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Article d'opinion

18 Nov 2024

Auteur:
Heidi Hautala

The EU should build on its strong record and step fully into the Legally Binding Instrument process

By Heidi Hautala, former MEP who focused on promoting binding rules for responsible business conduct and had a leading role in the EU CSDDD negotiations.

The 10th round of negotiations of the Legally Binding Instrument (LBI) to regulate, in international human rights law, business activities is approaching. During the week in Geneva – set to begin on 16 December -  it will be seen if the Chair-Rapporteur’s efforts and consultations during the past year have brought the parties any closer to reaching agreement on the text. These negotiations will take place in an environment where the trend towards mandatory accountability of business enterprises is on the rise. Hopefully this bodes well for the possibility of finding compromise.

Stakeholders across the spectrum are increasingly compelled by these ideas. More and more companies state that voluntary standards, certifications and labels, do not help to solve serious breaches of human rights, nor do they help to eradicate deforestation and other environmental harm. Many people have been surprised by the large number of business enterprises that have begun calling for mandatory due diligence. My first wakeup call happened in 2018, when the biggest chocolate companies approached EU lawmakers with just this message. The support of a growing number of business entities certainly helped facilitate the recent adoption of the EU Corporate Sustainability Due Diligence Directive (CSDDD). Could that have been foreseen five years ago? I do not think so.

But support did not come from business alone. As an EU legislator helping to lead the CSDDD process, I had never seen such cooperation between civil society, labour unions, states, international organisations and businesses towards the goal of making mandatory the voluntary human rights due diligence processes first spelled out in the United Nations Guiding Principles on Business and Human Rights (UNGPs). The expected impacts of the CSDDD are huge, hopefully not too overrated. To turn the new standards into reality, to really improve people’s lives and our planet, will be a formidable task. What has now been called ”the end of the beginning” means that stakeholders need to continue to work together.

The spillover effects of the EU CSDDD are also already visible, as the Directive does not only apply to European, but also to other companies operating in the EU internal market. This is no doubt adding further input to the robustly developing global framework for Responsible Business Conduct.

Interest in implementing the UNGPs themselves – which started off slow – is likewise continuing to grow. Countries on all continents are now taking the first important step by adopting National Action Plans. UNDP and OECD are great supporters of this process. Interest in sustainability reporting standards is also growing, such as in Nigeria and Kenya. While this effort may appear patchwork, the direction is clear.

Among these several pathways towards global standards of corporate accountability, the negotiations on a LBI have an important role. Despite disagreements between different regional groupings, this process has created the only platform which could finally evolve into a UN Convention on corporate accountability.

Until now, the EU has been a close observer of the negotiations in Geneva. It has frustrated many parties and stakeholders with its critical remarks on the process, and on the content of the draft treaty. The EU has been skeptical primarily because of the risk of a major deviation from internationally agreed standards. But its position has had some impact on the evolution of the text. There could not be a better moment for the EU to step fully in to the LBI process as its ”domestic” legislation is now in place.

Now the frontrunning EU Member States, notably the Friends of the Chair, France and Portugal in the lead, must work hard to achieve an EU mandate for joining the negotiations with full vigour and commitment.

The European Parliament has undoubtedly been the focal point for the deliberations and contacts around the CSDDD from the very beginning, even before it was conceived. On the other hand, the Parliament has no legal competence in the drafting and adoption of negotiation mandates of international agreements, such as the LBI, which aims at an international agreement at the UN. However, nothing stopped it from giving its ideas on how the EU mandate could be shaped.

The Parliament’s call on the EU to actively engage in the negotiation process with an ambitious position was adopted in January 2024, and reflected discussions and consultations of a number of stakeholders. Through this position, the Parliament lends its strong support to the work of the Inter-Governmental Working Group on transnational corporations and other business enterprises with respect to human rights negotiating the LBI. It calls for further alignment with the UNGPs and OECD guidelines, and promotes effective regulatory measures to prevent corporate abuse through due diligence.

The Parliament highlights that a parent-company-based extraterritorial regulation should allow access to justice for victims in the home states of the transnational corporations, and that provisions on the rights of victims and rights-holders should be robust, e.g. with regard to evidentiary burden and other practical and procedural obstacles to access to justice. Importantly, the LBI should expand to environmental adverse impacts. This is in line with the more recent legal developments which see climate and environment through the human rights lens.

EU domestic legislation cannot translate into a global treaty as such, but many principles enshrined in the EU CSDDD are worth defending in the negotiations. I see a well-defined human rights due diligence process as the centerpiece of the LBI, combined with effective remedies and access to justice for victims. Meaningful stakeholder engagement and heightened due diligence in conflict areas are essential. The EU is well-placed to press forward these elements in the negotiations.

Perhaps in anticipation of the new EU Commission, there might be an important announcement from the EU, or even just an indication in Geneva in December? Anything else would be a disappointment.

10 years on: Walking the talk for a powerful binding treaty

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