Limiting the application of the treaty to certain corporate entities could leave victims without access to remedy

Tom Mackall, Vice President, Global Labor Relations, Sodexo

To promote respect and enhance remedies for human rights globally, any international legal framework must apply human rights standards to all business entities

This blog is part of the debate blog series on the proposed treaty and its complementarity with the UN Guiding Principles. We believe that an inclusive and open debate is crucial to make sure these initiatives deliver for everyone, and that the business & human rights movement continues its "unity in diversity".

The statements made during an afternoon in which I participated as a panelist during the International Working Group (IWG)’s first session in Geneva were insightful and informative, as are the thoughtful blogs already posted to this site.  Out of the variety of viewpoints I discern a general agreement that victims of human rights abuses should have effective and prompt access to appropriate remedies and that a multi-lateral treaty may be one means of accomplishing that goal.  I am grateful to Ambassador Espinosa and the IWG for their inclusion of multiple stakeholders in the dialogue and to the Business & Human Rights Resource Centre for fostering continuing discussion.

Other contributors to this blog series have made many sound points.  Among others, I support Professor Ruggie’s call for realism and Ms. Kromjong’s position that the most effective path to promoting respect for human rights and enhancing remedies for violations is through the host states.  I also share the view of many others that the IWG’s work should support the UN Guiding Principles and the momentum they have created.  The Principles’ three-pillar framework provides meaningful and actionable guidance regarding obligations of states and businesses.  Since their endorsement, businesses have committed tremendous resources toward implementing the principles.  Like the unanimous endorsement of the Principles by the UN Human Rights Council in 2011, this activity within the business community focused on respecting human rights is unprecedented.

I wish to focus on the proposed “breadth” of any treaty.  If the goal is to promote respect and enhance remedies for human rights globally, then any international legal framework must apply human rights standards to all business entities, not simply transnationals or businesses with a transnational character. 

A two-tiered system where one segment is required to respect human rights and another segment is not, will allow adverse market forces to persist and could leave potential victims without access to remedies.  This contradicts a stated purpose of the treaty effort

What does this mean?  First, host states must be equipped to cast their regulatory and legal nets more broadly and minimize the informal economy.  Companies that evade regulation through graft or other means can readily avoid meeting even their legal obligations to employees, let alone operate to help raise standards.  The International Labour Conference of the ILO has stated that a prevalent informal economy presents “a major challenge for the rights of workers, including the fundamental principles and rights at work, and for social protection, decent working conditions, inclusive development and the rule of law, and has a negative impact on the development of sustainable enterprises ….”  As a company that operates locally, provides services locally, and competes for business and talent locally, Sodexo has seen this first-hand. 

This also means that “formal” domestic companies must have the duty to respect human rights and be subject to remedies for abuses, regardless of whether they conduct or support business across borders.  If it is agreed that human rights are universal and that victims of human rights abuses should have access to appropriate remedies, then limiting access to such remedies depending upon what type of commercial entity may be culpable is bad logic and bad policy.  A two-tiered system where one segment is required to respect human rights and another segment is not, will allow adverse market forces to persist and could leave potential victims without access to remedies.  This contradicts a stated purpose of the treaty effort.

Sodexo’s Supply Chain Inclusion Program is part of our commitment to have positive impacts on local communities.  We are committed to expanding our SME engagement and spend, with specific actions toward women and socially excluded communities.  Often in conjunction with local organizations, Sodexo is already working in 32 different countries to integrate Small & Medium Enterprises (SMEs) into our supply chain and to boost their quality and competitiveness.  During the Clinton Global Initiative’s last annual conference, we announced our intention to spend by 2017 US$1 Billion globally with more than 5000 SME’s, at least 1500 run by women. 

Most of these SME’s are domestic:  local companies providing goods and services to local operations within their home country.  In our present dialogue around the treaty, the impact of contracting with a local Sodexo subsidiary is not clear.  Maybe the engagement would imbue the SME with a “transnational” character and subject it to a different legal regime under the two-tier approach.  If so, the SME would have to decide whether investments required to comply with new obligations would be worth the business growth.  On the other hand, maybe the SME would still be considered a domestic company.  In that case, Sodexo would have to assess whether engaging the local company, as opposed to a company that is already “transnational,” is worth any additional risk.  Both companies would have to consider investments necessary to bring the local company into compliance with any new standards that do not apply to it in the first instance. 

In either case, the two-tiered system would create additional risk and complexity.  Rather than promoting common “hard law” standards regarding human rights applicable to all entities, it would compel entities to decide how to bridge regimes based on economic, personal, and corporate values and valuation.  This may effectively promote global respect for human rights, but it is the very “soft law” that treaty supporters believe is insufficient for shaping corporate behavior. 

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Mr. Mackall is Group Vice President, Global Labour Relations, for Sodexo, the world’s 18th largest private employer.  Mr. Mackall was a panelist during the first session of the IWG in Geneva and has spoken widely on business and human rights issues.