Day 2 of the negotiations of the Open-ended Inter-governmental Working Group (OEIGWG) for the elaboration of an International Legally Binding Instrument on Transnational Corporations and other Business Enterprises with respect to human rights began on Tuesday 15 October with still good participation (more than 50 states present). Countries such as Bolivia and Namibia took the floor to offer substantive and thorough contributions for the first time. Under discussion were articles 4 and 5 concerning Rights of Victims and Prevention respectively; however submissions relating to Day 1’s discussion on Scope continued to emerge.

The title of Article 4 ‘Rights of Victims’ provoked the response from several experts, states and civil society organisations (CSOs) that it be changed to more empowering language, namely ‘Right to redress’ or using the expression ’rights-holders’. It was acknowledged that the right to remedy is already well-established in International Human Rights Law; that the respective draft’s provisions are intended to give more precise and practical effect to this right in corporate-related human rights cases where barriers are unique and high.

Indeed, the Chair-Rapporteur explained the article’s aim as clarifying a certain set of minimal procedural rights for cases involving corporate human rights abuses. Ecuador noted that remedy is also contained in the Sustainable Development Goal (SDG) 16, namely ‘access to justice for all’. Alongside Brazil and others, it welcomed the explicit mention of gender in regards to the provisions to prevent ‘re-victimization’ during the procedural process.

Along the same lines, states delegates and CSOs raised the issue of the need to explicitly mention children in terms of right to redress and barriers to justice; as well as stronger language on women as they face unique barriers.

In accordance with the draft provisions, expert Professor David Bilchitz from the University of Johannesburg submitted that there should be a presumption against costs orders against claimants for claims relating to fundamental rights violations; unless the claims are found to be clearly vexatious. In other words: In principle, victims should not have to pay for the court costs even if they are unsuccessful. The reason being the clear inequality of arms between parties to the dispute, a thematic which expert Ana María Suarez-Franco (FIAN) stated required explicit mention and explanation in the Treaty text. The provision nonetheless provoked state and business concern that it may lead to abusive litigation, despite the implicit acknowledgement that businesses are currently abusing human rights and rights-holders.

Procedural barriers to access remedy: the burden of proof and presumption of control

The issue of the reversal of the burden of proof onto the defendant business entity in provoked heated discussion, eliciting concerns of incompatibility with domestic legal systems and even national constitutions. It was made clear, however, that reversal of the burden of proof was common according to restrictive circumstances in numerous jurisdictions. It was noted that other UN bodies have been exploring reversal of the burden of proof in different contexts. Echoing recommendations of UN bodies, ECCJ has called for the establishment of laws providing for the reversal of the burden of proof in order to enhance access to remedy for victims of corporate malpractice.

The idea of a rebuttable presumption of control was also raised, namely that a parent company can be presumed to control its subsidiaries and have effective control or influence over other business entities in its supply chain, unless it can prove otherwise. It was noted that a presumption of parent company control over its subsidiary is already a facet of EU competition law. It was noted that provisions on mandatory disclosure of information, discovery and burden of proof must work as a coherent whole.

On the issue of types of remedies, numerous countries, experts and CSOs argued that other forms of remedy must be included in the draft Treaty, such as apology and injunction. The deletion of provisions pertaining to collective redress and class actions was met with concern by numerous states, experts and CSOs who advocated for its re-inclusion on the grounds that it is an effective mechanism for overcoming barriers to justice is business and human rights related cases. It was highlighted that collective redress is present in many jurisdictions all over the world (such as the Inter-American Human Rights System). In Europe, the European Commission issued in 2013 EU recommendation on Collective Redress which promotes collective redress for all fundamental rights and harms.

The Russian Federation seemed to view the provisions on victims’ rights as having the potential to generate gross miscarriages of justice, leaving the room to wonder what had brought them all here in the first place.

Speaking in the civil society turn, the European Environmental Bureau (EBB) made the point that the Aarhus Convention gives standing to NGOs for harm caused to the environment; and that this Treaty should do the same.

Session on Prevention: Human Rights Due Diligence obligations

The experts, Professor Olivier De Schutter of Louvain University and Member of the UN Committee on ESCR, Makbule Sahan from the International Trade Union Confederation and Professor RobertMcCorquodale  (Inclusive Law) discussed whether an “Human Rights Due Diligence defence” should be available to companies (meaning that companies would be able to avoid liability when they can prove that they had undertaken the due diligence process).

The risk of such an approach is that it could result in a ‘box ticking’ exercise whereby a company does not fully invest in not causing harm rather just to satisfy the requirements of the relevant legal act. Commentary to UNGP 17 was provided to show that companies cannot expect to avoid liability simply from having undertaken HRDD.

The Russian Federation questioned whether a prevention section should even be in the Treaty at all, perhaps just as an annex, provoking the response from Brazil and many other states, experts and CSOs that prevention is indeed essential to the purpose of the Treaty.

Palestine requested elaboration on the HRDD element, in particular concerning a clarification in which cases a company would be required to divest or disengage from a human rights violating business relationship.

The issue of ‘consent’ versus ‘meaningful consultation’ was discussed in the context of the right to Free Prior and Informed Consent (FPIC) and development projects, with Bolivia, South Africa and numerous other country delegates favoring the former and referring to the recent UN General Assembly Declaration on Peasants rights.

Scope: the returning issue

The recurring issue of the scope was again raised on the second day of negotiations. Countries such as South Africa and Cuba referred to the mandate of the IGWG given by UN General Assembly Resolution 26/9, implying that the reformulation may be outside of its scope. On the other side, experts responded that, in order to regulate transnational corporations (TNCs) in International Human Rights Law it may be necessary to cover all companies that work with them or that integrate them in their global value chains.

Spain, like many states, experts and CSOs, took the floor to support changing the scope to all business activities rather than contractual relationships. It was argued that the Treaty language should be in line with the UNGPs and the OECD Due Diligence Guidance for Responsible Business Conduct. France participated in this part of the discussion to congratulate a much-developed draft text; speaking twice in order to explain the functioning of its duty of vigilance law. The EU delegation, for its part, expressed its satisfaction with the new broader scope.

China made the point that it would be impracticable to cover all human rights and all types of business activities. It suggested obtaining evidence to study which human rights are most frequently and seriously harmed by business operations in order to help guide on this question. in ECCJ’s view, this approach would seem at odds with the notion of salience of human rights risks in the UNGPs.

The issue of scope no longer being limited to TNCs provoked notable resistance from states and CSOs from the Global South. Professor Surya Deva from the UN Working Group on BHR and other experts sought to allay these concerns by making the point that if the scope covers all businesses then it will necessarily cover TNCs.

Furthermore, existing draft provisions are specifically intended and designed to fill the governance gaps and overcome the barriers to justice particular to TNCs, for instance those on cross-border and adjudicative jurisdiction. Professor Bilchitz made the radical and refreshing suggestion to delete the that the section on scope. His question was whether the issue of scope was a distraction from the actual operative provisions of the text; making the similar point that they do already address the unique problems posed by TNCs.

Namibia took this suggestion very seriously; also agreeing to focus on the substance rather than the form of company relationships. The country delegate also asked for explicit language on parent companies in recognition of the unique barriers to justice they pose via subsidiaries and suppliers. Professor Bilchitz also proposed a list of types of business relationships to be covered by the text.

Effectively all parties continue to praise to closer alignment of the text with the UNGPs, whilst noting as well that simple ‘copy pasting’ of key UNGP provisions is not practicable given that this is a legal instrument requiring as much clarity and specification as possible. As a matter of drafting, experts advised that definitions are controversial and should therefore only be included where absolutely necessary for the functioning of the Treaty.

This blog series on the UN treaty is supported by the Rosa Luxemburg Foundation.