human rights & business (and a few other things)

A Commentary of the Draft Optional Protocol to the Business and Human Rights Treaty

imagesEarlier this month, the Permanent Mission of Ecuador, on behalf of the Chairmanship of the Open-Ended Intergovernmental Working Group (OEIGWG) in charge of the elaboration the business and human rights treaty, released a Zero Draft Optional Protocol to the Zero Draft “Legally binding instrument to regulate, in international Human Rights law, the activities of transnational corporations and other business enterprises”. The Business and Human Rights Resource Centre published my commentary of the Zero Draft treaty, as part of a series.

Here I present my thoughts on the Draft Optional Protocol only (hereafter “the Draft Protocol”). Under the Draft Protocol, states parties shall establish a National Implementation Mechanism (hereafter “the Mechanism”) to promote compliance with, monitor, and implement the future treaty (Articles 1-7). This is the key innovation of the text and the focus of this blog post. The Draft Protocol also purports to establish a system of individual communications, similar to those administered under the nine core UN human rights treaties and protocols. This is not covered here.

The proposed Mechanism has three main tasks: raising awareness of the business and human rights treaty at the domestic level; conducting due diligence reviews; and running a mediation process.

Raising Awareness

The Mechanism will be tasked with raising awareness of the business and human rights treaty, in cooperation with other national institutions, civil society organizations, and foreign Mechanisms; and making recommendations to the state (Article 3). Both functions are important and provide added value compared to what we have now. In many countries the Mechanism could be run within existing, domestic National Human Rights Institutions (NHRIs), thus pooling resources and expertise. The Draft even refers to the Paris Principles on NHRIs (Article 2).

Conducting Reviews

Articles 4 and 5 of the Draft Protocol are also interesting, albeit not entirely clear. Article 4 purports to entrust the Mechanism with a role in the prevention of human rights violations by corporations, covered by Article 9 of the Draft Treaty. Article 9 of the Draft Treaty is about due diligence. It requires states parties to “ensure in their domestic legislation that all persons with business activities of transnational character within such State Parties’ territory or otherwise under their jurisdiction or control shall undertake due diligence obligations throughout such business activities.” Presumably, though this is not explained, it is expected that when undertaking due diligence, corporations produce and publish reports on non-financial matters, “internal policies, outcomes and indicators of environmental and human rights impact assessments”.

In this context, Article 4 of the Draft Protocol indicates that the Mechanism “shall, as a minimum, have competence to request all necessary information from the State Party in whose territory” that Mechanism operates. Such information may include the said corporate reports on non-financial matters, “internal policies, outcomes and indicators of environmental and human rights impact assessments”. This assumes that states actually gather and somehow store or keep track of such information, which I am not sure is necessarily the case. More generally, under Article 4, the mechanism will be able to gather information but the article does not contain any indication about how gathering information is supposed to prevent human rights abuse.

Likely, Article 4 is to be read in conjunction with Article 5, which aims to give the Mechanism the power to undertake due diligence implementation reviews, but this is not explicit in the text. Article 5 seemingly aims to address an important gap in the current legal framework on business and human rights. In many countries corporations are required to report on their human rights performance but there is no consequence for poor reporting, and no systematic process to check whether corporations have done enough, or even the veracity of those reports. Instead, states rely on civil society scrutiny. Article 5 attempts to change this, by giving the Mechanism the power to review corporate performance of their due diligence obligations when prompted by “victims” or other stakeholders or even “ex-officio”.

The power granted to the Mechanism is extensive and includes visits, inspections (those terms are not defined) “to monitor the implementation and follow up of due diligence plans or policies”. In case they identify non-compliance they will provide recommendations. If those are not followed, the Mechanism will “inform the competent authorities”. In this process, the Mechanism is required to “comply with the minimum requirements of due process of law.”.

My first reaction upon reading this is that it is going to be difficult to implement. I foresee many ways in which this could go wrong. For a start, it is likely corporations will view this review process with suspicion, at the very least. This is not a deal-breaker in my opinion, but still an important point to make. Also, how detailed will this review be? How long will it take? How to ensure that the Mechanism is staffed with people with a good understanding of how corporations function? What will happen if the Mechanism has (allegedly) not complied with the minimum requirements of due process of law? I am sure other commentators will have many other questions.

Running a mediation process

Article 6 sets up a non-judicial complaint mechanism relying on mediation, similar to those run by OECD National Contact Points (NCPs). This is an interesting idea. I can see how this could really add value, in the same way as I am rather enthusiastic about some of the NCPs. One important point: in practice the potential for overlap between the work of the Mechanism in this area and the work of NCPs seems high. If States go forward with the idea, it would perhaps make sense to explore ways to merge the two institutions.

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