Info Service on WTO and Trade Issues (Jul15/04)
8 July 2015
Third World Network
body to elaborate treaty on TNCs/human rights holds first session
Published in SUNS #8058 dated 8July2015
Geneva, 7 Jul (Kanaga Raja) -- The open-ended intergovernmental working
group in charge of elaborating an international legally binding instrument
on transnational corporations (TNCs) and other business enterprises
with respect to human rights convened its first session here on Monday.
The inaugural session of the Working Group (6-10 July) appointed Ambassador
Maria Fernanda Espinosa of Ecuador as its Chairperson-Rapporteur.
The session opened with a video message from the United Nations High
Commissioner for Human Rights Mr Zeid Ra'ad Al Hussein.
It also heard some opening remarks by its keynote speaker, Ms Victoria
Tauli-Corpuz, the United Nations Special Rapporteur on the rights
of indigenous peoples, who told the delegates that an international
legally binding instrument on business and human rights could contribute
to redressing gaps and imbalances in the international legal order
that undermine human rights, and could help victims of corporate human
rights abuse access remedy. (See below.)
In a resolution (26/9) adopted at its twenty-sixth session on 26 June
2014, the United Nations Human Rights Council decided to establish
"an open-ended intergovernmental working group on transnational
corporations and other business enterprises with respect to human
rights; whose mandate shall be to elaborate an international legally
binding instrument to regulate, in international human rights law,
the activities of transnational corporations and other business enterprises."
It also decided that the first two sessions of the open-ended intergovernmental
working group shall be dedicated "to conducting constructive
deliberations on the content, scope, nature and form of the future
international instrument, in this regard."
The Council further decided that the Chairperson-Rapporteur of the
working group "should prepare elements for the draft legally
binding instrument for substantive negotiations at the commencement
of the third session of the working group on the subject, taking into
consideration the discussions held at its first two sessions."
The working group will be holding a series of panel discussions on
related issues as well as several side events during its week-long
According to a Concept Note proposed under the responsibility of the
designated Chairperson-Rapporteur, resolution 26/9 stresses that the
obligation and primary responsibility to promote and protect human
rights and fundamental freedoms lies with the State, and that States
must protect against human rights abuse within their territory and/or
jurisdiction by third parties, including transnational corporations
It noted that while the obligation of States to regulate business
activities within their territorial jurisdiction is clear, on the
other hand, States' obligations regarding corporate conduct acting
abroad remain unclear.
"Member States' discussions during the process of preparation
of the resolution underlined that there are gaps in the international
legal framework related to the duty to protect human rights in respect
of business activities, and that related instruments are concentrated
in soft law."
Furthermore, said the Concept Note, the international legal system
reflects an asymmetry between rights and obligations of TNCs.
While TNCs are granted rights through hard law instruments, such as
bilateral investment treaties and investment rules in free trade agreements,
and have access to a system of investor-State dispute settlement,
there are no hard law instruments that address the obligations of
corporations to respect human rights.
Noting that the role of TNCs has exponentially expanded over the last
few decades and that value chains are shaped by TNCs that account
for around 80 per cent of global trade, the Note said that it is clear
that the role of corporations has evolved in a way that transcends
Yet, TNCs still lack international legal responsibility commensurate
with their role and influence in international and domestic affairs.
While it is important to strengthen national legal frameworks and
mechanisms for access to remedy in cases of human rights violations,
there is an increasing need for international cooperation between
States to ensure that victims of corporate human rights abuse have
access to remedy, it said.
OPENING REMARKS BY KEYNOTE SPEAKER
In her opening remarks at the first session, the United Nations Special
Rapporteur on the rights of indigenous peoples Ms Victoria Tauli-Corpuz
noted that indigenous peoples have been at the forefront of discussions
regarding the human rights abuses committed by corporations since
For decades, indigenous peoples have been victims of corporate activities
in or near their traditional territories, which have depleted and
polluted their traditional territories without their consent, putting
many peoples at the verge of cultural or physical extinction.
"Today, little has changed in relation to this situation,"
she said, pointing out that indigenous peoples and other local communities
continue to suffer disproportionately the negative impact of corporate
activities, while community leaders and activists suffer a true escalation
of violence at the hands of government forces and private security
"Many of the displacements of indigenous peoples from their ancestral
territories and the extrajudicial killings of indigenous activists
usually happen in communities where there are ongoing struggles against
The Special Rapporteur recalled her predecessor in the mandate, Professor
James Anaya, as concluding that extractive and other large-scale corporate
activities constitute today "one of the most important sources
of abuse of the rights of indigenous peoples' in virtually all parts
of the world."
The adoption by the Human Rights Council of resolution 26/9, establishing
this Working Group, represents a significant development, said Ms
The United Nations responded to calls from around the world, including
the persistent appeals of indigenous peoples, to strengthen the architecture
of international human rights law in order to adapt further to the
challenges posed by corporate-related human rights abuses.
"While the global economic trends are increasingly characterized
by dominance of corporations, their role extends beyond the capacities
of any one national system to effectively regulate their operations.
The issues at stake are global, and so should be the response."
Too often those whose human rights are affected by the operations
(for too long considered the externalities of business activity) are
left without any real access to effective remedies, and often States
themselves are without the requisite tools to hold corporations' accountability
According to the Special Rapporteur, this is a matter which concerns
her the most because the weaknesses of States, corporations and the
United Nations in providing effective remedies creates desperation
and hopelessness, which provide a fertile ground for the operations
of criminal transnational syndicates.
"An international legally binding instrument on business and
human rights could contribute to redressing gaps and imbalances in
the international legal order that undermine human rights, and could
help victims of corporate human rights abuse access remedy."
The rights expert acknowledged that some progress has been achieved
in the area of human rights and business in recent years.
Notably, the adoption by the Human Rights Council in 2011 of the UN
Guiding Principles on Business and Human Rights marked a significant
step forward, particularly by clarifying many elements of the State's
duty to protect human rights from business-related human rights violations,
and acknowledging also that businesses themselves have responsibilities
to respect human rights.
The rights expert underlined that the search for a new international
legal instrument and the implementation of the Guiding Principles
should not be seen as contradictory, but rather complementary objectives.
She said that the mandate established by resolution 26/9 is highly
relevant and necessary.
Corporations are key actors in shaping and influencing economic, as
well as political, social and cultural issues, activities and frameworks
all over the world, including production and consumption patterns
and livelihoods of communities. While global economic trends are increasingly
characterized by the dominance of corporations, their role extends
beyond the capacities of any one national system to effectively regulate
As foreign investors, corporations are benefiting from an international
protection regime that is consolidated through rules under bilateral
investment treaties and/or free trade agreements and other regional
This system is enabled through an investor-State dispute settlement
mechanism and far-reaching rules for recognition and enforcement of
According to the Special Rapporteur, reform of the international investment
protection regime, including the substance of the treaties and the
investor-State dispute settlement mechanism, is emerging as an issue
of concern for both developing and developed countries.
"What we see more and more is that foreign investors and transnational
corporations are provided with very strong rights and extremely strong
enforcement mechanisms. On the other hand, global and national rules
dealing with the responsibilities of corporations and other forms
of businesses are characterized by the form of soft law."
They fall short of legally binding instruments that allow for achieving
balance in the rights and responsibilities of these actors.
The rights expert said: "We face a context where corporations
still lack international legal responsibility commensurate with their
role and influence in international and domestic affairs. At the same
time, there are gaps in the international legal framework in regard
to the duty to protect human rights and access to remedy."
An international legally binding Instrument would significantly help
in establishing the much needed balance in the international system
of rights and obligations with regard to corporations and host governments,
Resolution 26/9 takes us one step further along the pathway toward
strengthening the system of human rights law, and this opportunity
for the Intergovernmental Working Group must be seized upon to address
two urgent global realities - the first being access to remedies and
the second relating to the need to uphold the primacy of human rights
in the context of business activities.
At the present time, said the rights expert, the ability for communities
and people affected by corporate human rights violations to access
remedies is very weak and such remedies do not even cut across all
At the same time, in many cases corporate human rights violations
touch upon the interests of more than one country's jurisdiction.
"In this sense, for the Intergovernmental Working Group to make
real advances in providing access to effective remedies, the future
legal instrument must clarify the extraterritorial obligations of
states to ensure access to effective remedies within all states that
are connected to the corporations in question."
Fortunately, the Maastricht Principles on Extraterritorial Obligations
of States in the Area of Economic, Social and Cultural Rights go a
long way to clarifying the application of law in this context, and
will provide a powerful resource for the Intergovernmental Working
Group to call upon for guidance.
Ms Tauli-Corpuz said that a second key opportunity for the Intergovernmental
Working Group concerns the possibility for a new international instrument,
within the context of business activities, to reinforce the fundamental
principle of international law which recognizes the primacy of human
rights above all other systems of law.
As recognized by the Committee on Economic, Social and Cultural Rights
1998 Statement on Globalisation "the realms of trade, finance
and investment are in no way exempt from these general [human rights]
The global reality for many communities, as well as States from all
parts of the world, is that corporations today have the ability under
international trade and investment law to sue States when they pass
laws that aim to improve human rights and environmental protections.
In this context, said the rights expert, the international community
is failing to realise the guarantees of the international human rights
The work of the Intergovernmental Working Group can also benefit corporations
by producing a level playing field for investment across all States.
In this sense, the Working Group has the opportunity to develop standards
for all States that codify within international law the regulatory
advances being made within some jurisdictions on a piecemeal basis.
"Providing this type of regulatory clarity and certainty, within
international human rights law, provides a uniform approach which
will benefit all corporations."
This advance would also undermine the practice of some corporations
to seek out investment jurisdictions with weak regulatory environments,
thereby creating negative incentives for other corporations to do
likewise, resulting in what some refer to as the race to the bottom.
"Similarly, for States, this advance in international law would
also undermine the ability of their counterpart States weakening their
regulations, at the same time exposing their populations to human
rights violations, in the process of attracting investment."
The Special Rapporteur underlined that any discussion on an international
legal instrument regulating the responsibility of corporate actors
in relation to human rights should not divert the attention of the
important responsibilities that pertain to States in fulfilling their
obligation to protect their own citizens against corporate activities.
Unfortunately, more often than ever, States are silent witnesses or
victims of corporate abuse, but they are all also, either by action
or by omission, responsible to a certain extent in these abuses.
The line that separates corporate interest from State policy is sometimes
The rights expert said that an international legally binding instrument
would go some way to establish balance in the international system
of rights and obligations with regard to corporations and host governments.
It would benefit States in their human rights obligations in relation
to corporate activities.
Businesses that already respect human rights and are engaged in best
practice development would also benefit and have a clear interest
in supporting and helping develop this instrument, she added.
In this connection, the Special Rapporteur expressed hope that the
discussions in this forum will also contribute to make concrete progress
in this regard.
She reminded the audience that "we should not lose sight of the
ultimate objective of this exercise, which should not be other than
strengthening the protection of human rights against abuses committed
in the context of corporate activities. For indigenous peoples, as
well as for many other human communities of this world, the issues
at stake are just too high." +