Transnational corporations (TNCs) have grown over the years and attained a position of great influence and power.[1] It is argued that their powers compete with those of the state and, in some cases, threaten to strong-arm the state. This growing and unhinged power of transnational corporations has led to gross human rights violations ranging from exploitative labour practices, and environmental pollution, to complicity in repressive governments. TNCs continue to violate human rights with impunity despite many existing instruments and frameworks aimed at addressing the issues of human rights violations by transnational corporations, such as the International Labour Organisation’s (ILO) Conventions, the Universal Declaration of Human Rights (UDHR), the United Nation’s Guiding Principles on Business and Human Rights, (UNGP’s), the OECD Guidelines for Multinational Enterprises, and other regional and national human rights instruments.
Currently, the international community relies largely on voluntary frameworks and national legislation to oversee the conduct of businesses and its impact human rights. However, the growing consensus suggests that these measures are insufficient, as evidenced by ongoing violations and the inability of victims to achieve justice. While these instruments lay out essential guidelines and standards for preventing human rights violations by transnational corporations, they are not without their limitations and shortfalls, chief amongst which are the lack of enforceability and implementation mechanisms and, the government’s failure to ensure compliance with due diligence obligations, amongst others. These limitations gave rise to the debate about the necessity of a binding UN Treaty on Business and Human Rights to prevent human rights violations by transnational corporations.
THE NECCESITY FOR A BINDING UN TREATY ON BUSINESS AND HUMAN RIGHTS
The existing frameworks and instruments governing transnational corporations and its relationship with preventing human rights violations all have one major limitation, which is its non-binding nature. Many advocates for a binding treaty have criticized the existing frameworks for their lack of enforcement mechanisms as chief among other criticisms. This has heralded the call for a binding treaty on business and human rights that states the duties and obligations of multinational corporations and provides consequences for non-compliance with and violations of the duties and obligations. This is a departure from the voluntary approach that merely suggests guidelines of ethical conduct and corporate social responsibility standards that should be followed but does not make provisions for implementation mechanisms to ensure the guidelines are complied with, nor appropriate penalty for violations. An instrument void of powers to enforce compliance is akin to ‘A toothless bulldog that can only bark but cannot bite’.
A binding UN treaty on Business and Human rights is necessary because, unlike existing frameworks such as the UN Guiding Principles on Business and Human Rights, a treaty will impose legal obligations on transnational corporations to comply with the provisions of the treaty in preventing human rights violations and impose stronger accountability measures. A binding treaty has been criticized on the grounds that it places undue pressure on TNC’s, and this affects their productivity. It is argued that this is a very selfish position to take against the binding treaty. A duty to comply with human right standards and ethical conduct in carrying out business operations cannot be regarded as a burden. It is in fact the least expected responsibility required from a business.
Others argue that there already exist one too many “binding treaties” that do not hold true to its name in terms of being binding.
Critics of the UN treaty on business and human rights often argue that many international treaties, while well-intentioned, become largely symbolic and fail to effect tangible changes in practice. This “ritualism” can be attributed to several factors such as lack of enforcement mechanisms, monitoring and compliance difficulties, mostly because of an absence of political will, limited resources or the sovereign rights of states to handle its affairs. These limitations have not been resolved and have greatly affected the effectiveness of already existing treaties, and the question often arises as to how a UN treaty on business and human rights hopes to overcome these challenges. While these concerns are not unfounded, it is better to look at the glass half full rather than half empty. There is no doubt that other existing treaties have commanded compliance because of its binding nature and in most cases, violators of such treaties have been held accountable regardless of the challenges. It is better to have a framework that is binding and mandatory and work out the limitations than to have one that is voluntary and not binding, leaving victims of human rights abuses at the hand of transnational corporations helpless and without any recourse to enforceable remedy. Also, political will can be developed through diplomacy, campaigns and advocacy efforts towards raising awareness and strengthening institutions to meet up with the upholding the rights of the people and businesses complying with the demands of the treaty.
Other critics against the creation of a new binding treaty on business and human rights, argue that it might follow the same path as previous agreements.[2] They suggest instead that efforts should focus on strengthening and effectively implementing the current frameworks, such as the UNGPs, rather than creating new legal instruments that might also fail to be enforced rigorously. While this is a possible solution to the problem, it is important to note that strengthening a framework that has no force of implementation will not have any real impact if corporations can choose to adopt or not. The importance of a binding treaty is accountability and enforceability. The letters can be great but without the ability to command obedience, it will be a mere charade.
There is also the concern of political feasibility and implementation, it is raised often that the political landscape necessary to adopt and ratify a new binding treaty might be lacking, considering the divergent interests of powerful states and multinational corporations, and that even if adopted, the practical implementation of a new treaty would face significant obstacles, similar to those encountered by existing treaties namely, varying national legal systems and economic priorities that may hinder uniform application. It is often argued against this point that issues of political will to implement are not static, if there is a binding framework in place, government will be better positioned to implement same.
FINDING A FINE BALANCE BETWEEN THE BENEFITS AND CHALLENGES
Keeping a fine balance between the advantages and downsides of a binding UN Treaty on Business and Human Rights is important for its effectiveness and application on a global scale. Though the provisions of the treaty are thought to offer a great deal of hope, with greater corporate responsibility, adherence to environmental principles, and administering justice to victims of human rights violations being the probable advantages, there exist several obstacles that must be resolved by making careful considerations and taking the necessary measures.
One of the major problems is the possible effect on economic growth and competitiveness. Critics believe that a binding treaty could incur additional costs for TNCs, but it also comes with the concerns that come with compliance with a new regulation that could altogether result in a decrease in investment activities and therefore slow down economic development. On the other hand, the proponents argue that these costs would not only create an array of employment opportunities but also attempt to balance out by the long-term advantages of better corporate governance, fewer human rights violations, and an improved reputation for responsible business practices. Finding that balance point for these contradicting interests is a key contributing factor in the attainment of the treaty’s mandate while also ensuring its sustainability.
In the same vein, conflicting national sovereignty and regulatory frameworks, poses another problem, as some countries can choose not to comply with these international standards because of the sovereignty concerns , where states fear the international frameworks may encroach upon their powers to regulate businesses operating within their boundaries.[3] Even so, a legally binding treaty could resolve this by stablishing uniform standards on a common basis for protecting human rights all over the world, thereby refining global cooperation and coordination. Although, this calls into question the issue of the enforcement and application of binding treaties. Nonetheless, implementation and enforcement can be considerably be achieved through the inculcation of effective monitoring mechanisms and the establishment of appropriate enforcement mechanisms.[4] This can be made possible if all relevant stakeholders from governments, the private sector, and other actors, such as civil society organisations, join efforts and forces to ensure sufficient awareness and capacity-building programmes to facilitate this endeavour.
More so, questions arise over the added complexity, scope, and feasibility of implementing a binding treaty, as making a comprehensive treaty that addresses all relevant issues and areas without making it so vague and impractical to implement will require thorough drafting and negotiation efforts.[5] This will also call for continued efforts involving consistent revisions and adaptations to meet evolving challenges and circumstances. Also, the drafting process of the treaty has to be transparent and all inclusive, gathering information and concerns across a wide spectrum of actors will ensure a more inclusive treaty that speaks to the needs of all concerned.
In essence, drawing a fine line between the benefits and challenges of a binding treaty is crucial to its effectiveness.
CONCLUSION
In conclusion, the establishment and adoption of an internationally binding UN treaty will be instrumental in tackling the ongoing challenge of human rights violations by multinational corporations while also ensuring beneficial economic growth outcomes for businesses, the society, the environment, and the global economy. It will safeguard human rights, enhance corporate accountability, encourage environmentally friendly and ethical business practices, and ensure justice for victims of human rights violations. In addition, it could serve as a tool for aligning international standards, building cooperation, and creating equal opportunities for business, which in turn would bring about a more stable and sustainable economic environment. The success of such treaty rests on effective implementation that will require careful balancing of advantages and challenges, by considering the interests of all the stakeholders, which include governments, non-governmental organisations, TNCs, and individuals. It will also call for persistent scrutiny, and adjustment of the treaty to incorporate new challenges, and stay relevant and efficient in the future.
[1] Hubert Buch-Hansen, ‘Freedom to Compete? The Cartelization of European Transnational Corporations’ (2012) 16 Competition & Change 20.
[3] Raimo Väyrynen, ‘Sovereignty, Globalization and Transnational Social Movements’ (2001) 1 International Relations of the Asia-Pacific 227; C Sheela Reddy, ‘Globalisation and The Sovereignty Of The Nation-State’ (2012) 16 World Affairs: The Journal of International Issues 60; Jinseop Jang, Jason McSparren and Yuliya Rashchupkina, ‘Global Governance: Present and Future’ (2016) 2 Palgrave Communications 1.
[4] Ryan Goodman and Derek Jinks, ‘How to Influence States: Socialization and International Human Rights Law’ (2004) 54 Duke Law Journal 621.
[5] Riccardo Vecellio Segate, ‘The First Binding Treaty on Business and Human Rights: A Deconstruction of the EU’s Negotiating Experience along the Lines of Institutional Incoherence and Legal Theories’ (2022) 26 The International Journal of Human Rights 122.
A Contrario ICL 