1 Introduction

In June 2014, the UNHRC adopted Resolution 26/9, in which it decided ‘to establish an open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights’ (OEIGWG).¹ This working group has a mandate ‘to elaborate an international legally-binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises’ (BHR Treaty). The first two sessions of the OEIGWG were dedicated to ‘conducting constructive deliberations on the content, scope, nature, and form of the future international instrument’.² Since 2018, the OEIGWG has annually released a draft version of a potential BHR Treaty: the Zero Draft,³ along with a Draft Optional Protocol to the legally binding instrument;⁴ the Revised Draft (2019 Draft);⁵ and the Second Revised Draft (2020 Draft).⁶

As Bilchitz argues, the proposed BHR Treaty will be unique among human rights treaties.⁷ In general, human rights treaties outline rights that all individuals or particular vulnerable groups, such as women or children, are entitled to, and impose obligations on States to respect, protect, or realize these rights. In contrast, the BHR Treaty is likely to focus on the regulation of a specific class of non-State actors, meaning businesses, to ensure that they do not harm human rights and that they potentially play their part in contributing to the realization of human rights.⁸ Furthermore, the adoption of the BHR Treaty would offer a significant opportunity not only to extend the scope of international human rights law to business actors, but also to ‘envision a system that could actually offer effective remedies for corporate human rights violations’.⁹ In particular, it could address procedural, substantive, and practical barriers that victims of business-related human rights abuse face when seeking redress, especially against MNEs. However, due to long-standing State and business opposition towards binding international human rights standards for corporate actors and the complexity of the topic, negotiating, adopting, and implementing a BHR Treaty will be challenging.

2 The contentious road to an international treaty on BHR

This section examines the reasons that led to the BHR Treaty initiative, especially the UNGPs’ inability to effectively achieve corporate accountability and access to remedy. It also describes the position of key players on the BHR Treaty initiative and the existing arguments in support of or against the adoption of a BHR Treaty.

The UNGPs’ failure to achieve access to justice

Since their adoption in 2011, the UNGPs have often been described as having achieved a long-awaited consensus on BHR issues among a majority of stakeholders.¹⁰ However, a significant number of stakeholders, most notably CSOs and academics, have been critical of the UNGPs or have opposed their adoption.¹¹ Similarly, some States from the Global South have expressed misgivings either publicly or privately.¹²

In general, actors have been dissatisfied with the development, content, and implementation of the UNGPs.¹³ First, the development of the UNGPs has been criticized for excluding the voices of those most likely to be impacted by business human rights abuse.¹⁴ Deva explains how the SRSG made the conscious decision not to engage directly with victims of business human rights abuse while at the same time holding face-to-face consultations with businesses.¹⁵ Furthermore, the SRSG did not adequately articulate the dissenting voices from NGOs and scholars in his consultation papers and reports.¹⁶ For Deva, ‘the SRSG bypassed controversial issues and ignored dissenting voices in an attempt to sustain a façade of consensus’.¹⁷

Second, there is discontent with the content and normative value of the UNGPs. For Penelope Simons, the UNGPs failed to adequately address some of the most controversial BHR issues, such as whether companies should have obligations under international human rights law. They also misrepresented international human rights law, especially with regard to the State extraterritorial obligation to protect from business human rights abuse.¹⁸ Moreover, as noted earlier in this book, a significant number of CSOs and scholars have regularly expressed their dissatisfaction with the formulation of Pillar III on access to remedy in the UNGPs. For Deva, the UNGPs do not adequately reflect the rich international human rights jurisprudence concerning the right to remedy because the UNGPs recognize Pillar III as flowing from the State duty to protect human rights rather than imposing a self-standing obligation.¹⁹ In addition, Principle 26 on State-based judicial mechanisms only recommends that States ‘should’ take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing business-related human rights abuses, therefore departing from the obligatory ‘must’ language.²⁰

Third, the implementation of the UNGPs is deemed insufficient by some CSOs and scholars. For instance, Simons criticizes State uptake of the UNGPs, describing it as ‘far from spectacular’.²¹ To date, the development and implementation of NAPs by States have been disappointing.²² Furthermore, according to Deva, even if the UNGPs have achieved ‘alignment of standards and actions in line with a commonly accepted framework’ and have ‘facilitated the socialisation of human rights norms among businesses’, at the same time ‘not much has yet changed for the rightsholders on the ground’.²³ Regarding access to remedy, various CSOs and scholars contend that Pillar III has not made meaningful progress. Legal and practical hurdles continue to thwart access to justice for victims of business abuse of human rights, especially in the transnational context.²⁴ Furthermore, victims and their litigators have suffered significant setbacks in lawsuits against MNEs in some jurisdictions, such as the US, since the adoption of the UNGPs.²⁵ At the same time, recent cases, such as Vedanta and Okpabi in England, Shell in the Netherlands, or Nevsun in Canada, raise a number of interesting prospects for potential future success.

Dissatisfaction with the UNGPs, and the recurring preference for soft law or CSR initiatives more generally, ultimately led some States, especially from the Global South, and CSOs to advocate for the adoption of binding international standards on BHR.

The positions of the main stakeholders on a BHR Treaty

The decision to establish the OEIGWG and the negotiations of the BHR Treaty have been highly contentious.

While the decision to negotiate the BHR Treaty has generally received support from States from the Global South and a large number of CSOs, it has received a cold reception from MNEs and their home countries, including the US, the UK, France, and Germany.²⁶ The vote on Resolution 26/9 was representative of this divide. The resolution was adopted by a recorded vote of 20 to 14, with 13 abstentions. While most of the 20 countries in favour came from the Global South,²⁷ the 14 countries opposed to Resolution 26/9 came mainly from the EU,²⁸ along with Japan, Montenegro, South Korea, what is now the Republic of North Macedonia, and the US.

To date, the negotiations have been crippled by a lack of participation by key stakeholders, such as the US and the EU. The US has repeatedly expressed its opposition to the BHR Treaty initiative and decided not to take part in the sessions of the OEIGWG in Geneva.²⁹ Many observers have raised concerns that the US opposition to the negotiations could have a negative impact subsequent to the adoption and during the implementation of the BHR Treaty.³⁰

The EU originally opposed the establishment of the OEIGWG. During the UNHRC session in which Resolution 26/9 was adopted, the EU and its Member States questioned whether the OEIGWG would be the most effective response for tackling BHR challenges. Furthermore, all the EU Member States in the UNHRC voted against Resolution 26/9. Since 2014, the EU has regularly criticized the treaty negotiations.³¹ During the first session of the OEIGWG, the EU participated in the first meetings, but left the negotiations during the second day after it had failed to alter the programme of work.³² This departure was strongly criticized by NGOs.³³ Moreover, only eight out of the then-28 EU Member States attended the first session.³⁴ Nonetheless, since then the EU and a growing number of EU Member States have attended the OEIGWG’s sessions, although the EU has not actively participated in the sessions on the ground that it does not have a formal negotiation mandate under EU law.³⁵ In addition, for some time, it refused to participate actively in the negotiations as long as the scope of the BHR Treaty did not include domestic companies. However, the EU remained reserved even after the OEIGWG extended the scope of the BHR Treaty to all business activities. While some NGOs have accused the EU of obstructing the BHR Treaty negotiations,³⁶ other stakeholders have called for the EU to effectively engage in the negotiations.³⁷

At the same time, some EU institutions have endorsed the BHR Treaty negotiations. Among them, the EP has repeatedly expressed its support for the negotiations of a binding BHR Treaty.³⁸ In 2018, it adopted a resolution specifically on the EU’s input on the BHR Treaty in which it highlighted ‘the paramount importance of the EU constructively contributing to the achievement of a Binding Treaty’.³⁹ In general, the EP has lamented ‘that a global approach is still lacking to the way in which transnational corporations (TNCs) abide by human rights law and ensure other remedy mechanisms, which may contribute to TNCs’ impunity for cases of human rights abuses and thus be detrimental to people’s rights and dignity’.⁴⁰ It has also regretted ‘any obstructive behaviour in relation to this process’ and has called on the EU and Member States ‘to constructively engage in the negotiations’.⁴¹ Similarly, the European Economic and Social Committee (EESC) explicitly endorsed an international treaty on BHR,⁴² and called for the EU’s full commitment to the development of such an instrument.⁴³

Among non-State actors, a significant number of human rights and environmental NGOs, trade organizations, and scholars have signalled their support for the BHR Treaty project.⁴⁴ In fact, the creation of the Treaty Alliance, an NGO coalition on the BHR Treaty, proved crucial for the establishment of the OEIGWG.⁴⁵ A group of parliamentarians and local authorities from around the world has also expressed its support for Resolution 26/9.⁴⁶ On the other hand, the business community has generally rejected the idea of a BHR Treaty that imposes binding obligations on businesses, and has criticized the negotiations and the various drafts produced so far.⁴⁷

Pros and cons of a BHR Treaty

The idea of a BHR Treaty has attracted a great deal of attention and comment from CSOs, academics, States, and businesses over the last few years. Questions on the BHR Treaty project, such as whether there is a need for an international legally binding instrument to regulate corporate conduct, and what content such an instrument should contain, have been vigorously debated and have not yet been settled. This section provides an overview of the main arguments put forward in support of, and against, a BHR Treaty.

Arguments in support of a BHR Treaty

The most prominent argument in favour of a BHR Treaty is the necessity to adopt legally binding standards governing corporate conduct towards human rights.⁴⁸ Bilchitz contends that there is a need to expressly recognize and clarify that businesses have legal obligations flowing from international human rights law. In his opinion, only an international treaty has the authoritative nature to do so.⁴⁹ A BHR Treaty would ‘provide a clear recognition and articulation of the important normative position that fundamental rights under international law impose legally-binding obligations upon businesses’. He adds that the ‘increased capacity of businesses in recent years to impact upon fundamental rights provides added impetus for this development’.⁵⁰

As mentioned earlier in this book, an international instrument seems to be an appropriate instrument for addressing the transnational nature of human rights abuse involving MNEs. Deva argues that, in order to add value to the existing regulatory landscape, the future BHR Treaty should accomplish key normative objectives, such as addressing the asymmetry between transnational operations of companies and the predominantly territorial nature of human rights law.⁵¹

In line with this view, a more recent argument links the need for a BHR Treaty with the growing adoption of mandatory HRDD standards at national and regional level. As discussed earlier, an increasing number of countries and the EU are imposing or considering imposing mandatory HRDD requirements on companies. This situation may place an unfair burden on domestic companies which are subject to mandatory HRDD requirements vis-à-vis their foreign competitors who are not subject to such requirements. Krajewski argues that the adoption of an international treaty mandating HRDD legislation could contribute to a level playing field among the States Parties to such a treaty.⁵² It would certainly encourage more States to adopt mandatory HRDD standards.

Deva also claims that a BHR Treaty is needed ‘to fill certain governance gaps left by existing regulatory initiatives, including the [UNGPs]’.⁵³ It has been argued that soft law or CSR instruments have proved ineffective in stopping businesses from committing or being involved in human rights abuse.⁵⁴ Moreover, they have been of little help to victims seeking redress because they do not create legally enforceable obligations whose infringement could lead to liability. For instance, Stephens argues that the State duty to protect and the corporate responsibility to respect human rights in the UNGPs are ‘not backed by a commitment by states or corporations to take any concrete steps to implement effective remedies: the [UNGPs] are phrased as soft law, not binding obligations, contain no enforcement mechanisms and rely heavily on voluntary procedures designed and implemented by corporations with no state supervision’. The UNGPs have ‘perpetuated the gap between the promise of remedies and the reality of corporate impunity’.⁵⁵ In this context, a BHR Treaty ‘should assist in overcoming at least some of the obstacles in holding corporations accountable for human rights violations’.⁵⁶ In particular, the current negotiations offer ‘an opportunity to envision a system that could actually offer effective remedies for corporate human rights violations’.⁵⁷

Finally, the adoption of obligations for businesses under international human rights law would represent a philosophical shift in the international legal order vis-à-vis unchecked global capitalism and corporate power. Aragão and Roland suggest that the current treaty process is an opportunity to challenge neoliberal hegemony and corporate power in international governance.⁵⁸ They argue that, so far, ‘the UN has mostly adhered to the neoliberal and global capitalist hegemonic project. Its recent initiatives on [human rights and business] served to legitimize [MNEs’] globalizing goals, instead of holding them accountable for human rights violations’. The current negotiations could represent ‘an opportunity for the UN to effectively engage with and commit to counter-hegemonic demands grounded in the primacy of human rights’. Such demands require ‘regulations and mechanisms that could constrain business privileged status of rule and authority in contemporary global politics’.⁵⁹ The active participation of global civil society in the treaty negotiations may contribute to overcoming corporate capture of the process. Ultimately, the negotiations represent an opportunity to put a people-centred approach to human rights back on track.⁶⁰

Arguments against a BHR Treaty

Critics of the BHR Treaty initiative have argued that reopening the debate on the role of businesses in human rights abuse in treaty negotiations may weaken the consensus reached with the UNGPs and undermine their implementation.⁶¹ For example, following the adoption of Resolution 26/9, concerns were raised that the resources of governments, CSOs, and businesses would be diverted from implementing the UNGPs at national level towards the treaty process.⁶² Some stakeholders have also argued that the UNGPs are still new and growing in impact, and that more time is required to implement them.⁶³

Furthermore, critics have raised questions about the form and substance of a potential BHR Treaty. With regard to the form of a future instrument, the International Chamber of Commerce stated that it is unconvincing that ‘a treaty-based approach can be truly effective in dealing with the web of complex interrelationships between business and human rights’.⁶⁴ The US has also contended that the one-size-fits-all approach represented by the proposed treaty is not the best way to address all adverse effects of business activities on human rights.⁶⁵ Similarly, various scholars have expressed doubts about the feasibility and the practical added-value of an international legally binding instrument on BHR, particularly one that is comprehensive in scope.⁶⁶

The content of the BHR Treaty is also the subject of a controversial debate among stakeholders. In particular, the scope of the future instrument raises a number of contentious questions.⁶⁷ The first question relates to its application to business actors. Should the treaty apply to all types of business enterprises (ie transnational and domestic ones) or should it be limited to transnational corporations only?⁶⁸ According to Resolution 26/9, the BHR Treaty should focus on ‘the activities of transnational corporations and other business enterprises’. However, here the term ‘business enterprises’ refers to all business enterprises that have a transnational character in their operation activities, but not to local businesses registered in terms of relevant domestic law.⁶⁹ The EU and the US have criticized this exclusive emphasis on transnational corporations. For the EU, it ‘neglects the fact than many abuses are committed by enterprises at domestic level, thus undermining a fundamental element of the UNGPs that cover all businesses, regardless of whether firms are transnational’.⁷⁰ A second scope-related question refers to which human rights should be covered: all international human rights or only selected human rights, such as gross or serious human rights violations?⁷¹ Here again, there are various opposing views.⁷²

Another important issue regarding content relates to business obligations under international human rights law. Will the future instrument impose obligations on States only or will it also impose obligations on businesses?⁷³ It has been argued that imposing obligations on businesses under international human rights law would raise complex normative issues and would be difficult to enforce. Furthermore, it is unclear whether such an approach would provide a better avenue for victims than the traditional State-centric one.⁷⁴ States are already obliged to enact a regulatory framework that establishes obligations of third parties, including businesses, in relation to fundamental rights. Where the law provides a means of adequately addressing the problems caused by business impacts on human rights, it may be more effective to focus on ensuring enforcement of that law instead.⁷⁵

Some stakeholders, including the US, the EU, and the business community, have criticized the way the negotiations have been conducted. The process has been decried for its lack of consensus building (in opposition to the UNGPs) and the exclusion of the business community from the negotiations. The US has contended that ‘[t]‌he process has become irreconcilably broken and dissenting voices are routinely silenced by those running the process, including by omitting dissenting views from the annual reports, ostensibly to project an appearance of greater consensus’.⁷⁶ Businesses have also criticized the public release of the various drafts while, at the same time, arguing that ‘no real effort has been made to ensure a robust, transparent and open process that fully draws on the expertise and experience of all stakeholders’.⁷⁷

Finally, there have been concerns about the lack of political adherence to the BHR Treaty project. So far, many key stakeholders have been absent from the negotiations (eg the US) or have been present without participating in the negotiations (eg the EU). There are fears that the lack of political consensus in the negotiations may be felt when States have to adopt and/or ratify and implement the future instrument.

3 The added-value of an international treaty on BHR for access to justice

One aim of a future BHR Treaty must be to improve victims’ access to justice. As discussed earlier, the persistent difficulties faced by victims in accessing justice, and discontent with how the UNGPs have dealt with corporate accountability and access to remedy, have largely contributed to calls for the adoption of a BHR Treaty. The future instrument must therefore include provisions to enable victims to obtain corporate accountability and redress. This section sets out provisions that should be included in a future instrument in order to guarantee access to justice in the context of litigation against MNEs in the home State. These provisions are suggested on the basis of the various normative, procedural, and practical obstacles identified in the previous chapters of this book. Although the issue of access to justice in the host State is important in the context of the more general debate on the necessary contribution of a BHR Treaty to access to justice, it remains outside the scope of this book. This section also briefly analyses whether the most recent BHR Treaty draft includes the suggested provisions. The negotiations were still ongoing at the time of writing, with no final version of the BHR Treaty in sight. It is therefore likely that the provisions analysed here will change in the future. However, an analysis of the drafts is valuable in assessing whether the OEIGWG is directly addressing the issues that have impacted access to justice in the home country in recent years.

The type of international instrument

The question of the type of instrument to be adopted has been the subject of debate. CSOs and academics have suggested a variety of hard law and soft law instruments, ranging from international treaties and framework conventions with optional protocols to declarations.⁷⁸

From an access to justice perspective, a legally binding instrument appears to be more appropriate than a soft law instrument. There are two main reasons for this argument. First, as discussed in Chapter 2, a number of legally binding international instruments already protect the right to an effective remedy where human rights are violated and/or provide for the necessary procedural safeguards to ensure the right to a fair trial. However, these instruments do not address the specific barriers that victims face when seeking redress for human rights abuse involving transnational business actors. Second, soft law instruments have failed to improve access to justice for victims of business-related human rights abuse. The UNGPs provide for the need for effective remedy through judicial and non-judicial grievance mechanisms. However, they are ‘phrased as soft-law, not binding obligations, contain no enforcement mechanisms and rely heavily on voluntary procedures designed and implemented by corporations with no State supervision’.⁷⁹ As a result, the implementation by States of Pillar III of the UNGPs has been unsatisfactory to date, and victims of business-related abuse continue to struggle to seek redress. Having said this, it is important to keep in mind that a legally binding instrument is not a panacea. International human rights treaties have been criticized for being ineffective or even counterproductive, sometimes exacerbating, rather than attenuating, human rights abuses, especially in authoritarian countries.⁸⁰ Many of them lack strong enforcement mechanisms to ensure that States respect and protect human rights.⁸¹ However, as Bilchitz argues, only legally binding instruments have the authoritative nature required to expand the scope of international law with regard to businesses, in particular to create corporate obligations under international human rights law.⁸²

A number of scholars have advocated for the adoption of a framework convention.⁸³ A framework convention or agreement is a type of legally binding treaty that establishes general obligations for its States Parties and leaves the adoption of specific targets or more detailed obligations either to subsequent protocols or to national legislation. Methven O’Brien suggests adopting a BHR Treaty modelled as a framework convention and centred initially on the UNGPs.⁸⁴ In a nutshell, the framework convention would define an overall purpose or common objectives that States must achieve. To attain this purpose or those objectives, States would use the UNGPs as guidance and NAPs as implementation tools. A Conference of the Parties could then adopt protocols in order to advance the objectives of the framework convention.⁸⁵

The instrument suggested by Methven O’Brien undoubtedly presents a number of strengths. Framework conventions establish living treaty regimes. They contribute to a progressive development of international law in a manner that is flexible, sensitive to contemporary needs or circumstances, and based on continuous legislative activities.⁸⁶ Framework conventions also tend to secure State consensus more easily, which is useful in the context of controversial issues such as BHR. Moreover, a BHR framework convention centred on the UNGPs could capitalize on ‘the widespread acceptance of the UN Framework and the UNGPs among governments, labour, business and other actors as well as substantial efforts since 2011 to implement them’.⁸⁷ An important characteristic of this approach is that ‘if hardening the UNGPs would constitute a baseline, this approach would also offer scope to generate new soft and hard law standards on topics of global concern as they emerge, such as systematic human rights challenges posed by big tech, AI, and the platform economy’.⁸⁸ This approach could, in Methven O’Brien’s words, ‘bridg[e]‌ the hard law-soft law divide and contribut[e] meaningfully to advancing respect for human rights in the global market sphere’.⁸⁹

At the same time, a BHR Treaty modelled as a framework convention centred on the UNGPs presents a number of pitfalls. First, past and current examples of framework conventions, such as the United Nations Framework Convention on Climate Change (UNFCCC),⁹⁰ show they can be difficult to implement in the long term. Despite near-universal membership, the UNFCCC has failed to achieve its objective of stabilization of greenhouse gas concentration in the atmosphere since it came into force in 1994. One reason for this failure is the UNFCCC’s excessive reliance on subsequent protocols that States are increasingly reluctant to adopt or that are devoid of meaningful commitments. Furthermore, the flexibility offered by the nature of framework conventions in general has led to the creation of a complex and, at times, opaque institutional structure whose effectiveness is dubious.

Second, there is a risk that an excessive emphasis on the UNGPs, even initially, could limit the possibility of imposing corporate human rights obligations. Such a risk could materialize in two different ways. First of all, as discussed earlier, the UNGPs provide that business enterprises should respect human rights. A number of actors have been critical of the corporate responsibility to respect human rights under the UNGPs because it does not formulate an obligation on companies to respect human rights and fails to consider whether companies could have other human rights obligations, such as the protection and the fulfilment of human rights.⁹¹ A BHR framework convention centred on the UNGPs is therefore more likely to require States to encourage corporate respect of human rights instead of requiring States to impose appropriate corporate human rights obligations.⁹² In addition, there is a risk that any future attempts to adopt or implement innovative corporate human rights standards that go beyond those established under the UNGPs may fail due to reluctance on the part of States to accept these or to delays in adopting the necessary additional protocols. Although this risk is also possible in the context of a more ‘classic’ conventional instrument, the potential negative impact of the absence of new standards would nevertheless be minimized if the BHR Treaty established strong corporate human rights obligations from the outset. In addition, it could be argued that, in the context of a framework convention centred on the UNGPs, voluntary responsibility could become a binding duty of care over time. However, it would be left to the national courts to decide this. This approach would be uncertain and likely to take years without providing legal certainty to businesses as to what is expected of them and victims as to whether they can have access to remedies.

Finally, the State implementation of the UNGPs through NAPs has been rather disappointing to date.⁹³ As of May 2021, only 24 countries had produced a NAP,⁹⁴ and 16 of them were EU Member States that were explicitly asked by the EC to develop a NAP by 2012.⁹⁵ Furthermore, the content of NAPs has been problematic. In particular, States have paid insufficient attention to the implementation of Pillar III in their NAPs.⁹⁶ Access to remedy has received little to no attention in a large number of NAPs,⁹⁷ although the most recent NAPs have begun to address this flaw. Observers have criticized States for their passive attitude towards developing NAPs and strengthening their national systems to improve corporate human rights accountability. There appears to be a clear contrast between this attitude and the consensus reached at the time the UNGPs were adopted.⁹⁸

In this book, it is suggested that the BHR Treaty could be modelled as a convention that establishes the basic principles governing the relationship between business and human rights. At a minimum, the BHR Treaty should require States to: (1) impose human rights obligations on business actors; (2) hold business actors liable when they fail to comply with their human rights obligations; and (3) ensure access to justice and effective remedy for victims of business-related human rights abuse. The BHR Treaty should distinguish between main obligations, which should be formulated in a clear and concise manner directly within the body of the convention, and more detailed obligations, which seek to address specific issues. For example, ensuring access to justice and effective remedy is likely to require specific obligations in relation to aspects such as jurisdiction, cause of action, rules on evidence, costs of proceedings, and so on. These obligations may be too detailed or contentious to be included in the main body of the treaty.⁹⁹ In this event, it may be appropriate to have these detailed obligations in a separate document. They could be set out in an annex or could be developed over time in optional protocols adopted through procedures and mechanisms established by the convention (eg meeting of the Parties). Furthermore, the BHR Treaty need not be centred on the UNGPs to ensure consistency with them. Its provisions could incorporate the UNGPs as minimum standards. However, the BHR Treaty should probably go further than the UNGPs on certain aspects, such as corporate human rights obligations and effective access to remedy, in order to fill current normative gaps.

Scope

The scope of the future instrument will have a significant impact on the ability of victims to seek redress when they have suffered human rights abuses committed by or involving business actors. To date, the scope of the BHR Treaty has been one of the most contentious issues in the negotiations.¹⁰⁰ In particular, there are two aspects that have proved to be problematic. First, should the BHR Treaty apply to all types of business enterprises or should it be limited to MNEs?¹⁰¹ Second, should the BHR Treaty cover all international human rights or only selected ones, such as gross violations of human rights.

With regard to the first question, the OEIGWG was originally mandated to elaborate a BHR Treaty to regulate the activities of transnational corporations and other business enterprises. This mandate excluded domestic companies with no transnational character from the scope of the BHR Treaty. This approach attracted considerable criticism from various stakeholders, including governments, NGOs, and academics, who have argued that the BHR Treaty should apply to all business enterprises.¹⁰² Deva suggests that in the situation where States cannot reach a consensus on whether the BHR Treaty should apply to all types of businesses, a ‘hybrid option’ should be considered. For example, the BHR Treaty could apply only to MNEs, and a subsequent or optional protocol could extend the BHR Treaty provisions to all other types of business enterprises.¹⁰³ However, the risk with this approach is that standards that apply to all companies will never be adopted.

At the time of writing, the scope of the 2020 Draft covered ‘all business enterprises, including but not limited to transnational corporations and other business enterprises that undertake business activities of a transnational character’.¹⁰⁴ Importantly, States Parties had the possibility ‘to differentiate how business enterprises discharge these obligations commensurate with their size, sector, operational context and the severity of impacts on human rights’.¹⁰⁵ This approach had the advantage of avoiding either the unique regulatory challenges posed by MNEs or the limited capacity of small and medium-sized enterprises.¹⁰⁶

With regard to the second question, from an access to justice perspective, the future instrument should cover a broad – rather than narrow – range of human rights. In accordance with the UNGPs, it should at least refer to internationally recognized human rights expressed, at a minimum, in the International Bill of Human Rights and the principles concerning fundamental rights set out in the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work. However, the BHR Treaty should go further and require respect for the human rights of individuals and communities belonging to vulnerable groups, such as women, children, indigenous peoples, migrant workers and their families, or persons with disabilities.¹⁰⁷ Furthermore, standards of international humanitarian law should be respected in situations of armed conflict.¹⁰⁸ The future instrument should also not be limited to gross human rights violations because, in Deva’s words, ‘such a narrow focus might not be able to capture how people are suffering in diverse ways, especially in the Global South, from human rights abuses linked to corporate activities aimed at profit-maximization’.¹⁰⁹ Focusing on gross human rights violations would de facto exclude economic, social, and cultural rights from the protection afforded by the BHR Treaty.

At the time of writing, the 2020 Draft provided that the BHR Treaty must ‘cover all internationally recognised human rights and fundamental freedoms emanating from the Universal Declaration of Human Rights, any core international human rights treaty and fundamental ILO convention to which a state is a party, and customary international law’.¹¹⁰ While this list provided an extensive coverage of human rights, it did not include the ILO Declaration on Fundamental Principles and Rights at Work.¹¹¹ Furthermore, Deva suggests that a reference to the Rio Declaration on Environment and Development would be desirable.¹¹²

Content

A future BHR Treaty should include a general objective to ensure access to justice and effective remedies for victims of business-related human rights abuses. A positive aspect of the treaty negotiations at the time of writing was that the 2020 Draft already provided for such an objective in its statement of purpose.¹¹³ In terms of content, a future instrument should contain provisions imposing general obligations on States to ensure access to justice and effective remedy for victims of business-related human rights abuses. To date, the various BHR Treaty drafts have included detailed provisions imposing different obligations on States with regard to key aspects of access to justice, such as business legal liability, jurisdiction, applicable law, victims’ rights, procedural and practical barriers, and remedy.

Business liability for human rights abuse

From an access to justice perspective, a future instrument should recognize that all business enterprises have human rights obligations. As Bilchitz points out, there is a significant link between the recognition of binding obligations and the right to access remedies. ‘Without an understanding of the legal obligations corporations bear with respect to fundamental rights, it will not be possible for victims of rights violations to claim access to a legal remedy against such a private corporation.’¹¹⁴ Imposing legally binding human rights obligations on businesses is ‘the crucial precondition for providing legal remedies to individuals against such entities’.¹¹⁵ The BHR Treaty could recognize that businesses have obligations either under international human rights law or under national law.¹¹⁶ Importantly, it should clarify the nature and extent of business human rights obligations (ie respect, protect, or fulfil human rights). However, if this approach is too controversial, the instrument could provide States Parties with discretion in defining the scope of such obligations. In any case, business human rights obligations should not mirror the obligations of States under international human rights law and should be tailored to the nature and capabilities of business actors.

A future instrument could use corporate responsibility to respect human rights under the UNGPs as a basis for the development of business human rights obligations. It could recognize that, at the very least, all business enterprises have an obligation to respect human rights. For example, it could mirror the language used in GP 11 by stating that business enterprises shall respect human rights (as opposed to should in the UNGPs) and that ‘they shall avoid infringing on the human rights of others and shall address adverse human rights impacts with which they are involved’. If this proposal is too contentious, the future instrument could alternatively provide that States shall take the necessary or appropriate measures to require all business enterprises to respect human rights. This approach would guarantee consistency with the UNGPs and ensure that both instruments are mutually reinforcing. It should be noted that the business obligation to respect human rights might not be sufficient to protect human rights in some circumstances. Therefore, it may be appropriate for the future instrument to allow States Parties to consider the imposition of other human rights obligations on business enterprises in such situations.¹¹⁷

So far, the various BHR Treaty drafts have not explicitly provided that all business enterprises have human rights obligations. In its Article 2 on the statement of purpose, the 2020 Draft provides that one of the purposes of the BHR Treaty is ‘to clarify and facilitate effective implementation of the obligation of States to respect, protect and promote human rights in the context of business activities, as well as the responsibilities of business enterprises in this regard’, and ‘to prevent the occurrence of human rights abuses in the context of business activities’. Nonetheless, in its Article 6(1) on prevention, the 2020 Draft provides that ‘States shall take all necessary legal and policy measures to ensure that business enterprises, including but not limited to transnational corporations and other business enterprises that undertake business activities of a transnational character, within their territory or jurisdiction, or otherwise under their control, respect all internationally recognised human rights and prevent and mitigate human rights abuses throughout their operations’. Therefore, the 2020 Draft indirectly creates an obligation for business enterprises to respect human rights.

Given the recent momentum gained by the concept of HRDD introduced by the UNGPs, the BHR Treaty should require States to impose mandatory HRDD on business enterprises.¹¹⁸ Every business enterprise should be obliged to carry out HRDD for its own human rights impacts as well as for those within its value chain, including subsidiaries, suppliers, and other third parties.¹¹⁹ The UNGPs provide valuable inspiration in this regard. On the basis of HRDD under GP 17, the BHR Treaty could require States Parties to impose on business enterprises the obligation to: (1) identify and assess any actual or potential adverse human rights impacts with which they may be involved either through their own activities or those of their business relationships; (2) prevent and mitigate adverse human rights impacts; (3) verify whether adverse human rights impacts are being addressed; and (4) account for how they address their human rights impacts. Strong compliance mechanisms should be in place (eg liability mechanisms, a set of sanctions for non-compliance, and/or a supervisory body with monitoring and sanctioning powers), and business enterprises should be required to provide effective remedy where adverse human rights impacts occur. Furthermore, contrary to the UNGPs, a future instrument should require that failure to conduct reasonable HRDD be punishable by robust penalties.

In the 2020 Draft, Article 6(2) provides that ‘State Parties shall require business enterprises, to undertake human rights due diligence proportionate to their size, risk of severe human rights impacts and the nature and context of their operations’. HRDD should be conducted in a manner similar to the four-step HRDD process outlined in the UNGPs.¹²⁰ The formulation of an HRDD obligation in the 2020 Draft is now more in line with the UNGPs (compared to previous drafts of the BHR Treaty).¹²¹ The 2020 Draft also provides that HRDD measures should include various processes or display certain characteristics, such as the integration of a gender perspective, meaningful consultation with rightsholders, and consultation with indigenous peoples in accordance with free, prior, and informed consent standards. Importantly, according to Article 6(6), failure to comply with HRDD duties shall result in ‘commensurate sanctions, including corrective action where applicable, without prejudice to the provisions on criminal, civil and administrative liability under Article 8’.

Finally, victims must be able to hold businesses liable for the harm they have suffered as a result of a human rights violation involving those businesses. The BHR Treaty should therefore require States Parties to take the necessary or appropriate measures to establish liability for legal persons that infringe human rights falling under its scope in the context of business activities. Importantly, in order to have meaningful home state remedies, the future instrument should recognize substantive legal norms that hold parent companies liable for their subsidiaries’ unlawful actions and abuses in their supply chains. This means that the parent company should be held liable not only when it has been directly involved in human rights abuses, but also when it has conspired with, assisted, or otherwise furthered conduct that violates human rights.¹²²

In the event that the BHR Treaty provides for, or does not exclude, the possibility of criminal liability, its drafters should take into account certain aspects that may give rise to difficulty. First, it is unlikely that States can and should criminalize all human rights violations, especially those committed outside their territory. As Darcy argues, ‘Not all violations of human rights are recognised in positive law as criminal acts, and corresponding offences for violations of socio-economic rights, for example, tend not be found in national criminal codes or in the statutes of the various international criminal courts.’¹²³ The future instrument should therefore define a set of crimes, most likely crimes under international law, that are subject to domestic criminal prosecution.¹²⁴ Second, as a result of the variance in domestic approaches to criminal liability, drafters should probably defer to States the decision as to whether they want to impose criminal liability on legal persons. The BHR Treaty should require States to impose liability on legal persons and let them choose whether such liability should be criminal, civil, or administrative.¹²⁵ Criminal liability could be imposed on natural persons within the company only, such as corporate directors. Nevertheless, where States impose criminal liability on legal persons, such liability should not prevent the criminal liability of the natural persons who have committed the offence. Third, the BHR Treaty should clarify modes of liability and complicity, as those play an important role on assertion of jurisdiction over crimes committed by or involving MNEs.¹²⁶

In the 2020 Draft, Article 8 contains 11 provisions governing legal liability. Article 8(1) generally provides that:

Therefore, Article 8(1) provides direct liability of the business for its own activities and indirect liability of the business for the activities of its business relationships. Article 8(7) also posits liability of a business for its failure to prevent another person with whom it has a business relationship from causing or contributing to human rights abuses. This liability should apply when the former controls or supervises the person or the activity that caused or contributed to the human rights abuse, or should have foreseen risks of human rights abuses in the conduct of its business activities, including those of transnational character, or in their business relationships, but failed to put in place adequate measures to prevent the abuse. The introduction of ‘business relationship’ and a broader notion of control is a useful advance.¹²⁷ An important aspect is that the transnational nature of business activities cannot prevent corporate liability. Other provisions of Article 8 also govern various important aspects, such as reparation and the financial security obligations to cover potential claims of compensation.

Article 8(9), (10), and (11) deal with criminal liability. ‘States Parties shall ensure that their domestic law provides for the criminal or functionally equivalent liability of legal persons for human rights abuses that amount to criminal offences under international human rights law binding on the State Party, customary international law, or their domestic law.’¹²⁸ In this context, States Parties must provide for the application of penalties that ‘are commensurate with the gravity of the offence’. Furthermore, the liability of legal persons shall be without prejudice to the criminal liability of natural persons who have committed the offences under the applicable domestic law.¹²⁹ Finally, ‘State Parties shall provide measures under domestic law to establish the criminal or functionally equivalent legal liability for legal or natural persons conducting business activities, including those of a transnational character, for acts or omissions that constitute attempt, participation or complicity in a criminal offence in accordance with this Article and criminal offences as defined by their domestic law.’¹³⁰

The 2020 Draft aims to cover a number of long-standing issues related to business liability for human rights abuse. However, while the drafters’ intentions are good, the manner in which they address certain issues is problematic. Currently, there are a number of structural and substantive issues with how liability is addressed in the 2020 Draft. First, Articles 6 and 8 appear to be catch-all provisions, which are excessively long and complex. They provide a disproportionate level of detail which is inappropriate in the context of an international instrument that should impose general obligations on States. Such an approach could create more resistance to future adherence to the BHR Treaty. Second, while various observers have suggested that the 2020 Draft has improved in comparison with previous versions of the BHR Treaty, a number of substantive issues remain. For instance, the use of HRDD as a defence to potential liability under Article 8(7) is unclear.¹³¹ Furthermore, Article 8(9) on liability for international crimes removes the list of widely accepted criminal offences under international law found in the 2019 Draft, which would have provided States, businesses, and victims with welcome guidance and legal certainty.¹³² Finally, the 2020 Draft neglects to clarify important concepts, such as complicity in criminal law.

Jurisdiction

As discussed earlier in this book, establishing jurisdiction in the home country remains a significant obstacle for victims of business-related abuse seeking redress. It is therefore crucial that the BHR Treaty clearly addresses the question of jurisdiction, particularly procedural issues in transnational litigation against MNEs, in both civil and criminal proceedings.¹³³

Jurisdiction in civil cases

It is important to note from the outset the difficulty of clarifying jurisdiction in transnational civil cases in the context of an international human rights instrument. The question of which court is competent to hear a case involving natural and/or legal persons from different countries normally falls within the scope of private international law, which operates under different rules and conditions from public international law. Therefore, in drawing up provisions on jurisdiction in transnational civil cases, the OEIGWG should ensure that such provisions remain consistent with private international law rules applicable to jurisdiction.¹³⁴

In general, the BHR Treaty should clarify that victims of human rights abuse involving MNEs may choose to bring a civil claim before the courts of either the host or home State. Therefore, it should impose obligations on both host and home countries to allow victims to bring civil claims before their courts. Any requirements for establishing jurisdiction, such as nationality or domicile of parties, should be carefully weighed in order to avoid unduly restricting the ability of victims to access the courts of the home State.

The BHR Treaty should also address other jurisdiction-related issues. One issue relates to claims made against multiple defendants domiciled in different countries (eg parent companies and their subsidiaries). The BHR Treaty should provide for rules that allow the joining of subsidiaries in claims against their parent company (ie joining of co-defendants).¹³⁵ Allowing the joining of co-defendants would provide for faster dispute resolution and, importantly, limit the risk of conflicting judgments if claims against the parent company and the subsidiary are litigated in separate tribunals.¹³⁶ Furthermore, in order to avoid situations where victims are denied justice on the grounds of jurisdictional issues, NGOs, lawyers, and academics have also called for the BHR Treaty to address the doctrine of forum non conveniens,¹³⁷ and allow for the application of the doctrine of forum necessitatis.¹³⁸

In the 2020 Draft, Article 9 governs adjudicative jurisdiction. Article 9(1) provides that jurisdiction with respect to claims made by victims shall vest in the courts of the State where: (1) the human rights abuse occurred; or (2) an act or omission contributing to the human rights abuse occurred; or (3) the legal or natural persons alleged to have committed an act or omission causing or contributing to such human rights abuse in the context of business activities, including those of a transnational character, are domiciled. Importantly, Article 9(2) establishes a broad definition of domicile,¹³⁹ and the nationality or place of domicile of the victim is irrelevant when establishing jurisdiction.

The scope of Article 9(1) seems at first sight to be sufficiently broad to allow victims to bring claims against parent companies in the home State. Indeed, the courts of the State where the parent company is domiciled may hear claims against the company. However, the wording of Article 9(1) has raised concerns by NGOs that victims may be obliged to prove that the acts or omissions that resulted in the human right abuse are those of the parent company in order to be heard by the court of the home State.¹⁴⁰ As Sherpa has pointed out, attributing those acts and omissions to the parent company is precisely the difficulty in many cases. ‘Conversely, if the victim is not able to link the violations to acts or omissions of the parent company, then it will only be able to rely on acts or omissions of the local subsidiary, supplier or subcontractor, and the local court will have jurisdiction.’¹⁴¹ Furthermore, with regard to domicile, some commentators have suggested that the BHR Treaty should adopt a broader definition of domicile, which could include the place where the company has, or ‘recently had’, its main corporate governance office, its registered office, or, interestingly, its main stock market listing.¹⁴²

The 2020 Draft takes a significant step forward with the introduction of provisions addressing forum non conveniens and forum necessitatis, and the joining of co-defendants.¹⁴³ Article 9(3) provides that where the victim chooses to bring a claim in a court in accordance with Article 9(1), jurisdiction shall be obligatory and, therefore, that court shall not decline it on the basis of forum non conveniens. Article 7(5) on access to remedy also provides that States Parties shall ensure that their courts do not use the doctrine of forum non conveniens to dismiss legitimate judicial proceedings brought by victims. Furthermore, courts shall have jurisdiction over claims against persons not domiciled in the territory of the forum State where the claim is closely connected with a claim against a person domiciled in the territory of the forum State (Article 9(4)), or where no other effective forum guaranteeing a fair trial is available and there is a sufficiently close connection to the State Party concerned (Article 9(5)).¹⁴⁴ In practice, Article 9(4) and (5) would allow victims to sue the foreign subsidiary of a parent company in the home State on the grounds of the joining of co-defendants and forum necessitatis. However, commentators have warned that limiting the scope of application of Article 9(3) to claims brought in accordance with Article 9(1) ‘preserves room for courtroom battles’ over the application of forum non conveniens where jurisdiction arises under Article 9(4) or (5).¹⁴⁵ This means that, in practice, courts could still invoke forum non conveniens in cases where a foreign subsidiary of a parent company is sued in the home State on the grounds of the joining of co-defendants and forum necessitatis. As a result, the true scope of the rule excluding forum non conveniens should be clarified.

Jurisdiction in criminal cases

As discussed in Chapter 5, criminal prosecution of corporations is possible in many States. Furthermore, in some countries victims of crimes can seek redress for the harm they have suffered in criminal courts (eg France). In practice, however, prosecutors rarely decide to prosecute corporations, and many hurdles prevent victims from seeking redress through criminal proceedings. This situation is exacerbated when MNEs are involved in crimes that relate to human rights violations occurring in a foreign country. One reason is that prosecuting companies, especially MNEs, is expensive and complex. Moreover, corporate criminal liability standards may not be adapted to hold MNEs liable for their involvement in human rights violations occurring in a foreign country.¹⁴⁶ As a result, prosecutors are generally reluctant to investigate corporate crimes involving human rights abuse committed in a transnational context.

In order to ensure that MNEs can be held criminally liable when they are involved in human rights abuse, the BHR Treaty should ensure that prosecutorial authorities are independent and capable of investigating allegations of transnational crimes involving business offenders, and of prosecuting them. The BHR Treaty could encourage States to engage in legal reforms to permit criminal prosecution of businesses and commit sufficient resources to fund prosecutions.¹⁴⁷ Furthermore, the future instrument should require States to establish the criminal liability of business actors (either natural or legal persons) for their involvement in transnational or extraterritorial human rights-related crimes. In this context, a State Party could establish its jurisdiction over human rights-related crimes when the offence is committed in whole or in part within its territory, or when the offence involves business actors under its jurisdiction. As previously indicated in Chapter 5, the application of criminal law and the exercise of criminal jurisdiction are intertwined. A court’s exercise of jurisdiction usually follows from the application of its State’s criminal law. It is therefore necessary that a State provides adequate criminal offences applicable to companies before it can establish jurisdiction to prosecute companies. The question of corporate liability for criminal offences is addressed earlier in this book.

The 2020 Draft does not directly address the question of jurisdiction in the context of transnational or extraterritorial crimes. However, in the context of protection of victims, its Article 5(3) provides that ‘State Parties shall investigate all human rights abuses covered under this [BHR Treaty] effectively, promptly, thoroughly and impartially, and where appropriate, take action against those natural or legal persons found responsible, in accordance with domestic and international law’. Nonetheless, this provision does not seem to apply to the investigation and prosecution of transnational crimes.

Importantly, all the successive drafts have contained a specific article on mutual legal assistance (MLA).¹⁴⁸ MLA generally refers to a form of cooperation in civil or criminal matters between the authorities of different States for various purposes, such as the exchange of information or the collection of evidence. Provisions on MLA could solve the difficulties faced by prosecutors in collecting evidence located in the territory of a foreign State. In the 2020 Draft, Article 12 is long and covers MLA in criminal, civil, or administrative proceedings. In general, it provides that:

Several provisions of Article 12 are relevant in the context of criminal proceedings. Pursuant to Article 12(3), MLA should include evidence-gathering,¹⁵⁰ facilitating the voluntary appearance of persons in the requesting State Party, facilitating the freezing and recovery of assets, assisting and protecting victims, their families, representatives, and witnesses, and assisting in regard to the application of domestic law. MLA could also include any other type of assistance not contrary to the domestic law of the requested State Party. Furthermore, Article 12(4)(a) provides that with respect to the criminal offences covered under this BHR Treaty, MLA ‘shall be provided to the fullest extent possible, in a manner consistent with the law of the requested Party and its commitments under treaties on mutual assistance in criminal matters to which it is Party’.

The inclusion of MLA requirements is welcome in order to remedy the practical difficulties arising from the exercise of extraterritorial jurisdiction.¹⁵¹ Article 12 has the potential to significantly enhance the ability of prosecutorial authorities to access critical evidence in order to demonstrate corporate liability. Currently, however, it lacks in clarity and precision, and presents certain shortcomings that could ultimately affect the ability of victims to have access to justice. Article 12(10) is particularly problematic. It provides that MLA or international legal cooperation may be refused by a State Party if the human rights abuse is not covered by the BHR Treaty or if it is contrary to the legal system of the requested State Party. Ultimately, the vagueness of this provision could allow States to justify refusals to cooperate with other State authorities.

Applicable law

As noted in this book, the issue of the law applicable to a transnational civil case is a significant barrier to victims seeking redress. It is therefore recommended that this issue be addressed by the future BHR Treaty.¹⁵² Bright has called for the introduction of a choice-of-law provision allowing victims to make a choice between various options for the law governing disputes on business-related human rights or environmental damage.¹⁵³ At the very least, the BHR Treaty could provide that, in the context of claims directed at parent companies, victims should be able to request the application of the law where the parent company is domiciled or has its main place of business. This approach would not contradict the principle of legal certainty. Furthermore, where the home country is a State Party to the BHR Treaty, such a provision would be essential to ensure that the standards of the BHR Treaty on business liability for human rights apply to transnational civil cases.¹⁵⁴

In the 2020 Draft, Article 11 governs the law applicable to civil cases. In particular, Article 11(2) provides that the victim of a business-related human rights abuse, or its representatives, may request that all matters of substance regarding human rights law relevant to claims before the competent court be governed by the law of another State. However, this possibility is limited to two situations: (1) the law of the place where the acts or omissions that result in the human rights violation have occurred; or (2) the law of the place where the natural or legal person alleged to have committed the acts or omissions that result in the human rights violation is domiciled. Article 11(2) introduces a welcome choice-of-law provision allowing victims to choose the law of the home State. However, it is unclear what the expression ‘all matters of substance regarding human rights law’ refers to.¹⁵⁵ In addition, the 2020 Draft excludes the law of the place where the victim is domiciled, which was a potential option under the 2019 Draft.

Participation of victims in proceedings

The BHR Treaty should ensure that States adopt procedural rules to facilitate the ability of victims to bring a claim against business actors and to participate actively in the proceedings. In particular, it should address the issue of standing. The BHR Treaty should require States to grant standing, at the very least, to persons who have suffered direct harm as a result of business action or omission. Ideally, standing should also be granted to individuals who have suffered indirect harm as a result of human rights violations (eg family members). Secondarily, the BHR Treaty could require, or encourage, States to grant standing to other actors, such as NGOs defending victims interests.

The BHR Treaty should also require States to allow group claims and remove any barriers that prevent groups from seeking redress. This is important, for example, when a community has suffered harm from the same human rights abuse (eg employees of the same company who suffered labour rights violations or rural communities who suffered from environmental pollution). Furthermore, the BHR Treaty should require States to ensure that plaintiffs enjoy a number of guarantees during the proceedings, such as the right to receive information on their case without undue delay, the right to a review of a decision not to prosecute, the right to be protected from reprisal, or the right to be protected from revictimization.¹⁵⁶ Finally, the BHR Treaty should pay attention to the participation of vulnerable groups, such as women, minorities, or persons with disabilities, in proceedings.

The successive drafts of the BHR Treaty have addressed victims of business-related human rights abuse. In the 2020 Draft, Article 1(1) defines victims as:

The definition of victims in the 2020 Draft is in line with that of the Basic Principles on the Right to a Remedy. Nonetheless, the 2020 Draft also contains welcome additions. For example, it recognizes that victims can be persons and groups of persons. In addition, it refers to acts or omissions in the context of business activities that constitute human rights abuse, as opposed to gross violations of international human rights law, or serious violations of international humanitarian law under the Basic Principles on the Right to a Remedy.¹⁵⁷

Each draft of the BHR Treaty has contained an article dedicated to the rights of victims.¹⁵⁸ This could undoubtedly represent an important contribution of the BHR Treaty towards rebalancing the asymmetry that exists between business actors and victims of business-related human rights abuse. The 2020 Draft lists a number of rights that are relevant for ensuring the participation of victims in proceedings. It provides that victims shall be ‘guaranteed the right to fair, adequate, effective, prompt and non-discriminatory access to justice and effective remedy in accordance with this BHR Treaty and international law’.¹⁵⁹ Furthermore, victims must ‘be guaranteed the right to submit claims, including by a representative or through class action in appropriate cases, to courts and non-judicial grievance mechanisms of the State Parties’.¹⁶⁰ They must also ‘be protected from any unlawful interference against their privacy, and from intimidation, and retaliation, before, during and after any proceedings have been instituted, as well as from revictimization in the course of proceedings for access to effective remedy, including through appropriate protective and support services that are gender responsive’.¹⁶¹ The 2020 Draft also requires that victims have ‘access to information and legal aid relevant to pursue effective remedy’.¹⁶²

Other articles of the 2020 Draft contain welcome provisions to ensure victims’ participation in the proceedings. Article 5(1) on the protection of victims provides that the State must protect victims, their representatives, families, and witnesses from any unlawful interference with their human rights and fundamental freedoms, including during proceedings and before and after they have instituted any proceedings to obtain an effective remedy. In addition, Article 7(3) on access to remedy provides that States must offer adequate and effective legal assistance to victims throughout the legal process. In particular, they should make information available to victims on their rights and the status of their claims, guarantee the rights of victims to be heard in all stages of proceedings, and provide assistance to initiate proceedings in the courts of another State Party in appropriate cases of human rights abuses resulting from business activities of a transnational character. Unfortunately, the 2020 Draft does not refer to the participation of vulnerable persons in proceedings. It makes only passing reference to vulnerable rightsholders in the preamble.

Regarding the role of NGOs in legal proceedings, the 2020 Draft adds very little value. While the preamble emphasizes that civil society actors, including human rights defenders, have an important and legitimate role in seeking effective remedy for business-related human rights abuses, the 2020 Draft does not contain legally binding provisions on the role of NGOs in legal proceedings. Article 5(2) requires States to take adequate and effective measures to guarantee a safe and enabling environment for persons, groups, and organizations that promote and defend human rights and the environment, so that they are able to exercise their human rights free from any threat, intimidation, violence, or insecurity. However, this provision is vague and does not impose any obligations on States or encourage them to guarantee that NGOs can participate in legal proceedings.

Procedural and practical barriers

The BHR Treaty should address the most important procedural and practical barriers that victims face in proceedings. Here, two types of obstacles seem to be the most relevant. The first obstacle relates to gaining access to evidence held by businesses, the existence of procedures for disclosure and/or discovery, and burden of proof.¹⁶³ The practical question of the costs of the proceedings should also be addressed in the BHR Treaty.

The various drafts of the BHR Treaty have dealt with burden of proof.¹⁶⁴ In the 2020 Draft, Article 7(6) provides that ‘State Parties may, consistent with the rule of law requirements, enact or amend laws to reverse the burden of proof in appropriate cases to fulfil the victims’ right to access to remedy’. While the inclusion of a provision on burden of proof should be welcomed, the wording of Article 7(6) is problematic. First, it gives States the discretion to take the necessary steps to give effect to that provision. Second, this provision is too vague and open-ended.¹⁶⁵ For instance, what is a rule of law requirement? Similarly, what situations fall within the category of ‘appropriate cases’? It is also unclear if the reversal of the burden of proof should apply in both civil and criminal cases. However, as Cassel points out, the reversal of the burden of proof should not be taken lightly in criminal matters where it could negatively impact the presumption of innocence and the right to a fair trial.¹⁶⁶ Furthermore, the expression ‘to fulfil the victim’s access to remedy’ is ambiguous. Third, the 2020 Draft remains silent regarding the conditions for reversing the burden of proof. For instance, should the victims play an active role in demonstrating the need to reverse the burden of proof? Would the reversal of proof be left to the discretion of courts? Article 7(6)’s lack of clarity could jeopardize its application at national level and contribute to legal uncertainty for parties that want to use it.

In addition, the various BHR Treaty drafts have left out procedures that would allow victims to access information held by companies, such as discovery and/or disclosure. Overall, the various drafts have not adequately addressed issues related to the production of evidence in trials against businesses. From an access to justice perspective, this absence is one of the most serious flaws in the drafts produced so far, especially when one considers that the lack of fair rules on evidence exacerbates the severe asymmetry between victims and businesses.

The successive drafts of the BHR Treaty have addressed the issue of costs.¹⁶⁷ In the 2020 Draft, Article 7(3) requires States to provide adequate and effective legal assistance to victims throughout the legal process. They must avoid unnecessary costs or delays for bringing a claim, during the cases and the execution of rulings, and ensure that rules concerning allocation of legal costs do not place an unfair and unreasonable burden on victims. Furthermore, States Parties shall ensure that court fees and other related costs do not become a barrier to commencing proceedings and that they allow waiving of certain costs in suitable cases.

Drafters have also included two important provisions that could contribute to reducing litigation costs. First, States Parties may require natural or legal persons conducting business activities in their territory or jurisdiction, including those of a transnational character, to establish and maintain financial security, such as insurance bonds or other financial guarantees to cover potential claims of compensation.¹⁶⁸ Litigators for victims in transnational litigation against MNEs have generally welcomed the inclusion of such a provision.¹⁶⁹ Second, all the BHR Treaty drafts have included the establishment of an international fund to provide legal and financial aid to victims.¹⁷⁰ However, the Conference of Parties will define and establish the relevant provisions for the functioning of the Fund. This provision has been criticized as ‘far too vague to give any confidence that this would translate into a legal fund sufficient for complex and protracted litigation against well-resourced multinationals’.¹⁷¹ Furthermore, it is unclear how such a fund could realistically finance all cases brought against businesses for human rights abuse and remedy inequality of arms between parties, especially when States already allocate little, if any, resources towards legal aid.¹⁷²

Remedies

In line with the UNGPs, the BHR Treaty should require States to provide effective access to an adequate remedy through judicial and non-judicial mechanisms. It should also encourage effective access to remedy through ‘operational-level grievance mechanisms’ established by businesses. However, victims should be in a position to choose which mechanism to use to seek redress. The BHR Treaty may require both State and non-State non-judicial grievance mechanisms to comply with the effectiveness criteria set out in GP 31. In particular, they should be legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of continuous learning, and, for business operational-level mechanisms, based on engagement and dialogue.

The BHR Treaty should also specify that persons injured by business-related human rights abuse must have access to a full range of remedies, as appropriate to the specific harm they have suffered.¹⁷³ Remedies should include: interim or provisional measures to halt abusive activities or prevent further violations; measures to restore the situation that would have existed prior to the wrongful act (eg restitution, compensation, rehabilitation, satisfaction and guarantees of non-repetition); and sanctions against those responsible for human rights abuses.¹⁷⁴ Stephens points out that monetary compensation may often be insufficient, especially when communities have been forced off their land or have lost access to fields, water, or other essential resources. In such cases, a full remedy includes restoring access to the resources upon which these communities depend.¹⁷⁵

References to remedy can be found throughout the 2020 Draft. First, Article 7 is dedicated to access to remedy. States must provide their courts and State-based non-judicial mechanisms with the necessary jurisdiction to enable victims to have access to adequate, timely, and effective remedy.¹⁷⁶ Furthermore, States shall provide effective mechanisms for the enforcement of remedies for human rights abuses, including through prompt execution of national or foreign judgments or awards.¹⁷⁷ Second, Article 8 on legal liability contains a provision on reparation. It provides that States must adopt necessary measures to ensure that their domestic law provides for adequate, prompt, effective, and gender-responsive reparations to the victims of human rights abuses in the context of business activities, including those of a transnational character, in line with applicable international standards for reparations to the victims of human rights violations.¹⁷⁸ Third, Article 4(2)(c) on the rights of victims provides that victims shall be guaranteed effective remedy in accordance with the BHR Treaty and international law, such as ‘restitution, compensation, rehabilitation, satisfaction, guarantees of non-repetition, injunction, environmental remediation, and ecological restoration’.

4 Conclusions

This chapter has discussed the current UN initiative to elaborate an international BHR Treaty to regulate the activities of businesses in international human rights law, and its potential contribution to improving access to justice for victims of business-related human rights abuse.

Prevalent substantive, procedural, and practical barriers faced by victims in accessing justice and discontent with the UNGPs, together with the recurrent regulatory preference for soft law or CSR initiatives more generally, have led some States, CSOs, and academics to advocate for the adoption of binding international standards on BHR. There is a strong expectation that the future BHR Treaty must aim to improve victims’ access to justice. To do so, the future instrument should therefore include provisions to enable victims to obtain corporate accountability and redress. In particular, it should recognize that all business enterprises have human rights obligations and that failure to comply with those obligations may lead to liability of business actors. The BHR Treaty should also ensure that States take measures to facilitate the ability of victims to bring a claim against business actors when human rights abuses have occurred, and to participate actively in the proceedings. In particular, it should address procedural issues arising from the transnational nature of home State litigation against MNEs, such as jurisdiction in both civil and criminal proceedings or the law applicable to civil proceedings. In addition, the BHR Treaty should address access to evidence and costs of proceedings. Finally, it should require States to ensure that those injured by business-related human rights abuses have access to a full range of remedies appropriate to the specific harm they have suffered through various State and non-State judicial mechanisms.

To date, the various drafts of the BHR Treaty have contained a strong focus on victims and access to remedy. However, they have included provisions on the other issues mentioned above to varying degrees. The 2020 Draft does not explicitly provide that business enterprises have human rights obligations, but it indirectly imposes an obligation on companies to respect human rights by requiring States to take measures to ensure that business enterprises respect all internationally recognized human rights and prevent and mitigate human rights abuses throughout their operations. Furthermore, the 2020 Draft provides for the direct liability of businesses for human rights abuse arising from their own activities and for indirect liability for human rights abuse arising from the activities of their business relationships. These two aspects represent important milestones towards legally binding corporate accountability.

That said, the 2020 Draft contains a number of weaknesses that may limit the added-value of a BHR Treaty in order to ensure access to justice. In general, it addresses most of the procedural and practical issues that victims face when seeking redress in transnational litigation against MNEs. However, it fails to address in concrete terms legal rules or principles that contribute to the maintenance of asymmetry between victims and MNEs, such as the application of forum non conveniens and access to evidence. In addition, the structure and wording of the 2020 Draft, as well as the legal coherence between its various provisions, are generally still in need of improvement. It is crucial that these weaknesses be addressed in the next draft. Hopefully, this chapter has helped to provide guidance on how the future draft could be improved to ensure that a BHR Treaty fulfils the long-awaited wish of victims, CSOs, and academics for effective achievement of justice.

Even if the future BHR Treaty contains provisions that could, in theory, contribute to more effective access to justice for victims, it is crucial that these provisions do not turn into dead letters. Such a result is possible if the BHR Treaty fails to garner universal acceptance by a large majority of States, and if the drafters do not envisage proper enforcement mechanisms.¹⁷⁹ To date, the creation of the OEIGWG and the negotiations of the BHR Treaty have created controversy. A significant number of actors are opposed to or are hindering negotiations. Future negotiators and NGOs must therefore temper expectations as a result of the risk of a lack of adherence to the BHR Treaty project and weak enforcement of the treaty, as they could undermine effective access to justice on the ground otherwise achieved through a robust and comprehensive international legal framework.