New treaty on business and human rights must hold ‘home’ states accountable

To ensure justice for victims of corporate human rights abuse, transnational companies who evade accountability in the states hosting their operations must face justice at home—a new treaty under negotiation holds the promise of doing so.


By: Daniel Cerqueira & Alexandra Montgomery
April 5, 2018

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Photo by Sebastian Pichler on Unsplash

It is important that home states ensure human rights obligations placed on national companies also apply when they go abroad.


‘Home’ states create the legal regime that allows corporations to operate, but when those companies go abroad, to ‘host’ countries, they usually operate under the latter’s laws, free of any obligations they might face at home. Where, as is too often the case, the host state is either unwilling or unable to properly regulate these transnationals, it leaves actual or potential victims of corporate-related human rights abuse without the possibility to access legal remedy.

This is why it is important that home states ensure human rights obligations placed on national companies also apply when they go abroad—so-called extra-territorial obligations (ETOs). It is essential that the proposed UN treaty on business and human rights (now being negotiated) include a provision that home states clearly establish ETOs on their companies. 

Adopted in 2011, the UN Guiding Principles on Business and Human Rights barely address this matter. Moreover, the National Action Plans enacted in order to implement the Guiding Principles have either omitted any mention or narrowed the scope of ETOs. Yet several other UN bodies have spoken out in favour of ETOs, creating a clear legal basis for including them in any new treaty.

As of March 2018, the UN Committee on Economic, Social, and Cultural Rights has raised the issue of ETOs in five of its general comments, as well as in assessing the implementation of human rights treaties by different States.  Several other UN treaty bodies have also done so, as have different Special Rapporteurs and Independent Experts appointed by the Human Rights Council. At a regional level, the Inter-American Commission on Human Rights (IACHR) published a report on the impact of the extractive sector on human rights that supported the need for ETOs.

Additionally, there are several treaties—covering terrorism, corruption, bribing of foreign officials, torture and trafficking—that allow or require the exercise of extraterritorial jurisdiction to prosecute certain transnational crimes.

In civil cases (lawsuits), there is no multilateral treaty requiring the exercise of extraterritorial jurisdiction to redress human rights violations. Article 14 of the UN Convention against Torture, however, requires states parties to provide an enforceable right to compensation, including for acts of torture that take place in a foreign country.

Yet, international human rights standards clearly demand effective remedies to be pursued for violations. While they may not explicitly require criminal prosecutions at home for corporate abuse abroad, at a minimum, the home state is obliged to enable civil remedies for those persons whose rights have been violated by the overseas operations of their companies. And in some cases, when a company’s behavior entails certain international crimes, states should also pursue criminal proceedings.

Further, three months after the adoption of the UN Guiding Principles, a group of international experts adopted the Maastricht Principles on ETOs  which emphasize States’ obligation to monitor multinational companies domiciled in their jurisdiction and refrain from supporting them whenever they are involved in human rights violations in the territory of third countries.

Despite all this legal precedent, the implementation of the UN Guiding Principles by states has not strengthened the case for ETOs. The process of agreeing on National Action Plans to implement the Guiding Principles has—in most countries—not included appropriate action on ETOs.

In June 2016, the UN Human Rights Council established an open-ended intergovernmental working group (IGWG) to develop an international treaty on business and human rights. In September 2017, the IGWG published the draft elements of such a treaty, which includes a promising section on jurisdiction that points out that:

“… it has been considered that the legally binding instrument has an enormous potential to avoid TNCs [Transnational Corporations] and other OBEs [other business enterprises] from making use of limitations established by territorial jurisdiction in order to escape from potential prosecution in the host States where they operate. The inclusion of a broad concept of jurisdiction will also allow victims of such abuse by transnational corporations to have access to justice and obtain remediation through either the forum where the harm was caused, or the forum where the parent company is incorporated or where it has a substantial presence.”

The draft elements also stress the importance of setting clearer rules on access to justice for victims of violations committed by companies and their subsidiaries operating abroad, and reaffirm that “State Parties’ obligations regarding the protection of human rights do not stop at their territorial borders”.

Given the narrow approach on ETOs that has prevailed under the UN Guiding Principles framework, the inclusion of these issues in debate on the business and human rights treaty deliberations is welcome and necessary. The treaty provides an opportunity for the international community to establish clearer rules in this field, in line with the standards already developed by international human rights bodies. These rules should address, at a minimum, the parameters for states’ obligations to regulate the activities of companies domiciled in their jurisdiction, registered under their laws, and/or with administration and significant business operations in their territory. In developing the treaty, the drafters should clarify these elements and ensure that they are consistent with the standards already in place, including those that stem from the pronouncements of international human rights bodies.

The final treaty must ensure territorial boundaries are not an unwarranted barrier to victims seeking justice for corporate abuses of human rights.

This is a shorter version of a piece that first appeared on ESCR-Net.


Daniel Cerqueira is Senior Program Officer at the Due Process of Law Foundation (DPLF).

Alexandra Montgomery is Coordinator of the ESCR-Net Corporate Accountability Working Group.


 

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