European civil society organisations met with the Ecuadorian Ambassador to the UN in Geneva and Chair-Rapporteur of the Open Ended Intergovernmental Working Group (IGWG) Luis Gallegos in the morning of the third day of negotiations for a Binding Treaty. Participants exchanged views on the negotiation process, on expectations towards Friday, when the conclusions of the 4th session will be discussed, as well as possible next steps in the process.

The third day of the negotiations was dedicated to Article 10 on Legal Liability, Article 11 on Mutual Legal Assistance and Article 12 on International Cooperation of the Zero Draft.

Good discussions on Access to Justice, whilst the EU and member states remained silent in the room

The experts on the panel included Surya Deva, from the UN Working Group on Business and Human Rights, David Bilchitz, from the University of Johannesburg, Richard Meeran, from the UK-based legal firm Leigh Day, and Maddalena Neglia, from FIDH.

Surya Deva highlighted the complementarity of the Zero Draft and the UNGPs. He criticised that Article 10 only relies on reactive sanctions. In his view, preventive administrative sanctions should apply in cases of breaches of due diligence obligations.

Drawing from his experience as a lawyer, Richard Meeran recalled that the main problem with the UNGPs was their non-binding nature. Corporations, he said, were never concerned about respecting the UNGPs, but just about their legal liability. Another key problem was the lack of victims’ access to justice in practice. Whether the Treaty would de facto change this would depend on the effective alignment of the articles on legal liability with provisions on access to remedy in the Zero Draft.

Maddalena Neglia pleaded not to leave the decision on a possible reversal of the burden of proof to domestic courts, as mentioned in article 10.4, but to specify this as a binding treaty provision. The same argument was valid concerning the definition of a supply chain. She recommended to incorporate a requirement for domestic legislation to better define legal liability and its reach. A good example for this solution was EU competition law.

In their turns for intervention, many states deplored the lack of clarity of the concept of “universal jurisdiction” as established in Article 10.11 of the Zero Draft, and warned about possible conflicts with domestic law. Some suggested deleting it altogether.

The reversal of the burden of proof as foreseen in Article 10.4 was in principle welcomed by most intervening delegates, however there was disagreement on whether this should be subject to domestic legislation as suggested in Draft Zero, or whether it should be more specified in the Treaty text, as Maddalena Neglia of FIDH had suggested.

On the third day, it seemed increasingly strange that neither the EU not its member states contributed to the debate on content. Their position that the scope of the Treaty should be extended to all companies and not only to Transnationals was shared by a majority of speakers, who obviously had no problem in engaging in the process anyway.

In his reaction, David Bilchitz of the University of Johannesburg mentioned again that many were calling for direct obligations on companies. He said this was a fundamental principle in human rights law and must be implemented through national law.

At a lunchtime side event on the protection of Human Rights Defenders (HRDs), the EU representative in Geneva surprised by talking about content after all. He criticized that the Zero Draft didn’t specifically mention HRDs – a point that has been heavily criticized by civil society. He commended the upcoming guidance by the UN Working Group on Business and Human Rights, even urging the participants present in the room to let him know of any cases of intimidations or threats against HRDs doing advocacy in Geneva. In response, a civil society representative urged him to engage in the Treaty negotiation because this was the chance to work for HRDs.

The scope, the human rights covered and the recognition of direct obligations for companies, among the most discussed issues

The afternoon evolved around Article 3 on Scope and Article 4 on Definitions of the Zero Draft.

David Bilchitz elaborated on the current lack of domestic enforcement of existing human rights rules. An international Binding Treaty is needed to fill these gaps in domestic law, because it can go beyond the current states’ limits. He also proposed to include direct obligations for transnational business, where domestic legislation is not (sufficiently) in place, refining and amending the Zero Draft’s definition.

Olivier De Schutter, Professor at the University of Louvain, explained the Zero Draft would, by the current definitions in Article 3, actually apply to all corporations, while the limit is set at the transnational nature of business activities. He argued that Article 4.2 left some uncertainty and would in its current form not automatically cover the activities of subsidiaries, affiliates, or subcontractors in the supply chains, who, themselves, would not have any transnational activities. He also suggested including ‘for profit” state-owned enterprises as they were big players on the market, especially in public services and extractives.

Sandra Ratjen of Franscicans International agreed with the inclusion of domestic activities under the Treaty. She made proposals for clarifications on which human rights should be covered and suggested to follow the UNGPs and, as a safeguard, to add “without any prejudice to other obligations adopted by States”. Furthermore, she suggested to specify that the Treaty shall not prevent States from adopting more stringent laws.

Kinda Mohamadieh of South Centre noted that in fact the Zero Draft never refers to Transnational Corporations (TNCs) beyond its title. It is useful to avoid the TNCs terminology, because it would open doors for maneuvering by businesses and their lawyers. She was generally skeptical of defining transnational companies because this would play out as a potential loophole. According to her, the current text was open enough and didn’t indicate a limitation to transnational companies. In her reading, all for-profit activities that result in impacts, or requiring sourcing, financing or materials, etc. from abroad were covered.

Concerning Article 9 on Prevention, which allows states to exempt certain types of businesses, notably SMEs, from their obligations, Mohamadieh deducted that generally these entities are covered in the rest of Treaty. She recalled that regulating domestic corporations was already an obligation for state under international law, and for example under principles of non-discrimination in trade.

The interventions of states again mostly called for an extension of the scope of application and to a better definition of which human rights must be covered.

In his response, Chair-Rapporteur Gallegos pointed out that international human rights law was constantly changing. That is why the Zero Draft on purpose avoided any express way to quote the sources of human rights obligation. In his view, a list of references would be very long, and any new reference, change or update wouldn’t be covered. He further explained that the aim of Article 4. was not to exclude public companies. This text simply was aligned to the criteria of Resolution 26/9 in relation to transnational activity. He thanked the many contributions that can help to solve the question of access to justice for victims.

On the issue of corporate direct international obligations, the International Organisation of Employers’ speaker expressed that these obligations can be already identified in the provision defining victims, which was a matter of concern for them.

CETIM argued for a proper definition of global value chains that would allow for true accountability of transnational companies with their complex structures. In this sense, national enterprises that are part of global value chains, could be covered.

On the definition of victims, Clean Clothes Campaign and Sudwind proposed to replace the term ‘victims’ by “rights-holders” to make sure HRDs and trade union activists are covered. They also emphasized that a definition for the concepts of parent company, subsidiary, supplier etc. is needed for more clarity on the scope.