Towards a UN Business and Human Rights Treaty: Do we need

one?

A. Introduction

In August 2013, at the Regional Forum on Business and

Human Rights for Latin America and the Caribbean, and

later at UN Human Rights Council 24th session in

September 2013, the representative of Ecuador before the

UN made a declaration regarding "Transnational

Corporations and Human Rights". With this statement the

government of Ecuador proposed a legally binding

international instrument on business and human rights to

be concluded within the UN system. The instrument

envisioned "would clarify the obligations of

transnational corporations in the field of human rights"

and "provide for the establishment of effective remedies

for victims in cases where domestic jurisdiction is

clearly unable to"1 provide them. Ecuador was speaking not

only in its own behalf but also for the African Group,

the Arab Group, Pakistan, Sri Lanka, Kyrgyzstan, Cuba,

Nicaragua, Bolivia, Venezuela and Peru. Over eighty

states have supported the initiative and it has also

gained the support of over hundred fifty regional and

international human rights organizations and social1 UNCHR, 24th session, September 2013, Statement on behalf of a Groupof Countries (Equador, Arab Group, African Group, Pakistan, SriLanka, Kyrgyzstan, Cuba, Nicaragua, Bolivia, Venezuela, Peru) on“Transnational Corporations and Human Rights”.

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movements. This proposal potentially brings the business

and human rights agenda to a new inflection point2.

On June 2014, at the 26th session of the UN Human Rights

Council in Geneva, two resolutions were tabled for

adoption by the Council. The first was a resolution

drafted by Ecuador and South Africa and signed also by

Bolivia, Cuba and Venezuela, which is supposed to direct

"to establish an open-ended intergovernmental working

group with the mandate to elaborate an international

legally binding instrument on Transnational Corporations

and Other Business Enterprises with respect to human

rights." and it was supported by 20 countries. The other

was a resolution drafted by Norway, which included a

request that the UN Working Group prepare a report

considering, among other things, the benefits and

limitations of legally binding instruments. This

resolution was supported by 22 other countries from all

regions. On 26th June 2014, the UN Human Rights Council

adopted Ecuador and South Africa’s resolution. The votes

were twenty in favour and thirteen abstentions. On 27th

June 2014, the Council adopted by consensus Norway's

resolution.

The negotiations for the treaty are slated to start in

2015. The central question is whether the United Nations2 John G. Ruggie, A UN Business and Human Rights Treaty Update, AnIssues Brief, 28. Januar 2014,<http://www.hks.harvard.edu/mrcbg/CSRI/UNBusinessandHumanRightsTreaty.pdf> accessed 3 January 2015.

2

should move forward with a proposed treaty on

transnational business and human rights, or whether it

should focus on implementing the current Guiding

Principles.

B. The problem

The cases of human rights violations and abuses by some

Transnational Corporations (TNC)3 are fact.

Economic globalisation has significantly altered the

institutional and regulatory environment in which

corporations operate. The internationalisation of

business has created increasing gaps between the

operational capacities of multinational corporations

(MNCs) and the regulatory capacities of States. It is

notable that according to United Nations Conference on

Trade and Development (UNCTAD), there are 82,000 parent

companies and 810,000 foreign affiliates all over the

world4.

3 Peter Muchlinski has defined the transnational corporation as anentity that ‘owns (in hole or in part), controls and manages incomegenerating assets in more than one country’, P. Muchlinski,Multinational Enterprises and the Law (Oxford: Blackwell, 1995), 12.The notation is used here in a broader sense, as includingcorporations that have supplies, sub-contractors, or franchisees incountries other than in their country of origin.4 United Nation Conference on Trade and Development (UNCTAD), WorldInvestment Report 2009: Transnational Corporations, AgriculturalProduction and Development, Geneva, United Nations Publications,2009.

3

Where a TNC develops relationships with a country other

than its country of origin, either directly or through

the establishment of subsidiaries or by contractual

relationships, both the State of incorporation of the

leading (parent) company, referred to as the ‘home

State’, and the State where the TMC conducts its

activities, or ‘host State’, may potentially assert

jurisdiction over the corporation’s activities. ‘Positive

conflicts of jurisdiction’ may occur as a result, where

both the ‘home State’ and the ‘host State’ seek to

control the activities of the TNC, thus running the risk

of imposing conflicting requirements on the corporation.

Conversely, where neither the home State, nor the host

(territorial) State effectively controls the activities

of the TNC, this may result in a situation of effective

impunity for human right violations5. As a matter of fact,

companies may come into a legal vacuum, if neither the

home nor the host country is willing or able to apply its

rules, or if rules applicable to the activity in question

do not exist at all. Firms may exploit this vacuum by

taking advantage of low labour, health, environmental,

tax, or consumer protection standards6.5 Olivier de Schutter, Sovereignty – plus in the Era of Independence:Towards an International Convention on Combating Human RightsViolations by Transnational Corporations’, in Making TransnationalLaw work in the Global Economy: Essays in Honour of Detlev Vagts, P.Bekker, R. Dolzer and M. Waibel (eds), Cambridge University Press,2010, 245-284, 249.6 Andreas Heinemann, Business Enterprises in Public InternationalLaw: the Case for an International Code on Corporate Responsibilityin From Bilateralism to Community Interest: Essays in Honour of BrunoSimma (Oxford 2011), <http://www.zora.uzh.ch/53712/1/Heinemann_From_bilateralism_to_community_interest_2011.pdf> accessed 4 January 2015.

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At the same time, privatization of state functions has

shifted powers and responsibilities from governments to

the market. These developments have significant impacts

on the international and domestic legal frameworks

through which States, corporations, civil society

organizations and citizens interact in relation to human

rights and the environment. While States are under legal

obligations to protect individuals against human rights

and environmental harms, there are also increasing

demands on corporations to respect human rights and the

environment in their global operations. At the same time,

the perceived dichotomy of business and human rights is

increasingly displaced by a growing recognition of their

interdependency7.

These developments pose three major challenges to the

traditional state‐centered paradigm of human rights under

international and domestic law. First, to what extent

human rights should directly come to bear on the

relationship between corporations and citizens

(‘horizontality’); secondly, to what extent human rights

7 Daniel Augenstein, Study of the Legal Framework on Human Rights andthe Environment Applicable to European Enterprises Operating Outsidethe European Union, submitted by the University of Edinburgh<http://ec.europa.eu/enterprise/policies/sustainable-business/files/business-human-rights/101025_ec_study_final_report_en.pdf> accessed 4January 2015, David Kinley mentions, that ‘human rights must embracethe power of the global economy, while insisting that its power isharnessed so as to promote the overarching goals of human rights’, inDavid Kinley, Civilizing Globalisation: Human Rights and the GlobalEconomy (Cambridge University Press 2009), 9.

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should apply beyond the territorial confines of the State

(‘extraterritoriality’); and thirdly, to what extent

traditional state‐based ‘command and control’ approaches

to protecting human rights and the environment should be

complemented by ‘softer’ forms of regulation

(‘governance’)8.

The above mentioned governance gaps provide the

permissive environment for wrongful acts by companies of

all kinds without adequate sanctioning or reparation. How

to narrow and ultimately bridge the gaps in relation to

human rights is a fundamental challenge9.

Domestic mobilization is crucial for the efficacy of

international norms10. But these problems cannot be solved

by domestic legislation alone. It is possible for a State

to extend the geographic scope of its regulations in

order to cure under-regulation, provided that the

jurisdictional limits resulting from public international

law are respected. However, often it will not be easy to

obtain information about facts which have taken place

abroad. Furthermore, the extraterritorial application of

8 Daniel Augenstein, Study of the Legal Framework on Human Rights andthe Environment Applicable to European Enterprises Operating Outsidethe European Union, submitted by the University of Edinburgh<http://ec.europa.eu/enterprise/policies/sustainable-business/files/business-human-rights/101025_ec_study_final_report_en.pdf> accessed 4January 2015.9 John Ruggie, Protect, Respect and Remedy: A Framework for Businessand Human Rights (2008), 189.10 See generally Simmons Beth, Mobilizing Human Rights: InternationalLaw in Domestic Politics. (Cambridge University Press, 2009).

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domestic law will increase the risk of conflicts with

other jurisdictions. Moreover, the interest of political

institutions in regulating behaviour of domestic firms

abroad may be limited. Hence, there is an urgent need of

international coordination in order to overcome the

problems raised by trans-border business. The general

verdict applies that trans-border problems can only be

solved internationally11.

C. The existing framework

It must be highlighted that over the last several

decades, international society has become increasingly

concerned about human right issues. There are a lot of

bilateral and multilateral treaties aimed to protect

human rights and fundamental freedoms generally.

Since the 1970s, several attempts have been made to adopt

instruments regulating multinational corporations conduct

at the international level. The result has been a number

of codes of conduct at international and regional level

focused on the impact of multinational corporations

11 Andreas Heinemann, Business Enterprises in Public InternationalLaw: the Case for an International Code on Corporate Responsibilityin From Bilateralism to Community Interest: Essays in Honour of BrunoSimma (Oxford 2011), <http://www.zora.uzh.ch/53712/1/Heinemann_From_bilateralism_to_community_interest_2011.pdf> accessed 4 January 2015.

7

(MNCs) in two main areas: social conditions and the

environment. Among the codes of conduct are: The OECD

Guidelines for Multinational Enterprises, the UN Norms on

the Responsibilities of Transnational Corporations and

Other Business Enterprises with Regard to Human Rights,

the Global Compact and, the most recent attempt in this

field, the Guiding Principles on Business and Human

Rights: Implementing the United Nations 'Protect, Respect

and Remedy' Framework proposed by UN Special

Representative John Ruggie. These codes are voluntary in

nature and have no enforcement mechanism12.

a. History and Development of International Corporate

Accountability within the United Nations

International development of corporate accountability is

by no means a recent phenomenon. Already in the year

1972, the United Nations began addressing corporate

accountability, when its Economic and Social Council

ordered a study of the role of transnational corporations

and their impact on the development process as well as on

international relations13, which led two years later, in

December 1974, to the establishment of the UN Commission

12 Daniel Iglesias Márquez, The green side of the International Codesof Conduct for Business (Maastricht School of Management 2014),<http://www.msm.nl/resources/uploads/2014/09/MSM-WP2014-24.pdf>accessed 5 January 2015.13 UN Economic and Social Council, Resolution 1721 (LIII), July 28,1972.

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on Transnational Corporations (UNCTC) as an advisory

body14.

The United Nations Conference on Trade and Development

has focused on a number of different tasks, as the

understanding of the political, economic, social, and

legal effects of activities undertaken by transnational

corporations, especially in developing countries, to

secure international arrangements that promoted the

positive contributions of transnational corporations,

national development goals and world economic growth,

while controlling eliminating their negative effects and

to strengthen the negotiating capacity of host countries,

in particular developing countries, in their dealings

with transnational corporations15.

In addition to these tasks, one of the UNCTC's primary

goals was to create an international code of conduct for

transnational corporations and it began to formulate such

a code in 1977. The final draft16 was completed in 1990

but despite the UNCTC's efforts to engage in dialogue

with governments to complete work on the draft, it was

14 UN Center on Transnational Corporations, Background and Activitiesof the Commission and the Centre on Transnational Corporations, 1972to 1975, <http://unctc.unctad.org/aspx/ UNCTC%20from%201972%20to%201975.aspx> accessed 5 January 2015.15 United Nations Conference on Trade and Development,<http://unctc.unctad.org/aspx/ UNCTCOrigins.aspx> accessed 5 January2015.16 United Nations Draft International Code of Conduct on TransnationalCorporations, 23 International Legal Materials (1984), 626.

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unable to establish a set of standards for corporations

related to human rights. The code was never adopted.

The United Nations Global Compact was launched in 200017,

on the occasion of the leading role of private firms in

the process of globalization, and proposed the creation

of a platform whose task would be to assist businesses in

developing socially responsible and sustainable policies.

The UN Global Compact is a strategic policy initiative

for businesses that are committed to aligning their

operations and strategies, it consists of ten universally

accepted principles in the areas of human rights, labour,

environment and anti-corruption and invites companies to

embrace, support, and enact, within their sphere of

influence, a set of core values in the above mentioned

areas. By doing so, business, as a primary driver of

globalization, can help ensure that markets, commerce,

technology and finance advance in ways that benefit

economies and societies everywhere18.

The principles are based on the idea that businesses

should support and respect the protection of

internationally proclaimed human rights and ensure that

they avoid complicity in human rights abuses19. In17 UN Global Compact, <http://www.unglobalcompact.org/index.html>accessed 5 January 2015.18 UN Global Compact, <https://www.unglobalcompact.org/AboutTheGC/>,accessed 5 January 2015.19 UN Global Compact, The Ten Principles, Principles 1-2,<http://www.unglobalcompact.org/

10

addition, the Compact called on businesses to protect the

labor rights of their workers, including the elimination

of forced labor and discrimination20. Moreover,

corporations were to promote and encourage environmental

responsibility and actively work against all forms of

corruption21.

The Global Compact is not a Code of Conduct, but a forum

which is supposed to gain private companies’ support for

the UN goals22.

The principles were not supposed to be binding - and

remained so. The Global Compact remained a voluntary

corporate responsibility initiative without legal

enforcement.

The UN Sub-Commission on the Promotion and Protection of

Human Rights approved in 2003 the Norms on the

Responsibilities of Transnational Corporations and Other

Business Enterprises with Regard to Human Rights Norms,

represent the most recent comprehensive and concise

AboutTheGC/TheTenPrinciples/index.html>, accessed 5 January 2015.20 UN Global Compact, The Ten Principles, Principles 3-6,<http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html>, accessed 5 January 2015.21 UN Global Compact, The Ten Principles, Principles 7-9 and 10,<http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html>, accessed 5 January 2015.22 Andreas Heinemann, Business Enterprises in Public InternationalLaw: the Case for an International Code on Corporate Responsibilityin From Bilateralism to Community Interest: Essays in Honour of BrunoSimma (Oxford 2011), <http://www.zora.uzh.ch/53712/1/Heinemann_From_bilateralism_to_community_interest_2011.pdf> accessed 5 January 2015.

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global document dealing with companies’ human rights

obligations and responsibilities23

The Norms do not introduce new obligations for

businesses. They reaffirm and reinforce the declarations

that have been made so far with regard to human rights

responsibilities of business enterprises24. Actually the

Norms were a restatement of existing international and

legal principles found in treaties and customary

international law, including dozens of UN declarations

and resolutions.

These Norms were a valuable articulation of obligations

of businesses to respect human rights because they

provided for greater accountability than previous efforts

by requiring that each transnational corporation or other

business enterprise shall adopt, disseminate and

implement internal rules of operation in compliance with

the Norms25.

23 Karl-Heinz Moder, Norms on the Responsibilities of TransnationalCorporations and other Business Enterprises with regard to HumanRights: Background paper to the FES side event at the 60th session ofthe UN-Commission on Human Rights on 25 March 2005, <http://www.fes-globalization.org/geneva/documents/UN_Norms/25March04_UN-Norms_Background.pdf> accessed 5 January 2015.24 Karl-Heinz Moder, Norms on the Responsibilities of TransnationalCorporations and other Business Enterprises with regard to HumanRights: Background paper to the FES side event at the 60th session ofthe UN-Commission on Human Rights on 25 March 2005, < http://www.fes-globalization.org/geneva/documents/UN_Norms/25March04_UN-Norms_Background.pdf> accessed 5 January 2015.25 Norms on the Responsibilities of Transnational Corporations andOther Business Enterprises with Regard to Human Rights, U.N. Doc.E/CN.4/Sub.2/2003/12/Rev.2 (2003), para 15,<http://www1.umn.edu/humanrts/business/norms-Aug2003.html>, accessed

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Therefore, the Norms obligated corporations to the

application of a specific human rights standard, which

would be followed by the United Nations conducting

periodic monitoring and verification of corporations'

efforts as well as investigating complaints of

violations26.This was very important, because, such a

mechanism, unlike many previously developed measures,

would thus allow the international community to actively

hold corporations accountable for human rights standards.

Moreover, the Norms expanded corporate responsibility

beyond the transnational enterprise itself. They held

that corporations should include the Norms in their

arrangements and dealings with contractors,

subcontractors, suppliers, licensees, distributors, or

natural or other legal persons that [they] enter into any

agreement with27. Therefore, the Norms recognized the

nature of business activity and the importance of holding

the liability of parent companies and their subsidiaries,

contractors and agents for violations of human rights.

5 January 2015.26 Norms on the Responsibilities of Transnational Corporations andOther Business Enterprises with Regard to Human Rights, U.N. Doc.E/CN.4/Sub.2/2003/12/Rev.2 (2003), para 16,<http://www1.umn.edu/humanrts/business/norms-Aug2003.html>, accessed5 January 2015.27 Norms on the Responsibilities of Transnational Corporations andOther Business Enterprises with Regard to Human Rights, U.N. Doc.E/CN.4/Sub.2/2003/12/Rev.2 (2003), para 15,<http://www1.umn.edu/humanrts/business/norms-Aug2003.html>, accessed5 January 2015.

13

But even with the positive improvements incorporated in

the Norms, the fatal flaw was the failure of the UN

Commission on Human Rights, the parent body of the sub-

commission, to adopt them. Without such approval, their

accountability measures had little authority and, as a

result, could not be effectively realized.

b. Other important International Accountability

Instruments and Structures

In addition to various UN-developed mechanisms, other

voluntary codes and systems have been introduced over the

last four decades. Among the most widely recognized and

accepted are the Organisation for Economic Cooperation

and Development's (OECD) Guidelines for Multinational

Enterprises28 and the International Labour Organization's

(ILO) Tripartite Declaration of Principles Concerning

Multinational Enterprises and Social Policy29.

The OECD Guidelines were drafted in 1976. Talks on

updating them began in June 2010, and on May 25, 2011,

28 Organisation for Economic Cooperation and Development, OECDGuidelines for Multinational Enterprises: Recommendations forResponsible Business Conduct in a Global Context,<http://www.oecd.org/about/ 0,3347,en_2649_34889_1_1_1_1_1,00.html>,accessed 5 January 2015.29 International Labour Organization, Tripartite Declaration ofPrinciples Concerning Multinational Enterprises and Social Policy(hereafter Tripartite Declaration), 4th ed.,<http://www.ilo.org/empent/Whatwedo/Publications/lang--en/docName--WCMS_094386/index.htm>, accessed 5 January 2015.

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forty-two governments adopted the update at the fiftieth

anniversary OECD ministerial meeting30.The Guidelines,

which are an annex to the OECD Declaration on

International Investment and Multinational Enterprises,

cover business ethics on employment, human rights, the

environment, information disclosure, combating bribery,

consumer interests, science and technology, competition,

and taxation. Governments signing on to the Declaration

commit to promoting the Guidelines among multinational

enterprises operating in or from their territories, with

observance of the Guidelines supported by National

Contact Points (NCPs), a unique implementation mechanism.

Each signatory establishes a NCP, which becomes the forum

for promoting the Guidelines on a national level. A NCP

handles all enquiries and matters related to the

Guidelines in that particular country, including

investigating complaints about a company operating or

headquartered there31. The OECD is a pioneer organization

for Economic Co-operation and Development and its mission

is to promote policies that will improve the economic and

social well-being of people around the world. The OECD

Guidelines, which are not legally binding – actually –

30 Organisation for Economic Cooperation and Development, New OECDGuidelines to Protect Human Rights and Social Development,<http://www.oecd.org/document/19/0,3746,en_21571361_44315115_48029523_1_1_1_1,00.html>, accessed 5 January2015.31 OECD Guidelines for Multinational Enterprises, supra note 70, JohnRuggie, Regulating Multinationals: The UN Guiding Principles, CivilSociety, and International Legalization (July 30, 2014), Business andHuman Rights: Beyond the End of the Beginning (César Rodriguez-Garavito, ed., Forthcoming), <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2474236>, accessed 1 January 2015.

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were the basis for the further attention to the rights

and needs of those may be at heightened risk of becoming

vulnerable or marginalized by business enterprises.

The ILO Tripartite Declaration was first issued in 1977

and the most recent edition was released in 2006. The

principles enshrined therein address several areas of

corporate activity, including the promotion of employment

and equality of opportunity and treatment.

In this context, ways for governments to develop national

policies for vocational training and skill development

that are closely connected to employment are discussed.

Additionally, favorable conditions of work and life are

encouraged. Surveys are to be conducted periodically to

monitor the effect given to the ILO Tripartite

Declaration by multinational enterprises, governments,

and employer and worker organizations. A summary and an

analysis of the replies received are submitted to the ILO

governing body for discussion. But the Declaration covers

only a limited area, to wit, worker's rights and

therefore, as a narrowly crafted mechanism, it cannot be

used to address the broader range of human rights

violations that corporations often commit.

The OECD Guidelines for Multinational Enterprises and the

ILO Tripartite Declaration of Principles sought to

directly engage corporations in the development of human

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rights programs within their businesses. In addition,

they added a layer of accountability over their

implementation. Indisputable, these codes are useful in

addressing and emphasizing the importance of corporate

participation in the protection of human rights. Although

this influence may be positive, they, however, remain

voluntary, reliant on the goodwill of corporations to

implement them. Thus, impunity often prevails in the

absence of strong legal mechanisms for accountability and

redress.

c. Guiding Principles on Business and Human Rights:

Implementing the UN Protect, Respect and Remedy Framework

In April 2005, the UN Commission on Human Rights adopted

Resolution 2005/69. The Secretary-General was requested

to appoint a Special Representative on the issue of human

rights and transnational corporations and other business

enterprises for an initial period of two years32. Harvard

Professor John Ruggie was appointed to the post. The UN

Human Rights Council (UNHRC), which was formed in 2006,

assumed the representative's mandate, which in 2008 was

renewed for three years. Secretary-General Ban Ki-Moon

subsequently retained the assignment.

32 UN Economic and Social Council, Commission on Human Rights: HumanRights and Transnational Corporations and Other Business Enterprises,para. 1, UN doc. E/CN.4/2005/L.87, April 15, 2005.

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Ruggie's efforts as Special Representative are

commendable. He has promoted a constructive and open

dialogue among a diverse group of stakeholders. Most

notably, he adopted the Responsibility to Protect (R2P)

framework33. This was the foundation for his ‘Protect,

Respect and Remedy’ Framework, which addressed corporate

accountability34.

Over six years he ran a careful process of research,

consultation and pilot work, that led to the UN Guiding

Principles on Business and Human Rights. This document

set out the baseline expectations of both governments and

business for ensuring that companies do not harm people’s

fundamental human rights. It generated sufficient

consensus among the previously warring factions for

governments to endorse them in 2011 without changing a

word35.

The United Nations Guiding Principles on Business and

Human Rights (UNGPs) encompass three pillars outlining

how states and businesses should implement the framework.

33 UN General Assembly, 2005 World Summit Outcome, UN doc. A/RES/60/1,24 October, 2005.34 UN "Protect, Respect and Remedy" Framework and Guiding Principles,< http://business-humanrights.org/en/un-secretary-generals-special-representative-on-business-human-rights/un-protect-respect-and-remedy-framework-and-guiding-principles>, accessed 5 January 2015.35 Caroline Rees, Treaties and the UN Guiding Principles on Business &Human Rights: The Way Forward,<http://www.csrwire.com/blog/posts/1417-treaties-the-un-guiding-principles-on-business-human-rights-the-way-forward>, accessed 5January 2015.

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The first pillar is the state duty to protect against

human rights abuses by third parties, including business,

through appropriate policies, regulation, and

adjudication.

The possible measures by States to promote corporate

respect for human rights and prevent corporate-related

human rights abuse are grouped into “five priority areas

through which States should strive to achieve greater

policy coherence and effectiveness as part of their duty

to protect: (a) safeguarding their own ability to meet

their human rights obligations; (b) considering human

rights when they do business with business; (c) fostering

corporate cultures respectful of rights at home and

abroad; (d) devising innovative policies to guide

companies operating in conflict-affected areas; and (e)

examining the cross-cutting issue of extraterritorial

jurisdiction.”36

The second pillar is the corporate responsibility to

respect human rights. This requires corporations to act

with due diligence and to exercise due diligence in

36 Report of the Special Representative of the Secretary-General onthe issue of human rights and transnational corporations and otherbusiness enterprises, John Ruggie, Business and Human Rights: Furthersteps toward the operationalization of the “protect, respect andremedy” framework, A/HRC/14/27, Human Rights Council, 14th session,Agenda item 3, Promotion and protection of all human rights, civil,political, economic, social and cultural rights, including the rightto development, <http://www.reports-and-materials.org/Ruggie-report-2010.pdf>, accessed 5 January 2015.

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controlling the acts of the subsidiaries to avoid

infringing on the human rights and to address adverse

impacts that do occur. This responsibility applies to all

aspects of business activity and requires corporations to

consider their impact on all internationally recognized

rights.

The third pillar addresses both the state's

responsibility to provide access to remedy through

judicial, administrative, and legislative means, and the

corporate responsibility to prevent and remediate any

infringement of rights that they contribute to. Having

effective grievance mechanisms in place is crucial in

upholding the state's duty to protect and the corporate

responsibility to respect. The UNGPs dictate that non-

judicial mechanisms, whether state-based or independent,

should be legitimate, accessible, predictable, rights-

compatible, equitable, and transparent. Similarly,

company-level mechanisms are encouraged to operate

through dialogue and engagement, rather than with the

company acting as the adjudicator of its own actions37.

The framework has been widely welcomed from governments,

businesses and international organizations. Ruggie had

done a lot of work to ensure that. The Guiding Principles

37 U.N. Human Rights Council, The UN 'Protect, Respect, and Remedy'Framework for Business and Human Rights, September 2010, <http://www.reports-and-materials.org/sites/default/files/reports-and-materials/Ruggie-protect-respect-remedy-framework.pdf>, accesses 5January 2015.

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were, therefore, developed to “operationalize” the

framework and to provide concrete and practical

recommendations for its implementation. Each of the

thirty-one principles is accompanied by a commentary,

further clarifying its meaning and implications, and

elaboration on how states and corporations can carry out

their respective pillars of the framework.

The final version of the Guiding Principles on Business

and Human Rights: Implementing the United Nations

Protect, Respect and Remedy Framework was released in

March 201138.

The Guiding Principles are useful because they are a

result of extensive discussions and analysis by various

stakeholder groups, including governments, corporations,

NGOs and experts in various areas of law and policy.

Remarkable advancements were made as a result of the

principles.

D. UN Business and Human Rights Treaty

38 UN Human Rights Council, Guiding Principles on Business and HumanRights: Implementing the United Nations ‘Protect, Respect and Remedy’Framework, UN doc. A/HRC/17/31, Art. 31, 21 March 2011.

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Two decades ago, Professor Louis Henkin began his

magisterial “The Age of Rights” with a ringing claim of

universality: “Ours is the age of rights. Human rights is

the idea of our time, the only political-moral idea that

has received universal acceptance. The Universal

Declaration of Human Rights, adopted by the United

Nations General Assembly in 1948, has been approved by

virtually all governments representing all societies.

Human rights are enshrined in the constitutions of

virtually every one of today’s 170 states -old states and

new; religious, secular, and atheist; Western and

Eastern; democratic, authoritarian, and totalitarian;

market economy, socialist, and mixed; rich and poor,

developed, developing and less developed”39.

International law, in both its “hard” (binding) and

“soft” (nonbinding) variants, has contributed to the

incorporation of many human rights into the domestic

constitutions of a significant number of states40.

In the current state of development of international law

a clear obligation for States to ensure that private

actors such as corporations will not violate the human

rights of others has not yet crystallized. The Guiding

Principles themselves are soft law. Without the

conclusion of a special treaty on corporate39 Louis Henkin , The Age of Rights xvii (1990).40 Tom Ginsburg, Zachary Elkins & Beth Simmons, Getting to Rights:Treaty Ratification, Constitutional Convergence, and Human RightsPractice, 54 Harvard Journal of International Law 61 (2013), 63.

22

responsibility, the legal basis for human rights

obligations of private actors stays vague41. Therefore, in

the absence of new conventional obligations, the above

mentioned Framework would only have a legal effect if his

guidance had an impact on State practice meeting the high

requirements for a change in customary law. It is more

realistic to say that the legal consequences that work

will be restricted to modifying the lex mercatoria42.

However, the development of customary international law,

could be a lengthy process, with inconsistent

availability of remedies. It is very possible, that

large-scale human rights violations will continue to

result from business operations, thus many believe that

it is important that steps be taken by the international

community to address those violations. They believe that

a Treaty is necessary to bring hard-law coherence and

power to the full implementation of the Guiding

Principles and that a treaty could complement them. An

international Treaty on Corporate Responsibility could

41 Andreas Heinemann, Business Enterprises in Public InternationalLaw: the Case for an International Code on Corporate Responsibilityin From Bilateralism to Community Interest: Essays in Honour of BrunoSimma (Oxford 2011), <http://www.zora.uzh.ch/53712/1/Heinemann_From_bilateralism_to_community_interest_2011.pdf> accessed 4 January 2014.42 Andreas Heinemann, Business Enterprises in Public InternationalLaw: the Case for an International Code on Corporate Responsibilityin From Bilateralism to Community Interest: Essays in Honour of BrunoSimma (Oxford 2011), <http://www.zora.uzh.ch/53712/1/Heinemann_From_bilateralism_to_community_interest_2011.pdf> accessed 4 January 2014.

23

contribute to establishing a world economic order worthy

of the name43.

Those seeking a treaty expressed the desire of a faster

pace of progress in the face of widespread corporate

abuse of human rights, and the lack of effective

prevention and remedy. The continued exposure of

vulnerable and less powerful people to arbitrary

dispossession of land, poverty wages and dangerous

working conditions, harmful pollution, internet

censorship and surveillance, and rising attacks on human

rights defenders, serve as reminders that there is a long

road yet to travel. In addition, that there are

advantages of a treaty for business, such as that it

could create a level playing field where now there are

huge discrepancies in human rights enforcement across

jurisdictions, it could enhance legal predictability and

stability and contribute to risk management, it

potentially reduces the cost to companies of protest and

crime, and could induce an environment of greater trust

and enhanced reputation in which responsible business can

thrive44. The treaty debates could act as a ‘political

43 Andreas Heinemann, Business Enterprises in Public InternationalLaw: the Case for an International Code on Corporate Responsibilityin From Bilateralism to Community Interest: Essays in Honour of BrunoSimma (Oxford 2011), <http://www.zora.uzh.ch/53712/1/Heinemann_From_bilateralism_to_community_interest_2011.pdf> accessed 6 January 2014.44 Does the World Need a Treaty on Business and Human Rights?Weighing the Pros and Cons: Notesof the Workshop and Public Debate, Notre Dame Law School, 14th May2014, by the Business and Human Rights Resource Centre, <http://business-humanrights.org/sites/default/files/media/documents/

24

spur’ for governments and businesses to implement the

Guiding Principles faster and more fully. The process of

treaty development itself could encourage and cajole

greater action.

Proponents argue that human rights are so fundamental to

human well-being and to companies’ social license to

operate, that they need a hard-law ‘floor’ of minimum

standards, at least equivalent to companies’ rights, not

a soft-law or voluntary code. Equally, the greater

coherence of hard law, which a binding treaty would

create, is a further argument for the treaty to enshrine

the principle of extraterritoriality, after the

exhaustion of all national channels for remedy (the

latter to avoid any accusations of imperialism)45.

Practically, a convention could impose on the home States

of TNCs an obligation to adopt parent-based

extraterritorial regulation, allowing the home State to

exercise extraterritorial jurisdiction where this appears

necessary to avoid impunity, or where victims would have

note_event_does_the_world_need_a_treaty_on_business_and_human_rights__21-5-14.pdf>, accessed 6 January 2014.45 Does the World Need a Treaty on Business and Human Rights?Weighing the Pros and Cons: Notesof the Workshop and Public Debate, Notre Dame Law School, 14th May2014, by the Business and Human Rights Resource Centre, <http://business-humanrights.org/sites/default/files/media/documents/note_event_does_the_world_need_a_treaty_on_business_and_human_rights__21-5-14.pdf>, accessed 6 January 2014.

25

no effective remedy before the national courts of the

host State46.

On the other hand, a rapid Treaty would be weak, in order

to accommodate the most recalcitrant states influenced by

the most recalcitrant companies. Much of what is needed

to strengthen human rights in business is there already

in diverse statutes in diverse legal domains. An

international agreement concluded between States cannot

replace domestic mobilization and of course the treaty

will not be a deus ex machina and solve every existing

problem.

Further, the Treaty would be negotiated by the very same

states that do not implement their own human rights laws

and constitutions now, and many governments would either

not ratify the treaty, or it would take them time to do

so. In contrast, if regional and national advocates and

movements could harmonize and accelerate implementation

of laws and augment their application in courts, this

would likely drive greater respect and remedy for human

rights than a moribund treaty debate.

Unfortunately, some of the states with the world's worst

child labor records are promoting promulgation of a new

UN business and human rights treaty that, while unlikely

46 Pieter Bekker, Rudolf Dolzer, Michael Waibel, Making TransnationalLaw Work in the Global Economy: Essays in Honour of Detlev Vagts,Cambridge [U.K.]: Cambridge University Press, 2010, pp.245-284, 283.

26

to have any impact on victims, will obscure their own

corruption and irresponsibility in a fog of anti-free

enterprise rhetoric. Given the tendency of abusive states

to foster meaningless global human rights legislation and

institutions, it can be assumed their support is part of

a strategy of obfuscation47.

Moreover, not all states that can make the biggest

difference have signed on to the full range of human

right standards and those who haven't are unlikely to

impose them on their corporations as a matter of hard

law. That not only results in an ineffective treaty, of

which there are many.

Ruggie himself expressed many times his concerns for the

attempt at further legalization48. One of the most

profound global geo-economic shifts today is the rapid

increase of transnational corporations based in so-called

47 Aaron Rhodes, The False Promise of an International Business andHuman Rights Treaty, <http://www.huffingtonpost.com/aaron-rhodes/the-false-promise-of-an-i_b_5575236.html>, accessed 6 January 2014.48 John Ruggie, A UN Nusiness and Human Reghts Treaty? An IssuesBrief, 28 January 2014,<http://www.hks.harvard.edu/m-rcbg/CSRI/UNBusinessandHumanRightsTreaty.pdf>, accessed 6 January 2015, John Ruggie, A UN Nusiness and HumanReghts Treaty Update, 1 May 2014,<http://business-humanrights.org/sites/default/files/media/un_business_and_human_rights_treaty_ update.pdf>, accessed 6 January 2015, JohnRuggie, Treaty Road not travelled, Ethical Corporation, May 2008,<http://www.hks.harvard.edu/m-rcbg/news/ruggie/Pages%20from%20ECM%20May_FINAL_JohnRuggie_may%2010.pdf>, accessed 6 January 2015, JohnRuggie, Third United Nations Forum on Business & Human Rights:Closing Plenary Remarks, 3 December 2014,<http://www.ohchr.org/Documents/Issues/Business/ForumSession3/Submissions/JohnRuggie_SR_SG_BHR.pdf>, accessed 6 January 2015.

27

emerging markets. The issue of business and human rights

is complex. The larger the number and diversity of home

countries of transnational corporations, the more complex

the process of international legislation becomes in this

space.

Another point is that the current human rights treaty

proposal is focused exclusively on transnational

corporations, namely national companies will be excluded,

which is highly problematic49, because a lot of violations

will not be covered and effective protection will not be

guaranteed. A treaty should encompass all business

enterprises.

In addition, there is a certain intuitive and even moral

appeal to the idea that there ought to be one law, one

international law, governing the conduct of all business

enterprises everywhere under a common set of standards

protecting all human rights. But such a treaty 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. The crux of the problem is this: while business

and human rights may be a single label that we attach to

49 Human Rights Watch said: "There need to be stronger human rightsrules for business, but the UN’s decision to move ahead with thedevelopment of an international treaty that only covers transnationalcorporations is compromised by the opposition of key governments andits narrow mandate. The UN’s decision is too narrow since it onlyfocuses on transnational corporations and will not address nationalor other businesses that should also be required to respect humanrights."

28

a range of activities, it is so vast, diverse, and

conflicted an issue area that it does not lend itself to

governance through a single set of comprehensive and

actionable treaty obligations. That is why the principled

pragmatism on which the Guiding Principles rest

recommends international legal instruments that are

carefully crafted precision tools50. Moreover, it is

doubtful that any overarching treaty in practice would

extend protection of all internationally recognized human

rights against corporate abuse, even if the treaty were

to encompass all business enterprises, which the proposed

treaty does not.

The status of businessenterprises has changed so that

some defend the idea that they have developed from mere

objects to subjects of public international law. Ruggie

managed to have their unanimous consensus and made slow

but stable steps forward, so that many believe that the

adoption of Ecuador’s resolution is a genuine set back to

the efforts have been made underway to improve human

rights and access to remedy on the ground51.50 John Ruggie, Third United Nations Forum on Business & Human Rights:Closing Plenary Remarks, 3 December 2014, <http://www.ohchr.org/Documents/Issues/Business/ForumSession3/Submissions/ JohnRuggie_SR_SG_BHR.pdf>, accessed 6 January 2015.51 The International Organisation of Employers (IOE) said in astatement that it "deeply regrets" that the adoption of the Ecuadorresolution has broken the unanimous consensus on business and humanrights achieved three years ago with the endorsement of the UNGuiding Principles; that the vote is a "genuine setback" to theefforts underway to improve human rights and access to remedy on theground; and that the Human Rights Council has decided to return to"approaches which have failed in the past and which are diametricallyopposed to the goal of quickly advancing the implementation" of the

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E. Conclusion

The claim of the "universality" of human rights is as

enticing as it is puzzling. On the one hand, it is hard

to deny the apparent ubiquity of at least some formal

rights in both international and domestic law. On the

other hand, many have questioned the genuine embrace of

these rights worldwide, and a raft of observers -from

pundits to practitioners to scholars- have questioned

whether rights on paper have influenced the enjoyment of

human rights on the ground52.

The ultimate value and future credibility of both the

Guiding Principles and a new international instrument

will be seen in the extent to which they lead to actions

at national and international level which stop the

occurrence of human rights abuses by businesses.

Governments should both move forward with national

measures including human rights due diligence

Guiding Principles, <http://www.ioe-emp.org/index.php?id=1238>,accessed 6 January 2015.52 Tom Ginsburg, Zachary Elkins & Beth Simmons, Getting to Rights:Treaty Ratification, Constitutional Convergence, and Human RightsPractice, 54 Harvard Journal of International Law 61 (2013), 62, seegenerally Oona A. Hathaway, Do Human Rights Treaties Make aDifference?, 111 Yale L.J. 1935, 1989 (2002) finding thatratification leads in some cases to less observance of human rights;Eric A.Posner, Why is Human Rights Law Such a Failure? (26 February2012), arguing that human rights law has been unsuccessful.

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requirements, and support the international process

towards a binding instrument53.

The new process towards an international legally binding

instrument, if thoughtfully developed, could provide an

important additional tool to ensure that businesses

respect human rights.

The question actually should not be if we need a UN

Business and Human Rights Treaty, but if we need it now.

An International Code on Corporate Responsibility will be

sooner or later fact, but maybe it would be better to

make some more preliminary steps.

The Guiding Principles seem to have some influence and

they are becoming embedded in the regulatory ecosystem

for business and human rights. States have just begun to

take additional steps to act upon them. So maybe we

should first redouble efforts to implement and build on

the Guiding Principles - or to start the process where it

has not yet begun54. Ergo, the Guiding Principles should

53 CIDSE briefing note, UN Business & Human Rights Framework: Moreaction required at national and international level to stop humanrights abuses by business, December 2014, <http://business-humanrights.org/en/cidse-argues-that-the-process-towards-a-binding-instrument-is-an-opportunity-to-strengthen-un-framework> accessed 3January 2015.54 John Ruggie, Third United Nations Forum on Business & Human Rights:Closing Plenary Remarks, 3 December 2014, <http://www.ohchr.org/Documents/Issues/Business/ForumSession3/Submissions/ JohnRuggie_SR_SG_BHR.pdf>, accessed 6 January 2015.

31

be implemented, which means that we need to measure and

report on implementation.

In addition, we should be more practical and identify

specific gaps that the Guiding Principles and other such

means cannot reach, and then assess options for narrowing

those gaps based on evidence about which are likely to be

the most effective and achievable where it matters most,

namely in the daily lives of people55.

Further, a legal instrument addressing corporate

involvement in the category of “gross” human rights

violations could be established, because of the severity

of the abuses involved. Because the underlying

prohibitions already enjoy widespread consensus among

states yet there remains considerable confusion about how

they should be implemented in practice when it comes to

legal persons; and because the knock - on effects for

other aspects of the business and human rights agenda

would be considerable56.

Hence, in a last stage, soft law should turn into hard

law by concluding a multilateral treaty, but we should

55 John Ruggie, Third United Nations Forum on Business & Human Rights:Closing Plenary Remarks, 3 December 2014, <http://www.ohchr.org/Documents/Issues/Business/ForumSession3/Submissions/ JohnRuggie_SR_SG_BHR.pdf>, accessed 6 January 2015.56 John Ruggie, Third United Nations Forum on Business & HumanRights: Closing Plenary Remarks, 3 December 2014,<http://www.ohchr.org/Documents/Issues/Business/ForumSession3/Submissions/ JohnRuggie_SR_SG_BHR.pdf>, accessed 6 January 2015.

32

move ahead step by step, so that the protection of human

rights on business is effective and sufficient.

33