[Carlos Lopez] The responsibility of multinationals in terms of human rights
The business enterprise and human rights treaty is said to be the first of its kind under the auspices of the United Nations, and has been in the works for a decade. In 2011, the United Nations Human Rights Council approved a set of guiding principles that state that business enterprises “have a responsibility to respect human rights”. Business associations supported the principles and pledged to uphold them, in part because it was not legally required to do so. The principles were not binding and their observance was impossible to monitor or enforce. States were expected to prevent and punish human rights violations committed by corporations as part of their existing obligations under international law.
In 2017, France became the first country to pass a law requiring large multinational companies operating in France to exercise human rights due diligence in all of their global operations. Earlier this year, Germany passed a similar law that will come into force in 2023, and the European Commission is preparing a directive on the issue that will cover the entire bloc. The draft treaties also contain provisions on business due diligence, now under public scrutiny and enforcement. If approved, this responsibility would become a global obligation, raising the bar for global affairs.
The Guiding Principles also stated that states should investigate and sanction human rights violations by businesses and provide remedies to victims. The use of an effective judicial remedy is a fundamental principle of international human rights law and should be included in any treaty covering corporate liability. But legal remedies have often failed to materialize in the context of global business operations with complex value chains. The rights of workers and indigenous groups, in particular, are often violated.
Recently courts in the UK and the Netherlands delivered groundbreaking judgments in cases involving large multinationals, including Vedanta Resources and Royal Dutch Shell. These decisions made it clear that workers and community members in all areas where subsidiaries operate have the right to access the courts in the parent company’s home country.
These decisions sent shockwaves through the business world and alarmed corporate lawyers, and for good reason: corporate accountability advocates and academics see this new case law as a key part of an emerging legal framework for hold parent companies accountable for abuses committed in their aggregate value. Chains. But these judgments are unlikely to have the broader effect needed unless the principles they articulate are further developed and incorporated into national and international law. The European Parliament proposes to do this with a bill on responsible companies.
The proposed UN treaty is explicit on the legal liability of parent or controlling companies. Under the provisions of the draft, companies controlling a chain or network can be held liable for harm caused by business associates whose activities they control or supervise, or for not preventing those associates from harming workers, indigenous peoples, to women and children. The treaty would also strengthen the international framework governing social and environmental sustainability in global business operations.
The largest trade union confederations and other civil society organizations support the proposed treaty, but major developed countries such as the United States and EU member states largely ignore it. The problem is that policymakers in these countries prefer the old model of limited regulation and maximum freedom for their multinational corporations – and for themselves. The symbolic participation of EU members in treaty discussions so far is surprising, given these countries’ declared commitments to multilateralism and human rights.
This treaty is an opportunity for the EU to show political coherence and leadership in this area, following landmark national legislation in France and Germany and groundbreaking case law in the UK and the Netherlands. The same is true of the United States, which is trying to reassert its leadership in a rules-based international order.
The governments of these countries regularly proclaim that respect for human rights is a fundamental value. And yet they seem to be content with old formulas and empty models that lack legally binding obligations. As the next round of treaty negotiations approaches, their credibility hinges on their willingness to hold companies accountable for human rights under international law.
Carlos Lopez is Senior Legal Advisor to the International Commission of Jurists. – Ed.
By Korea Herald ([email protected])