The European Economic and Social Committee (EESC) firmly believes that infringements of human rights can be better prevented when there is an internationally agreed binding standard implemented and protected by states. Therefore, in an opinion adopted at its December plenary session, the EESC supports the United Nations Human Rights Council initiative to adopt a binding UN treaty to regulate businesses activities, including sanctions in case of violation of international human rights law.
The EESC believes that states have the duty to protect, promote and respect human rights, and that businesses have to respect those rights too. This is why in its opinion on a Binding UN treaty on business and human rights it expresses its full support for the initiative taken by the United Nations Human Rights Council (UNHRC) to adopt an internationally binding treaty to regulate the activities of private companies in terms of international human rights law.
The EESC is of the opinion that the European Commission needs a mandate to participate on behalf of the EU in the ongoing UN treaty negotiations in Geneva.
Human rights are a basis for Europe's wealth and a decent life. Infringements must not lead to unjustified profits and unfair competition, said Thomas Wagnsonner, rapporteur of the opinion.
The EESC recognises that most businesses, especially in the EU, are committed to upholding human rights and that a lot of progress has been made in relation to non-binding existing guidelines. However, according to the International Labour Organization (ILO), forced labour still generates USD 43 billion in profits worldwide in the construction, manufacturing, mining and utilities sectors.
Some big companies active worldwide and particularly in Europe, such as McDonalds and Starbucks, have a low implementation ranking on the United Nations Guiding Principles on Business and Human Rights (UNGPs). European companies committed to observing human rights are therefore at a disadvantage in comparison with these non-European firms.
Although binding and non-binding measures are compatible, a binding treaty is important for those companies that are not yet taking their responsibilities seriously. It would also serve to level the playing field for businesses and create legal certainty and fairer global competition, as binding measures accompanied by appropriate sanctions would serve to ensure adherence to a minimum legal standard.
Human rights infringements in global value chains can be better prevented when there is an international binding standard for everyone, said Thomas Wagnsonner.
Content of the treaty
As for the content of the treaty, the EESC fully agrees with the European Parliament resolution adopted in October 2018, which mentions the following provisions as necessary:
- defining mandatory due diligence obligations for transnational corporations and other business enterprises, including their subsidiaries;
- recognising the extraterritorial human rights obligations of states and adopting regulatory measures to that effect;
- the recognition of corporate criminal liability;
- mechanisms for coordination and cooperation between states on the investigation, prosecution and enforcement of cross-border cases; and
- setting-up international judicial and non-judicial mechanisms for supervision and enforcement.
The draft of the treaty presented by the UNHRC in July 2019 includes a number of proposals made by the EU and strongly supported by the EESC. The treaty would apply to all kind of businesses, not only to transnational corporations, and would be more in line with the United Nations Guiding Principles on Business and Human Rights (UNGPs).
However, the EESC is aware that implementing the measures laid down in the treaty can be a challenge for small and medium-sized enterprises (SMEs) and urges the EU and its Member States to take measures to support businesses, particularly SMEs, with the implementation of their human rights obligation.
In order to increase the efficiency of the treaty, the EESC recommends the development of action plans both at national and European level, with the participation of organised civil society. The EESC also asks the European Commission to study the feasibility of a Public EU Rating Agency for human rights, focused on business, as well as a strong monitoring and enforcement mechanism offering the possibility of bringing complaints to an international committee. The EESC's opinion also envisages an independent UN officer (ombudsperson) for victims of human rights infringements.
In 2014, the United Nations Human Rights Council (UNHRC) adopted a Resolution in which it decided to establish an intergovernmental working group to draw up an internationally binding treaty to regulate the activities of transnational corporations and other business enterprises in terms of international human rights law.
The European Union participated in the working group, but dissociated itself from the results in October 2018 due to a number of issues, particularly those related to the transparency of the process and the scope of the treaty. The EESC believes that the EU should participate actively in the process and that an official negotiating mandate should be given to the European Commission.
The United States is not actively participating in the negotiations and China does not seem deeply engaged. However, even if they do not ratify the treaty, firms from these two major economies which enter or operate on the European common market would potentially be liable in Europe.