First impressions on the Draft Optional Protocol to the Human Rights and Business Treaty

Gabriela Kletzel, Andrés López Cabello, and Daniel Cerqueira*

Originally published in ESCR-Net.

Lea la versión en español aquí.

At first glance, the zero drafts of the Legally Binding Instrument (LBI) and Optional Protocol (OP) raise serious doubts as to whether they add value to the effort of making business enterprises accountable for human rights abuses. The draft LBI establishes the “effective access to justice and remedy to victims of human rights violations in the context of business activities” as one of its main purposes. However, the OP addresses enforcement mostly through national implementation mechanisms and an international committee of experts, both of which have weak oversight and monitoring powers.

Although this piece is focused on the OP, we cannot ignore how the LBI affects the possibility of improving corporate accountability, particularly in relation to effective access to justice and remedy. We must voice once again our disagreement with the limited scope of the draft treaty. The current text excludes corporations that act solely within the confines of the jurisdiction of the State where they operate. Our experience in Argentina and in other Latin American countries indicates that these kinds of corporations can also be involved in human rights violations. Therefore, it is of utmost importance to expand the scope of the LBI to go beyond business activities of a transnational character.

Even for transnational corporations that commit abuses, the LBI fails to establish effective measures to prevent impunity with exemptions for the enforcement of judgments involving redress for these kinds of abuses. Some of the exemptions are based on extraordinarily vague criteria, such as situations “contrary to the public policy” of the State in which the judgment enforcement is sought.

Furthermore, the LBI does not adequately address States’ extraterritorial obligations. Although it mentions the obligation to provide remedies and to comply with due diligence duties for both home and host states of offending companies, the LBI falls short in establishing concrete obligations. For instance, it does not address the issue of forum non conveniens (power to dismiss a case where another forum may more conveniently hear the case) nor the corporate veil doctrine, among legal tools frequently used to avoid liability and other forms of responsibility of “parent companies” and shareholders of transnational enterprises involved in human rights violations.

Unfortunately, the recent release of the OP only added to our several concerns about the substance and procedural aspects of the current draft treaty. The enforcement framework of the OP relies on the National Implementation Mechanism (NIM) to promote compliance with, monitor and implement the LBI, as well as on a committee of experts (Committee), established in the LBI under Article 14, which would have the competence to receive and consider individual complaints.

Most of the OP text regulates the establishment and functions of the National Implementation Mechanism (NIM). However, this mechanism does not provide an effective venue for monitoring and redressing corporate abuses. According to the draft, the NIM will act as a mediator among contesting parties to bring together opposing positions in a so-called amicable solution process. It is highly problematic for NIMs to focus their mandate on this kind of mediation process. Experience shows that States often use these instances as delay tactics. Such processes only work properly when extreme asymmetries between involved parties are balanced with adequate institutional arrangements. At a minimum, it is fundamental to create a public office staffed with specialized lawyers to represent victims’ interests in this context.

The NIMs’ oversight capacities established in the OP are contingent upon the achievement of an amicable settlement. There are no provisions addressing cases in which solutions are not amicably met. And in cases in which the amicable settlements are breached (OP Art. 6), the purpose of NIMs sending information to the Committee is left unclear.

It is crucial for NIMs to have standing before national courts in civil, criminal and administrative proceedings. They should also be able to lodge class actions and collective claims in defense of diffuse interests. These functions could represent a real contribution for victims’ access to justice, especially considering that NIMs are supposed to be specialized agencies, well trained in business liability.

While OP’s Art. 2 asserts that States Parties “shall consider the Principles Relating to the Status of National Institutions for the Protection and Promotion of Human Rights (Paris Principles) when designating or establishing the [NIM],” the draft focuses almost exclusively on conciliation and mediation functions. It makes no mention of other functions contained in the Paris Principles, especially the possibility of issuing binding decisions, hearing complaints or petitions of human rights violations, and transmitting them to the competent administrative and judicial national authorities.

There is also deficient elaboration of the NIMs’ powers to demand information from companies and state agencies. NIMs should have a clear and effective mandate to request or even, requisition relevant information for analyzing concrete cases of human rights abuses, and not just regular data and reports that companies are already required to produce to comply with legal requirements at the national level. It is essential to develop clear criteria and guidelines on what and how information should be produced and delivered to the NIMs.

Likewise, it is unclear what kind of remedies the Committee and the NIMs may order. Although the draft LBI refers to States’ obligation to establish diverse remedies, the OP´s text is silent when it comes to their powers on this matter.

Furthermore, it is important for the LBI and the OP to include strict and transparent requirements for the appointment of members and composition of the NIMs and the Committee. It is especially important to establish clear rules to prevent conflicts of interest and to ensure impartiality and independence of said organs and their members.

It is also necessary to strengthen the prevention of retaliation against those who interact with NIMs or the Committee, with provisions addressing, for example, anti-union actions by companies and governments. Article 21 of the OPCAT might be helpful in this regard. The Committee should be able to grant interim or provisional measures and accept third-party interventions and amici curiae, as other international human rights bodies frequently do. Moreover, it is important that the Committee has stronger oversight and monitoring powers, including, and in line with other human rights human rights instruments, such as the Optional Protocol to the International Covenant on ESCR, the ability to follow up with states on Committee recommendations in context of individual complaints.

Finally, we expect that civil society organizations and victims of corporate abuses will be key in shaping the deliberation process around the LBI and its OP at the UN Human Rights Council. Otherwise, it is unclear how these new instruments could be a meaningful contribution to the field of business and human rights.

*Gabriela Kletzel is Director of the International Team for Centro de Estudios Legales y Sociales. Andrés López Cabello is a lawyer working in the Litigation & Legal Defense area for Centro de Estudios Legales y Sociales (CELS). Daniel Cerqueira is a Senior Program Officer for the Due Process of Law Foundation (DPLF). All three authors are members of the ESCR-Net.

About Justicia en las Américas

Este es un espacio de la Fundación para el Debido Proceso (DPLF, por sus siglas en inglés) en el que también colaboran las personas y organizaciones comprometidas con la vigencia de los derechos humanos en el continente americano. Aquí encontrará información y análisis sobre los principales debates y sucesos relacionados con la promoción del Estado de Derecho, los derechos humanos, la independencia judicial y el fortalecimiento de la democracia en América Latina. Este blog refleja las opiniones personales de los autores en sus capacidades individuales. Las publicaciones no representan necesariamente a las posiciones institucionales de DPLF o los integrantes de su junta directiva. / This blog is managed by the Due Process of Law Foundation (DPLF) and contains content written by people and organizations that are committed to the protection of human rights in Latin America. This space provides information and analysis on current debates and events regarding the rule of law, human rights, judicial independence, and the strengthening of democracy in the region. The blog reflects the personal views of the individual authors, in their individual capacities. Blog posts do not necessarily represent the institutional positions of DPLF or its board.

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