UN Guiding Research Articles

Re-righting the international tax rules: operationalising human rights in the struggle to tax multinational companies

ABSTRACT Who finances government, and how, is foundational to realising human rights for all, without discrimination. This is especially pertinent during the COVID-19 pandemic, which is only exacerbating health and economic disparities. This article reviews what a national human rights-aligned tax policy would look like, and then dissects how the international tax rules currently impede individual States, and particularly low- and middle- income countries, to bring their national tax policies in line with human rights. The authors then discuss how international human rights law, including the UN Guiding Principles on Human Rights Impact Assessments of Economic Reforms, can provide a stronger normative foundation to curb harmful tax competition and help resolve disputes over the right to tax multinational companies. Given the paucity of practical tools to embed human rights norms into the process and substance of reforming international tax policies, the authors then develop a set of assessment questions to help operationalise human rights norms into current efforts to re-write the international tax rules.

Business and Human Rights, from Theory to Practice and Law to Morality: Taking a Philosophical Look at the Proposed UN Treaty

This paper considers the UN efforts to introduce a legally binding Treaty on corporate accountability for human rights impacts in the context of other proposed legislation at country level, on the one hand, and existing voluntary initiatives like the UN Guiding Principles (2011), on the other. What we are interested in is whether the proposed Treaty signals a transition from voluntary initiatives (based on moral commitments) to law (that is, a focus on compliance), and the extent to which it might stimulate or hinder links between judicial and non-judicial initiatives. The scholars who have explicitly addressed these two divides are – Michael Sandel, on theory v. practice; and Amartya Sen, on law v. morality. We engage with their views, in sections II and III respectively, seeking to build an integrated approach to help us overcome these dualisms. We further consider John Ruggie’s “principled pragmatism”, a strategy that he uses to build the Protect, Respect and Remedy (henceforth, PRR) Framework; and we invoke arguments from casuistry as well as a practice-focused deontology (Thomas Donaldson’s) in favour of an ethics ‘beyond cognition’, which we consider better suited than either utilitarian or principle-based theories to guide the debate on human rights. This is because it allows us to take non-rational factors into account (such as emotions and personal affiliations), when judging the kind of common good we consider worth pursuing. In the last section of the paper, we investigate whether and how might the Treaty illustrate the two divides, trying to (a) distinguish between purely legal elements and those of a wider nature, to do with morality; and (b) understand what might help bridge the gap between theoretical commitments to the universality of human rights and various practical challenges. Our aim is not to evaluate the Treaty, from a legal viewpoint, or suggest improvements to it (lawyers are better placed to do that); rather, we seek to investigate the way in which the proposed Treaty – which is the first attempt to address the challenge of transnational business and human rights in international law – combines moral and legal aspects, and what this tells us about the world we live in.

Toward a Corporate Duty for Lead Companies to Respect Human Rights in Their Global Value Chains?

AbstractThe corporate responsibility to respect human rights was formally introduced in 2011 with the unanimous endorsement of the UN Guiding Principles on Business and Human Rights (UNGPs) by the UN Human Rights Council. It is grounded in social expectations and forms part of the companies' “social license to operate.” This paper argues that this responsibility is progressively turning into a legal duty for lead companies to respect human rights in those types of value chains which are characterized by a high level of control by a lead company over its business partners. Our argument rests on two recent legal developments. Firstly, the article analyzes the judicialization of the corporate responsibility to respect in the case law on parent company liability in various jurisdictions, which, we argue, is highly likely to have some implications in relation to certain types of value chains so as to trigger the liability of lead companies for the human rights harms arising out of the activities of entities over which they exercise sufficient control. Secondly, the article delves into the legislative developments which increasingly require lead companies to exercise due diligence so as to prevent and address adverse human rights impacts in their own activities and global value chains.

A regulação da transparência em direitos humanos e escravidão moderna nas cadeias de suprimentos corporativas

O presente artigo analisa alguns limites dos modelos de prestação de informações para avaliar se são ferramentas hábeis na identificação de riscos das atividades empresariais em matéria de direitos humanos, bem como para engajar as empresas em esforços colaborativos para defende-los. A Lei de Escravidão Moderna da Austrália (MSA, 2018, Commonwealth) é o mais recente exemplo global entre os modelos legislativos criados para estimular a ação corporativa nas operações de seus negócios e nas cadeias de suprimento diante desses riscos. Alguns desses modelos exigem a implementação de medidas de due diligence em direitos humanos (DDDH), como previsto pelos Princípios Orientadores sobre Empresas e Direitos Humanos da ONU, de 2011. Entretanto, o modelo do MSA é melhor descrito como um regime de transparência e de dever de informar. Esse tipo de regime não exige que as empresas tomem medidas de DDDH; ao invés, apenas exigem que elas reportem sobre as medidas que tomaram durante o período avaliado. Nesse artigo, analisamos algumas suposições subjacentes ao modelo desses modelos ou esquemas baseados em relatórios. Consideramos, para tanto, a prática usual das companhias ao investigar suas cadeias de suprimentos: a auditoria social. Alertamos, porém, contra o excesso de confiança nessa prática, que não é sinônimo de DDDH. Ela não necessariamente promove uma conformidade abrangente e não meramente cosmética, assim como não estimula ações corporativas perante riscos não evidentes no tema direitos humanos. Finalmente, oferecemos algumas abordagens alternativas para o aperfeiçoamento da eficácia dos mecanismos de percepção de riscos de direitos humanos especialmente nas cadeias produtivas.

Implications of the COVID-19 pandemic for human rights and modern slavery vulnerabilities in global value chains

The COVID-19 pandemic has revealed vulnerabilities and fragilities in global value chains. The worldwide economic lockdowns to contain COVID-19 have led in some industries to unilateral cancellations and suspensions of orders from overseas suppliers by transnational corporations (TNCs). These decisions are argued to be in conflict with the UN Guiding Principles on Business and Human Rights, the Sustainable Development Goals, and related national laws because they have contributed to the risk that the human rights of workers will be violated and that they will become victims of modern slavery. In response, international business policies that target the conduct of TNCs and global value chains need to be reconsidered to achieve global value chain integration while strengthening local bargaining, affording sustainable growth, and protecting human rights.

IMPLEMENTING HUMAN RIGHTS DUE DILIGENCE THROUGH CORPORATE CIVIL LIABILITY

AbstractSince the adoption of the UN Guiding Principles on Business and Human Rights the relationship between human rights due diligence (HRDD) and corporate liability has been a source of legal uncertainty. In order to clarify this relationship, this article compares and contrasts civil liability provisions aiming at implementing HRDD. It explains the legal liability mechanisms in the draft Treaty on Business and Human Rights and in domestic mandatory HRDD legislation and initiatives such as the French Duty of Vigilance Law and the Swiss Responsible Business Initiative. It compares these developments with the emerging case law on parent company and supply chain liability for human rights abuses. It explores the potentially perverse effects that certain civil liability provisions and court decisions might have on companies’ practices. Finally, it makes recommendations for the design of effective liability mechanisms to implement HRDD.

Obstacles to implementing the UN Guiding Principles on Business and Human Rights in Southeast Asia

In June 2011, the United Nations Human Rights Council (UNHRC) unanimously passed the United Nations Guiding Principles on Business and Human Rights (UNGPs), amidst an atmosphere of cautious optimism. These principles provided a new set of global standards for preventing and addressing adverse human rights impacts associated with business activity, and have been described as ‘the single most important innovation in the human rights and business field in the last 25 years’. Indonesia, Malaysia and Thailand—members of the UNHRC at the time the UNGPs were adopted—all voted in support of the framework, and several governments in the region subsequently indicated a potential willingness to develop National Action Plans to guide implementation. Nonetheless, almost ten years since the endorsement of the UNGPs, their implementation within Southeast Asia has remained slow and uneven.

Contributory Fault under International Law: A Gateway for Human Rights in ISDS?

Abstract The intersection between foreign investment and human rights is gaining attention, as is evident from an increasing number of investment treaty awards analysing legal issues relating to human rights. In the recent International Centre for the Settlement of Investment Disputes (ICSID) arbitration of Bear Creek v Peru, Philippe Sands QC posited, in a dissenting opinion, that the investor’s contribution to events—ie protests against its allegedly adverse environmental impact and disregard of indigenous rights, namely resulting from its ‘inability to obtain a “social licence”’—which led to the unlawful expropriation of its investment, was ‘significant and material’. He further noted that the investor’s ‘responsibilities are no less than those of the government’ and found that damages should thus be reduced. Last year, the Netherlands adopted a new model bilateral investment treaty (BIT), which allows tribunals to ‘take into account non-compliance by the investor with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises’ when assessing damages. These recent developments shed light on how states and tribunals, as part of their decision-making process, can take into account human rights in practice, and crucially in respect of damages analyses. By first dissecting the concept of contributory fault, then shedding light on the intersection of investment treaty law and human rights, as elucidated in recent jurisprudence, this article questions whether there now exists a gateway for human rights obligations (soft or hard) in the investment treaty arbitration realm through the concept of contributory fault.

The Paradox of Corporate Globalization: Disembedding and Reembedding Governing Norms

The discussion begins with the current purpose debate. it is then divided into five parts. The first draws a baseline of corporate globalization and traces key policy measures that created its enabling environment. The second identifies the paradox of corporate globalization: at the very height of the recent globalization boom multinationals discovered that their legal license to operate, provided by states, did not in itself translate into a social license. Firms responded by adopting enterprise-wide corporate social responsibility (CSR) as a management tool. Although quite superficial in its early iterations, in retrospect this marked the first step toward systematically engaging stakeholder, if only in the attempt to placate them. The following two sections recap the institutional strategies and cascading effects of two global initiatives intended to narrow the gap between legal and social license: the UN Global Compact, the world’s largest corporate engagement platform, and the UN Guiding Principles on Business and Human Rights, the global standard in this space. Both reflect, and contributed to, the further normative evolution through which the corporation came to be viewed – in the end by many firms themselves. The conclusion returns to the current corporate re-purposing debate and reflects on what, if any, contributions it is making to rebalancing market and society, and to people and planet challenges humanity faces today.

Research Handbook on Labour, Business and Human Rights Law, edited by Janice R.Bellace and Beryl terHaar. Edward Elgar Publishing, Cheltenham, UK, 2019, 528 pp., ISBN: 978‐1‐78642‐310‐7, £195.00 (US$290.00)

Research Handbook on Labour, Business and Human Rights Law, edited by Janice R.Bellace and Beryl terHaar. Edward Elgar Publishing, Cheltenham, UK, 2019, 528 pp., ISBN: 978‐1‐78642‐310‐7, £195.00 (US$290.00)

International Protection of Human Rights and the Activity of Transnational Corporations.

INTRODUCTION. This study analyzes available remedies for victims who have suffered harm from business activity of transnational corporations. The goal of this study is to evaluate the effectiveness of available remedies for the protection human rights of individuals from adverse impacts of the business activity of TNCs. To achieve the goal, it is necessary to fulfill the following tasks: to consider the obligations of TNCs in modern international law, the role of states in the protecting human rights against the business activities of TNCs, examine the content of the right to an effective remedy, and characterize the existing remedies for the individuals.MATERIALS AND METHODS. During the research the latest theoretical studies of leading Western scholars was analyzed, as well as the regulatory documents, recommendations and reports of the human rights treaty bodies, international human rights treaties and extensive court practice of the ECHR. For this study formal logical, general scientifi , comparative legal and private scientific methods has been applied. RESEARCH RESULTS. In recent years, the importance of soft law in the field of international business and human rights has been increasingly strengthened. The UN Guiding principles on Business and Human Rights have become the basis for a draft legally binding instrument to regulate, in international human rights law, the activities of transnational corporations. It should be noted that the latest innovations in the draft related to the introduction of environmental rehabilitation as one of the mandatory forms of redress. Indeed, when considering mass violations of human rights by transnational corporations, we oft n encounter with serious damage to the environment, as a result of which environmental rights are violated. Increasing cases of such violations have led to the need to improve international and domestic remedies.DISCUSSION AND CONCLUSIONS. The study concluded that a remedy would be effective if it would be affordable, acceptable, adequate and timely. An effective remedy against the activities of TNCs should provide an adequate compensation or the leveling of the damage caused and bring TNCs to account for human rights violations in order to ensure such compensation. In turn, access to remedies consists of two interrelated elements: the existence of a grievance mechanism that provides a redress for business-related damage and the availability to the mechanism by aff cted persons. Access to remedies should be provided without discrimination on any of the prohibited grounds and should take into account the situation of vulnerable groups. The approach to the calculation of compensation or the choice of remedy should be individualized, taking into account the social and legal status of the victim.

Preliminary Draft Text for a Business and Human Rights Treaty Based on the UN Guiding Principle

Preliminary draft text for a Business and Human Rights Treaty based on the UN Guiding Principles

The Contractual Balance Between ‘Can I?' and ‘Should I?’ Mapping the ABA’s Model Supply Chain Contract Clauses to the UN Guiding Principles on Business and Human Rights

This paper examines the efforts of the American Bar Association to draft proposed Model Contract Clauses for businesses that prohibit modern slavery and child labor in supply chain contracts. This involves a careful balancing of a buyer's desire to avoid consuming goods manufactured with human rights abuse and its desire to protect itself legally, in order to ensure that the company is acting in alignment with its responsibility to respect universally recognized human rights under the UN Guiding Principles on Business and Human Rights. This subject is quite timely in light of the current efforts of many companies, in response to the COVID-19 pandemic, to exercise force majeure clauses in their contracts to dump suppliers without regard to the impacts of vulnerable workers in their supply chains.

ПРО СИСТЕМУ ЗАСОБІВ ЗАХИСТУ ПРАВ У КОНТЕКСТІ КЕРІВНИХ ПРИНЦИПІВ ООН З ПИТАНЬ БІЗНЕСУ ТА ЛЮДИНИ

The presented paper, giving the reference to the 2030 Agenda for Sustainable Development aimed at transforming our world, underlines the internationally recognized foremost importance of human rights protection. The presently intensified economic globalization causes concerns in regard to responsibility of states and business entities to respect and safeguard human rights. Thus, the author presents the UN contribution into establishing the system of human rights remedies, that can and should be applied by states, subjects of economic activities and other stakeholders in order toensure the rights of individuals in case of the business-related abuses and violations. On the basis of the UN experience and the current international practices, being actively elaborated after the adoption of the UN Guiding Principles on Business and Human Rights of 2011, the author indicates the essence and the content of the legal phenomenon of the system of remedies for rights protection. In particular, the paper provides some specific characteristics of the State-based judicial, State-based non-judicial and non-State based non-judicial mechanisms for protecting human rights in business. The judicial remedies, being the basic, need to be more efficient; the international community calls for more profound development of the State-based non-judicial remedies, paying significant attention to the role of the national institutions for the promotion and protection of human rights, incl. Ombuds-institutions. The system of the non-State based non-judicial mechanisms is described as an evolving matter; business entities, especially transnational corporations, are to incorporate them into their policies and practice, to ensure their responsibility to respect human rights. The advantages and shortcomings of all the above mentioned mechanisms are described in general. The UN requirement towards states and businesses to provide a complex approach — "a bouquet of remedies" is presented, also as a recommendation for Ukraine. The suggested conclusions underline the importance of implementing in Ukraine the UN Guiding Principles on Business and Human Rights in the overall context of realization of the Sustainable Development Goals. This includes the necessity to integrate the UN Guiding Principles into the national policy, strategic and legal acts in a number ofareas, to establish a holistic and efficient system of remedies in cases of business-related human rights abuses and violations. The evident benefits for Ukraine and Ukrainians, provided the required international provisions are implemented, are identified.

Do Agricultural Companies that Own Intellectual Property Rights on Seeds and Plant Varieties have a Right-to-Food Responsibility?

Building on both the UN Guiding Principles on Business and Human Rights and the relevant portions of the advisory opinion of the International Monsanto Tribunal, this article presents a normative argument on the right-to-food responsibility of corporate actors that own and exercise intellectual property rights on seeds and plant varieties. This article contends that while states bear the primary responsibility for the right to food, corporate actors that own intellectual property rights on seeds and plant varieties equally have a responsibility to respect the right to food and to ensure that the exercise and enforcement of their intellectual property rights does not negatively affect the ability of small scale farmers to gain access to the means of food production nor threaten agricultural biodiversity, as both of these factors are crucial for ensuring food security. In this regard, agricultural companies that own intellectual property rights on seeds and plant varieties should not engage in activities that negatively impact the non-commercial farmers’ seed system nor should they prevent farmers from saving and exchanging seeds.

Regulating transparency on human rights and modern slavery in corporate supply chains: the discrepancy between human rights due diligence and the social audit

ABSTRACT This article examines some of the limits of reporting schemes as a tool for addressing business-related human rights risks and for engaging business in a collaborative effort to improve human rights. Australia’s Modern Slavery Act 2018 (Cth) (MSA) is the latest example globally of a legislative scheme intended to foster corporate action on such risks within businesses’ operations and supply chains. Some such schemes require firms to implement human rights due diligence (HRDD) measures, as envisaged by the 2011 UN Guiding Principles on Business and Human Rights. However, the MSA’s model is best described as a disclosure or reporting regime. Such regimes do not require businesses to take HRDD measures; rather, they only require businesses to report on any such measures that they have taken during the relevant reporting period. In this article, we analyse some of the assumptions underlying the design of reporting-based schemes. We then consider one practice used by firms facing supply chain scrutiny: social auditing. We caution against an over-reliance on this practice, which is not synonymous with HRDD. It does not necessarily promote fulsome, non-cosmetic reporting compliance or foster corporate action on underlying human rights risks. We finally offer some alternative approaches that could improve the effectiveness of measures to address human rights risks in supply chains.

Toward a Corporate Duty for Lead Companies To Respect Human Rights in Their Global Value Chains?

The corporate responsibility to respect human rights was formally introduced in 2011 with the unanimous endorsement of the UN Guiding Principles on Business and Human Rights (UNGPs) by the UN Human Rights Council. It is grounded in expectations and forms part of the companies' social license to operate. This paper argues that this responsibility is progressively turning into a legal duty for lead companies to respect human rights in those types of value chains which are characterized by a high level of control by a lead company over its business partners. Our argument rests on two recent legal developments. Firstly, the article analyses the judicialization of the corporate responsibility to respect in the case law on parent company liability in various jurisdictions, which, we argue, is highly likely to have some implications in relation to certain types of value chains so as to trigger the liability of lead companies for the human rights harms arising out of the activities of entities over which they exercise sufficient control. Secondly, the article delves into the legislative developments which increasingly require lead companies to exercise due diligence so as to prevent and address adverse human rights impacts in their own activities and global value chains.

Transcending the Binary: Linking Hard and Soft Law Through a UNGPS-Based Framework Convention

Achieving respect for human rights by businesses requires not making the “right” choice between hard and soft law but establishing an architecture to sustain a constructive dialectic between the two. This essay argues that a business and human rights treaty modelled as a framework convention and centered initially on the UN Guiding Principles (UNGPs) offers such a structure while avoiding the shortcomings of treaty proposals advanced to date.

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

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.

Implementing Human Rights Due Diligence Through Corporate Civil Liability

Since the adoption of the UN Guiding Principles on Business and Human Rights, the relationship between human rights due diligence (HRDD) and corporate liability has been a source of legal uncertainty. In order to clarify this relationship, this article compares and contrasts civil liability provisions aiming at implementing HRDD. It explains the legal liability mechanisms in the draft Treaty on Business and Human Rights and in domestic mandatory HRDD legislation and initiatives such as the French Duty of Vigilance Law and the Swiss Responsible Business Initiative. It compares these developments with the emerging case law on parent company and supply chain liability for human rights abuses. It explores the potentially perverse effects that certain civil liability provisions and court decisions might have on companies’ practices. Finally, it makes recommendations for the design of effective liability mechanisms to implement HRDD.