UN to take treaty negotiations to regulate big business to next level

Activists demonstrate in Geneva during UN discussions for a binding treaty on human rights abuses by corporations. (Credit: Victor Barro/Friends of the Earth International)

Talks on a global treaty against rights abuses by transnational corporations are resuming on Monday in Geneva. Countries are set to begin text-based discussions after seven years of controversial negotiations.

The UN agreement, which is being drafted by a group of countries led by Ecuador, would regulate the activities of companies when operating outside their home country and hold them accountable when they commit violations.

The initiative has faced major pushback from powerful economies as well as the private sector. “We have industrialised countries, states that are close to them and businesses who say this is too ambitious. And on the other side, we have civil society, affected communities, lawyers and environmental defenders who say this is not enough,” Ana María Suárez, Geneva representative of the organisation FIAN International, who has been following talks closely, told Geneva Solutions.

The US, which had boycotted the process along with Canada, Australia and New Zealand up until now, announced it would be participating in the meeting, Suárez said.

Ending impunity

The UN already has a set of guidelines on how businesses should behave to respect human rights, however advocates of a tougher treaty say that time and time again rights abuses by companies remain unpunished.

They often cite famous cases such as  that of Swiss-based oil trading company Trafigura, which has been embroiled in several environmental lawsuits over the years in different countries including the Netherlands where it is registered. But courts have dismissed complaints, arguing that the plaintiffs do not live in the country, among other factors.

“What we hope is that countries adopt laws that regulate companies that are located or domiciled in their countries that are active in other countries to prevent violations or abuses,” Suárez noted. “For example, if you have a victim from Monsanto’s pesticides in Uganda or in Sri Lanka, the person could bring their case to Germany.”

One of the key proposals by rights groups is the creation of an international court which could prosecute transnational companies for human rights violations. Suárez is skeptical that countries will agree to create such a court in the current process, however says that it could be the next step once the treaty is adopted.

Among other key demands, she said, is that the treaty guarantees access to information so that communities can know which companies are active near them and what those activities are. But enterprises claim that it would violate their right to commercial secrecy.

Advocates would also like to see a reversal of the burden of proof, which in many countries falls on the victim. This would require, for instance, an oil company to conduct studies to show that their activities are not harming the environment and the nearby communities before even beginning to drill.

Many countries already have such principles in their legislations, but the treaty would force other states to toughen their regulations.

“If we just have national laws and the laws have very different levels of protection, we could have something similar to what happens with taxes, where companies move where [rules are less strict],” said Suárez.

“It's important to have a global level playing field,” she added.

At the end of the week, the Ecuadorian chair is expected to announce a group of country friends tasked with resolving the remaining points of contention and making proposals to come to an agreed text, which could very well become the final draft.

“The big challenge for the chair and the friends of the chair will be to come up with a draft that can satisfy as many states as possible while maintaining a text that is effective to ensure the access to remedy for the affected communities and to reduce corporate impunity,” said Suárez.