Guest post: The National Action Plan on Business and Human Rights, the legal imbalance and the need for a complementary approach

I am very pleased to welcome this latest guest post in the series on Ireland’s recently published national plan from Julian Waagensen, a policy adviser with Trócaire based in Maynooth. 

Having recently returned from the UN Forum on Business and Human Rights (27-29 November), I wanted to write briefly about the new Irish National Action Plan on Business and Human Rights (NAP), the legal imbalance between business protection and obligations, and the need for a complementary multipronged approach to business and human rights (B&HR).

The launch of the NAP on 15 November 2017 should be recognised as an important step towards promoting respect for human rights by Irish businesses. It brings the UN Guiding Principles on Business and Human Rights (UNGPs) into the sphere of official Government policies and demonstrates a continued commitment towards ensuring that Irish businesses respect human rights domestically and abroad.

The plan remains short on details, opting instead for more of a top-line approach. While there is nothing wrong with this approach, it does put additional pressure on the implementation of the plan to flesh out commitments and add details and depth to the plan. Outside of some areas where stronger language would have been preferable (one can wonder why state-owned or controlled companies are merely “encouraged” rather than required to undertake effective human rights due diligence), and some areas of omission (the issue of taxation comes to mind), the plan is certainly worthy of support, but it will all come down to implementation.

At the launch, Minister (now Tánaiste) Coveney was clear that this is not a plan that will be allowed to gather dust on a shelf, the plan will be actively implemented. That is of course encouraging to hear and I hope this enthusiasm continues, especially given the importance, and magnitude, of the task at hand.

From the plan, a number of actions are worthy of scrutiny as we move towards implementation. These include:

  • The establishment a ‘Business and Human Rights implementation group’ – given the importance of effective implementation, the composition of this group will tell us a lot about a) the government’s commitment towards ensuring a holistic approach (with inclusion of diverse viewpoints) to the implementation of the plan, and b) the buy-in from the business community in Ireland.
  • Ensuring coherence between the National Plan on Corporate social Responsibility and the National Plan on Business and Human Rights – while certain synergies do exist between the two, it is important to not make a correlation between B&HR and CSR. CSR has historically focused on corporate voluntarism and the idea of social responsibilities of businesses, including philanthropy. By contrast, B&HR is focused on corporate accountability for human rights, including the need for prevention and mitigation. In addition, the Irish National Plan on CSR was developed, without public consultations, together with the CSR Stakeholder Forum (which includes very limited representation from civil society). While policy coherence should be encouraged it will be important that it is based on a thorough understanding of the important differences between a CSR and a B&HR approach.
  • The development of a practical toolkit on business and human rights for public and private entities within 12 months to assist them in their human rights due diligence – This will be crucial to the success of the plan. Conducting effective human rights due diligence can be a complicated task. Larger companies will be able to hire in specialist knowledge, on a temporary or permanent basis, but for many SMEs this will not be possible. While a practical toolkit is an important first step, roll-out and on-going support will need to accompany the toolkit. If we want to be serious about helping all business (big and small) to better respect human rights and take appropriate preventive measures, we need to ensure they are provided with the support to do so.
  • The Commissioning of a study to conduct a comprehensive baseline assessment of the legislative and regulatory framework pertaining to business and human rights as it applies in Ireland – Given the Irish Government’s strong focus on voluntary measures, and given the almost non-existent avenues for potential victims to have meaningful access to remedy through the Irish courts, the scope and outcome of this study will provide an interesting indication of gaps and the actions needed to close such gaps.

The last point brings me to the issue of complementarity. In his speech at the launch of the NAP, Minister Coveney reinforced the Government’s commitment to a voluntary approach as the best way to ensure greater corporate respect and accountability for human rights. While a voluntary approach, focused on implementation of the UN Guiding Principles on Business and Human Rights (UNGP), certainly has merit (and is worth supporting), it would be unfortunate to view one’s approach to B&HR solely through such a narrow lens. Minister Coveney was insistent that the key is to ensure buy-in and changing mind-sets, and while that should be an integral part of any approach, it should be coupled with the pursuit of legally binding measures. Minister Coveney was clear that he believes legally binding measures are “not straight forward”. That is certainly true, but the same could be said about the protection of businesses against the actions of States, yet globally we currently have 2363 active bilateral investment agreements and 310 treaties with investment provisions and many of these include investor-State dispute settlement mechanisms.

Institutions like the World Bank affiliated International Centre for Settlement of Investment Disputes (ICSID – as established by the ICSID treaty, signed by 153 States, including Ireland) and the Permanent Court of Arbitration in the Hague provide legally binding arbitration in disputes between investors and States. These measures were originally intended as a protection measure for foreign investors to protect their investments from issues such as misappropriation/expropriation, but today States are being taken to arbitration over a huge range of government measures, including environmental and social regulations, which investors say infringe on their rights. In 2015, 500 cases were brought to the ICSID alone and multinationals have sued to recover not only money they have already invested, but also for alleged lost profits and “expected future profits”.

Cases such as the Kraftwerk Moorburg case in Germany and the issues between Guatemala and Canadian mining giant Goldcorp (as disclosed by the Guardian newspaper in 2015) show 1) How corporations’ claims against states are now seen as assets that can be invested in or used as leverage to secure multimillion-dollar loans, with companies using the threat of a lawsuit at the ICSID to exert pressure on governments not to challenge investors’ actions, and 2) The length to which this system can severely limit the policy space of Governments and force them to put the profits of corporations ahead of the human rights and environmental rights of their own citizens.

There is a severe legal imbalance between the protection and rights afforded to businesses globally, potentially at the expense of the human rights of citizens, and the lack of any legally binding obligations on them to respect human rights.

Increasingly, pressure is building towards more legally binding measures to hold businesses to account. The French Duty of Vigilance law (enacted this year) provides an important example of how national legislation can be used to ensure businesses take the necessary steps to ensure respect for human rights (the Dutch Child Labour Due Diligence law is another example, albeit with a more limited scope). It should also be noted that during a session at the UN Forum on Business and Human Rights, several French companies made statements in support of the French law and the predictability and certainty it brought with it. Minister Coveney said in his speech at the launch of the NAP that human rights is good for business. I agree and I would go further and say that legal clarity on their human rights obligations, and a level playing field for all businesses, is good for business.

Pressure is also forming at international level. At the UN, the Open-ended intergovernmental working group on transnational corporation and other business enterprises with respect to human rights has been tasked with elaborating a legally binding instrument to regulate the activities of transnational corporations and other business enterprises in international human rights law. Progress has so far been slow, and the EU has played a fairly obstructive role in proceedings so far.

While I don’t believe an international treaty will provide the definitive solution to the issue of B&HR – there are many discussion needed around scope, feasibility, enforcement etc. – I do believe it forms an important element of the multipronged approached needed to ensure that companies conduct their business in a manner that ensures the respect for human rights of all stakeholders in their business operations. The enactment of national legislation is another important element, and so is the implementation of the UNGPs. I believe strongly in supporting the implementation of the Irish NAP to ensure the best possible outcome, but it should not be the entirety of your approach. At least not if you are truly serious about ensuring respect for human rights and holding business to account for human rights violations both nationally and globally.

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