Article-by-article negotiations continued on the second day of talks on the UN binding treaty to regulate transnational corporations and other businesses, starting with the preamble and ending with the big question of the day: scope. 

This round of negotiations comes at a critical moment for the EU. It is expected to release a draft law later this year, which would require companies to address risks of human rights violations and environmental harm in their global value chains.

Even as UN member states are expected to present specific textual proposals on the draft treaty text, the EU has again chosen to stay on the sidelines.

To complicate the situation further, chatter about an “alternative approach” risks undermining years of diligent deliberation undertaken by an inclusive global coalition, often led by Global South nations. During yesterday’s session, the International Organization of Employers even made reference to it, ignoring that it is a proposal by one academic from the Global North. However, the US, Japan, China and EU seemingly toying with the idea of an alternative approach is of great concern.

An analysis by a member of the Treaty Alliance, of which ECCJ is also a member, underscores how this idea for a Framework Convention is being used as a strategic attempt to dilute and distract from the existing legally binding instrument currently under discussion in Geneva. People and communities affected by corporate abuse have the most to lose from such a weak instrument.

Preamble cont.

Discussions around use of certain terms started early, but the distinction between ‘responsibilities’ and ‘obligations’ remains contested.

State representatives suggested including references to the UN Declaration on the Rights of Peasants and other People Working in Rural Areas, humanitarian law, as well as gender. The EU delegation took the floor to reaffirm that although it is in no position to negotiate, it would be “very difficult to imagine that a final version of the instrument would be without a solid reference to a gender perspective.” The EU’s suggestion was backed by France and was registered in the draft.  

Cameroon led the way with helpful suggestions to spell out the primacy of human rights law over all other legal instruments, including those related to trade and investment, and to clarify that business enterprises also have obligations under international human rights law.

However, some member states took a different approach. Brazil sought to remove the reference to ILO Convention 190 concerning the elimination of violence and harassment at work, while China, Iran and Egypt wanted to delete any mention of human rights defenders from the draft.

Definitions, definitions, definitions

The definition of ‘victims’ was generally accepted, but still received some pushback. 

In response to criticism from the US and China, the EU intervened again to make a case for including the right to a clean, healthy and sustainable environment, despite still not having a negotiating mandate. The EU delegate also reaffirmed that environmental impacts will be covered by the forthcoming EU directive on sustainable corporate governance. 

Afternoon sessions zeroed in on the definition of ‘business activities’. The EU, US and Russia considered it too broad and vague, while Namibia rejected any mention of state-owned enterprises. Other states jumped into the fray, making it clear that this definition will require more discussion. 

Some delegates wanted to broaden the definition of ‘business relationship’ to cover all entities along global value chains, even where the relationship is not contractual. 

A coordinated push for a narrower scope

Two opposite positions were defended today. On one side of the debate were Russia, China, Egypt, Iran and Cuba, defending the need to narrow the scope by excluding domestic business. Such an approach would limit the focus of the treaty to the protection of human rights in the context of the activities of transnational corporations only.

In the other corner were the EU and Mexico, favouring a broader scope. The EU delegate stressed that all business enterprises should be covered by the treaty, irrespective of their field of operation. 

In the spirit of creating a level playing field and aligning the draft with the UN Guiding Principles on Business & Human Rights, industry groups – including the International Organisation of Employers and the United States Council for International Business – agreed.

Caught in the middle were states like Palestine and Namibia who agreed with having a broader scope, but also emphasized the importance of focusing on transnational business.

Regarding human rights and environmental standards to be respected by business under the treaty, the US and Russia raised objections. The US delegate argued that the scope is inconsistent with human rights law, listing as evidence a number of agreements that do not create legally binding obligations.

When Palestine argued for extending business obligations to the prevention of environmental harm, both the US and the EU worryingly opposed the current wording on business obligations for “mischaracterizing” international law, proposing to use ‘business responsibilities’ instead – a suggestion Brazil agreed with.

On a more positive note, Panama proposed including international and regional environmental agreements, such as the Paris Agreement. 

In spite of the EU’s lack of negotiating mandate and yesterday’s “flirting” with the idea of an alternative approach, the EU struck a different tone today. Whenever it took the floor to make substantive inputs, the delegation defended fundamental human rights. This is the EU we want to see more of.