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Beyond the Ritual of Treaties as Gestures

Effectively Closing the Governance Gap in the Area of Business and Human Rights with a Framework Treaty


A framework convention approach to the regulatory management of the human rights and sustainability effects of economic activity holds much promise. Defined as an international instrument establishing a general governance system built around broad party commitments, a framework convention leaves “more detailed rules and the setting of specific targets either to subsequent agreements between the parties, usually referred to as protocols, or to national legislation.” Where, as in this context, there exist wide margins of appreciation around core consensus on normative foundations, a framework style agreement hardens the duty of actors around objectives and fundamental norms while permitting a measure of flexibility in their realization. It may thus avoid the regulatory ritualism of efforts like the much criticized project that has to date now produced the Third Draft of the Open-Ended Intergovernmental Working Group (OEIGWG).  Nonetheless, a framework style agreement, just like the throwback exercise that is the old UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights (‘the Norms’) in an OEIGWG Draft bottle, would face challenges. Those challenges become acute where the instrument means to manage State and non-State actors through the so-called “smart mix” of regulatory measures (statute, caselaw, regulation, public decision-making and the like). Even more difficult is the challenge for treaty making in a polycentric regulatory ecology. This brief essay suggests the broad contours of the challenges of treaty making in the human rights and sustainability environment. It then describes the regulatory ecologies whose gaps add a substantial obstacle to effective, rather than ritualistic or gesture based, treaty projects.

The Challenge of Polycentricity and International Law Making

A core challenge for any public law instrument is to identify and overcome the perceived governance gaps in activities unconstrained by territorial borders and state power. In this case that governance gap remains substantially unchanged since articulated by John Ruggie in the process leading to the endorsement of the UN Guiding Principles for Business and Human Rights (UNGPs). Two forms of those gaps are noteworthy here: (1) the disjunction between the regulatory authority of States and the integration of global production across borders; and (2) the sometimes substantial differences in the normative values of legal orders. This was made more difficult by the inability or the refusal to confront regulatory gaps between normative systems (liberal democratic, Marxist-Leninist, theocratic, and identitarian) as well as governance gaps among five emerging key systems of legal-regulatory ordering now emerging.

The Norms have failed, and the process that has to date produced a Third OEIGWG Draft will fail, precisely because both insist that legal legitimacy must be grounded in a 20th century sensibilities about the role of law in and through States. The framework convention approach, on the other hand, may succeed by combining shared goals, principles, and general obligations with procedures for negotiation and adoption of supplementary rules, as well as incentives for voluntary adoption of measures. With this combination, it enhances the possibilities of convergence. Success, however, presupposes a better understanding and recognition of the character and role of the emerging regulatory environments, whose gaps drive the challenges for better management of human rights and sustainability-based behaviors among economic actors (public and private). Each of these technologies of governance poses a different challenge to the project of framing the human rights and sustainability effects of economic activity. Well interwoven, however, they represent a powerful, multi-layered approach to coordination through a framework convention.

The Polycentric Regulatory Environment at the Core of Successful Regulatory Frameworks

Each of the emerging mechanisms of international law and governance contributes an important aspect to the viability of a potential framework convention (here is a more theoretical framing, from which the following is drawn).

Orthodox and Traditional International Law.  The Norms and the Third OEIGWG Draft  start and end within this regulatory field. This is perhaps best understood in this context as a form of husbandry that view the autonomy of the individual as property in the hands of the state They are meant to mirror the domestic legal orders but not to reach them directly. The subject can be divided into two broad objectives. The first objective is a convergence directed towards the development of fundamental norms that promote cooperation and interaction as well as provide a common normative language. The second objective is to protect and develop national productive forces – encompassing people and things. The objectification of international law – as the overseer of systems – is designed to facilitate value-enhancing interactions that protect State investment in its human and other resources. It a system that lurches toward the constitutionalization of supra-national governance collectives whose “citizens” are States. To those ends, legalization has been the mode of operationalization par excellence. It has become so ubiquitous that both its novelty and fragility are hardly recognized. Tied to the legalization of inter-State relations is the judicialization of dispute resolution. Discursively, the rule-system narrative of legalisation-judicialisation through supranational law stresses the objectives of (1) stability and prosperity; (2) unity in diversity; and (3) convergence and consensus. Coming back to the metaphor of animal husbandry, this produces its own set of narrative taboos: harming the welfare of nations, reducing the value of populations, and challenging the primacy of wealth creating social and economic structures. Its mechanics center on ‘contracts’ (treaties and related measures) between States and on the constitutionalization of international organs. This is the solitary focus of mandatory measures: governance by displacing normative and governance development by its restatement or version of rules, systems. It works perfectly in a world that can be made more perfect in and through more perfectly ordered States.

The Private Law of Public Law. In this area, one encounters the development of State regulation through private activity, put differently: the emergence of a private law of public law. This is the private law of sovereign wealth funds (SWFs) and of State-owned enterprises (SOEs); it is the governance realm of international financial institutions. This kind of State regulation provides the legal framework for the internal governance of public lending and of investment guarantees. The government of Norway, for example, may not intervene directly in Brazil, but it can indirectly project its public policy through the internal regulation of hydro throughout its production chain,. The Sustainable Global Supply Chain project is one example of this; there are other expressions of this impulse. Private law of public law is expressed through governance contracts, but also as the terms of loan agreements. Here, public policy is transformed into corporate governance and administrative regulation into compliance systems. Public international norms advance this project through instruments such as the Santiago Principles and the OECD Guidelines on Corporate Governance of SOEs. The value of this regulatory ecology is that it frees States of territorial constrains -it is functionally differentiated soft extraterritoriality and a powerful force in BHR regulation (e.g., UNGP 2, 23).

The Public Law of Private Law. Governance gaps and the limits of direct State action in markets have also created incentives for compliance-oriented regulation and the  governmentalization of the private sector itself. The thrust of European efforts to legalise due diligence operationalized through private bureaucracies within business provide a contemporary example (France; Germany; EU). More than that, the trend toward the legalization of corporate responsibility also contributes to a process of mandatory delegation of regulatory-administrative functions structured as compliance and accountability measures. Mandatory human rights due diligence, ironically, fuels the growth of governmentalized private economic entities which are now made responsible for the administrative oversight of actors and activities within their global production (or value) chains.  At its limits, the economic sphere is reconstructed as the primary space for the management of human relations and the conduct of aggregated actors. Current projects of human rights due diligence transform the State into a centre of  objectives and accountability, whose operationalization is undertaken not through public administrative organs but by the regulatory systems of private responsible actors.

The ‘Law’ of Data-Analytics. Data-driven governance is as important in the context of human rights and sustainability as it is in virtually every other regulatory space of human social organization. It does not fit well with traditional forms of governance, and yet may come to dominate its practice. Law and norms become data and analytics. Judgment becomes algorithmic determinations of consequences.  And all of this can be done (once it is operationalized) without much human intervention. It is the law of simulation and modelling where behaviors can be described, relationships simulated and behaviors managed in real time. It is well suited to the pace and focus of managing the consequences of economic activity, driven by the principles of prevention, mitigation, and remediation. The modalities of governance are shifting from the qualitative to quantitative dominion. This becomes a project of formal internalization of norms without the bother of command and enforcement processes. It is better aligned with the sensibilities of the market and of the operation of enterprises, than with the formal, bureaucratic administrative sensibilities of the State and its public law. This is the space where the coder is king and the analyst who is creating and overseeing analytics and algorithms is the legislator.

Platform Governance. Automated law, data-driven governance, requires its own regulatory spaces.  The speed and data embeddedness of quantitative governance can neither keep up with the pace of the 20th century bureaucratized administrative state.  Nor can this form of governance match the pace of economic activity.  Something else is needed: a space where consumers and producers of information and norms central to the administration of a system may meet and interact. This is the platform – a virtual but powerful space for governance and the archive as the constitution of government. This is the realm of Chinese social credit systems; this is the space where information is coordinated for regulatory ends—from accreditation to blacklisting and collecting information necessary to develop judgments about the activity and to develop measures to nudge behaviors. It is also the space in which ratings systems and disclosure systems, such as  Modern Slavery Acts, and variations of mandatory human rights due diligence (HRDD) operate. Thus, compliance-oriented and accountability systems themselves lend their organization to the sensibilities of the platform governance. In this sense, the platform mimics the form and function of the framework convention approach itself; a framework agreement can be understood as a regulatory platform.

From Polycentric Systems to Systems Treaty that Makes Sense

Drafting an international instrument today is not as simple or simple-minded as it might have been in the late 20th century. Embracing ancient orthodox treaty forms will not bring back a world order that is currently quickly receding. Acknowledging  and incorporating current governance systems and seeking to coordinate them towards a greater objective is essential to any successful regulatory effort. The alternative would be a beautiful artifact with little impact. Still, transformations have begun with less than gestures that go bad. Like the Norms before it, the OEIGWG Draft, from Zero to Third Draft, is stubbornly and deeply embalmed in the sensibilities and tropes of orthodox and traditional international law. This, indeed, might have been a cause for celebration in the 1980s. In 2022, however, it ought to cause mourning. One mourns a process that fails to recognize and coordinate the private law of public law or the public law of private law within its structures. Detached, these regulatory systems remain beyond the reach of any such a treaty, and efforts will fail to bridge significant governance gaps. The Third OEIGWG Draft may marginalize two significant non-State centered regulatory systems, but it ignores both data driven and platform governance systems. Given the intimate connection between both and due diligence -the core modality of corporate obligation – this gap is both unfortunate and likely fatal to the effectiveness of the effort. A framework convention could end up following that same path, but it does not have to. The approach offers the opportunity both to recognize the need to incorporate the larger architecture of business, human rights, and sustainability, and to develop the structures within which that coordination can be given form. Cassel and Ramasastry noted once: “The main disadvantage of such a ‘framework’ approach is that it would not initially be likely to achieve what treaty proponents principally seek: legally enforceable corporate accountability, and access of victims to effective remedies.” Yet, the framework approach can provide the basis for doing so within the realities of the contemporary regulatory environment, which the Third OEIGWG Draft cannot.

Larry Catá Backer

Larry Catá Backer is the W. Richard and Mary Eshelman Faculty Scholar, Professor of Law and International Affairs at Pennsylvania State University.  He researches in the areas of economic globalization, corporate social responsibility, international affairs, global governance, trade and finance, and on Party-State systems.

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