I Introduction
The recently opened United Nations process to develop a treaty on business and human rights is often described as a ‘train already in motion’, but the second session of the intergovernmental group in charge of negotiating it which met in Geneva on 24–28 October 2017 gave the impression of a plane struggling to take off, endangering both passengers and cargo. The meeting that was generally well attended by a growing number of states and an impressive and growing group of diverse civil society organizations, failed, however, in breaking through key political impasses in the ongoing negotiations. There were also signs of entrenchment in the political positions of some actors.
The second session of the Open-Ended Working Group on the elaboration of a legally binding instrument on Transnational Corporations and other business enterprises with respect to human rights (OEIGWG) was mandated by Resolution 26/9 of the Human Rights Council.Footnote 1 According to the Resolution 26/9 the first two sessions were to be dedicated to ‘constructive deliberations’ on the ‘content, scope, nature and form’ of the future legally binding instrument. The Chairperson-Rapporteur is mandated to prepare a draft text of elements for the treaty for negotiations to start during the third session. The second session held in the conference rooms of the United Nations Office in Geneva was clearly a continuation of a discussion that started one year before, at the first session, but this time with less drama and more articulated positions. Prior to the meeting, a record number of written contributions were received by the secretariat from non-governmental organizations (NGOs) and individuals. A number of parallel events were held during the session by civil society groups.Footnote 2
II Political Prelude
The meeting was preceded by growing expectation among civil society and other stakeholders about the (unofficially) announced European Union (EU) and Member States’ participation in the session, regarded as a ‘U-turn’ in the EU’s stance towards the process. During the first session in 2015, the EU delegate walked away after failing to secure a change in the programme of work. Two weeks ahead of the second session, civil society groups campaigned intensively in Brussels and elsewhere in Europe, to pressure the EU to participate. These groups proclaimed victory when the EU signalled its intention to participate.Footnote 3 The EU U-turn was due to a change in its own strategy as much as to pressure from civil society. Events would show that the EU’s change was not a full U-turn but an accommodation to current circumstances.
The meeting started with a show of consensus and unity of purpose when the Ambassador of Ecuador, Maria Fernanda Espinosa Garcés, was re-elected as Chairperson-Rapporteur and the proposed programme of work for the session was adopted without a change.Footnote 4 The EU and Member States delegates seemed satisfied with a programme of work that reserved a clearly separated segment for the UN Guiding Principles on Business and Human Rights (UNGPs), and in fact dedicated most, if not all, their substantive interventions to highlight and insist on implementation of the UNGPs. This apparent change of strategy within the EU did not extend to countries such as the USA and Canada, both of which remained absent.
The programme and selection of speakers in the various panels were remarkable pieces of political and diplomatic craftsmanship to the detriment of clarity of the substance discussed. The programme appeared to be organized to respond to various pressure groups including states, civil society, academia and business. The programme was broadly structured to address the three pillars of the UN Framework: the obligations of states, obligations of business enterprises, and access to remedies. The issue of extraterritoriality was emphasized throughout the programme and one afternoon was dedicated to discussions about the implementation of the UNGPs, without clear connection to the subject matter of the OEIGWG – the elaboration of a legally binding instrument. Each panel comprised four or five and sometimes up to seven speakers, leading to overlap and repetition.
III The General Debate
As an innovation in relation to the first session, the programme of work included a first segment where states made general statements. This became the segment of choice for many state delegates to deliver their only speech on substantive issues during the whole session and, and for a few others, to fire their first shots. A keynote speaker, Professor Jeffrey Sachs, set the tone of the debate by raising some of the issues that would later be also addressed by states. These included: (i) the inequality between rights and obligations of business corporations and (ii) the role of international investor-state arbitration tribunals and the consequent inequality of bargaining power between corporations and communities affected by their operations, as rationales for the new binding instrument. Sachs also discussed the need to focus on the role of national justice systems as the mechanisms to implement legal liability for businesses, and the challenges that domestic judicial decisions face to be enforced both nationally and internationally.
Several interventions mirrored Sachs’s keynote addresss. Interventions overall reflected the general stance of each country for this session, and illustrated the divide among them. Supporting statements to the treaty process came from South Africa and the African Union, Ethiopia and others. Several states such as Chile, Brazil, Switzerland and South Korea, while declaring their interest in and the importance of the treaty process, stressed that the new binding instrument should be complementary with the UNGPs, not undermine its implementation and/or build on the consensus that the UNGPs had already created.
The EU restated its commitment to the UNGPs, praised the consensus achieved around the Office of the United Nations High Commissioner for Human Rights (OHCHR) project on Accountability and Remedies for business-related abuses, advocated for the broadening of the treaty scope to all business enterprises, and urged the treaty sponsoring states no longer object to references to the UNGPs in any UN document.Footnote 5 The EU repeated its prior assertion that there are no legal gaps in this field, using the first guiding principle as illustration of the binding character of the UNGPs, with a quote from John Ruggie about the need for a business and human rights treaty to be rooted in UNGPs. The Russian Federation, completely on its own, called for a discussion about the need for the treaty (something that many regarded as outdated given the resolution adopted by the Human Rights Council to elaborate a treaty). China declared its interest in the ‘very important’ treaty-making process, but underlined its complexity and the need to take national processes and differences into account.
Other delegates evoked the difficulties that states face to regulate transnational corporations (TNCs) using purely domestic law, given the ubiquity of TNCs operating in various jurisdictions and in the absence of international common standards that all states would respect, but others considered that there is already a body of existing international standards and that there is consequently no legal vacuum. Standards created through processes within the Council of Europe, International Labour Organization and the OHCHR were cited in addition to the UNGPs.
Several other interventions addressed the need for the treaty to cover all business enterprises, taking into account the asymmetries of power in the relationship with large ones, and the need for broad participation, including by business enterprises.
NGOs again raised issues relating to access to effective remedy and justice and called for home states to TNCs to exercise control on these enterprises operating abroad (under the umbrella of extraterritorial jurisdiction). Some NGOs even called for an international tribunal for corporations without entering into details. The International Organization of Employers (IOE) and International Chamber of Commerce (ICC) called for coverage of all business enterprises, not only TNCs, an equal focus on the three pillars of the UNGPs (and not only on access to remedy) and the preservation of the priority for UNGPs implementation.
IV Key Themes Emerging from Substantive Debates
The programme of work for the second session of the OEIGWG broadly reflected the classic three pillars of the UN Framework on business and human rights, and it was divided into segments dedicated to (1) states’ obligations, including extraterritorial obligations, to protect human rights, (2) obligations and responsibilities of transnational corporations and other business enterprises (TNC-OBE), and (3) lessons learned and challenges on access to remedies. Two special panels were dedicated to (1) approaches and criteria for the definition of the scope of the instrument, and (2) cooperation for prevention, remedy and access to justice.
The issues raised by the numerous speakers in the panels, delegates from states, NGOs and other groups, were so wide-ranging that they cannot be usefully summarized in this piece. The following will focus on a few of the most salient and recurring debates throughout the session. The selection of speakers and the subject matter for the panels suggests an intention on the part of the organizers for these issues to emerge prominently: (1) the interface of the binding instrument with trade and investment agreements, (2) extraterritorial obligations and jurisdiction, and (3) whether a treaty would be compatible with the UNGPs.
V The Interface with Trade and Investment Agreements
Following the keynote address by Jeffrey Sachs, several delegations and panellists noted the various ways in which trade and investment agreements (notably bilateral agreements) impact on the enjoyment of human rights by people. These agreements are said to provide high protection, rights and privileges for foreign investors only, not balanced by corresponding obligations for investors with respect to human rights and the environment. Access by investors to a system of international justice in the form of arbitration tribunals was portrayed as an additional source of inequality and asymmetry between the rights of and obligations for corporations in international commerce and in their relationship with local communities. Some panellists, states and NGOs advocated for the prospective treaty to create direct obligations for corporations to balance the perceived excessive rights and protections enjoyed under international trade and investment agreements. Others argued in favour of the creation of a new international justice system that would grant remedies to communities affected by business’ operations.
The relevance of trade and investment agreements in the debates was touched upon in most panels. For instance, in relation to remedies and access to justice, one panellist, in response to some states and business delegates stressing a focus on domestic justice mechanisms, made the observation that businesses appear eager for transnational and international justice in the form of arbitral tribunals to protect their rights but dislike the same in relation to the rights of individuals and communities affected by their operations.
VI Extraterritorial Obligations and Jurisdiction
The issue of extraterritorial jurisdiction became central in the debates during the second session. Two key aspects of jurisdiction were discussed: regulatory and adjudicatory. In relation to jurisdiction to regulate, several panellists and speakers from the floor evoked existing obligations on states to regulate the operations of their national companies abroad.Footnote 6 Some NGOs and states made reference to examples such as a new French Bill creating an obligation for larger companies to establish a monitoring system of their subsidiaries and suppliers abroad.Footnote 7 Regarding adjudication, speakers assigned a key role to the extension of national courts’ jurisdiction to deal with claims or offences committed abroad by national companies’ subsidiaries or contractors.
Business delegates did not show enthusiasm for a system of extraterritorial jurisdiction and instead stressed a focus on domestic laws and court systems. The IOE and ICC pointed to the limitations of the extraterritorial jurisdiction model, one of them being that states involved in the commission of human rights abuses by businesses could not be subject to the jurisdiction of foreign courts in general and accountability would only fall on businesses rather than states.
VII Complementarity
The issue of the relationship between the UNGPs on business and human rights and the prospective treaty was central to the debates in several panels. European delegates who spoke expressed their support for the UNGPs and often stressed the need not to undermine their implementation and the need to build on them as well as on other existing instruments. Others took the opportunity to elaborate on the ways in which the UNGPs were being implemented, and their national or regional initiatives that build on them. No state, however, elaborated further on the possible ways in which there may be a conflict between the UNGPs and a new instrument.
Business representatives were more explicit when they called for the new instrument to cover the three pillars of the UNGPs (Protect, Respect and Remedy) and not only the third one on remedies, and the need to stick to the definitions and guidelines on human rights due diligence or extraterritorial state action contained in the UNGPs.
VIII Other Issues
The number of panels and speakers allowed for a wide range of issues to be raised. Several delegates addressed the personal scope of the treaty and some discussed whether there is a need to define TNC-OBE or not. Others argued in favour or against an exclusive focus on TNCs or the expansion to cover all business enterprises.
Some speakers, states and NGOs argued that corporations have ‘captured’ the political and economic power structures, and many state structures are corrupted by business interests and influence. Some NGOs opposed business participating in the debates to avoid them unduly influencing the outcomes. Other speakers, state delegates and NGOs focused their interventions on the issue of direct versus indirect international human rights law obligations. One speaker, Professor David Bilchitz, suggested a series of criteria for states to define direct human rights obligations for corporations.Footnote 8 However, the IOE and ICC delegates opposed the concept, arguing that states’ human rights duties cannot be imposed on or transposed onto business corporations, and expressed their preference for the UNGPs’ distinction between states duties and business responsibilities. In this regard, an interesting question by Mexico about whether the business responsibility to respect human rights is now part of a corpus of general principles of law remained without response. Pakistan also asked how the treaty would guarantee access to justice to people whose territorial state has not ratified it, without answer.
Several delegations underlined the need for an international monitoring body and others asked for an international court or other similar accountability body. One panellist suggested the application of the rule of exhaustion of domestic remedies as condition to have access to international remedial mechanisms.
IX The Road Ahead
The report of the second session was presented (by videoconference!) to the 34th session of the Human Rights Council in March 2017.Footnote 9 The report also contains a series of recommendations by the Chair and conclusions adopted by the whole. It defines a road map of consultations towards the elaboration of the draft elements for the third session (already scheduled for October 2017). The Chair may circulate drafts of elements for consultation among restricted circles before presenting an official draft to the third OEIGWG session.
X Conclusion
The second session of the OEIGWG struggled to sharpen the discussion and to make progress on creating common ground among states and stakeholders, but that in itself is not a big problem. In the next few months leading up to the third session, steps should be taken to facilitate a focus on the most important issues and on identifying areas of common interest and positions. The draft elements to be prepared by the Chair will contribute to that if it aims at those objectives.
