1 Introduction
Since their endorsement by the Human Rights Council (âhrcâ) of the United Nations in 2011, the uptake of the UN Guiding Principles on Business and Human Rights (hereinafter the âungpsâ), currently the global agreed-upon authoritative standard in the area of business and human rights, has been impressive. The principles have been welcomed by states, business actors and non-governmental organizations (ângosâ). States have gradually developed and adopted National Action Plans (ânapsâ),1 which are policy documents where specific measures are indicated to implement the ungps at the domestic level. Business actors have developed their policies and committed to aligning their business practices to the principles set forth therein, specifically the responsibility to respect human rights in the context of business activities via processes of human rights due diligence.2 Last but not least, the ungps have influenced
The ungps fall within the loose category of so-called international âsoft lawâ instruments on business and human rights. The expression âinternational âsoft lawâ instrumentsâ encompasses all written legally non-binding instruments agreed to among states â including resolutions, codes of conduct, statements, and declarations â that seek to lay down principles and non-legal norms of
While the ungps have established themselves as the authoritative international âsoftâ standard on business and human rights, the last decade has witnessed numerous attempts to convert the principles set forth therein into international law. Put differently, the ungps have gradually inspired a ânew regulatory dynamicâ characterized by growing calls to develop a binding international legal instrument on business and human rights.8 Even the author of the ungps, Professor John Ruggie, contemplated that international legalization9 in this area would sooner or later become a ânecessary and inevitable development.â10 The drive to convert âsoftâ principles on business and human
The present chapter explores and tests the role of the ungps in the development of one of the formal sources of international law,13 specifically the current efforts to elaborate a universal multilateral treaty, or so-called âLegally Binding Instrumentâ, on business and human rights.14 Put differently, the
2 The Reasons behind the Call for a Multilateral Treaty on Business and Human Rights
This section presents some of the relevant reasons why different stakeholders have increasingly pushed for the elaboration and adoption of a universal multilateral treaty on business and human rights. In doing so, the following subsections draw on relevant documents released prior to the formal beginning of
2.1 The Perceived Inadequacy of Non-binding Instruments
One of the reasons why the elaboration of a multilateral treaty on business and human rights has been widely deemed necessary is the legally non-binding character of existing âsoftâ law instruments in this area, particularly the ungps. It is argued that instruments that do not create obligations binding on states under international law are inadequate to address ongoing concerns in relation to the conduct of tncs.
A number of states from the global South have witnessed how, in spite of the existing âsoftâ law regulatory attempts in business and human rights, corporate actors, and in particular tncs, continue to be involved in âhuman rights violations and abuses.â19 Along similar lines, civil society groups have highlighted
In light of the perceived inadequacies of âsoftâ law instruments, specifically the ungps, a number of states and civil society groups have emphasized that it is necessary to move from international âsoftâ law instruments, such as
2.2 The Perceived Substantive Shortcomings of the ungps
An additional reason behind the drive to elaborate and adopt a multilateral treaty on business and human rights is the necessity to remedy the perceived substantive shortcomings of the ungps. In calling for the adoption of a business and human rights treaty, and in discussing the potential substance of the proposed instrument, states and civil society groups have hinted at a number of substantive limitations of the ungps that the proposed treaty should address.
First, it has been argued that the proposed treaty on business and human rights should provide for human rights obligations binding on corporations under international law.26 The ungps do not speak of human rights obligations binding on corporate actors. Rather, they posit a corporate âresponsibilityâ to respect human rights; that is, a non-legal desideratum of refraining from interferences with individualsâ enjoyment of their human rights. The corporate responsibility to respect is not grounded in international law but in social norms and expectations. It is part of what Ruggie refers to as companiesâ âsocial license to operate.â27
Third, according to treaty proponents, the proposed treaty should require state parties to establish a regime of legal liability under their national law for companies whose acts or omissions cause or contribute to adverse human rights impacts.30 The ungps do not âequateâ31 adverse corporate human rights impacts with legal liability. On the contrary, they provide that âthe responsibility of business enterprises to respect human rights is distinct from issues of legal liability and enforcement, which remain defined largely by national law provisions in relevant jurisdictions.â32
Last, but not least, it is argued that the proposed treaty should require state parties to strengthen the protection of victims of adverse human rights impacts stemming from business activities, especially by guaranteeing victimsâ access to adequate and effective legal remedies at the national level.33 It has been suggested that, although the ungps dedicate a set of principles to access to remedies under Pillar iii,34 they fall short of âaddressing properly [â¦] the
3 The Beginning of the Treaty Process
The process of elaborating a so-called âLegally Binding Instrumentâ on business and human rights officially began in 2014, when the Ecuador Declaration was adopted at the 26th session of the Human Rights Council (âhrcâ) in the form of unhrc Resolution 26/9, which established an open-ended intergovernmental working group (âoeigwgâ) to elaborate a universal multilateral treaty on the topic. At the same session, the hrc also adopted unhrc Resolution 26/L.1, on strengthening domestic implementation of the ungps under the guidance of the existing Working Group on business and human rights. The resolutions reflect the two sides of what emerged as a debate over the necessity of a multilateral treaty on business and human rights instead of enhanced domestic implementation of the ungps.
In unhrc Resolution 26/9,37 the hrc adopted the Ecuador Declaration which established an open-ended intergovernmental working group (oeigwg) on tncs and other business enterprises with respect to human rights, with a mandate to elaborate a âLegally Binding Instrumentâ on business and human rights that would regulate the activities of tncs and other business enterprises under international human rights law.38 In the preamble to the resolution, the hrc stressed that, while states have obligations and the âprimary responsibilityâ to protect human rights âwithin their territory and/or jurisdictionâ against adverse corporate impacts, tncs and other business enterprises, have a responsibility to respect human rights â that is, to avoid interfering with individualsâ enjoyment of their human rights. The hrc decided in the resolution
The Ecuador Declaration was adopted with a recorded vote of 20 states in favor, 14 against and 13 abstentions. The majority of states in favor of the resolution, which is to say in favor of elaborating a multilateral treaty on business and human rights, belonged to the global South.
At the same session of the hrc, a second resolution was adopted by consensus. Resolution 26/L.140 was sponsored by Norway and proposed an alternative to the elaboration of a treaty on business and human rights. The so-called âNorway Resolutionâ recognized that effective regulation of tncs at the domestic level had the potential to contribute to âthe promotion, protection and fulfillment of and respect for human rights.â41 It encouraged states to make efforts to fully implement the ungps at the national level, specifically through the adoption of National Action Plans developed with the guidance of the existing UN Working Group on Business and Human Rights.42
Additionally, the resolution extended the mandate of the Working Group and requested it to launch a consultative process with all relevant stakeholders to consider, inter alia, the potential benefits and limitations of a multilateral treaty on business and human rights.43
Compared to the Ecuador Declaration, the Norway Resolution received wide support from states from the global North, generally home to the largest and most powerful tncs, which had strongly opposed the proposal to elaborate a multilateral treaty in the area of business and human rights. The two resolutions clearly reflect the polarization between some states from the global North âwho prefer a more conservative approach based on the ungps and on the primary role of the state and national lawsâ44 and some states from the global South who perceive the limitations of âsoftâ law instruments, such as the ungps, and consider a treaty necessary.
The division between treaty supporters and treaty opponents is also generally reflected in the context of early consultations held by the oeigwg. In
4 Early Proposals on Substantive Aspects of the âLegally Binding Instrumentâ
In Resolution 26/9, the unhrc requested the newly appointed oeigwg tasked with the elaboration of a multilateral treaty to dedicate its first two working sessions to âconstructive deliberations on the content, scope, nature and form of the future international instrument.â51 While, at the time of writing, a total of nine working sessions of the oeigwg have been held, the first two sessions specifically set the stage for the drafting process of the âLegally Binding Instrument.â During these sessions, views were shared among relevant stakeholders on a number of substantive aspects of the proposed instrument.
4.1 The Proposed Complementarity with the ungps
According to treaty proponents, the proposed âLegally Binding Instrumentâ needs to be complementary to the ungps with respect to its content. This complementarity, however, can be understood on two levels. On a basic level of complementarity, the substantive aspects of the ungps should be the natural starting point for the elaboration of a multilateral treaty on business and human rights â that is to say that the treaty should be complementary to the ungps with regard to both fundamental and operational principles. On a second level of complementarity, however, the proposed treaty should not take the ungps as the âend point.â52 As suggested during the first working session of the oeigwg, the treaty should go beyond and gradually develop the ungps.53 In other words, the treaty should not simply be a âhard-lawâ replication of the ungps, but it should attempt to build on the content of the ungps with a view to advance ways to fill in the perceived gaps left by the latter instrument.54 In this sense, it has been observed that the proposed treaty would operate as a logical extension of the ungps.55 Some of the substantive proposals made by stakeholders in the context of the oeigwgâs working sessions, further discussed below, are clear examples of the intention to elaborate a treaty that attempts to address the substantive limitations of the ungps.
4.2
With respect to treaty scope, the first and second working sessions of the oeigwg discussed the potential subject matter and regulatory targets of the proposed âLegally Binding Instrument.â
As to the subject matter of the treaty, discussions have focused on whether the proposed instrument should cover violations of all internationally recognized human rights or only gross human rights violations in the context of business activities. The latter option was originally put forward by Professor Ruggie at the outset of the treaty process. Specifically, Ruggie had pointed out that elaborating a treaty which addresses only gross human rights âviolationsâ by tncs and other business enterprises represented the only way to avoid adopting a treaty of little practical use in terms of addressing existing governance gaps in business and human rights.56 During the first working session of the oeigwg, however, a number of stakeholders stated that it would be inaccurate to elaborate a treaty covering only gross human rights violations by corporate actors, as the activities of business entities could have a negative impact potentially on all internationally recognized human rights.57 In addition to this, it was argued that, for the proposed treaty to reflect the universality,58 indivisibility,59 and interdependence60 of human rights in the context of business and human rights,61 it would have to cover all internationally recognized human rights.
In terms of regulatory targets of the proposed treaty, concerns have been raised on whether the proposed treaty should cover all business entities, including domestic companies, or just transnational corporations (âtncsâ). On the one hand, it has been argued that the proposed treaty should only cover entities with activities of a transnational character for a number of reasons. First, tncs have mustered enough economic power to surpass that of states and, as a result, there exist unbalanced power dynamics between states and tncs.
4.3 Obligations of State Parties in the Context of Business Activities
The early working sessions of the oeigwg touched upon the human rights obligations of states in the context of business activities, including jurisdictional obligations, obligations with respect to liability of corporate actors, and obligations with respect to access to remedies for victims of corporate adverse human rights impacts.
4.3.1 Jurisdictional Obligations
Discussions on jurisdictional obligations focused on the perceived existing gaps in statesâ exercise of extraterritorial prescriptive and adjudicative jurisdiction.
With respect to extraterritorial prescriptive jurisdiction, it has been observed that the ungps have fallen short of addressing the issue of statesâ extraterritorial jurisdiction in the context of business activities and that the proposed treaty should consider multiple options to operationalize the extraterritorial obligations of states to protect against (if any) the adverse human rights impacts of their corporate nationals abroad.65 Some have argued that the proposed treaty should oblige home states of tncs to exercise extraterritorial prescriptive jurisdiction to regulate the activities of their corporate nationals wherever they operate,66 whereas others have pointed out that a binding
With respect to extraterritorial adjudicative jurisdiction, concerns have been raised on matters of private international law applied in the context of business and human rights, including the exercise of personal jurisdiction over certain corporate defendants and the issue of applicable law in transnational litigation against tncs.68
4.3.2 Obligations with Respect to Legal Liability
As to the issue of corporate liability, treaty proponents have argued that a multilateral treaty should require state parties to have in place an effective system of liability under their national law to hold tncs and other business enterprises liable for their adverse human rights impacts. The treaty should also require states to tackle, at the national level, obstacles in holding these actors liable. During early consultations of the oeigwg, various stakeholders have addressed some of the challenges traditionally encountered when attempting to hold corporate entities liable for their adverse human rights impacts. Among these, the complex way in which tncs are structured and operate were seen to represent major hurdles in securing corporate liability.69 Furthermore, established principles of company law â separate legal personality and limited
4.3.3 Obligations with Respect to Access to Remedies
In terms of remedies for victims of corporate-related adverse human rights impacts, the proposed âLegally Binding Instrumentâ should require state parties to improve and facilitate access to legal remedies at the national level,72 and, at the same time, make up for national legal efforts to ensure there are remedies for corporate adverse human rights impacts, which have generally been regarded insufficient and ineffective.73 With specific regard to legal remedies for corporate adverse human rights impacts, according to treaty proponents, the proposed âLegally Binding Instrumentâ should require state parties to reduce or eliminate barriers to access to justice and provide ways to tackle existing legal and procedural obstacles encountered in the context of transnational civil litigation, such as the doctrine of forum non conveniens.74
4.4 Corporate Human Rights Obligations
According to treaty proponents, the future âLegally Binding Instrumentâ needs to depart from the existing âsoftâ corporate responsibility to respect human rights enshrined in the ungps in favor of the progressive establishment of corporate human rights obligations under international law.75 In this sense, it has been argued that the language to be adopted in the proposed instrument be that of âlegal dutyâ rather than âvoluntary responsibility.â76 According to treaty proponents, the legal duties potentially placed on corporations would be an addition to the existing international obligations binding on states, and would have to be tailored to the specific characteristics of corporate actors.77 The proposed establishment of international human rights obligations binding on
5 The Analysis of the 2023 Updated Draft of the âLegally Binding Instrumentâ
The treaty negotiations held by the oeigwg have produced, at the time of writing, a total of five drafts of the proposed treaty, released respectively in 2018,79 2019,80 2020,81 202182 and 2023.83 The second half of the present article is concerned specifically with the analysis of the proposed legal text of the 2023 updated draft of the treaty. With this in mind, the following sections look at a number of selected provisions from the draft.
The provisions analyzed hereinafter have been selected on the basis of three criteria. The first criterion concerns the potential alignment with the ungps. As discussed, it has been stressed that the ungps should serve as the natural starting point for the elaboration of the content of the treaty; therefore, a number of treaty provisions are analyzed to highlight the proposed substantive alignment between the two instruments. The second criterion for the
The overall objective of the second half of the chapter is, therefore, to examine the text of the 2023 updated draft of the proposed treaty in relation to principles enshrined in the ungps, as well as some of the established principles of public and private international law, applied in the context of business activities and human rights. The following sections are each dedicated to specific provisions of the third draft and adopt the following structure. First, each section discusses the text of the provision vis-Ã -vis relevant points raised during the working sessions of the oeigwg. Second, the text of the provision is discussed in terms of relevant changes (if any) adopted in the 2023 updated draft vis-Ã -vis previous drafts of the treaty. Third, the provision is discussed in terms of its alignment with the ungps and/or its attempt to address a perceived gap of the ungps. Fourth, the provision is discussed in terms of its potential to address traditional obstacles arising from the application of principles of public and private international law to corporate actors, if applicable.
A caveat is in order. The process of elaborating a treaty is on-going at the UN level. It remains to be seen whether and when the treaty will be adopted and, if adopted, whether it will be ratified by home states of the largest and most powerful tncs. Notwithstanding this, it should be reiterated that the overall purpose of the present article is to investigate the role of the ungps, as a soft law instrument, in the current process of developing one of the formal sources of international law, namely a multilateral treaty on business and human rights, irrespective of how long said process will take and whether it will succeed in yielding the expected results once adopted. In other words, the purpose of the analysis undertaken hereinafter is to highlight the role of the ungps in international hard law-making processes, which, to reiterate, would arguably not have been pursued in the absence of the ungps serving as âincubatorâ or transitional stage.
5.1
(pp7) Stressing that the primary obligation to respect, protect, fulfill and promote human rights and fundamental freedoms lie[s] with the State, and that States must protect against human rights abuse by third parties, including business enterprises, and to ensure respect for and implementation of international human rights law, and to respect and ensure respect for international humanitarian law in all circumstances.
Draft preambular paragraph 7 reaffirms the existing human rights obligations binding on states under international law. Among these obligations, it stresses the primary obligation of states to protect human rights against the adverse impacts of third parties, including corporate entities, as already enshrined in the majority of existing international and regional human rights treaties. The content of preambular paragraph 7 aligns with Pillar i of the ungps, which is concerned with statesâ obligation to protect human rights in the context of business activities.84 As stressed by Ruggie, this obligation is grounded in international human rights law.85
(pp12) Underlining that business enterprises [â¦] have to respect internationally recognized human rights, including by avoiding causing or contributing to human rights abuses through their own activities and addressing such abuses when they occur, as well as by preventing or mitigating human rights risks linked to their operations, products or services by their business relationships.
Draft preambular paragraph 12 is in line with Pillar ii of the ungps in framing what is incumbent on business enterprises as a âresponsibilityâ to respect human rights in contrast to statesâ âobligationâ to do so. This strongly suggests
Draft preambular paragraph 12 of the 2023 updated draft treaty contrasts with the previous draft of the treaty, namely the 2021 Third Revised Draft, the preamble to which stated that âbusiness enterprises [â¦] have the obligation to respect internationally recognized human rights.â87 In turn, the preamble to the third revised draft had departed from the voluntary corporate âresponsibilityâ to respect human rights under Pillar ii of the ungps, which had also been recognized in the respective preambles to the Zero Draft and the first and second revised drafts.88 The suggestion of a corporate âobligation to respectâ in the preamble â but solely in the preamble â89 to the third revised draft appeared to foreshadow an attempt to provide for a binding international legal obligation to avoid infringing individualsâ human rights in the context of their activities and business relationships. In response, various states and other relevant
(pp17) Recognizing the contribution and complementary role that the Guiding Principles on Business and Human Rights [â¦] have played in that regard and to advancing respect for human rights in the business activities.
Draft preambular paragraph 17 in the 2023 updated draft highlights the proposed complementarity between the treaty and the ungps. The proposed complementarity between the two instruments was not recognized in the previous drafts of the treaty. By way of example, the Preamble to the second revised draft only highlighted the role played by the ungps in terms of affirming the responsibilities of transnational corporations and other business enterprises with respect to human rights. By stressing the complementary relationship between the treaty and the ungps, the 2023 updated draft underlines how the treaty process, in line with what suggested by Ruggie, does not contradict nor undermine the ungps. As observed during treaty consultations, the treaty and the ungps would mutually reinforce one another while coexisting in the âsmart mixâ91 of regulatory measures on business and human rights put forward by the ungps.
5.2 Scope of the Proposed Treaty
- 3.1.
This (Legally Binding Instrument) shall apply to all business activities, including business activities of a transnational character. - 3.2.Notwithstanding Article 3.1. above, when imposing prevention obligations on business enterprises under this (Legally Binding Instrument), State Parties may establish in their law, a non-discriminatory basis to differentiate how business enterprises discharge these obligations commensurate with their size, sector, operational context or the severity of impacts on human rights.
In terms of regulatory targets, the 2023 updated draft covers all business activities, therefore including both the activities of businesses operating within the territory of any one state, as well as the activities carried out by businesses operating at the transnational level, such as tncs. The current scope is broader than the scope of earlier treaty drafts. Specifically, Draft Article 3 of the Zero Draft provided that the treaty would apply only to business activities of a transnational character, therefore excluding business activities carried out within the territory of a single domestic jurisdiction. The choice to broaden the scope of the treaty in its 2023 version is made considering ethical and practical concerns and taking into account the effectiveness of the proposed treaty and its alignment with other non-binding international standards on business and human rights.92 As to ethical and practical concerns, it has been argued that all business activities, irrespective of whether they are undertaken in a domestic or transnational context, can have negative impacts on individualsâ enjoyment of their human rights.93 As to the effectiveness of the proposed
- 3.3.This (Legally Binding Instrument) shall cover all internationally recognized human rights and fundamental freedoms binding on the State Parties of this (Legally Binding Instrument).
In terms of subject matter of the proposed treaty, as discussed earlier in the chapter, debates97 have focused on the question whether the instrument should cover violations of all internationally recognized human rights or should be limited to gross human rights impacts by all companies, including tncs. The current treaty draft, however, follows the first option, according to which the future instrument would cover violations of all internationally recognized human rights, including those recognized in a variety of instruments, and those recognized under customary international law.98 To recall, in the context of treaty consultations during the first working session of oeigwg, the majority of stakeholders observed that it would be inaccurate to adopt a treaty addressing only gross corporate human rights impacts, as the activities of business entities could have a negative impact potentially on all human rights.99
5.3 Obligations of State Parties with Respect to the Regulation of Business Conduct
- 6.1.State Parties shall regulate effectively the activities of all business enterprises within their territory, jurisdiction, or otherwise under their control, including transnational corporations and other
business enterprises that undertake activities of a transnational character.
In Draft Article 6.1, the proposed treaty sets forth the obligation of state parties to regulate effectively the conduct of all business entities within their territory, jurisdiction or otherwise under their control. Article 6.1 restates the existing103 regulatory obligations of states under international human rights law, as part of statesâ broader international obligation to protect human rights against interferences by third parties. International and regional human rights treaties place on state parties an obligation, inter alia, to protect human rights against adverse impacts arising out of conduct of third actors. As elaborated by international treaty-monitoring bodies104 and regional mechanisms and courts,105 the international obligation to protect human rights has been generally understood to encompass conduct by private actors like corporations.
- 6.2.State Parties shall adopt appropriate legislative, regulatory, and other measures to:
- (a)prevent the involvement of business enterprises in human rights abuse;
- (b)ensure respect by business enterprises for internationally recognized human rights and fundamental freedoms;
- (c)
ensure the practice of human rights due diligence by business enterprises;
The obligations provided for by Article 6.2 are incumbent on any State Party within whose territory or jurisdiction or otherwise under whose control business activities are carried out, irrespective of the nationality of the entity carrying out the activities. In other words, States Parties are required under the proposed treaty to regulate and adopt measures to ensure that business entities operating in their territory, including foreign companies, do not interfere with individualsâ enjoyment of their human rights.
The question of whether the proposed treaty purports to place extraterritorial human rights obligations to regulate on home states of tncs â for the purpose of ensuring that their companies do not interfere with individualsâ enjoyment of human rights when operating abroad â remains unsettled. It is true that home states of tncs have increasingly been called to bear greater responsibility in filling the regulatory gaps of host states,107 in terms of exercising their extraterritorial prescriptive jurisdiction to control and regulate their corporate nationals when undertaking activities abroad. The geographical scope of statesâ obligations under existing human rights treaties is generally confined to the territory of states parties. Excluding certain exceptional circumstances where the obligations binding on states under human rights treaties may apply extraterritorially,108 under current international law, a general obligation of states to regulate the conduct of their corporate nationals beyond their territorial borders, as part of their obligation to protect human rights, has not been consolidated. This was also emphasized by Ruggie, who observed that an extraterritorial obligation to protect human rights against the adverse
In light of this, the regulatory obligations set forth in Draft Article 6 accord with the scope of the existing regulatory obligations of state parties to international human rights instruments, therefore primarily applying within the territory of host states parties, which would be under the obligation to regulate the activities of entities operating in their territory with the view of ensuring respect for human rights. This, however, does not preclude a home state party from exercising its extraterritorial jurisdiction to prescribe laws in order to regulate the activities of their corporate nationals abroad, if they wish to do so. In other words, home states parties would still retain the power to exercise extraterritorial prescriptive jurisdiction to ensure that their companies do not cause or contribute to adverse human rights impacts when operating abroad, even if not under a specific obligation to do so under current international law.110
- 1.8.âHuman rights due diligenceâ shall mean the processes by which business enterprises identify, prevent, mitigate, and account for how they address their adverse human rights impacts. [â¦] These processes will in every case comprise the following elements:
- (a)identifying and assessing any human rights impacts with which the business enterprise may be involved through its own activities or as a result of its business relationships;
- (b)taking appropriate measures to prevent and mitigate such adverse human rights impacts;
- (c)monitoring the effectiveness of its measures to address such adverse human rights impacts;
- (d)communicating how the relevant business enterprise addresses such adverse human rights impacts regularly and in an accessible manner to stakeholders, particularly to affected and potentially affected persons;
The 2023 revised draft defines âbusiness relationshipâ as âany relationship between natural or legal persons, including State and non-State entities, to
The steps of the due diligence process set forth in Draft Article 1.8 reflect the human rights due diligence steps established by the ungps. Particularly, in line with Principle 18, Draft Article 1.8(a) speaks of businesses identifying and assessing any actual or potential human rights abuses arising from their own business activities and their business relationships. Along the lines of Principle 19, Draft Article 1.8(b) refers to appropriate measures to prevent and mitigate actual or potential human rights abuses arising from their own activities and business relationships. In accordance with Principle 20 and Principle 21, Draft Article 1.8(c) refers to monitoring and tracking the effectiveness of the measures adopted to address such adverse human rights impacts, while Draft Article 1.8(d) speaks of businesses communicating regularly and in an accessible manner to affected and potentially affected stakeholders how they address such adverse human rights impacts in their activities and business relationships.
Overall, by placing legally enforceable requirements to exercise human rights due diligence on business enterprises, states would discharge their international obligation to ensure that all business enterprises respect human rights, which is to say avoiding causing or contributing to adverse human rights impacts in the context of their own business activities, as well as preventing the adverse human rights impacts linked to their business relationships with third parties in their global value chains. The draft provision on mandatory human rights due diligence in the 2023 revised draft treaty is arguably a significant example of the attempt at âhardeningâ the ungpsâ non-binding corporate responsibility to respect human rights, which is grounded in the exercise of human rights due diligence. While, according to the ungps, businesses should exercise human rights due diligence as a matter of âsocial norms and
5.4 Obligations of State Parties with Respect to Access to Remedies for Victims of Corporate Adverse Human Rights Impacts
- 7.1.State Parties shall provide their relevant State agencies115 with the necessary competence in accordance with this (Legally Binding Instrument) to enable victimsâ access to adequate, timely and effective remedy and access to justice, and to overcome the specific obstacles which women and groups in vulnerable and marginalized situations face in accessing such mechanisms and remedies.
- 7.2.State Parties shall, consistent with its domestic legal and administrative systems:
[â¦]
- (b)progressively reduce the legal, practical, and other relevant obstacles that, individually or in combination, hinder the ability of a victim from accessing such State agencies [including domestic courts] for the purposes of seeking an effective remedy.
Relevant measures indicated to assist state parties in reducing obstacles to access to remedy include, in line with the recommendations of the ungps, reducing the costs associated with bringing claims related to corporate adverse
5.5 Obligations of State Parties with Respect to the Liability of Legal Persons
- 8.1.State Parties shall adopt such measures as may be necessary to establish a comprehensive and adequate system of legal liability of legal and natural persons conducting business activities, within their territory, jurisdiction, or otherwise under their control, for human rights abuses that may arise from their business activities or relationships, including those of a transnational character.
- 8.2.[â¦] Each State Party shall ensure, consistent with its domestic legal and administrative systems, that the type of liability established under this article shall be:
- (a)responsive to the needs of victims as regards remedy; and
- (b)commensurate to the gravity of the human rights abuse.
States have the general obligation to have in place a domestic system of legal liability of business entities and natural persons for adverse impacts stemming from their own business activities and business relationships. With respect to adverse human rights impacts directly caused or contributed to by companies as well as natural persons conducting business activities, Article 8.3 requires state parties to adopt âeffective, proportionate and dissuasive criminal, civil and/or administrative sanctions.â
- 8.6.State Parties shall ensure that their domestic law provides for the liability of legal and/or natural persons conducting business activities,
including those of a transnational character, for their failure to prevent another legal or natural person with whom they have had a business relationship, from causing or contributing to human rights abuses, when the former controls, manages or supervises such person or the relevant activity that caused or contributed to the human rights abuse, or should have foreseen risks of human rights abuses [â¦] but failed to take adequate measures to prevent the abuse.
Draft Article 8.1 obliges state parties to adopt measures to establish a domestic system of legal liability of business entities and natural persons for the adverse human rights impacts stemming from their business activities and business relationships. Draft Article 8 also addresses the potential liability of legal and natural persons for âconspiring to commit human rights abuseâ118 and for corporate complicity, meaning for âaiding, abetting, facilitating, and counselling the commission of human rights abuseâ119 by other state or non-state actor. The risk of complicity by corporations in the adverse human rights impacts of third parties is also addressed in the ungps,120 specifically in the context of human rights due diligence processes, which are envisaged by the srsg, inter alia, to help companies avoid direct and indirect involvement in conduct by state actors which would amount to violations of international human rights law, as well as conduct by non-state actors which, if engaged in by a state, would violate international human rights law.
The 2023 revised draft treaty omits two elements of Draft Article 8 of the third revised draft of the treaty. First, Draft Article 8 of the third revised draft addressed the potential liability of companies for the breach of a legal duty to prevent121 controlled legal or natural persons with whom they have a business relationship from causing or contributing to adverse human rights impacts.122 The current Draft Article 8 does not oblige states parties to take measures in this regard. At the same time, states parties remain free to establish the liability of companies for failure to prevent the adverse human rights impacts resulting from their business relationships.
5.6
- 9.1.State Parties shall take such measures as may be necessary to establish its jurisdiction in respect of human rights abuse in cases where:
- a.the human rights abuse took place, in whole or in part, within the territory or jurisdiction of that State Party;
- b.the relevant harm was sustained, in whole or in part, within the territory or jurisdiction of that State Party;
- c.the human rights abuse was carried out by [â¦] a legal persons domiciled in the territory or jurisdiction of that State Party;
- d.a victim seeking remedy through civil law proceedings is a national of, or has his or her habitual residence in the territory or jurisdiction of, that State Party.
Draft Article 9 gives rise to an obligation on state parties to vest jurisdiction in their domestic courts on the basis of specific grounds.128 Foremost, it gives rise to an obligation on both host states and home states of tncs to vest jurisdiction in their domestic courts to hear civil claims arising out of adverse human rights impacts of business entities. On the one hand, the courts of host states might have jurisdiction over claims against business actors for adverse human rights impacts located in their territory, irrespective of the nationality of the
- 9.3.State Parties shall take such measures [â¦] to ensure that decisions by relevant State agencies relating to the exercise of jurisdiction [â¦] shall respect the rights of victims [â¦] including with respect to:
- (a)the discontinuation of legal proceedings on the grounds that there is another, more convenient or more appropriate forum with jurisdiction over the matter.
Draft Article 9.3 attempts to ensure that the use of the doctrine of forum non conveniens in the context of litigation, specifically transnational litigation, respects the rights of victims, in line with Draft Article 4 of the 2023 revised draft treaty. The proposed regulation of the application of the doctrine of forum non conveniens responds to stakeholdersâ early concerns about the jurisdictional obstacles generally encountered in the context of transnational litigation.129 Additionally, the doctrine of forum non conveniens has at times been invoked by corporate defendants in the context of disputes arising out of harms stemming from their worldwide operations130 as a âdelaying and
In comparison to Draft Article 9 of the third revised draft of the âLegally Binding Instrumentâ, Draft Article 9 of the 2023 revised draft treaty omits provisions addressing the exercise of adjudicative jurisdiction in cases of connected claims133 and the possibility of forum necessitatis.134 First, with respect to connected claims, it has been noted that âthese matters are best governed by principles of domestic conflicts of law, and there is nothing in the lbi to prevent a State from taking jurisdiction on this basis in any event.â135 This mechanism is already provided for by the internal rules on private international law of some countries, which allow courts to exercise jurisdiction over a legal person not domiciled in the forum state, such as a foreign subsidiary, when the claims against the parent company and the foreign subsidiary are âso closely connected as to justify the joining of defendants for reasons of process efficiency.â136 The possibility of asserting jurisdiction in the case of connected claims is worth analyzing in the broader context of existing obstacles137
Secondly, forum necessitatis is omitted in the 2023 revised draft treaty âon grounds of the substantial overlap of this basis of jurisdiction [â¦] and the bases of jurisdiction set out in Article 9.1â138 discussed above. The application of the forum necessitatis rule generally allows domestic courts to exercise jurisdiction over legal persons not domiciled in the forum state, for instance foreign subsidiaries, where no other effective forum is available.139
5.7 Obligations of State Parties with Respect to the Applicable Law in Claims against tncs and Other Business Enterprises
- 11.1.All matters of procedure regarding claims before the competent court which are not specifically regulated in the (Legally Binding Instrument) shall be governed by the law of that court seized on the matter.
- 11.2.All matters of substance which are not specifically regulated under this (Legally Binding Instrument) may, upon the request of the victim, be governed by the law of another State where:
- (a)the acts or omissions have occurred or produced effects; or
- (b)the natural or legal person alleged to have committed the acts or omissions is domiciled.
In other words, the proposed treaty would allow victims to choose a body of substantive rules to be applied to the claim other than the forum stateâs, including the substantive rules of the state where the corporate actor allegedly responsible for the adverse human rights impact is domiciled, including the rules of the home state where the actor is incorporated, regardless of where the harmful action was initiated, or the adverse human rights impact took place. Draft Article 11.2, by allowing to choose the substantive rules applicable to claims against corporate actors, seeks to enhance victimsâ protection in transnational litigation.
In the broader context of obstacles encountered in the application of rules of private international law to corporate actors, the choice of applicable law might give rise to additional hurdles for victims of adverse corporate human rights impacts. In the context of transnational civil litigation, the substantive laws of the place where the alleged wrongful act has occurred are generally applied by forum courts according to the well-established lex loci141 rule in private international law. As observed during treaty negotiations, however, it is not always the case that the domestic rules of the place where the alleged wrongs occur, generally the host state, provide adequate protection of human rights,142 as they may sometimes impose an inadequate standard of liability
6 Concluding Remarks
While the ungps generally fall within the category of international âsoft lawâ instruments that, as such, do not create obligations binding under international law, the last decade has witnessed a wave of legal developments inspired by the ungps, which attempt to convert soft principles set forth therein into binding law at different regulatory levels. At the international level specifically, a process to elaborate an international binding treaty on business and human rights is on-going under the auspices of the UN. The scholarship on soft law has extensively explored the general role of soft law instruments in the development of formal sources of international law, including treaties. The role of soft law instruments in the development of formal sources of international law, however, remains underexplored in the specific field of business and human rights.
The present chapter has attempted to highlight the role of the ungps, as soft standard in business and human rights, in an international law-making process, namely the on-going international process of developing a multilateral binding treaty on business and human rights. To this end, the purpose of the analysis of selected provisions in the most recent draft of the treaty has been three-fold. First, the analysis has sought to highlight the substantive alignment between selected provisions and core aspects of the ungps. Second, the analysis has sought to highlight the potential of treaty provisions in going beyond the ungps, that is, in filling some of the perceived gaps of the latter instrument. Third, the analysis has sought to investigate how certain provisions in the treaty draft attempt to tackle some of the obstacles traditionally encountered by states in the regulation and adjudication of corporate actors at the domestic level. These obstacles generally arise when applying established principles of international public and private law to corporate actors.
Treaty negotiations are on-going, and it remains to be seen whether the treaty will be adopted and ratified, especially by home states of major tncs. Notwithstanding this, the role that the ungps have had in the current
While uncertainty lies ahead at the international level, it should be noted briefly that alternative regulatory avenues in the area of business and human rights have in the meantime been successfully unfolding at the regional level, specifically at the EU level. Here, negotiations have been ongoing for a European Union Corporate Sustainability Due Diligence Directive (csddd),143 whose final text has been adopted in April 2024.144 This instrument may constitute a promising tool for the regulation of corporate conduct with respect to, inter alia, human rights while the world awaits an international treaty on business and human rights.
The UN Working Group on the Issue of Transnational Corporations and Other Business Enterprises, established by the Human Rights Council as a follow-up to the adoption of the ungps, has defined a National Action Plan as âan evolving policy strategy developed by a State to protect against adverse human rights impacts by business enterprises in conformity with the ungps.â See âGuidance on National Action Plans on Business and Human Rights,â United Nations Working Group on Business and Human Rights, November 2016, (text available online at
Surya Deva, âBusiness and Human Rights: Alternative Approaches to Transnational Litigation,â Annual Review of Law and Social Science 17 (October 2021): 142. See also John G. Ruggie, âA UN Business and Human Rights Treaty? An Issues Brief,â Harvard Kennedy School, January 28, 2014, 2,
The oecd Guidelines are a set of voluntary and non-legally binding recommendations to multinational enterprises addressed by the 38 oecd member states and the 12 adhering non-member states. The instrument aims to assist the business sector in upholding responsible business conduct and to align business activities to the principles enshrined in the Guidelines in the areas of human rights, disclosure, employment and industrial relations, environment, combating bribery, consumer interests, science and technology, competition and taxation. The updated version of the oecd Guidelines released in 2011 includes a new chapter (iv) on human rights, elaborated on the basis of the ungps. (See âoecd Guidelines for Multinational Enterprises 2011 Edition,â oecd, 2011,
The ilo Declaration offers guidelines to mnes, governments, employersâ and workersâ organizations in home and host countries on labor-related aspects of corporate social responsibility. In 2017, the Governing Body of the ilo decided to further amend the Declaration, taking into account the developments at the international level since the previous update in 2006. Among the international developments in question, the ungps were taken into account in clarifying the corporate responsibility to respect human rights and the requirement to carry out human rights due diligence (Principle 10). See âTripartite Declaration of Principles concerning Multinational Enterprises and Social Policy,â ilo, March 2017,
The iso 26000 Guidance provides guidelines to companies in the area of sustainable development and corporate social responsibility. It consists of 7 core subjects, including human rights. See âGuidance on social responsibility,â iso, accessed May 20, 2024,
Dinah L. Shelton, âSoft Law,â in Routledge Handbook of International Law, ed. David Armstrong (Routledge, 2008), 3. See also Alan Boyle, âSoft Law in International Law-Making,â in International Law, ed. Malcolm Evans (Oxford University Press, 2014), 120; John Cerone, âA Taxonomy of Soft Law: Stipulating a Definition,â in Tracing the Roles of Soft Law in Human Rights, eds. Stéphanie Lagoutte, Thomas Gammeltoft-Hansen, and John Cerone (Oxford University Press, 2016), 17.
Alan Boyle and Christine Chinkin, The Making of International Law (Oxford University Press, 2007), 217.
Ruggie did not conceive the ungps as a static document that would foreclose future paths in business and human rights. Rather, the ungps were designed to generate this ânew regulatory dynamic,â out of which international legal measures would potentially evolve. See Ruggie, âHierarchy or Ecosystem?,â supra note 2, at 47, 55, and 59.
It is important to specify that this chapter focuses only on one alternative for the international legalization of the ungps, namely through the elaboration and adoption of a multilateral binding treaty. However, other avenues that could be mentioned include Bilateral Investment Treaties (âbitsâ), which already provide for a legal liability regime for foreign investors with respect to human rights. Additional avenues are domestic and regional regulation placing on companies certain obligations with respect to human rights. Examples include the number of domestic human rights due diligence legislations already adopted in EU and non-EU jurisdictions, as well as the ongoing negotiations at EU level for a EU-wide directive on corporate sustainability and human rights due diligence.
Ruggie, âHierarchy or Ecosystem?,â supra note 2, at 55. See also âReport of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie*,â United Nations General Assembly, February 19, 2007, para. 49 (text available online at
These are discussed in Section 2.
This is discussed further in Section 3.
Enumerated in Article 38 of the Statute of the International Court of Justice (âicjâ) (see âStatute of the International Court of Justice,â icj, accessed May 20, 2024,
It is however beyond the scope of this chapter to address whether adopting âhardâ law is preferable to existing âsoftâ law in the specific context of business and human rights. Along similar lines, it is outside the scope of this chapter to discuss the advantages and shortcomings of both systems of law.
At the time of writing, the most recent version of the draft treaty is the one published in July 2023, which formed the basis for state-led direct substantive intergovernmental negotiations during the ninth session of the intergovernmental working group on tncs and other business enterprises with respect to human rights, which took place between October 23, 2023, and October 27, 2023. The draft is available at âUpdated draft legally binding instrument (clean version) to regulate, in international human rights law, the activities of transnational corporations and other business enterprises,â Office of the United Nations High Commissioner for Human Rights (âohchrâ), July 2023,
Statement on behalf of a group of countries at the 24th session of the Human Rights Council, available at: âStatement on behalf of a Group of Countries at the 24rd Session of the Human Rights Council,â Business & Human Rights Resource Centre, September 2013,
The African Group, the Arab Group, Pakistan, Sri Lanka, Kyrgyzstan, Cuba, Nicaragua, Bolivia, Venezuela and Peru. It is relevant to point out that states belonging to the global South would generally host the activities of subsidiaries of tncs based in the global North. One could argue that it is not surprising for these states to demand an international treaty in the area of business and human rights. These States have generally experienced the consequences of lax regulation of corporate conduct, and the adverse human rights impacts of tncs have traditionally been located in the territory of host states, where unbalanced power relationships between tncs and local governments are common, with the latter oftentimes fearful that imposing human rights and environmental accountability standards might have repercussions on the economic growth of their countries. See, in this regard, Iman Prihandono, âBarriers to transnational human rights litigation against transnational corporations (tncs): The need for cooperation between home and host countries,â Journal of Law and Conflict Resolution 3, no. 7 (July 2011): 100.
The Statement was originally drafted by the participants in the first annual Peoplesâ Forum on Human Rights & Business, convened jointly by escr-Net. See âAbout the proposed Treaty,â escr-Net, accessed May 20, 2024,
Business & Human Rights Resource Centre, âStatement on behalf of a group of countries,â supra note 16.
See âJoint Statement: Call for an International Legally Binding Instrument on Human Rights, Transnational Corporations and other Business Enterprises,â Stop Corporate Impunity, accessed May 20, 2024,
Business & Human Rights Resource Centre, âStatement on behalf of a group of countries,â supra note 16. The arguments put forward by treaty proponents have also been extensively discussed in the academic literature. See, inter alia, Claret Vargas, âA Treaty on Business and Human Rights? A Recurring Debate in a New Govenance Landscape,â in Business and Human Rights: Beyond the End of the Beginning, ed. César RodrÃguez-Garavito (Cambridge University Press, 2017); Radu Mares, âThe United Nations Draft Treaty on Business and Human Rights: An Analysis of its Emergence, Development and Potential,â in Research Handbook on Global Governance, Business and Human Rights, eds. Axel Marx et al. (Edward Elgar, 2022); Chiara Macchi, âA Treaty on Business and Human Rights: Problems and Prospects,â in The Future of Business and Human Rights: Theoretical and Practical Considerations for a UN Treaty, eds. Jernej Letnar ÄerniÄ and Nicolás Carrillo-Santarelli (Intersentia, 2018); Larry Catá Backer, âConsidering A Treaty on Corporations and Human Rights: Mostly Failures but with a Glimmer of Success,â in The Future of Business and Human Rights: Theoretical and Practical Considerations for a UN Treaty, eds. Jernej Letnar ÄerniÄ and Nicolás Carrillo-Santarelli (Intersentia 2018).
Business & Human Rights Resource Centre, âStatement on behalf of a group of countries,â supra note 16.
Id.
Id. See also Stop Corporate Impunity, âJoint Statement,â supra note 20.
Business & Human Rights Resource Centre, âStatement on behalf of a group of countries,â supra note 16. See also Stop Corporate Impunity, âJoint Statement,â supra note 20.
Id.
âProtect, respect and remedy: a framework for business and human rights: report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, John Ruggie,â United Nations Digital Library, accessed May 20, 2024, para. 54,
âGuiding Principles on Business and Human Rights,â ohchr, accessed May 20, 2024, Commentary to Principle 2,
Stop Corporate Impunity, âJoint Statement,â supra note 20.
Id. See also Business & Human Rights Resource Centre, âStatement on behalf of a group of countries,â supra note 16.
Robert McCorquodale et al., âHuman Rights Due Diligence in Law and Practice: Good Practices and Challenges for Business Enterprises,â Business and Human Rights Journal 2, no. 2 (July 2017): 199.
ungps, supra note 28, Commentary to Principle 12.
Stop Corporate Impunity, âJoint Statement,â supra note 20.
With regards to judicial remedies specifically, the ungps provide that, in order to ensure that victims of adverse corporate human rights impacts are not denied access to judicial remedies, inter alia, states should take all necessary steps to reduce potential legal, practical, and procedural barriers. For examples of common legal obstacles see ungps, supra note 28, at Commentary to Principle 26.
Business & Human Rights Resource Centre, âStatement on behalf of a group of countries,â supra note 16.
Beth Stephens, âMaking Remedies Work: Envisioning a Treaty-Based System of Effective Remedies,â Building a Treaty on Business and Human Rights: Context and Contours, eds. Surya Deva and David Bilchitz (Cambridge University Press, 2017), 408.
âElaboration of an International Legally Binding on Transnational Corporations and Other Business Enterprises with Respect to Human Rights,â ohchr, July 14, 2014,
Id. at para. 1.
Id. at para. 2.
âHuman Rights and Transnational Corporations and Other Business Enterprises,â ohchr, June 23, 2014,
Id.
Id. at para. 2.
Id. at para. 8.
Chiara Macchi, Business, Human Rights and the Environment: The Evolving Agenda (Netherlands: t.m.c. Asser Press, 2022), 142.
âReport on the first session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights, with the mandate of elaborating and international legally binding instrument,â ohchr, February 5, 2016,
Id. at para. 4.
Id.
Id. at para. 22.
Id. at para. 23.
Id. at para. 26.
ohchr, âElaboration,â supra note 37, at para. 2.
Surya Deva, âThe UN Guiding Principlesâ Orbit and Other Regulatory Regimes on Business and Human Rights Universe: Managing the Interface,â Business and Human Rights Journal 6, no 2 (June 2021): 350.
ohchr, âReport on the first session,â supra note 45, at para. 26.
With specific regards to Pillar ii of the ungps, for instance, the first working session observed that the treaty âshould build on the second pillar of the Guiding Principles but not blindly copy all its content; while both processes are complementary, it is important to recognize the limitations of the principles and try to fill in the gaps.â See ohchr, âReport on the first session,â supra note 45, at para. 79.
Deva, âThe UN Guiding Principles,â supra note 52. See also Surya Deva, âBusiness and Human Rights: Time to Move Beyond the âPresentâ?,â in Business and Human Rights: Beyond the End of the Beginning, ed. César RodrÃguez-Garavito (Cambridge University Press, 2017), 66.
Ruggie, âA UN Business and Human Rights Treaty?,â supra note 2, at 5.
ohchr, âReport on the first session,â supra note 45, at para. 63.
Human rights are universal as all human beings everywhere are entitled to them. Article 1 of the Universal Declaration of Human Rights provides that âall human beings are born free and equal in dignity and rights.â âUniversal Declaration of Human Rights,â United Nations, December 10, 1948,
Human rights are indivisible, that is, they all have equal status and are all necessary to protect human dignity. See id.
Human rights are interdependent as fulfillment of one right is dependent on the fulfillment of others. See id.
ohchr, âReport on the first session,â supra note 45, at para. 46.
Id. at paras. 59 and 60.
Id. at para. 57.
Id. at para. 61.
Id. at para. 71.
âReport on the second session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights,â ohchr, January 4, 2017, para. 53,
Id. at para. 61. See, in this regard, the following general comments by the United Nations Committee on Economic, Social and Cultural Rights (âcescrâ): âStatement on the Obligations of State Parties regarding the Corporate Sector and Economic, Social and Cultural rights,â cescr, May 20, 2011, para. 5,
ohchr, âReport on the first session,â supra note 45, at paras. 69â70.
ohchr, âReport on the second session,â supra note 66, at para. 25.
Id. at para. 27.
Id.
ohchr, âReport on the first session,â supra note 45, at para. 98.
Id. at para. 103.
Id. at para. 105. See also ohchr, âReport on the second session,â supra note 66, at para. 83.
ohchr, âReport on the second session,â supra note 66, at para. 71.
ohchr, âReport on the first session,â supra note 45, at para. 78.
ohchr, âReport on the second session,â supra note 66, at paras. 69 and 75.
ohchr, âReport on the first session,â supra note 45, at paras. 83 and 85.
âLegally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises,â Open-ended Intergovernmental Working Group (âoeigwgâ), July 16, 2018,
âLegally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises,â oeigwg, July 16, 2019,
âLegally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises,â oeigwg, August 6, 2020,
âLegally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and Other Business Enterprises,â oeigwg, August 17, 2021,
âUpdated draft legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises,â oeigwg, July 2023,
ungps, supra note 28, at Principle 1.
âBusiness and human rights: Towards operationalizing the âprotect, respect, and remedy frameworkâ: Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises*,â ohchr, April 22, 2009, para. 13,
âProtect, Respect and Remedy: a Framework for Business and Human Rights: Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, John Ruggie,â ohchr, April 7, 2008, para. 54,
See preambular paragraph 11 in the Third Revised Draft, supra note 82. In this respect, it should be recalled that many proposals have been made during the consultations held by the oeigwg for a treaty that placed human rights obligations on companies under international law, while still acknowledging that the primary obligation to protect human rights lies with states (See ohchr, âReport on the first session,â supra note 45, at paras. 83 and 86).
For instance, the Preamble to the Second Revised Draft, supra note 81, provides: â[u]nderlining that all business enterprises [â¦] have the responsibility to respect all human rights, including by avoiding causing or contributing to adverse human rights impacts through their own activities and addressing such impacts when they occur, as well as by preventing or mitigating human rights abuses that are directly linked to their operations, products or services by their business relationships.â
This was, however, included only in the Preamble to the Third Revised Draft, supra note 82, and not repeated in the core text of the treaty. Notwithstanding this, the Preamble is part of the treatyâs text and, as such, forms part of the context of the operative provisions for the purposes of their interpretation, as stated in Article 31(1) and (2) of the âVienna Convention on the Law of Treaties,â United Nations, 23 May 23, 1969,
See, in this regard, âReport on the seventh session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights*,â ohchr, December 29, 2021, 6,
ungps, supra note 28, at Commentary to Principle 3.
âigwg tncs/obes: Guidelines for intersessional work ahead of 9th session,â ohchr, March 23, 2023,
ohchr, âReport on the first session,â supra note 45, at para. 61. Deva, among others, has argued that, from the point of view of victims of corporate human rights adverse impacts, limiting the treaty to tncs only, therefore excluding businesses operating at the domestic level but which can equally negatively impact human rights, is problematic. Furthermore, distinguishing between tncs and domestic businesses will offend the principle of non-discrimination. See Surya Deva, âScope of the proposed business and human rights treaty: navigating through normativity, law and politics,â in Building a Treaty on Business and Human Rights: Context and Contours, eds. Surya Deva and David Bilchitz (Cambridge University Press, 2017), 169. Along similar lines, in the context of treaty consultations, it was observed that it is the seriousness of the human rights impact that matters, rather than the type of business activity or nature of the company. See, in this regard, âReport on the fourth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights*,â ohchr, January 2, 2019, para. 73,
ohchr, âigwg tncs/obes,â supra note 91.
Id.
ungps, supra note 28, at General Principles: âthese Guiding Principles apply to all States and to all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.â See also id. at Commentary to Principle 11 and Principle 14.
See supra Part 3.
The inclusion of human rights recognized under customary international law is important as states potentially ratifying the treaty might not be parties to certain human rights instruments.
ohchr, âReport on the first session,â supra note 45, at para. 63. See also Deva, âScope,â supra note 92, at 175: âthe option of such a narrow treaty (in terms of subject matter) will not be very helpful because such a treaty might not cover a great majority of human rights abuses committed by companies all over the world.â
See ungps, supra note 28, at Commentary to Principle 12.
To recall, proposals for a treaty to directly bind business enterprises under international law were made, inter alia, in the early consultations held by the oeigwg during its first and second working sessions, as well as by the Treaty Alliance in its first Statement.
Radu Mares, âRegulating transnational corporations at the United Nations â the negotiations of a treaty on business and human rights,â The International Journal of Human Rights 26, no. 9 (February 2022): 3. Discussed also in Macchi, Business, Human Rights and the Environment, supra note 44, at 143; Deva, âBusiness and Human Rights,â supra note 2, at 148; Surya Deva, âTreaty Tantrums: Past, Present and Future of a Business and Human Rights Treaty,â Netherlands Quarterly of Human Rights 40, no. 3 (September 2022): 219; Jernej Letnar ÄerniÄ and Christian Bukor, âThe Potential United Nations Business and Human Rights Treaty: Turning of the Tides of Justice?,â in New Zealand Yearbook of International Law, eds. Jan Jakob Bornheim and Christian Riffel (Brill Nijhoff, 2022), 109â10.
See also paragraph 7 in the Preamble to the Third Revised Draft, supra note 82.
See, for instance, cescr, âGeneral Comment No. 15,â supra note 67; cescr, âGeneral Comment No. 14,â supra note 67; âGeneral Comment No. 12: The right to adequate food (art. 11),â cescr, May 12, 1999,
See, for instance, Social and Economic Rights Action Center & the Center for Economic and Social Rights v. Nigeria, Communication No. 155/96, African Commission on Human and Peoplesâ Rights, May 27, 2002; Case of the Mayagna (Sumo) Awas Tingni Community v. Nicaragua, Inter-American Court of Human Rights, August 31, 2001; Case of the Kichwa Indigenous People of Sarayaku v. Ecuador, Inter-American Court of Human Rights, June 27, 2012.
ungps, supra note 28, at Principle 1.
In the context of treaty consultations held by the oeigwg, many were the proposals on the clarification of statesâ extraterritorial obligations in the context of business activities. In particular, a number of stakeholders made it clear that the treaty would have to address and fill in the existing gaps in the context of extraterritoriality and tncs by requiring states to regulate the conduct of their corporate nationals by way of imposing on business entities a requirement to comply with certain norms wherever they operate. See ohchr, âReport on the first session,â supra note 45, at paras. 67 and 69. See also ohchr, âReport on the second session,â supra note 66, at para. 53; âReport on the third session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights,â ohchr, January 24, 2018, para. 63,
Human rights treaties may apply extraterritorially when the state party exercises jurisdiction outside its national territory, specifically in terms of power and effective control over areas and individuals located outside its territory. Control over areas and/or individuals, however, exists when state agents are present on the territory of a foreign state. In the context of business and human rights, however, the entities present and operating on the territory of a foreign state (or host state) are companies, that is, non-state actors.
âReport of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises Addendum: State responsibilities to regulate and adjudicate corporate activities under the United Nations core human rights treaties: an overview of treaty body commentaries*,â ohchr, February 13, 2007, para. 84,
The academic literature has extensively discussed the issue of statesâ extraterritorial human rights obligations with respect to business activities and human rights, including in the context of current treaty efforts. See, inter alia, Olivier de Shutter, âTowards a New Treaty on Business and Human Rights,â Business and Human Rights Journal 1, no. 1 (January 2016): 41â67; Daniel Augenstein and David Kinley, âWhen human rights âresponsibilitiesâ become âdutiesâ: the extra-territorial obligations of states that bind corporations,â in Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect?, eds. Surya Deva and David Bilchitz (Cambridge University Press, 2013); Nadia Bernaz, âEnhancing Corporate Accountability for Human Rights Violations: Is Extraterritoriality the Magic Potion?,â Journal of Business Ethics 117 (2013): 493â511; Robert McCorquodale and Penelope Simons, âResponsibility Beyond Borders: State Responsibility for Extraterritorial Violations by Corporations of International Human Rights Law,â Modern Law Review 70, no. 4 (July 2007): 598â625; Claire Methven OâBrien, âThe Home State Duty to Regulate the Human Rights Impacts of tncs Abroad: A Rebuttal,â Business and Human Rights Journal 3, no. 1 (January 2018): 47â73; Surya Deva, âActing Extraterritorially to Tame Multinational Corporations for Human Rights Violations: Who Should âBell the Catâ?,â Melbourne Journal of International Law 5, no. 1 (June 2004): 37â65; Markus Krajewski, âThe State Duty to Protect Against Human Rights Violations through Transnational Business Activities,â Deakin Law Review 23, no. 13 (December 2018): 13â39; Antal Berkes, âExtraterritorial Responsibility of the Home States for mncs Violations of Human Rights,â in Research Handbook on Human Rights and Investment, ed. Yannick Radi (Edward Elgar, 2018), 304â43; Olivier de Shutter, âExtraterritorial Jurisdiction as a Tool for Improving the Human Rights Accountability of Transnational Corporations,â Faculté de droit de lâuniversité catholique de Louvain, December 22, 2006,
Draft Article 1.6 of the Updated Draft, supra note 83.
The corporate responsibility to respect, together with the requirement to exercise hrdd, responds to social expectations rather than legal requirements: â[t]his responsibility is neither based on nor analogizes from state-based law. It is rooted in a transnational social norm, not an international legal norm. It serves to meet the companyâs social license to operate, not its legal license.â See Ruggie and Sherman, âThe Concept of âDue Diligence,â supra note 85, at 923â24.
The States subscribing to the 2013 Ecuador Declaration, supra note 16, inter alia, recognized that a treaty was necessary to âprovide appropriate protection, justice and remedy to the victims of human rights abuses resulting from or related to the activities of some tncs and other business enterprises.â Along similar lines, from the outset of discussions around a potential treaty on business and human rights, the Treaty Alliance pushed for a treaty which, inter alia, requires state parties to provide for access to an effective remedy.
See, inter alia, Article 8 of the Universal Declaration of Human Rights, supra note 58: â[e]veryone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law.â Article 2.3(a) of the International Covenant on Civil and Political Rights (âiccprâ) provides: â[e]ach State Party to the present Covenant undertakes to ensure that any person whose rights or freedoms as herein recognized are violated shall have an effective remedy.â See âInternational Covenant on Civil and Political Rights,â United Nations General Assembly, December 16, 1996,
The Updated Draft defines ârelevant State agenciesâ as encompassing âjudicial bodies, competent authorities and other agencies and related services relevant to administrative supervision and enforcement of the measures referred to in this (Legally Binding Instrument) to address human rights abuse, and may include courts, law enforcement bodies, regulatory authorities, administrative supervision bodies, and other State-based non-judicial mechanisms.â See Updated Draft, supra note 83, at Article 1.10.
Id. at Article 7.4(a).
Id. at Article 7.4(d).
Id. at Article 8.3(a).
Id. at Article 8.3(b).
ungps, supra note 28, at Commentary to Principle 17.
This is now addressed in Article 6.5 of the Updated Draft, which requires state parties to âtake necessary measures to ensure that business enterprises take appropriate steps to prevent human rights abuse by third parties where the enterprise controls, manages or supervises the third party, including through the imposition of a legal duty to prevent such abuse in appropriate cases.â Id. at Article 6.5.
Draft Article 8.6 of the Third Revised Draft, supra note 82, provided: âState Parties shall ensure that their domestic law provides for the liability of legal and/or natural persons conducting business activities, including those of a transnational character, for their failure to prevent another legal or natural person with whom they have had a business relationship, from causing or contributing to human rights abuses, when the former controls, manages or supervises such persons or the relevant activity that caused or contributed to the human rights abuse, or should have foreseen risks of human rights abuses [â¦] but failed to take adequate measures to prevent the abuse.â The relevant criteria upon which to assess the factual relationship between the company and another legal or natural person, for the purpose of establishing the liability of the former, included degree of control, management or supervision exercised by the company. With respect to this, a novelty introduced by the Second Revised Draft of the treaty and kept in the Third Revised Draft was that the liability of a company for the failure to prevent adverse human rights impacts might arise not only when the company controls, manages or supervises the relevant activity that caused the adverse impact, but also when it controls, manages or supervises the legal persons allegedly responsible for the adverse impact. In light of this, a company could be held liable if it had overall control over another company, even if not directly involved in the specific activity giving rise to harms.
Principle 17 of the ungps, supra note 28, provides that, while exercising human rights due diligence can help businesses mitigate the risk of legal claims brought against them âby showing that they took every reasonable step to avoid involvementâ in adverse human rights impacts, that should not assume that exercising human rights due diligence will automatically and fully absolve them from liability for causing or contributing to adverse human rights impacts in the context of their own business activities, as well as business relationships with third parties.
Draft Article 8.7 of the Third Revised Draft, supra note 82.
âSuggested Chair Proposals for Select Articles of the lbi (6 October 2022),â ohchr, October 24, 2022, 6,
Id.
Crawford, Browlieâs Principles of Public International Law, supra note 13, at 458.
In the context of treaty negotiations, it was observed that granting jurisdiction to a broad range of states âwas appropriate under international law and was desirable in order to address the access to justice challengesâ in the context of adjudicative jurisdiction. See, in this regard, âReport on the sixth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights*,â ohchr, January 14, 2021, para. 34,
See id.; see also inter alia, âReport on the fifth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights*,â ohchr, January 9, 2020, para. 13,
Jacqueline Duval-Major, âOne-Way Ticket Home: The Federal Doctrine of Forum Non Conveniens and the International Plaintiff,â Cornell Law Review 77, no. 3 (March 1992): 650.
ohchr, âReport on the third session,â supra note 106, at para. 105.
During treaty negotiations, a number of stakeholders have strongly supported the choice of addressing forum non conveniens. According to civil society actors, the provision is necessary in order to tackle gaps in victimsâ access to remedy through judicial mechanisms. See id. at para. 110; ohchr, âReport on the fifth session,â supra note 128, at para. 99; ohchr, âReport on the sixth session,â supra note 127, at para. 29.
Potentially allowing parent companies of tncs to be sued in their home state together with their foreign subsidiaries when the claims concerning alleged adverse human rights impacts are connected, Draft Article 9.4 of the Third Revised Draft, supra note 82, provided that âcourts shall have jurisdiction over claims against legal or natural persons not domiciled in the territory of the forum state, if the claim is connected with a claim against a legal or natural persons domiciled in the territory of the forum state.â
With respect to forum necessitatis, Draft Article 9.5 of the Third Revised Draft, supra note 82, provided that âcourts shall have jurisdiction over claims against legal or natural persons not domiciled in the territory of the forum state if no other effective forum guaranteeing a fair judicial process is available and there is a connection to the state party concerned.â
ohchr, âSuggested Chair Proposals,â supra note 124, at 7.
Daniel Augenstein and Nicola Jägers, âJudicial remedies: the issue of jurisdiction,â in Human Rights in Business: Removal of Barriers to Access to Justice in the European Union, eds. Juan José Ãlvarez Rubio and Katerina Yiannibas (London: Routledge, 2017), 31â34.
It is common for victims of corporate adverse human rights impacts located in host states to sue locally incorporated subsidiaries in the courts of home states along with parent companies. While asserting jurisdiction over the parent company, a corporate national of the forum state, will generally not be an issue on the basis of the nationality principle, courts of the home state have traditionally been unable to assert jurisdiction over foreign subsidiaries because the entities in question, which are legally distinct from their parent company, are incorporated and domiciled in a foreign state.
ohchr, âSuggested Chair Proposals,â supra note 124, at 7.
In the context of treaty negotiations, stakeholder have regarded forum necessitatis important to alleviate obstacles generally encountered in the context of transnational civil litigation for adverse human rights impacts by corporate actors and, as such, to improve victimsâ chances to have their claims heard in domestic judicial settings. See, inter alia, ohchr, âReport on the fifth session,â supra note 128; ohchr, âReport on the sixth session,â supra note 127.
The text of the provision is unclear as to whether âthe law of that courtâ refers to the law of the forum state or foreign law. The report of the sixth working session of the oeigwg, where the text of the Third Revised Draft, supra note 82, is discussed, does not provide clarification on Article 11.1 either.
Claims in the context of business and human rights are generally governed by tort law. In the field of tort law, torts are generally governed by the law of the place where they have occurred. The location of the tort typically determines the body of law applicable to the dispute both in common and civil law jurisdiction.
See ohchr, âReport on the fifth session,â supra note 128; ohchr, âReport on the sixth session,â supra note 127, at para. 36. See also Statement by fidh delivered during the 8th Session of the oeigwg with regards to Article 11 of the Third Revised Draft, available at:
The EU Commission adopted the proposed Directive in February 2022, the EU Council adopted its position in December 2022, and the EU Parliament adopted its position in June 2023. See Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937, com(2022) 71 final, 2022/0051(cod), February 23, 2022.
The text has been approved by the EU Parliament on April 24, 2024. See âProposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due Diligence and amending Directive (EU) 2019/1937,â Council of the European Union, March 15, 2024,