I. Introduction
The private sector is the main engine of economic growth, with corporations contributing to the development of countries where they operate.Footnote 1 However, concerns persist regarding the negative impacts of corporate activities, ranging from unethical and irresponsible business conduct to environmental deterioration, corruption, indigenous and local communities’ land rights violations, and human rights abuses.Footnote 2
These concerns have revived the longstanding issue of the relationship between businesses and society and the responsibilities businesses should assume, particularly in developing countries.Footnote 3 There have also been questions about the role that international investment law could play in advancing business and human rights (BHR). Three important developments have taken place since the mid-2000s.
The first was the gradual inclusion in virtually all international investment agreements (IIAs) of CSR clauses among investors’ obligations.Footnote 4 This development, dubbed the ‘hardening of CSR’,Footnote 5 appeared in response to the perceived failure of CSR to address corporate human rights abuses, due to its voluntary and non-legally binding nature.Footnote 6 The second development, parallel to the first one, was the introduction of BHR provisions in IIAs, especially after the adoption in 2011 of the United Nations Guiding Principles on business and human rights (UNGPs).Footnote 7 The third development, which is very recent, is the emergence of new type of CSR provisions in IIAs, which feature human rights elements. Art 38 of the Protocol to the Agreement establishing the African Continental Free Trade Area (AfCFTA) on Investment adopted in January 2023, titled Corporate Social Responsibility, is a perfect illustration.Footnote 8 This article coexists with BHR provisions in the same Protocol, notably arts 31, 33, 34 and 35, which deal respectively with investors’ obligations in relation to state parties, business ethics; human rights and labour standards; human rights to a clean, healthy and sustainable environment; rights and dignity of indigenous peoples and local communities; as well as sharing of benefits arising from investments with local communities.Footnote 9
This latest development raises the issue of the nexus between CSR and BHR. In other words, is the rise of new types of CSR provisions, which also include human rights elements and coexist side by side with BHR provisions, a move towards greater complementarity and convergence between CSR and BHR; or is it a tactical move of CSR to coopt and potentially weaken BHR?
This article examines the extent to which art 38 complements BHR provisions of the AfCFTA Protocol on Investment, its limitations, and ways to address them with a view to further enhancing corporate human rights accountability in the African context. The methodology used is the critical legal analysis of human rights elements of art 38, against BHR provisions of the AfCFTA Protocol on Investment, focusing on their substantive and procedural elements.Footnote 10
The CSR movement regained prominence after the Second World War. It involves a combination of interventionsFootnote 11: adoption of voluntary codes, principles and standards by corporations to advance workers’ conditions and values commonly accepted in societies where they operate, enactment of legislation by states as countervailing tools to prevent adverse human rights abuses, and shareholder activism.
With the increasing influence of corporations, there has been gradual acceptance that despite not being subjects of international law, corporations should not only assume non-legal responsibility to avoid human rights violations,Footnote 12 but also undertake positive duties to fulfil human rights, in particular socio-economic rights.Footnote 13 This evolution facilitated the rise of the BHR movement and resulted in a new allocation of responsibilities between businesses and governments with respect to human rights.Footnote 14 The BHR movement emphasizes three elements: centrality of states in protecting and promoting human rights, corporate accountability for any harm and wrongdoings caused, and availability of remedies enshrined in a legally binding instrument for victims of corporate human rights violations.Footnote 15
Scholars have rightly argued that the BHR movement is narrow in scope, because it does not recognise the positive role that business can play in promoting human rights.Footnote 16 This situation, which is due to the fact that BHR developed largely outside the business field,Footnote 17 has led to the conclusion that there is a gap between the BHR and CSR movements, and that BHR is drifting away from CSR.Footnote 18
Some scholars have recently questioned the usefulness of the BHR and CSR debate, given that the two share the same objective of advancing corporations’ accountability for the negative social, economic and environmental impacts of their operations.Footnote 19 Amodu argued that the focus should be on mechanisms which provide effective remedies to victims of all human rights abuses.Footnote 20 Others have contended that the debate is necessary and remains inconclusive; and that the focus should be on understanding the dynamic interplay between the two spheres, and its potential cumulative effects.Footnote 21 They further argued that developing an integrated model that addresses human rights questions more systematically should be the priority.Footnote 22 In this respect, Wettstein’s prediction that going forward, the CSR-BHR debate may evolve in three directions remains very pertinent: coexistence with occasional periods of overlaps; cooptation of the BHR by CSR; and replacement of CSR by BHR.Footnote 23 This article associates with this later view, whilst acknowledging the importance of leveraging the strengths of both movements to enhance corporate human rights accountability.
Research on the interplay between CSR and BHR in Africa is recent.Footnote 24 In a seminal work on the topic, Amodu argued that CSR and BHR are inseparable regulatory movements that contribute to establishing corporations’ accountability for their human rights violations.Footnote 25 To enhance human rights accountability, he recommended a Remedial Framework for victims that builds on the human rights due diligence process established under the UNGPs.Footnote 26 One of the weaknesses of this innovative framework is, as acknowledged by Amodu himself, the overreliance on the state for its operationalization.Footnote 27
Recent contributions to the field have emphasized the positive contribution of corporations to the promotion of human rights. Hence, Meyersfeld made the case for corporations to assume more positive duties under international law to fulfil socio-economic rights, given the wealth disparity between the wealthiest corporations and the countries in which they operate.Footnote 28 African scholars have also underscored the need for an African interpretation and implementation of the UNGPs, especially Pillar II. In the same vein, Abe and Olawuyi have called for the design of good-fit and home-grown implementation approaches to address the challenges to BHR in the African context.Footnote 29 In his work, Ogunranti used Ubuntu to reframe and reinterpret the term ‘respect’ used in Pillar II of the UNGPs in Afrocentric terms. He argues that when corporate responsibility to respect human rights in Africa is localized and reframed through Ubuntu, it gives birth to a congruent normative regime that prescribes both positive and negative obligations for multi-national corporations.Footnote 30
This article contributes in three ways to the discourse on the nexus between CSR and BHR. First, it complements the literature on CSR and BHR in the African context. Secondly, it builds on previous research, notably that of Ogunranti, on the need for an alternative epistemic worldview to advance corporate human rights in the African context. Thirdly, building on Ubuntu’s principles and values, notably its consequentialist understanding, this article proposes a multi-stakeholder accountability framework for ensuring that corporations doing business in the AfCFTA market effectively fulfil and account for their positive human rights duties.
The article is structured as follows: after this introduction (I), the theoretical framework underpinning CSR and the evolution of BHR in the African context are discussed (II). This is followed by a critical legal analysis of human rights elements of art 38 and their limitations (III). The article then recommends a multi-stakeholder accountability framework anchored on Ubuntu’s principles and values, as an option to strengthen art 38 with a view to further enhancing businesses and human rights in the African context (IV). It ends with a conclusion (V).
II. Theoretical framework of CSR and BHR in the African context
This section provides an overview of CSR and BHR in the African context.
A. Corporate social responsibility through African lenses
Despite the absence of a universally agreed definition of the concept,Footnote 31 CSR can be broadly understood as a ‘framework idea according to which a corporation is encouraged, if not obliged, to go beyond the speculative and economic goals that benefit its members only, to integrate into its decision-making process, other more holistic considerations of an ethical, social and environmental nature for the benefit of all stakeholders’.Footnote 32
Scholars are divided on the origins and the theoretical framework that underpins CSR in the African context.Footnote 33 Some view CSR under the Western prism, following which its theories and agenda are largely shaped by the West and have expanded to the continent during the colonial era and through multi-national corporations.Footnote 34 Other scholars contend that CSR in Africa is informed by socio-cultural influences and values such as communitarian lifestyles, which are rooted in the philosophy of African humanism.Footnote 35 Visser and Mofuoa have submitted that Ubuntu, the expression that captures the essence of the philosophy of African humanism, underpins the modern and inclusive approaches to CSR on the continent.Footnote 36
Ubuntu derives from the expression ‘umuntu ngumuntu ngabantu’, which in English means ‘a human being is a human being because of other human beings’.Footnote 37 Ubuntu, which is widely used across Africa, though under different names,Footnote 38 has the following main principles and values: communautarism (inclusiveness, togetherness, and collaboration), humanness (caring and sharing), dignity, and respect.Footnote 39 Taylor identifies four approaches to understanding Ubuntu: ethical, deontological, connectedness, and consequentialist. The consequentialist understanding of Ubuntu is an expression of a member’s inherent duties and responsibilities to his or her community.Footnote 40 This understanding is important for this article, because from a business perspective, it implies that as members of societies where they operate, corporations have duties to the local communities, including in relation to human rights.
To operationalise Ubuntu, scholars have developed several frameworks, one of which is Mofuoa’s Ubuntu-Botho African Ethics Approach to Stakeholder CSR.Footnote 41 This framework has three elementsFootnote 42: cooperative and consensus-driven decision-making processes; dedication of a percentage of corporations’ profits to foster community cohesion; and stakeholder mechanisms for community empowerment.
Beyond the debate over the pertinence of Ubuntu as a theoretical approach to CSR in Africa,Footnote 43 this article agrees with Mofuoa and Ogunranti that Ubuntu provides an African perspective and framework that can be used to illuminate the discussion and the understanding of the role of business organizations in African societies where they operate. Ubuntu also offers elements that can be used to build alternative frameworks and mechanisms for greater corporate human rights accountability, whilst preserving social cohesion and harmonious relationships among stakeholders.
Coming to the institutionalization of CSR in Africa, building on the work of Hamidu, Haraon and Amran,Footnote 44 Azapmo distinguishes five periodsFootnote 45: firstly, the ‘pre-legalization’ period (before 1885) marked by the predominance of values and principles of the philosophy of African humanism and Ubuntu. Secondly, the era of transposition of metropolitan laws to the colonies (1885 to mid-1950s). The third period was the adoption of the first African legal frameworks on CSR (1960s–1980s). This period coincided with the enactment of the first CSR legislation at the international level.Footnote 46 The fourth period was the rise of modern CSR legislation and emergence of the first generation of CSR provisions in African IIAs (1990s–2000s).Footnote 47 This period corresponds to the era of ‘hardening’ of CSR provisions,Footnote 48 in response to the voluntary and non-legally binding nature of CSR.Footnote 49 The fifth and last period (2010s onward), is the consolidation of CSR legislation., marked among others by the emergence in African IIAs of the second generation of CSR provisions, with more elaborate clauses.Footnote 50 One example is art 38 of the AfCFTA Protocol on Investment, which will be further discussed in Section 3. Before that, the next section provides an overview of BHR in the African context.
B. Evolution of business and human rights in the African context
Human rights are fundamental, inalienable and inherent rights to which a human is entitled simply by virtue of being a human person regardless of nationality, place of residence, sex, national or ethnic origin, colour, religion, language or any other status.Footnote 51
Before delving into the evolution of BHR in the African context, it is worth noting that African scholars have weighed in the debate on categories of human rights,Footnote 52 and have put forward a new classification, dubbed African human rights typology.Footnote 53 This sui-generis classification distinguishes civil and political rights, social and survival rights, economic, development and environmental rights, and cultural and spiritual rights. This classification, which suffers the same criticisms as the traditional categories of human rights,Footnote 54 is nevertheless useful as it embodies the philosophy of the African Charter on Human and Peoples’ Rights (African Charter),Footnote 55 and highlights some of the human rights dimensions that are very important in the African context, such as family, women and children, and local communities’ rights. In addition, other specificities of the African conception of human rights, which are also relevant for this article, are the strong linkage between rights and duties,Footnote 56 and the recognition of binding human rights obligations on private actors.Footnote 57
The evolution of BHR in Africa mirrors the three phases identified by Wettstein at the international level (1970s–1995s (early years)); 1995s–2011s (formative years) and 2011 onward (maturing of the debate).Footnote 58 The next sections highlight key features that are unique to the continent.
1975s–1995s: Early conceptualization of BHR
In spite of the legal void for holding corporations accountable for human rights abuses at the international level during this period,Footnote 59 Africa witnessed two important developments during this first phase.Footnote 60 The first was the adoption of the Sullivan Principles in 1977 in South Africa under the Apartheid era,Footnote 61 requiring American companies investing in South Africa to treat their African and American employees equally and to uphold certain key principles such as fundamental labour rights.Footnote 62 Whilst the Sullivan Principles are also linked to the CSR movement,Footnote 63 they are considered as the starting point of BHR’s institutionalization in the African context.Footnote 64 The second development was the adoption of the African Charter in 1981. Art 21 of the Charter guarantees the right of all peoples to freely dispose of their wealth and natural resources, whilst art 24 institutionalizes the right of all people to a general satisfactory environment for their development. Even though these provisions were broad and limited to the management of natural resources, they paved the way for subsequent developments in BHR and played a role in advancing corporate human rights accountability in Africa.Footnote 65
1995s–2011s: Expansion of BHR provisions in African IIAs
This period witnessed the expansion of human rights to the first IIA concluded among African countries, namely the ECOWAS Supplementary Act on Investment of 2008,Footnote 66 whose art 14 provides that investors shall uphold human rights in the workplace and the local community and not undertake or cause to be undertaken acts that breach such human rights. It also requires investors not to operate or manage their investment in a manner that does not circumvent human rights’ obligations to which the home state and or host state are parties; and to act in accordance with fundamental labour standards as stipulated in the ILO Declaration on Fundamental Principles and Rights at Work of 1998. More important is art 21 of the Supplementary Act on Minimum Standards on Environmental, Labour and Human Rights Protection, which states that each party shall ensure its laws and regulations provide for high levels of labour and human rights protection. Remarkably, the two above BHR clauses coexist with a CSR clause, namely art 16 titled ‘corporate social responsibility’. The coexistence between BHR and CSR provisions in the same instrument will become predominant in the majority of African IIAs concluded subsequently.
2011s onward: Consolidation of BHR provisions in African IIAs
Since the adoption in 2011 of the UNGPs, a pivotal moment in the BHR movement,Footnote 67 three important developments have taken place in the African context. The first is the presence of BHR clauses in virtually all African IIAs. Examples are arts 20(1)(e) and 23 of the Pan-African Investment Code of 2016, which deal respectively with investors’ respect for labour rights and interests of the host state and local populations; and most importantly, art 24 titled business ethics and human rights. Art 24 outlines five principles governing investors’ compliance with ethics and human rights: support and respect the protection of internationally recognized human rights; avoid being complicit in human rights abuses; elimination of all forms of forced and compulsory labour; elimination of discrimination in respect of employment and occupation and equitable sharing of wealth derived from investments. Like BHR provisions of the previous period, art 24 on Business Ethics and Human Rights coexists with art 22 on CSR.Footnote 68
The second development, which is still in an infancy state, is the emergence in African IIAs of CSR provisions which also include references to human rights elements. This trend started timidly in bilateral investment treaties (BITs) involving African countries,Footnote 69 before expanding to continental IIAs, such as the AfCFTA Protocol on Investment (art 38).
The third development in BHR during this period is the contribution of African human rights institutions. One example is the adoption in May 2017 by the African Commission on Human and Peoples’ Rights (Commission) of Guidelines and Principles for State Reporting on arts 21 and 24 of the Banjul Charter relating to Extractive Industries, Human Rights and the Environment. More recently in 2023, the Commission adopted Resolution No. 550 (LXXIV) requesting the African Union to develop a policy framework on BHR and a legally binding instrument to regulate the activities of transnational corporations and other business enterprises.Footnote 70 The Resolution also calls for the development of effective mechanisms for holding non-state actors accountable for human rights violations in Africa. Even though the resolutions of the Commission are soft-law instruments, they nevertheless represent a major step in the evolution of BHR in Africa. This is very important given that not much progress has taken place at the international level on the development of a global legal instrument to sanction corporate human rights abuses.Footnote 71
In conclusion to this section, two main observations can be made: firstly, BHR and CSR provisions have increasingly become key features of virtually all African IIAs and coexist side by side. Secondly, some of these CSR provisions now include human rights elements, as is the case with art 38 of the AfCFTA Protocol on Investment, raising the issue of the relationship with BHR provisions of the same Protocol. This issue will be further discussed in the next section.
III. Art 38 on CSR and other BHR provisions of the AfCFTA Protocol on investment: Complementarity or cooptation of BHR by CSR?
This section examines the extent to which art 38 of the AfCFTA Protocol on Investment complements BHR provisions of the same Protocol and the potential limitations. This is achieved through a critical legal analysis of substantive and procedural aspects of human rights elements of art 38, against BHR provisions of the same Protocol, notably arts 31, 33, 34 and 35. These provisions deal respectively with investors’ obligations to state parties, business ethics, human rights and labour standards, human rights to a clean, healthy and sustainable environment, rights and dignity of indigenous peoples and local communities, as well as sharing of benefits arising from investments with local communities.
Substantive elements refer to issues such as the scope and type of human rights (labour rights, socio-economic rights, environment, gender equality), the vulnerable groups (women, children, workers, local and indigenous communities), companies and business activities covered and the remedies available to victims.Footnote 72 Procedural elements pertain to issues relating to the approach and modalities used in creating the substantive rules and for enforcing human rights obligations such as stakeholders’ consultations, third-party mechanisms, transparency, exchange of information and supply-chain due diligence.
A. Substantive elements of Art 38 complement and enrich BHR Provisions
An analysis of art 38 shows that even though it does not explicitly refer to human rights, it nevertheless covers three elements that fall under the umbrella of socio-economic rights: strengthening of local and human capacity development through job creation and professional training (art 38(2)(b) and (c)); ‘gender equality and inclusiveness’ (art 38(2)(d)) and ‘benefit sharing with local communities’ (art 38(2)(i)).
Starting with human capacity development, job creation and professional training as outlined in art 38(2) b and c. This provision is important for Africa, particularly in the context of the huge job crisis it faces. In effect, the African Development Bank estimates that whilst 10 to 12 million youth enter the workforce each year, only 3.1 million jobs are created, leaving vast numbers of youth unemployed.Footnote 73 In this respect, encouraging investors to create job opportunities and equipping young Africans for the labour market through training and capacity development should become the number one priority for businesses operating on the continent. This will help avert some of the consequences of unemployment, notably illegal migration, social unrest and political instability.
Moving to ‘gender equality and inclusiveness’, art 38(2)(d) provides that investors and their investments shall promote gender equality and inclusiveness in the conduct of their activities. Gender equality involved four interconnected dimensions: redressing disadvantages that women face (job market and access to resources); countering stigma, prejudice, humiliation and violence against women; transforming social and institutional structures that hold women behind; and facilitating participation, both in the form of political participation and socio-economic inclusion. Presently, women account for 50.2 per cent of Sub-Saharan Africa’s total population.Footnote 74 In this respect, the emphasis on gender equality among the social responsibilities of corporations in art 38 has the potential to enhance the contribution of corporations operating in the AfCFTA market towards addressing some of structural inequalities that persist in Africa in terms of women’s access to the job market, remuneration, as well as representation in the leadership and board of corporations. In so doing, it will contribute to the realisation of a gender-based approach to the AfCFTA.Footnote 75 In the same vein, an effective implementation of para 2 (d) of art 38 can help operationalise art 13 of the Protocol to the Banjul Charter, which deals with the economic and social welfare rights of women. It can also help realize SDG 5 on gender equality.
The third dimension of human rights covered in art 38(2)(i) is the notion of benefit sharing with local communities. This is an expression of distributive justice aiming at advancing the socio-economic rights of local communities by addressing potential inequalities and improving their standards of living. In effect, local communities do not often grasp the job opportunities generated by investment liberalization, due to skills gaps and other unfavourable conditions. This led the African Commission on Human and Peoples’ Rights to conclude that local communities require special consideration.Footnote 76 Whilst awaiting the operationalisation of art 38, which could be done through profits sharing agreements or other contractual arrangements involving local communities and corporations,Footnote 77 the requirement for corporations to share the benefit of their investment with local communities gives the assurance that the AfCFTA will ultimately result in a win-win outcome for all stakeholders.
At this stage of the analysis, it is worth noting that the specific human rights elements of local and human capacity development, job creation and professional training of (art 38(2)(b) and (c)) and gender equality and inclusiveness’ (art 38(2)(d)) are absent from BHR provisions of the Protocol, which are rather broad and generic. For example, art 33 simply refers to compliance with ILO standards and elimination of discrimination in respect to employment.
It may be argued that the concept of benefits sharing found in art 38 is also present in art 35(1) of the Protocol, which may suggest an overlap between the two provisions. However, a close analysis of those two provisions suggests otherwise. In effect, as it will be further discussed in the next section, the obligations set in art 35(1) are subject to the relevant domestic laws and regulations, international law, norms, and best practices of the host state, which is not the case for obligations outlined in art 38. The responsibilities under art 38, including their human rights dimensions, simply require proactive interventions from businesses.
Considering the above, this article submits that the human rights dimensions of art 38 of the AfCFTA Protocol on Investment complement and enrich BHR provisions of the same Protocol, by providing the necessary specificities and details to guide businesses as they fulfil their corporate human rights duties.
B. Procedural aspects of Art 38 complement the approach adopted by BHR Provisions
This section focuses on the approach adopted in enunciating human rights elements of art 38, notably the positive duty and proactive business involvement approach.
The ‘positive duties’ approach of Art 38 complements the ‘negative obligations’ approach of BHR Provisions
Human rights elements featured in art 38 of the AfCFTA Protocol on Investment on CSR are framed in the realm of ‘positive duties’.Footnote 78 Positive duties imply actively performing certain actions to secure rights for others.Footnote 79 The substantive positive corporate human rights duties that investors operating in the AfCFTA market are required to pursue under art 38 are: capacity development and job creation through professional development; promotion of gender equality and inclusiveness; and fostering the benefit sharing arising from investments.
The positive human rights’ duties approach adopted by art 38 is different from the negative obligations approach predominant in BHR provisions of the AfCFTA Protocol on Investment (arts 31, 33, 35). These provisions outline corporate human rights responsibilities in the form of ‘negative obligations’. Specifically, they require investors to: ‘comply with’, ‘refrain from’, ‘do no harm’, ‘not be complicit’, ‘not use’ and ‘eliminate’ human rights abuses.Footnote 80
Whilst this article agrees with scholars that the boundary between negative and positive duties is not always clear, particularly in the presence of corporate human rights responsibilities,Footnote 81 it nevertheless recognises that the distinction between positive and negative duties is important to understand the nature and scope of corporate human rights responsibilities in comparison with those of states. As rightly observed by Wettstein, whilst a purely negative obligation to respect human rights may help to prevent a situation from getting worse, it will do little to improve the condition of local communities.Footnote 82 Such improvements require that businesses undertake positive initiatives to promote human rights, as envisioned under art 38.
Based on the above, this article submits that the positive human rights obligations approach promoted by art 38 complements the negative obligations approach of BHR provisions of the AfCFTA Investment Protocol.
Proactive business involvement of Art 38 complements the state-centric approach of other BHR Provisions
As currently framed, art 38 favours a proactive approach to advancing human rights, under which corporations proactively undertake actions for the realization of human rights. More specifically, this provision requires businesses to actively develop human capital, create employment opportunities, promote gender equality and inclusiveness, share the benefit from their investment with local communities and promote business and human rights in their supply chains and networks. It can be inferred from the approach adopted by art 38 that businesses can no longer hide behind the excuse of weak domestic regulatory and institutional environment of the host country to justify their inaction. Similarly, the explicit requirement for investors to promote human rights means that businesses are now human rights duty bearers, and that their actions can no longer be viewed from the angle of voluntariness or philanthropy but rather from the perspective of moral and legal obligation.Footnote 83
On the contrary, human rights in arts 31, 33, 34 and 35 of the AfCFTA Protocol on Investment depend largely on the state for their realization, notably through the adoption, promotion and enforcement of domestic human rights laws and regulations enacted by the host state, or the enforcement of international human rights instruments to which the host state is party. More specifically, art 31 requires state parties to enforce and promote laws and policies to protect investment-related human rights, labour rights, and the environment. In the same vein, art 35 subjects the rights of indigenous peoples and local communities to relevant domestic laws and regulations of the host state.
This approach, which reflects the traditional state-centric approach to business and human rights, under which the primary duty to protect and promote human rights rests with states,Footnote 84 has some limitations: Firstly, businesses may evade their corporate human rights responsibilities, or may simply adopt a tick box exercise attitude, especially when operating in a country with weak regulations and poor human rights tract records.Footnote 85 Secondly, as rightly pointed out by Nelson, ‘ruling out any responsibility of corporations to proactively engage in the protection and realization of rights at the outset appears as unwise in the face of global problems that cannot be solved by governments, or by any one agent acting alone’.Footnote 86
Ultimately, it appears that art 38 also has the potential to fill the deficiencies of the UNGPs and the proposed African Union Policy on BHR, under which, corporations’ main business is to respect human rights with no duties to promote or advance human rights; unless, as observed by Meyersfeld, states impose such duties on them.Footnote 87
In light of the foregoing, this article submits that the proactive business involvement approach to promoting BHR used in art 38 naturally complements and enriches the ‘passive’ approach and dependence on state’s interventions to promote BHR predominant in arts 31, 33, 34 and 35 of the AfCFTA Protocol on Investment.
Corporate human rights duties in supply chains and networks
The third and probably the most innovative element of art 38 is the reference to corporate social responsibility in supply chains and networks. In effect, art 38(h) urges corporations to encourage their business associates, which are part of their supply chains (including service providers and sub-contractors), to apply CSR principles articulated in the article. As elaborated in Section 3.1, these principles include human rights elements of human capacity development, job creation, promotion of gender equality and inclusiveness, and benefit sharing with local communities.
This requirement is important, considering that businesses in the modern economy are structured around supply chains spreading throughout several countries and regions. It is therefore necessary to ensure that human rights standards are upheld across the supply chains, and that businesses, in particular multi-national corporations, do not take advantage of weak regulatory environments as they establish or reconfigure their supply chains and networks. Viewed from this angle, art 38 has the potential to enhance human rights due diligence in the supply chains in the AfCFTA context. This is even more important given that none of the BHR provisions of the AfCFTA Protocol on Investment specifically refers to business associates, supply chains and networks.
In closing of this section, it appears that human rights elements of art 38 naturally complement and enrich BHR provisions of the AfCFTA Protocol on Investment through the positive duties and proactive business involvement approaches, as well as the expansion of corporate human rights to supply chains and business networks.Footnote 88 This complementarity between human rights elements of art 38 and BHR provisions in the AfCFTA Protocol on Investment suggests that rather than an overlap or an attempt by CSR to coopt BHR, we are instead witnessing a convergence between these two movements in the African context. The next section will discuss some of the potential limitations of art 38 in advancing human rights.
C. Limitations of Art 38 in advancing corporate human rights responsibility
Despite the innovative features of human rights elements of art 38 and their potential contribution to advancing human rights in the context of the AfCFTA, this provision exhibits three main weaknesses, which may limit its impact and eventually weaken corporate human rights accountability. The first two are intrinsic to art 38, whilst the third concerns other BHR provisions of the AfCFTA Protocol on Investment.
The first limitation deals with the voluntary, conditional, and non-legally binding language of art 38. In effect, art 38 is drafted in non-committal language, using verbs and expressions such as ‘shall endeavour’, ‘encourage’ and ‘whenever possible’. In practice, such a hortatory language, which is not binding on investors, may not be sufficient to advance corporate human rights accountability, particularly in the African context marked by weak regulatory and enforcement mechanisms. As rightly noted by Bueno, Vastardis and Djeuga, the mere fact that CSR provisions with human rights elements are embedded in a legally binding IIA alone does not transform these into effective, binding and enforceable standards.Footnote 89
Scholars have argued that a non-mandatory language may actually be viewed as a compromise between mandatory obligations and self-imposed obligations and that non-legally binding provisions may incentivize businesses to act in a more responsible manner.Footnote 90 Whilst this paper acknowledges the importance of soft law in encouraging positive corporate conducts, including in the area of human rights, it argues that this can only yield fruit if supported by an effective reporting and monitoring mechanism to scrutinize and audit human rights initiatives implemented by corporations. In the absence of such a mechanism, as is currently the case, human rights duties embedded in art 38, no matter how innovative they are, may just be a decorative feature of the AfCFTA investment regime.
The second limitation of art 38 relates to the principles of universality, indivisibility and interdependence of human rights,Footnote 91 which appear to be at risk. In effect, art 38 explicitly lists certain specific human rights discussed in Sections 3.1 and 3.2 of this paper, that investors are required to promote. Whilst this drafting technique helps clarify and enhance understanding of the specific types of human rights for which businesses operating in the AfCFTA market should advance, it may accidentally send the wrong signal that they are the only human rights that may be adversely impacted by corporations and that require positive corporate interventions.Footnote 92 In other words, listing human rights elements in art 38 may ultimately be a source of confusion by giving the wrong impression that human rights not listed in art 38 are outside the scope of corporate human rights responsibilities. This then inadvertently results in a compartmentalisation of human rights and unintentionally weakens the principles of universality, indivisibility and interdependence attached to them.
To eliminate the above risk, this article submits that human rights elements listed in art 38 should not be considered as exhaustive of duties and responsibilities for which corporations doing business under the AfCFTA should be held accountable. Rather, they should be viewed merely as indicative of some of the pressing human rights dimensions that corporations should promote in the African context. As rightly put by Amodu, any categorization of human rights in the BHR and CSR discourse should be less articulated because corporations can and do violate all kinds of human rights.Footnote 93 In this respect, this article submits that art 38 should be enriched with a chapeau clause setting the context and requiring investors to promote all human rights recognized by the host state. This paper further submits that art 38 should also be strengthened with a reference to the promotion and strengthening of African cultural values. Such a reference is important for two reasons: Firstly, it will provide the necessary context for promoting corporate human rights in Africa. As rightly observed by scholars, for the content of universal rights to be relevant for Africa, it should be tempered with the continent’s cultural experiences.Footnote 94 Secondly, it will promote alignment between the AfCFTA Protocol on Investment and the proposed AU Policy on BHR, which lists African shared values among its seven cardinal principles.Footnote 95
The third limitation of art 38, which is also relevant to other BHR provisions of the AfCFTA Protocol on Investment, is the dispute settlement mechanism for enforcing human rights duties and obligations under the Protocol. Regrettably, the dispute settlement mechanism is currently confined to state parties, with no direct access granted to local communities.Footnote 96 This narrow state-centric approach has the potential to deprive impacted local communities of the appropriate remedial mechanism to directly redress any potential corporate human rights abuses and violations. As currently designed, local communities will have to rely on the host state to act on their behalf in case of human rights violations.Footnote 97 This could be problematic, especially if the host state itself is complicit in human rights abuses or is influenced by corporations involved.
Indeed art 47 (1) and (3) the AfCFTA Protocol on Investment provides for the possibility of civil actions for investors’ liability in their home states for acts, decisions or omissions made in the host state in relation to their investment where such acts, decisions or omissions lead to damage, personal injuries or loss of life,Footnote 98 which has the potential to enhance corporate human rights accountability.Footnote 99 However, this article argues that this possibility does not replace the access of victims of corporate human rights abuses to the dispute settlement mechanism established under the Protocol, which should be institutionalized.
To further strengthen corporate human rights accountability, Amodu has developed a Remedial Framework named the Human Rights Due Diligence Framework. Under this Framework, businesses are required to identify and review any negative impacts of company operations on human rights and to demonstrate all possible measures taken to prevent and/or mitigate such violations.Footnote 100 The main issue with this Framework is the over-dependence on states for its operationalization. As discussed earlier in this article, overreliance on states to enhance corporate human rights accountability has its own set of limitations in terms of regulatory and institutional weaknesses.Footnote 101
Having discussed the main limitations of art 38 in advancing human rights under the AfCFTA regime and ways to address them, particularly the recommendations to enhance state-based grievance mechanisms, the next section on recommendations will focus on non-state-based grievance mechanisms to enhance accountability for corporate human rights elements of art 38.
IV. Furthering corporate human rights accountability under Art 38 through a multi-stakeholder accountability framework
The central issue in the CSR and BHR debate is accountability, which is tied to the existence of effective remedies for impacted stakeholders. As rightly observed by Tamvada, accountability keeps a check on the actions of the actors who have the responsibility or obligation to discharge their functions under a role.Footnote 102
In this respect, this article puts forward a multi-stakeholder accountability framework, underpinned by Ubuntu’s values and principles of social cohesion and harmonious relationships, which are central to any relations in the African context, including business-society relationships and the consequentialist understanding of Ubuntu, under which a member has inherent duties and responsibilities to his or her community.Footnote 103 This accountability framework rests on three pillars: (1) mandatory corporate human rights reporting, (2) a multi-stakeholder monitoring and engagement mechanism, and (3) the possibility of denying benefits of the AfCFTA to corporations that do not fulfil their positive corporate human rights duties.
A. Mandatory corporate human rights reporting
This mandatory reporting aims to ensure that corporations disclose information on initiatives and actions undertaken in implementing their positive duties, under art 38. It also ensures that corporations communicate on their human rights duties’ performance, and that this is made available and accessible to all stakeholders, including the local communities, with a view to enhancing transparency in corporate human rights practices. This recommendation builds on the growing trend in the adoption and use of corporate social disclosure and corporate social reporting as a means of enhancing accountability on corporate practices.Footnote 104 It also resonates with the proposed AU Policy on BHR, which requests states to enact mandatory provisions for submission of periodical reports to designated authorities.Footnote 105 In practice, a clause would be added to art 38 requiring investors to publish reports on the implementation of their positive corporate human rights duties.
Several issues arise regarding the mandatory reporting requirement: firstly, the periodicity of reports. This article recommends that reporting on human rights performance should align with reporting on other aspects of corporate governance. The second issue is whether corporate human rights reports should be standalone documents or whether they should be part of existing reports. The article recommends that the reports on corporate human rights performance should be integrated into existing reports. This will be cost effective and will not impose an additional cost on corporations. Thirdly, with respect to the format and content of the reports, the article recommends that the UNGPs Reporting Framework should be used as a template with necessary adaptations that are relevant for positive corporate human rights duties.Footnote 106 Keeping in line with the positive corporate human rights approach of art 38, the reports should focus on promotion activities undertaken by businesses to promote human rights, as part of their positive corporate human rights duties.Footnote 107 Furthermore, the reports should inform on practices and management systems developed and implemented by corporations to realise the socio-economic and cultural rights enshrined in art 38.
The fourth question is whether the reports should go beyond initiatives undertaken in fulfilment of positive corporate human rights duties. Considering that the line of demarcation between positive duties and negative obligations can be very thin, this article submits that businesses should report on both. Similarly, the reports should also cover initiatives that the corporation may have agreed to as part of a community investment agreement or benefit-sharing agreement concluded with local communities. Another question relates to the categories of corporations that would be required to publish a corporate human rights report. This is important, given that the African business landscape is dominated by micro and small-medium enterprises. Keeping in line with Principle 14 of the UNGPs, this article submits that the mandatory reporting system should extend to all transnational companies operating in the AfCFTA market. However, in practice, the size of the company and the magnitude of its operations will help determine how detailed the reports should be.
Ultimately, whilst reports on corporate human rights will not constitute conclusive proof that corporations have fulfilled their positive duties, they will certainly be used as prima facie evidence before any adjudicatory or monitoring human rights bodies.
B. Multi-stakeholder monitoring and engagement mechanism
To ensure that reporting is done in an impartial and consequential manner, the second pillar of the accountability framework put forward in this article is a multi-stakeholder monitoring and engagement mechanism. This mechanism will serve as an oversight body responsible for reviewing the reports on corporate human rights performance, with a view to assessing their accuracy.Footnote 108 In doing this, the proposed mechanism will also foster a relationship of mutual trust between companies and local communities by providing a platform for dialogue on corporate human rights practices in the AfCFTA market. This mechanism aligns with the idea of stakeholder mechanism for community empowerment under the Ubuntu-Botho African Ethics Approach to Stakeholder CSR discussed in Section 2 of this article.Footnote 109
There are a few issues regarding the mechanism that warrant clarification. The first relates to the composition of the mechanism. Para 2(f) of art 38 requests investors to ‘develop and apply effective […] management systems that foster a relationship of mutual trust between the companies and the community in which the operations are conducted’. In this respect, this article submits that the mechanism should comprise representatives from the company, the local communities and the host government. Once the reports are approved, they would then be released and made publicly available on a dedicated virtual platform at the national and continental levels.
The second issue relates to the benchmarks to be used in assessing the extent to which positive corporate human rights duties have been fulfilled or not. Given that not all corporations have equal capabilities to contribute to the promotion and furtherance of human rights, this article submits that the multi-stakeholder monitoring mechanism should, in a consensual manner, strike a balance between what would be a realistic fair share of responsibility to be assumed by each corporation.
One question at this stage relates to the remedies available in the event of non-reporting or repetitive wide discrepancies between the content of the reports and the reality on the ground. The next section answers the question.
C. Denial of benefits linked to corporate human rights abuses
The third and most important component of the multi-stakeholder accountability mechanism is the possibility for denial of benefits (DoB) granted to companies under the Protocol. DoB clauses are provisions through which states reserve the right to deny the benefits and protections accorded under IIAs to companies because they do not have an economic connection to the state on whose nationality they rely.Footnote 110 Traditionally, the admission of DoB claims is subject to two main conditions: control of the company by nationals of a third state to the IIA at hand, and no substantial business activities taking place at the place of incorporation.Footnote 111
There has recently been an evolution in the functions, scope, and use of DoB clauses in IIAs.Footnote 112 They are increasingly used to deny prima facie investors the benefits of IIA claims where investors are found to be involved in wrongful practices, including instances of corruption,Footnote 113 national security interests,Footnote 114 and even in situations of human rights abuses.
From an African perspective, extending the DoB clauses to situations of non-fulfilment of positive corporate human rights is justifiable under the consequentialist understanding of Ubuntu. In effect, as discussed in Section 2, under this understanding, a member has inherent duties and responsibilities to his or her community. As rightly put by Chirwa, rights and duties are inseparable in Africa and highlight the reciprocal relationship between the individual and the community to which he or she belongs.Footnote 115 In this sense, corporations that do not, or stop fulfilling their positive corporate human rights duties vis-a-vis the local communities where they operate should also lose the rights and protection granted for their economic operations in those communities. At the same time, the possibility of invoking the DoB clause will help rebalance the asymmetrical relationship between investors and other stakeholders.
Therefore, considering the increasing social inequalities, and the urgency of realizing socio-economic rights and the overall United Nations sustainable development goals (SDGs) in Africa, this article submits that the AfCFTA legislator should, based on the experience of the two African IIAs discussed above, insert in the AfCFTA Investment Protocol, a DoB clause tied to non-fulfilment of positive human rights duties enshrined in art 38. The addition of a DoB clause tied to corporate human rights will provide the state with a deterrence measure that can be used to advance corporate human rights responsibility and accountability.
The expansion of DoB clauses to the human rights terrain raises several issues: first, at what stage should it be invoked? Considering the gravity of a potential termination of benefits and protection granted to corporations, this article submits that DoB should be invoked by the denying state at any stage of the adjudicatory process, which means it can be retrospectively invoked. Another question is whether DoB clauses can be invoked unilaterally or on a mutual accord. Keeping in line with Ubuntu’s principles and values of social cohesion and harmonious relations among all stakeholders, this article argues that opportunities should be given to corporations, through the multi-stakeholder monitoring and engagement mechanism, to engage host states and impacted local communities, with a view to finding a consensual solution. Another issue relates to the burden of proof. Whilst it rests in principle with the party denying the benefits, this article argues that in the absence of corporate human rights duties, the burden of proof should be established by corporations.
In conclusion of this section, it can be said that despite the innovative features of the proposed framework, notably a DoB clause tied to corporate human rights abuses, this article recognizes that there are several issues associated with it. First, the proposed framework presupposes that the AfCFTA legislator is willing and ready to go the extra mile of threatening corporations with terminating the protection and rights they enjoy under the AfCFTA in case of failure to fulfil their positive corporate human rights duties. This is considering the dilemma in which most governments find themselves when they must choose between investment promotion and corporate human rights protection.
Secondly, the framework assumes that all stakeholders, especially corporations, are keen on their long-term relationship in the society where they operate. This is not always the case. In some instances, corporations are engaged in forum shopping as they look for jurisdiction with the least stringent regulatory environment. In this respect, the framework can only work if implemented by all countries.
V. Conclusion
This article examines the nexus between CSR and BHR by looking at the extent to which art 38 of the AfCFTA Protocol on Investment on CSR, which also includes some human rights dimensions, complements or not BHR provisions of the same Protocol, notably arts 31, 33, 34 and 35. The findings show that art 38 complements and enriches BHR provisions in two ways: firstly, substantive elements of art 38 specify and clarify the nature of corporate human rights responsibilities of businesses operating in the AfCFTA market. Art 38 includes explicit references to socio-economic rights such as capacity development, job creation, gender equality and inclusiveness, and sharing of benefits arising from the investment with the local communities.
Secondly, procedural aspects of art 38 complement and enrich BHR provisions. By adopting a positive and proactive duties approach to corporate human rights, art 38 naturally complements the negative obligations approach predominant in conventional BHR provisions of the Protocol, which focuses mainly on ‘do no harm’obligations.Footnote 116 Even more important is the dimension of human rights in the supply chains and networks encapsulated in art 38(h), which is absent from BHR provisions of the Protocol.
Based on these findings, this article concludes that the coexistence in the AfCFTA Protocol on Investment of art 38 on CSR and other BHR provisions enhances greater convergence between the CSR and BHR movements. In this sense, the inclusion of human rights elements in art 38 on CSR is by no means a strategic move or an attempt by CSR to coopt or capture the BHR movement.
The analysis also shows that there are some intrinsic limitations to art 38, which may ultimately affect its contribution to advancing corporate human rights in the African context. These include the conditional language of art 38, the limited access by potentially impacted stakeholders to state-based mechanisms for remedies, and, more importantly, the perception risk resulting from the implicit categorization of human rights in art 38.
Moving forward, the article puts forward an accountability framework for strengthening art 38 and enhancing corporate human rights responsibility and accountability in the African context. This mechanism, anchored on Ubuntu’s principles and value of harmonious relationships between businesses and stakeholders, rests on three pillars: a mandatory corporate human rights performance reporting, a multi-stakeholder monitoring and engagement mechanism, and the possibility for denying investors the benefits and protections afforded under the Protocol on investment.
Despite the innovative features of this framework, its success hinges on a few assumptions. These include the AfCFTA legislator’s willingness to take a bold approach on the issue of corporate human rights accountability, the willingness of all AfCFTA state parties to implement the framework in a uniform manner, and the willingness of corporations to repair and keep their relationship with local communities when cases of human rights abuse arise.
In the final analysis, the article concludes that the accountability framework’s main selling point will be the deterrence factor attached to the denial of benefits in case of non-fulfilment of corporate human rights duties. One can only hope that this deterrence factor will not push corporations towards greenwashing, instead of genuinely working with other stakeholders to promote and enhance human rights, particularly socio-economic rights in the AfCFTA market. This is critical for the AfCFTA to deliver on its objectives of attaining sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties.
Competing interests
Patricia Lenaghan and Jean Bertrand Azapmo declare none.
Financial support
No funding was received for the writing of the manuscript.
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