Resisting Corporate Capture

In 2014, the Human Rights Council adopted Resolution 26/9, which established, for the first time in the history of the United Nations, an intergovernmental body charged with the responsibility to elaborate an international legally binding instrument to address corporate-related human rights abuses – the Open-ended intergovernmental Working Group on transnational corporations and other business enterprises with respect to human rights (OEIGWG). Since then, seven negotiation sessions have taken place, on all of which different actors sought to influence the substance of the proposals. In this blog post I will focus on the role and mode of engagement of civil society in this process.

My main argument is that, in a world under corporate governance, where we have no difficulty finding cases of human rights violations related to corporations – mainly in the Global South – civil society acts as an important counterpart against corporate capture, understood as the power connecting States (especially those from the Global North) and transnational corporations (TNCs). The argument presented here is part of a broader research, in which I have been investigating how the negotiation sessions of the OEIGWG operate through participant observation.

A Story of Motion and Counter-motion

The struggle for a regulatory instrument for corporate accountability for human rights violations has been going on for more than 40 years within (and outside of) the United Nations. One milestone was the speech Salvador Allende delivered at United Nations Assembly in 1972. It was the first time that the role of TNCs play in the construction of instabilities in democratically elected governments was addressed. “International law does not have to be identified with the interests of large capitalist companies”, Allende stated, hinting to the important role civil society plays in international treaty negotiations. In the Global South, where colonization ensured the exploitation of labour and resources through the use of force, post colonisation sustained similar exploitation through the use of financial blockades, among other diverse forms of informal interventions disguised as claims to protect private property. The coup d’état in Chile, which took place a shortly after Allende’s speech is one case in point and marks the beginning of what quickly became neoliberal hegemony in Chile. At the same time this spurred a sequence of efforts to adopt human rights standards and hold transnational corporations accountable. In 1973, the United Nations Economic and Social Council (ECOSOC) gave a “Group of Eminent Persons” the task of advising on matters related to transnational corporations. Since then, commissions and groups were formed, drafts of norms and codes were presented, until 2011 when the UN Guiding Principles on Business and Human Rights (UNGPs) were adopted. The UNGP process has been the most prominent alternative to the norms and codes initiative drafted prior to 2011 – albeit being a soft law instrument.

Post-UNGP: Resolution 26/9 and the Treaty Project

With the creation of the Working Group in charge of promoting, disseminating and implementing UNGPs, a new chapter of technical, practical, and theoretical work in law was opened. Yet, only a few years after the adoption of the UNGPs, with Resolution 26/9 the project of a binding treaty on the issue became possible, marking the turning point in this history of Business and Human Rights.

The Resolution’s approval was widely celebrated by those who understood that only a binding instrument could fill the existing regulatory gaps regarding accountability (or rather, the lack of accountability) of TNCs for human rights violations. Besides that, the vote was a historic moment in which a narrow majority made the geopolitical fault lines on the issue visible. The Resolution was supported mainly by delegates of the Global South and opposed by all EU member state, as well as by (most) of the States in which the major TNCs are incorporated. In its text, the Resolution highlighted the crucial importance of civil society participation in the promotion of corporate social responsibility mechanisms.

And civil society took the job assigned to it (very) seriously. Over the years, civil society has actively participated in the process, being present at the sessions and collaborating in the presentation of proposals. Last year, at the seventh session of the OEIGWG, the Permanent Mission of Ecuador, on behalf of the Chairmanship, released a third revised draft  for a legally binding instrument. The draft was the outcome of a diverse and participatory process, with crucial involvement of civil society actor, and was intended to serve as the basis for State-led negotiations during the week-long session, which took place from 25 to 29 October 2021 in Geneva. At least that was the envisaged plan…

All over before It Could Even Begin?

Yet in Geneva, the biggest surprise was not the fact that the United States decided to participate in the OEIGWG for the first time, as a (proclaimed) part of the US’ return to multilateral venues. Rather it was that instead of focusing on the current and carefully drafted proposals, the US delegate, in its opening statement, expressed its openness to exploring alternatives to the 3rd Revised Draft, including specifically “a legally binding framework agreement” that would build on the UNGPs. In that, putting forward the idea that the OEIGWG should explore an alternative approach which more stakeholders – including the business community – could support. In addition, the US announced that their delegates would not engage in line-by-line negotiations, as the US continued to oppose the 3rd Revised Draft text altogether.

Proposing a framework design for Business and Human Rights treaty is in fact not a novel idea. A framework convention, is a legally binding international agreement that establishes key objectives and a system of governance, but leaves the details to be determined in the future by an agreed-on mechanism. Perceived by some (here and here) as offering a promising and (more) realistic route, nonetheless, it’s a proposal that goes against what most parts of the civil society engaged in the negotiations at the OEIGWG have demanded, that is the need for clear and binding rules to regulate corporations globally.

Civil Society vs. the US?

To understand how the global alliance of non-governmental organizations, affected communities and social movements working in this context is structured, we need to outline some considerations about contemporary human rights activism: Global civil society is a historically constructed space where contrasting political projects face each other, and in which human rights activism has directed a large part of its activities to the production of human rights regulations and to advocacy, in addition to involvement in strategic litigation. In a sense, this process has resulted in the creation of a participatory culture of governance, which has progressively increased the legitimacy of United Nations agencies, and has also undoubtedly created a genuine space for global initiatives for justice. However, civil society is a non-homogeneous group, which articulates its agendas according to different interests. Despite this, some civil society groups have established alliances for the treaty advocacy, such as the Treaty Alliance.

Against this backdrop it should not come as a surprise that soon after the US made its proposal, more than 40 civil society organizations signed a statement, in which they expressed their concerns. They argued that pursuing a framework convention instead of a conventional treaty would be taking a step back and would waste the enormous resources stakeholders have already contributed in an effort to move the treaty process this far. To these groups, after seven years of ignoring and opposing the OEIGWG, the US attempt to use its political power to undermine the OEIGWG process and its mandate. Moreover, they highlighted that for them the US statement gave evidence to a deeply rooted disrespect for the large group of predominantly Global South States, which had been working together in previous sessions. In their view, it remains crucial that the binding treaty establishes direct obligations for transnational corporations with concrete measures for respecting Human Rights and the necessary implementation mechanisms for their fulfilment.

An Opportunity for Necessary Improvement

Albeit it is important to note that even before the seventh session took place, a large part of civil society was already concerned about the direction in which the treaty negotiations were heading. Indeed, and according to the Global Campaign to Reclaim Peoples Sovereignty, Dismantle Corporate Power and Stop Impunity, a network of over 250 social movements and civil society organisations, in its current state, the treaty would be incapable of fulfilling the objectives set out by Resolution 26/9. Likewise, they warn that the use of vague and undetermined concepts may compromise the interpretation and future application of key provisions, not being able to fill the existing legal gaps that precisely allow TNCs to violate human rights without being held accountable for their actions. For them, it is unacceptable to ignore the proposals for how the 3rd Revised Draft could be improved which were presented during the negotiation sessions by representatives of affected communities, social movements and alike by many experts and States.

When negotiating a treaty, it should be noted that the grammar impacts the effectiveness of the commitments established in the document. The use of verbs with broad meaning in the 3rd Revised Draft, avoiding taking specific and determined commitments points to the imprecision of the proposal, as preferring to use “boost, foster, strengthen” rather than “implement, effect, apply”- as the pattern reproduced in the UNGPs. Liability, access to justice, protection of affected communities, are some of the key elements needed to put an end to corporate impunity and without innovative and ambitious provisions, the treaty risks to remain merely one more instrument aligned with voluntary frameworks that have already demonstrated low effectiveness. In the mark of 10 years anniversary of the UNGP, what remains is a poor track record in terms of implementation, while corporate abuses remain rampant globally, especially in the Global South. As a Framework convention follows the same line, that’s why it faces resistance from these groups.

Surely, States are still experimenting with new approaches to regulating issues such as corporate due diligence and human rights reporting. One advantage often cited on adopting a BHR framework convention is that it might swiftly secure broad agreement by States. However, there is no certainty if after the adoption of a framework convention any future protocols or adjustments will be adopted. With such level of insecurity, some proponents doubt if a framework convention would be able to solve the problem of lack of corporate accountability and how this would improve access of victims to effective remedies.

If, on the one hand, the rejection of hard norms has resulted in limited participation from key stakeholders, a point that the US statement did draw attention to, on the other hand, within civil society, despite possible accreditation difficulties, the number of organizations that participated in the OEIGWG’s annual meetings remained stable and significant over time. There is an effort to guarantee the participation of people from the Global South in the sessions, something that could be considered a mark of this movement. This indicates a demand for the democratization of the debate and the political resistance in pursuit of binding norms. For these groups, the participation of the U.S. delegates was only to delay or obstruct this process.

In fact, even if Global North States are not as active in the process, the OEIGWG has significant support by the international community, as illustrated by the average participation of over 80 UN Member States in each of the previous six sessions. Companies also participate in the sessions, even though there is a long debate about whether they should be allowed to do so. For example, in the negotiations of the Framework Convention on Tobacco Control parties were required to insulate the debates about development and implementation of public health policies from tobacco industry influence. It should be mention that there have been some parallels between the US and business associations interventions, and concerns on corporate capture were raised.

Conclusion

Yet, to succeed, any version of a BHR treaty should strive to ensure prevention, protection and remediation of business-related human rights abuses. For the moment, business profits remain concentrated in large corporations and for the benefit of their shareholders, while the damages and risks associated keep being unevenly distributed in society. Against this background, in this blog post, my first argument is that the treaty negotiation process must be protected from corporate capture. Secondly, the discussions prior to the US proposal for a Framework Convention cannot be ignored and must be taken into account if the negotiations move in that direction. Likewise, I emphasize that, in order to be effective, Global South people cannot be a mere observer in this process, given the asymmetries of power and coloniality. These are the public interests that reside within the BHR treaty.