Resolving Business and Human Rights Disputes – Is Arbitration the Way to Go?

Abstract

The insufficient level of protection afforded to human rights violations caused by business-related activities of multinational enterprises has recently begun to garner increased attention. On an intergovernmental level, the elaboration of an internationally binding treaty regulating the activities of transnational corporations is underway. States have also taken initiatives on a national level to reflect their commitment in implementing the UN Guiding Principles on Business and Human Rights. In both respects, much work remains ahead. Against this background, a group of prominent lawyers have suggested the use of arbitration as an alternative venue for resolving business and human rights disputes. After a span over five years of concept elaboration, public consultation and drafting, the idea has materialised in the creation of the Hague Rules on Business and Human Rights Arbitration (the Hague Rules or Rules), which were officially launched on 12 December 2019. This paper aims to take stock of the proposed Rules and the context of their appearance and examine if arbitration is a suitable medium for resolving business-related human rights infringements. In doing so, it discusses the legal framework governing the confluence of business and human rights as well as the features which speak both in favor and against arbitration as a means of settling business-related human rights disputes. The provisions of the Hague Rules are addressed in detail, particularly where default rules where tailored to better respond to the needs of human rights disputes. The paper concludes with an assessment of arbitration’s potential to ensure protection and enforcement of human rights in international business and reflects whether the Rules are robust enough to empower victims in this endeavor.