Proposed Binding Business and Human Rights Treaty Stirs Controversy

Three years after the unanimous endorsement of the UN Guiding Principles on Business and Human Rights by the UN Human Rights Council (UNHRC), the UNHRC passed a resolution on June 26 to begin the process of developing an international legally binding treaty to regulate the activities of transnational corporations and other business enterprises with respect to human rights. The resolution, sponsored by Bolivia, Cuba, Ecuador, South Africa, and Venezuela, revealed rifts between governments in the North and South, and among civil society organizations. Companies and their associations were unanimous in their opposition to the resolution.

The resolution was voted against by all the Western industrialized states on the UNHRC, including the U.S. and EU member states. The U.S. representative to the UNHRC warned: “We have not given states adequate time and space to implement the Guiding Principles… The proposed Intergovernmental Working Group will create a competing initiative, which will undermine efforts to implement the Guiding Principles.”

Past efforts at creating a binding treaty for business and human rights at the UN have failed. In the 1970s attempts to create a Code of Conduct for transnational corporations never came to fruition. More recently in 2003, the United Nations Sub-Commission on the Promotion and Protection of Human Rights pursued a treaty strategy with its drafting of the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights. The Norms were framed in mandatory terms, setting forth corporate obligations with respect to human rights, and would have paved the way for a treaty. But the Norms were rejected by the UN Human Rights Commission (which would later become the UNHRC), and set the stage for the creation of the mandate for a Special Rapporteur on Business and Human Rights. The position was held by John Ruggie, who led efforts to draft the UN Guiding Principles. It appears that the collective political will for a treaty is no greater this time around, leading John Ruggie to ask: “Will this latest attempt to impose binding international law obligations on transnational corporations turn out to be another instance of the classic dysfunction of doing the same thing over and over again and expecting a different result?”

In contrast, a second resolution passed by the UNHRC and sponsored by Norway and a number of other states encourages, among other things, a strengthening of the process to implement the UN Guiding Principles, extends the mandate of the UN Working Group on Business and Human Rights for another three years, and calls on the Working Group to launch a transparent, multi-stakeholder consultative process “to explore and facilitate the sharing of legal and practical measures to improve access to remedy, judicial and non-judicial, for victims of business-related abuses, including the benefits and limitations of a legally binding instrument, and to prepare a report.”

In a statement, the International Chamber of Commerce expressed “deep concern that the adoption of a resolution for a binding human rights treaty on multinational corporations will undermine progress already made by the widely supported UN Guiding Principles on Business and Human Rights.”

Various stakeholders have different perspectives on the value of a binding business and human rights treaty.

Some opponents of a treaty fear that a treaty process could undermine the consensus that was built among stakeholders around the UN Guiding Principles and could hamper ongoing implementation efforts. They question how a treaty can succeed if the key states that are headquarters to the majority of multinational companies refuse to participate and support the treaty process. As with any human rights treaty, it would likely take decades to negotiate and only be binding to states that choose to become party to it and implement their treaty obligations in national law. Human Rights Watch and Amnesty International expressed concern that Ecuador’s resolution fails to address the operations of domestic companies and focuses exclusively on transnational corporations.

John Ruggie noted the impossibility of one single treaty covering the complex issues at the nexus of business and human rights. In a recent opinion, he noted: “The crux of the challenge is that business and human rights is not so discrete an issue-area as to lend itself to a single set of detailed treaty obligations…  It encompasses too many complex areas of national and international law for a single treaty instrument to resolve across the full range of human rights. Any attempt to do so would have to be pitched at such a high level of abstraction that it would be devoid of substance.”

Supporters, including a coalition of over 500 NGOs and social movements, point to the voluntary nature of the UN Guiding Principles and inadequate implementation of them to date by states and companies alike. They are seeking greater corporate accountability for rights abuses and better access to remedy for victims of abuses. Friends of the Earth Europe has argued that implementation of the UN Guiding Principles and a treaty negotiation process can proceed on parallel tracks. Supporters also note that a treaty could create a globally more level playing field for businesses currently operating in jurisdictions with differential laws on human rights enforcement.

As things currently stand, it appears that efforts to negotiate a treaty with widespread support will likely fail due to the lack of consensus and political will for a treaty process. Best case scenario is a treaty that enjoys little support, but that might set the stage for more scoped efforts to do such things as strengthen domestic legislation, elaborate on states’ extraterritorial obligations for their multinational corporations’ conduct, and improve mechanisms of remedy for victims of corporate abuses. In a worst case scenario, disagreements over the treaty negotiations will undermine the careful consensus that John Ruggie built among states, business, and civil society around the UN Guiding Principles, and will distract from further efforts to implement these norms.

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