Towards a binding international treaty on business and human rights

With its extended value chains, economic globalisation has provided numerous opportunities, while also creating specific challenges, including in the area of human rights protection. The recent history of transnational corporations contains numerous examples of human rights abuses occurring as a result of their operations. Such corporations were known to have taken advantage of loose regulatory frameworks in developing countries, corruption, or lack of accountability resulting from legal rules shielding corporate interests.

This situation had created a pressing need to establish international norms regulating business operations in relation to human rights. So far, the preferred approach had been 'soft', consisting of the adoption of voluntary guidelines for businesses. Several sets of such norms existed at international level, the most notable being the UN Guiding Principles on Business and Human Rights. Nevertheless, while such voluntary commitments were clearly useful, they couldt entirely stop gross human rights violations (such as child labour, labour rights violations and land grabbing) committed by transnational corporations, their subsidiaries or suppliers. To address the shortcomings of the soft approach, an intergovernmental working group was established within the UN framework in June 2014, with the task of drafting a binding treaty on human rights and business.

After being reluctant at the outset, the EU had become involved in the negotiations, but had insisted that the future treaty's scope should include all businesses, not only transnational ones.

The 'Zero Draft' published in July 2018 does not reflect the EU's position on this point. It had been welcomed by experts for its more precise focus on prevention, on effective remedies and access to justice for victims, and on companies' liability for their subsidiaries and suppliers in third countries. The European Parliament was a staunch supporter of this initiative and had encouraged the EU to take a positive and constructive approach.

European Parliament: European Parliamentary Research Service: Study, February 2017: Implementation of the UN Guiding Principles on Business and Human Rights http://www.europeansources.info/record/implementation-of-the-un-guiding-principles-on-business-and-human-rights/

Council of the European Union: Press Release, PRES/359/16 (20.06.16): Council conclusions on business and human rights http://www.europeansources.info/record/press-release-council-conclusions-on-business-and-human-rights/

UN: OHCHR: Zero Draft: Legally Binding Instrument to Regulate, in International Human Rights Law, the Activities of Transnational Corporations and other Business Enterprises, July 2018 https://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session3/DraftLBI.pdf

UN: OHCHR: Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights https://www.ohchr.org/en/hrbodies/hrc/wgtranscorp/pages/igwgontnc.aspx

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