欧盟和关于企业与人权的有约束力的条约的谈判

NO.16MARCH2023Introduction

TheEUandtheNegotiationsfora

BindingTreatyonBusinessand

HumanRights

MultilateralcooperationforstrengtheningtheEU’sstrategicautonomyin

supplychains

SikhoLuthangoandMeikeSchulze

TheEuropeanUnion(EU)isseekingoutnewpartnershipsandtostrengthenexisting

ones,particularlywithGlobalSouthstates,toenhanceitsopenstrategicautonomy.

Thisincludesaresilientsupplyofrawmaterialsforitstwintransitiontoadigitaland

greeneconomy.Hostingmanytransnationalcorporations,severalofthesepartners

advocateforabindinginternationalstandardtoregulatebusinessandhumanrights

beyondthenon-bindingUnitedNationsGuidingPrinciples(UNGPs).Thus,theEU

shouldestablishamandateandactivelyengageinthenegotiationsforaBindingTreaty

onBusinessandHumanRights(BHR)toconsolidateitsimageasadefenderofhuman

rightsinternationally.Multilateralnegotiationsenabledialogueandmutualcoopera-

tionthatregionalandnationallawsonsupplychainduediligencedonot,andthus

riskacceptancebyinternationalpartnersonceimplemented.Thisposesachallenge

formutualcooperation,whichisnecessarytoachievecorporateaccountability.

Thegovernancesystemforbusinessandhumanrightshasseenafurtherconsolida-tioninthelastdecadewithinternational,regionalandnationalinitiatives.Thereby,theendorsementoftheUNGPsin2011markedadecisivestep.Developedinamulti-stakeholderprocess,theUNGPscreateaframeworkthatimposesnon-bindingstandardsonbothstatesandbusinesses.However,shortlyaftertheiradoption–

emergingfromwhatcanbedescribedasa

“‘widebutthin’–ratherthana‘thick’

consensus”

–wasanotherpushfromstates

toestablishabindinginstrument,which

wasadirectreactiontothenon-binding

characteroftheUNGPs.

InSeptember2013,attheUnitedNations

HumanRightsCouncil(UNHRC),Ecuador

proposedthecreationofanOpen-ended

IntergovernmentalWorkingGroup

(OEIGWG)toelaboratealegallybinding

instrument(LBI)ontransnationalcorpora-

tions(TNCs)andotherbusinessenterprises

withrespecttohumanrights.Atthe26th

sessionoftheUNHRCinJune2014,Ecua-

dor’sresolution(29/6)wasadoptedandco-

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2

sponsoredbyBolivia,Cuba,SouthAfricaandVenezuela.However,therewasasmallmajoritythatcast20votesinfavour,with14againstand13abstentions.TheEUmem-berstatesallvotedagainsttheresolutionand,togetherwithotherGlobalNorthstates,receivedthetreatyalliancewithhostility,arguingthattheparallelprocesswouldposeathreattotheimplementationoftheUNGPs.Thiswasperceivedbysomestatesasanegativesignal,andthecredi-bilityofEUmemberstatesaspromotersofhumanrightswasquestioned.

Despitethisopposition,theOEIGWGhelditsfirstsessioninJuly2015,withEcuadorelectedasChair,andsubsequentlysevenfurthermeetingsinGenevabytheendof2022.TheChairpublishedtheFirst(Zero)TreatyDraftbeforethenegotiationswereheldin2018fortextualproposalsby

states.Inthe8thsession,heldinOctober2022,statesdebatedthelatest

ThirdRevised

Draft,

adrafttextforanLBIincludingvari-ousstates’proposalsforamendments.A“FriendsoftheChairGroup”–ageo-graphic,economicandpoliticalrepresen-

tationofstatestaskedwiththefacilitationofcompromisesforthetreatyacrossregions–wasalsoconsolidatedinthelastsession.

Theprocesshassofarseenengagementfrommanyofitssupporters,butitlacksdynamicandbroadstateparticipation.Thisisslowlychanging,however,asmomentumaroundbusinessandhumanrightsisin-creasinggloballyandasmorestatesjointhenegotiations–includingtheUnitedStates(US),JapanandtheUnitedKingdom(UK)–followingsomecriticismabouttheprogressandcredibilityofthenegotiations.More-over,theEU’sstrongoppositiontothepro-cesshassubsided.Eventhoughanofficialnegotiatingmandatehasnotyetbeenestab-lished,theadvancementofthelegislativeprocessforabindingEUsupplychainlawmaypavethewayforgreaterinternationalengagement.

TheEU’sactiveengagementinthenego-tiationsisespeciallysignificant,astheEUseekstoreshapeitseconomicties.Thepan-demic–especiallyinrelationtoChina–andthesubsequentinterruptionofglobal

supplychains,aswellasRussia’swaragainstUkraine,havecompelledtheEUtoreassessitssupplychaindependencies.Ad-ditionally,theintensificationofUS-Chinatradetensionssince2022hassolidifiedtheEU’sobjectivetostrengthenitsstrategicautonomyandbuildmoreresilientsupplychainstoachieveitstransitiontoadigitalandgreeneconomy(twintransition).Tothisend,internationalpartnershipsthatenablethestrategicdiversificationofsup-plychainsaretobeconsolidatedornewlyestablished.

ItisimportantfortheEUtosendacon-sistentsignalaboutthesignificanceofhumanandenvironmentalstandardstolike-mindedpartnerstates.Regulatingbusinessthroughregionalandnationalduediligencelawsthatwillhaveanextraterri-torialimpact,butwithoutparticipatinginmultilateralnegotiations,doesnotsendaconsistentsignaltothesepartners.

Patterns,alliesanddivisionsatthenegotiationsforabindingtreaty

Asinpreviousinternationalnegotiationsontheregulationoftransnationalcorpora-tions,positionstoelaborateonanLBIweredivided.Andeventhoughtheprocesshasgainedmomentumsince2021,disagree-mentoncertainissuesremains.Manycoun-triesoftheGlobalSouthcontinuetocam-paignforacomprehensiveLBIthatgoesbeyondtheUNGPs.TheGlobalNorth’sop-positiontotheprocesshasbeenweakened.However,thebeliefthatthevoluntarynatureoftheUNGPsissufficientisstillwidespreadandremainscontentiouswiththeinitiatorsandproponentsofanLBI.

OutliningthekeydemandsofGlobalSouthstates

GlobalSouthstates,whicharecommonlyhoststatesofTNCs,arefacingincreasingdomesticpressuretoaddresshumanandenvironmentalrightsviolations,withmanyexplorationorextractiveprojectsinseveral

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3

ofthesecountrieshavingbeenhalted.Forexample,inSouthAfrica,aShellseismicsurveyforoilandgaswasinterdictedbythewildcoastcommunityduetoa

flawed

humanrightsduediligenceprocess

.Thereareweakgovernancezonesandchallenges

intheimplementationoflegislationinsomeofthesestates,whichaddsanotherlayerofdifficultyinaddressingthesevio-lations.Thishasincreasedtheneedto

pursuecasesinthehomestatesofTNCs,as

withthe

landmarkverdict

bytheCourtofAppealinTheHague,Netherlands,thatfoundShellNigerialiableforpollutioncausedbyleakingoilpipelines.

ThesestatesarealsomainlyinitiatorsandproponentsoftheresolutionforanLBIonbusinessandhumanrights.Ecuador,asthelong-termChair,andSouthAfricaarekeepingthenegotiationsaliveandshapingtheprocesssignificantly.StatessuchasSouthAfrica,Cuba,Bolivia,Namibia,Alge-ria,Panama,PalestineandCameroonre-mainstrongsupportersofacomprehensive,broad-spectrumtreaty.ThesestatesarguethatthevoluntarynatureoftheUNGPsisinsufficientanddemandacomprehensivelegalinstrumentattheinternationallevel,astheycontinuouslyexperiencethepreva-lenceofhumanrightsviolationsbybusi-

nessesandchallengestoaccessremedy.

A2021

studybyUllahandco-authors

showsthatGlobalNorth-listedTNCsareoftenengagedinviolationsofhumanrightsand/orenvironmentalrights,whichmostlyoccurindevelopingcountriesandareoftenrelatedtotheextractivessector.Thevastmajorityofthesecompaniesinstitutional-isedsustainabilitycommitteesandaresignatoriesoftheGlobalCompact,buttheyfailtodiscloseviolationsofthiskindandhamperaccesstoremedy.

Anillustrativecaseiswhatisnowknownasthe2012MarikanaMassacreinSouthAfrica,where34workerswerekilledduringastrikeataplatinummine.Responsibilityandremedyarestillbeingnegotiatedtoday.Atthecentreremainsthequestionofliabil-ityoftheBritishminingcompanyoperatinginSouthAfrica,Lonmin,whichhadexportrelationsmainlyinternationally,including

withBASFinGermany.Issuessuchaslia-

bilityandaccesstoremedyremainkeycon-

cernsformanyTNC-hostcountries,which

thenon-bindingUNGPsdonotaddress:

Cor-

porateveilsleadtocomplexliabilityissues

,

andthejurisdictionofcourtsinlegaldis-

putesoftenhasanegativeimpactonthe

protectionofhumanrights.Suingtheparent

companyintheTNC’shomestate,orthe

mainbuyer’s,isfraughtwithconsiderable

obstacles.

Moreover,thesestatesoftenweighthe

pursuitofanLBIagainstthefearoflosing

foreigninvestment.Butthismaychangeif

moreGlobalSouthstatesjointhenegotia-

tions.TheAfricangroupcanalsobeex-

pectedtostrengthen.Forexample,with

Ghana’sannouncementtoimplementthe

UNGPsthroughtheestablishmentofa

NationalActionPlan(NAP),itmayre-join

andactivelyshapethenegotiations.Fur-

thermore,despiteconcernsfromcivilsocie-

tyaboutnothavinganAfricanrepresenta-

tiveintheFriendsoftheChairGroup,Cam-

eroon’sannouncementtojointhegroupin

the8thsessionindicatesthatthereisstilla

commitmentfromtheAfricangroupasa

regionalbloc.Greaterregionalcoordination

intheareaofbusinessregulationisalso

likelytominimiseinter-statecompetition

inlightofnewinvestments.Inthewake

ofthegeopoliticalchangesofthelasttwo

years,majoreconomies–theUS,theEU

andChina–areseekingtosecurepartner-

shipswiththeGlobalSouth,especiallyfor

criticalmineralsbutalsootherstrategic

supplychains,whichincreasestheleverage

ofthesestates,includingontheprotection

ofhumanrights.

FragmentedBRICS:Anopportu-

nitytostrengthendialoguewith

like-mindedstates?

ExceptforBrazil,whichabstained,theother

BRICSstatesallvotedinfavourofelaborat-

ingonanLBIbackin2014andhavebeen

activelyengagedinthenegotiations,thus

showingtheircommitmenttomultilateral

negotiations.However,asarguedbysome

scholars,theGlobalNorth/Southdistinction

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4

canobscureimportantpowerdynamicsandresourcesasitrelatestobusinesses,includ-ingaccountability,becauseTNCsarealsolocatedindevelopingandemergingecono-mies,aswiththeBRICSstates.Theirregion-al–partlyglobal–economicinfluenceisalreadypronounced.

Theirviewregardinginternationalstan-dardsisinterestingtoobserve,astheirpoliticalleverageiscontinuallyincreasing,withtheforumplanningtoexpandandformanalternativetotheG7.Althoughtheyallemphasisetheprotectionoftheirrighttosocio-economicdevelopment,theytakedifferentstancestowardstheprovi-sionsoftheThirdRevisedDraft.

SouthAfricahasstronglyadvocatedforanLBIsincethebeginningandremainsinvestedintheprocess,despiteconcernsaboutthedirectionoftheCyrilRamaphosapresidency.Itseesextraterritorialobliga-tions(ETOs)askeytoaccessjustice.ETOsguaranteetherightsofthoseimpactedbyhumanrightsviolationstobeheardinallstagesofproceedingsandremoveslegalob-staclessuchasthedoctrineofforumnoncon-veniens.ThedoctrineisacommonmeasureusedbyTNCstoevadeaccountabilityinplaceswhereforeigncourtsmaydismissacasetobeheardinanother“appropriate”

jurisdiction,usuallywheretheviolationoccurred.Somescholars,suchas

DeSchut-

ter,

arguethatETOsareweaklyformulatedbytheUNGPsandshouldbeclarifiedinanLBI.

However,asastatethatisalsohometoTNCs,SouthAfricaiscurrentlyfacingsuch

acase.In2020,Zambiancommunitiesfiled

a

lawsuit

againstminingcompanyAngloAmericanforleadpoisoninginoneofitsoperationsinZambia.AsofJanuary2023,aSouthAfricancourtiscurrentlydecidingwhetherthesubsidiaryoftheAngloAmeri-canminingcompanywillfaceaclass-actionlawsuit.

ComparedtoSouthAfrica,China,RussiaandBrazilareengagingactivelyinthenegotiationswithtextualproposalsbutrejectseveralkeyprovisionsofthetreaty,especiallythoserelatingtoETOs.Mostnotably,allthreestronglyemphasisethe

protectionofnationalsovereigntyand,inlinewiththisargument,rejecttheremovalofthedoctrineofforumnonconveniens.

Withthistypeofengagement,Chinaispursuingalonger-observedapproachinUNhumanrightsbodiesandattemptingtorewritenormsinitsinterest,especiallyinitspursuitofnewstrategicpartnershipswithotherGlobalSouthstates.

InBrazil,thegovernmentchangetoaleft-leaningPresidentLuladaSilvaislikelytohaveanimpactonthegovernment’sstanceinthecomingnegotiations.LularecentlycameoutagainstthedeforestationoftheAmazonrainforest,whichshowsastrongerpoliticalcommitmenttotheprotectionofhumanandenvironmentalrightsthanwiththepreviousgovernment.WhetherLulawillbeabletoachieveabalancingactbetweenBrazil´sdomesticdevelopmentneedsandtheprotectionofhumanandenvironmentalrightsremainstobeseenintheupcomingnegotiations.

UnderPresidentNarendraModi’sgovern-mentandinlinewithitssupportfor(re-formed)multilateralism,whichistheinclu-sionofdevelopingstatesininstitutionsofglobalgovernance,IndiasupportstheUNprocessforanLBI.India’srepresentatives,

however,emphasisetheirnationalinitia-

tivesandneedfor

aflexibleagreement

thattakesintoaccounttheirrighttodevelop-ment.OncetheEUcomestothefore,itmaybeinIndia’sbestinteresttoalignitselfbyusingalong-observedforeignpolicyap-proachthatusuallyemphasisesitsvaluesontheruleoflawanddemocracy.Asapotentialpartner,thiswouldsetIndiaapartfromChina.

Atthemoment,onecanconcludethattheBRICS’participationinthenegotiationsisfragmented.Thus,theEUshouldusethebindingtreatynegotiationsasanopportu-nitytointensifydialoguewiththeseemerg-ingeconomieswithwhichacloserpartner-shipisenvisioned.TheseincludeSouthAfricaaswellastheobservationofdevelop-mentsinBrazilandIndia.Additionally,notingwhatthesestatesconsiderasimpor-tantinthetreatynegotiationsisnecessaryifpotentialpartnershipsaretobebuilt.

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5

PossibleGlobalNorthconstel-lations:TheEUneedsitsownstrategicposition

Sincethe7thsessionin2021,moreGlobalNorthstateshaveparticipatedinthenego-tiations,presentingtheirpositionsandinfluencingtheprocess.Thesestates’par-ticipationissignificantbecauseoftheireconomicinfluenceworldwideasthehomestatesformanyTNCs,andthroughthemtheycanshapeintegratedtransnationalsupplychains.Forexample,AustraliaandJapanre-joinedthenegotiationsin2021and2022afterbeingabsentforseveralyears.TheUSparticipatedforthesecondtimeatthe8thsessionin2022aftervehe-mentlyrejectingtheprocessatthebegin-ning.Therefore,allG7members(exceptfor

Canada)aswellastheEUwerepresentinGeneva.TheG7labourministersalso

an-

nounced

theirsupportforanLBIin2022–areflectionofchangingattitudesamongmanyGlobalNorthstates.

Nevertheless,severalGlobalNorthstatessuchasNorway,AustraliaandJapanopenlyrejecttheThirdRevisedDraftandarenotactivelyengaginginthenegotiations.Indoingso,thesestatesarebroadlyaligningthemselveswiththepositionoftheUS,whichisexperiencingachanginglandscapedomestically,especiallyasitrelatestothe

rightsofindigenousgroups.Forexample,Arizonaiscurrentlydealingwith

resistance

fromNativeAmericangroups

againstacopper-miningprojectbackedbyRioTintoandBHP.US-basedcivilsocietygroupsthat

supporttherightsofindigenousgroupswerealsoactivelyparticipatinginthenego-tiationsatthe8thsession.

However,withitsstatementsandtextualproposals,theUSstillrejectsabroad-spec-trumtreaty.Itfavoursvoluntarismby,forexample,suggestingtochange“obligations”ofbusinessesto“responsibility”–akeyfeatureofthenon-bindingnatureoftheUNGPs.Theseproposalsareinlinewiththesuggestionforaframeworkagreementandasaless“prescriptive”approachinregulat-ingbusiness.Nonetheless,theUSalsoaimstodiversifyandreduceitsdependencyon

China.Consideringtheincreasingdomestic

pressurefortheprotectionofhumanrights,

theUScanbeexpectedtoremaincommit-

tedtonegotiatinginthecomingsessions.

However,itremainsunlikelythatitwill

ratifyabroad-spectrumtreaty.Inthissce-

nario,anallianceofstateswiththeUScan

beexpected.Thismayweakensomeofthe

strongdemandscomingfromcertainGlobal

Southstates.

ThemajorityofEUmemberstateshave

notyetestablishedtheirownpositionson

theLBI–theycontinuetoactasaregional

bloc,awaitinganEUmandate.However,

havingvotedagainsttheestablishmentof

theOEIGWGin2014,theEU’sinitialab-

soluteoppositiontoabindinginstrument

hassoftened.Forexample,along-time

demandoftheEUwasthebroadeningof

thetreaty’sscopeofapplication,andthisis

nowfulfilledwiththeprovisionsofthe

ThirdRevisedDraft.Additionally,theEU

concessioncanbeseenasareflectionof

increasinginternationaldebatesaboutthe

responsibilitiesofbusinessandincreased

awarenessofconsumers.

InalignmentwithotherGlobalNorth

states,theEUcritiquesthelevelofdetail

andlackofclarityofvariouslegalformula-

tionsandtermsoftheThirdRevisedDraft,

includingliabilityclauses,despitenothav-

inganofficialmandateyet.However,these

argumentsareopposedbystatesthatinsist

theoptiontoseekclarityonthetextis

availablebymeansofnegotiatingtheThird

RevisedDraft,asopposedtonotestablish-

ingamandate.

SomeEUmemberstatesareincreasingly

sympathetictotheprocessandarepushing

foranEUnegotiatingmandate,including

clarificationoncompetenciesbetweenthe

EUanditsmemberstates.Thiswilldeter-

minewhichprovisionstheEUandthemem-

berstatescannegotiateonrespectively.The

LBIcoversvariousaspectsthatfallunder

theEU’scompetence,suchasinternational

trade,whichwillexpandfurtherwiththe

adoptionoftheCSDDD.However,thereare

stillmanyaspectsoftheLBIthatwillremain

withinthecompetenceofthemember

states,suchasprovisionsrelatedtoproce-

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durallaw.Thiscoordinationwillalsoaffectthetimelyestablishmentofamandate.

FranceandPortugal,bothparticipantsfromtheEUsince2016,haveagreedtobepartoftheFriendsoftheChairGroup.And,withGermanyhavingpassedtheGermanSupplyChainAct(LkSG)andshownsupportfortheupcomingEUregulation,thepoliti-calwillforanLBIseemstobegrowing.However,thereseemstobenoagreementyetonacommongovernmentpositionin

Germany.LabourMinisterHubertusHeil

statedinOctober2022

thatthenegotiationsintheUNHRCshouldbeconstructivelysupportedandthatanEUmandatewasoverdue,buttheresponsibleForeignOfficeremainshesitant,asdoestheMinistryofJustice.AcommonGermanpositionisintegraltoadvancingtheprocessregionallyandinternationally.

PotentialallianceswiththeEU–andespeciallywiththeUS–arelikely.OnceamandatehasbeenestablishedbytheEU,buildinganalliancewiththeUSwithouttakingintoaccountthekeydemandsoftheGlobalSouthandpotentialramificationsmaynegativelyimpacttheEU’spartnershipefforts.ThiswarrantsastrongEUpositionofitsown.

TheEU’sdraftsupplychainlawanditsroleinthenegotiations

InFebruary2022,theEUCommissionpro-posedthedraftforanEUsupplychainlaw,the

CorporateSustainabilityDueDiligence

Directive

(CSDDD).Onthebasisofthisdraft,thetriloguenegotiationsbetweenthe

Commission,theParliamentandtheCoun-ciloftheEUarecurrentlytakingplace.Afinaldraftlawisexpectedby2024.

TheEUdemonstratesapoliticalwilling-nesstomoveawayfromvoluntarystan-dardstowardsmorebindingregulationforcorporates.However,withitscurrentlackofactiveengagementinthebindingtreatyprocessandwithoutamandatetonegoti-ate,thiswillingnesshasnotmaterialisedattheinternationallevel.Withmoreengage-mentinthemultilateralprocess,theEUhas

abetterchanceofpresentingtheimageitisstrivingfor:apromoteranddefenderofhumanrightsandatrustworthyinter-nationalpartner.

Inthisrespect,theexternalperceptionoflegislativeinitiativesattheregionallevel,withoutengagementinthemultilateralnegotiations,needstobeacknowledged.Implementingduediligencelawswithcross-borderimplicationscanbeinterpretedastheGlobalNorthimposinglawsontheGlobalSouth,especiallysinceonlylimitedformsofdialogueandconsultationwith

relevantpartnershaveoccurred.Thismay

leadtoa

riskofacceptance

oftheselawsbypotentialandexistingpartnersandmayposechallengesformutualcooperation,especiallywiththestatesoftheGlobalSouth,whichareaffectedmostbythehumanrightsimpactsofTNCs.TheEUcansendaconsistentsignalbybeingmoreactiveatthislevel.

Nevertheless,regionalinitiativessuchastheupcomingCSDDDmayverywellenrichtheprocessattheinternationallevelby,forexample,broadeningthescopeofthetreatytoincludeimpactsontheenvironmentaswell.

Asseenduringthe8thsessionin2022,theEUhasalreadybeguntousetheCSDDDproposaltoinformthenegotiations.How-ever,thelimitsandimplicationsofusingtheproposalastheonlybasisforengagingmultilaterallyshouldbeconsidered.Thisisparticularlyimportantinordertoacknowl-edgethelongstandingdemandsofcommu-nities–andpartlystates–intheGlobalSouthtoensureproperaccesstojustice,particularlyforvictimsofhumanrightviolations.

Accesstojusticeisaparticularchallengeintransnationalsupplychains.A

studyby

theEuropeanLawInstitute

foundthatneithertheCSDDDnorthelawsfromFranceorGermanyliftthecorporateveilandadequatelyaddressaccesstoremedy.

Forexample,astheCSDDDcurrentlyde-clares,civilliabilitycanonlybeinvokedwhenthereisa

directlink

betweenthe

company’sfailuretocomplywithitsduediligenceobligationsandthedamage.This

SWPComment16

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7

approachislikelytoimpedevictims’accesstojustice.Ensuringaccesstojusticeandremediesoftenremaininsufficientlypro-videdforinduediligencelaws.Hence,theLBIsetsaliabilityregimethatappliesbe-yondduediligenceobligations.

Inordertobuildpartnerships,theEUmustbewillingtotakeasteptowardsitspartnersinthisarea.DiversifyingitssupplychainwillrequireabalancingactbetweenitspotentialalliancewithotherGlobalNorthstates,suchastheUS,anditsgoalofcreatingandstrengtheningitspartnershipswithGlobalSouthstates.

AndinthespiritofhavinganinstrumentthatalignswiththeUNGPs–alongstand-ingfocusoftheEUinthenegotiations–theprovisionssetoutinthecurrentThirdRevisedDraftwouldprovidenotonlycon-tinuity,butalsocomplementar