9th Session of the Intergovernmental Working Group on Transnational Corporations

By Lené Sophia Strydom / GICJ

The 9th session of the Intergovernmental Working Group on Transnational Corporations from the 23rd to the 27th of October, is the latest attempt to find agreement on a binding treaty that establishes clear human rights obligations in respect of large mega companies, and their transnational activities that can sometimes fall outside the scope of domestic laws.

The scope of the treaty should provide a specific focus on business of transnational character (TNCs), in light of the legal gaps created by the extraterritorial complexity of these entities operating across different legal regimes. The focus should also be on solidifying the priority of protecting human rights indivisibly, above chasing profit margins. 

TNCs have long profited from conflict, and have thrived whilst populations affected by their activities have been kept poor, uneducated, and systemically excluded from society. Their involvement prolongs conflicts, props up repressive regimes and contributes to the huge financial wealth transfers to the global north. The role of companies in conflicts and their aftermath has been plain to see in Iraq, Yemen, Democratic Republic of Congo and in supporting Israeli occupation of Palestinian territories.

The Binding Treaty looks to build on the partial success of the UN Guiding Principles on Business and Human Rights which has led more than 50 countries to develop National Action Plans to strengthen their regulation of business conduct. However, progress towards action to prevent and remedy abuses has been unsatisfactory. States retain the clear obligation to prevent and remedy abuses carried out by companies based on their territory. There also remains the problem of large TNCs just moving territories to avoid new obligations. All States must produce stronger legislation that gives clear rights to victims of such abuse, they further make accessing information about corporate abuses much easier alongside effective access to justice for those without the significant resources of profiteering enterprises.

These rights and remedies of some of the most vulnerable groups in the world can only be realised if the serious issue of corporate impunity for abuses by transnational-corporations, big-businesses, and extractive industries are addressed. To this end, there is an urgent need for a Binding Treaty to regulate TNCs, to restrain their excesses and provide for effective remedies for the victims in a joined-up manner that creates both a level playing field and realises the universality of human rights protection.

The main recurring debates and concerns discussed during the 9th session of the Intergovernmental Working Group on Transnational Corporations concerning the pivotal provisions in the Preamble and  definitions contained in Article 1 include the following:

Clarity of Definitions:

Many countries expressed concerns about the clarity and specificity of the definitions within the article. This includes the need for a clearer scope for what constitutes human rights abuses and the need for precise definitions. Argentina, among other countries, expressed their concerns on the lack of clarity in the scope of human rights abuses as opposed to violations of human rights treaties and called for clearer, more precise definitions. Some states raised a point of view that companies cannot be found to be in breach of human rights treaties i.e., they are not reviewed by treaties bodies, nor formally be the subject of individual communications mechanisms which are limited to addressing only states and occasionally non-state actors.

Definition of Victims:

The issue of who qualifies as a victim and the scope of victimhood was a recurring theme. This is critical in defining the categories of people who will be able to bring legal claims for reparation following the entry into force of the treaty. Some countries, such as Mexico, supported expanding the definition to include immediate family members of those directly affected, while others were cautious about broadening the scope of victims beyond previously agreed notions. Mexico also proposed expanding the definition of victims to include those who have suffered harm while assisting victims such as human rights defenders, rescuers and medical staff. China supported modifying the definition of victims to make it less ambiguous with particular classes specified.

Extraterritoriality:

Several countries emphasised the need to address the challenges posed by transnational activities and extraterritorial operations of large companies, emphasising the legal gaps that exist in this context and the mandate of the group negotiating this treaty is to focus on bridging these gaps in human rights protection to prevent exploitation by corporate entities with deep pockets Several countries, including South Africa, raised concerns about the need to distinguish between ‘transnational corporations (TNCs)’ and ‘other business enterprises’ in the treaty as broadly defined provisions should not unduly penalise the cross-border cooperatives that operate in Africa and other parts of the world. The position of small enterprises must remain outside of the punitive obligations that would prevent the operations of companies with only a handful of companies. Overall, the lengthy discussion reflected a number of concerns about encapsulating the legal complexities of TNCs operating across multiple jurisdictions.

Corporate Accountability and human rights due diligence:

There was a recurring theme of ensuring that the binding treaty establishes clear obligations for corporations regarding human rights generally as well as specifically, putting human rights above profit margins. Various countries, such as Brazil, emphasise their concerns for this, as well as the need to hold corporations accountable for their actions, particularly in conflict areas.

Business Activities and Scope:

The scope of business activities and which types of companies the treaty should apply to, including transnational corporations (TNCs), were discussed. Some countries raised concerns about the vagueness in the definition of "other business activities." China proposed changes to the definition of "business" and the scope of the treaty, with a focus on aligning the treaty with the nature of business activities. Chile supported maintaining references to "transnational corporations and other business enterprises" in the treaty, emphasising the scope of the treaty.

Reparations and Remedies:

There were various suggestions related to reparations and remedies for victims of human rights abuses, with an emphasis on a comprehensive approach that includes a range of measures. Brazil suggested splitting the paragraph to distinguish between full reparation and a range of measures, emphasising the need for effective remedies for victims.

Human Rights Due Diligence:

There were discussions about developing further the concept of human rights due diligence obligation, particularly in the context of responsible corporate behaviour, these were first incorporated into the UN Guiding Principles, but many countries have been slow to impose them through national legislation. Many countries identified that the binding treaty would be the ideal opportunity to pressure reluctant states to establish regimes that could truly act as a preventative mechanism, with the aim of ensuring human rights abuses do not arise in the first place if such due diligence obligations were faithfully carried out. The European Union raised its directive on human rights due diligence as an example of implementation of the concept to ensure responsible corporate behaviour, indicating a focus on companies' responsibilities regarding human rights.

International Consistency:

The need to ensure that definitions and terms in the treaty align with international standards and agreements was a recurring theme. Several countries, including Argentina and Brazil, emphasised the importance of aligning the definitions and terms in the treaty with international human rights standards and agreements to ensure consistency.

These discussions highlight the complex and multifaceted nature of the treaty negotiations, with a focus on establishing clear and comprehensive guidelines for addressing corporate human rights abuses, particularly those related to transnational activities. The session reflected a wide range of views and concerns from participating countries.

Geneva International Centre for Justice (GICJ) believes that the adoption of the binding treaty is the first step of many necessary ones to prove the success of the campaign to regulate transnational companies’ activities through the framework of human rights law. For it to succeed it requires further steps, such as the ratification and implementation of the treaty at the domestic level, the harmonisation of legal procedures, and the establishment of domestic enforcement and follow–up mechanisms. 

In this regard, GICJ calls on other countries to adopt legislation that makes it an obligation for mandatory human rights due diligence. We also call on states that have not adopted national action plans on business and human rights to do so and make such human rights take center stage. 

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