The third day of talks on the UN binding treaty to regulate transnational corporations and other businesses exposed familiar fault lines, but Palestine gave a powerful reminder to the member states present: the purpose of this treaty is to close gaps and guarantee corporate accountability.

Scope cont.

As the issue of scope was not settled at yesterday’s session, the EU took the floor to express surprise with the change in formulation from ‘all business activities’ in the earlier draft of the treaty text to ‘business activities of transnational character’ in the draft currently under consideration, and asked for further clarification on the rationale for this change.

Another issue remained unclear: which human rights and environmental standards should be respected by business under this treaty. Adding to yesterday’s discussion, Brazil proposed that the treaty should cover international conventions ratified by each member state, while Palestine introduced a reference to international humanitarian, criminal, and environmental law.

Rights of victims

Palestine kicked off the discussions with a suggestion to add ‘violations’ in addition to ‘abuses’. This received backing from civil society, as states also commit human rights violations in the context of their commercial activities or through state-owned enterprises. 

Yet significant differences still remain among member states. Even as delegates from Panama, Mexico, South Africa and Cameroon tried to strengthen the text, representatives from Brazil, US and China attempted to curtail the rights of victims. Russia submitted that ecological rights do not have an internationally-recognized definition and opposed any reference to gender. 

Constructive proposals included a clarification that non-judicial grievance mechanisms should not infringe on the right to access judicial mechanisms, as well as an improved formulation on participation, transparency and independence in the gathering of evidence.

NGOs strongly defended the importance of this article for those who have suffered from corporate harm, and asked delegates to strengthen provisions on access to information and legal aid, and consider renaming the article to something more inclusive, such as ‘Rights of affected communities and individuals’.

The International Organization of Employers – the largest network of the private sector in the world – attacked the very essence of this article. It took issue with the fact that it is focused on the rights of claimants without addressing, for example, the right to confidentiality of other parties. It further noted that class actions and collective redress do not exist in many jurisdictions and that access to information should not be absolute but limited.

Protection

On article 5 relating to state obligations to project victims, Palestine and Cameroon submitted positive proposals on harassment, reprisals, and emergency response mechanisms.

Palestine’s suggestion that states should take adequate and effective measures to protect the right to peaceful protest, including for those who denounce abuses and violations linked to corporate activities, was widely welcomed by NGOs and other member states like South Africa and Panama.

However, skepticism came from the Chinese, US and Russian delegation which argued against strengthening current protection provisions. 

Civil society organizations supported the use of strong language on human rights defenders and proposed changing the title of the article to “Protection of victims and human rights defenders”.

Prevention

State reactions were both constructive and critical of article 6, which outlines the state duty to regulate due diligence obligations for companies. Some worried that the text is overly prescriptive and needs to be “significantly simplified”. 

States like Cuba, Egypt, Pakistan, and Iran sought to limit the scope of the article by removing references to ‘all business’ and applying it only to transnational corporations or other businesses with a transnational character.

Regarding the state obligation to require companies to undertake due diligence, Cuba expressed its reservation to the entire article 6(3). The US representative spoke against its prescriptive nature, favouring the so-called “alternative approach”, which would define due diligence expectations.

Based on France’s pioneering 2017 duty of vigilance law, the French delegate suggested the following: adding a threshold for size or turnover; better defining the content of due diligence obligations; and clarifying jurisdictional competences and accountability mechanisms.

Germany also noted its recent adoption of a supply chain law, arguing that mandatory due diligence and enforcement are vital to creating a level-playing field. On the issue of defining due diligence, it argued that it must be aligned with the UN Guiding Principles on Business & Human Rights.

The EU intervened with questions on whether a company would be responsible for the violations of any partner and what ‘enhance human rights due diligence’ entails. It asked member states to come up with something “operationally implementable for companies and governments alike.” The EU also noted its concern that the text on article 6 is deviating “considerably” from the practice of due diligence as “developed between major partners for the last decade and a half”.

Towards the end of the session, the Chair reminded delegates that the treaty text has evolved thanks to earlier consultations and warned against taking steps backwards. 

In the hope of positively advancing the draft, Mexico, Panama, Cameroon and Palestine suggested including precautionary measures; full value chain scope; clearer wording on free, prior and informed consent; and proposed the deletion of “mitigation of abuses”, since mitigation refers to risks.