Today marks the 10-year anniversary of the unanimous endorsement of the UN Guiding Principles on Business & Human Rights (UNGPs) by the UN Human Rights Council. This globally recognised and authoritative framework was the first global standard for preventing and addressing the risk of adverse impacts on human rights linked to business activity. 

The UNGPs were an important breakthrough because they proposed a transparent and participatory due diligence process to identify, prevent, mitigate, cease, and account for actual and potential adverse human rights impacts in global operations, supply chains and business relationships of companies.

However, governments’ failure to regulate effective due diligence obligations and the consequences of non-compliance continues to be a major obstacle to a more just, sustainable world. UNGPs can only work if governments want them to.

The past decade is proof of this, from the collapse of the Rana Plaza building, which killed 1,134 workers in Bangladesh, to the Mariana and Brumadinho dam disasters – the two worst environmental catastrophes in Brazil’s history. The rise in child labour to 160 million children worldwide, mostly in agriculture, especially in cacao production, and countless other human rights violations taking place on a daily basis in the supply chains of European companies show that mere commitments are not enough.

Ten years on, the framework’s non-binding nature explains its poor track record in terms of implementation. This is despite increasing evidence that business can significantly damage the environment and violate human rights.

Neglected last mile

The value of the UNGPs lies in the three pillars. They compel states to protect human rights (Pillar 1) and businesses to respect human rights (Pillar 2). The third pillar on access to remedy is the crucial ‘last mile’, so affected people can seek redress through effective judicial and non-judicial mechanisms when harm occurs. After 10 years of endorsements and public commitments, the reality is that victims are still denied a path to justice. 

The judicial barriers to obtaining an effective remedy for corporate abuse are well-documented.

In ‘host’ countries where corporate abuse often occurs, victims can face barriers associated with weak rule of law and corruption. The inability to enforce court decisions is equally significant – even when justice is served, the problem is that there is no way of enforcing it where corporate culprits have their assets. 

When attempting to bring cases against EU-domiciled companies before EU ‘home’ courts for harms committed abroad, victims also face unique procedural and substantive barriers, which are often insurmountable.

The legal case against Royal Dutch Shell, which lasted almost 13 years, demonstrates how difficult it is for victims of harm to obtain justice. A key barrier in this case was the ‘corporate veil’ –  a corporate shield against liability for human rights abuses. In court, the oil giant had argued that it was not responsible for the oil spills and other violations committed by its Nigerian subsidiary. It is exceptionally difficult for the plaintiffs and their lawyers to disprove this, as it requires significant disclosure from the parent and subsidiary – information that corporate entities do not readily divulge. 

Changing the rules of the game

UNGPs have led to a decade of action on business and human rights. To date, 25 countries have developed and approved National Action Plans for the UNGPs’ implementation, but nearly half of the EU member states are still lagging behind. And most of the existing plans still rely heavily on voluntary business approaches. 

Significantly, none of the plans include environmental damage as a priority. This has always been a major flaw in the UNGPs, one that must also be corrected in the new generation of corporate accountability laws.

While a number of European member states have proposed domestic legislation, only France and The Netherlands have adopted laws that explicitly include civil liability provisions. 

Last week’s twin adoptions of the German Supply Chain Law  and the Norwegian Transparency Act were important first steps, but the lack of new and improved civil liability rules for companies condemns victims to costly and lengthy legal battles. In both, environmental and climate change considerations were weak.

Pillar 3 will be key

Moving into the second decade of UNGPs implementation, the EU has an opportunity and a responsibility to put money where its mouth is. That is to say, to fulfill its duty to protect and regulate.

The European Commission is about to turn the principles into clear, mandatory, due diligence legislation, making European companies fit to operate sustainably in accordance with their environmental and human rights commitments. 

If it’s serious about ending corporations’ privileged treatment, and if it’s genuine when it says that human rights are non-negotiable, it must honour all three pillars of the UNGPs.

The third pillar is sometimes described as the ‘forgotten’ pillar. The Commission must change this by providing affected individuals and communities with access to justice and effective remedy to hold corporations accountable when harm has occurred.

Only this shift can tip the scales and address unequal powers at the root of rampant human and environmental rights violations in the value chains of European companies.

The alarming scale and serious nature of the abuse taking place globally makes effective action on business and human rights an urgent matter. The European Parliament has twice in the past eight months officially called on the Commission to develop civil liability rules for companies, which extend into their value chains, as a key element of forthcoming directive. 

There have also been calls for a fairer distribution of the burden of proof covering all evidentiary elements; the right for victims to choose the applicable law; financial support for victims to enable them to take companies to court; and reasonable time limitations for transnational claims as means to addressing just some of the well-known barriers to judicial remedy facing victims of corporate abuse. 

UNGPs on pause in Brussels?

However, as we mark the UNGP’s first 10-year milestone, the fate of the Commission proposal on sustainable corporate governance remains unclear.

Firstly, because it has been delayed until after the summer recess, and secondly, because it has been reported in the media that the file will now be co-led by Commissioner for Internal Market, Thierry Breton, without any official statement from the Commission to explain the delays or the change in direction.

This comes against a backdrop of the ongoing pandemic crisis with its serious economic and social impacts, making the call for action to advance the mandatory due diligence agenda even more pressing.

The UNGPs were created to achieve tangible results for affected individuals and communities, and to contribute to a socially sustainable globalisation. The ‘offspring’ of the UNGPs should make this happen.

Commissioners Reynders and Breton must not scrap the UNGPs on their tenth birthday (or ever). People and the planet cannot afford another decade of regulatory inaction.