3 International Legal Personality in a Human Rights Context
4.3 Attempts at a Binding Treaty in the UN
4.3.4 Scope of the Possible Treaty
In September 2017, the Chair of the OEIGWG published the Elements for The Draft Legally Binding Instrument on Transnational Corporations and other Business Enterprises with Respect to Human Rights, which acted as the basis for the negotiations in October 2017. Before the publication of the Draft, state representatives were considering the lack of material to base the upcoming negotiations on. The Draft sets a clear tone and scope for the upcoming treaty, but it is important to note that it was written based on the first two sessions and has the status of being a basis for future negotiations.
The stance of the OEIWG on the plausible instrument’s content and scope has been surprisingly liberal, considering the chaos of the first session. It is believed that the instrument should cover all human rights and all human rights violation under its scope.472 The Draft notes the universality, indivisibility and inter-relationship of
467 Bilchitz (n 454) 220.
468 ibid 115.
469 Report on the First Session of the Open-Ended Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with Respect to Human Rights, with the Mandate of Elaborating an International Legally Binding Instrument (n 458) 17.
470 ibid 112.
471 Cantú Riviera (n 407) 1212.
472 Report on the First Session of the Open-Ended Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with Respect to Human Rights, with the Mandate of Elaborating an International Legally Binding Instrument (n 458) 57.
all human rights, which are therefore to have the same relevance.473 All human rights and hence all abuses should be covered, according to the Draft.474 The preamble references various UN instruments and reaffirms the Guiding Principles. The referenced UN instruments also include the UN Norms, which as noted were deliberately left out of the Guiding Principles.
One of the most pressing issues during the first session was whether to limit the instrument to solely transnational corporations or to also include domestic entities, and the issue was debated during the first session of the OEIWG. Resolution 26/9 discusses ‘transnational corporations and other business enterprises’. The EU’s wish to add the word “all” was seen by some to extend or change the given mandate.475 Previously international instruments have decided not to limit their scope to multinational entities. For example, the UN Guiding Principles apply to ‘all enterprises regardless of their size, sector, operational context, ownership and structure,’476 whilst the UN Norms also cover all other business entities. As mentioned, transnational corporations as a term is not universally defined, and most international instruments have failed to bring clarity to its content. It is vital that the instrument clearly depicts which features are attributed to a multinational corporation, and whether size, variability in location, revenue or control over various domicile subsidiaries are stipulated for a business entity to be considered a transnational corporation. It would actually be beneficial for that objective to cover other business operations in the scope. One of the key problems of attempting to draft a binding international treaty is the possibility of companies using the treaty’s definitions to bypass applicability. If, for instance, the instrument only applies to multinational corporations, companies could adjust their corporate structure to define themselves as local companies. Therefore extending the scope to all business entities would ensure that mere strategically aligned changes in corporate structures would not impact the applicability of the instrument to all multinational corporations. The Draft opted not to use a legal definition of transnational corporations or other business enterprises, as the ‘the determinant factor is the activity undertaken by transnational corporations and other business enterprises, particularly if such activity has a transnational character’.477
The state duty to protect is at forefront of the Draft, with states being responsible for private acts if they have failed to act with due diligence in preventing, investigation
473 ‘Elements for the Draft Legally Binding Instrument on Transnational Corporations and Other Business Enterprises With Respect To Human Rights’ (2017) 3. [herein after Elements for Draft Legally Binding Instrument]
474 ibid 4.
475 ibid 114.
476 The UN Guiding Principles (n 373) II A. 14.
477 ‘Elements for the Draft Legally Binding Instrument (n 473) 4.
and punishing these acts.478 The state’s duty is noted as the primary responsibility in relation to business and human rights, and ensuring preventive mechanisms, access to remedies and access to justice.479 Legal liability should be established by states within their legal systems through criminal and civil processes.480 Similarly, states should ensure that companies undertake human rights impact assessments, report on addressing human rights impacts and address impacts in their supply chains.481 The Draft notes the responsibility for states to respect sovereignty and territoriality, but simultaneously notes the reaffirmation that the obligations of state parties ‘do not stop at their territorial borders’.482 Extending the concept of jurisdiction is noted in the Draft as giving a possibility for victims to reach access to justice in the forum where the parent company is incorporated or has a presence.483
Multinational corporations are in the Draft asked to comply with applicable laws and respect human rights, prevent impacts, provide redress ad promote respect for human rights.484 Much like the Guiding Principles, the Draft discusses due diligence as a manner by which companies can meet their responsibilities in their capacities, but it is situated under preventive measures.485 The Draft actually proposes requiring states to adopt laws asking companies to adopt and implement due diligence processes and hence making it a legal standard.486
In including international cooperation, the Draft wishes to strengthen existing international mechanisms, but possibly also establish new international organs in the judicial and non-judicial monitoring of the Draft. Surprisingly, the Draft even considers an International Court on Transnational Corporations and Human Rights or adding a special chamber to the existing international courts.487 This is very suprising, because international courts are not often widely accepted by states. For example, jurisdiction of the International Criminal Court has not been accepted by states like the US and Russia and it would be unlikely that these states would rush to hold their companies internationally liable in an international organ when they do not wish to do so with individuals.
478 ibid 5.
479 ibid.
480 ibid 8.
481 ibid 6.
482 ibid 4.
483 ibid 11.
484 ibid 6.
485 ibid 7.
486 ibid.
487 ibid13.