40/48 Report on the fourth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights
Document Type: Final Report
Date: 2019 Jan
Session: 40th Regular Session (2019 Feb)
Agenda Item: Item3: Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development
GE.18-22806(E)
Human Rights Council Fortieth session
25 February–22 March 2019
Agenda item 3
Promotion and protection of all human rights, civil,
political, economic, social and cultural rights,
including the right to development
Report on the fourth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights*
Chair-Rapporteur: Luis Gallegos
* The annexes to the present report are circulated as received, in the language of submission only.
United Nations A/HRC/40/48
Contents
Page
I. Introduction ................................................................................................................................... 3
II. Organization of the session ........................................................................................................... 3
A. Election of the Chair-Rapporteur .......................................................................................... 3
B. Attendance ............................................................................................................................ 3
C. Documentation ...................................................................................................................... 3
D. Adoption of the agenda and programme of work ................................................................. 4
III. Opening statements ....................................................................................................................... 4
A. Keynote speech ..................................................................................................................... 4
B. General statements ................................................................................................................ 4
C. General introduction to the draft legally binding instrument ................................................ 7
IV. First reading of the draft legally binding instrument ..................................................................... 7
A. Articles 2 and 8 ..................................................................................................................... 7
B. Articles 6, 7 and 13 ............................................................................................................... 9
C. Article 9 ................................................................................................................................ 10
D. Articles 10, 11 and 12 ........................................................................................................... 12
E. Articles 3 and 4 ..................................................................................................................... 13
F. Article 5 ................................................................................................................................ 14
G. Articles 1, 14 and 15 ............................................................................................................. 15
V. Presentation of the draft optional protocol .................................................................................... 17
VI. Panel: “The voices of victims” ...................................................................................................... 17
VII. Recommendations of the Chair-Rapporteur and conclusions of the working group ..................... 18
A. Recommendations of the Chair-Rapporteur ......................................................................... 18
B. Conclusions of the working group ........................................................................................ 18
VIII. Adoption of the report ................................................................................................................... 19
Annexes
I. List of participants ......................................................................................................................... 20
II. List of panellists ............................................................................................................................ 22
III. Summary of statements by panellists ............................................................................................ 24
I. Introduction
1. The open-ended intergovernmental working group on transnational corporations and
other business enterprises with respect to human rights was established by the Human Rights
Council in its resolution 26/9 of 26 June 2014 and mandated to elaborate an international
legally binding instrument to regulate, in international human rights law, the activities of
transnational corporations and other business enterprises with respect to human rights.
2. The working group’s fourth session, which took place from 15 to 19 October 2018,
opened with a statement from the United Nations Deputy High Commissioner for Human
Rights. She congratulated the Chair-Rapporteur on the release of the draft legally binding
instrument and the draft optional protocol, noting that those drafts marked a key milestone
and provided a welcome basis for the start of substantive negotiations. The instrument should
focus on the needs of people affected by business-related human rights abuses and take into
account the differential impact that such abuses had on different groups of rights holders.
Noting that there was no inherent conflict between the Guiding Principles on Business and
Human Rights and the development of a legally binding instrument, she stressed that the
treaty process should build on the progress made with the Guiding Principles and relevant
initiatives aimed at improving access to remedy for victims of corporate abuses, such as the
Accountability and Remedy Project of the Office of the United Nations High Commissioner
for Human Rights (OHCHR). She noted the shared goal and aspirations among those present
to end corporate abuse, expressed deep appreciation for the civil society organizations driving
the process forward and recalled the aims of the process. Finally, she invited all stakeholders
to engage constructively and work collaboratively during the session.
II. Organization of the session
A. Election of the Chair-Rapporteur
3. The Permanent Representative of Ecuador, Luis Gallegos, was elected Chair-
Rapporteur by acclamation following his nomination, on behalf of the Group of Latin
American and Caribbean States, by the delegation of Mexico.
B. Attendance
4. The list of participants, the list of panellists and the summary of statements by
panellists are contained in annexes I, II and III, respectively.
C. Documentation
5. The working group had before it the following documents:
(a) Human Rights Council resolution 26/9;
(b) The provisional agenda of the working group (A/HRC/WG.16/4/1);
(c) Other documents, including the Chair-Rapporteur’s zero draft legally binding
instrument to regulate, in international human rights law, the activities of transnational
corporations and other business enterprises, the Chair-Rapporteur’s zero draft optional
protocol to the draft instrument and a programme of work, all of which were made available
to the working group on its website.1
1 See www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Session4/Pages/Session4.aspx.
D. Adoption of the agenda and programme of work
6. In his opening statement, the Chair-Rapporteur said that the draft instrument was the
result of years of joint efforts. Its core aims are the protection against business-related human
rights abuse, the elimination of impunity and access to justice for victims. The draft was
based on discussions held during the working group’s first three sessions, as well as several
consultations and more than 100 bilateral meetings held in 2018 with multiple stakeholders.
He referred to legal gaps and noted that the obstacles faced by victims of business-related
human rights abuse with respect to access to remedy had been clearly identified and could be
addressed only by the adoption of a legally binding instrument. The current draft could and
should be improved; thus, the Chair-Rapporteur wished for States to contribute
constructively during the session.
7. The Chair-Rapporteur presented the draft programme of work and invited comments.
As there were no comments by States, the programme of work was adopted.
III. Opening statements
A. Keynote speech
8. The keynote speaker, the Member of the French National Assembly, Dominique
Potier, said that a new dawn for globalization, which should be based on the recognition of
rights for all, was approaching. He called for a shift in the discourse, away from the
idolization of markets and towards respect for human rights. The struggle for human dignity
and the survival of the planet were part of the same battle. Drawing on the French experience
in the field of business and human rights, he referred to three lessons that could inform the
working group’s discussions. The first was the need to work in alignment with the Guiding
Principles and avoid redefining parameters. Second, the discussion should be grounded in a
realistic vision that could prompt international and national engagement. Third, defining the
scope of companies to be regulated could be challenging; France had found success in a
gradual approach. Prevention was key to any successful arrangement.
B. General statements
9. Delegations congratulated the Chair-Rapporteur on his election, with many
expressing their full support for his leadership.2 Many delegations also thanked the Chair
delegation for the release of the draft legally binding instrument and the draft optional
protocol in advance of the session, noting that the production of those documents represented
a significant step in the process of the working group. Furthermore, several delegations
recognized the importance of civil society as a driving force behind the process.
10. Several delegations and many non-governmental organizations (NGOs) reminded the
working group of the multiple reasons for further developments in the field of business and
human rights. General issues were raised, such as the unfair power imbalance between
companies and rights holders, the growing power of companies vis-à-vis States, the increased
scope of the rights granted to companies on the international stage without corresponding
obligations and the lack of effective regulation in conflict and post-conflict settings. Specific
types of abuse were also mentioned, such as the negligent exposure of children to toxic
chemicals and the displacement and murder of indigenous peoples. Many delegations and
NGOs saw those issues as evidence of gaps in the international legal order that had been
brought on by globalization and should be filled with a legally binding instrument.
2 Copies of the oral statements made by States and observer organizations during the fourth session that
were shared with the secretariat are available at
www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Session4/Pages/Session4.aspx. A webcast of the
entire session is available at http://webtv.un.org/.
11. Some delegations and observer organizations referred to regional and international
standards and initiatives relevant to business and human rights, stressing the importance of
building upon the work that had already been undertaken. Reference was made to
International Labour Organization conventions, the Guidelines for Multinational Enterprises
of the Organization for Economic Cooperation and Development (OECD), European Union
regulations and directives, and the work of OHCHR (its Accountability and Remedy Project
in particular) and the Working Group on the issue of human rights and transnational
corporations and other business enterprises. Some delegations and organizations affirmed the
importance of the Guiding Principles and emphasized that the draft instrument must build on
and borrow from them. Although several delegations recognized the influence of the Guiding
Principles on the draft instrument, others pointed out the lack of any explicit reference to
them in the draft. Two business organizations explained that they did not support the draft
instrument or the draft protocol for many reasons; in their view, the drafts undermined and
diverged from the accepted approach taken in the Guiding Principles.
12. The majority of the discussion centred on the draft instrument itself. Many delegations
considered the draft to be a good starting point for negotiations and a major improvement on
the elements document that had been the basis for discussions at the working group’s third
session. The recognition in the draft that the primary responsibility to promote, respect,
protect and fulfil human rights and fundamental freedoms lay with States was especially
welcome. While many delegations noted approvingly that the draft imposed obligations on
States only, some delegations asked whether that was actually the case. One delegation
pointed out, for instance, that, throughout the draft, there were references to human rights
“violations” committed in the context of business activities and insisted that the word
“violations” referred to breaches of obligations. In its view, it would be more accurate to refer
to human rights “abuses” if the direct obligations of companies were not being discussed in
the draft. Another delegation and several NGOs considered it unproblematic to impose direct
obligations on companies under international law and expressed the hope that the future
instrument would establish such obligations.
13. There were some calls by delegations and observer organizations for more clarity and
precision in the language of the draft, given its legal nature. The articles covering the scope,
definitions, jurisdiction, applicable law, rights of victims, legal liability and international
cooperation were specifically mentioned in that regard. A regional organization reserved its
position on the draft. It stated that the added value of any possible legally binding instrument
should be to enhance the protection of and respect for human rights and ensure a level playing
field for companies globally. The organization noted that it was reflecting on what type of
legally binding instrument would stand the best chance of achieving that level playing field.
Some delegations also reserved their position on the draft as a whole, arguing that it risked
jeopardizing the ongoing efforts to ensure that the Guiding Principles were followed. One
delegation noted that many provisions in the draft merely restated general obligations and
principles of international law. It suggested that those provisions could be removed to avoid
unnecessary duplication.
14. Specific provisions of the draft were also addressed during the general discussion.
Many delegations and organizations commented on the scope of the instrument, that is, the
companies to be covered under it. They argued that the scope was too narrow, because only
companies with transnational activities were to be regulated. It was noted that the structure
or nature of a company was irrelevant to victims, who should be entitled to access to remedy
regardless of the kind of company committing the abuse. In addition, many transnational
corporations owned or had relationships with strictly domestic companies, making it difficult
to differentiate between transnational and national companies in practice. It was thus
suggested that all companies be covered by the future instrument (although some argued that
resolution 26/9 restricted the scope to transnational corporations alone). Some delegations
and observers also expressed concern about the limitation of the draft’s scope to companies
involved in for-profit economic activity, as that limitation, they argued, would exclude from
the scope many companies responsible for documented abuses, such as State-owned
enterprises. Two delegations suggested that developing countries be given special
consideration, and that State-owned enterprises, as well as micro-businesses and small
businesses in those countries, be subject to more lenient treatment.
15. Some delegations requested more clarity with respect to the rights to be covered by
the instrument. They noted that “all international human rights and those rights recognized
under domestic law”, could vary from State to State, since States ratified different human
rights treaties and had different domestic laws. There was a question as to whether such
differences would cause implementation issues.
16. Delegations and NGOs expressed their appreciation for the article on jurisdiction
since, in their view, the use of extraterritorial jurisdiction by home States was crucial to
ensuring that companies could not avoid accountability. However, other delegations voiced
concern over the use of extraterritorial jurisdiction.
17. Many delegations and organizations welcomed the focus on prevention, with several
NGOs stressing the importance of mandating due diligence activities.
18. Divergent views were expressed with respect to the article on legal liability. Although
some delegations and organizations argued that the provision made in the draft instrument
for criminal, civil or administrative liability was crucial for victims, other delegations
questioned whether it was appropriate to discuss the criminal liability of legal entities, as
such liability was not provided for in their jurisdictions. Concern was also raised about the
provision authorizing universal jurisdiction.
19. Differing views were also discussed with respect to the relationship between the future
instrument and trade and investment agreements. At least one delegation and several
organizations stressed the importance of affirming the primacy of human rights over such
agreements. However, some delegations were concerned that such an affirmation would
prioritize one branch of international law over another and could restrict States’ negotiating
positions. With respect to investment more generally, delegations noted the importance of
sustainable development and argued that a legally binding instrument would not have a
negative effect on investment; rather, it would create a level playing field and ensure that
investment occurred in a context in which human rights standards were respected. In that
regard, several delegations mentioned the 2030 Agenda for Sustainable Development and
pointed out that the Sustainable Development Goals recognized the positive role that could
be played by business.
20. Many NGOs and a network of national human rights institutions suggested additions
to the draft. In their view, the instrument could more clearly refer to the role and protection
of human rights defenders and other at-risk populations. Specific reference was made to
indigenous peoples and the importance of free, prior and informed consent. Calls were also
made for the greater structural integration of a gender perspective.
21. Delegations thanked the Chair for his intersessional consultations and for leading an
inclusive, transparent process of elaborating the draft. However, a regional organization
expressed the view that the Chair had not addressed its concerns. It regretted that most of its
proposals had not been taken into account, including (a) a suggestion to revert to the Human
Rights Council to adopt a new resolution, which could have reaffirmed the mandate for the
elaboration of a legally binding instrument; (b) a request that a footnote be added to the
programme of work to clarify that the working group could discuss all business enterprises;
and (c) a proposal to invite the former Special Representative of the Secretary-General on
the issue of human rights and transnational corporations and other business enterprises, John
Ruggie, to deliver a keynote speech at the opening of the session.
22. Some delegations noted that the treaty process was not anti-business and that business
should have a greater voice in it, whereas other delegations called for the process to be
protected from the commercial and vested interests of the business sector. A business
organization requested that the business community be consulted more fully, noting that there
had been a lack of meaningful discussion with its members on important substantive issues.
Several NGOs disagreed that business should be given a greater voice and warned against
corporate capture of the process.
23. In addition, delegations and organizations pointed to the need for broader State
participation in the process. They noted the risks involved with any instrument that enjoyed
only partial support and argued that any legally binding instrument would need traction
among many States to be effective. Many NGOs called on States and a regional organization
to engage more proactively in the future.
24. Many delegations pledged to engage constructively in the working group’s fourth
session and expressed their hopes for an open, frank and productive dialogue.
C. General introduction to the draft legally binding instrument
25. The Chair-Rapporteur, explaining the background to the elaboration of the draft, said
that the text of the draft had been informed by the voices of thousands of victims, discussions
at many bilateral and multilateral meetings and the input of experts of different backgrounds.
Following the distribution of the draft instrument on 20 July 2018, the Chair-Rapporteur had
received a number of comments from States, civil society, lawyers, academics and other
experts.
26. The draft drew heavily on basic principles of international law and human rights and
rested on four pillars.
27. The first, and primary, pillar was prevention. It incorporated elements of the Guiding
Principles, drew on experiences from national, regional and international systems and took
into account discussions held in earlier sessions of the working group.
28. Victims’ rights, access to justice in particular, were the second pillar. The emphasis
was on the removal of practical obstacles faced by victims in their pursuit of redress.
Inspiration had been taken from working group discussions and regional regulations
concerning jurisdiction.
29. International cooperation was the third pillar. The transnational nature of
contemporary practices and the need for States to work together to ensure that justice was
done were recognized in that pillar.
30. Monitoring mechanisms, which were discussed in the draft instrument and, more
prominently, in the draft protocol, were the focus of the fourth pillar. Inspiration had been
drawn from other human rights treaties.
31. While the draft instrument was based on four pillars, all of its parts were interrelated,
and it should be read as a whole.
IV. First reading of the draft legally binding instrument3
32. During each session of the first reading of the draft instrument, the Chair-Rapporteur
introduced the relevant article(s). Following his introduction, panellists provided expert
views, and there was a general debate (see annex III for a record of the comments made by
the panellists).
A. Articles 2 and 8
33. The Chair-Rapporteur noted that the primary objectives of the draft instrument were
set forth in article 2 (1) (b), which focused on human beings as victims of business-related
harm and their effective access to justice and remedy. Article 8, which sought to ensure that
many practical obstacles to justice were eliminated, also focused on the rights of victims.
34. Delegations and organizations welcomed the inclusion of articles 2 and 8 and voiced
their opinion that articles setting out the purposes of the instrument and the rights of victims
were crucial. However, many argued that those provisions would need more precision and
clarity, particularly if the instrument was to be applied in national courts. Some delegations
also noted that it would be more appropriate if the references to “victims” in both articles
3 The present section should be read in conjunction with the draft instrument, available at
www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session3/DraftLBI.pdf.
(and elsewhere in the document) were changed to “alleged victims”, so as to ensure
impartiality.
35. With respect to article 2, delegations debated the appropriate scope of the instrument,
in particular with regard to the multiple references to “business activities of transnational
character”. Several delegations and organizations reaffirmed their positions that the future
instrument should apply to all companies without distinction, including national and State-
owned companies. Others contested that view, arguing that transnational corporations
escaped regulation, and therefore should be the focus of the instrument. One delegation
suggested that the matter could be resolved by focusing on the transnational nature of the
activity rather than the nature of the business. Some delegations and many NGOs argued that
the future instrument should establish direct obligations for transnational corporations and
that the establishment of such obligations should be reflected in the instrument’s statement
of purpose.
36. Several delegations called for greater precision in the wording of article 2. At least
one delegation expressed the view that the provision in which human rights violations “in the
context of” business activities were referred to was too vague for courts to apply. There was
some concern about the use of the word “violations” in article 2 (1) (b), as some delegations
and a business organization said that the term “abuses” – or “violations and abuses” – was
more appropriate. It was also unclear what rights were covered in that provision. While
several delegations welcomed the reference to international cooperation in 2 (1) (c), they
wondered whether the draft was too comprehensive and suggested stating that one purpose
of the instrument was to further international cooperation in matters relating to business
activities.
37. Some delegations also suggested adding more to article 2 by including specific
references to the Guiding Principles; the universal, indivisible, interdependent and
interrelated nature of human rights; and the aims of bolstering domestic systems outlining
international standards. Some NGOs requested an explicit reference to the primacy of human
rights over trade and investment agreements.
38. While many delegations and NGOs signalled their appreciation of article 8 and its
focus on victims, several delegations suggested abridging the article since much of it
reiterated accepted norms of international law, and one suggested removing it altogether. In
addition to calls to remove particular provisions (specifically article 8 (9–13)), there were
calls to use language that was more accurate and more typical of a legal instrument.
39. With respect to article 8 (1), some delegations asked for more clarity regarding the
definition of terms (e.g., “satisfaction”) and the entities that would be subject to the
obligations in the article. Several delegations and a business organization voiced concern
about the reference to “environmental remediation and ecological restoration” in article 8 (1)
(b), noting that the terms were undefined, beyond the scope of the Guiding Principles and not
within the remit of the working group.
40. Concern was also expressed about article 8 (2), since it could be read as authorizing
extraterritorial jurisdiction (any discussion of which, in the view of those expressing concern,
should be confined to article 5). One delegation requested that references to claims of groups
be removed, as class actions were not permitted in the legal system of the State on behalf of
which the representative of the delegation was speaking.
41. The representatives of two delegations criticized article 8 (3) for being too general
and going beyond the intended scope of the future instrument.
42. Several NGOs stressed the importance of keeping article 8 (4), as it would have
practical benefits for victims.
43. At least one delegation voiced concern about the vague terminology used in article 8
(5) (c), asking, in particular, what constituted “unnecessary” formalities, costs or delays. In
its view, such vague terminology would lead to inconsistent application from one State to
another and could render the provision meaningless. Two delegations raised strong
objections to the clause in article 8 (5) (d) that provided that “in no case” would victims be
required to reimburse the legal expenses of other parties to a claim. In their view, cost shifting
was sometimes reasonable and necessary to prevent frivolous lawsuits; thus, unjustified
claims should be excluded from the provision. In the same vein, some delegations mentioned
the importance of including language to ensure protection from vexatious litigation. Such
language could be included in article 8 (5) (d) or elsewhere (in article 8 (6) or a new, stand-
alone provision, for instance).
44. Much discussion centred on the potential establishment of an international fund for
victims (art. 8 (7)). Several delegations welcomed the idea in principle, with many seeking
greater clarity as to the modalities of the fund, its funding and management. Several were
also of the view that the establishment of the fund merited a separate article. However, other
delegations, concerned that States might be expected to pay for the harm caused by
companies, expressed reservations.
45. Two delegations also voiced concern about the potentially broad scope of articles 8
(8) and 8 (9). Those articles, they said, should be brought into closer alignment with existing
international law and relevant cases.
46. In addition, several delegations and NGOs requested numerous additions to article 8
– for instance, a more pronounced gender perspective, protections for human rights defenders
and the inclusion of groups as victims. One delegation also suggested that the differing
capacities of States be taken into account, particularly in articles 8 (5) and (6).
B. Articles 6, 7 and 13
47. Noting that short statutes of limitation often hampered victims’ ability to bring claims,
the Chair-Rapporteur stressed the importance of including article 6 in the future instrument.
He discussed how article 7 acknowledged that human rights standards could vary across
jurisdictions and emphasized that victims should be given the option to decide which human
rights standards applied. The aim of article 13 was to harmonize the interpretation of, and
ensure the consistency of the treaty with, international law.
48. Delegations had differing views of article 6. Some expressed support for an article
regarding statutes of limitation, although at least one suggested that the article be removed,
and many others pointed out issues with the text. With respect to the first sentence of article
6 (1), many delegations and a business organization sought clarification of the meaning of
“crimes under international law”. In the absence of an agreed-upon and exhaustive definition
of the concept, there could be implementation issues, as States would have divergent views.
Several delegations expressed the view that if “crimes under international law” meant the
core crimes covered in the Rome Statute of the International Criminal Court (namely,
genocide, crimes against humanity, war crimes and the crime of aggression), international
law was already clear that no statutes of limitation applied, so it would be unnecessary to
state that statutes of limitations would not apply to crimes under international law in the
future instrument. It was also not clear to all whether the phrase also covered crimes having
an international character, such as piracy, trafficking and terrorism. Some delegations
suggested addressing issues involving the definition of terms by focusing on gross human
rights violations or all international human rights violations instead of crimes under
international law.
49. Some delegations and an NGO expressed concern about the vague language in the
second sentence of article 6 (1), in particular the references to “unduly restrictive” and
“adequate period of time”. In their view, the provision would need to be clearer for it to be
effective. One delegation suggested using the words “unnecessarily restrictive” rather than
“unduly restrictive”. Two delegations raised the issue of variations in domestic law regarding
statutes of limitation, with one insisting that the instrument should not interfere with national
law in that regard.
50. There was a range of views regarding article 7. Some delegations and NGOs viewed
the article as crucial, arguing that it should be expanded to include references to competent
regional courts and indigenous peoples’ laws and customs. Other delegations supported the
article but requested more precise language. Also requested was a clarification of what was
meant by “competent” courts and “involved persons”. There were calls to ensure that the
article was consistent with existing standards of private international law. In that respect, one
State suggested consulting the International Law Commission. Several delegations expressed
concern about the formulation of article 7 (2), while some others expressed unease with the
idea that their courts could be burdened with trying to decipher foreign laws, potentially in
different languages and coming from foreign cultures, with respect to complex issues. A few
delegations noted that permitting flexibility in choice of law rules could be acceptable in
some civil lawsuits but would be unacceptable in criminal cases. They requested that the text
thus be amended to remove criminal cases from its ambit. One delegation considered that the
provision would create too much uncertainty, and suggested that it be removed.
51. Some States and many organizations insisted that article 13 (6) and (7) be
strengthened and explicitly state that human rights enjoyed primacy over trade and
investment agreements. One delegation suggested that those provisions take into account
ongoing efforts to revise such agreements, and some NGOs said that the provisions should
require that human rights impact assessments and consultations be conducted prior to
entering such agreements. Two delegations, however, warned that going too far could
undermine development. In addition, several delegations reserved their position on those
provisions and expressed concern that the provisions could create an unacceptable hierarchy
in international law, potentially violating customary international law. One delegation
cautioned that there should be careful consideration of the language used as it could have an
impact on many States’ large networks of agreements.
52. In the context of that discussion, reference was made to article 13 (3), since some
delegations and NGOs considered there to be a conflict between it and the provisions in
article 13 (6) and (7). Several NGOs suggested deleting article 13 (3), or at least the first
sentence thereof.
53. One delegation signalled its approval of the reference to State sovereignty and
territorial integrity in article 13 (1), while another expressed concern that States could attempt
to rely on the reference to avoid assisting with international cooperation. One delegation
asked as to why only some of the principles of the Declaration on Principles of International
Law concerning Friendly Relations and Cooperation among States in accordance with the
Charter of the United Nations had been cited. The delegation suggested that reference be
made to all or none of them, so as not to give the impression of favouring some over others.
C. Article 9
54. The Chair-Rapporteur opened the debate on article 9 by mentioning the texts that had
been consulted in drafting the article. Chief among them were the Guiding Principles,
guidelines of the International Labour Organization, European Union rules on non-financial
reporting, national legislation such as the French law on the corporate duty of vigilance and
general comments of the Human Rights Committee and the Committee on Economic, Social
and Cultural Rights.
55. Many States and observer organizations welcomed the inclusion of an article focused
on prevention and noted that it was one of the key articles of the draft. Of those, many agreed
with a panellist that it would be more appropriate to refer to “human rights due diligence”
throughout the article rather than due diligence alone. Similarly, there were several calls to
align the provision more closely with the letter and spirit of the Guiding Principles and to
build upon them where necessary. In that regard, some delegations and a business
organization took issue with what they perceived to be an approach that focused on outcomes
rather than conduct. In addition, multiple delegations reiterated their call for the instrument
to cover all companies, both national and transnational. While several delegations and NGOs
called for more precision in the text of the article, some States criticized it for attempting to
prescribe too much. In their view, the article would be more effective if it outlined general
standards and left it to each State to determine how best to implement them. Several NGOs
insisted that the article impose direct obligations on transnational corporations; however,
some delegations voiced concern that there was a risk that the article could lead to the
inappropriate transfer of some obligations from the State to business. At least one delegation
called for the article to give consideration to the need for States to develop and warned against
overburdening certain companies.
56. There were several suggestions for other considerations to be reflected in the text. For
instance, some delegations requested greater recognition of the varying capacities of States.
Other delegations suggested including provisions addressing situations of conflict and the
need for enhanced due diligence therein. Several NGOs referred to the need for an
independent monitoring body, suggested including explicit references to global supply
chains, insisted on a greater recognition of gender issues and structural inequalities and made
several proposals for other forms of prevention that go beyond human rights due diligence,
such as increased access to information, protection of human rights defenders and the
provision of injunctive relief.
57. With respect to article 9 (1), many NGOs voiced approval of mandating due diligence
by companies. One delegation was of the view that the text should be expanded to refer to
the indirect effects of business activities and suggested that the provision mention the impact
resulting from “or associated with” such activities. A business organization, on the other
hand, criticized the provision for being too broad and expressed particular concern about the
provision’s reference to “all persons”.
58. Most of the discussion centred on article 9 (2) and its many provisions. There were
many calls for this provision’s greater alignment with the concepts and terminology of the
Guiding Principles (as well as the OECD guidelines, and guidance on due diligence). Some
delegations and organizations specifically noted that some of the stages of human rights due
diligence referred to in the Guiding Principles were missing from or had been altered in the
draft and that new elements had been added. In their view, the stages of the Guiding
Principles should be strictly followed, with new elements added only where necessary. Some
delegations suggested making clearer references to the different ways companies could be
responsible for adverse human rights impacts.
59. One delegation suggested that, in article 9 (2) (c), “Prevent human rights violations”
be changed to “Seeking to prevent human rights violations”. Another delegation requested
that article 9 (2) (d) include reporting on financial matters, in addition to reporting on non-
financial matters. Some NGOs called for the inclusion of gender impact assessments in article
9 (2) (e).
60. A few delegations took issue with article 9 (2) (f). They stated that the term “all
contractual relationships” was too broad given the many different types of commercial
contracts States entered into, and requested that the provision be made more precise or
removed from the text.
61. Article 9 (2) (g) was welcomed by some delegations and many NGOs. It was noted
that “meaningful consultations” was nonetheless too restrictive and vague. There was thus a
call to remove the word “meaningful” and to elaborate on the types of consultations needed.
Some delegations and many NGOs suggested including a specific reference to free, prior and
informed consent (and the notion of continuous consent) in this provision. In addition, some
NGOs requested that a stronger gender perspective be included. While there were also some
calls for adding to the categories of peoples at heightened risk (in particular lesbian, gay,
bisexual, transgender and intersex persons and persons with chronic diseases), one delegation
suggested removing specific references to any group, as including some groups could be
interpreted as excluding others.
62. Some delegations sought more clarity with respect to what was expected in article 9
(2) (h). One delegation and a business organization suggested removing article 9 (4) due to
its lack of clarity (and taking into account their concerns about other parts of article 9).
63. Some delegations supported article 9 (5) as written, with one pointing out the need for
developing countries to rely on small and medium-sized enterprises. Two delegations
recognized the risk of overburdening such enterprises but voiced their opinion that they
should not be exempted. Several other delegations and a business organization criticized the
ambiguity of the provision, noting that there was no accepted definition of “small and
medium-sized undertakings”, that no standards for authorizing exemptions had been put forth
and that it was unclear what “selected obligations” such undertakings would be exempted
from. It was argued that the provision left far too much discretion to States and would weaken
the article. The instrument, in their view, should apply to all companies without distinction.
For those reasons, they argued for the removal of that provision.
D. Articles 10, 11 and 12
64. With respect to article 10, the Chair-Rapporteur noted that the working group’s
previous discussions had highlighted the need for the draft to include reference to legal
liability, in particular civil, criminal and administrative liability. The draft sought to balance
prescription and flexibility, thus allowing States the freedom to determine how best to
implement the article. The provisions on civil liability focused on broadly accepted
principles, while those on criminal liability allowed States to apply effective non-criminal
sanctions in order to garner broader acceptance by States. Articles 11 and 12 on mutual legal
assistance and international cooperation were devoted to filling jurisdictional gaps; the Chair-
Rapporteur expressed hope that they would help in realizing the implementation of the future
instrument.
65. Several delegations and NGOs welcomed the inclusion of article 10, on legal liability,
with many NGOs expressing appreciation that it covered civil, criminal and administrative
liability. Although some were of the view that appropriate distinctions between natural and
legal persons had been made in the draft, a few delegations suggested that the distinction be
made clearer in several provisions of the article. Many NGOs requested that the article refer
directly to the obligations of transnational corporations. There were also calls for the article
to more clearly address aspects of corporate law, in particular separate legal personality and
fiduciary duties. Most NGOs requested clearer provisions on piercing the corporate veil,
whereas one business organization found that the current draft already disregarded separate
legal personality and unfairly subjected companies that could have very tenuous connections
to abuses to legal risks. Several delegations and an NGO asked for provisions focusing on
situations of conflict. One delegation suggested adding references to international
humanitarian law throughout the article, while another suggested including language on
liability for aiding and abetting, particularly in situations of occupation.
66. Two delegations sought clarification with respect to article 10 (3), with one asking
whether States would be expected to bear financial responsibility for the acts of private
parties.
67. States were divided on article 10 (4) on the reversal of the burden of proof. Some
delegations and a business organization considered the provision to be too broad, noting that
it could lead to due process violations and other violations of defendants’ rights. Other
delegations found that the provision would be problematic if it did not clearly exclude
criminal cases, as reversing the burden of proof in such cases would run counter to the
presumption of innocence. Several delegations and NGOs welcomed the inclusion of the
provision. State delegations expressed appreciation for the inclusion of the condition that the
reversal of the burden of proof was to be subject to domestic law, but many NGOs insisted
that the condition be removed and that the reversal of the burden of proof be mandated by
the instrument.
68. There were many calls for clarity and increased precision in article 10 (6). State
delegations specifically asked what was meant by “control” in article 10 (6) (a) (one
delegation suggested changing the wording to “sufficient control”) and the words
“sufficiently close relation” and “strong and direct connection” in article 10 (6) (b). That
ambiguity was noted by the representatives of an NGO and a business organization, both of
whom argued that, as written, the provisions could subject companies to unreasonable legal
risk through their business relationships, regardless of their control over events or
relationship to the harm. One delegation nonetheless suggested expanding the article to cover
harm indirectly related to companies, and several NGOs suggested including more references
to supply chains and piercing the corporate veil.
69. Some delegations raised serious concerns about article 10 (8), as they interpreted it to
require the imposition of criminal liability on legal entities, which was not a possibility in
their legal systems. One delegation said that the references to dissuasive non-criminal
sanctions as an alternative in articles 10 (10) and 10 (12) did not resolve the issue and that
the State it represented would be unable to accede to any instrument that made corporate
criminal liability an obligation. Some delegations welcomed the provision and suggested
making it even stronger – for instance, by lowering the threshold of “intentional” acts to
something easier to prove in practice. There were also calls for clarification as to what crimes
were being referred to in the provision. An NGO cautioned that the principle of legality could
be violated if the crimes were not defined with sufficient clarity.
70. Many delegations voiced concern about the inclusion of universal jurisdiction in
article 10 (11). There were several requests for clarity as to the scope of the crimes covered
by the provision. It was pointed out that universal jurisdiction was a very controversial
subject with no common agreement, and that it had been abused by some States in the past;
thus, in their view, it was better to remove any reference to it. Other delegations
acknowledged those concerns and suggested deferring to other processes or experts on the
matter (such as the General Assembly’s Sixth Committee or the International Law
Commission). One delegation asked why the provision appeared in article 10 rather than
article 5, which was on jurisdiction.
71. In general, delegations seemed to approve of articles 11 and 12, considering them to
have a foundation in existing international law and to be important for the future instrument.
Some delegations, however, expressed concern about article 11, in particular its obligatory
nature, its lack of sufficient regard for the difficulties developing countries might have in
implementing it and the imbalance regarding procedural rights for defendants. One State
suggested incorporating a dual-criminality component in some provisions to ensure that the
article would not be abused. With respect to article 12, some delegations suggested including
references to the Charter of the United Nations and the Guiding Principles, addressing cross-
border issues more explicitly and allowing transnational corporations and other business
enterprises to join international cooperation efforts.
E. Articles 3 and 4
72. The Chair-Rapporteur said that the previous working group discussions had informed
the wording of articles 3 and 4. In article 3, a broad approach, in which reference was made
to all human rights recognized internationally and domestically, had been chosen, to account
for disparities among legal systems. The draft had also retained, and strengthened, the
approach adopted in the third session – namely, the focus on “activities of a transnational
character”. That term, defined in article 4, includes, notably, activities undertaken by
electronic means. In the same article, the term “victims” is defined in broad terms so as to
include the immediate family or dependants of the direct victim.
73. Although delegations indicated that articles 3 and 4 were necessary, there were
divergent views as to what they should consist of. With respect to article 3 (1), many States
and organizations insisted that the instrument cover all business enterprises, regardless of
whether they engaged in transnational activities, noting that such an approach would be
consistent with the Guiding Principles. In their view, what was important was the seriousness
of the human rights impact, not the type of activity or nature of the company. Some
delegations called for the instrument to cover only transnational corporations. Several other
delegations were of the view that the approach taken in the draft, in which the focus was on
the transnational character of business activities, was a fair compromise that was consistent
with the footnote to resolution 26/9 and should satisfy those who wanted the instrument to
cover more than just transnational companies. Yet other delegations disagreed, arguing that
such an approach was vague and potentially too broad. In addition to the issue of scope, some
delegations and organizations reasserted their position that it was inappropriate to refer to
“violations” when referencing business activity. It was suggested that the draft should refer
instead to “abuses” or “adverse human rights impacts”.
74. Many delegations and some organizations sought clarity regarding the meaning of the
words “all international human rights and those rights recognized under domestic law”,
which appeared in article 3 (2). Some delegations were of the view that such a formulation
could be understood to impose obligations on States that they had not consented to and that
States could thus be averse to signing the future instrument. Those delegations suggested
moving that language to the preamble or changing the text to read “all treaties adopted by
States”. Other delegations considered the formulation in the draft to be too broad and open
to differing interpretations, thus potentially causing implementation problems. It was
suggested that the instrument use the terminology of principle 12 of the Guiding Principles,
which referred to internationally recognized human rights. In addition, some delegations
suggested expanding the wording of article 3 (2) to cover international humanitarian law or
human rights and fundamental freedoms. Some NGOs made suggestions about which rights
to include, such as environmental rights, gender equality, the right to self-determination and
the collective rights of indigenous peoples.
75. Many delegations requested more precision for the definition of victims contained in
article 4 (1). Some were of the view that the definition was too broad, and there was concern
that it could be abused by people who did not even need to establish a link to a company’s
harmful activities. At least one delegation and one NGO noted that the list of harms was not
entirely clear, and others asked why the impairment of a person’s human rights needed to be
“substantial” before he or she could be considered a victim. Another delegation and an NGO
challenged the use of the term “victim” in general and suggested that it would be more
appropriate to refer to “person” or “rights holder”. Some delegations and NGOs suggested
including references to particular groups, such as peoples or communities, vulnerable
populations and human rights defenders.
76. Although the comments on article 3 (1) were applicable to article 4 (2), arguments
specifically regarding the latter article were also made. Some delegations and NGOs
questioned the provision of article 4 (2) under which business activities of a transnational
character were understood to mean for-profit activities alone. That qualification, in their
view, unnecessarily narrowed the scope of the instrument and exempted certain companies
that were responsible for human rights abuses. There were also calls for explicit references
to parent companies and/or global supply chains, as well as transnational corporations and
other business enterprises.
F. Article 5
77. The Chair-Rapporteur opened the panel discussion by clarifying that the goal of article
5 was to allow victims to choose the forum where their legal cases should be heard. In the
working group’s previous discussion, having such a choice had been identified as key to
ensuring effective access to justice. The sources that had been drawn on to draft the article
had included European Union regulations, general comment No. 24 (2017) on State
obligations under the International Covenant on Economic, Social and Cultural Rights in the
context of business activities of the Committee on Economic, Social and Cultural Rights and
general comment No. 16 (2013) on State obligations regarding the impact of the business
sector on children’s rights of the Committee on the Rights of the Child.
78. Several delegations and many NGOs stressed the importance of including an article
on jurisdiction and noted that transnational corporations and other business enterprises often
escaped accountability by taking advantage of differing rules among States regarding
jurisdiction. Thus, they expressed the hope that the instrument could address such gaps and
provide some uniformity in that area. There were several calls for clearer provisions in article
5 and internal consistency with other parts of the draft (articles 7 and 10 in particular). An
NGO asked whether article 5 addressed civil jurisdiction alone and requested clarification of
the draft’s approach to criminal jurisdiction.
79. Delegations expressed their support for article 5 (1) (a), as it reaffirmed jurisdiction
on the basis of territoriality. There was greater discussion surrounding article 5 (1) (b), since
it could permit the exercise of extraterritorial jurisdiction. A business organization argued
that the exercise of such jurisdiction threatened States’ sovereignty and would divert attention
from the need to strengthen access to remedy in the jurisdictions where harms occurred. Some
delegations raised similar concerns, noting that States had abused extraterritorial jurisdiction
in the past, and requested that the exercise of extraterritorial jurisdiction be appropriately
limited. Many NGOs disregarded those concerns and argued that the basis for jurisdiction in
article 5 (1) (b) was accepted in international law – States had the right to regulate the actions
of their nationals abroad. Calls to include additional bases of jurisdiction in article 5 (1) were
also made. Two delegations suggested permitting courts to assert jurisdiction when the victim
was a national or domiciliary of the forum State. An NGO suggested referring to universal
jurisdiction.
80. Some delegations voiced concern about article 5 (2) (subparagraphs (c) and (d) in
particular), as they considered it too broad. There were several calls to refine the language,
with one delegation suggesting looking to private international law for clarity regarding the
concept of “domicile”. While there were no concerns expressed about subparagraphs (a) and
(b), several delegations and some organizations found subparagraph (c) problematic, as there
was no accepted definition of “substantial business interest”. There was similar unease with
subparagraph (d). In particular, clarity was sought with respect to the meaning of
“instrumentality” and “or the like”. It was suggested that those provisions be deleted or
revised. Some delegations and NGOs nonetheless requested that article 5 (2) (d) be
strengthened to more clearly address issues relating to corporate structures and separate legal
personality. They insisted that the article permit jurisdiction over parent companies and other
entities with established commercial relationships with the entity causing harm.
81. Although one delegation suggested deleting article 5 (3) (in its view, the provision
covered a procedural issue governed by national law), other delegations welcomed it. Several
delegations took issue with the clause permitting actions to be taken on behalf of victims
without their consent, if justified. In their view, such a provision could be subject to abuse,
and it would be inappropriate to bring claims without people’s consent. The Chair-
Rapporteur said that their consent would be unnecessary only in exceptional circumstances,
such as where serious violations made the presence of a victim impossible. One panellist
insisted that the clause be retained, as it was necessary for effectuating class action suits (for
which there could be elaborate procedural systems ensuring that people could opt out if they
did not want to be part of an action). The delegation of one State suggested removing
references to actions brought by groups of individuals, since its legal system did not permit
class actions.
82. There were calls to address additional issues in article 5. Some delegations and many
NGOs insisted that forum non conveniens be prohibited. Several NGOs also suggested
including a provision on forum necessitatis. One delegation requested that special attention
be paid to situations of conflict. Several delegations said that the article or the draft should
address the issue of conflict of jurisdictions. They expressed concern about the consequences
of the broad approach to jurisdiction taken in article 5, in particular relating to forum
shopping and parallel proceedings. Neither article 5 nor article 7 provided rules for the
resolution of disputes between competing jurisdictions. One delegation proposed that the
court first seized of a matter should have priority over it. A panellist agreed that the issue
should be addressed but warned that the proposed solution could be subject to abuse.
G. Articles 1, 14 and 15
83. The Chair-Rapporteur noted that article 1, the preamble, was based on the major
instruments and principles of international human rights law. He emphasized some of its
paragraphs. Article 14 was derived from provisions of the major human rights treaties. Article
15 contained certain final provisions, particularly those of a procedural nature.
84. Much of the discussion centred on the preamble. Several delegations and some
observer organizations suggested taking the preamble out of the operative part of the text.
There were also several calls to make the text more precise. One delegation suggested
revising the wording of the second preambular clause to read “in case of harm decisive for
the enjoyment of their human rights”. Several delegations suggested adding a reference to
international humanitarian law in the third and eighth preambular clauses, whereas another
proposed deleting the reference to “international human rights law”, since it was subsumed
under “international law”. One delegation argued that the third preambular clause added little
to the text and should be deleted. Another delegation welcomed the formulation in the fourth
preambular clause that stated “or otherwise under their jurisdiction or control”. A delegation
and a business organization suggested changing the word “shall” in the sixth preambular
clause to “should” to bring it more closely into line with the Guiding Principles. However,
another delegation and several NGOs preferred the text as it was and insisted that there be
more references to the direct obligations of transnational corporations and other business
enterprises in the preamble. Some delegations that were of the view that only transnational
corporations should be covered by the instrument called for the removal of the reference to
“all” business enterprises. A business organization asked whether it was consistent to include
the reference to all business enterprises when the rest of the draft referred to businesses with
activities of a transnational character. A delegation and an NGO suggested adding more
principles to the list of principles in the seventh preambular clause; however, another
delegation asked whether including some principles could be seen as favouring some over
others, while another delegation suggested referring to principles of international law
generally rather than listing specific ones. In addition, there was a call to delete the ninth
preambular clause, which referred to Council resolution 26/9.
85. There were many suggestions for additions to the preamble. For example, several
delegations recommended making reference to the principles and purposes of the Charter of
the United Nations (one delegation suggested referring to the Charter as a whole). There were
also several calls for references to the importance of sustainable development and the positive
role that companies could play. Some delegations and many NGOs suggested including
stronger language with respect to gender. Many NGOs also requested references to the
primacy of human rights. There were calls by delegations for a number of other references,
including to fundamental rights and freedoms, the Guiding Principles and the right to a
sustainable environment.
86. Some delegations and NGOs welcomed the provision, in article 14, for the
establishment of a committee, and suggested numerous powers that it should have, in
particular the ability to receive and review complaints and make binding decisions. Other
delegations expressed concern about the rush to create a new committee. It was suggested
that the working group consider the ongoing review of the treaty body strengthening process.
To reduce the risk of fragmentation and duplication of effort, some delegations suggested
relying on existing mechanisms for the implementation and interpretation of the future
instrument. Those delegations also raised the issue of the funding implications of establishing
a new body. Another delegation stated that it was premature to discuss the establishment of
a committee before reaching a stronger consensus on the substance of the draft instrument.
Some NGOs argued that the article should go further and establish more powerful
international bodies, such as a court or monitoring centre.
87. With respect to specific provisions under article 14, some delegations called for the
inclusion of a clause prohibiting conflicts of interest in 14 (b). Other delegations said that
parties to the instrument should have five years to meet the reporting requirements
established in article 14 (2), instead of four. It was also suggested that article 14 (4) (e) be
removed or revised to provide for the conduct of studies by the committee itself.
88. There was general approval of article 15, although one delegation suggested that the
first six paragraphs, on implementation, should form a separate article. Another delegation
considered article 15 (1) to be redundant and argued that States should be allowed to
determine how to fulfil their treaty obligations. Some delegations called for greater
consideration of the capacities of developing States and said that including article 15 (2), in
addition to the reporting requirements under article 14 (2), was unnecessary. Some
delegations and many NGOs welcomed the inclusion of article 15 (3), considering it
important to retain it in the instrument and potentially replicate it in article 9, the preamble
or both. However, it was argued that the rights of all interested parties should be considered,
and one delegation voiced concern that the provision could cause businesses to oppose the
human rights agenda. Another delegation suggested either deleting the provisions contained
in article 15 (4–6) or moving them to the preamble. However, some delegations and NGOs
requested that article 15 (4) be strengthened, in particular the references to gender-based and
sexual violence, which, in their view, deserved a stand-alone provision. Similarly, some
delegations and NGOs approved of article 15 (5) and requested its replication in other parts
of the draft. One delegation warned against another’s proposal to add groups to the list of
groups facing heightened risks of violations of human rights, as including one group could
be read as excluding another. A delegation and an NGO recommended that article 15 (10)
and (11) and the references to regional international organizations be removed. Some
delegations requested the working group to decide upon a reasonable number of ratifications
to be required under article 15 (12) regarding entry into force. One delegation also agreed
with a panellist that a provision should be added to cover dispute resolution between States
regarding the interpretation and application of the instrument.
V. Presentation of the draft optional protocol
89. The Chair-Rapporteur, introducing the draft optional protocol, said that the text had
been inspired by previous working group discussions, the views of experts and instruments
such as the Optional Protocol to the Convention against Torture and Other Cruel, Inhuman
or Degrading Treatment or Punishment. It was to be a living document, subject to future
developments and (potentially) future protocols. The protocol focused on access to justice
for victims and provided for the ability to bring complaints at both the national and
international levels. For that purpose, the provisions on the committee proposed in the draft
instrument would be supplemented by the strengthening or establishment of national
implementation mechanisms, which would have numerous competencies, such as the ability
to receive complaints, recommend measures, propose legislative reforms and collaborate
with and help bolster national institutions.
VI. Panel: “The voices of victims”
90. Several participants mentioned instances of business-related abuses, particularly in
relation to indigenous peoples, conflict-affected areas and human rights defenders. Several
delegations and NGOs agreed with the panellists that the plight of victims needed to be
addressed and that victims’ rights to access to justice and effective remedy should be ensured.
Some delegations shared domestic laws and initiatives that could help the working group
address those issues. A regional organization discussed its own set of regulations and
directives, which included strong provisions for the access of victims to justice and remedies.
All victims, it was noted, should enjoy the same rights and protections, but any legally
binding instrument should also include provisions for groups of persons often
disproportionately affected by abuses related to business activities, such as women, persons
with disabilities, children, indigenous peoples and ethnic or religious minorities. Some NGOs
said that it would be beneficial to address the needs of some disproportionately affected
groups more effectively in the draft instrument. It was also advocated that the instrument as
a whole should have a stronger gender perspective. A regional organization and several
delegations noted that human rights defenders faced specific risks and that any form of
retaliation against those who spoke out against abuse was completely unacceptable. It was
suggested that States should generally increase protections in that respect, and that the
instrument should include greater protections for human rights defenders. Several resources
were cited, including the Declaration on the Right and Responsibility of Individuals, Groups
and Organs of Society to Promote and Protect Universally Recognized Human Rights and
Fundamental Freedoms, reports of the Special Rapporteur on the situation of human rights
defenders, European Union laws and examples from national action plans on business and
human rights.
VII. Recommendations of the Chair-Rapporteur and conclusions of the working group
A. Recommendations of the Chair-Rapporteur
91. Following the discussions held during the fourth session, and acknowledging the
different views and suggestions on the draft legally binding instrument to regulate, in
international human rights law, the activities of transnational corporations and other
business enterprises expressed therein, the Chair-Rapporteur makes the following
recommendations:
(a) That the Chair-Rapporteur invite States and other relevant stakeholders
to submit their comments and proposals on the draft legally binding instrument no later
than the end of February 2019;
(b) That the Chair-Rapporteur prepare a revised draft legally binding
instrument on the basis of the discussions held during the fourth session of the working
group, of the addendum to the present report containing a compilation of oral
statements from States,4 of the submissions referred to in subparagraph (a) and of the
informal consultations to be held, and present the revised text no later than the end of
June 2019, for consideration and further discussion;
(c) That the Chair-Rapporteur direct substantive intergovernmental
negotiations on the draft legally binding instrument during the working group’s fifth
session, to be held in 2019, on the basis of the revised draft referred to in subparagraph
(b), in order to fulfil the mandate of Human Rights Council resolution 26/9;
(d) That the Chair-Rapporteur present a second briefing on the draft optional
protocol, as an annex to the draft legally binding instrument, during the working
group’s fifth session;
(e) That the Chair-Rapporteur hold informal consultations with
Governments, regional groups, intergovernmental organizations, United Nations
mechanisms, civil society and other relevant stakeholders before the working group
meets for its fifth session;
(f) That the Chair-Rapporteur prepare an updated programme of work on
the basis of the discussions held during the fourth session of the working group and of
the informal consultations and make available that programme before the fifth session
of the working group for consideration and further discussion during the session.
B. Conclusions of the working group
92. At the final meeting of its fourth session, on 19 October 2018, the working group
adopted the following conclusions, in accordance with its mandate established by
resolution 26/9:
(a) The working group welcomed the opening message of the United Nations
Deputy High Commissioner for Human Rights, Kate Gilmore, and thanked the
Member of the French National Assembly, Dominique Potier, for serving as keynote
speaker. It also thanked a number of independent experts and representatives who took
part in the first reading of the draft legally binding instrument and took note of the
proposals, comments, suggestions and questions received from Governments, regional
and political groups, intergovernmental organizations, civil society, NGOs and all other
relevant stakeholders on substantive as well as procedural issues related to the draft
instrument;
(b) The working group acknowledged the dialogue focused on the content of
the draft legally binding instrument, as well as the participation and engagement of
Governments, regional groups, civil society, experts, intergovernmental organizations
and relevant stakeholders, and took note of the input they had provided;
(c) The working group noted the shared concern about the victims of abuses
caused by transnational corporations and other business enterprises and the serious
challenges faced by such victims, especially those in the most vulnerable situations, and
the need to respect, promote, protect and fulfil their human rights;
(d) The working group took note with appreciation the recommendations of
the Chair-Rapporteur and looked forward to the revised draft legally binding
4 To be prepared by the secretariat by no later than the end of December 2018 and issued under the
symbol A/HRC/40/48/Add.1.
instrument, the informal consultations, and the updated programme of work for its fifth
session.
VIII. Adoption of the report5
93. At its 10th meeting, on 19 October 2018, after an exchange of views on the report
and its contents, the working group adopted ad referendum the draft report on its fourth
session and decided to entrust the Chair-Rapporteur with its finalization and
submission to the Council for consideration at its fortieth session.
5 Upon request of the representative of the European Union, it is noted that the regional organization
disassociated itself from the conclusions of the working group reached at its fourth session.
Annex I
List of participants
States Members of the United Nations
Afghanistan, Albania, Algeria, Angola, Argentina, Austria, Azerbaijan, Bahrain, Belgium,
Bolivia (Plurinational State of), Brazil, Cameroon, Chile, China, Colombia, Congo, Costa
Rica, Cote d’Ivoire, Cuba, Czechia, Democratic Republic of the Congo, Denmark, Ecuador,
Egypt, El Salvador, Ethiopia, Finland, France, Germany, Ghana, Greece, Guatemala, Haiti,
Honduras, Hungary, India, Indonesia, Iran (Islamic Republic of), Iraq, Jordan, Kuwait, Lao
People’s Democratic Republic, Lebanon, Lesotho, Libya, Liechtenstein, Lithuania,
Luxembourg, Madagascar, Malaysia, Malta, Mauritania, Mauritius, Mexico, Monaco,
Mongolia, Morocco, Mozambique, Myanmar, Namibia, Nepal, Netherlands, New Zealand,
Nigeria, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Republic of
Moldova, Romania, Russian Federation, Rwanda, Saudi Arabia, Senegal, Slovenia, Sri
Lanka, South Africa, Spain, Sweden, Switzerland, Thailand, Togo, Trinidad and Tobago,
Ukraine, United Kingdom of Great Britain and Northern Ireland, Uruguay, Venezuela
(Bolivarian Republic of), Zimbabwe.
Non-member States represented by an observer
Holy See, State of Palestine.
United Nations funds, programmes, specialized agencies and related
organizations
World Health Organization Framework Convention on Tobacco Control (WHO FCTC).
Intergovernmental organizations
European Union, International Chamber of Commerce, International Organisation of La
Francophonie (IOF), International Labour Organisation (ILO), Organisation for Economic
Cooperation and Development (OECD), Permanent Court of Arbitration, South Centre.
Special procedures of the Human Rights Council
Working Group on the issue of human rights and transnational corporations and other
business enterprises, Special Rapporteur on the implications for human rights of the
environmentally sound management and disposal of hazardous substances and wastes.
National human rights institutions
Commission Nationale des droits de l’homme et des libertés (Cameroon), European Network
of National Human Rights Institutions, German Institute for Human Rights, Danish Institute
for Human Rights, National Human Rights Council of the kingdom of Morocco.
Non-governmental organizations in consultative status with the
Economic and Social Council
Al-Haq, ActionAid, American Bar Association, Amnesty International, Asia Pacific Forum
on Women, Law and Development (APWLD), Associação Brasileira Interdisciplinar de
AIDS (ABIA), Association for Women’s Rights in Development (AWID), Catholic Agency
for Overseas Development (CAFOD), Center for Constitutional Rights, Center for
International Environmental Law (CIEL), Centre de documentation, de recherché et
d’information des peoples Autochtones (DOCIP), Centre Europe – Tiers Monde – Europe-
Third World Centre (CETIM), Centre for Human Rights, Comité Catholique contre la Faim
et pour le Développement (CCFD), Conectas Direitos Humanos, Congregation of Our Lady
of Charity of the Good Shepherd, Conselho Indigenista Missionário (CIMI), Coopération
Internationale pour le Développement et la Solidarité (CIDSE), Coordinadora Andina de
Organizaciones Indígenas (CAOI), Corporate Accountability International (CAI),
Development Alternatives with women for a new era, DKA Austria, Dominicans for justice
and peace – order of preachers, FIAN International e.V., Franciscans International, Friends
of the Earth International, Global Policy Forum, Indian Council of South America (CISA),
Indian Movement “Tupaj Amaru,” Indigenous Peoples’ International Centre for Policy
Research and Education (Tebtebba), Institute for Policy Studies (IPS), International
Association of Democratic Lawyers (IADL), International Commission of Jurists,
International Corporate Accountability Roundtable (ICAR), International Federation for
Human Rights Leagues (FIDH), International Indian Treaty Council (IITC), International
Institute of Sustainable Development, International-lawyers.org, International Organisation
of Employers (IOE), International Trade Union Confederation, Iuventum e.V, Le Pont,
MISEREOR, Public Services International (PSI), Réseau International des Droits Humains
(RIDH), Social Service Agency of the Protestant Church in Germany, Swiss Catholic Lenten
Fund, Tides Center, Verein Sudwind Entwicklungspolitik, Women’s International League
for Peace and Freedom (WILPF), World Federation of Trade Union (WFTU).
Annex II
List of panellists
Monday, 15 October 2018
Keynote speaker
• Dominique Potier, Member of the French National Assembly
Subject I – Articles 2 and 3 (15h–18h)
• Ibrahim Salama, Office of the United Nations High Commissioner for Human Rights
• Ana María Suárez Franco, Fian International
• Gabriela Quijano, Amnesty International
• Molly Scott Cato, Member of the European Parliament
Tuesday, 16 October 2018
Subject I – Articles 6, 7 and 13 (10h–13h)
• Lilián Galán, Member of the Parliament of Uruguay
• Nicolas Guerrero, Senior Legal Officer, WHO FCTC Secretariat
• Sam Zia-Zarifi, Secretary General, International Commission of Jurists
• Makbule Sahan, International Trade Union Confederation
Subject I – Article 9 (15h–18h)
• Elżbieta Karska, UN Working Group on Business and Human Rights
• Baskut Tuncak, UN SR on human rights and toxics
• Robert McCorquodale, Inclusive Law
• Gabriella Rigg Herzog, United States Council for International Business (USCIB)
Wednesday, 17 October 2018
Subject I – Articles 10, 11 and 12 (10h–13h)
• Surya Deva, UN Working Group on Business and Human Rights
• David Bilchitz, University of Johannesburg
• Richard Meeran, Leigh Day
• Maddalena Neglia, FIDH
Subject I – Articles 3 and 4 (15h–18h)
• David Bilchitz, University of Johannesburg
• Olivier De Schutter, Professor, University of Louvain
• Sandra Ratjen, Franscicans International
• Kinda Mohamadieh, South Centre
Thursday, 18 October 2018
Subject I – Article 5 (10h–13h)
• Olivier De Schutter, University of Louvain
• Richard Meeran, Leigh Day
• Lavanga Wijekoon, Littler
Subject I – Articles 1, 14 and 15 (15h–18h)
• Bradford Smith, OHCHR
• Layla Hughes, CIEL
• Carlos Lopez, ICJ
Friday, 19 October 2018
Subject II – The voices of the victims (selected cases from different sectors and
regions) (10h–13h)
• Iván González, Trade Union Confederation of the Americas
• Tchenna Masso, MAB
• Wandisa Phama, University of Witwatersrand – CALS
• Ana María Suárez Franco, FIAN
Annex III
Summary of statements by panellists
First reading of the Draft LBI
A. Articles 2 and 8
1. The first panellist discussed two trends: the increasing recognition of the indivisibility
of human rights, and the increasing protection in specialized areas. When such notions
overlap, a beneficial impact occurs when there is allocation of resources and synergies with
existing normative standards. These exist in the Draft LBI, and the enhanced protection of
victims can be seen in the provisions on protection of victims and national implementation
mechanisms.
2. The second panellist noted that, although article 8 is based on existing standards, it is
important to include specific provisions on remedy and prevention. She underlined that
victims often face obstacles when seeking access to justice, such as difficulties encountered
when trying to prove a causal link between the acts of businesses within a supply chain and
damage suffered. She welcomed the inclusion of certain provisions, such as those covering
the right to collective action, the establishment of a victims’ fund and those facilitating
judicial remedy. Additionally, she suggested more clarity in certain articles, particularly 8 (2)
and 8 (4).
3. The third panellist suggested that article 2 should give prevention a more prominent
role, include corporate accountability, and seek to empower individuals and communities
whose rights are at risk. The panellist noted that, given the purpose of prevention, article 8
should add protections for those who are at risk of becoming victims, such as human rights
defenders, and cover issues such as procedural protections and injunctive relief. While article
8 recognizes the right to access to justice, she noted that it does not clearly oblige States to
remove barriers to justice. Additionally, she suggested that several provisions be clarified,
such as 8(3), in relation to which States are addressed, and article 8(4), with respect to the
kind of information referred to.
4. The fourth panellist shared a story of a human rights defender who had been attacked
and who was unable to stop abuses by a TNC through domestic laws. She argued that this
demonstrates the need for creating an LBI to address the power imbalance between those
seeking to vindicate rights and powerful companies. She called for an extension of the
international rule-based system to address the consequences of globalization, and noted the
collective responsibility for protecting everyone, no matter where they live.
B. Articles 6, 7 and 13
5. The first panellist emphasized the need for TNCs’ obligations to be clearly enshrined
in a future instrument. Regarding article 13, she noted two key issues: first, the adherence of
domestic law with international law should be clearer, and second, the primacy of human
rights over trade and investment treaties should be prominently stated. With respect to article
7, the panellist suggested including stronger language favouring victims’ choice of law.
6. The second panellist encouraged the OEIGWG to take into consideration several
provisions of the Framework Convention on Tobacco Control, and guidance interpreting
those provisions. For instance, the OEIGWG could borrow language from Framework
Convention article 5 (3) regarding preventing corporate capture. With respect to Draft LBI
articles 13 (6) and 13 (7), the panellist queried how they relate to most favoured nation
clauses, and pointed out that interpretation of trade and investment agreements are often done
by dispute resolution mechanisms, not States.
7. The third panellist noted that article 6 is particularly useful and a good building block
for the treaty, emphasizing that it should cover certain acts that are not part of the Rome
Statute of the International Criminal Court. He voiced some concern over article 7, noting
that it may go too far and that the reference to “competent” courts was ambiguous.
Concerning article 13, the panellist pointed out that the ending qualification in article 13 (2)
could create a big loophole with respect to the treaty’s application. Additionally, he suggested
simplifying article 13, making it more explicit that international human rights law enjoys
primacy over investment and trade agreements.
8. The fourth panellist found articles 6 and 7 generally helpful but suggested that certain
language be clarified. With respect to article 13, she expressed two key concerns. First, the
provisions relating to trade and investment could be made stronger: the primacy of human
rights should be clearly stated and there should be a new provision requiring human rights
language to be placed in trade and investment agreements. Second, she voiced concern that
article 13(1), which reaffirms principles of sovereign equality and territorial integrity, could
be used to justify restrictions of other parts of the instrument, in particular in relation to
extraterritorial jurisdiction.
C. Article 9
9. The first panellist stressed the importance of including an article on prevention in the
Draft LBI. States remain the main actor to protect human rights, and while non-binding
instruments have provided guidelines for improving human rights protection, gaps remain in
domestic systems (such as the lack of human rights safeguards and non-recognition of
corporate criminal responsibility). This instrument has the potential to improve human rights
due diligence systems on a large scale. She suggested that guidance could be sought from the
2018 report of the Working Group on Business and Human Rights to the General Assembly
on human rights due diligence (A/73/163).
10. The second panellist emphasized the well-documented harm caused by companies’
reckless handling of hazardous substances. In order to address this, he argued that States
should compel companies to actively monitor and prevent violations. Mandatory human
rights due diligence should go beyond what is in article 9 (2) and be transparent and traceable
through the supply chain. Additionally, it should cover actual and potential exposure to toxic
waste.
11. The third panellist agreed that article 9 is a crucial aspect of the Draft LBI and noted
that the text should reference “human rights” due diligence so as to distinguish it from the
due diligence conducted in business transactions. He suggested aligning the text better with
that of the UNGPs and OECD guidelines, specifically with respect to the mitigation and
tracking of impacts. The panellist warned against permitting exemptions in article 9(5) for
small and medium-sized enterprises, as corporations would find a way to exploit this.
Additionally, he advocated the inclusion of a defence for companies which took all
precautions possible.
12. The fourth panellist did not support the Draft LBI or Optional Protocol and reaffirmed
the business community’s support for the UNGPs. In her view, article 9 unhelpfully departs
from the UNGPs and adopts an unrealistic, outcome-based standard regarding due diligence.
She emphasized that no business in the world – irrespective of its size – operates in a legal
vacuum. States have the responsibility to pass laws that meet international standards and to
enforce those laws for all companies in their jurisdiction. The first line of defence for rights
abuses should be a strong and effective domestic rule of law.
D. Articles 10, 11 and 12
13. The first panellist recommended that any binding instrument should build on and
complement the UNGPs. He noted that article 10 omits details on administrative penalties
and preventive remedies, and suggested it might be useful to consider non-judicial
mechanisms. He emphasized that the obligations in article 10 (1) should be limited to the
territory or jurisdiction of the relevant States. Additionally, he expressed doubts over article
10 (4) since legal reforms would be needed to implement the provision, and questioned the
restriction in article 10 (8) to “intentional” acts. With respect to article 11, he asked for greater
elaboration regarding provisions on the recognition and enforcement of judgments.
Additionally, he suggested that the international cooperation in article 12 could include
national human rights institutions and civil society.
14. The second panellist underscored the weakness of the State-based model that the Draft
LBI adopted, arguing that it would be advisable to privilege a system of direct liability of
corporations. He also noted the draft’s failure to fully engage with corporate law, and
suggested to recognize and address the notion of fiduciary duty in order to recognize the
responsibility of natural persons, in particular directors of corporations.
15. The third panellist highlighted the importance of facilitating access to courts in the
home states of TNCs since victims often do not have access to justice where abuses occur.
While noting that article 10(6) covers many important situations, he suggested that the
wording be made clearer. Additionally, he stressed the importance of removing practical
obstacles victims face; thus, the inclusion of issues like access to information in article 8 (4)
are crucial to the success of the treaty and should be read along with article 10.
16. The fourth panellist welcomed article 10 (4) on the reversal of the burden of proof,
but criticized the qualification that it be subject to domestic law, suggesting its removal.
While noting that article 10 (6) should be explicitly linked to article 9 on prevention, she
suggested that liability not be limited to the failure to comply with due diligence.
Additionally, the panellist argued that requiring “intentional” conduct to establish criminal
liability was too high a threshold and suggested that the instrument include more elaboration
on administrative penalties.
E. Articles 3 and 4
17. The first panellist noted the division regarding the scope of the Draft LBI. In his view,
a victims-oriented approach requires that human rights violations are recognized and
remedied regardless of the nature of activities of the perpetrator, be it a TNC or State. Further,
he noted that most businesses are locally based, and if the focus is on the transnational
character of activities, the LBI will be subject to loopholes. Thus, he proposed amending the
scope so that transnational activity refers to “economic activity existing not solely for local
purposes” and “taking place as a network of relationships that cross boundaries.”
18. The second panellist noted the impossibility of distinguishing between TNCs and
OBEs. While the LBI could focus on the transnational character of the activities, its definition
in article 4 should be refined. First, it should not exclude State-owned enterprises. Second, it
should clarify that the activities could be those of the corporation or of the subsidiaries with
whom they have a contractual link.
19. The third panellist highlighted the need to strike a balance between addressing
accountability gaps of TNCs and making sure that no new conditions for impunity are created
in the LBI. She supported the broad approach of article 3(2) but suggested clarifying the
meaning of “international human rights” to avoid divergent interpretations. In her view,
adopting a minimum core of human rights approach would set a floor and allow States to
establish greater protections.
20. The fourth panellist argued that the Draft LBI covers all entities regardless of their
legal nature. Thus, domestic companies are covered so long as they have the capacity to
commit human rights violations and their activities span two or more jurisdictions. She noted
that no place in the Draft LBI excludes national companies; rather, article 9(5) even suggests
they are covered as it references small and medium-sized enterprises, which include national
companies.
F. Article 5
21. The first panellist suggested some textual revisions to the article, specifically
removing references to “natural” persons and, potentially, “association of natural or legal
persons.” He noted that: (i) article 5 adds nothing beyond what is already authorized under
international law, as it focuses on jurisdiction based on the principles of territoriality and
active personality; (ii) it concerns adjudicative jurisdiction rather than prescriptive or
enforcement jurisdiction; (iii) the jurisdiction is to uphold international human rights rather
promoting States’ unique sovereign interests; (iv) the article establishes a duty to assert
jurisdiction rather than merely permitting it; and (v) the formulation in article 5 (2) (c) is
potentially too broad and vague.
22. The second panellist considered article 5 to be largely superfluous as it reflects
existing rules of international law. He suggested that (i) the doctrine of forum non conveniens
be prohibited; (ii) it should be clearer that courts in home States of TNCs should have
jurisdiction over their subsidiaries; and (iii) article 5 (3) should be revised so as to make it
easier to institute opt-out class action suits.
23. The third panellist considered the jurisdictional scope of the Draft LBI to be sweeping
and overbroad as it permits claimants or activists to bring claims in home States against TNCs
and their directors, owners, or even shareholders for actions abroad committed by entities
with which TNCs may have had little or no relationship. It also allows plaintiffs to choose an
applicable law outside of the forum jurisdiction and provides for universal jurisdiction.
According to his view, this approach likely violates international law and principles, threatens
State sovereignty, and could increase the risks of legal liability which could lead to a decrease
in investments.
G. Articles 1, 14 and 15
24. The first panellist suggested that article 14 clarify whether Committee members can
be re-elected, require supplementary reports every five years instead of four, and align the
Committee’s functions with those from other human rights treaties. Regarding article 15, he
proposed specific revisions to the language concerning regional integration organizations and
suggested having a low threshold for entry into force. He also proposed a number of revisions
to the format of the Draft LBI, including taking the preamble out of the operative section of
the LBI and splitting articles 14 and 15 into several articles.
25. The second panellist proposed that a gender-based perspective be adopted throughout
the treaty. Emphasizing the special risks women face, she proposed revising article 1 so that
it acknowledges gender equality as a fundamental right. Additionally, she suggested revising
article 14 so that a gender balance be “achieved” in the Committee. She also noted that article
15 contains crucial provisions that need to be fleshed out in other articles; for example, article
15 (4) should have a corresponding obligation in article 9.
26. The third panellist suggested enhancing the provisions on the Committee, for instance
by including provisions prohibiting conflicts of interest for Committee members and for
ensuring the participation of civil society and UN agencies. He proposed that the functions
of the Conference of States Parties be clarified and expanded. Additionally, he suggested
including a provision to cover dispute resolution between States regarding the interpretation
and application of the instrument.
Panel on “The voices of victims”
27. Four panellists introduced the session by discussing specific incidents of abuses by
companies and noting attacks on the freedom of assembly, environmental crimes, land
grabbing, and the disproportionate impact of business-related harm on women. They argued
that accountability has been elusive (including throughout supply chains) and voluntary
mechanisms have not sufficiently addressed these harms; thus, it was imperative to have an
LBI that focuses on the need for effective remedy. Some suggested that the Draft LBI include
more language on human rights defenders; free, prior and informed consent; precautionary
measures; and accountability throughout entire supply chains.