1-Flora Sapio on the Zero Draft of a Legally Binding Instrument to regulate the activities of transnational corporations and other business enterprise (Article 2, Statement of Purpose)

(Pix © Larry Catá Backer 2018; Musée Ariana, porcelain figures Meissen 1725-1730 )

Flora Sapio (Comments on the "Zero-Draft"), and I (Making Sausages?: Preliminary Thoughts on the "Zero-Draft") have been considering the challenges posed by the Zero Draft.  But we wanted to dig deeper.  To that end we wanted to avoid the altogether too easy exercise of textual exegesis to suggest the challenges that this draft might construct for itself.  

Rather than consider text, or text in light of the various mandates and principles purportedly manifested in the language used to build the Zero Draft, we thought it might be useful to consider text within the context of the initial commentary it might generate among Zero Draft stakeholders motivated enough to make them. These, then, might usefully inform the reading of text, and sharpen analysis of its structure and consequences. 

To that end, and in this and subsequent posts, Flora Sapio  presents summaries of discussions on each article of the Zero Draft, based on the written submissions available on the website of the OEIGWG.  These, then, will be woven together first to develop both a critique of the Zero Draft, and thereafter to suggest the value of an alternative, framework, model for such a project. 

These Commentaries form part of a larger Coalition for Peace and Ethics Project on the Effort to Elaborate an International Instrument on Business and Human Rights. Go to CPE Treaty Project Page: HERE.

This post considers Article 2 of the Zero Draft (Statement of Purpose). 

Summaries of discussions on each article of the Zero Draft, based on the written submissions available on the website of the OEIGWG
Article 2 (Statement of Purpose)
Flora Sapio 

On 14 July 2014, the Human Rights Council created an Open-Ended Intergovernmental Working Group (OEIGWG) on Transnational Corporations and Other Business Enterprises  with respect to human rights (OEIGWG). According to Resolution 26/9, the Working Group has the mandate to:

“elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises”

By “Other business enterprises” the Human Rights Council referred to all business enterprises having a transnational character in their operational activities. This designation does not apply to local businesses.

In establishing the OEIGWG, the Human Rights Council also decided that the first two sessions of the OEIGWG would be dedicated to conducting constructive deliberations on the content, scope, nature, and form of the future Treaty. Following deliberations, the Chairperson would prepare elements for the draft Treaty. Substantive negotiations on the Treaty would be held during the third session of the Working Group, based on the discussions held during the first two sessions.

The OEIGWG held its first session from 6 to 10 July 2015. A second session took place from 24 to 28 October 2016. Based on discussions held during the first two sessions, a third session was convened from 23 to 27 October 2017. During this session, the elements for the draft Treaty were discussed. Also, the OEIGWG requested the Chair-Rapporteur to complement the ongoing bilateral consultations with states and non-state stakeholders with informal consultations.

Following the third session, a Zero Draft of a Legally Binding Instrument (LBI) on Transnational Corporations (TNCs) and Other Business Enterprises (OBEs) was prepared by Ecuador. In July 2018 the Ministry of Corporate Affairs of India released the draft for public comments.

The Zero Draft of the Legally Binding Instrument (and a zero draft of an optional protocol to the binding instrument) formed the basis for a first round of substantive negotations, held in Geneva from 15 to 19 October 2018. According to the program of work adopted by the OEIGWG, substantive negotations saw experts, representatives of national states, transnational organizations, and NGOs comment on the Zero Draft.

In this and in following posts, I will be presenting summaries of discussions on each article of the Zero Draft, based on the written submissions available on the website of the OEIGWG.

Article 1 – summary of discussions - Thursday 18 October 2018

Article 2 – summary of discussions -  Monday 15 October 2018

Article 3 – summary of discussions - Wednesday 17 October 2018

Article 4 – summary of discussions - Wednesday 17 October 2018

Article 5 – summary of discussions -  Thursday 18 October 2018

Article 6 – summary of discussions - Tuesday 16 October 2018

Article 7 – summary of discussions - Tuesday 16 October 2018

Article 8 – summary of discussions - Monday 15 October 2018

Article 9  – summary of discussions - Tuesday 16 October 2018

Article 10  – summary of discussions -  Wednesday 17 October 2018

Article 11  – summary of discussions - Wednesday 17 October 2018

Article 12  – summary of discussions -  Wednesday 17 October 2018

Article 13  – summary of discussions -  Tuesday 16 October 2018

Article 14  – summary of discussions - Thursday 18 October 2018

Article 15  – summary of discussions -  Thursday 18 October 2018

Article 2. Statement of purpose

1. The purpose of this Convention is to:

a. To strengthen the respect, promotion, protection and fulfilment of human rights in the context of

business activities of transnational character;

b. To ensure an effective access to justice and remedy to victims of human rights violations in the

context of business activities of transnational character, and to prevent the occurrence of such

violations;

c. To advance international cooperation with a view towards fulfilling States’ obligations under

international human rights law;

Article 2 of the Legally Binding Instrument on Transnational Corporations and Other Business Enterprises was scheduled for discussion on Monday 15 October 2018, from 3 to 6 PM, together with article 8.

After an introduction by the Chair, Luis Gallego Chiriboga, permanent representative of Ecuador at the UN in Geneva, comments on Article 2 were submitted by 4 experts. Written comments specific to Article 2 were submitted by:

·      9 states (Azerbaijan, Chile, China, Egypt, India, Mexico, Namibia, Peru, South Africa)

·      5 NGOs.

Comments by Experts

Molly Scott Cato, Member of the European Parliament, expressed her pride for the work of the European Parliament in supporting the future Treaty, and her regret for the EU’s refusal to engage in the negotiations. She conveyed the testimony of a Mexican woman activist, who attempted to obtain remedy from the harm caused by the economic activity of a Canadian TNC, but Mexican “ laws are not strong enough to resist the power of massive global companies who are larger than many countries.” Chapters of trade agreements including protection for human rights and the rights of indigenous people are not parts of legally binding treaties.

Written comments by Ibrahim Salama (OHCHR) are not available on the OHCHR website.

Ana María Suárez Franco (FIAN) recommended including a reference to gender perspective in Article 2.

Gabriela Quijano (AmnestyInternational) suggested to more prominently articulate prevention as a purpose; to make corporate accountability a specific purpose of the future Treaty, and to add the key purpose of empowering individuals, communities and human rights defenders.

Comments by States

Written comments on Article 2 were submitted by 9 states: Azerbaijan, Chile, China, Egypt, India, Mexico, Namibia, Peru, South Africa

Azerbaijan: Article 2 should make a stronger reference to the obligations of TNCs under international law, as well as to differentiate between the definition of the host state and the owner state in order to avoid any further confusion and misinterpretation of the terms.

Chile: Article 2 should mention the United Nations Guiding Principles on Business and Human Rights. The future Treaty should include all enterprises, not only TNCs, because States obligation include all enterprises, regardless of the domestic or transnational nature of their business activities. Limiting the future Treaty to TNCs would limit its applicability.

China:  the relationship between the three paragraphs of Article 2 needs to be further clarified. The focus should on be paragraph b of Article 2, because this paragraph states the purpose of the future Treaty. The wording about State obligations under international law is too broad. Different countries have ratified differen treaties, and therefore are under different obligations, therefore the word “applicable” should be added before “international human rights law”.

Egypt: paragraph c is not clear, and more of general nature that goes beyond the purpose and the object of the legally binding instrument. Egypt proposed to modify its language to link it with the activities of the TNC and OBEs and not to fulfill its obligations under international human rights law in general.

India: reserved comments on article 2 until the discussion on Article 4 would clarify the meaning of “business activities of a transnational character”. India believes the Treaty should not cover national enterprises, because India already regulates national enterprises through its domestic legislation.

Mexico: the standard of protection of the Treaty should extend to all enterprises within the jurisdiction of the State, without distinction between public or private enterprises, and regardless of the transnational or domestic character of their activities. The term “violation” should be used only in relation to actions or omissions of a State, while the term “abuse” or “adverse impact” should be used with reference to enterprises.

Namibia: States already have a duty to regulate the operations of national businesses and the focus of this treaty is on the extra-territorial operations of businesses, and on TNCs. In the interest of consensus, the Treaty could refer to all types of business entities.

Peru: the Treaty should not be limited to transnational enterprises, but include all business activities.  Paragraph 1.b is ambiguous, and it should specify the human rights violations covered by the Treaty.

South Africa: the Treaty must recognize that TNCs and Other Business Enterprises must contribute to the requisite means of implementation for the realization of all human rights; for the eradication of poverty; and that they must adopt sustainable and ethical business practices.

Comments by NGOs

Asia Pacific Forum on Women, Law and Development and the Feminists For a Binding Treaty. (Representing 250 feminist organizations in Asia Pacific and globally): article 2 should  state the primacy of human rights over any other type of law or obligations, including trade and investment agreements.

CCFD-Terre Solidaire, France Amérique Latine and Amis de la Terre France: Article 2 should include new obligations for States, and direct obligations for transnational corporations. The granting of these obligations stems from the “Protect, Respect and Remedy” report published in 2008 by the Special Representative on business and human rights John Ruggie, and the OECD Guidelines for Multinational Enterprises, the UN Convention on the Law of the Sea and the general observation 31 of the UN Human Rights Committee. The following wording was suggested:

“transnational corporations have obligations derived from International Human Rights Law. These obligations exist regardless of the legal framework in effect in Host, Home or Affected States, directly or through their supply chains”.

CETIM: Article 2 should include direct obligations for TNCs. It is important to highlight that existing international treaties, some investment treaties, and the law of the European Union already include such obligations for TNCs.

International Organizations of Employers: stated its position against the future Treaty. The focus of Article 2 is too narrow, it will not achieve the goal of human rights protection, and leave the vast majority of rights-holders outside of the Treaty’s mandate. Victims of harms caused by purely domestic companies or State-owned enterprises would not be afforded the same protection or remediation avenues. The text should adopt the term "abuse" instead of "violations" or at least state that companies would have a duty not to violate national laws that reflect the provisions of this Treaty. The purpose to advance "international cooperation with a view towards fulfilling States' obligations" should be supported by measures increasing policy coherence between standards and national law; enabling states to address challenges in their jurisdictions; increase peer pressure between States to meet their human rights duties.

Institute of Policy Studies/Transnational Institute (TNI), Transnational Migrant Platform-Europe (TMP-E) as is part of the Global Campaign to Reclaim of Peoples Sovereignty, Dismantle Corporate Power and Stop Impunity: address the gap in the current draft Zero in relation to the obligations of TNCs with respect to human rights that are already established by UN Conventions.

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