The Debate about having a debate about a business and human rights treaty

By Joanna Kyriakakis

The current debate about the desirability of renewing discussions on a UN Business and Human Rights treaty frustrates me a little. There. I said it. I am not referring to conversations about what the substance of any treaty might look like, which will in due course be necessary. Rather, it is opposition to the renewal of treaty efforts at all that I am struggling with. I say this well aware of the political history in this area and, in particular, that the last proposed treaty, the Draft Norms for Transnational Corporations, inspired polarised views.

To provide some background. Following recommendations of the UN Special Representative on Business and Human Rights (SRSG), the UN adopted the Protect, Respect and Remedy Framework (2008) and Guiding Principles (2011) to guide international action on business and human rights. According to this approach, states will commit more strongly to remedying the current governance gap that sees businesses, particularly large transnational operations, breaching human rights without being accountable for those harms. They will do so by adopting National Action Plans that identify how their laws, policies and practices can ensure corporate human rights compliance and accountability. Most importantly, they will remedy any deficiencies their Plans identify. For their part, corporations will better integrate human rights compliance and grievance procedures into their business models and operations. They will do so on the basis that this makes good business sense, rather than as an international legal obligation. This program does not include moves toward a treaty.

The UN Framework and Guiding Principles provide a level of guidance to states and corporations as to measures they should take, unseen before at the international level. They are also a resounding diplomatic success, with clear examples of state and corporate buy in. However, some commentators have cynically suggested that rhetorical buy in is easy because the program contains nothing radically new. Rather, the new UN strategy continues a formula of national regulation by individual states and corporate voluntarism that has dominated the global regulatory approach in this area for decades. This raises the question of whether these approaches alone are sufficient. If they are, the problem has been the lack of meaningful state and corporate investment in those processes. This begs the further question as to whether the current tide of state and corporate support will actually result in a lasting shift in behaviours.

At least some states are not confident that the solution lies entirely in continued reliance on states individually committing to act and on corporate voluntarism. Instead, in 2014, a group of states put the treaty prospect back on the agenda. And so the debate began as to whether that is a good idea.

Some critics of renewed treaty efforts are concerned that the discussion will derail the productive energy directed toward the current UN strategy. Others are concerned that the prospects of treaty success are so far away that more immediate steps are preferable, such as using the UN Universal Periodic Review process to highlight failure by businesses and governments. Yet others are concerned that another binding treaty will have little practical effect. Another line of caution is that the content and focus of the proposed treaty are uncertain: the final document could be too narrow or unwieldily wide.

Criticisms of renewed treaty discussions strike me as counterintuitive for a number of reasons, not least of which is that fear of conversations should always be viewed with scepticism. First, rather than accept the opinion of those, such as the SRSG, who say that a treaty is not needed, it is states that are seeking to renew the debate. State authorship of this effort, even if encouraged by certain lobby groups, presses against those who are concerned that a treaty addressing corporations will threaten the privileged position of states in the international legal order. Second, a number of those states advocating for a treaty have suffered the worst effects of the current global governance gap, such as the African group and Ecuador, which ought to give us all a moment’s pause.

Indeed, Ecuador’s case illustrates the weaknesses of the current system. Recently, Ecuadorian courts found Chevron liable for environmental mismanagement of its (then Texaco’s) operations in Ecuador in the 1960s – 1990s. Because Chevron’s local subsidiaries have insufficient assets in Ecuador to satisfy the compensation order, the plaintiffs have sought enforcement in courts around the world. Chevron has (thus far successfully) opposed those enforcement efforts.

And while we may laud an imagined new era of international commitment to improved corporate human rights compliance, the fact is that judicial avenues for legal redress have become fewer.  Recent US decisions that radically restrict the ability of victims to bring human rights claims against corporations in US courts were helped along by states formally objecting to the US exercising extraterritorial jurisdiction over foreign corporations.

There are significant hurdles for states unilaterally enforcing human rights law against transnational corporations. Some are a result of gaps in law and require multilateral efforts to be effectively resolved. Challenges include: the limited capacity of some states to enforce laws against foreign corporate operations within their territories; diplomatic objections when other interested states enforce human rights law extraterritorially; the role of international trade and investment law in restricting states’ abilities to deal with human rights issues; dealing with the (usually theoretical) problem should multiple states claim jurisdiction over a case; the challenge of evidence collection and enforcement in trans-border cases; differing models of attribution for corporate responsibility; and when and how it is permissible to look behind the legal separation of different companies within corporate groups.

Addressing these issues through formal inter-state cooperation could legitimise, harmonise, and support domestic enforcement efforts. There are many areas where states are coordinating their responses to cross-border challenges through multilateral treaty making, including terrorism, bribery, corruption, money laundering, the movement of hazardous waste, and trafficking. Given the SRSG’s findings that our globally integrated economic system makes it difficult to pursue transnational corporations for human rights breaches, it seems eminently reasonable to redress the balance through a treaty.

None of this is intended to understate the importance of the current UN strategy. Without doubt, it will go an enormous way towards remedying current governance gaps if implemented by states and corporations. A treaty could be entirely complementary to this process. I am not aware of anyone claiming that a treaty is the panacea.

The fear that the efficacy of current efforts will be compromised by renewed treaty talks implies one of two things. Either the commitment of businesses and states to the current project is very fragile indeed, in which case we should in any event be concerned. Alternatively, we do not believe that as an international community we can successfully pursue multi-level efforts towards a shared goal.

If complexity, farsightedness, and tackling politically difficult subjects were reasons not to try, then, for all their flaws, we would have no international criminal justice or international human rights system at all.

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Joanna Kyriakakis

Joanna is a Senior Lecturer at the Monash Faculty of Law and a Deputy Director of the Castan Centre for Human Rights. Her research interests lie at the intersection of corporate accountability, international criminal law, animal law, human rights, transitional justice, and legal theory.

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