Jordan Barnes
In October 2022, the UN’s open-ended Intergovernmental Working Group (‘IGWG’) met for its 8th session to continue drafting an ‘International Legally Binding Instrument on Transnational Corporations and other Business Enterprises with respect to human rights’ (‘the Binding Treaty’). The IGWG was established by the UN Human Rights Council in 2014 in an attempt to codify the obligations of states and business with respect to human rights . It builds on the momentum of the 2011 UN Guiding Principles on Business and Human Rights (‘UNGPs’) which provide guidance as to the roles and responsibilities of states and business to respectively protect and respect human rights.
A legally binding instrument is increasingly necessary in light of the relative failure of the UNGPs to prevent human rights abuses by corporations across the globe, particularly as recent political and economic turmoil has provided a convenient excuse for companies looking to ‘save their profits’ at the expense of their workers. Amidst cases of modern slavery, union busting and attacks on human rights defenders, binding obligations are clearly one path forward to achieving meaningful change.
Since 2014, the drafting process for the Binding Treaty has been fraught with disagreement, watered-down commitments and a seemingly never-ending lack of progress. However, with major players like the EU starting to push human rights due-diligence legislation in their own jurisdictions, will the Binding Treaty finally start to get off the ground?
What is the Binding Treaty?
In its current form, a Third Draft, the Binding Treaty features a number of positive obligations on States Parties to regulate the actions of corporations in respect to human rights, including:
- Reinforcing the rights of victims and providing avenues for seeking remedy;
- Imposing mandatory due diligence obligations for businesses operating within their territory; and
- Establishing legal liability for businesses that commit abuses, with no statute of limitations.
The Binding Treaty also notably promotes the particular protection and guidance of vulnerable groups such as women, Indigenous Peoples and migrants, as well as the right to a clean, healthy and sustainable environment.
The journey so far
While the current Draft of the Binding Treaty is a sign of progress, reaching this point has been difficult and the road ahead is not particularly clear. Since its inception, the IGWG, led by Ecuador and largely spearheaded by countries from the Global South, has been consistently undermined by countries from the Global North. This is perhaps unsurprising, considering that it is these countries that host the headquarters of many of the worlds’ largest transnational corporations. Australia has refused to participate in the IGWG, stating a continued opposition to the ‘divisive’ proposed Binding Treaty and indicating a strong preference for the UNGPs instead.
At its first participation at the 7th Session in 2021, the US began a push to actively undermine the Binding Treaty, pressuring other participating countries to work towards a ‘framework instrument’ that would merely codify the existing UNGPs without introducing any new positive obligations. Further, countries like China have used their active participation to erode the text of the Draft Treaties by pushing to weaken States Parties’ obligations.
What’s next?
For the first time since 2018, this year’s session did not work off a new draft of the Binding Treaty. Rather, the Third Draft from 2021 and a series of textual proposals submitted by states was the basis for discussion. Unusually for this session, the Chair Rapporteur’s failed to create a ‘Friends of the Chair’ group, which would have met earlier this year to clarify topics for negotiation in order to improve the session’s efficiency, as it was supposedly not possible to confirm participation from States Parties from each of the UN’s five regional groups. There was some criticism both in the lead up to the session and during it, of the disorganised nature of the negotiations and a lack of clarity as to whether the Third Draft should be the only basis for negotiations,
Time will tell whether the session will lead to further productive developments, and whether influential parties like the EU will make meaningful contributions to the negotiations. Given that the EU has previously used its lack of legislation in this area as justification for its relative absence in the drafting process, some have speculated that the EU Commission’s recent proposal for a Corporate Sustainability Due Diligence Directive indicates that it may become more involved. However, criticism of the Directive’s lack of scope and limited liability suggests that political will in the EU for the Business and Human Rights agenda may still be inadequate to engender substantial progress in codifying these obligations.
Regardless, as major economies around the world struggle with rising inflation and a severe cost-of-living crisis, it is vital that states create laws to protect individuals from corporations that may be incentivised to violate their rights.
Jordan Barnes was an intern with the Australian Journal of Human Rights in Term 3, 2022.