The amount of power and influence corporations exercise, in and outside of Europe, is not yet balanced by a robust framework outlining rules to make business accountable for how it affects human rights and the environment.
Business & Human Rights
Cases of serious corporate-related environmental and human rights abuses make the news regularly. From the sourcing of conflict minerals , to banks financing megaprojects causing irreparable damage to indigenous communities, to the use of slave labour in the production of food sold in leading EU supermarkets - no sector is excluded from the corporate list of shame.
States have a duty to protect against business-related HR abuses. However civil society, academics, legal experts and international organisations have long highlighted significant gaps in the current legal framework, which contribute to corporations being able to act with impunity. Companies’ ability to evade responsibility is greater when they operate in developing countries where the legal system is frail or corrupt, and victims have little chance to access justice. Addressing these gaps at national, European and international levels must be a priority for the European Union and its Member States.
State of play
In 2011, the European Union (EU) and its Member States pledged full support to the UN Guiding Principles on Business and Human Rights (UNGPs). The UNGPs build on international human rights law and articulate both the States’ duty to protect human rights and ensure effective remedy for victims of violations, as well as the companies’ duty to respect human rights. At the time, it was hoped that this would mark the beginning of an ambitious EU agenda on business and human rights, which would address the many challenges faced by those negatively affected by the activity of EU companies.
Over the past years the EU has made repeated commitments to make business and human rights issue part of its political agenda. The 2011 European Commission (EC) Communication on Corporate Social Responsibility (currently under revision) represented a relevant step forward in this sense. It defined Corporate Social Responsibility (CSR) as the responsibility of enterprises for their impacts on society, identifying human rights as an issue that needs to be addressed by enterprises in order to meet that responsibility. With this definition, the EC moved away from the voluntary-only aspect of prior communications to a “smart-mix” of voluntary and regulatory measures.
In October 2011, the European Union became the first region worldwide to call on its governments to develop specific National Action Plans (NAPs) to implement the UNGPs, and committed to also developing an EU Strategy in this sense. Seven European countries have published a NAP so far, and several others have on-going drafting processes. The Member States who published NAPs are (in order of publication): UK, the Netherlands, Italy, Denmark, Finland, Lithuania, Sweden. The European Commission has not yet published the EU Strategy, promised in 2011. The 2015 “Trade for all” EC Communication emphasized the need to reinforce corporate responsibility and due diligence, including through legislative measures, with a special focus on the respect of human rights and the environment, throughout company value chains.
The EU Council’s EU Action Plan on Human Rights Democracy 2015-2019, has called for strengthening the business and human rights agenda and thorough UNGPs implementation by the EU and Member States.The Council of Europe has also released a set of recommendations on business and human rights, for its members to better fulfil States’ international human rights obligations, including through more effective implementation of theUNGPs.
But despite these encouraging developments, implementation remains weak and the main EU focus still remains on a voluntary approach to corporate responsibility. Several NAPs have been released, and several others being developed, but all the plans lack teeth. They do not sufficiently explore regulatory options to ensure adequate human rights protections or access to remedy.
We still do not have an EU Strategy on business and human rights, as the EC has thus far only published a state of play document: a technical and descriptive document, which, despite being a useful contribution to the policy debate, lacks a clear identification of policy priorities. At both EU and Member State level, a lack of top level political will can be observed and serious challenges reside in ensuring decision-makers demonstrate leadership in the matter of business and human rights. The EU and MS are hiding behind each other, blaming inaction on the division on competences, continuing to prefer a business-driven, non-prescriptive approach to corporate responsibility, which brings the fight against impunity to a stalemate.
The area of business and human rights touches on several policy areas: trade and investment, justice, company law, development, corporate governance, procurement, external policy, internal market. Therefore, adopting a holistic approach, together with policy coherence and mainstreaming are two key issues.
While both domestic and European reforms are needed, it is crucial that the EU and Member States also engage in good faith in global normative processes related to business and human rights. In particular, governments should participate in the UN Inter-Governmental Working Group developing a legally binding instrument on business and human rights, and support its efforts to bridge gaps in the global protection of human rights.
UNGPs implementation and participation in negotiations on a binding instrument on business and human rights should be regarded as complementary as both are essential pathways to achieving greater protection against business-related human rights abuses across the globe. It is high time the EU and its Member States fully acknowledge the severity of the problem and the urgent need to make tangible changes in policies and legislations in this regard, in particular areas concerning human rights and environmental protection from corporate abuse, access to justice and remedy for victims, embedding human rights due diligence in law, improving corporate transparency, enhancing the global legal framework and ensuring policy coherence, and developing robust EU and Member States Action Plans on business and human rights
- UNGPs implementation
- Corporate accountability
- National Action Plans
- Corporate responsibility to respect human rights
- UN Treaty
- Corporate Social Responsibility