The UN Human Rights Council is working towards a convention to end transnational corporations’ impunity for human rights abuses.

As Australia is in the midst of the Royal Commission into Banking and Financial Services, a United Nations Human Rights Council body has been meeting in Geneva. The open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights, completed its Fourth Session debating a “Zero Draft” of a proposed legally-binding convention which aims to render transnational corporations liable in civil, criminal and administrative law for human rights abuses.

What is the Zero Draft?

The Zero Draft is a broad document which has high aspirations to achieve justice for victims of human rights abuses perpetrated by transnational corporations. The Zero Draft would compel states party to the convention to alter their domestic laws to ensure that victims of human rights abuses perpetrated by transnational corporations have rights and remedies, either individually or in groups. The convention would mandate mutual legal assistance, compel states to investigate all allegations and would establish an International Fund for Victims. There is a prevention element which would require states to alter their laws to compel transnational corporations to complete due diligence analysis on all transnational business dealings.

The spirit of the Zero Draft is highly commendable and, if passed, would be a significant step towards ending corporate impunity in the global community. However, in its current form, the Zero Draft is not likely to attain consensus agreement of United Nations member states, chiefly a consequence of the European Union withdrawing from discussions about the draft. The EU is displeased with the inconsistency between the document and the UN Guiding Principles on Business and Human Rights and other work already being done within the UN and other multilateral systems to address business impunity.

There are a number of flaws which must be rectified to ensure that any convention that arises is as legally sound as possible.

Which human rights?

Article 3, as it is presently drafted, is incredibly broad. In addition to all domestic rights, the convention would compel observance of: the International Covenant on Civil and Political Rights; International Covenant on Economic, Social and Cultural Rights; Convention on the Rights of the Child; Convention on the Elimination of All Forms of Discrimination Against Women; and many more.

While some of these do seem to confer rights to person at large, others are created specifically with states as the actor that ensures that people hold these particular rights. For example, it would create very onerous obligations on companies if they were compelled to ensure that rights to education, healthcare and shelter were to be enforced.

The Zero Draft should ensure that there is conceptual coherence with pre-existing human rights treaties. Greater specificity would avoid lengthy legal arguments about whether the drafters meant for a right to be enforceable and would facilitate the just, quick and cheap resolution of any claims made.

Some of the governments, experts and civil society actors that have presented to the working group have suggested an amendment so that the convention would apply only to gross human rights violations. This amendment seems sensible in limiting the scope of potential actions.

Why only transnational corporations?

The Zero Draft applies only to transnational corporations, which are only a part of the business community, albeit particularly influential and powerful. There are many other business actors which play a role in people’s daily lives, such as small-to-medium enterprises, sole traders, partnerships and state-owned enterprises.

State-owned corporations, with various gradations of state ownership, are increasingly receiving public attention for their conduct in the Global South, particularly for their actions in environmental degradation and regarding the rights of Indigenous people, for example in the destruction of the Amazon rainforest.

The draft also excludes any conduct that is not-for-profit. However, it is not difficult to conceive of instances where not-for-profit activities could be detrimental to human rights, such as political or lobby groups that engage in hate speech and racial vilification. The convention in its current form would exclude victim action against those types of organisations.

If the international community is going to implement a convention to prevent corporate actors’ impunity for human rights abuses, then all forms of corporations should be included within its purview, especially wholly and partially state-owned corporations.

Lack of interim measures

Article 8 of the Zero Draft provides for remedies for victims including restitution, compensation and environmental remediation. However, it does not make any provisions for interim measures such as injunctions once a claim has been filed. Injunctions are very powerful legal tools which force a cessation of actions that infringe upon someone’s legal rights. The failure to include any interim measures could render any court or tribunal exercising power under this convention toothless in cases where irreversible damage or harm is underway.

The presence of interim measures would also likely increase the popularity of any convention mechanism, as it would provide quick and effective relief for victims of rights violations.

Looking ahead

The aims and objectives of the working group are highly commendable and the Zero Draft is a significant step in the right direction towards ending corporate impunity which has endured for too long. However, there is much to do in ensuring that parts of the Zero Draft are tightened and clarified in the next draft, to be provided to the Secretariat by December of this year, to ensure it will operate in the most effective manner possible. Hopefully, the efforts of this working group will result in an outcome which will assist people like those whose heartbreaking stories have been shared through the Royal Commission.

Josh Pallas is Vice President of the NSW Council for Civil Liberties and has been observing the debates of the Working Group at the United Nations in Geneva. He tweets at @joshpallas. 

This article is published under a Creative Commons Licence and may be republished with attribution.