A Business and Human Rights Treaty? We shouldn’t be afraid to frighten the horses

Those of a certain age may remember that quintessentially British comedy Fawlty Towers where the hotel owner, Basil Fawlty, has to keep reminding himself not to upset his German guests by mentioning The War. This is the position civil society organisations find themselves in with regard to Ecuador’s call for an international treaty on business and human rights, which has set the cat amongst the pigeons.

The public reticence on this issue on the part of some governments may be understandable in the run up to the UN Human Rights Council session that starts this week in Geneva, but why the privately expressed indignation towards NGOs that are supporting this initiative? What are they afraid of?

Governments in the North are only too aware there is a groundswell of support for such a Treaty within the South and that being too reactive might drive more States into Ecuador’s camp. They are also aware of the debacle of the UN Sub-Commission Norms a decade ago, where a group of UN experts, in alignment with civil society organisations, attempted unsuccessfully to persuade governments in the UN Human Rights Commission to agree a legalistically worded set of standards for business. Many believed this would have become a forerunner to an international treaty that would hold companies accountable for human rights abuses.

The UN Norms fiasco is held up as an example of what can be expected if NGOs persist in polarising opinion on the issue of how to advance corporate accountability for human rights. This view reflects a certain mindset on how to move forward, according to which progress comes through building consensus, as evidenced by the success of the UN Special Representative, John Ruggie, in piloting the UN Guiding Principles on Business and Human Rights (UNGPs). According to this logic, talk of a treaty will frighten business and some governments, leading to a backlash against the UNGPs, which will undermine the process of their implementation.

There is no doubt that Ruggie’s achievement was remarkable with regard to the conceptual and political challenges he managed to overcome in establishing the UN ‘Protect, Respect and Remedy’ framework and Guiding Principles. It was a feat to secure a strong degree of endorsement from governments, business associations, international NGOs and civil society organisations, and then to get this endorsed by the Human Rights Council.

The fact that there is a broad consensus around the UNGPs, North and South, that they gel with wider societal narratives around the need for responsible capitalism, and that there is a mechanism within the UN system to take them forward, has given them momentum. This is currently where the energy is in the field of business and human rights, which may explain why the approach taken by the Ecuadorean government and by others supporting their initiative is viewed so negatively by many. But are they really rocking the boat?

The consensus achieved by Professor Ruggie may be a strength in some respects, but it is also a weakness and a delusion. There is no consensus around any implementation process for the UNGPs which would enable them to have their intended effect on the behaviour of companies. For the moment, they are just a set of principles, which are not binding on States or on companies, though they do reflect states’ existing obligations and set for the first time at UN level a baseline of expected conduct for all companies.. Not only are the UNGPs not enforceable as an instrument, but at this point they are not embodied in any other enforceable instrument. This means that nowhere in the world where individuals and communities are defending their rights against the activities of multinational corporations, can they rely on this UN-endorsed standard for protection or for remedy.

Three years after the UN Human Rights Council adopted the UNGPs, there is growing frustration at the slow pace of implementation. While governments and inter-governmental bodies are under pressure to find ways of closing the accountability gaps which allow companies to get away with abuses, there is little sign that the UNGPs are pointing us in this direction. The lack of effective action by States is indicative of the low prioritisation given to this.

In this context, it is fitting to have a far-reaching debate on the kind of binding mechanisms that are necessary to ensure companies operate to acceptable standards and the different pathways towards achieving this. The fact that the Ecuadorean government and others are helping to break the deafening silence on this issue is to be welcomed, even if there is much work to be done in defining the substance of such an approach, and even if it would be problematic to place too much emphasis on the deliberations of a UN inter-governmental working group.

One avenue that needs to be pursued by governments is the lack of integration of human rights norms and standards into global rules governing trade and investment, which makes it more difficult to hold companies accountable. The International Law Commission has drawn attention to the fragmentation of international law, a point that has been reinforced by studies of the interfaces between international human rights law on the one hand, and laws in the economic sphere on the other hand, such as Bilateral Investment Treaties, Economic Partnership Agreements and WTO protocols. A UN treaty on business and human rights could have the effect of empowering states to protect and realise human rights in the face of economic activity, while also removing constraints that might prevent them from doing so. 

There are two lines of argument in favour of the integration of human rights into international trade and investment processes. The first type of argument is that the modern recognition of human rights as part of general international law implies that human rights should become part of the context for interpreting rules and policies in other areas. The fact that international bodies with an economic remit ignore human rights is because of constitutional and governance failings.  A related argument is that international organisations should embody human rights, which would happen if States operating through organisations such as the World Bank, WTO, WHO, and IMF take into account their human rights obligations in their decisions and voting behaviour.

However, not all international human rights lawyers support the integration of human rights into economic law. Some challenge the underlying assumption on the basis that the two bodies of law have different ideological underpinnings and that there is a danger that human rights would become detached from their foundations in human dignity and would instead be viewed primarily as instrumental means for the achievement of economic policy objectives.

Greater corporate accountability for human rights could be pursued in different ways via a range of institutions and instruments. An overarching UN treaty is one such approach. The UNGPs would appear to offer scope for integration into the spheres of trade and investment having become part of ‘soft law’ instruments of bodies that have a largely economic remit, such as the OECD’s Guidelines for Multinational Enterprises and the International Finance Corporation’s Performance Standards. An OECD-initiated process similar to the one on corruption could become an element of the solution to addressing protection gaps.

Despite the furore provoked by Ecuador’s proposal, it provides a wake-up call for governments who should be doing much more to consider effective solutions to address the adverse human rights impacts of companies. Open, transparent and productive discussions on this are overdue. The fact that some governments and intergovernmental bodies might rather not discuss such solutions is not a reason for anyone else to remain silent. Unlike Basil Fawlty, none of us should feel inhibited from raising this important issue.