The tenth round of negotiations on a #BindingTreaty to establish the responsibilities of Trans-National Corporations (TNCs) for human rights abuses committed in the context of their economic activities and their respective supply chains will take place in Geneva, at the Human Rights Council of the United Nations, from 16 to 20 December 2024. (1)
1) #BindingTreaty, context
On June 26 2014 the United Nations Human Rights Council adopted resolution 26/9, which decided to:
– ‘to establish an Open-Ended Intergovernmental Working Group (OEIGWG) on Trans-National Corporations and Other Business Enterprises in relation to Human Rights‘, to whom to entrust the mandate of
– ‘to develop a legally binding international instrument to regulate, under international human rights law, the activities of Trans-National Corporations and other commercial enterprises‘.
2) Ten years of negotiations
Ten years of negotiations were not enough to define the rules underlying the #BindingTreaty (or Legally Binding Instrument, LBI), to fill the gaps in international law that still allow transnational corporations to evade responsibility for crimes committed along their global value chains.
In the last decade, the financial oligarchies that control the Trans-National Corporations have in the meantime obtained – through the ISDS (Investors-State Dispute Settlements) clauses inserted in various international treaties (i.e. CETA), regimes of protection of their economic interests that go beyond the laws of the contracting States. (2)
On hold, however, in the context of the definition of an agreement on the #BindingTreaty, there are no international legal instruments available that can affirm the responsibilities of Corporations for human rights violations committed in their global value and production chains (e.g. land grabbing, exploitation of workers including minors, etc). (3)
3) Trans-National Corporations, De-territorialization and Impunity
The Global Campaign – a network representing over 250 social movements, organizations and communities affected by the activities of Trans-National Corporations (TNCs) – insists on the need to focus human rights due diligence responsibilities on these entities, in the context of the #BindingTreaty. Considering that:
– 80% of international trade, according to estimates, (4) is managed by Trans-National Corporations whose production chains are extraordinarily decentralized and fragmented (de-territorialization);
– parent companies and holding companies are mostly domiciled in ‘developed’ countries and often manage to evade national judicial systems when violations occur in ‘developing’ countries, thanks to
– regulatory shortcomings, lack of transparency in commercial relations, inability of victims of violations to access judicial systems due to lack of resources (financial, legal and technical); to which is added
– the organizational complexity of Trans-National Corporations, with many companies (sometimes divided into several subsidiaries or supported by contractors) registered in different jurisdictions. The parent companies thus profit from the violations without ever being responsible for them, with rare exceptions. (5)
4) Identification of responsible operators
It is essential to establish clear and effective provisions that define economic groups and recognize the joint responsibility of multinational institutions with all entities along their global value and production chains, including:
– private and public investors, international economic and financial institutions, nationally registered companies with transnational activities, as well as banks and financiers participating through investments in production processes, for all their activities.
The scope of application of the #BindingTreaty should therefore include ‘all violations or abuses of human rights resulting from the activities of multinational corporations and others having a transnational character, regardless of their mode of creation, control, ownership, size or structure‘.
5) Hypothesis of extension of responsibilities
An extension hypothesis (arbitrary) extension of the #BindingTreaty to all types of business enterprises – including state-owned enterprises and small and medium-sized enterprises with no transnational character or cross-border activity – was presented by the Chair of the Intergovernmental Working Group (the Ambassador of the Republic of Ecuador to the UN) in 2019.
The protests of the more than 250 members of the Global Campaign, as well as the repeated and subsequent interventions of most of the States of the Global South, have failed to obtain the restoration of the original imprint of the #BindingTreaty. Whose text under discussion continues to illegitimately apply to any type of commercial enterprise.
6) Risks of project failure
The draft of Legally Binding Instrument has been systematically and arbitrarily watered down, losing its necessary attention to Trans-National Corporations. In March 2023, the presidency of the inter-governmental working group even tried to impose the closure of the debate with a procedural subterfuge, once again ignoring the democratic nature of the process. (6)
The extension of the scope of the #BindingTreaty to millions of companies in the world – as already noted (7) – has the clear aim of making people lose attention on the activities of Trans-National Corporations and unload the responsibilities on the myriad of their subsidiaries and suppliers. In addition to dispersing official controls and legal actions on the innumerable distinct legal personalities, without tracing the direction of operations and supply chains that disrespect fundamental human rights.
7) Due diligence, the dusk before the dawn?
Due diligence is the most effective tool ever conceived to force the financial oligarchies that dominate the planet – managing securities with a value greater than the GDP (Gross Domestic Product) of most of the countries in the world (8,9) – to assume responsibility for the impact of their operations, in an ESG (Environmental, Social, Governance) logic.
The scenery which is being proposed today to the working group on #BindingTreaty at the United Nations therefore tends to defuse the potential and extraordinary impact of due diligence on populations and the environment, with a simple yet deadly mechanism:
– extend ESG reporting obligations to all companies, including small and medium-sized ones, so as to force national policies to limit the burden and settle for greenwashing by everyone;
– at the same time weaken small and medium-sized enterprises, with these and other burdens completely disproportionate to their activities, so as to favor the acquisition of these or their market shares by Corporations.
A mechanism already implemented, not by chance, in the policies of the European Union that have always privileged the interests of Corporations over those of small and medium-sized enterprises. Due diligence Directive and EUDR (Deforestation Regulation) confirm the above (10,11).
Dario Dongo
Cover credit Zago Brothers. The Indigestibles https://www.theindigestibles.com
Footnote
(1) Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights https://tinyurl.com/yy9hpcdy
(2) Dario Dongo, Sabrina Bergamini. CETA, Court of Justice’s green light for ‘shredder’ to serve ‘corporations’. FT (Food Times). May 6, 2019
(3) The due diligence responsibilities of Corporations on the respect of human rights therefore remain entrusted to national legislation. See for example the previous article by Dario Dongo. Due diligence, investigation in Germany on three meat industries. FT (Food Times). November 9, 2024
(4) La Impunidad de Las Empresas Transnacionales. CETIM. Geneva, 2016, p.16
(5) Uribe Daniel and Danish. Designing an International Legally Binding Instrument on Business and Human Rights. South Centre, Geneva, 2020 https://tinyurl.com/yuaewxnd
(6) Guidelines document for intersessional work in preparation for the 9th session. OEIGWG, Chair, March 2023.
(7) Open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights (2021). Annex to the report of the seventh session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights (A/HRC/49/65)
(8) Dario Dongo. The tentacles of finance on food sovereignty and our food. GIFT (Great Italian Food Trade).
(9) Dario Dongo. The warlords in the European elections. Egalité. 2.4.24
(10) Dario Dongo. Directive (EU) No 2024/1760 on Corporate Sustainability Due Diligence, the ABC. FT (Food Times). September 23, 2024
(11) Dario Dongo. Deforestation Regulation. Due diligence on critical raw materials kicks off. FT (Food Times). July 29, 2023
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
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