1
ELEMENTS TOWARDS A BINDING TREATY ON BUSINESS
AND HUMAN RIGHTS:
Establishing Direct Obligations of Corporations under International
Law
By Gizem Erbaş
University of Amsterdam
LL.M. in International and European Law: Public International Law
Thesis Supervisor: Prof. Dr. Y.M. Donders
2 TABLE OF CONTENTS
1. INTRODUCTION ... 3
2. LEGAL PERSONALITY OF CORPORATIONS UNDER INTERNATIONAL LAW .. 7
2.1. Recognition of International Legal Personality as a Possibility ... 9
2.2. Recognition of International Legal Personality for Non-State Actors as an Analogy ... 11
2.3. Interim Conclusion ... 13
3. EVOLVEMENT OF INTERNATIONAL BUSINESS AND HUMAN RIGHTS INSTRUMENTS: CURRENT STRUCTURING ... 14
3.1. Structuring of Obligations and Scope of Application under Relevant Binding Sources of International Law ... 15
3.2. Structuring of Responsibilities and Scope of Application under International Soft Law Documents on Business and Human Rights ... 19
3.3. Interim Conclusion ... 22
4. ELEMENTS TOWARDS A BINDING TREATY: ANALYSIS IN LIGHT OF THE SCOPE AND DIRECT CORPORATE OBLIGATIONS ... 23
4.1. Background and General Information ... 23
4.2. Structuring of Obligations: Direct Obligations for Corporations ... 24
4.3.A. Comparison with Current IHRL Instruments ... 26
4.3.B. Review in line with ILP of Corporations ... 27
4.3. Scope of Application ... 28
4.2.A. Review in line with current IHRL Instruments ... 30
4.2.B. Review in line with ILP of Corporations ... 31
4.4. Interim Conclusion ... 32
5. CONCLUSION ... 32
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Abstract
This paper examines the ‘Elements for the Draft Legally Binding Instrument’ on Business and Human Rights announced by the Intergovernmental Working Group (established by Human Rights Council) in September 2017, which sets the basis for a draft Treaty. The paper aims to respond as to what extent corporations can and do have direct international obligations under the envisaged Treaty, according to the Elements. In this context, the paper identifies that the Elements do foresee binding direct obligations for corporations, in addition to primary state obligations (structuring of obligations), yet it limits the envisaged Treaty’s scope to the activities of corporations that have a transnational character (scope of application). By analysing the international legal personality, the paper concludes that corporations do and can possess a limited and relative personality from which their international obligations will derive. With its further analysis on the current international human rights instruments, this paper also concludes that the Elements is a step-forward by envisaging to turn direct non-binding responsibilities of corporations into international non-binding obligations; whereas it is a step-back since it restricts today’s broader scope of protection under international human rights law instruments solely to the violations arising from the corporate activities of a transnational character.
1.
INTRODUCTIONIn 1996, Pfizer conducted an experimental drug trial in Nigeria on 200 children, that caused the deaths of 11 among them and serious injuries to many others. After over 8 years of long trial and appeal process, US Appeal court found that Pfizer is in violation of customary international law, which led to a settlement between parties. 1
In 2007, a case was brought by a Chinese national before US courts, accusing Yahoo for providing his user identification information to Chinese authorities, therefore wilfully aiding and abetting him being tortured and his human rights being abused. While court was delaying its decision, the parties agreed to a private settlement.2
In 2010, a lawsuit was filed before German courts against Lidl, with the claim that in Lidl’s supply chain; Bangladeshi employees worked excessive overtime, were not entitled to a week-holiday and were subjected to systematic harassment. Lidl agreed to withdraw the advertisements that its goods were being produced under fair and decent working conditions. A consent decree was filed with the court to memorialize this agreement, yet, with no remedies to Bangladeshi workers.3
1 Business & Human Rights Resource Centre, (undated), ‘Nigeria: Pfizer compensates victims of experimental
drug’.
2 Business & Human Rights Resource Centre, (undated), ‘Yahoo! lawsuit (re China)’. 3
4
The sample cases above, among many others4, are the reflections of a pattern within the framework of business and human rights (BHR). This pattern, which is the problem that this thesis aims to contribute to, may be summarized in three points: First of all, corporations are the actors in the international sphere which may cause serious cross-border human rights violations. Secondly, states -territory in which the violation has occurred- may be unable or unwilling to protect such victim, and fail to create effective or binding “obligations” for such corporations in their domestic laws. This issue forces the victims to claim their rights before other jurisdictions, where those “obligations” can be recognized and remedied. Lastly, those violations and protection gaps occurred globally for decades, which led the adoption of certain international soft law instruments addressed to corporations and expedited the work for enacting a binding international treaty that recognizes international obligations for corporations.
The UN Human Rights Council, at the initiative of Ecuador and South Africa and with the support of civil society organisations, is currently working on a binding international treaty on the BHR, thereby, evolving the current non-binding instruments into binding hard law. With this purpose, it established Open-Ended Intergovernmental Working Group (OEIGWG) in its resolution 26/9 on “Elaboration of an international legally binding
instrument on transnational corporations [TNCs] and other business enterprises [OBEs] with respect to human rights” (Resolution 26/9)5. In September 2017, OEIGWG announced the Elements for the Draft Legally Binding Instrument on TNCs and OBEs with Respect to Human Rights6 (to be referred to as “Document containing Elements”), as the basis and framework for the draft binding treaty (to be referred to as “envisaged Treaty”). The Document containing Elements have raised debate on two critical topics: (i) the “scope of
application” (which corporations the draft Treaty would address) and (ii) the “structuring of obligations” (whether corporations have direct binding international obligations).7 Many critiques, mainly from the international business community, have pointed out the inadequacy
4 For further examples, see Zerk J., ‘Corporate liability for gross human rights abuses: A report prepared for the
Office of the UN High Commissioner for Human Rights’, 2012, pp 17-23.
5 Human Rights Council, 26/9 Elaboration of an International Legally Binding Instrument on Transnational
Corporations and Other Business Enterprises with Respect to Human Rights, 14 July 2014.
6 OEIGWG, ‘Elements for the Draft Legally Binding Instrument on Transnational Corporations and Other
Business Enterprises with Respect to Human Rights’, 29 September 2017.
7 See “Written submissions received in response to the call for comments and proposals on the draft elements
5
of the current international law principles regarding the establishment of direct obligations for the non-state actors: corporations.8
Therefore, this thesis will aim to respond to the following question: To what extent can and do corporations have direct obligations under the Treaty, as envisaged by the
Document containing Elements. This question will be answered in light of the review (i) on corporations’ international legal personality (ii) on current structuring of obligations/responsibilities and scope of application under IHRL. In this respect, the thesis will further aim to respond to sub-question of whether the Document containing Elements is a move forward or a step-back in terms of human rights protection, as compared to current mechanisms.
In order to answer the main question, this thesis will first discuss as to what extent corporations can and do have legal personality under current international law, from which their obligations will derive. While outlining the principle, it will emphasize on the recognition of non-state actors’ personality in light of the other international law disciplines both as a possibility and as an analogy. (Chapter 2)
As the Document containing Elements acknowledges, and is based on, the current international human rights law (IHRL) instruments, the following chapter will outline structuring of obligations/responsibilities under these instruments. The Chapter will elaborate on the current soft law BHR documents establishing (non-binding) direct responsibilities for corporations. It will also review the binding IHRL treaties creating indirect horizontal effect on corporations in light of the General Comments of treaty monitoring bodies. This chapter will also point out the scope of application (which corporations are covered) under those instruments. (Chapter 3)
Last Chapter will elaborate on how the Document containing Elements envisages the (i) scope of application, and (ii) the structuring of obligations. This Chapter will analyse the Document, and its critiques, through the lenses of the current BHR mechanisms (discussed
under Chapter 2) and through the extent of corporations’ international legal personality (discussed under Chapter 3). This chapter will further conclude as to what extent the
envisaged Treaty based on the Elements can and do establish the direct binding obligations of
8 See BIAC, FTA, International Chamber of Commerce and International Organisation of Employers, 20
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corporations, and whether the Elements is a step forward or a step back in comparison with the current instruments. (Chapter 4)
This thesis is based on a desk-research on the existing literature on the subject, the relevant international law instruments (including UN instruments, OECD Guidelines and Document containing Elements), the reviews and comments of the different actors involved, the relevant international tribunal and court decisions which enabled us to formulate a synthesis regarding the current status of the subject, while highlighting the Document containing Elements, and reaching a conclusion on how the BHR is being shaped under IHRL.
As the terms ‘obligations’ and ‘responsibility’ are used in distinct ways under international law in general and under the UN Guiding Principles9 (UNGP), there is a necessity to clarify the usage of some terminology for this thesis. In order to identify the meanings for obligation and responsibility under international law, one may first refer to the ILC’s Draft Articles on Responsibility of States for Internationally Wrongful Acts10 (ILC
Articles). The ILC Articles establishes their relationship by indicating that “the breach of
[international obligations] gives rise to responsibility.”11 Even though the ILC Articles indicates the responsibility of states, but not of corporations, this commentary can be used as a basis to review the relation between obligation and responsibility for corporations by analogy. As distinct from the terminology of the ILC Articles, the UNGP does not create any new international law obligations, although it refers to corporate responsibility.12 While explaining the rationale of UNGP, the Office of the UN High Commissioner for Human Rights (OHCHR) indicates that “the term “responsibility” [as used for corporations], rather than “duty” [as used for states], indicates that respecting rights is not an obligation that current [IHRL] generally imposes directly on companies.”13 Thus, corporations’ responsibility as referred to in the UNGP is distinct from the term ‘responsibility’ under
9 UN & OHCHR, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations
‘Protect, Respect and Remedy’ Framework’, HR/PUB/11/04, 2011, endorsed by Human Rights Council in its resolution 17/4 of 16 June 2011.
10 Adopted in 2001. Shaw noted that certain rules of ILC Articles reflected the customary international law. He
further emphasized on the particular weight given to these Articles as follows: “General Assembly resolution 56/83 of 12 December 2001 annexed the text of the articles and commended them to governments, an unusual procedure which must be seen as giving particular weight to the status of the articles.” Shaw M.N., 2014, Chapter 14 (State Responsibility).
11 International Law Commission, Draft Articles on Responsibility of States for Internationally Wrongful Acts
with Commentaries, 2001, General Commentary, p.31.
12 UNGP, General Principles “Nothing in these Guiding Principles should be read as creating new international
law obligations (…)”.
13 United Nations & OHCHR, ‘Frequently Asked Questions About The Guiding Principles On Business And
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international law which arises by the breach of an international obligation. Therefore, this thesis will refer to ‘obligations’ as the binding obligations created under international law, whereas the ‘responsibility’ will be used in a sense solely limited to non-binding terminology under soft law instruments.
For the purposes of this thesis, the term ‘structuring of obligations’ will be used to explain how the obligations are structured within the instrument (e.g. whether corporations
are directly addressed and holds direct international obligations, and/or whether states hold main duties in a way to create indirect horizontal effect on corporations). The term
‘structuring of responsibilities’ will be used similarly while addressing non-binding instruments.
This thesis will elaborate on the establishment of binding obligations for corporations; consequently, remedy mechanisms for the enforcement and, substantive content of those binding obligations will be out of the scope of this thesis. This thesis will limit its scope to international law, whereas any national laws or decisions of the national courts will be out of the scope of the review herein. For the purposes of this thesis, unless otherwise stated, the term ‘corporation(s)’ will be used in a widest scope, covering both TNCs and OBEs; and will be assumed to cover the terms such as the business entities, enterprises and companies used in other international instruments.
2.
LEGAL PERSONALITY OF CORPORATIONS UNDER INTERNATIONALLAW
In today’s global structure, corporations have a strong impact on international arena: Of the 100 largest economies in the world, 51 are corporations, while only 49 are countries.14 Corporations, as non-state actors, are the influencers of a wide range of international legal areas from economics and trade, to human rights and environment. As will be elaborated under Chapter 3, the acts of corporations required regulation on an international level due to their effects on human rights. These regulations were either through the obligations of states while creating an indirect horizontal effect on corporations, or by soft law instruments through creating direct non-binding responsibilities for corporations. Yet, to evolve those “soft” direct responsibilities of companies into binding international obligations, one question
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significantly raised the debate: Whether or not corporations possess international legal personality (ILP) under international law.15
Legal personality is traditionally considered as the capability to be the bearer of legal rights and obligations.16 ILP gains importance to determine as to which actors are subject to the force of international law: It represents the framework of “international legal realm; the difference between inclusion and exclusion.”17 According to the International Court of Justice (ICJ), having an international personality would mean that the holder [of ILP] is a subject of international law, capable of possessing international rights and duties and has a capacity to maintain its rights by bringing international claims.18 Therefore, rights, duties and capacity to bring claims under international law may be derived from the ILP.
Since there is no law determining ILP of non-state actors,19 the question is as to what extent corporations (as a non-state actor) may possess ILP, in which their international rights and obligations may be derived.
The traditional approach was that international law governs the transactions between sovereigns, which are the states.20 This approach caused the non-state actors, covering a wide range of actors including international organisations, corporations, terrorist groups, non-government organisations, minority peoples and individual persons21 being carved out of the scope of international law. However, non-state actors have a crucial impact on the international arena in today's globally interdependent structure. The emergence of new players in international arena, even more powerful than states in certain aspects, triggered the discussion about the role of international law in relation to those entities, and vice versa.22 In line with the recent order, the understanding on the subjects of international law has expanded. Scholars now catalogue, in addition to states as ‘original subject’, certain actors as holders of ‘derived’ or ‘relative’ international personality, while this assumption of personality does not automatically grant those subjects a particular legal capacity.23 It is now
15 Wouters J. and Chane A., 2015, pp 228-229.
16 Brölmann C. and Nijman J., p 1; See also Nijman E., 2004, p 3, stating that ILP is a concept that is “used to
identify a certain actor as a separate and independent entity” in international law.
17 Green F., 2008, p 50.
18 International Court of Justice, Reparation for injuries suffered in the service of the Nations, Advisory Opinion,
1949, p 179.
19
Worster W.T., 2016, p 210.
20 Wouters J. and Chane A., 2015, p 228. 21 Green F., 2008, p 49.
22 Nowak M & Januszewski K.M., 2015, p 154. 23
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clear that, by covering the new players of international legal sphere, the understanding for ILP is constantly evolving from a state-centric approach towards a more comprehensive approach.
2.1.Recognition of International Legal Personality as a Possibility
In order to “derive” personality, majority of scholars maintain the idea that states -as primary subjects of international law- may grant ILP under international law to non-state actors.24 Doctrine considers this granting as a generally recognized prerequisite to achieve ILP.25 As noted by Wouters and Chane, “non-state actors derive their subjectivity from states and are dependent on their recognition.”26 In the meanwhile subjects of international law are not restricted or listed explicitly, thus, there are also no systematic obstacles to integrate non-state entities in the international legal system as recognized actors.
The ILP of corporations, as non-state actors, is highly debated among scholars. Certain scholars claim that corporations27 do not hold ILP in today’s legal structure. While many authors preferred to leave the question open, scholars who addressed the matter stated that corporations have 'controversial candidatures' which in principle have no ILP.28 In general, their arguments are based on the formal pre-requisite of “deriving subjectivity.” Hence, they argue that corporations have not been granted obligations under international law.29 This “no-personality” argument is further used by the international business community in their response to the Document containing Elements. While opposing to the idea of binding obligations for corporations under international law, they noted that “human rights law binds States, not private entities.”30
However, this argument can be challenged by the fact that corporations holds ILP where their rights and capacity to bring claims under international law are derived. Corporations already possess a limited and relative personality under various branches of law, as right-holders: They are entitled to the rights under international investment law and
24 Wouters J. and Chane A., 2015, p 228; see also Worster W.T., 2016, p 212. 25
Nowrot K., 2006, p 566. With his further reference to Sir Robert Jennings & Sir Arthur Watts, Oppenheim’s International Law 16 (9d, ed. 1992); Ian Brownlie, Principles of Public International Law 57 (6d, ed. 2003); J Crawford, The Creation Of States In International Law 25 (1979); Peter Fischer & Heribert F. Kock, Volkerrecht 109 (6" ed. 2004).
26
Wouters, J. and Chane, A., , 2015, p 228.
27 The scholars defending this claim in general refer to the transnational and/or multinational corporations. 28 Pentikainen M., 2012; with its further reference to Brownlie I., Principles of Public International Law, 1999, p
66.
29
Nowrot K., pp 567- 568 read as follows“(...) predominant view that the multinational corporations have neither under treaty law nor in the realm of customary international law (...) received a sufficient degree of normative recognition by states and international organizations with regard to the imposition of obligations under international law.”
30
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IHRL.31 They are also entitled to bring claims in relation to their international rights before regional human rights courts and investment arbitral tribunals. 32
Secondly, while those arguments solely focus on today’s international law structure, they fail to explain why corporations’ ILP -in terms of deriving obligations- cannot be recognized, and consequently established, by states. As Nolan rightfully noted, “international law can extent international legal obligations to corporations in relation to human rights, or at least that there is no conceptual barrier to doing so.”33 Another concern about those arguments is that they hold a conservative approach towards international personality, which falls behind the reality of today’s global structure. Accordingly, Steinhardt identified this conservative approach as an “excessive formalism” and criticized it as being an “anachronistic assumption about personality.”34 The ILP of corporations should be acknowledged since they are powerful actors within international legal area, and has a strong impact on the rights recognized under IHRL. To deem the granting of international legal obligation as a precondition for ILP carves a massive amount of non-state actors out of international law’s scope and does not fulfil the necessities of today’s global world.
Another argument brought against corporations’ direct obligations by international business community was that ‘the companies do not have the capacity or mandate to assume governments’ functions, therefore they are not capable to bear direct obligations.’35 This argument is right by stating that the companies do not have the capacity to create laws the same way as the states are authorized to. However, not having a legislative power does not necessarily relieve corporations of their ILP.36 The scope of ILP for corporations can be in a limited nature. Since states are acknowledged as the main subject of international law, with the capacity of international-law-making, other subjects possess a limited capacity.37 This capacity can be in the form of (i) entitling to international rights, (ii) bearing international
31 Corporations enjoy rights such as the right to a fair trial, the right to privacy, the right of freedom of
expression, and property rights as noted in Clapham A., ‘Human Rights Obligations of Non-state Actors’, 2006, pp 80-81.
32 Corporations can (i) bring claims before arbitral tribunals under bilateral investment treaties (BITs) and (ii)
bring claims before human rights courts (e.g. European Court of Human Rights) although those treaties (e.g. BITs or European Convention on Human Rights) are signed solely by states, but not by corporations. See Clapham A., ‘Human Rights Obligations of Non-state Actors’, 2006; See Dolzer R. & Schreuer C., ‘Principles of International Investment Law’, 2nd Edition, 15 November 2012, OSAIL, ISBN: 9780199651795.
33 Nolan J., p 6. 34
Steinhardt R. G., 2015, p 28.
35 BIAC, FTA, International Chamber of Commerce and International Organisation of Employers, October 2017. 36 See Pentikainen M., 2012, p 148: “(...) This is to recognise the importance of non-state actors and their
influence without suggesting that they have achieved the role of legislator.”
37
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obligations, or (iii) bringing claims at the international level.38 Accordingly, ICJ also emphasized on the non-existence of a uniform nature or content for the international personality by stating that “subjects of law in any legal system are not necessarily identical in their nature or in the extent of their rights, and their nature depends on the needs of the community.”39 As there is no generally accepted standards for the scope and limitation of subjectivity; the scope of rights and obligations of each actor, and legal liabilities arising thereunder, can differ in a ‘relative’ manner.40 This scope would be dependent on the relation of the actor to the particular area of such substantive law.41 For instance, in BHR sphere, corporations have the power and influence regarding the interference with the most fundamental rights of the people recognized under IHRL. Therefore, the scope of their ILP would be dependent on, and in proportion to, their relation with IHRL, in terms of the protection of such rights as well as the reparation in case of any abuses.
2.2. Recognition of International Legal Personality for Non-State Actors as an Analogy
The recognition of the non-state actors’ ILP, from which rights and obligations may be derived, is not a new phenomenon. International law has witnessed the creation of direct obligations for non-state actors under international treaties; although those treaties are signed and ratified solely by states, not by those non-state subjects. The recent and most basic example for this mechanism is the international criminal law. Article 25 of the Rome Statute42 introduces international criminal responsibility for natural persons: individuals has a direct international obligation not to commit the crimes that are envisaged under the Statute. The subject-matter of the international criminal law is the liability of individuals, in general, irrespective of whether or not such individual is a state agent.43 This shows that non-state actors may be granted ILP and be conferred liabilities via states, through the international treaties. The same structuring can also be applied by analogy for recognizing corporations’ ILP and, therefore, creating binding obligations under IHRL for them.
38 Pentikainen M., 2012, with further reference to case of International Court of Justice, Reparation for injuries
suffered in the service of the Nations, Advisory Opinion, 1949, p 179 regarding the characterization of UN’s ILP.
39
International Court of Justice, Reparation for injuries suffered in the service of the Nations, Advisory Opinion, 1949, p 178.
40 As to the relativity of ILP, Worster W.T., 2016, p 209 “Because this assessment [(international community’s
decision on the need for ILP)] is dependent on the entities’ functions and exists within a specified relationship, [ILP] for non-state actors is therefore relative”; Shaw, 2014, p 196 “Personality is a relative phenomenon varying with the circumstances.”
41 Pentikainen M., 2012, p 151.
42 Rome Statute of the International Criminal Court, entered into force at 1 July 2002. 43
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Furthermore, there are situations where this recognition does not explicitly come from states, but international tribunals, courts or scholars interpret current mechanisms and treaties in a way to conclude that states implicitly recognize the non-state actors’ ILP.
An example which also sheds light to corporations’ ILP and their international obligations is again from international criminal law: There is a recent tendency to extend the scope of subjects under international criminal law to corporations, by interpretation. This issue has been highly debated among scholars. For instance, Nerlich interpreted the text of Rome Statute in accordance with its ordinary meaning, along with the travaux preparatoires, and stated that, corporations would not be bound by international criminal law since the scope is limited to natural persons.44 However, due to recent developments on international law, Nerlich then concluded that “it is arguable that transnational business corporations are bound by the prohibitions underlying the core crime of international law, despite the fact that currently no international criminal court or tribunal has jurisdiction to hold them accountable.”45 Therefore, while making a distinction between the obligation and accountability (capacity for a trial before an international court); he acknowledges that corporations’ direct obligations under international law is a possibility.46 This issue has been further reviewed in recent decisions of Special Tribunal for Lebanon (STL).47 In accordance with the Article 31 of the Vienna Convention,48 STL interpreted the term “person” in STL Rule 60 bis, to include both natural and legal persons.49 Therefore, STL confirmed the capacity of corporations to be tried before the tribunal. The tribunal noted the increasing power of corporations in the international sphere, in support of its decision.50 It therefore concluded that strong power and influence of corporations entail responsibility, and no legal person is allowed to operate outside of the rule of law.51 This example further shows that, due to corporations’ role in today’s international legal sphere, international tribunals have the
44 Nerlich V., 2010, pp 896-897. 45 ibid.
46
See also Thielborger P., Ackermann T., 2017, pp 57-59 (about liability: “Legal persons may have the same obligations, but they are, in any event, not subject to international criminal liability”,“the jurisdiction of the ICC only extends to natural persons (within corporations). The legal person itself remains excluded from international criminal liability.”)
47
STL, the Appeals Panel, ‘in the case against New TV S.A.L. Karma Mohamed Tahsin Al Khayat, decision on interlocutory appeal concerning personal jurisdiction in contempt proceedings’ Case No. STL-14-05/PT/AP/ARI26.1 (2 October 2014); STL, the Appeals Panel, ‘in the case against Akhbar Beirut S.A.L. Ibrahim Mohamed Ali decision on interlocutory appeal concerning personal jurisdiction in contempt proceedings’ Case No. STL-14-06/PT/AP/AR126.1 (23 January 2015)
48 1969 Vienna Convention on the Law of Treaties.
49 STL, the Appeals Panel, ‘New TV S.A.L. Karma Mohamed Tahsin Al Khayat’, Para 26-30. 50 ibid, para 82.
51
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tendency to acknowledge the limited and relative ILP and the direct obligations of corporations under international law.
International humanitarian law (IHL) mechanism can be given as another example for creating direct obligations of non-state actors. It is widely accepted by scholars that IHL is now considered as directly applicable to non-state entities in an internal armed conflict.52 The direct obligations of non-state actors under IHL is also admitted by the Special Court of Sierra Leone as follows: “it is well-settled that all parties to an armed conflict, whether states or non-state actors, are bound by international humanitarian law, even though only non-states may become parties to international treaties.”53 As in parallel with the conclusion of the Court, by analogy, states can introduce direct obligations for corporations under IHLR, although corporations are not parties to such IHLR treaties.
Last example of this section would be the recognized ILP and direct obligations of the international organisations under international law,54 and in particular under IHRL.55 In 1949 Advisory Opinion, ICJ asked the question as to whether international organisation (which is a non-state actor) has an international personality, so that it would have a capacity to bring an international claim. ICJ stated that enjoying rights can only be explained “on the basis of a large measure of international personality.”56 ICJ then confirmed the ILP of UN57 due to the fact that states have tacitly recognized it as an international person. This understanding of the court, according to Shaw, can be applied to the other international organisations.58
2.3. Interim Conclusion
One of the most debated issues for corporations’ being entitled to direct horizontal obligations under IHRL is whether they have a form of ILP. This question is important, because ILP is -as Bröllman and Nijman noted- “inclusion in the international legal system as an actor, (…) being subject to the law and having the right to use it. To be denied ILP (…) may also mean freedom from normative constraints.” Recognizing corporations’ ILP may result to their becoming subject to (and being bound by) the IHRL; whereas denial may free them from any direct legal obligations under international law. Business community and
52
Clapham A., 2014, pp 543-544.
53 Special Court for Sierra Leone, Prosecutor v. Sam Hinga Norman - Decision on Preliminary Motion Based on
Lack of Jurisdiction (Child Recruitment), Case No.SCSL-2004-14-AR72(E), 31 May 2004, para 22.
54 Shaw, 2014, p 47. 55
Clapham A., 2014, 540.
56 International Court of Justice, Reparation for injuries suffered in the service of the Nations, Advisory Opinion,
1949, p 179.
57 ibid. 58
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traditional scholars argued that in today’s structure, corporations do not have ILP from which direct obligations may be derived. Therefore, as a response to those arguments, this chapter aimed to respond as to what extent corporations does and can possess ILP.
Corporations do possess ILP in today’s structure, although limited and relative. Their rights -along with their capacity to bring claims in respect of those rights- are recognized under IHRL and international investment law. In addition, there is a strong tendency among the international courts, tribunals and scholars to acknowledge direct legal obligations of corporations under international humanitarian law and international criminal law. Both of those current applications prove that corporations are deemed as right and duty holders under international legal area, with a relative ILP, from which their obligations under IHRL may be established.
In addition, non-state actors can possess personality in the international legal system to the extent to which they function on the international legal area.59 The ILP can explicitly or tacitly be recognized by the states. Recognition of ILP does not require to possess all power of states under international law: ILP may have degrees60 and limitations in proportion to such international actors’ influence and power in the international arena. This chapter further provided the examples under various branches of international law in which the personality of the non-state actors are recognized and enforced. These examples can be used by analogy to create direct obligations for corporations under IHRL, by the envisaged Treaty.
3.
EVOLVEMENT OF INTERNATIONAL BUSINESS AND HUMAN RIGHTSINSTRUMENTS: CURRENT STRUCTURING
Power and rights of corporations within international legal arena required the creation of certain international instruments, particularly in the last three decades.61 The most recent creation for this purpose was the Document containing Elements, which is a basis for the envisaged Treaty. In order to concretize the path to the envisaged Treaty -which is grounded by today’s IHRL instruments- and to conclude as to whether it is a step forward, this section
59 Worster W.T., 2016, p 208.
60 As recognized by the International Court of Justice on Reparation for injuries suffered in the service of the
Nations, Advisory Opinion, 1949,.
61
Ruggie J., ‘Protect, Respect and Remedy: A Framework for Business and Human Rights’ Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises A/HRC/8/5, 7 April 2008, para. 104 “The current debate on the business and human rights agenda originated in the 1990s, as liberalization, technology, and innovations in corporate structure combined to expand prior limits on where and how businesses could operate globally.”
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will provide an overview on the current mechanisms under BHR, (i) their structuring of obligations/responsibilities and (ii) their scope of application.
3.1. Structuring of Obligations and Scope of Application under Relevant Binding Sources of International Law
In order to comprehend the framework for BHR, one should first review which sources of international law referring to this subject exist. Article 38(1) of the Statute of International Court of Justice is widely recognized as the statement of the sources, which includes international treaty and international custom.62
International custom appears to remain silent on BHR. Particularly, direct corporate responsibility for human rights violations does not exist under customary international law since states are unable to agree on the need and parameters for such responsibility.63 As ICJ stated in its decisions, the substance of customary law is found primarily in the actual practice and opinio juris of states.64 Today, those two elements to prove a customary international law’s existence do not exist in BHR sphere.
Furthermore, there is not an international treaty establishing corporations’ obligations under IHRL as of today. As Choudhury pointed out “international law governing business issues has evolved without much acknowledgement of human rights issues, while [IHRL] has similarly evolved without recognition of the role of business in this area.”65 None of the current core human rights treaties;66 such as the International Covenant on Civil and Political Rights (ICCPR), the International Covenant on Economic, Social and Cultural Rights (ICESCR) or International Convention on the Elimination of All Forms of Racial
62
See Shaw M.N., 2014, p 70.
63 Adeyeye A., 2007, pp 160–161. As this thesis will not focus on the debate on international obligations of
corporations which has undertaken the state-like functions; please refer to ICSID, Urbaser v Argentina award, 8 December 2016, paras 1193-1210. In this decision, arbitral tribunal concluded that under international law, corporations do not have a direct international obligation to fulfil a human right: “human right to water entails an obligation [for] State, but it does not contain an obligation for performance [for] company providing the contractually required service.” (para 1208) However, the tribunal made a distinction between the obligation to perform (fulfil) and the obligation to abstain (protect), without analysing whether corporations have direct obligations to respect under IHRL.
64 ICJ, Advisory Opinion on the Legality of the Threat or Use of Nuclear Weapons, ICJ Reports, 1996, pp. 226,
253; 110 ILR, p 163.
65 Choudhury B., 2017, pp 434-435. 66
Save for one reference in the Convention on the Elimination on all Forms of Discrimination against Women, regulating the state responsibility, not a direct corporate obligation: (“Parties … agree to pursue by all appropriate means and without delay a policy of eliminating discrimination against women and, to this end, undertake…(e) To take all appropriate measures to eliminate discrimination against women by any person, organization or enterprise”).
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Discrimination refer explicitly to the role of corporations in protecting or respecting human rights.67
Hence, how does the structure of the binding instruments of IHRL cover the acts of corporations? The answer is the ‘indirect horizontal effect’ of the human rights treaties on corporations. Under the IHRL treaties, the obligations are vertical – being owed by the state (as obligation-holder) to the beneficiaries.68 States bear the duty to regulate the acts of non-state actors in their domestic laws, to protect other non-non-state actors from any violations under IHRL. Therefore, IHRL tends to address non-state actors’ behaviour indirectly by creating obligations for states to regulate non-state actors, instead of imposing direct obligations for such actors:69 This effect of the IHRL treaties on the non-state actors is called as the ‘indirect horizontal effect’. In a situation of indirect horizontal effect, it is the state -as the obligation holder-, not the non-state actor, against whom a claim can be brought for a human rights violation.70
On the contrary, application of IHRL instruments directly between the non-state actors is called the ‘direct horizontal effect’ of that instrument. In other words, direct horizontal effect of a human rights treaty “would lay duties directly upon a [non-State actor] to abide by its provisions” and “would place non-state actors under direct and explicit obligations to respect, protect and/or fulfil human rights.”71 Under IHRL, it is rare to find direct horizontal obligations (owed by a non-state actor to a beneficiary).
The ‘indirect horizontal effect’ stems from the state’s direct obligation to protect human rights beneficiaries from violations by third parties; and is well established by the comments of human rights treaty monitoring bodies. Human Rights Committee (HRCtee), as the treaty monitoring body for the ICCPR, elaborated in General Comment No. 3172 on how the obligations under ICCPR creates an indirect horizontal effect.73 While accepting the absence of direct horizontal effect on corporations, HRCtee emphasized on the states’ positive obligations to protect individuals “against acts committed by private persons or entities that
67 See Choudhury B., 2017, p 436. 68
Lane L., 2018 p 26.
69 Nowak M. & Januszewski K.M., 2015, p 151. 70 Lane L., 2018, p 26.
71 Lane L., 2018, p 16, with its further reference to Phillipson G., ‘The Human Rights Act, ‘Horizontal Effect’
and the Common Law: A Bang or a Whimper?’, The Modern Law Review 62(6), 1999, p 826.
72 UN Human Rights Committee (HRC), General comment no. 31 [80], 26 May 2004,
CCPR/C/21/Rev.1/Add.13, para. 8.
73 Other rights-specific General Comments that refer to horizontal effect of ICCPR rights can be listed as
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would impair the enjoyment of Covenant rights.”74 In this way, HRCtee acknowledged the indirect horizontal effect of the ICCPR on corporations, via the obligations brought on states.
In addition to the HRCtee, the Committee on Economic, Social and Cultural Rights (CESCR), monitoring the ICESCR’s application, further focused on the indirect horizontal application. In its General Comment No.2475 on state obligations in the context of business activities, the CESCR emphasized on the state obligation not only “to protect”, but also “to respect” and “to fulfil.” For instance, CESCR noted that the states would be in violation of their right to protect, “by failing to prevent or to counter conduct by businesses that leads to such rights being abused, or that has the foreseeable effect of leading to such rights being abused.”76
Secondly, at Comment No. 24, the CESCR emphasized on the expectations from business entities ‘to respect’ the human rights as follows:
“In addition, under international standards, business entities are expected to respect Covenant rights regardless of whether domestic laws exist or are fully enforced in practice. The present general comment therefore also seeks to assist the corporate sector in discharging their human rights obligations and assuming their responsibilities, thus mitigating any reputational risks that may be associated with violations of Covenant rights within their sphere of influence.”77
First of all, with this explanation, the CESCR refers to international standards, which could be understood as the current soft-law instruments (elaborated under Chapter 3.2. below). In parallel to those soft-law instruments, particularly UNGP, the CESCR acknowledged the expectancy from corporations to respect ICESCR, even in times when the domestic laws fall short on providing protection. Secondly, the CESCR appears to have gone one step further than the sole ‘indirect horizontal effect’ of ICESCR on corporations and have recognized the ‘expectancy’ from business entities to ‘discharge their human rights obligations’. The CESCR used both the terms ‘obligations’ and ‘responsibilities’ of corporations regarding human rights, which leaves a door open for debate: Does it mean that corporations have ‘human rights obligations’ under international laws or mechanisms? In her article, Lane considered the usage of the term ‘obligations’ as well as ‘responsibilities’ as
74 ibid, para 8.
75 CESCR, General Comment No. 24 on State Obligations under the International Covenant on Economic, Social
and Cultural Rights in the Context of Business Activities, E/C.12/GC/24, 10 August 2017.
76 ibid, para 18. 77
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“striking”.78 However, she noted that it is unclear from the said paragraph if the CESCR referred to obligations of corporations at the national or international level.79 Considering the facts that (i) the ICESCR should be interpreted in accordance with Article 31 of the Vienna Convention;80 and the obligations there are solely addressed to states rather than corporations,81 and (ii) the CESCR referred solely to ‘reputational risks’ as the consequence of violation; it is unlikely to conclude that the CESCR recognized direct obligations for corporations under IHRL. However, this paragraph still exemplifies that the CESCR accept the expectation from corporations to respect the human rights under ICESCR.
Apart from acknowledging indirect horizontal effect of ICESCR on corporations, Comment No.24 is also significant in two perspectives regarding the BHR: First of all, it explains the scope of application of the business activities as follows: “all activities of business entities, whether they operate transnationally or their activities are purely domestic, whether they are fully privately owned or State-owned, and regardless of their size, sector, location, ownership and structure.”82 With this definition, the CESCR extends the scope to all activities of all corporations, irrespective of their national and transnational nature. This extended scope is also reflected by other treaty monitoring bodies, such as UN Committee on the Rights of the Child (CRC) in its General Comment No. 16.83
For the purposes of this section, it is important to emphasize on the legal status of the treaty bodies’ comments. The literature dominantly acknowledges the ‘authoritative’ status of the general comments. As stated by the Office of the High Commissioner for Human Rights, “treaty bodies [provide] authoritative guidance on the meaning of international human rights standards, the application of treaties and the steps States parties should take to ensure full implementation of human rights.” 84 Therefore, although they do not have a binding nature, the comments are deemed as an authoritative interpretation of the treaties.
78 Lane L., 2018, pp. 49-50. 79 Lane L., 2018, pp. 49-50. 80
1969 Vienna Convention on the Law of Treaties.
81 Lane L., 2018, pp. 35and 85.
82 CESCR, General Comment No. 24, para 3.
83 UN Committee on the Rights of the Child (CRC), General Comment No. 16 on State obligations regarding the
impact of the business sector on children's rights, 17 April 2013, CRC/C/GC/16, “(...) the business sector is defined as including all business enterprises, both national and transnational, regardless of size, sector, location, ownership and structure.”
84 Concept Paper on the High Commissioner’s Proposal for a Unified Standing Treaty Body: Report by the
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3.2.Structuring of Responsibilities and Scope of Application under International Soft Law Documents on Business and Human Rights
As explained under Section 3.1 above, the current binding IHRL instruments fall short on establishing direct obligations for corporations. As a result, although they are bound by human rights obligations by domestic laws which stemmed from the states’ duties under international treaties, corporations are under almost no direct international legal obligation to respect human rights in contrary to the necessities of today’s globalized world.85 Therefore, international soft law instruments are adopted to regulate the acts of corporations with respect to the protection of international human rights; by creating “non-binding” corporate responsibility. Today, those soft law instruments has created an “unmediated” horizontal responsibility for corporations to human rights’ beneficiaries, on a voluntary basis.86
First of all, this Section begins with a brief explanation on what soft law is. In general, particular non-binding instruments or documents such as recommendations, guidelines, codes of practice or standards form a special category that may be termed ‘soft law’. According to Shaw:
“This terminology is meant to indicate that the instrument or provision in question is not of itself ‘law’, but its importance within the general framework of international legal development is such that particular attention requires to be paid to it. The propositions of ‘soft law’ are important and influential, but do not in themselves constitute legal norms.”87
The attractiveness of soft law lies in the fact that it is easier to pass than hard law.88 In this respect, there are various non-binding BHR instruments adopted by distinct international organizations. Their “scope of application” and “structuring of responsibilities” will briefly be indicated under this Section 3.2.
UN Global Compact: Global Compact was formally adopted on 26 July 2000 as an
instrument to fill the governance gaps by requesting businesses to incorporate UN principles in their business strategy and operations. It introduces ten principles on human rights, labour, environment and anti-corruption issues. It has now become the world’s largest corporate
85
Davarnejad L., 2011, p 355.
85 See Cirlig R.E., 2016, p 232.
86 Nowak M & Januszewski K.M.,2015, p 154. 87 Shaw M., 2014, p 117-118.
88
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sustainability initiative,89 with more than 13,000 participants, covering over 9,000 companies.90 In terms of the scope of application, the Global Compact does not make a distinction between local or transnational corporations: It is applicable to any activities of any corporations. Furthermore, rather than pointing out the obligations of states, the Global Compact is directly addressed to corporations.
OECD Guidelines for Multinational Enterprises:91 The OECD Guidelines were
adopted in 1976 and updated in 2011 with the inclusion of a new chapter on human rights in accordance with the UNGP. The Guidelines consist of “recommendations addressed by [adhering] governments to multinational enterprises.”92 Observance of the recommendations
by corporations is solely voluntary and not legally enforceable.93 In terms of the application, Guidelines’ scope is profoundly comprehensive.94 They apply to all corporations which operate in or have a parent company in any of the adhering states, even if such corporations operate in non-adhering states.95 Even though the term “multinational enterprise” is used throughout the Guidelines, Part I-I(5) clarifies that they reflect good practice for both multinational and domestic enterprises, and they are subject to the same expectations, to the extent possible. Structuring of responsibilities within the OECD Guidelines is in parallel with the UN Global Compact: Guidelines are directly addressed to corporations (i.e. respecting human rights, carrying out human rights due diligence), rather than creating obligations of states. Hence, as noted by Lane, they “have also helped to pave the way to direct horizontal effect for businesses.”96
ILO MNE Declaration:97 The Declaration, adopted by International Labour
Organisation, provides direct guidance on social policy and responsible practices to enterprises, states, employers’ and workers’ organizations. As in parallel with Part I-I(5) of OECD Guidelines, the principles of MNE Declaration applies both to multinational and national enterprises, as applicable, without aiming to introduce any inequalities.98
89 See link: https://www.unglobalcompact.org/what-is-gc
90 The list of participants can be found at the link: https://www.unglobalcompact.org/what-is-gc/participants/
[Accessed 4 June 2018].
91
OECD, OECD Guidelines for Multinational Enterprises, 2011 edition.
92 ibid, 5 (Foreword).
93 OECD Guidelines for Multinational Enterprises, 2011, Part I- I (1). 94 For detailed information see Davarnejad L., 2011, p 355.
95
See Cirlig R.E., 2016, 232.
96 Lane L., 2018, p 18.
97 Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration)
- 5th Edition (2017)
98
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UNGP: In July 2005, Ruggie, the Special Representative of the Secretary-General on
the issue of human rights and TNCs and OBEs was appointed to work on a solution for the systematic human rights violations by corporations.99 During his mandate, Ruggie observed the problem as the “governance gap” “between the scope and impact of economic forces and actors, and the capacity of [political institutions] to manage their adverse consequences.”100 He noted that the worst cases of corporate-related human rights violations occurred where governance challenges were the greatest: In low income countries and in countries where the rule of law was weak and levels of corruption was high.101 He has seen the challenge as to narrow and bridge the gaps,102 and came up with the Protect, Respect and Remedy Framework as a solution. The Framework has been turned into UNGP and endorsed the by the Human Rights Council in its resolution 17/4 of 16 June 2011. The UNGP is constructed on a three-pillar framework:
“(a) States’ existing obligations to respect, protect and fulfil human rights and fundamental freedoms (Pillar 1);
(b) The role of business enterprises as specialized organs of society performing specialized functions, required to comply with all applicable laws and to respect human rights (Pillar 2);
(c) The need for rights and obligations to be matched to appropriate and effective remedies when breached (Pillar 3).”103
The UNGP introduces a direct responsibility (rather than an obligation)104 for corporations to respect human rights, as well as a responsibility to perform human rights due diligence and to put in place processes to enable remediation for any adverse human rights impacts they cause or contribute to.105 Distinct from the structuring of responsibilities envisaged under the OECD Guidelines and UN Global Compact; UNGP foresees direct duties both for states (pillar 1) and for corporations (in the form of a non-binding responsibility) (pillar 2). However, the responsibilities of corporations differ extensively from the duties of
99 Ruggie J., A/HRC/8/5, 7 April 2008, para 4. 100 ibid, paras 3 and 18.
101
ibid, para 16.
102 ibid, paras 3 and 17.
103 UNGP, 2011, General Principles 1. 104 Lane L., 2018, p 18.
105
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states: While states have comprehensive duties to respect, protect and fulfil human rights, companies are solely responsible for ensuring that they do not violate those rights.106
As well as the other soft law instruments, UNGP (which is based on minimum global expectations from businesses) does not impose new legal obligations on businesses.107 Its observance is voluntary. This non-binding nature of UNGP, establishing no binding obligations for corporations or states is considered to be its major weakness.108 On the other hand, a significant strength of this document is considered as its recognition, since it is supported by UN member states, is based on the consultations with, and referred afterwards by, a wide variety of stakeholders.109
UNGP adopts a comprehensive scope of application: It applies “to all business enterprises, both transnational and others, regardless of their size, sector, location, ownership and structure.”110
3.3.Interim Conclusion
Chapter 3 of this thesis aimed to elaborate on the current international law framework in terms of BHR. This framework occurred in two shapes: (i) Binding IHRL treaties which have an indirect horizontal effect on corporations, where the States are the sole obligation bearers under international law, (ii) soft law instruments which introduce direct horizontal responsibilities on corporations, as well as recognizing states as the main duty-bearer.
For the purposes of this thesis, those soft-law BHR documents prove that addressing directly to corporations and establishing direct horizontal effect on them under an international instrument is not a new phenomenon in BHR sphere. Additionally, as the treaty bodies consistently emphasize, the binding obligations for states to protect individuals from corporate-related human rights abuses are already established. What is missing in the IHRL area is to give a binding force to the “direct responsibility” mechanisms for corporations under soft law instruments. Whether the Document containing Elements focused on this missing part and carried these current mechanisms a step further will be reviewed under Chapter 4 of this Thesis.
106 Wouters, J. and Chane, A., 2015, p 240. 107
Ruggie J., Sherman J., 2015, p 2.
108 SOMO, CEDHA, Cividep India, November 2012, p 11; Amnesty International et al., January 2011, p 2. 109 UNGP, 2011, General Principles p 1; See also Ruggie J., Sherman J., 2015, p 2; SOMO, CEDHA, Cividep
India, November 2012, p 11.
110
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Secondly, with regard to the scope of application, the current instruments establish the scope of application as wide as possible. The fundamental aim is the protection of human rights, and the prevention from any human rights violations. Therefore, the instruments refer not only to the transnational corporations, but also to any business entities irrespective of their local or international nature. This application covers both those corporations’ direct responsibilities and the states’ obligations and/or duties to protect from those corporations’ abuses. The question as to whether the Document containing Elements reflects this wide scope for application will be discussed under Chapter 4 of this thesis.
4.
ELEMENTS TOWARDS A BINDING TREATY: ANALYSIS IN LIGHT OFTHE SCOPE AND DIRECT CORPORATE OBLIGATIONS 4.1. Background and General Information
In September 2013, at the Human Rights Council’s 24th session, the representative of Ecuador, on behalf of a group of states, made a statement on "Transnational Corporations and Human Rights."111 While endorsing the UNGP as a first step, the representative proposed to introduce a legally binding international instrument on BHR that "would clarify the obligations of transnational corporations in the field of human rights, as well as of corporations in relation to States, and provide for the establishment of effective remedies for victims in cases where domestic jurisdiction is clearly unable to prosecute effectively those companies.”112 This led to the adoption of Resolution 26/9 by Human Rights Council in July
2014, although lacking a consensus due to political considerations:113 20 votes in favour, 14 against and 13 abstentions.114 With the Resolution 26/9, Human Rights Council established OEIGWG with the mandate to elaborate an international legally binding instrument on the TNCs and OBEs in IHRL.115 In September 2017, OEIGWG published the Document containing Elements as a “basis for substantive negotiations.”116 It consists of nine main-titles including, among others, the general framework, the scope of application and the general obligations. Most commentators observed the Document as a good point of departure for negotiations, by its broad-range of coverage and its flexible wording.117 Accordingly, more
111
“Statement on behalf of a Group of Countries at the 24rd Session of the Human Rights
Council” Geneva, September 2013, “On behalf of the African Group, the Arab Group, Pakistan, Sri Lanka, Kyrgyzstan, Cuba, Nicaragua, Bolivia, Venezuela, Peru and Ecuador”
112 ibid. 113
Espinosa-Salas L., 2017.
114 Human Rights Council, Resolution 26/9, 2014, p 3. 115 Ibid, p 2.
116 Introduction of Document containing Elements. 117
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than 100 states and 200 representatives of social movements, trade unions and NGOs participated in the third session of OEIGWG in October 2017 to negotiate the Elements.118 As the majority of the states which were present at the session reaffirmed their support to the OEIGWG, the process towards a binding Treaty will continue, with a zero draft of the Treaty that is planned be presented at the fourth session.119
The purpose of the Treaty is explained under the Document as to guarantee the respect, promotion and protection of human rights against violations or abuses resulting from the activities of TNCs and OBEs by creating an international legally framework.120 However, while aiming the protection of human rights by introducing binding obligations, the Document containing Elements has raised debate and critiques.121 For the purposes of this thesis, this Chapter will focus on two aspects of the debate regarding the Document: (i) its scope of application and (ii) its structuring of obligations. This chapter will analyse the extent of those two aspects in accordance with (i) the structuring under the current BHR instruments and (ii) ILP of corporations as discussed in previous chapters.
4.2.Structuring of Obligations: Direct Obligations for Corporations
Since the Document containing Elements is drafted for negotiation purposes, the Document lists the obligations that will possibly be included in the envisaged Treaty.122 Documents containing Elements foresees obligations in three different sub-sections for three actors: for States (Article 3.1), for TNCs and OBEs (Article 3.2) and for International Organisations (IOs) (Article 3.3).
The Document recognizes that human rights violations may be caused by corporations’ operations, and existing loopholes hinders effective protection.123 To strengthen
the international system, it considers to “[establish] clear rules for States and other stakeholders”124 by “the adoption of an international legally binding instrument which recognizes such general obligations.”125
118 Report on the third session of [OEIGWG]. 119
Seitz K., (Global Policy Forum, Rosa Luxemburg Stiftung—New York Office), January 2018.
120 Article 1.3 (Purpose) of the Document containing Elements
121 See notes recorded by civil society organisations involved in the Treaty Alliance for further details: Treaty
Alliance, 2017, Notes, IGWG 3rd Session.
122
Article 3 (General Obligations) of the Document containing Elements.
123 ibid. 124 ibid.
125 ibid. The term ‘obligations’ also refer to TNCs’ and OBEs’ obligation as the same article indicates “the
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The Document formulates the obligations of States126 in a way to be imposed directly and primarily to states, while creating an indirect horizontal effect on corporations. This structuring is in line with both the binding IHRL treaties (as interpreted by treaty bodies) and the UNGP’s pillar 1 (state duty to protect). Furthermore, the Document maintains the duties for states -such as to take all necessary and appropriate measures to prevent violations, or to require business enterprises to respect human rights- in line with the duties envisaged under the current BHR mechanisms (i.e. IHRL treaties and UNGP).
Meanwhile, the Document indicates only one obligation for the IOs. As per this obligation, states should strive to ensure that IOs do not adopt or promote any international norm that could harm the objectives of the envisaged Treaty.127 Thus, rather than directly
addressing IOs, this obligation is structured in a way to establish a state obligation, which would create an indirect horizontal effect on IOs.
In addition to states’ obligations -which would create an indirect horizontal effect on corporations-, the Document containing Elements envisages direct binding obligations for corporations. Document acknowledges the states’ being primary duty-bearers under IHRL. However, it also emphasizes on the importance of the recognition of corporations’ obligations, with the following phrase: “The reinforcement of the primary responsibility of States and the recognition of general obligations of TNCs and OBEs represents the core of an international legally binding instrument (…).”128 Direct obligations of TNCs and OBEs
envisaged under Article 3.2 is one of the most debated issue regarding the Document containing Elements. This Article introduces the obligations under four bullet points:
“TNCs and OBEs shall
• (…) comply with all applicable laws and respect internationally recognized human rights, wherever they operate, and throughout their supply chains; • prevent human rights impacts of their activities and provide redress when it has
been so decided through legitimate judicial or non-judicial processes;
• design, adopt and implement internal policies consistent with internationally recognized human rights standards (to allow risk identification and prevention
126 Article 3.3 (Obligations of States) of the Document containing Elements. 127
Article 3.3 (Obligations of International Organisations) “State Parties shall strive to ensure that international organizations, including international and regional economic, financial and trade institutions, in which they are Members, do not adopt or promote any international norm or decision that could harm the objectives of this legally binding instrument, or affect the capacity of the Parties to fulfill their obligations adopted herein.”
128
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of violations or abuses of human rights resulting directly or indirectly from their activity) and establish effective follow up and review mechanisms, to verify compliance throughout their operations.
• further refrain from activities that would undermine the rule of law as well as governmental and other efforts to promote and ensure respect for human rights, and shall use their influence in order to help promote and ensure respect for human rights.”
As seen from this Article, the Document containing Elements envisages direct obligations for TNCs and OBEs. Therefore, if drafted in accordance with the Elements, the envisaged Treaty will innovatively be (i) recognizing the ILP of TNCs and OBEs, where their international duties are derived from and (ii) acknowledging the legal obligations for TNCs and OBEs under international law, in a binding nature.
4.3.A. Comparison with Current IHRL Instruments
In light of the above, the primary state duty envisaged under the Document, with an indirect horizontal effect on corporations, is in parallel with the rationale of current IHRL treaties.
Furthermore, the structuring of obligations under the Document containing Elements is similar to the structure under the UNGP: in addition to the acknowledgement of the state duty to protect as the primary principle (pillar 1), the corporate responsibility to respect (pillar 2) is also recognized. The structuring of obligations under the Document containing Elements resembles to the structuring of responsibilities under the current soft law BHR documents (reviewed under Chapter 3.2.). Both the Document containing Elements and the soft law documents are directly addressed to corporations.129 Additionally, the Document containing Elements, if turned into Treaty, goes a step further than the current soft-law instruments by turning those direct responsibilities of corporations into direct obligations. As many stakeholders, including EU,130 state that the Treaty should be firmly rooted, and go in parallel with the UNGP and other principles,131 it is necessary to maintain the structure in a way to directly address corporations.132
129 See Treaty Initiative, October 2016, p 30-31 for further review. 130
Zamfir I., (European Parliament Research Service), April 2018.
131 CIDSE et al, February 2018, p 2 “reaffirmation of the UNGP and other such principles and frameworks
carries forward the spirit of complementarity between the UNPG and the Treaty.”
132 See Treaty Initiative, October 2016, p 37, “key proposal: Treaty must recognise that corporations have legal
