The Committee on Economic, Social and Cultural Rights (CESCR) welcomed a full house on 21 February for its Day of Discussion on economic, social and cultural rights in the context of business activities. Under discussion was the Committee’s draft General Comment[1] on this topic which has generated a great deal of interest, evidenced by 62 submissions[2] and one of the highest levels of participation seen at a CESCR Day of Discussion. In attendance were a good mix of stakeholders who actively participated in the discussions - 19 State representatives, a large number of civil society organisations, UN agencies (such as UNICEF, ILO), NHRIs and business organisations and representatives. Interestingly, about half of the States present were developed economy or ‘home’ States that focused on issues regarding: extra-territorial obligations (ETOs); promotion of the UN Guiding Principles on Business and Human Rights (UNGPs); supply chain due diligence; and State attribution in respect of corporate human rights abuses. Also represented were a reasonable number of Latin American States and State proponents of an internationally legally binding instrument regarding transnational corporations and other business enterprises and human rights (TNCs treaty process). The intervention by the ‘Group of Friends of ESC Rights’[3] conveyed a supportive and encouraging tone which welcomed the Committee’s endeavours and looked forward to its deeper guidance on States’ ICESCR obligations in the context of business activities.

In essence, the oral interventions by States reflected their political positioning in the Human Rights Council debates on business and human rights which, put crudely, range between States who support the UNGPs and States who support the TNCs treaty process. For example, Norway, the US and Switzerland called on the Committee to better align the General Comment with the UNGPs and some interventions suggested that the UNGPs set the legal standards on business and human rights and the General Comment must adhere to those standards.  On the other hand, Ecuador, Venezuela, Bolivia and South Africa, urged the Committee to acknowledge and reinforce the TNCs treaty process in the General Comment and some interventions suggested that the UNGPs and National Action Plans should not be mentioned in the General Comment.

On these points, Mr de Schutter on behalf of the Committee, acknowledged the TNCs treaty process and said the General Comment was without prejudice to that political process.  He also articulated the Committee’s position that it is important to make a distinction between the UNGPs which are a non-binding policy instrument that guides States in improving their approach to business and human rights, and the legal duties States have under the ICESCR which will be elaborated in this General Comment. He stressed that the Committee does not consider that the UNGPs are binding on it, however, the Committee is inspired by many aspects of the UNGPs.

Ambassador Marta Maurás Pérez of Chile gave the opening presentation, noting the importance of this topic for economic, social and cultural rights and for many of the most pressing international issues, such as climate change and the Sustainable Development Agenda. She also reflected on her own involvement, during her term as member of the Committee on the Rights of the Child, in the elaboration of a General Comment (No. 16 (2013)) on business and children’s rights. She congratulated the Committee for an excellent first draft of the General Comment and for its openness and participatory approach to the process.

The Day proceeded with dedicated panel discussions on ‘Rationale, Context and Scope’, ‘State Obligations to Respect, Protect and Fulfil ESC Rights’, ‘Extra-territorial dimensions’ and ‘Access to Remedy’, each being followed by interventions from the floor. There was active participation from the floor, whereas the Committee itself appeared to be in ‘listening mode’ with only short interventions being made by the Chair and the Rapporteurs, Mr Zdzislaw Kedzia and Mr Olivier de Schutter.

Broadly, the interventions by business representatives and ‘home’ States emphasised and urged the Committee to take a less regulatory approach and instead encourage more voluntary initiatives to address human rights abuses, to ‘align’ with the UNGPs and to not meddle with current legal structures and systems that restrict liability within corporate groups and across jurisdictions. Broadly, civil society urged binding regulation of business entities, more transparency and participation, mandatory due diligence procedures and extra-territorial reach of the Covenant to enable cross-border liability and access to justice. Other topics that received significant attention from NGO interventions included: tax justice and fiscal policy; transparency in commercial relationships between State and business, including access to information; State-owned enterprises; privatisation and public-private partnerships; trade and investment agreements and dispute resolution regimes; corporate capture; the Sustainable Development Agenda; and climate change.

Perhaps the topic which evinced the most divergent views was ‘Extra-territorial dimensions’. The Committee’s draft General Comment dedicates considerable attention to this topic, noting that States’ ‘obligations under the Covenant do not stop at their territorial borders. State Parties are required to take necessary steps to prevent human rights violations abroad by corporations over which they may exercise influence, without infringing the sovereignty or diminishing the obligations of the host States under the Covenant.’[4] The draft unpacks the extra-territorial obligations to respect, protect and fulfil in what may be the most fulsome articulation of ETOs by any UN treaty body. For instance, the draft explains that States must ‘pay close attention to the adverse impacts outside their territories of the activities and operations of business entities that are domiciled under their jurisdiction’ and must ‘prevent and redress such impacts … regardless of where the harm occurs’[5]. The Committee suggests a broad understanding of the concept of ‘domicile’, potentially including entities with substantial activities or generating substantial revenues in the State Party or where the entity otherwise has a reasonable link to the State Party. In relation to the ETO to fulfil, the Committee emphasises international cooperation and assistance and the requirement to create and maintain an international environment that enables the fulfilment of Covenant rights, including for instance, in relation to taxation of corporations.

Predictably, business and ‘home’ State interventions[6] on ETOs said the Committee’s approach went too far and described it as contrary to international law and to the UNGPs. Other States[7] were supportive of the Committee’s approach. The ILO noted that there are a number of initiatives operating in the labour context that are explicitly extra-territorial and to which States and business are parties[8]. France referred to their new corporate duty of vigilance law (which was adopted by the French National Assembly that day) as an example of how States might address extra-territorial human rights impacts and supply chain due diligence. A significant number of civil society representatives strongly defended the Committee’s approach to ETOs both on legal grounds and as urgently needed to address impunity for ESC rights abuses in the context of business activities.

The discussion on remedies covered a broad range of issues. The OHCHR[9] showcased its substantial research (Accountability and Remedy Project) in this area and highlighted issues such as inequality of arms between parties, greater creativity in types of remedies, international co-operation and assistance in cross-border criminal cases, ‘after-care’ by Courts (implementation of judgements), importance of collective redress mechanisms, and their up-coming work on State-based non-judicial remedies.  Business representatives emphasised that the focus should be on building the capacity of domestic judicial systems to deliver domestic remedies and were protective of the corporate veil concept (ie. individual corporate legal personality). Others highlighted the reality that domestic remedies are not available in many countries due to corrupt, weak or ineffective legal systems and that impunity will prevail unless cross-border options are available. Several civil society interventions mentioned the need for law reform and capacity building in the area of corporate criminal liability and the significant barriers to justice for many victims of human rights abuses, including access to legal aid, the power imbalance between parties, the ‘forum non conveniens’ rules, costs rules and lawyers’ fees and access to evidence.

The Committee can be pleased with the level of interest and engagement in relation to its elaboration of this General Comment. The interactive and robust discussion that took place during the Day of Discussion and that is also reflected in the Written Submissions received, is an indication of the significance of this General Comment.  The Committee will now reflect on the inputs received and prepare a second draft which will be discussed by the Committee later this year and potentially adopted during its September/Oct session. It seems likely that not all participants will be happy with the outcome, given the word limits imposed and the diversity of issues raised. It will be most interesting to see how the Committee responds to the discussion on the UNGPs and ETOs, in relation to which there were very divergent positions. The remarks of the Rapporteurs suggest that the Committee will pursue its role of interpreting the ICESCR, being ‘inspired by’ but not bound by the UNGPs. Once adopted, it will be for States to ensure that the Committee’s guidance is reflected in its policies, laws and programs relating to economic, social and cultural rights in the context of business activities.  Civil society and business will also be able to also draw guidance from the future General Comment in their work to prevent and address human rights abuses related to business activities.

Lucy McKernan

Geneva Representative, GIESCR

15 March 2017

[1] http://www.ohchr.org/EN/HRBodies/CESCR/Pages/Discussion2017.aspx

[2] http://www.ohchr.org/EN/HRBodies/CESCR/Pages/Submissions2017.aspx

[3] Argentina, Belgium, Bolivia, Bosnia and Hercegovina, Chile, Egypt, Finland, France, Germany, Italy, Mexico, Namibia, Spain, Uruguay and Portugal

[4] CESCR Draft General Comment on economic, social and cultural rights in the context of business activities, paragraph 31

[5] paragraph 35

[6] Eg : UK, International Employers Organisation, Norway, Clifford Chance, Switzerland

[7] Ecuador and South Africa

[8] Eg: in relation to maritime labour standards

[9] Office of the High Commissioner for Human Rights