The EU and the UN Treaty on Business and Human Rights: Time to Change Course

By Dimitris Christopoulos, Olivier de Schutter, Miguel Moratinos, and Eva Joly.

This article was published (in French) in Le Monde and in the Financial Times

Since 2014, the 47 member-large intergovernmental United Nations body within which human rights issues are discussed, the Human Rights Council, has been working on a new Treaty on Business and Human Rights. An intergovernmental working group chaired by Ecuador, which has taken the lead in this process, has met in three successive sessions. At the most recent session in Geneva in October 2017, ’Elements’ were presented to guide the discussions. Still far short of a first draft, the ’Elements’ are a list of issues and options proposed for the delegation’s consideration.

The Member States of the European Union voted against the resolution that launched this process. The EU initially refused to even engage in the discussions. It finally accepted to do so only reluctantly, drawing ’red lines’ as conditions for entering into this dialogue. Its attitude, rather than constructive, has been defensive and suspicious of the intentions of the countries supporting the process. If and when the negotiations make progress over the coming months, it will not be thanks to the EU but rather in spite of its opposition.

As Europeans, we are deeply committed to the idea of a European Union whose external policies are guided by its values, including the universality and indivisibility of human rights and the promotion of multilateralism to address common problems, an idea expressed in Article 21 of the Treaty on the European Union. We regret that, until now, the EU has not proven capable of putting proposals on the table that would allow it to influence the negotiations in a constructive manner. We believe this is a mistake for four reasons.

First, while these obstructive tactics continue, precious political capital is being spent. In international diplomacy, the ability of any State or entity to influence discussions on an issue it cares about depends on its constructive engagement on other issues, which its partners attach greater importance to. By refusing to engage constructively, the EU will make it more difficult, in the future, to gather support for its own priorities. Its credibility, when it points at shortcomings of other governments, is already significantly reduced by its attitude in this particular dossier. This tactic is shortsighted and self-defeating.

Second, corporations registered in the EU are, by far, the most strictly regulated, ensuring that they neither violate human rights, nor be complicit in human rights violations. Under the Brussels 1 Regulation (now Regulation No. 1215/2012), victims of human rights violations attributable to EU-based companies have access to remedies before national courts in the EU. All EU Member States have established National Contact Points in accordance with the OECD Guidelines for Multinational Enterprises, allowing non-governmental organizations, trade unions and local communities to file complaints against corporations registered in the EU Member States that are allegedly acting in violation of the Guidelines, including their newly integrated human rights chapter. The Corporate Social Responsibility agenda of the European Commission has a strong human rights dimension, and large companies (with more than 500 employees) must report on the human rights violations that their activities may be responsible for, since the adoption in 2014 of a Directive to that effect. Further progress is taking place at the domestic level: France has taken the lead by adopting a law on 27 March 2017 imposing on companies of a certain size that they adopt “due diligence” plans to ensure, inter alia, the respect for human rights throughout their supply chains. The Netherlands has followed suit with a focus on child labour and nine national parliaments have sent a “green card” to the European Commission, requesting that an initiative be adopted at EU level.

The EU should be proud of the fact that these standards of corporate behaviour are imposed on its own companies. It is in the interest of these companies that the EU should enforce such standards even outside its area: competition will continue to be unfair, and the playing field will not be “level”, until this is done.

Third, in a number of EU Member States, often relying on classic civil liability rules, courts are ordering EU-based companies to comply with the duty to respect human rights throughout their activities, whether these take place in the EU or outside the EU. Case law is not always predictable, however. The scope of the “duty of care” a company owes to the employees or those affected by the activities of its subsidiaries or business partners, in particular, remains unclear. The current developments, based on case law, may be a source of legal uncertainty. The reputation of brands may be affected by lawsuits, filed under conditions that, in most EU Member States, no legislation clearly defines.

Fourth in the EU, perhaps more than in any other part of the world, citizens are turning away from economic globalization. Free trade agreements meet with strong resistance. The privileges of foreign investors, including their access to investor-State dispute-settlement mechanisms (in courts of arbitration, rather than ordinary courts), are being openly challenged. There has been a backlash against policies favoring regulatory reforms that comply with the exigencies of international competitiveness in almost all EU Member States, fueling economic nationalism and providing ammunition to demagogues from both the right and the left. It is high time for the EU to demonstrate that it supports a form of globalization that is tame, that serves sustainable development and does not result in further strengthening the power of the economic juggernauts.

No corporation deserves impunity. But corporations registered in the EU do deserve a level playing field, and they also have a right to legal certainty: progress towards multilateral standards of human rights conduct of companies could serve both goals at once. And the citizens of the EU have a right to expect that the EU foreign service engages in the international negotiations to promote the EU’s values, as required by the European treaties, rather than shying away from them, as if they were something to be ashamed of. The EU should put forward ambitious proposals for a legally binding instrument on business and human rights, and restore its credibility as a trusted participant in the shaping of a more humane economic globalization.

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