Identifying standards for legal liability of TNCs and other business enterprises for human rights violation and building national and international mechanisms for access to remedy

A meeting of a UN Human Rights Council working group recently discussed a treaty on the human rights effects of transnational corporations (TNCs) and other business enterprises. Below is the fourth part of the report on the meeting, focusing on discussions concerning the legal liability of TNCs and other business enterprises and mechanisms for access to remedy.

By Kinda Mohamadieh and Daniel Uribe

The seventh and eighth panels of the open-ended intergovernmental working group on a legally binding instrument on transnational corporations (TNCs) and other business enterprises with respect to human rights discussed the standards for legal liability to be applied in case of human rights abuses committed by TNCs and other business enterprises and building national and international mechanisms for access to remedy, respectively.

Resolution A/HRC/RES/26/9 adopted by the Human Rights Council on 25 June 2014 established an open-ended intergovernmental working group to “elaborate an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises” (Operative paragraph 1, Resolution A/HRC/RES/26/9).

It also recommended that “the first meeting of the open-ended intergovernmental working group serve to collect inputs, including written inputs, from States and relevant stakeholders on possible principles, scope and elements of such an international legally binding instrument” (Operative paragraph 5, Resolution A/HRC/RES/26/9).

Standards for legal liability of TNCs and other business enterprises

CONTRIBUTIONS FROM PANELLISTS

Professor Surya Deva, Associate Professor at the School of Law at the City University of Hong Kong, called for special attention to the “disadvantaged position of victims” in relation to TNCs, as the latter have “access to much more resources and expertise than the affected communities”. Currently, there are well-known obstacles to hold corporations accountable, Professor Deva highlighted, noting in particular:

1. The complex corporate structures built on the principles of separate corporate personality and limited liability;
2. The doctrine of ‘forum non-conveniens’, and;
3. The procedural rules governing discovery proceedings, standing, legal aid and class action.

Professor Deva considered that different standards should be applicable for civil and criminal liability. Since “states have diverse legal systems and traditions” the prospective treaty should consider providing some “flexibility as to how standards are applied under domestic systems”, Professor Deva recommended.

Furthermore, Deva considered that achieving legal certainty with regard to these standards is necessary to avoid “frivolous or vexatious litigation”. Professor Deva stressed that international mutual assistance and cooperation for the collection of evidence and enforcement of judgments is critical for a new instrument on business and human rights.

In regard to types of conduct that the prospective instrument should regulate, Professor Deva specified that both actions and omissions should be regulated. He also called for covering the conduct of TNCs acting on their own in addition to the conduct of their subsidiaries and supply chain partners. Professor Deva added that the prospective treaty should also “propose appropriate standards to deal with situations of corporate complicity […] with State agencies and state-owned enterprises or with other private corporate actors”.

Deva stressed the importance of a flexible approach when addressing the responsibility of legal persons attributable to wrongful conducts due to the diverse legal systems currently existing. “The mens rea element of ‘intention’, ‘knowledge’ or ‘negligence’ could be established, for example, with reference to the existing policies and practices of a company. Corporate culture within a given group – whether it is the culture of conscious ‘hands off’ approach or of ‘extensive supervision’ – could also be taken into account to determine whether a company should be liable or not”, Professor Deva explained.

For Deva, the “existing approaches to piercing the ‘corporate veil’, which are limited to certain circumstances, are highly problematic and should be changed”. As a matter of principle, the parent company should be accountable for human rights violations if not otherwise proven that they did not know, or that they did not have to know, or that they put in practice mechanisms for prevention, Professor Deva argued.

Mr. Roberto Suarez, Deputy Secretary-General of the International Organization of Employers (IOE), observed that a legally binding instrument on business and human rights requires precise definitions. Suarez noted that, as a first step, it is necessary to determine the kinds of conduct that will be considered violations. Mr. Suarez recalled the report prepared by Jennifer Zerk for the Office of the High Commissioner for Human Rights, which stated that:

“…the first difficulty in achieving convergence in practice (principles and policies) comes with finding a suitable definition of the corporate conduct to be targeted that corresponds to the full range of behaviours that amount to gross human rights violations and deals adequately with the concept of corporate complicity”.

Mr. Suarez explained that a “formalist and legalist statement that all international human rights should be covered by a binding instrument” is not an adequate approach. Rather, it would be necessary to identify the specific immediate needs of victims and its relation to a negative business conduct, Mr. Suarez added. In addition, it is important to identify the areas in which States are willing to commit their own jurisdiction, he added. Mr. Suarez explained that this approach would include considering the following factors:

1. For which norms is it prudent or realistic to expect that companies could be held accountable as the primary actor?
2. How to address the challenges when a company is implicated in a violation in tandem with a government actor, the so-called corporate complicity?
3. How to account for the complex and changing structure of companies that are composed of different legal entities?

Mr. Suarez stressed the importance of legal certainty as basis for a reasonable approach to civil and criminal liability of natural or legal persons, at the domestic and international levels. In addition, he noted that the ‘due diligence’ approach reflected in the UN Guiding Principles “has to do with the expectations of society”, which sometimes could entail “much more serious economic impacts compared to a long legal process linked to theoretical civil liability process”.

Similarly, Mr. Suarez raised several elements in regard to transnational litigation, including the costs associated with such litigation, the different legal standards and approaches of each jurisdiction, and the lack of clear responsibility among governments in case of cross-border cases.

According to Mr. Suarez, the effective forum for addressing these issues is at the domestic level, noting that significant injection of resources, both financial and technical, at domestic level as well as responsible attitude by governments is needed.

Dr. Carlos Lopez, senior legal adviser in business and human rights of the International Commission of Jurists, noted that the term ‘responsibility’ in law implies the existence of a violation or non-compliance with a legal duty or obligation. This means that in law “responsibility presupposes the existence of an obligation”.

Likewise, in law the term ‘responsibility’ refers not only to actions, but also to omissions that may harm human rights, he added. For Lopez, this harmful conduct can be committed by a natural person – the director, the manager or the chair of a company in representation of the company – or by the business as such through its agents, or in its various legal forms. Dr. Lopez stressed that there is no impediment to assign legal responsibility to a company, either as a legal person or as a group of natural persons.

Dr. Lopez highlighted that the meaning of legal responsibility entails the existence of a wrongful conduct which is in violation of an obligation. This conduct should be defined in a “clear and unequivocal manner”, Dr. Lopez added.

Furthermore, concentrating on clarifying the action or omission will allow the prospective treaty to avoid the complexities associated with the question of defining what a transnational corporation is. A harmful action can happen in a national context or outside of it, and by a natural or a legal person. It is not necessary to define if these subjects are transnational or not, what is important is defining whether the harmful conduct happened in the national territory or outside of it, Dr. Lopez explained.

Companies can be held liable under various types of responsibility; it might be criminal, civil or administrative, noted Dr. Lopez. Not all harmful conduct should be criminal and subjected to sanctions; it might also be subject to civil remedy or administrative sanctions. Dr. Lopez stressed that generally the wrongful conducts which require criminal sanction are the most serious, and their investigation and sanction requires the public prosecutors or other bodies, to have a preponderant role.

There is a strong argument in regard to the duty of States to protect human rights, and as such the violation of these rights should be “tackled from the point of view of public law and not private law”, Dr. Carlos Lopez noted. He added that most cases involving the violation of human rights by corporations involve civil responsibility, better known as ‘tort law’ under English common law, and this is the reason why it would be important to emphasize the role of public law in the protection of these rights.

In regard to attributing responsibility to businesses, Dr. Lopez suggested different models since “the practice and the legal traditions in States are very different”. For example, not all countries recognise the possibility of attributing criminal liability to legal persons, he stressed. Nonetheless, other countries do recognise the attribution of administrative sanctions to legal entities, such as businesses, while others recognise such responsibility in the director or head of the company.

Dr. Carlos Lopez underlined that, in international law, there are a series of obligations for States to include in their national legislation with regard to conducts that can be identified as crimes, and other types of conduct that can be sanctioned through civil and administrative means. He referred to the Optional Protocol to the Convention on the Rights of the Child on the sale of children, child prostitution and child pornography as an “inspiring example”. Article 3 of this instrument provides for the obligation of States to introduce legislation establishing certain conducts as criminal offences, and also provides for States to establish the liability of legal persons for these offences, subject to the legal principles of the State party. Such liability may be civil, criminal or administrative. This Protocol “defines the harmful conduct, establishes the State responsibility to sanction the behaviour, and also establishes the responsibility of the legal person”.

Dr. Carlos Lopez concluded by proposing that the prospective treaty should provide the obligation of States to incorporate in their national criminal legislation the definition of a series of harmful conducts against human rights, which should be defined with clarity and certainty. This legislation should be applicable to natural and legal persons, as provided by the national legal system of each State, when the conducts are perpetrated outside or within the borders of the State. Likewise, States should incorporate civil and administrative sanctions for these conducts. Finally, the act of aiding or abetting, and the attempt of perpetrating these conducts, should also entail sanctions, according to Dr. Lopez. Moreover, the attribution of liability to businesses, as legal persons, should not limit the attribution of individual responsibility to the director, president or manager of the company, he added.

Ms. Sanya Reid Smith, legal advisor and senior researcher at the Third World Network, discussed the implications of international trade and investment agreements on States’ legislation, policies and their human rights obligations. The current scenario seems to suggest that these international agreements give strong rights to transnational corporations to bypass their legal obligations in host countries with effective impunity, according to Ms. Reid Smith. Under investment treaties or investment chapters in free trade agreements, investors have their rights protected and may benefit from an unlimited amount of monetary damages, and monthly compound interests on unpaid awards.

Ms. Reid Smith gave examples of how TNCs manage to use the international investor-state dispute settlement mechanism (ISDS) in order to evade their obligations and to attain monetary damages for presumed wrongful acts committed by the State under such agreements. Furthermore, Ms. Reid Smith pointed to a recent study that examines how successfully States have been able to raise the issue of investors’ violation of domestic laws under ISDS cases, particularly violations of human rights obligations, environmental law, labour laws, etc. This study showed that from all the cases examined, there was not even one case where the ISDS tribunal agreed with the State’s position of raising the claim. Likewise, a similar analysis looked at ISDS cases publically available until May 2010 and revealed that US companies have benefited from a broad interpretation of their procedural rights ninety-eight per cent (98%) of the time, and there are similar percentages regarding substantial rights (See: Gus Van Harten, “Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration” (2012), 50 Osgoode Hall Law Journal).

Ms. Reid Smith cautioned that the “mere threat of one of these cases” leaves a chilling effect on both developed and developing countries in regard to regulatory action, including for human rights obligations. Ten UN Human Rights rapporteurs have expressed concern about the investment treaty provisions that give foreign investors such strong rights, especially given the big gap between the rights given to foreign investors and those of victims of human rights violations by TNCs, due to the difficulties that victims must face to effectively sue a TNC.

Ms. Reid Smith exemplified this issue by examining what happens if a domestic company violates an environmental law or a human rights regulation in the host country. In such a case, the host country can sue the company in its own courts leading to a penalty. On the other hand, if the host State tries to do the same with a foreign investor, the latter “can effectively ‘appeal’ the decision of the highest court of the host country under the investment treaty provisions on ISDS, whereby the tribunal would examine whether the host government, including its courts, violated the investor’s rights. They do not tend to take account of any human rights treaty obligations”.

There are over 3000 concluded investment treaties. Although they were designed to protect nationals of the States parties to the agreements, sometimes these treaties give a broad and loose definition of the protected investor or investment, Ms. Reid Smith noted. She gave the example of the plain tobacco packaging case against Australia, where the complainant bought shares in one country in order use protection under a treaty signed by that country with Australia, even though the company is incorporated in another country that does not have a similar treaty concluded with Australia.

Ms. Sanya Reid Smith highlighted that investment treaties have various definitions of investors whose rights are protected. It could refer to shares that an investor holds, or cover entities if they have been established under the laws of one of the States party to the Agreement, or if they have substantial business activities or have their primary site of business in one of the States party to the agreement, or if they have their seat or headquarters there. Cases brought over decades have interpreted these provisions to see whether or not an investor is covered by the investment treaty provisions.

Several countries have been developing new investment treaty models, in which they clarify obligations on investors and on the home country of the investor, Ms. Reid Smith noted. For example, some new treaties provide for the duty of investors to respect corporate responsibility, require mutual cooperation between home and host States, and establish obligation on foreign investors to respect human rights and on the home State to allow in its courts cases on the civil liability of investors resulting from their acts in the host State. In other cases, the new treaty models establish direct link between the obligation of investors to comply with human rights provisions in order to benefit from the treaty, which tends to create a balancing mechanism, Ms. Reid Smith concluded.

CONTRIBUTIONS FROM STATES

South Africa stated that the footnote in resolution 26/9 is justifiable. The thresholds for respect of human rights by local business entities must be foreseen in national legislation. The footnote does not undermine the work States could undertake to enhance human rights standards in their national legislation, and to strengthen the role and capacity of regional mechanisms and institutions. In this context, the proposed treaty will serve to complement and reinforce such measures, South Africa noted.

The primary purpose of the exercise undertaken by the open-ended intergovernmental working group is clearly outlined in resolution 26/9, and focuses on regulating in a uniform manner the operational activities of TNCs and other business enterprises that have a transnational character, South Africa explained. The global reach of transnational corporations and other business enterprises in their operational activities have had social and political impacts disproportionate to their legal and social obligations, both nationally and internationally, the delegate stressed. It is therefore inconceivable to equate local businesses with TNCs who drive globalisation and own a big share of global wealth. Without an understanding of the obligations that TNCs and other business enterprises bear with respect to fundamental rights, it would not be possible for victims of rights’ violations to claim access to remedy against these entities.

South Africa pointed to British Petroleum’s payment of 18.7 billion US dollars as remedies to victims in the case of Deepwater Horizon, while many other disasters go on unaddressed. South Africa noted that this case reflects the double standards applied today given the differences in relations TNCs have with States, and the consequent differences in the ability to hold corporations accountable of their actions.

South Africa noted that the discussions in regard to a prospective treaty are important for the work undertaken by the intergovernmental working group on private military and security companies.

Cuba highlighted that a future legally binding instrument on TNCs and other businesses enterprises should clarify the basis for legal responsibility of companies, including the conduct that will be considered a breach of human rights’ obligations.

According to Cuba, the future instrument should consider the legal loopholes that companies use to escape responsibility for harmful conduct, including by operating through subsidiaries. The working group should consider defining the basis for determining corporate ‘nationality’, Cuba added.

Cuba noted that there are no obstacles to allocating responsibility to companies as individual entities or as a group of entities. Cuba also underlined that natural persons working in companies should have responsibility in the case of harmful acts carried out by the company. The treaty should also take into consideration the diversity of national legislation and the procedures that exist in various jurisdictions.

Cuba also noted the importance of addressing the case of private military and security companies.

Venezuela addressed the proposition of listing the harmful conducts and violations recognised in international law under a future instrument, as illustrated in Article 3 of the Optional Protocol to the Convention on the Rights of the Child on the sale of children, child prostitution and child pornography. Venezuela noted that the instrument should cover all human rights, and accordingly the list of conducts that could be included should be comprehensive and linked to domestic laws of States. It is important to address how the drafting and listing of these conducts would ensure the effectiveness of the instrument at the time of determining responsibility and sanctions that correspond to the harmful conduct. The list could be non-exhaustive, according to Venezuela.

Ecuador pointed to the importance of addressing the ‘proof of nationality’ of the corporate actor. Ecuador added that practice in this regard varies among States, but in general, criteria used consider the legal registration of the company, the place of its headquarters, the place of administration control and financial control or the territory in which the majority of its business or operations take place.

Ecuador also pointed to the importance of clarifying the basis for determining the responsibility of the whole company, or the responsibility of each of the operational levels of the corporate structure, using criteria such as ‘effective’ control, the extent of the misconduct and the link between the parent company and its subsidiaries. Ecuador spoke of the principles of ‘attribution’ that will allow for establishing the chain of responsibility within the complex corporate structures of transnational corporations.

The model that could be most effective for addressing the responsibility of corporations is one that recognises the responsibility of the enterprise as a whole, according to which the violation of human rights is attributable to the whole company, including the different levels of its internal structure. Ecuador also raised issues pertaining to the implication of the ‘corporate veil’ . Ecuador referred to the application of the principles of “duty of care” in several judicial decisions, whereby the parent company has to take the necessary due care in regard to the actions of the subsidiaries, including the design and applications of standards for human rights throughout its operations and at all levels of its corporate structure. The UN Guiding Principles also make reference to the ‘duty of care’ in several areas pertaining to due diligence and the duty to identify, prevent, mitigate and remediate human rights violations.

Mexico raised questions on how the future instrument could establish a normative hierarchy that ensures the primacy of human rights above the rights of investors. Mexico also addressed how international mechanisms , including ISDS tribunals and regional human rights courts, should address and interpret provisions of the future instrument and existing bilateral investment treaties that could be conflicting.

Bolivia considered that a legally binding instrument on transnational corporations and other business enterprises with respect to human rights should allocate legal responsibility to transnational corporations and their directors. Bolivia stressed that parent companies should also be liable for the acts of their subsidiaries, supply chains, licensees and subcontractors for actions that hamper or impair the enjoyment of human rights.

The Russian Federation recognised that the discussion of the standard of legal liability applicable in cases of corporate misconduct is of most importance, as it may entail the responsibility of legal entities or natural persons depending on the different applicable legal systems. Russia pointed to the direct link between the standard of liability applicable to corporations and international investment and trade agreements. For Russia, it is necessary to discuss the transnational operations of corporations because the actions of national companies fall under domestic jurisdictions and the implementation of domestic law depends directly on the domestic judiciary. Russia also supported the appeal for the working group to deal with the question of private military companies, which according to Russia is a classic example of transnational activity.

China addressed the effectiveness of a future instrument in regard to the protection of the interests of host countries and those of parent and subsidiary companies, while not affecting the host countries’ attractiveness to foreign investment. China also pointed to the importance of effective attribution of legal liability to parent companies, their subsidiaries and supply chain companies, as this issue may entail the use of domestic laws and regulations of different countries and also relates to attraction of foreign investment.

Ghana addressed the relationship between the OEIWG on business and human rights and the OEIWG on private military and security companies (PMSCs). The legitimate work relationship existent between some of these companies and the UN – for example to protect UN assets in conflict zones –should not be confused with the phenomenon of mercenaries, according to Ghana. The risk entailed in the OEIWG on business and human rights addressing the issue of PMSCs is two fold. Ghana noted. First, it would take the risk of duplicating the effort of the OEIWG on PMSCs. Second, it could lump the different categories of PMSCs together.

South Africa recalled that the Human Rights Council provided a mandate to the OEIWG on private military and security companies (PMSCs) to conclude a binding instrument to regulate their activities. South Africa explained that the mandate given to the working group on a legally binding instrument on transnational corporations and other business enterprises addresses the corporate violations of human rights, while the OEIWG on private military and security companies is mainly concerned with the regulation of these companies. South Africa added that the case of ‘floating armouries’ in the high seas should be considered by the OEIWG on business and human rights, as they fall within its mandate.

CONTRIBUTIONS FROM CIVIL SOCIETY

SOMO¹ recalled that it is necessary for States to transform the voluntary corporate responsibility to respect human rights into mandatory corporate obligation. The future treaty could consider the UNGPs and the OECD guidelines as a base to elaborate different modalities, particularly with respect to parent company and supply chain liability. SOMO noted that clarifying the concept of complicity is a key element in order to avoid businesses ‘outsourcing’ their responsibility for a wrongful conduct that should have been known or was known by the parent company, or is committed by a linked entity, such as a business partner, the host state or other non-state actors. SOMO highlighted the complex organizational structures of business relationships. For those reasons, in cases of corporate human rights abuse, the burden of proof should be shifted from the claimant to the defendant, according to SOMO. In such cases, the corporation will be responsible to prove that human rights due diligence was conducted to prevent violations, rather than the victim being obliged to prove that the company did not fulfil its obligation to respect human rights, SOMO added.

Friends of the Earth International noted that voluntary measures adopted by corporations and their financiers are not enough. The future treaty should establish shared liability of TNCs for the acts and operations carried out by their subsidiaries, suppliers, licensees and subcontractors. Various examples have shown that voluntary codes of conduct, although useful, “do not hold sufficient weight to solve problems of the company’s own making”, Friends of the Earth International affirmed. The group stressed its concern in regard to the role of corporate financial institutions, and suggested that legal liability of TNCs should also be extended to the institutions financing their wrongful conduct.

The Institute for Policy Studies and the Transnational Institute noted that the prospective instrument should integrate a new approach to the principle of attribution of criminal liability into the field of international human rights law and international criminal law. The discussions over a future treaty could elucidate the different mechanisms available for victims to attribute the consequences of acts or operations carried out by corporations, the groups added. Likewise, the future instrument must reaffirm the hierarchy of human rights norms. In addition, the new binding treaty should consider possible tools to address cooperation between judiciaries and magistrates belonging to different jurisdictions, the groups added.

Franciscans International² noted that a future treaty should provide for statutory cause of action in cases of human rights abuses committed by TNCs as well as other business enterprises. The groups noted that complicity should be understood as co-responsibility in criminal offences, involving adverse impacts on human rights. Additionally, the future instrument should clarify liability for human rights abuses perpetrated by complex corporate structures, including liability of parent companies in cases of abuses committed by its subsidiaries. Franciscans International added that the lack of proper ‘due diligence’ mechanisms to protect human rights must trigger legal liability of companies. The group recommended clarifying grounds for criminal, administrative, and civil liability for all human rights abuses as guaranteed by international law; establishing corporate criminal liability for certain severe human rights violations; attributing responsibility for natural and legal persons; ensuring that criminal proceedings do not prevent victims from seeking civil remedies; defining liability for parent companies, including negligence and casual link; and criminalising situations of complicity, including negligence and omission.

FIAN International considered that the prospective instrument should provide a “legal framework prescribing the conduct to be considered as harming the enjoyment of human rights”.This framework should include States’ domestic and extraterritorial obligations, and the provision of criminal, administrative and civil liability for businesses involved in human rights offences. FIAN International proposed the following elements for consideration:

1. Corporate groups should be obliged to disclose their corporate structure, including enterprises forming the group, contractual relationships or specific supply chains;
2. Mechanisms to lift the corporate veil used in other fields of law, such as competition, taxes or labour law, should also be used in human rights;
3. The working group should explore different theories and models to determine criminal liability on the basis of bona fides and effectiveness principles;
4. The burden of proof regarding ‘due diligence’ should be shifted to the defendant in order to ensure equality of arms and due process for the victims;
5. Clear norms and definitions for ‘complicity’ of parent or controlling companies is needed in cases of harms caused by subsidiaries or linked legal entities.

Centre Europe Tiers Monde (CETIM)³ proposed that the prospective instrument should require States to allocate civil and criminal liability to legal and natural persons in cases of human rights abuses perpetrated by TNCs. This liability should extend to direct offences committed by corporations, and to acts amounting to aiding and abetting in those abuses. The future instrument should also consider joint responsibility of TNCs with respect to wrongful acts committed by their subsidiaries, supply chain providers, licensees, and even financers, according to CETIM.

Amnesty International stressed that the doctrine of separate legal personality often frustrates legal claims against parent companies and constitutes a major legal barrier for accountability and justice. States should address this challenge by providing ‘due diligence’ duties to parent companies in order to guarantee that their subsidiaries’ operations do not harm human rights. These ‘due diligence’ duties may refer to international due diligence standards, and the burden of proof in this regard should fall with these companies.

The International Federation for Human Rights (FIDH) raised issues concerning the regulation of private security and military contractors (PMSCs) and access to remedy for victims of human rights violations by these companies. It was recalled that for more than a decade, the Centre for Constitutional Rights has represented claimants for war crimes and torture against PMSCs in US Courts, including on behalf of four Iraqi alleged torture victims at the Abu Ghraib prison. These procedures have been found to satisfy the Kiobel ‘touch and concern’ test in the appeal phase, after they were dismissed under the ‘political question’ doctrine. For this reason, FIDH urged the working group to clarify and affirm the liability of companies, including PMSCs, for their participation in human rights abuses, and stressed that the contractual relation of those companies with sovereign States, or the United Nations, should not serve as a shield from legal liability. In particular, the immunities enjoyed by States or the UN should not be attributed to private corporations, FIDH stressed.

The Economic, Social and Cultural Rights Network (ESCR-Net) noted that the prospective instrument should consider “corporate complicity and parent company responsibility for the offences committed by its subsidiary”. The attribution of legal liability to the legal entity should also consider the responsibility of directors and managers, ESCR-Net added. The Network proposed that the working group may use as reference in the development of standards for allocation of legal liability to corporations section 12.3 of the current Australian Criminal Code that provides that elements of fault – other than negligence—could be attributed to a corporate body when it “expressly, tacitly or impliedly authorised or permitted the commission of the offence”.

Highlights of some elements of discussion and points of view shared during the OEIWG’s session

In regard to standards of legal liability of TNCs and other business enterprises:

• There is no impediment to assign legal responsibility to a company, either as a legal person or as a group of natural persons;
• Companies could be held liable under various types of responsibility; it might be criminal, civil or administrative. Since states have diverse legal systems and traditions, the prospective Instrument should consider some flexibility as to how standards are applied under domestic systems;
• A prospective Instrument could require States to establish in their domestic legislation certain minimum conducts as obligations for corporations, and clarify various types of responsibilities, as well as criminal, civil and administrative liability;
• The types of conduct fostering legal liability for corporations should not be limited to direct liability for the harm caused by corporations, but should cover aiding or abetting, and the attempt to perpetrate such conducts;
• The liability of financial institutions supporting or financing projects hampering, or will hamper, the enjoyment of human rights could also be considered under a prospective Instrument;
• Designing a prospective Instrument should address and clarify the “attribution of responsibility” to businesses, given that the practices and the legal traditions in this regard vary among States ;
• The approach that considers the responsibility of the enterprise as a whole, according to which the violation of human rights is attributable to the whole company, helps in addressing the responsibility at different levels of the corporate structure and helps in avoiding situations where businesses ‘outsource’ their responsibility for wrongful conducts to a linked entity (i.e. contractor, sub-contractor, and subsidiary, among others in the supply chain);
• In addition, a prospective Instrument could tackle issues pertaining to the ‘proof of nationality’ of the corporate actor, which is also approached in different ways by States: some consider the legal registration of the company, the place of its headquarters, the place of administration and financial control, or the territory in which the majority of its business or operations take place.

Building national and international mechanisms for access to remedy

CONTRIBUTIONS FROM PANELLISTS

Lene Wendland from the Office of the UN High Commissioner for Human Rights (OHCHR) presented the OHCHR Accountability and Remedy project (ARP), which focuses on enhancing corporate accountability and access to remedy for victims, particularly in the most severe cases of business-related human rights abuses. According to Ms. Wendland, the ARP was initiated to support more effective implementation of Pillar III of the Guiding Principles. The outcomes of the project will focus on practical and action-oriented guidance and recommendations for States, suitable for a range of legal systems and traditions, and developed through an evidence-based methodology.

Ms. Wendland explained that the ARP process commenced in May 2013 through an initial study on domestic law remedies. The project included a period of public consultations and a global online consultation in June 2015 (A progress report is expected to be presented to the Human Rights Council in June 2016). The conclusions from an earlier study provided the starting point of the ARP study, particularly in regard to the legal, financial, practical and procedural barriers to accessing judicial remedies that victims of severe human rights abuses face, and the variations among national jurisdictions that may exacerbate inequalities and create legal uncertainty for companies and affected persons. “The present system of domestic law remedies is patchy, unpredictable, often ineffective and fragile”, Wendland contended.

The ARP program of work includes six distinct, but interrelated, projects addressing issues identified as creating obstacles to effective access to judicial remedy. These projects include: Project 1: Tests for corporate legal liability; Project 2: Roles and responsibilities of interested states; Project 3: Overcoming financial obstacles to legal claims; Project 4: Criminal and administrative law sanctions; Project 5: Civil law remedies; and Project 6: Domestic prosecution bodies.

Ms. Wendland explained that the ARP project is based on a two-track approach to data gathering. The first approach consists of a global on-line consultation, designed as an “umbrella process” to obtain information from States and other stakeholders about present State practice. This approach aims at ensuring broad stakeholder input as well as geographical diversity. The second approach consists of a detailed comparative process that covers about 20 different-focus jurisdictions and research by law firms and legal experts from the perspective of civil society and plaintiffs.

A report on the progress of the ARP was presented⁴ during the 20^th Session of the Human Rights Council. The report included preliminary findings from research and issues that require further attention from the OHCHR. Some uncertainty was noted on States’ attitudes and practices in relation to some key issues such as exhaustion of remedies, ‘universal civil jurisdiction’, among others. Likewise, States’ implementation of extraterritorial jurisdiction appears low even though explicitly provided for by international conventions. In addition, the report also noted a contraction of legal aid in many States, whereby measures to overcome financial obstacles are required, including new funding mechanisms, the use of the office of the Ombudsperson and of other means of litigation aside from civil litigation. Law-enforcement cooperation is a key element to guarantee access to effective remedies for victims, Ms Wendland concluded.

Richard Meeran, Partner at Leigh Day and Co., stressed that national mechanisms have interrelated legal, procedural and practical hurdles facing access to remedy. Particularly in cases of civil litigation, issues as ‘forum non conveniens’ and legal liability of parent companies are key barriers to overcome. Mr Meeran also highlighted that cases related to corporate complicity in human rights violations perpetrated by the State are difficult to prove factually and legally, as it is necessary to prove that conduct of police or military was in fact influenced or controlled by such corporation. In addition, the principle of “foreign act of State”, which is similar to State immunity, precludes the courts of one State from exercising jurisdiction in a case against another State, with exception of commercial matters. This argument is often used in cases involving corporate complicity with a State’s harmful conduct, whereby the court would first ascertain that the host State has acted unlawfully, but this would entail the home State judging the legality of the host State’s conduct.

Other aspect to consider is the payment of damages, Mr. Meeran noted. It is true that payment of damages by a multinational company has the potential to deter bad conduct as well as provide redress for victims, he added. But in the case of the European Union, the Rome II Regulation now applies to choice of law in tort cases and stipulates that damages will invariably be assessed by reference to local levels, Mr. Meeran explained. This reduces the deterrent effect and also reduces the financial viability of cases for victims’ lawyers, especially in smaller cases.

Moreover, there are additional procedural hurdles affecting access to justice for victims of human rights abuses by corporations. Access to documents/discovery and availability of class action procedures are some of these cases, according to Mr. Meeran. Class action procedures enable one or few representatives to advance a case on behalf of a large group that falls into the class definition, which reduces the expenses and resources required by enabling aggregation of cases and determination of common issues through representative cases. Likewise, this type of procedures are important because it protects claims from becoming time-barred, Meeran explained. Without class action legislation, individual victims are required to file court claims before the statutory deadline.

The overriding practical hurdle according to Mr. Meeran is the availability of funding for legal representation. It is clear that without effective legal representation there will be no effective access to remedy, which not only requires legal representation, but legal representation that guarantees equality of arms. Substantial and technical resources are required over a protracted period of time to pursue a claim against a multinational corporation (MNC). It is well known that these corporations are capable of deploying an array of lawyers and experts to try and overwhelm their claimants, which is not the case for victims who obviously cannot afford the costs of these procedures. Furthermore, Meeran noted that the nature, scale and complexity of cases involving corporate human rights abuse limits public funding and reduces the probability of guaranteeing equality of arms. Similarly, the resources required and the nature of litigation generally makes it unrealistic for public interest law centres to act if not in conjunction with other law firms that could afford to act on a contingency basis, Mr. Meeran explained. Consequently, legal representation is rarely available for victims to pursue claims in MNCs’ host countries and is also relatively scarce in MNCs’ home countries.

Even lawyers acting on a contingency basis face substantial financial disincentives because there are high risks associated with the magnitude of the legal and procedural barriers that claimants have to face, Meeran explained. For example, lawyers’ fees or other expenses may not be paid if there is an unfavourable outcome, and the costs of carrying such cases for an uncertain period with an uncertain outcome will also represent cash-flow risks. In addition, the principle of ‘loser pays’ applicable in some jurisdictions, such as the United Kingdom, South Africa and Australia, enables lawyers representing victims to be paid if the case finally succeeds, but just once the procedure is over and does not entail payment of costs in full, Meeran added. He also noted that there is a downside of the ‘loser pays’ principle, namely that the victims could end up being liable for the MNC costs. In the United Kingdom for example, qualified one-way costs (QOCs) has been introduced in injury cases, where the defendant only pays if it loses, but claimants will not pay even if they lose.

For these reasons, low financial value cases, which involve small numbers of claimants, are not financially viable in general terms under any system, according to Mr. Meeran. For instance, the Rome II Regulation, stipulating damages at local levels, reduces the financial value of the claim, and hence the viability of these procedures. Similarly, cases involving a large number of claimants are more financially viable, but entail higher risks. MNCs could threaten to make victims’ lawyers personally liable for costs incurred by MNCs in their defence, which could create a further disincentive.

To conclude, Mr. Meeran stressed the importance of capacity building. The collaboration and the involvement of US lawyers in the South African Class action is a good example in this regard. Since 2003, Mr. Meeran has worked together with the South African Legal Resources Centre (LRC) on the gold miners’ silicosis litigation through a series of test cases until 2013, which have entailed a significant amount of capacity building.

Nabila Tbeur, Special Advisor to the President of the National Council for Human Rights in Morocco, spoke on behalf of the Working Group on Business and Human Rights of the International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights. Ms. Tbeur pointed out that national human rights institutions (NHRIs) are independent public bodies established by national law or constitutions to promote and protect human rights, through inter alia monitoring, formal investigations, advice to government, reporting to international and regional human rights supervisory mechanisms, research and human rights education. More than a hundred countries in the world have an NHRI. These institutions are subject to periodic re-accreditation with reference to the UN Paris Principles to assure their independence and objectivity. NHRIs are organised at regional level according to four networks, in Africa, the Americas, Asia and Europe.

Ms. Tbeur focused on the role and potential of NHRIs, in coordination with other judicial and non-judicial grievance mechanisms, to contribute to access to remedy in cases of business-related human rights abuses. An ‘effective remedy’ could encompass different types of reparations, such as restitution, rehabilitation, compensation, satisfaction, public apologies, changes in relevant laws and practices, and guarantees of non-repetition, Ms. Tbeur noted. Additionally, the right to remedy also includes procedural rights, for example the right to an effective investigation, the right to information, and the right to legal and other assistance necessary to claim a remedy, Ms. Tbeur stated.

The UN Guiding Principles on Business and Human Rights have recognised, in Guiding Principle 25, the potential role of NHRIs amongst different non-judicial grievance mechanisms. Moreover, NHRIs also play an important role in monitoring and holding the State and business to account with regard to their respective duty to protect and responsibility to respect human rights under Pillars 1 and 2 of the UNGPs. Likewise, Ms. Tbeur noted that the Paris Principles relating to the Status of National Institutions include business and human rights in their scope, which was recognised in the 2010 Edinburgh Declaration adopted by the International Co-ordinating Committee of National Institutions for the Promotion and Protection of Human Rights and four subsequent NHRI regional action plans on business and human rights.⁵

Ms. Tbeur highlighted that over recent years, NHRIs have steadily increased their efforts to put this human rights and business mandate into action, across all four regions of the world. Different cases involving human rights abuses by corporations have been brought to the attention of NHRIs, which involve corporations, security and finance companies, among others, she added. In the period of January-November 2012 the Indonesian Human Rights Commission handled 5,422 human rights cases, from which 1,009 were complaints against businesses in areas such as land and labour disputes, Ms. Tbeur explained. Similarly, NHRIs have undertaken formal investigations on the impacts of human rights abuses resulting from the operations of businesses in their countries and have engaged as independent observers or mediators in cases of conflict between rights-holders and businesses, she added.

Ms. Tbeur noted that despite progress made since the adoption of the UN Guiding Principles, the UNGPs have not yet impacted sufficiently on the daily life of individuals and communities throughout the world. Persisting tragedies caused by business enterprises or state failures in regulation or enforcement reveal that adequate prevention and control mechanisms, including judicial remedies, are still weak at national level, she added. Moreover, government responses to recommendations made by NHRIs, and attacks on the independence of NHRIs, recently recognised as human rights defenders within the UN system, and attempts to undermine their mandates and efforts to protect human rights, continue, Tbeur cautioned.

Tbeur pointed to the importance of broadening the discussion in the OEIWG to include, not only transnational corporations, but equally the broad range of business enterprises operating domestically. She also pointed to the importance of maintaining a strong focus on the primary duty of states to prevent, investigate, punish and redress such abuse through effective policies, legislation, regulations and adjudication.

Ms. Tbeur underlined that the value added and effectiveness of a future instrument would depend on its ability to complement existing national, regional and international efforts to implement the UNGPs and reinforce the role of state-based non-judicial mechanisms and non-state-based grievance mechanisms, described by Guiding Principle 27, alongside a comprehensive, efficient and appropriate judicial system. Finally, Ms. Tbeur emphasised that NHRIs seek to participate actively in the discussion of a prospective treaty.

Chip Pitts, lecturer at the Law School of Stanford University, stressed that a new treaty should clarify, simplify, harmonize and ensure that States’ duty to protect and the duty of corporations to respect are reflected on the ground and are given a meaning in practice. Similarly, the prospective treaty must shore up good initiatives that have been applied at the international level and avoid regression, Pitts added.

In relation to barriers in access to effective remedy, particularly on equality of arms and funding, there are some good practices to build on, Pitts highlighted, giving the example of the Inter-American Court of Human Rights and the European Court that provide funding for victims. Similarly, the Statute of the International Criminal Court provides grounds for criminal liability of corporations at the domestic level.

Professor Pitts emphasised that it is at domestic level where enforcement happens, while international and regional remedies are secondary and last resort remedies. Resort to regional and international remedies usually requires exhaustion of local remedies, whereby the principle of complementarity would be applicable, Pitts explained. This raises the requirement to prove that States are unwilling or unable to act, limiting the possibility of victims to bring cases to these courts, Pitts added.

International treaties have also helped in cases of environmental harm, Pitts noted. The Basel Convention allowed the European Union, particularly the Netherlands, to pursue the prosecution of Trafigura to successful settlement. Moreover, even where formal law of the domestic jurisdiction does not directly incorporate international law, its courts and judges are increasingly looking at international law.

Another trend is the criminalization of corporations when they commit crimes at the national level. Nevertheless, Professor Pitts emphasised, it is wrong to say that any violation of human rights is a crime. There is a need to distinguish international crimes in customary and treaty law from civil liability and administrative liability, he added. Each State has different approaches to their application and it will be basic to respect the realities of different jurisdictions, their history and traditions. The key issue is to guarantee an effective remedy, beyond only monetary remedy, Pitts underlined. Every so often a specific injunctive relief and apology are needed. As a matter of example, Pitts recalled that the Inter-American human rights system covers a full range of remedies. The prospective treaty could cover a full scope of remedies that meet the criteria of UNGPs and that are recognised in the UN General Assembly resolution on the right to a remedy and reparation for victims, Pitts added.

Pitts noted the need to work on a comprehensive jurisdictional approach in order to overcome procedural hurdles, such as ‘forum non conveniens’, ‘touch and concern’ principle in ATCA, or act of the State — State’s immunity principle. It can be done by simplifying rules for choice of jurisdiction, applicable law and effective remedy, amongst others, he added.

Professor Pitts remarked that the treaty has the opportunity to be innovative in relation to the institutional options. The institutional framework that might emerge from the treaty could receive complaints, elevate good practices, do research and cooperate with other institutions in the UN framework.

CONTRIBUTIONS BY STATES

Ecuador highlighted that access to justice is one of the most important issues raised during the first session of the OEIWG, and is one of the clear gaps in cases of impunity for human rights violations perpetrated by corporations. The lack of balance between the influence and power of corporations on the one hand, and the limited resources available to victims on the other, are hurdles that should be overcome by national mechanisms and institutions. The delegate of Ecuador remarked that allowing victims to bring their claims to the jurisdiction of the host and home State is one of the objectives pursued by the international treaty.

Ecuador recognised that the project carried out by the Office of the High Commissioner of Human Rights will be a valuable asset for the discussions of the OEIWG. Likewise, the proposal for creating an international body to hear cases of human rights abuses perpetrated by corporations should be carefully analysed. The prospective treaty must be based on an institutional framework capable of guaranteeing its implementation in an effective manner, and that contributes in the fight against impunity in cases of human rights abuses perpetrated by corporations, Ecuador added.

Namibia recalled two of the conclusions cited in the study of the OHCHR Accountability and Remedy Project (ARP), including that “variations between national jurisdictions may exacerbate inequalities and create legal uncertainty for companies and affected persons” and that “the present system of domestic law remedies is patchy, unpredictable, often ineffective and fragile”. Namibia recalled that there is clear evidence that an international legally binding instrument ought to cover all businesses, that is domestic businesses, domestic businesses with foreign operations, as well as TNCs.

Cuba recalled the need for a future treaty that establishes mechanisms to which natural persons whose human rights have been infringed by TNCs could resort to in order to have binding redress . Cuba noted that the complementarity of such body with domestic legal systems should also be discussed.

China stressed that national law plays a dominant role in the regulation of TNCs. Nevertheless, due to limitations in national laws, including in both home and host States of corporations, the human rights responsibilities of TNCs have not been addressed and human rights violations by corporations have not been deterred. China noted the importance of establishing a multilateral human rights coordination mechanism through effective consultation between host and home States, with the aim of enhancing cooperation on ‘due diligence’ investigations, administration of justice and enforcement of judgments. The different economic and development conditions of States, and their history and cultural characteristics must also be taken into account, as States have diversified approaches to the protection of human rights. In addition, the need to understand the imbalance between TNCs and the host country in terms of capacity, resources and level of knowledge, and the gaps between developed and developing countries is required in order to develop fair and equitable rules acceptable to both parties. China pointed to the importance of enhancing technical assistance and capacity building by developed countries under a prospective treaty.

Bolivia noted that effective resources should be available in order for the future instrument to guarantee the right of reparation of victims of human rights abuses perpetrated by TNCs. Bolivia underlined the importance of strengthening mechanisms for legal and judicial redress and the rules for application of sanctions in order to avoid impunity.

Nicaragua recalled that issues of reparation and remedy are fundamental aspects for States. Nicaragua added that remedy is a responsibility assumed by States. In Nicaragua for example, the government licensed a forestry company and indigenous communities were affected due to the operations. These communities complained to the Inter-American Human Rights Court, which ruled in favour of the communities and Nicaragua was responsible for redress. In the framework of a prospective instrument, it is important to identify how a TNC would take responsibility, as the treaty only bounds States. Nicaragua noted that it is familiar in human rights instruments to include provisions creating monitoring bodies, while States have the option not to recognise the competence of these monitoring mechanisms. If such approach is adopted in the future instrument, then it will complicate the process towards effective remedies.

Venezuela underlined that OEIWG should ensure the most direct and expedite access to judicial and administrative mechanisms for redress to victims. Likewise, Venezuela pointed out that it necessary to fully respect exhaustion of local remedies before regional and international mechanisms kick in. The future instrument should also lay down obligations for TNCs to respect and uphold the law of host States, Venezuela added.

Ghana questioned whether the test of remedy effectiveness is based on quantum or on the effectiveness of institutions at the national level. Ghana also raised the case where a State refuses to be a party to the treaty, and the effect such cases will leave on the possible creation of an international forum. Ghana stressed the participation of civil society in “naming and shaming and putting the pressure” on TNCs.

El Salvador noted that when there is conflict between companies and States, there is already a mechanism and a process to deal with such cases under international investment agreements. These procedures have often concluded in favour of companies despite their participation in human rights abuses. El Salvador stressed that it is important to clarify the relationship between international investment agreements, including investor-state dispute settlement, and the future instrument on business and human rights.

South Africa noted that benefits to host countries from corporations are not automatic. Therefore regulations are needed to balance the economic requirements of investors with the need to ensure that investments make a positive contribution to sustainable development. Human rights standards should be upheld while governments retain the policy space to regulate in the public interest, South Africa added. Human rights are enshrined in South Africa’s Constitution and the judicial system of South Africa has adjudicated successfully various cases involving corporations and big conglomerates for human rights abuses. South Africa also pointed to their experience in reviewing investment treaties and designing a new approach with appropriate balance between the rights and obligations of investors while ensuring the respect for human rights. The success of the international treaty cannot only lie in the State’s duty to protect human rights, but rather it should be a “comprehensive and balanced manner of addressing the obligations of TNCs and other business enterprises with respect to human rights, including their adherence to existing regulations and policies and extra-territorial obligations”, South Africa stressed. This approach will contribute to closing the governance gap and ensuring that TNCs and other business enterprises could be held liable for human rights violations. This approach should also ensure universal application of uniform standards on a global scale and address the widely perceived inequality in rights and obligations, South Africa concluded.

CONTRIBUTIONS FROM CIVIL SOCIETY ORGANIZATIONS

CIDSE⁶ noted that impunity and lack of remedy is clearer when abuses take place in “in weak governance zones and conflict affected areas”. CIDSE advocated for a treaty that urgently provides access to justice and promote non-judicial remedies. CIDSE underlined the importance of addressing extraterritorial jurisdiction, including the obligation of home States to provide access to judicial remedy whenever victims cannot access effective judicial remedy in their own State. The treaty should include the principle of complementarity between the home and the host State jurisdiction, according to CIDSE. A ‘consultation clause’ that obliges the home State to consult the host State before exercising its extraterritorial jurisdiction could be included in the treaty, CIDSE proposed. The group also proposed that the treaty address mutual legal assistance and cooperation in order to ensure access to effective remedy, particularly in the collection of evidence, and the enforcement of judgments. CIDSE noted that the treaty should consider establishing a new monitoring and enforcement mechanism whereby corporations could respond to allegations before this international mechanism.

FIAN considered that the treaty should include the obligation of States to adopt effective remedy mechanisms, including administrative, quasi-judicial and judicial remedies, and should ensure restitution, compensation, indemnity, rehabilitation and guarantees of non-repetition. FIAN noted that the main barrier for access to justice is the lack of remedy mechanisms in the home State of the corporation. This access should be ensured in cases where: a) the harm or threat of harm originates or occurs in its territory; and where b) the business enterprise or its parent or controlling company has its centre of activity, is registered or domiciled, or has its main place of business or substantial business activities, in the State concerned. FIAN also referred to the principle of ‘equality of arms’ and suggested on this matter that States should have the obligation to ensure qualified legal assistance and avoid costs or other procedural hurdles for victims. FIAN also addressed the enforcement of domestic judgments and recognised the importance of ensuring that patrimony of parent or controlling companies could respond for conducts of linked companies harming human rights. FIAN also suggested that a treaty body in charge of monitoring the implementation of the instrument could be created.

Franciscans International⁷ proposed that the treaty should require States to provide for civil damages in cases of human rights violations committed by corporations. Franciscans International pointed to the challenges faced by victims of corporate violations, including impediments to the disclosure of documents, exclusion of causes of action in domestic law, territorial jurisdictional limitations, and complexity of corporate structures, among others. In order to tackle these impediments, Franciscans International suggested that the international instrument should require States to ensure access to effective remedy through judicial, administrative, legislative or other appropriate means, to establish general jurisdiction of the courts where the company is domiciled, and to require States to exercise jurisdiction over human rights abuses committed by their companies outside their territories. Franciscans International also proposed provisions dealing with the circumstances under which the corporate veil would be lifted, and addressed the need to shift the burden of proof, ensure that damages are adequately quantified in favour of victims, and address any financial barriers to access effective remedy.

The International Federation for Human Rights (FIDH) highlighted that human right defenders have been victims of attacks from corporations. FIDH noted that access to justice in some countries have become increasingly difficult as a result of legislative reforms or regressive judicial decisions. Therefore, a treaty must include provisions to ensure affected individuals, communities and peoples access to effective remedies in both host and home States of corporations. FIDH proposed that a prospective instrument should remove barriers to remedy, especially the corporate law doctrine of separate legal personality and limited liability, forum non conveniens, and other financial constraints and procedural hurdles. FIDH also highlighted the importance of extraterritorial civil and criminal jurisdictions, and the application of the principle of complementarity including effective and robust supra-national remedial mechanisms.

The Transnational Institute (TNI) focused on the need for effective bodies of enforcement that oversee compliance, particularly the possibility of setting up a public centre with the capability to inspect the practices of TNCs. TNI also proposed the creation of a world court or tribunal with the jurisdiction to sanction and enforce judgments and possibility for victims to submit claims pertaining to business-related human rights abuses.

Endnotes:

¹ On behalf of Friends of the Earth Europe, Global Policy Forum, CIDSE, Brot für die Welt, IBFAN and IBFAN-GIFA.

² On behalf of Sisters of Mercy-Mercy International Association, Centre for Research on the Environment, Democracy and Human Rights of the DRC, GRUFIDES-Peru, IBASE-Brazil, SINFRAJUPE-Brazil and NGO Mining Working Group.

³ On behalf of Friends of the Earth International, World March of Women and the Campaign to Dismantle Corporate Power and Stop Impunity.

⁴ UN Doc. A/HRC/29/39, 7 May 2015 available online at http://www.ohchr.org/EN/HRBodies/HRC/RegularSessions/Session29/Pages/ListReports.aspx, accessed 5 October 2015.

⁵ See: http://nhri.ohchr.org/EN/Themes/BusinessHR/Pages/Capacity%20Building.aspx, accessed 7 October 2015

⁶ On behalf of SOMO, Friends of the Earth Europe, Brot für die Welt, IBFAN, IBFAN-GIFA and Global Policy Forum.

⁷ On behalf of Sisters of Mercy – Mercy International Association, The Center for Research on the Environment, Democracy, and Human Rights of the DRC, GRUFIDES, IBASE, SINFRAJUPE, NGO MINING WORKING GROUP

Highlights of some elements of discussion and points of view shared during the OEIWG’s session

In regard to mechanisms for access to remedy:

• The current systems of remedies for victims of corporate human rights abuses are patchy and inconsistent, complicated by jurisdictional challenges as ‘forum non convenience’, asserting the liability of parent company, and availability of funding for legal representation;
• A prospective Instrument should help in attaining equality of arms for victims in the face of TNCs’ reach and access to resources. One way a prospective Instrument could help overcome these obstacles is through shifting the burden of proof from the claimant to the parent companies;
• A prospective Instrument should address the issues pertaining to enforcement of national judgments and legal cooperation, including in regard to the collection of evidence, witnesses’ protection, discovery procedures, and enforcement procedures (including freezing of assets);
• A prospective Instrument could establish an international body in charge of monitoring the fulfilment of obligations set under the treaty, and/or hearing cases involving corporate-related human rights abuses. In such a case, it is important to recognize the principle of ‘exhaustion of local remedies’;
• ‘Effectiveness’ of remedies to victims entail the twin test of preventive and redressive efficacy, including reasonable certainty of redress in a timely manner and at an affordable cost;
• The role of national mechanisms to support victims of human rights abuses, including through legal aid and National Human Rights Institutions, could be enhanced in home and host states;
• It is important to consider the value of non-judicial mechanisms and preventive remedies, like injunctions.