Towards a Treaty on Business and Human Rights?

The Human Rights Council has adopted a resolution establishing a new working group with a mandate to elaborate “an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights”. In this note, we briefly summarise the background to the resolution and its implications for the future of the business and human rights agenda at the UN.

Background

Regular readers of this blog will be familiar with the UN Guiding Principles on Business and Human Rights (UNGPs) which were unanimously endorsed by the Human Rights Council in 2011 and which are recognised as the authoritative global statement on the obligations and responsibilities of States and business enterprises in the area of business and human rights.

The UNGPs did not establish new legal obligations for States. Instead the UNGPs emphasise that, under existing international law, States have legal obligations to protect human rights, including obligations to protect human rights against business-related abuse. While recognising that business enterprises are not obliged directly to comply with international human rights law, the UNGPs make clear that business enterprises should respect human rights.

The UNGPs contain a range of recommendations addressed to both States and business enterprises regarding the steps each ought to take to discharge their obligations and responsibilities in the area of human rights. The UNGPs also urge States and business to ensure that victims of business-related human rights abuses can access effective remedies, via both judicial and non-judicial processes.

In addition to being endorsed by the member-States of the Human Rights Council, the UNGPs have been widely supported by the private sector and leading NGOs. A number of States have introduced new legislation in response to the UNGPs and many business enterprises have adopted or revised corporate human rights policies. Various other important international standards have been revised to reflect the normative content of the UNGPs, including the OECD Guidelines for Multinational Enterprises and the International Finance Corporation’s Performance Standards on Environmental and Social Sustainability.

Notwithstanding these positive developments, the UNGPs have not eliminated business-related human rights abuse. It is partly due to frustration with the lack of progress that certain groups have continued to call for a new treaty for business and human rights.

This debate about the need for an international legal instrument in the field of business and human rights is not new and can be traced at least as far back as the early 1970s when the UN attempted to negotiate a code of conduct for transnational corporations. In 2004 the then UN Human Rights Commission (now the Human Rights Council) famously rejected a document which sought to define, in international law, the legal obligations of transnational corporations and other business enterprises in relation to human rights.

Opinions on the matter continue to be divided. Indeed, the Human Rights Council’s latest resolution was only passed by the slimmest of margins, with many States either abstaining or voting against the resolution.

The treaty working group

The resolution provides for the establishment of “an open-ended intergovernmental working group … whose mandate shall be to elaborate an international legally binding instrument to regulate, in international human rights law, the activities of Transnational Corporations and Other Business Enterprises.”

The intergovernmental working group will hold its first working session in 2015. The resolution envisages that the first two sessions of the group of will be dedicated to discussion on the content, scope and form of a future international legal instrument. Rather ambitiously given the complexity of the issues involved, the resolution suggests that the Chairperson of the working group will prepare a draft instrument for substantive negotiation during the group’s third session.

The resolution contains a recommendation that the first meeting should be used to “collect inputs” from States and “relevant stakeholders” but contains no express guarantee that there will be formal opportunities for civil society or private sector involvement in the group’s discussions. The vagueness of the resolution in this regard stands in stark contrast to other recent resolutions in the area of business and human rights which have heavily emphasised, and in some cases expressly called for, multi-stakeholder dialogue.

The resolution leaves many important substantive questions unanswered. Most fundamentally, given that States have failed to fully implement and collectively enforce their existing obligations under a plethora of international treaties dealing with human rights, how will yet another treaty improve the situation?

Notwithstanding that there is only a very slim chance of consensus on a new treaty being reached in the short-term companies will wish to monitor the negotiations closely, and to have input into those negotiations wherever possible.

Where does this leave the UNGPs?

A second resolution adopted by the Human Rights Council last week welcomed the progress made by many actors in implementing the UNGPs and urged the continuation of that work. This resolution also renewed the mandate of the existing five-member working group established to promote and oversee the implementation of the UNGPs. Work to implement the UNGPs will therefore continue under the oversight of the existing working group notwithstanding the parallel treaty negotiations.

We expect that companies will continue to be under pressure to demonstrate that they are taking steps to implement the UNGPs, not least because the UNGPs have now become effectively embedded in a range of other international standards and in many corporate policies. We also expect that many States will press ahead with work to implement the UNGPs at the domestic level, including through the adoption of national action plans and the introduction of new legislation. It is possible that some States will redouble their efforts in order to demonstrate that progress is not dependent on the adoption of a new treaty.

For further information, please contact one of the authors, or your usual Herbert Smith Freehills contact.