Towards a binding international treaty on business and human rights

11-07-2017

With its extended value chains, economic globalisation has provided numerous opportunities, while also creating specific challenges, including in the area of human rights protection. The recent history of transnational corporations contains numerous examples of human rights abuses occurring as a result of their operations. Such corporations are known to have taken advantage of loose regulatory frameworks in developing countries, corruption, or lack of accountability resulting from legal rules shielding corporate interests. This situation has created a pressing need to establish international norms regulating business operations in relation to human rights. So far, the preferred approach has been 'soft', consisting of the adoption of voluntary guidelines for businesses. Several sets of such norms exist at international level, the most notable being the UN Guiding Principles on Business and Human Rights. Nevertheless, while such voluntary commitments are clearly useful, they cannot entirely stop gross human rights violations (such as child labour, labour rights violations and land grabbing) committed by transnational corporations, their subsidiaries or suppliers. To address the shortcomings of the soft approach, an intergovernmental working group was established within the UN framework in June 2014, with the task of drafting a binding treaty on human rights and business. After being reluctant at the outset, the EU has become involved in the negotiations, but has insisted that the future treaty's scope should include all businesses, not only transnational ones. The European Parliament is a staunch supporter of this initiative and has encouraged the EU to take a positive and constructive approach.

With its extended value chains, economic globalisation has provided numerous opportunities, while also creating specific challenges, including in the area of human rights protection. The recent history of transnational corporations contains numerous examples of human rights abuses occurring as a result of their operations. Such corporations are known to have taken advantage of loose regulatory frameworks in developing countries, corruption, or lack of accountability resulting from legal rules shielding corporate interests. This situation has created a pressing need to establish international norms regulating business operations in relation to human rights. So far, the preferred approach has been 'soft', consisting of the adoption of voluntary guidelines for businesses. Several sets of such norms exist at international level, the most notable being the UN Guiding Principles on Business and Human Rights. Nevertheless, while such voluntary commitments are clearly useful, they cannot entirely stop gross human rights violations (such as child labour, labour rights violations and land grabbing) committed by transnational corporations, their subsidiaries or suppliers. To address the shortcomings of the soft approach, an intergovernmental working group was established within the UN framework in June 2014, with the task of drafting a binding treaty on human rights and business. After being reluctant at the outset, the EU has become involved in the negotiations, but has insisted that the future treaty's scope should include all businesses, not only transnational ones. The European Parliament is a staunch supporter of this initiative and has encouraged the EU to take a positive and constructive approach.