A Business and Human Rights Treaty? Smart strategies are needed to close accountability gaps

This is the first contribution in a series.

Despite the progress of recent years in advancing understanding and action on the relationship between business and human rights, gaps in legal accountability continues to be a subject of much heated debate.

In the coming weeks, the matter will be on the agenda of the UN Human Rights Council. Our own recent “state of play” report shows that while states may employ many non-legal incentive structures to influence corporate behaviour, legal measures are also emerging within some jurisdictions.

I remember participating in the advisory group meetings that the late (and much missed) Nick Howen convened nearly a decade ago during his leadership of the International Commission of Jurists (ICJ). At that time, the ICJ assembled a panel of legal experts from all over the world to examine the issue of companies and human rights violations. The ICJ’s project explored when companies and their officials could be held legally responsible under criminal or civil law for complicity in gross human rights abuses and sought to provide guidance for companies to avoid such situations. The result of that work was an extensive study that contributed significantly to wider understanding of the complex issues involved.

Nearly ten years later, with the endorsement of the UN Guiding Principles on Business and Human Rights reaching the three-year mark, the reality remains that although our collective understanding of the issues have improved significantly, legal accountability gaps remain and must still be bridged. In particular, in many jurisdictions there are often multiple shortcomings in domestic law to address corporate liability for human rights abuses, resulting in a failure to provide remedies including for harms that occur outside of the state in which the company is registered. The UN Office of the High Commissioner for Human Rights recently commissioned a study on the subject of domestic law remedies, which serves as a valuable starting point for wider dialogue on legal accountability gaps.

One of the great legacies of the UN Guiding Principles has been to place an equal emphasis on prevention and remedy. Prevention is as much a part of accountability as is remedy. Companies need to work to achieve agreed thresholds of due diligence and sometimes governments will need to clarify and mandate due diligence requirements in law (as is the case for health and safety issues for example). And if it falls below that mark, then a company might be deemed to be acting in a negligent or reckless manner. No one today would argue that fatalities in the workplace are ‘inevitable’. So accountability can’t mean waiting for abuses to happen. Prevention and remedy are not interchangeable. The clear priority should be on preventing abuses as a first step. Just as it is no longer acceptable to plan for a certain small proportion of fatalities as a cost of doing business, accepting in advance that human rights abuses will occur as a cost of doing business is no longer an acceptable approach. But remedies are still required regardless of how much due diligence is undertaken.

The former UN Special Representative on Business and Human Rights, John Ruggie, recognized in his work that there are international crimes for which corporate leaders or business entities could already be held directly liable under domestic legislation. The Norwegian think tank FAFO and the New York-based International Peace Institute concluded after a multi-country study that laws in many jurisdictions on all continents have incorporated international crimes within their reach and are sufficient to launch prosecutions against corporate entities. The recent global focus on issues such as forced labour and human trafficking is likely to see further moves to hold private actors criminally accountable, wherever in the world the harm might have occurred through the actions of home or host states.

First and foremost, there is much states can do at the national level. This can be a question of law but also of political will, and a range of actions can move practice in the right direction. For example, law enforcement agencies should lift the lid on long-standing practices ranging from forced labour in agriculture, to the role of third party labour providers in many supply chains concerning sexual exploitation and violence within many workplaces across all continents. It means, with the Rana Plaza factory collapse in Bangladesh or the Turkish mining disaster in mind, that national governments should take bolder actions to protect human rights in any workplace.

Would a new international convention strengthen national resolve and make member states of the UN more accountable to each other in their application of domestic law? Perhaps it would, but the case now needs to be made about how a new international legal instrument would have real impact and how it would best be crafted to achieve this. The case for a new instrument will obviously also need to take into account the fact that the ILO already has well-established standards in place on a range of workplace issues.

We should also recognise that much of the political heat behind discussions on a possible new UN instrument in this area goes straight to the issue of extra-territoriality. Nation-states guard their sovereignty and resent other countries extending their own laws to actions taken in their country. But there is a difference between a state extending its laws to cover activities conducted overseas by a company registered in its jurisdiction for a civil offence compared to prosecuting a company for conduct abroad when the abuses committed are grave. Put crudely (and as argued by the amicus briefs of a number of states in the Kiobel case in the US Supreme Court, where a Nigerian litigant sued Shell, the Dutch oil company), what justification does a US court have to judge the rights or wrongs of what a Dutch company did in Nigeria? For this issue to move forward, might some new international agreement become necessary?

There are a number of red herrings in the net that need to be removed on the issue of extra-territoriality. Clearly, a new UN treaty – if it were to be agreed – wouldn’t take the place of national sovereignty. Any instrument negotiated within the UN will still rely on states first and foremost. However, a new treaty or some other UN text could potentially help clarify when and how ‘home’, ‘host’ or other connected states might act in cases involving accountability for business involvement in rights abuses.

Equally, it is hard to see how the scope of any new legal instrument could cover all human rights (however desirable that might be). There may be a greater chance of political action around the idea of restricting discussion to corporate involvement in gross violations of rights that have already been criminalised in most jurisdictions. Nor could a new global standard apply in some regions more than others. The existing (non-legal) OECD Guidelines for Multinational Enterprises apply additionally in some non-OECD member states, but any UN instrument would need to include all geographies, for example:  Latin American companies investing in the Middle East, or for that matter Asian companies investing in Africa.

Extraterritoriality can’t be the primary focus for inter-governmental discussions about new international law. But neither can the issue be sidelined. States can, when political will is strong enough, achieve a lot if interests and principles align. Historic examples include the sinking of the Titanic and other shipping disasters that led to the 1914 Safety of Lives at Sea (SOLAS) Convention. It imposes a general obligation on private actors to save lives regardless of jurisdiction or the nationality of those in distress. Compare this with more recent examples of the reality on-shore, such as the evacuation of foreign workers during the Libyan war. Some people (e.g. expatriate oil workers in the desert) were repatriated by the companies for which they worked and therefore significantly better off than migrant workers undertaking domestic work in cities or working on construction projects in the country. Migrant workers were often left stranded, dependent on international aid agencies or their own governments.

Governments would be well served if over the coming weeks and months they carefully and impartially considered how to address the multiple accountability gaps that remain. The work already undertaken by OHCHR in this area is a good place to start. It is critical that any further discussions should build on the UN Guiding Principles and not be seen as a substitute for, nor an alternative to, their effective implementation. The Guiding Principles are a foundational document for a smart mix of voluntary and mandatory approaches.

So let’s start being smarter about the strategies needed to effectively close accountability gaps at every level. We look forward to hearing from our invited commentators and from all of you over the coming weeks on what smart approaches might look like in practice.