This blog was also published by OpenGlobalRights on 11 October 2019 here.

Half a decade has passed since in July 2014 the UN Human Rights Council first voted to begin negotiating a legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises. The elements, scope, and substance of the Treaty have been subject to a healthy debate, which the Business & Human Rights Resource Centre has helped facilitate in ourDebate the Treaty blog series.

The ongoing discussion has been marked by several key milestones; the most recent of which is the release of the Revised Draft Treaty by the government of Ecuador in July 2019. This Draft will be discussed at the UN Intergovernmental Working Group in October. We have argued elsewhere that for any Treaty to be effective it must pass three key tests: It must 1. meet the needs of vulnerable groups, 2. ensure effective access to remedy and justice, and 3. reinforce mandatory transparency and due diligence. How does the Revised Draft Treaty measure up against this criteria compared to the ‘Zero Draft’ of 2018? 

Vulnerable Groups 

Since 2015 we have tracked almost 2,000 killings, beatings, threats and other forms of intimidation against human rights defenders working on business-related issues. This includes judicial harassment of defenders, who are increasingly subjected to Strategic Lawsuits against Public Participation (SLAPPs). Our latest research shows that between 2015 and 2018, 12 major oil, gas and mining companies and one industry association filed at least 24 SLAPPs against 71 defenders, seeking a combined total of US$ 904 million in damages. An effective Treaty must address these defenders’ needs; and the needs of others who are at heightened risk of vulnerability in companies’ operations and supply chains. 

The Revised Draft Treaty gives greater recognition and affords increased protection to human rights defenders, both in its preamble and in several operative provisions, and bears key improvements towards ensuring gender justice and to the protection of persons living under occupation and in other conflict-affected areas. The Treaty rightly acknowledges other at-risk groups such children, persons with disabilities, indigenous peoples, migrants, refugees, and internally displaced persons. 

Access to Remedy and Justice 

100 of the world’s largest companies received an average score of just 15% for their remedies and grievance mechanisms in the Corporate Human Rights Benchmark’s latest 2018 ranking. This indicates that most victims of corporate human rights abuse routinely do not have access to effective remedy and justice. The prevailing lack of remedial avenues is exacerbated when companies hide behind corporate structures to evade legal liability for the human rights impacts of their subsidiaries. An effective Treaty must therefore strengthen access to effective remedy and justice, both nationally and extraterritorially, piercing the ‘corporate veil’ that subsidiaries use to avoid justice. 

Perhaps one of the Revised Draft’s most compelling aspects is that it “rightly places its raison d’être on victims and their protection,” as Antonella Angelini notes. The strengthened provisions on legal liability for enterprises have also been widely welcomed; including by Carlos Lopez who has highlighted their “enormous significance for the implementation of international criminal law and human rights law in relation to business enterprises.” 

On the other hand, many stakeholders have rightly criticised the Draft’s lack of clarity and specificity in key provisions, such as those relating to the reversal of the burden of proof and to civil liability. While the Revised Draft requires states to establish legal liability for complicity in certain (international) crimes, Prof. Doug Cassel has rightly argued that “nothing in the draft explicitly requires “civil liability” for businesses which are complicit in human rights violations committed by states.” 

Transparency and Due Diligence 

Many governments have recognised that voluntary measures – while important - are insufficient to ensure companies' respect for human rights. The failure of this approach has prompted the growing movement towards mandatory human rights due diligence at the national and regional levels. In Europe, France spearheaded the movement with its duty of vigilance law in 2017; other countries including Switzerland and Austria are considering similar initiatives. The Dutch Child Labour Due Diligence Law requires companies to determine whether child labour occurs in their supply chain; and civil society in Germany has just launched a campaign for legislation on human rights and environmental due diligence. Importantly, the Finnish Government - currently holder of the EU presidency - has committed to exploring mandatory human rights due diligence legislation and to raise it at EU level. 

The Treaty provides a key opportunity to accelerate and reinforce these trends, to ensure that companies take adequate action to prevent abuse. The Revised Draft includes important provisions requiring states to introduce legislation to make human rights due diligence mandatory and to oblige business to “take appropriate actions to prevent human rights violations or abuses in the context of its business activities.” While this is a particularly significant step in the right direction, advocates have gone further and called for more clarification of the relationship between the prevention and the remediation of human rights abuses. In her most recent commentary, Gabriela Quijano of Amnesty International suggests ways in which states can and must go beyond due diligence to prevent harm. 

Final Observations 

The Revised Treaty brings with it many improvements, some of which have been outlined above. Two additional improvements are worth noting: The widened scope of the Revised Draft applies to all businesses, transnational and local; and the preamble explicitly refers to the UN Guiding Principles on Business and Human Rights (UNGPs). This is an important affirmation of the complementarity of the treaty process with the UNGPs, which can and must reinforce each other as an international system that pursues genuine protection and remedy for victims. 

Some concerns remain to be addressed in the upcoming negotiations. These include the issues outlined above, and several others, including the Draft’s lack of recognition of direct human rights obligations by companies. With that said, there seems to be a consensus among lawyers, scholars and civil society that overall the Revised Draft is stronger than the ‘Zero Draft’, “both politically and substantially”. We are hopeful that the upcoming round of negotiations will be yet another step in the lengthy journey towards an effective treaty. 
  
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Check out our Binding Treaty Portal and our Debate the Treaty Blog, which includes reflections by diverse thought-leaders on the Treaty Elements & Process, the Zero Draft and the Revised Draft. An unofficial summary of the Revised Draft is available here.