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5 Years of UNGPs: 5 Business & Human Rights issues to focus on

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The international community adopted the UN Guiding Principles on Business and Human Rights (UNGPs) in June 2011, pledging to address adverse impacts of business activities. Five years later, the progress made is minimal. Here are the five major action areas we think the EU and its Member States should be focusing on:

Since their global endorsement, civil society organisations has been calling on the EU and Member States to increase efforts to implement the UNGPs. Their most recent recommendations have been shared with all EU States in a joint letter to the Council of the EU, in April 2016.

Further recommendations have been formulated after the Eu Roadmap on Business and Human Rights Conference organised by civil society and the Dutch presidency of the EU, in May 2016.

Here are the five major action areas we think the EU and its Member States should be focusing on:

National Action Plans for effective implementation

The UN Guiding Principles on Business and Human Rights (UNGPs) adopted in 2011, are the first globally accepted standard articulating the States’ duty to protect human rights from impacts of business activities, while recognizing the companies’ responsibility to respect human rights throughout their operations and their business relationships. The EU was the first region worldwide to call on its governments to develop specific National Action Plans (NAPs) to implement these principles. If developed based on a coordinated, transparent and evidence-based approach, these plans have the potential to address legal and policy gaps existing in field of business and human rights.

To date, seven EU States have released NAPs. But the plans lack teeth, coming short in terms of both process and content, while failing to effectively address the challenges faced by victims of corporate-related abuses. As a result, a legislative framework to ensure corporate respect for human rights is still lacking at European and Member State level.

Our recommendations for EU and Member States:

The EU should uphold its commitment to prepare a European Action Plan implementing the UNGPs in all areas falling under its competence and encourage national governments to do so as well. Member States should, in turn, revise or develop National Action Plans trough an inclusive and evidence-based process which leads to effective and meaningful policies on business and human rights. They should identify priorities, define specific actions and timelines, allocate responsibilities between government bodies, and ensure policy coherence. They should address all the pillars of the UNGPs, including Access to Remedies which has been inadequately addressed so far. This should be done using a smart mix of voluntary and regulatory measures. Monitoring mechanisms on the implementation of these plans should also be established.

Mandatory Human Rights Due Diligence

Human Rights Due Diligence (HRDD) is a process that helps companies identify, prevent, mitigate and account for the negative human rights impacts of their activities and those linked to their business relationships. Building on previous international standards such as the OECD Guidelines, the Global Compact and others, the UNGPs articulated HRDD as the operational principle to implement the companies’ responsibility to respect human rights.

Today companies are not legally obliged to conduct human rights due diligence as such yet, but several national and international legal frameworks already incorporate due diligence or some of its elements (reporting, impacts assessment, etc.) in areas such as labour rights, environmental and consumer protection. Furthermore, some steps are being taken at State and EU level to establish corporate human rights due diligence duties (for instance, the French duty of vigilance bill and the Swiss Responsible Business initiative) or disclosure obligations (such as the UK Modern Slavery Act Transparency in Supply Chains Clause, the EU Timber Regulation, or the EU Non-Financial Reporting Directive). 

Our recommendations for the EU and Member States

The EU and Member States need to take civil society calls into account and adopt regulatory measures to ensure that companies respect human rights throughout their operations and their business relationships, both inside and outside the EU. Policy-makers should draw from existing and on-going legal developments and embed mandatory human rights due diligence into law. Moreover, the EU should take the opportunity presented by the current negotiations on Conflict Minerals Regulation and support mandatory human rights due diligence in line with the OECD Due Diligence Guidance.

Non-Financial Reporting & Corporate Transparency

The disclosure of information about the social, environmental and human rights impacts of companies’ activities is essential to prevent adverse business impacts and hold companies to account when they occur. The UNGPs recognize the importance of corporate transparency, and establish a corporate responsibility to externally communicate human rights and environmental risks and impacts, as well as the measures taken to address them.

The EU Non-financial Reporting Directive, adopted after a strong call to action from civil society organisations, including ECCJ, obliges companies to report annually on their human rights and environmental risks and impacts, and the policies implemented to address them. Despite its shortcomings, the Directive represents an important milestone for the movement towards better corporate accountability and transparency.

Our recommendations for the EU and Member States:

Member States are required to transpose the new EU Directive into national law by the end of 2016. They should seize this opportunity to tackle the gaps and limitations of the Directive. This includes expanding the scope of application to both listed and non-listed large companies; ensuring effective reporting on the risks and impacts in companies’ business relationships and value chains, and ensuring that key concepts of the Directive are interpreted in line with the UNGPs and the most relevant reporting frameworks, such as the UNGPs Reporting Framework.

The European Commission’s upcoming Guidelines on methodology for non-financial reporting should reflect the demands of civil society expressed in a recent public consultation. In this sense, the guidelines should clarify the scope and meaning of certain concepts of the Directive which leave a broad margin of appreciation to States and companies. Among other aspects, it should better define the reporting obligations regarding a company’s own impacts and those of business relationships. In both scenarios, due diligence procedures to identify and address impacts and risks should be included as reporting requirements. Suppliers, subcontractors and partners in joint ventures should always be considered within the scope of the “business relationships” concept. Risks of severe human rights impacts in the supply/subcontracting chain should always be considered “relevant and proportionate” for purposes of reporting. 

Access to Justice for victims of corporate abuse

The activities of EU companies can severely impact human rights of individuals and communities across the world. Currently, victims of corporate-related abuses from outside of Europe face multiples obstacles when seeking justice both in their home countries, where the abuses took place, was well as in the European States where the companies are established. Addressing the problem of a lack of access to justice, the UNGPs articulate that States have a duty to ensure effective remedies for victims of human rights violations.

However, five years after the UNGPs’ global endorsement, the EU and its Member States are far from complying with their obligation to guarantee victims judicial remedies. Individuals and communities face numerous legal and practical obstacles, including limitations on admissibility, restrictive rules on the disclosure of evidence, standards of burden of proof, lack of corporate liability standards, costs of litigation, etc. This situation leads to a practical denial of the victims’ right to access to justice and to the impunity of human rights abuses and crimes committed by European companies worldwide.

Our recommendations for the EU and Member States:

The EU and Members States should assess and tackle existing financial and legal barriers to access to justice. Legal measures avenues to do so include establishing parent company liability for acts of their subsidiaries, reversing the burden of proof, regulating collective redress, and guaranteeing disclosure of evidence, among others. The EU should also revise the rules of private international law (such as the Rome II Regulation on applicable law) that hinder the fulfilment of procedural rights of victims.

A UN Treaty on business and human rights

In 2014, the United Nations Human Rights Council passed a resolution establishing an open-ended Intergovernmental Working Group (IGWG) to develop a legally binding instrument on business and human rights. This process should be understood as complementary to the UNGPs. As Prof Ruggie, the person behind the UNGPs, stated: “the UNGPs are a floor, not a ceiling”. The UN Treaty and the UNGPs represent essential pathways to achieving greater protection against business-related human rights impacts across the globe.

The EU and its Members States have fallen short of having a constructive position on the Treaty process, in contrast to their eagerness to proceed with TTIP negotiations. The ‘empty chair’ policy adopted by the EU in the first IGWG meeting in July 2015, because its objection to the work programme did not find support among other States, caused widespread discontent among civil society.

Our recommendations for the EU and Member States:

The process of making human rights globally enforceable must become a priority for the EU and Member States. This can only be achieved through the development of comprehensive regulation establishing clear rules and effective accountability mechanisms rendering abuses a costly and risky business venture. Current challenges in the business and human rights area require an integrated and coherent approach which designs solutions at national, regional and international level.

During the Treaty talks a consensus about the necessity of a binding instrument was reached among many participating States, experts and civil society. All parties agreed that developing transnational regulation is essential to addressing the legislative gaps which have left victims disarmed in their fight for justice. It would also be a mandatory step in rebalancing the power between people’s rights and private financial gain. The EU needs to engage constructively and in good faith in the Treaty process for it to deliver a historical advance for human rights against corporate impunity.

 

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