A step forward? A sceptical view on the need for a new business and human rights treaty

Chris Esdaile
26 May 2014

I confess to being a sceptic. Not regarding the need for legal accountability for human rights abuses by transnational corporations (TNCs) or other companies - indeed, I believe this is absolutely essential and a key challenge for the global human rights system - but I am sceptical about whether a treaty, at the present time, is the right way of achieving this. My professional work involves trying to ensure this kind of accountability, so why this scepticism?

Many responsible companies engage in Corporate Social Responsibility (CSR) initiatives, and the most responsible companies increasingly recognise the language of human rights and are adopting policies accordingly; but the fact remains that many do not. Companies who need not fear damage to their reputation, as they are not well known and operate outside the public spotlight, may feel it less essential to engage in CSR or to follow the UN Guiding Principles on Business and Human Rights (GPs). Indeed, most companies were hostile to the UN Norms on TNCs (a 2003 initiative to begin a process to establish binding rules in this sphere), and campaigned against them. How much has changed since then? Companies are still not likely to be enthusiastic about the prospect of binding rules in this area.

The recent call for a treaty came from over 80 states – a significant number. But the support of these states may wane in response to heavy lobbying by companies against the idea of a treaty, not least by those companies operating in their jurisdictions. Governments generally responded negatively to the UN Norms; low income states didn’t want intrusive regulations, and didn’t want to upset TNCs investing in their countries, and developed states felt that the Norms were unnecessary or excessive, and didn’t want to upset TNCs headquartered in their jurisdictions. I doubt that much has changed. The unanimous state support for the UN Guiding Principles at the UN Human Rights Council shouldn’t be misinterpreted: the GPs are a set of voluntary, non-binding principles and endorsing them does not imply state support for binding rules.

Further, the aspirations of some states and many NGOs are unlikely to be met in the treaty negotiation process. Much could be lost in such a process. There are a number of potential problems. For example, what rights would be included? The UN Norms were based on 56 types of human rights rules, and were widely criticised as being too complex and self-referential (one commentator referred to them as engaging in “self-generating normative cannibalism”[1]). But as regards the recent calls for a treaty, NGOs are again demanding comprehensive obligations “in relation to human rights violations, economic and ecological crimes, and abuses”. It seems highly unlikely that companies will willingly accept binding obligations in the area of economic, social, and cultural rights (despite them being included in the GPs), never mind regarding environmental damage.

I sympathise with those who argue that a treaty based on civil and political rights is not enough; a new treaty must extend to environmental issues, economic and social rights, and recognise the poverty caused by the trade disparities between the global south and the global north. But I struggle to see states or companies signing up to that.

Another potential problem is that, even if a treaty were agreed, many states would probably not ratify it. The US – which was particularly hostile to the UN Norms – has a poor record of ratifying treaties (it has the dubious privilege of standing alongside only Somalia and South Sudan in having failed to ratify the UN Convention on the Rights of the Child), and it is unlikely to be alone in objecting to a treaty on business and human rights.

A treaty negotiation process, therefore, would face the very real possibility of ending up with a watered-down set of rules, and a treaty with few ratifications. The process itself might generate added hostility to the prospect of binding rules on business and human rights. In short, such a negotiation process may leave us in no better position than we are now.

So what is the answer? The global human rights movement is only about 60 years old, and is a ‘work in progress’. The system was largely designed to protect individuals from human rights violations by states, and was never designed to cope with protecting individuals from violations by non-state entities like companies. The system is still far from perfect, and is particularly weak in providing remedies and enforcement - one of the key areas of focus for the proposed new treaty.

A new response is required that creatively harnesses the existing patchwork of rights and remedies, both on a domestic and international level. One idea would be to foster the propagation of the binding rules that already exist in this area. Perhaps states in the global south would be particularly well-placed to drive efforts to harmonise legislation and remedies at domestic and regional levels, to seek to embed binding rules in regional human rights mechanisms (historically less suspicious of economic, social and cultural rights), and to embed binding rules in their constitutions (recent constitutions in Latin America have been particularly progressive as regards the rights they recognise). These states might also be well placed to lobby for funding to enable claimants to seek remedies in existing local and/or regional mechanisms. Such an approach recognises the difficulty of achieving global consensus on a treaty, and also the fact that it is the global south which is often impacted by the most serious human rights abuses by companies.

There is little doubt that enforceable rules and accessible remedies are desperately needed in this area. However, John Ruggie, who led the process to develop the GPs, recently cautioned against “...going down a road that would end in largely symbolic gestures, of little practical use to real people in real places, and with a high potential for creating serious backlash against any form of further international legalization in this domain.” Although I disagree with John Ruggie on many issues, here I share his sentiments. We need accountability, not a treaty at any price.

[1] U. Baxi, ‘Market Fundamentalisms: Business Ethics at the Altar of Human Rights’, 5 Hum Rts L Rev 1 (2005)


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