Substantive discussions on the Treaty’s purpose, scope and general obligations finally took main stage in the second day of sessions. ● The EU spoke on behalf of the 28 Member States with questions and concerns rather than proposals. ● EU Member States hid behind the institutional delegation. ● Interventions were in general vague and lacked depth, satisfactory for a warm-up session yet will need to become more pragmatic and constructive in the coming days
First day coverage here.
[The article is also available in Spanish and in German]
The second day of the Third Session of the Intergovernmental Working Group (OEIGWG) on Transnational Corporations and Other Business Enterprises with Respect to Human Rights took place on October 24th in Geneva. The day finally saw the real kick-off of substantive discussions on the elements of a future Treaty on business and human rights. As suggested the day before, the EU Delegation took part in the discussions with comments and (mainly) questions on the elements, which had been pre-agreed by the 28 Member States.
The Programme of Work for the current session follows the structure of the Draft Elements. The work started with a resumption of the previous day’s discussion on the General Framework (Preamble, Principles, Purpose, and Objectives), which had run over-time and been interrupted the evening before. After the heated discussions of the first day, the second day found delegates more reluctant to break the ice. Some of them, including the EU and Russia, reiterated their reservations with the overall process at every possible occasion. Some other delegates, such as Indonesia, spoke in their personal capacity due to the lack of an official position from their governments. These signals can be read as showing that the room is not yet ready for in-depth meaningful discussions on the content of a future treaty. As the Chairperson-Rapporteur had already expressed, the goal of the current session was to set solid grounds for further negotiations in the future sessions of the coming next years.
Reaffirming the supremacy of human rights, a challenge of the XXI century
Discussions on the first item arouse around two main issues, namely extraterritoriality and the provisions on the supremacy of human rights over trade and investment agreements. The latter found clear opposition among a majority of Delegates, with the EU speaking on behalf of the 28 member States and both Singapore and Mexico questioning the legal foundation and implications of such provisions. On the other side, Bolivia, Ecuador and the vast majority of oral statements from civil society stood up for the supremacy of human rights, providing clear arguments from international law.
An oral statement signed by CIDSE, SOMO, Global Policy Forum, Terre Solidaire among other organisations pointed out that, given the ample evidence of frequent conflicts between States’ human rights and trade or investment obligations, the issue can no longer be left in the hands of those designing economic policies. The Chairperson-Rapporteur admitted being shocked by the fact that reaffirming human rights protection over economic and investment interests raised doubts in the twentieth century.
The EU delegation’s intervention was extensive and prolific, yet mainly expressed in terms of concerns and questions addressed to the Chairperson-Rapporteur. While not presenting a clear position on how the elements of the future treaty should look, the way in which the intervention was tailored gave a hint as to the Delegation’s views on how the elements should not look like. Besides issues of extraterritoriality and the supremacy of human rights, the EU’s intervention re-advanced objections over the scope as well as uncertainty regarding the exact purpose of the future instrument. Not surprisingly, given the active role of the EU in advancing the free trade agenda, the delegation also stressed its concern over the implications of human rights supremacy for current and future trade negotiations.
“Transnational” or all business enterprises? The issue of scope continues to split the room
The next item addressed was the key issue: the scope of the treaty in terms of companies covered. The topic still causes disagreement among States and civil society, which has thoroughly discussed the matter over the last months. For the latter, however, there is at least one point that is not under question: the need for the Treaty to have a strong focus on the particular challenges presented by the operation of transnational corporations and the resulting accountability gap.
Point 3 of the Draft Elements addresses the issue with the formulation, “ … violations or abuses of human rights resulting from any business activity that has a transnational character, including by firms, partnerships, corporations, companies, other associations, natural or juridical persons, or any combination thereof, irrespective of the mode of creation or control or ownership, and includes their branches, subsidiaries, affiliates, or other entities directly or indirectly controlled by them”.
Different voices have so far welcomed the definition as a way to tackle the main challenges presented by transnational corporate structures, namely separate legal personality of parent and subsidiary companies and the ensuing accountability gaps in global supply chains.
Yesterday’s debate was overall intense. Some States simply pointed out the lack of clarity in the paragraph. Others, such as Brazil, agreed with the need for the Treaty to address the specific complexities linked to transnational activities whilst also including domestic enterprises. The EU delegation was aware of the relevance of this item for the organisation. It hinted that leaving some companies aside could lead to discrimination in the application of legal regimes to foreign owned and nationally owned companies. The remark was counterargued by the Chairperson-Rapporteur, who highlighted that rules under international economic law already do differentiate between national and transnational companies.
On the other extreme, South Africa and Indonesia kept a strong opposition, bringing the HRC Resolution 26/9 to the debate. According to the African delegation, focusing on business enterprises with transnational character was in the spirit of the resolution. This spirit, it continued, was aimed at solving the specific challenges presented by the transnational character of these companies and the resulting accountability gap for human rights violations.
The recurring debate of the international obligations of business enterprises
The panel introducing the last issue of the day, (Obligations of States, Companies and International Organisations) was itself dynamic. Representatives of employers and of workers sat on both sides of academic experts. The International Organization of Employers representative came to affirm that human rights obligations on business would discourage foreign direct investment; statements which provoked the surprised reaction of the speaker for unions during its turn. Further debate was prevented by the already long delay that the session had accumulated.
Delegates were given time to present their interventions. The main issue of disagreement remains the possibility and desirability of the Treaty imposing direct international obligations for companies. Opinions range from directly questioning the legal grounds for this within the current state of international law, to wondering about the practical enforcement of such obligations. Others, in line with many civil society voices and experts, supported binding obligations as something both necessary and feasible.
The EU Delegation, always in terms of questions, asked the Chairperson-Rapporteur how the treaty would avoid that States transfer their obligations to other actors and circumvent their own duties. With a more positive tone, it then referred to the provision on corporate disclosure obligations and offered to share the EU’s experiences regarding the Directive on Non-Financial Reporting.
The day was also complemented with very instructive side events. Friends of the Earth Europe discussed the relationship between the French Law on due diligence and the Binding Treaty; the Transnational Institute presented testimonies of communities harmed by transnational corporations, and the International Institute for Sustainable Development addressed the problem of investor state dispute settlement.
The HRC venue could finally witness one entire day of discussions on the substantive issues of the future Treaty on business and human rights. It cannot be ignored that many of the delegates’ interventions were vague, lacked depth, and that many statements focused on objections rather than on proposals. The EU’s insistence in questioning the Chairperson-Rapporteur rather than presenting clear positions and proposals was also remarkable. Moreover, Member States present in the room refrained from taking the floor, appearing to hide behind the EU Delegate. Civil society is expecting a proactive and constructive attitude not only from the EU but also from its Member States, who are also and individually crucial actors in the United Nations. We expect that after this warm-up, all the relevant actors will be fully engaged in the upcoming days.
[ECCJ thanks Sarah Lincoln from Brot Für die Welt and Mariëtte van Huijstee from SOMO for their help in developing this article]