and defend human rights and the environment.”
These explicit provisions to enhance the protection of human rights defenders working in the field of corporate accountability has been a key demand by several States delegates and civil society observers, and is essential to enable individuals and groups of victims of abuse to pursue strategies in search of justice and redress.
The wording of current Article 5 also presents a huge improvement. While preserving most of the “zero draft” content, it more clearly adopts the definitions of businesses’ human rights due diligence established in the UNGP: identification, prevention and mitigation, monitoring and communicating. One step seems missing: the obligation of integration of the assessment findings into company’s policies and operations.
It is not clear why detail of measures that could be taken within each step of the due diligence process are listed in a separate paragraph (5.3), when those measures could have been listed, illustratively, within each of the steps, unless they are relevant for more than one step. It is also surprising to see frequent references to businesses’ “contractual relationships” instead of the reference to broader “business relationships” (which includes contractual relationships) adopted in the UNGPs. This is an aspect that will probably be corrected during negotiations.
A major improvement can also be seen in the area of legal liability, where some of the “zero draft” provisions are preserved, but the bulk of the article (currently article 6) has been substantially redrafted and streamlined. Standing out, in particular, are certain provisions which aim at creating a comprehensive system of legal liability for human rights abuses committed by business enterprises or with their participation. For instance:
6.1 States Parties shall ensure that their domestic law provides for a comprehensive and adequate system of legal liability for human rights violations or abuses in the context of business activities, including those of transnational character
This provision potentially encompasses civil, criminal and administrative liability but also the various modalities and models of civil liability, including torts based on negligence, strict liability and other forms of civil liability. The implementation of this provision, and others, will necessitate adequate guidance that can be provided, among other sources, by the monitoring body proposed under the treaty. There are several other provisions in this article 6 of enormous importance and deserve extensive commentary beyond the present blog. For instance, article 6.6 which posits a standard of legal responsibility of one company in relation to the harm caused by another company, no matter where the latter is located, when the former company controls or supervises the activities that caused the harm. However, the reach of this provision is obscured by the reference to “contractual relationship” between the two companies, which is an unnecessary limitation to the potentially vast array of ways in which companies relate one to the other.
But from all provisions it is article 6.7 that stands out for its potential reach and impact in terms of legal responsibility and reparations for victims:
“6.7 Subject to their domestic law, State Parties shall ensure that their domestic legislation provides for criminal, civil or administrative liability of legal persons for the following offences.
- War crimes, crimes against humanity and genocide as defined in articles 6, 7 and 8 of the Rome Statute for the International Criminal Court;
- Torture, cruel, inhuman or degrading treatment, as defined in article 1 of the UN Convention against Torture and other cruel, inhuman or degrading treatment or punishment;
- enforced disappearance, as defined in articles 7 and 25 of the International Convention for the Protection of All Persons from Enforced Disappearance;
- extrajudicial execution, as defined in Principle 1 of the Principles on the Effective Prevention and Investigation of Extra-Legal, Arbitrary and Summary Executions;
- Forced labour as defined in article 2.1 of the ILO Forced Labour Convention 1930 and article 1 of the Abolition of Forced Labour Convention 1957;
- The use of child soldiers, as defined in article 3 of the Convention on the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour 1999
- Forced eviction, as defined in the Basic Principles and Guidelines on Development based evictions and displacement;
- slavery and slavery-like offences,
- Forced displacement of people,
- Human Trafficking, including sexual exploitation,
- Sexual and gender-based violence.”
Article 6 also requires that domestic law provide legal liability for “acts that constitute attempt, participation or complicity in a criminal offence in accordance with Article 6.7” but controversially keeps the reference to “criminal offences as defined by their domestic law”.
This article provides, for the first time, a list of well-defined offences that would trigger legal liability of business enterprises under domestic law. Such liability could be civil, administrative or criminal. In this way, this article follows the path of the first Optional Protocol to the Convention on the Rights of the Child, on the sale of children and child pornography, which contains a similar provision but referred to other offences and specifically targeted at legal entities. A provision of this type is a welcome addition to the draft treaty because a series of offences catalogued as crimes under international law or for which international law requires criminalization require separate treatment in the treaty, given their serious character and gravity. However, it also raises questions because it would have some overlap with article 6.1 that mandates a comprehensive legal liability system, presumably also including civil, administrative and criminal. The text of article 6.7 is not clearly linked to a clause providing for sanctions or penalties commensurate with the gravity of the offences (which appears in 6.4 in a way that seems to relate to the whole article 6 and not especially to art 6.7 where it is necessary).
It should be clear that art 6.7 refers to the legal responsibility of business legal persons for some of the most serious atrocities usually considered as crimes under international law. Many States do not recognise in their legal systems the criminal responsibility of legal persons (business corporations). Several states, including the Russian Federation and Argentina, made clear, in past sessions of the OEGWG, their opposition to formulas that would require them to adopt legal criminal liability for business enterprises. In this context, the new treaty has to follow the same flexible approach of criminal, civil or administrative liability, as adopted by the Protocol on the sale of children. Practice shows that States tend to enact some form of criminal liability when serious or grave offences are at stake, or at least, to apply the most severe sanctions against the culprits, to reflect the serious nature of the offence committed. However, to give it full meaning and differentiate this paragraph from others in the same article 6, it would be important to link it to a provision on sanctions commensurate to the gravity of the offences and also amend paragraph 6.8 to take account of the fact that individuals within the company (CEO, manager or directors) may also be legally liable for their role in the commission of the offences.
Although article 6 will surely generate some controversy in relation to the list of offences included, their definitions, or even the convenience of having a separate provision for serious offences, it is clear that its inclusion is a step forward that overcomes previous objections based in breach of the principle of legality. It is also a necessary and relevant provision for States that accept criminal liability of business legal entities, but have a limited set of offences for which such liability applies.
The revised draft treaty is clearly a welcome and crucial step forward in the process of establishing a legally binding instrument in the field of business and human rights, overcoming most of the most serious – or even the less serious- objections relating to the scope of the treaty and its complementary character in relation to other instruments. There are still many aspects of the treaty and its provisions that require refinement during the process of negotiation. To this effect, it will be vital that largest possible number of States participate in the next session of the IGWG next October in Geneva, Switzerland. The revised draft treaty is sufficiently clear and comprehensive to be subject of serious negotiations, which responsible governments should undertake without delay.