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/
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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.
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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.
30
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.
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