Key issues in the debate on a binding business and human rights instrument

In February of this year, I was asked to provide the opening remarks at a brainstorming session organised by Geneva for Human Rights and Friedrich-Ebert-Stiftung on a binding business and human rights instrument. The session brought together State representatives from countries such as Ecuador and South Africa who have been pushing this initiative at the Human Rights Council, as well as representatives from EU countries, who are less enthusiastic. Civil society was also well-represented at the meeting, which focused on access to remedies and the question of extraterritorial jurisdiction. My remarks are available here, and I have also reproduced them below.

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Thanks to Geneva for Human Rights and Friedrich Ebert Stiftung for the invitation to provide some remarks at the opening of this session. It is an honour and a challenge for an academic who is at a remove from the business of human rights here in Geneva. There are others in the room who surely have greater expertise and practical experience regarding business and human rights, but hopefully I can make a valuable contribution. What I would like to do is reflect a little on developments and the debate to date and to pose some questions regarding a potential future business and human rights instrument.

In approaching this talk, I have decided to use a number of old Irish proverbs or seanfhocail, as they are called. They help, I think, to highlight some of the key issues regarding the development of a business and human rights instrument and provide food for thought in the context of this brainstorming session.

#1 ‘Bíonn dhá insint ar scéal agus dhá leagan déag ar amhrán’

There are two sides to every story & twelve versions of every song

At first glance, it may seem that we have a re-emergence of the ‘divisive’ debate between binding and voluntary means of addressing business and human rights. Perhaps it has never fully gone away. In any event, we can roughly see two sides on this debate. Those in favour of a binding instrument argue that:

• The United Nations Guiding Principles are merely guidance, and along with the subsequent initiatives – the Annual Forum and Working Group – have not provided accountability for corporate harms or ensured a right to a remedy
• Domestic efforts are more likely to succeed when linked to a binding obligation
• Transnational actions of multinational corporations can only be addressed by action at the international level
• A binding instrument can build on the Guiding Principles and provide better measures for implementation.

On the other side, those against a binding instrument argue that:

• More time and effort needs to be given to the UN Guiding Principles
• Pursuing a treaty might detract from this, and be used by States as an excuse not to implement the Guiding Principles
• Such efforts could undermine implementation programmes and processes already in train (such as those designed by NGOs and CSR professionals)
• There may be ulterior motives on the part of proposers, who have not done much to implement UN Guiding Principles.
• Treaty making is a slow process and which poses “monumental challenges”, according to John Ruggie, given the breadth of business and human rights issues. A treaty could be so abstract as to be meaningless
• Who would ratify such an instrument? A low uptake could prove fatal.
• A binding instrument is divisive and confrontational and would, as one observer put it, lead “states and businesses will go back to their trenches” (the International Organisation of Employers suggests a treaty would “conflict” with the current approaches).

There is of course greater nuance to these positions than my shopping list approach presents. It is arguable that many engaged in this debate are singing from the same hymn sheet, with an acceptance of an eventual move towards binding regulation, but that at the moment the versions of the song being sung are different. If we take the debate between John Ruggie and Amnesty in 2011, this could easily be misinterpreted, when in fact Amnesty have pushed for a binding instrument, but not in isolation, while Ruggie has accepted that treaties are the bedrock of the human rights system and has never fully dismissed their role – it depends on what a proposed treaty addresses.

What many in this debate have said is that pursuing further implementation of the Guiding Principles is compatible with developing a binding instrument, and can if fact be complementary. As Amol Mehra has put it, significant gains can be made by pursuing both. But some States are treating this otherwise, emphasising the need to focus on the UN Guiding Principles, given the ‘threat’ of a treaty.   

#2 ‘Is fearr leath builín ná bheith gan arán’

Half a loaf is better than to be without bread

The Guiding Principles, as unanimously endorsed by the Human Rights Council, have served to draw greater attention to business and human rights and have placed it firmly on the on the agenda of the Council. They provide a coherent and broadly accepted framework to address human rights in the context of business activities. Their reception has been generally positive – civil society has been able drawn upon them; the Council and the European Commission have called on States to develop national implementation plans and they have been adopted by some major companies and international organisations (IFC, OECD). The Guiding Principles are beginning to seep into the work of the UN human rights bodies. They represent a promising start – John Ruggie described their endorsement as the “end of the beginning”.

That being said, although endorsed three and a half years ago, only a handful of States have developed national action plans, and the commitments therein fall short of what is needed. The OECD Guidelines, incorporating the Guiding Principles, remain a voluntary, non-binding initiative, with at times weak national contact points. There remains a very real ignorance of the Guiding Principles amongst business – Aaronson and Higham note that less than half a per cent of MNCs have a human rights policy, because of “a lack of education by governments”. Amnesty International has said that the Guiding Principles enjoy broad support from business, “because they require little meaningful action”.

The Guiding Principles can be considered as half a loaf: they do not themselves provide for accountability or remedy, and the iteration of extraterritorial obligations does not match that which is put forward by the UN human rights treaty bodies. The Guiding Principles are arguably not capable of meeting the challenges posed by the unprecedented power and reach of corporations today; redressing the negative impact that they may have on human rights is blocked by significant legal and political obstacles.

#3 ‘Is fearr réal inniu ná scilling amárach’

It is better to have sixpence today than a shilling tomorrow

The Guiding Principles are here today and it is argued that we should work towards improving these existing tools. This can be done in various ways: developing national action plans, which requires political will, resources, and concerted civil society pressure. Business respect for human rights can be embedded in procurement, investment or other forms of State support, especially the requirement of due diligence. There should also be a push to ‘mainstream’ business and human rights in the existing human rights treaty monitoring processes and the Universal Periodic Review.

Like any guidance, however, those to whom it is directed might choose to ignore it. Few would disagree, however, than a binding instrument would be a better option to addressing business and human rights, even if it is tomorrow. An instrument could help fill the gaps and failings of the international legal framework concerning access to justice. Existing international accountability mechanism, such as the International Criminal Court, do not address corporate harms adequately and domestic processes have proven incapable of dealing with transnational corporate complicity – the Alien Torts Claims has provided very limited success, and barriers such as forum non conveniens and non-interference in foreign affairs often deny accountability. While the UN Guiding Principles, if implemented, could improve matters, “we cannot afford to wait for state practice to fully develop”, as Mehra has put it.

David Bilchitz argues persuasively that the fundamental nature of human rights requires a binding instrument – human rights need to be recognised on the same level as other obligations in the context of trade and investment. A treaty could recognise and clarify the legal obligations of business and contribute to their development, such as providing for mandatory due diligence. And as the International Commission of Jurists has noted, codification could level the playing field for business and avoid a “race to the bottom”. The process towards a treaty is already underway.

#4 ‘Tús Maith Leath na hOibre’

A good start is half the battle

While previous efforts have failed, the latest endeavour was spurred by 80 States, led by Ecuador, calling for a legally binding instrument in Sept 2013, with over 600 civil society organisations of the treaty alliance supporting such an initiative. Efforts towards a binding business and human rights instrument centre around Human Rights Council Resolution 26/9, adopted in June 2014. This resolution established a new UN Intergovernmental Working Group with an open-ended mandate to work on the elaboration of “an internationally legally binding instrument on transnational corporations and other business enterprises with respect to human rights.”

Did it have a good start? Well 20 States voted in favour, 14 against and 13 abstained. Those that voted against included Ireland, the United Kingdom, the United States, France and Germany, while those in favour included China, India, Russia and South Africa. John Ruggie notes that no home State of the major multinationals voted in favour and suggested that the voting does not reflect a neat north/south divide. It may not be neat, but there is a distinct developed versus developing world feel about the voting pattern. Ruggie sees the Intergovernmental Working Group as having a “weak mandate”. It may not be the most auspicious beginnings, but should this prove fatal? There is a long road ahead, with planned annual meetings, and this time could be used to build greater support for the initiative.

#5 ‘Is deas an rud an beagán ach é a dhéanamh go maith’

Little is best if well done

John Ruggie sees the treaty promoters as pushing for “a single, overarching legal instrument that, like a silver bullet, promises the resolve business and human rights challenges once and for all”. This approach is “fundamentally flawed”, as there is too much to squeeze into a single instrument.

It has been suggested instead that a binding instrument should focus on ‘gross human rights violations’. Ruggie has advocated for “carefully constructed precision tools” – with the most likely candidate dealing with “the worst of the worst” given that there is already a firm basis on which to proceed. This would mean excluding broader human rights issues, some of which might not be understood as gross violations, but which for victims are no less real.

An amendment of the Rome Statute, perhaps, might accommodate such an approach, bearing in mind that attempts to include corporate criminal liability in 1998 failed, although the situation has arguably changed since then given the increased attention on business and human rights. That said, the International Criminal Court deals with a very narrow set of crimes, while trials have proven slow and expensive. If gross violations is interpreted more broadly than international crimes, then the ICC might not make sense.

David Bilchitz sees some merit in this approach, but considers that it would apply only to a limited number of cases, and it would not fully address the accountability gap, or other reasons for creating a treaty. It could address some of the deficiencies in the international legal regime concerning standards applicable to companies for gross violations, but, as the International Commission of Jurists has asked, what would be achieved by focusing solely on gross violations?

While it may improve accountability and remediation for the most serious violations in terms of, it seem most NGOs and experts suggest that an instrument should address the ‘broad universe’ of human rights standards. Focusing on crimes would place more emphasis on civil and political rights and undermine efforts over recent years to advance socio-economic rights.

Those undertaking this task will need to make choices to be made about issues to cover. There is no shortage of good candidates – tax abuse, for example, in which companies play a major role, and which deprives many countries of the necessary resources to ensure they meet their human rights obligations, is a pressing issue which requires attention. But how much can one treaty address?

#6 ‘Is maith an scéalaí an aimsir’

Time is a good storyteller

In undertaking negotiations on a new instrument, some lessons might be gleaned from other endeavours, including past efforts to develop binding instruments addressing business and human rights. Key issues have been the subject matter, enforcement, monitoring and implementation, and whether to address the responsibilities of State, companies or both.

Notable past efforts, in the 1970s and late 1990s at creating binding standards, were overtaken by other initiatives, including the adoption of the OECD Guidelines for Multinational Enterprises and the appointment of John Ruggie as the Special Representative of the Secretary General. Was this to take the momentum out of those efforts? Ruggie has written had he tried to create new international law, his efforts would never have got off the ground.

The Draft Norms, adopted by the UN Sub-commission on the Protection and Promotion of Human rights in 2003, addressed all human rights, with some more relevant examples highlighted, as well as corruption, consumer protection, and environmental harm. They sought to apply the full range of obligations to companies and transpose the existing system of human rights monitoring and reporting on to business. Would a UN Committee feasibly be able to monitor the activities of 1000s of companies? It has been said that their broad scope is why they were not acted upon, although it should be reiterated that they were draft norms.

As to which companies, Resolution 26/9 seems to mean transnational companies only, as was seemingly the case with the Draft Norms and the UN Centre on Transnational Corporations’ Code of Conduct. John Ruggie considers that major States would insist that it also applies to national companies – a sentiment echoed also by Human Rights Watch. Is there an argument to be made that transnational corporations present particular problems as compared to those that are purely national?

If a treaty is too broad for some major States, how would it fare without their support? The Apartheid Convention can be considered a poorly drafted instrument, partly because it did not go through the UN’s Sixth Committee – it did not have the support of several major powers, for political reasons, and no prosecutions for apartheid ever ensued. But the crime is incorporated in the Rome Statute and has become part of the legal landscape. And there are a number of other human rights treaties which have proceeded fairly successfully without the support and at times opposition of certain major states, including the Convention on the Rights of the Child, Additional Protocol II of the Geneva Conventions and the Rome Statute of the International Criminal Court.

If the decision is to proceed on a narrowly focused treaty, it is suggested that the Anti-Bribery Convention could provides a comparable example and some valuable lessons. It has a narrow focus on a discrete issue, and importantly, had significant backing from the United States. Anita Ramasastray has suggested that a set of narrower treaties might emerge, rather than a single overarching human rights framework. In this regard, it its worth noting that the international community has for decades been unable to adopt a comprehensive Convention on terrorism, so has instead opted for a series of specific treaties addressing issues such as financing, hostage-taking, hijacking etc. Might this work in a business and human rights context?

#7 ‘Ní sheasaíonn sac folamh’

An empty sack does not stand

It is said that a broad overarching treaty runs the risk of being too abstract. To cover everything, John Ruggie has said, it “would have to be pitched at so high a level of abstraction that it would be of little if any use to real people in real places”. But many human rights treaties set general protections and enunciate broad principles, which are then subject to jurisprudential developments – the European Court of Human Rights treats the European Convention as a living instrument and has developed its content over several decades.

The issues on today’s agenda of access to justice and extraterritorial obligations are both linked in this context of business and human rights and are seen as essential pieces of the puzzle. A binding instrument that does not satisfactorily address these might not be supported by civil society, who have played such a prominent role in pushing the business and human rights agenda.

Access to Justice: according to the International Commission of Jurists, “the most acute challenges and needs in the area of business and human rights relate to the deficits both in ensuring the accountability of companies and in access to effective remedies for victims of abuse”. The UN Guiding Principles paint a fairly comprehensive picture of what remedies should look like, but as Ruggie himself has accepted, they “are better at decrying inadequate access to judicial remedy than fixing it”. The UN Guiding Principles have not spurred governments to act sufficiently on providing remedies.

The right to a remedy is an unquestioned component of human rights law but its realisation faces considerable obstacles in the business and human rights context, especially as regards transnational corporate activities. The International Commission of Jurists has highlighted problems with jurisdictional rules, corporate structures, legal standing, the potential for individual or group claims, the enforcement of judgments, and the lack of knowledge or understanding on the part of affected peoples. A binding instrument could usefully provide more specific standards, and could be “an effective tool” to enable States enact the legislation necessary to define companies’ responsibilities and establish liabilities. Domestic action tends to follow international obligation, provided, of course, that ratification has occurred. International law is arguable at its most effective when domesticated.

Which avenues for remedy would a binding instrument focus on? Ensuring access to civil claims processes or strengthening criminal prosecution in domestic systems? Administrative measures? Enhancing the jurisdiction of the human rights bodies? Some type of international court for corporations? There are limitations and advantages for each of these. For domestic remedies, the High Commissioner for Human Rights paper by Jennifer Zerk warns of the significant challenges presented by differing national approaches, as well as resource implications.

Extraterritorial obligations: the UN Guiding Principles have taken a more restricted reading than the UN human rights bodies, stating that international law permits States to exercise jurisdiction extraterritorially but does not require this. Ruggie has explained that State practice generally does not support this for the entire array of rights. For the treaty advocates, he puts it that they are on “tricky terrain” when they seek “comprehensive forms of extraterritorial jurisdiction under international human rights law”.

But if everything else is globalised, why not human rights obligations and access to a remedy? As the introduction to the Maastricht Principles on Extraterritorial Obligations put it, such obligations are “a missing link in the universal human rights protection system”. Given the nature of transnational activates and where human rights violations tend to occur, international human rights law thus “fails where it is most needed”, as Daniel Augenstein has put it. Extraterritoriality exists already, but not sufficiently in the business and human rights context, advocates argue.

How would a binding instrument address this? Do the findings of international human rights bodies provide a sufficient basis – are they consistent and do they cover all rights? How to address the view of the United States Supreme Court that there is a “presumption against extraterritoriality”, or that some States may be this as an external imposition? Perhaps an approach similar to the complementarity regime under the International Criminal Court, where a home State would only be under an obligation to take proceedings if the host State was either “unwilling or unable”, with some external oversight or remedy in case neither acts.

#8 ‘Chíonn beirt rud nach bhfeiceann duine amháin’

Two people see a thing that an individual does not

It seems clear that the treaty-making process that is underway must be a consultative and open approach, involving States, civil society and business. As the International Commission of Jurists noted, dialogue could help avoid misunderstandings on this contentious topic. Unity is unlikely on this subject, as even the preliminary debates reveals, but it is important to build as broad a support as possible. Ruggie has emphasised the importance of choosing the right chair of the Intergovernmental Working Group. He has suggested a respected third party to help focus on ‘consensus-building rather than the pursuit of strong national positions’. Although “politics is the art of the possible”, political opposition should not be an excuse for not proceeding at this stage, and for seeking to generate greater support as the process moves along.

Sources

• International Commission of Jurists, Needs and Options for a New International Instrument in the Field of Business and Human Rights, 2014.
• John Ruggie, Life in the Global Public Domain: Response to Commentaries on the UN Guiding Principles and the Proposed Treaty on Business and Human Rights, Harvard Kennedy School, 23 January 2015, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2554726.
• John Ruggie, The Past as Prologue? A Moment of Truth for UN Business and Human Rights Treaty, Institute of Human Rights and Business, 8 July 2014.
• John Ruggie, A UN Business and Human Rights Treaty?, Harvard Kennedy School, 28 January 2014, available at: http://www.hks.harvard.edu/m-rcbg/CSRI/UNBusinessandHumanRightsTreaty.pdf.
• Susan Ariel Aaronson and Ian Higham, Putting the Blame on Governments; Why Firms and Governments have failed to advance the Guiding Principles on Business and Human Rights, Institute for International Economic Policy, 2014.
• Amol Mehra, The Caravan Towards Business Respect for Human Rights, Institute for Human Rights and Business, 11 February 2015.
• David Bilchitz, The Necessity for a Business and Human Rights Treaty, 2014, available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2562760.
• Anita Ramsastray, ‘Closing the Governance Gap in the Business and Human Rights Arena: lessons from the anti-corruption movement’, in Surya Deva and David Bilchitz (eds), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect, Cambridge, 2013, 162.
• Jennifer Zerk, Corporate liability for gross human rights abuses; towards a fairer and more effective system of domestic law remedies, Report prepared for the Office of the High Commissioner for Human Rights, 2014.
• Daniel Augenstein, The Crisis of International Human Rights Law in the Global Market Economy, 2014, EUI Working Paper, RSCAS 2014/118.