07 Sep Symposium: The 2nd Revised Draft of a Treaty on Business and Human Rights–Moving (Slowly) in the Right Direction
[Carlos Lopez is a Senior Legal Adviser at the International Commission of Jurists.]
A second revised Draft of an international treaty on business and human rights has been released by the Chairperson of the Open-ended Intergovernmental Working Group on Transnational Corporations and other Business Enterprises with respect to Human Rights (OEIGWG), established by UN Human Rights Council resolution 26/9 . In the few weeks of its release, the immediate reactions from scholars and advocates that follow the process has been generally positive and welcoming, although there remain flaws and a number of issues to be resolved. The new draft does not make dramatic revisions, additions or deletions to the draft of 2019. Instead, it presents several wording changes and a reorganization of a few provisions which create the combined effect of a more coherent and well -organized draft. A closer and more detained look at the draft reveals some persisting inconsistencies and grey areas that need to be fixed. To explore and analyse these aspects of the new draft and propose possible ways to address problems or highlight progress, the ICJ has convened the blog symposium that starts with the present blog.
Having a well-structured and conceptually coherent draft is an essential component of an international negotiation, but it is not everything. Like its predecessor, the 2019 Draft, the 2020 Revised version of the treaty is a positive step that contains welcome improvements that could be debated in a substantive intergovernmental negotiation. But, it is well known that so far there has been limited amount of negotiation among a critical mass of States, with some of what has taken place in backdoors or through proxy states. The lack of political will among key countries, including the European Union and other states in the Western Group is still a major obstacle to progress in this area. The reasons for that are complex and cannot be the focus of the present blog, but clearly -in political and diplomatic terms- the successive drafts are making slow progress to gather a critical mass of interested States behind the initiative. However, from a human rights perspective the most critical thing is whether the text of the treaty is fulfilling the main purpose of the new instrument, which us to fill major gaps in ensuring prevention or business human rights abuse and access to justice and reparation for the victims of abuse. And the answer to that question is clearly positive: overall, the draft treaty is going in the right direction.
The Revised draft 2020 presents important improvements that add clarity to the text and more cohesion to the whole. Among those positives are: better and more comprehensive definitions of terms in article 1, where “victims” now substantially corresponds to the definitions accepted in international law; the definition of “human rights abuse”, which, while preserving the distinction from “violations” that presumably would be committed only by States, provides a definition that substantially coves the same ground. In relation to the scope (article 3) we have now a more complete statement regarding the coverage of the treaty of all human rights. However, the requirement that the relevant State needs to be a “party” to the international instruments referred to is problematic. It should be noted that some instruments, such as the ILO 1998 Declaration on Fundamental Principles and Rights at Work is of obligatory character for ILO Member States regardless of ratification.
Other improvements concern those in current articles 4 and 5 that unpack provisions regarding victims’ rights, human rights defenders and the rights to an effective remedy. These articles provide a better organization of provisions that were previously compressed in one single and lengthy article. Article 6 on prevention and mandatory business’ human rights diligence is also more in line now with standards from the UN Guiding Principles on Business and Human Rights and the reference to the need for consultations with indigenous people carried out by business enterprises “are undertaken in accordance with the internationally agreed standards of free, prior and informed consent” is a welcome precision.
There are also some changes and additions that deserve a more nuanced assessment and some areas that remain to be fixed from the previous drafts.
Among those changes likely to raise further controversy are those relating to current article 8 on legal liability. Legal accountability together with provisions on the right to a remedy and reparation constitute the core of the proposed treaty and its distinct contribution to the international legal framework. As such, they were already the object of heavy pushback from some business advocates and States and it is likely they will continue to remain so despite the changes inserted in the text.
Article 8 contains two of the central provisions that tackle head on the key gaps of protection and reparation of human rights abuses in the context of global business operations. Art 8.7 concerns the responsibility of the parent or lead company in a business relationship in relation to the abuses committed with the occasion of the operations of their business associates or subsidiaries.
Art 8.7: States Parties shall ensure that their domestic law provides for the liability of legal or natural or legal persons conducting business activities, including those of transnational character, for their failure to prevent another legal or natural person with whom it has a business relationship, from causing or contributing to human rights abuses, when the former legally or factually controls or supervises such person or the relevant activity that caused or contributed to the human rights abuse, or should have foreseen risks of human rights abuses in the conduct of their business activities, including those of transnational character, or in their business relationships, but failed to put adequate measures to prevent the abuse.
Although most of this provision remains substantially the same as in previous drafts, the new draft contains some language that would make its coverage and application more comprehensive, but at the same time may create more resistance. The new draft adds overall control of one company over the other as an element for legal liability to arise in this context, whereas the previous draft would speak only of control or supervision over the “relevant activity” of the business partner that caused the harm. Under the current draft, for instance, a parent company may be liable if it has overall control of the other company even if it did not substantially participate in the specific partner’s activity that caused the harm.
Article 8.7 also keeps “foreseeability of risks” and failure to take measures to prevent those risks from materializing as grounds for attribution of civil responsibility. This could mean that one company may be liable if it should have foreseen the risk that a human rights abuse could happen in its business relationships – but did not take adequate measures to prevent it from materializing. Liability would arise regardless of whether it engages or directly participates in the conduct that causes or contributes to the harm. As such, the general thrust of this provision is to be welcome as it attempts to establish a rule of legal responsibility in supply chains’ lower tiers where businesses do not necessarily have a direct relationship with the main buyer up in the chain, but its wording could be improved to instil more clarity and legal certainty. This kind of foreseeability of risks is likely to be achieved, for instance, through a process of impact assessment or more broadly due diligence, but is unfortunately likely to be challenged as a sole ground to generate civil liability for the substance of the violation that may occur in the business relationship. In fact, identifying risks in the business relationship and not doing anything to prevent them from materializing is equivalent to conduct that facilitates, assists or aids the business partner to commit the abuse. It is in fact a sort of accessory liability.
The new draft also brings changes in another important provision in the same article: the one that addresses civil, criminal or administrative liability for the commission of abuses that amount to crimes defined in international law. The 2019 Draft contained a detailed list of those crimes, which had a mixed reception during the negotiation session. The current draft aims to overcome obstacles and objections by replacing the whole lists with a succinct formulation:
“States Parties shall ensure that their domestic law provides for the criminal or functionally equivalent liability of legal persons for human rights abuses that amount to criminal offences under international human rights law binding on the State Party, customary international law, or their domestic law.” (emphasis added)
Although well meaning, the change may not serve the purpose of bringing more clarity and legal security for States or businesses. It would be difficult for States to ascertain the full range of conduct that they are required to address in implementing measures to ensure that persons and entities, including companies and the law enforcement and prosecution authorities, are aware of the kind of conduct that is proscribed. Substantial work needs to be carried out to improve the drafting of this provision to arrive to a formula that is politically workable while at the same time providing the necessary clarity and security that is required in law.
The symposium that starts now will address the above and other aspects of the Revised Draft of treaty on business and human rights, highlighting positive changes and debating alternatives for the perceived gaps or weaknesses. It is to be hoped that the combined analytical power of the various blogs to be published during this week will be useful for States, advocates and business’ legal advisors who are preparing for the 6th session intergovernmental negotiations next 26-30 October. This session is likely to be one of special format and character, given the limitations imposed by the COVID-19 pandemic, but it is also hoped it will constitute a significant progress in the negotiations.