Transformations in the global economy have created a governance gap as regards the world’s largest companies. In response, an effort is underway at the United Nations to draft a Treaty on Business and Human Rights (the draft treaty). The purpose is to make clear how both governments and corporate entities should ensure that corporate conduct doesn’t infringe on any rights. The current (2018) draft treaty builds on existing global, but non-binding, standards. Negotiations are expected to continue in earnest over the coming few years.
Many developing countries are active proponents of the draft treaty. Conversely, many European countries, as well as the United States, argue that the treaty is either unnecessary or risks being unduly restrictive. Likewise, although Canada plays an active role on the Human Rights Council, it has largely ignored the work on the draft treaty. This brief argues that the Canadian government’s stated commitment to a rules-based international order is at odds with a position that appears – to many – to uphold a status quo that eschews rules for transnational corporations. Canada should join the negotiations on the draft treaty and work hard to improve the existing text.
A key legal issue in the draft treaty concerns the question of whether victims of human rights abuses by a transnational corporation in a host country can seek redress in the corporation’s home country (i.e. where it is incorporated). This is a major issue for Canada as the majority of global mining companies are incorporated in Canada and because this sector is widely implicated in human rights abuses. Canadian courts are already hearing numerous cases alleging that Canadian mining companies have been complicit in human rights abuses abroad. Canada clearly has an interest in the scope and content of any new international rules in this area. Furthermore, Canada already has legislation (prompted by an OECD treaty which Canada has ratified) allowing it to prosecute, in Canada, corruption offences committed by Canadian companies abroad. Why not treat companies implicated in human rights abuses similarly?
The question of the human rights obligations of companies has been on the global agenda since the late 1990s. Companies have been, inter alia, accused of ignoring “sweatshop” conditions in their supply chains, using abusive security personnel to guard their property, being complicit in the forcible displacement of local communities, discriminating against employees, and abetting or tolerating intimidation and violence against activists and union members.
In response, there have been three broad developments:
- lawsuits against the companies involved in many home countries, including Canada;
- multi-stakeholder initiatives bringing companies, NGOs and governments together to agree to (voluntary) standards in specific sectors and some form of certification process to ensure companies abide by them (e.g. the “Kimberley Process” for diamonds, the “Global Network Initiative” for online privacy, the UN’s “Global Compact,” “Voluntary Principles on Security and Human Rights” for the extractive industry, etc.); and
- the development of global standards, resulting in the 2012 adoption of the UN’s Guiding Principles on Business and Human Rights (GPs).
Canada supports many multi-stakeholder initiatives in this area as well as the GPs. Progress has been made, but the agreed-upon standards and principles remain essentially voluntary, and states and companies can choose whether or not to abide by them. Canada has also recently established an ombudsperson’s office to promote good practices among Canadian companies abroad and adjudicate complaints made against those companies. It is odd, therefore, that it remains aloof from the draft treaty process, which is aimed at precisely the same problem.
Canada’s hands-off position as regards the draft treaty process appears strongly linked to the similar position adopted by European countries and the U.S. They are uncomfortable with the draft treaty’s focus on transnational corporations (not all businesses), and with efforts that aim to create international rules for private actors rather than states. These and other concerns are not without merit, but the best way to address them is through negotiation in the drafting process. Ignoring this process may simply result in the establishment of rules to which Canada objects and may not adhere, but which nevertheless set global benchmarks.
Like many U.N. initiatives, the draft treaty process is heavily politicized, with supporters and opponents broadly falling into the camps of developing and developed (or southern and northern) countries, respectively. Countries where the most transnational companies are headquartered are for the most part opposed to the initiative. Countries in the global South see the draft treaty as a way to perhaps give them more clout in dealings with transnational corporations; others say it is a cynical ploy by these countries to deflect attention from their own poor human rights records onto private business. Nevertheless, politicization of the issue cannot detract from the fact that better rules are needed, and combining efforts to agree to them is a better strategy than bemoaning the somewhat flawed process.
Canada should engage meaningfully with the U.N. process underway to agree to a treaty on business and human rights. Based on consultations with Canadian industry in key sectors and Canadian civil society, Global Affairs Canada should develop positions on key issues being discussed in the process, and commit itself to achieving an effective, fair and workable global treaty.
David Petrasek is an Associate Professor at the Graduate School of Public and International Affairs at the University of Ottawa. Formerly Special Adviser to the Secretary-General of Amnesty International, David Petrasek has worked extensively on human rights, humanitarian and conflict resolution issues.