A treaty to guarantee responsible business practices
Fridays for Future, the international movement calling for action to address the climate crisis, has gained huge momentum in the past year. People across the world, young and old, are calling for oil to stay in the ground and a shift to renewable energy. But they are also calling for something more profound, something that will tackle the root causes of climate change: a different economic system.
Solving the climate crisis is not about sexy technological inventions; it is about re-evaluating the economic system to stop greed and corruption and dismantle the culture of inequality. A vital part of what needs to change is the profit motive, which must shift towards being an expression of collective public interest, rather than being only for the enrichment of companies and businesses.
A chance to change the economic system
Christian Aid and our partners in the ACT Alliance believe that one way that governments can respond to these calls for systemic economic change is to support the development, ratification and implementation of an International UN Treaty on Business and Human Rights.
The UN Treaty is a very welcome attempt to regulate business activities in line with international human rights law. For too long, debates on reducing the harm to people and planet perpetrated by businesses have been dominated by voluntary language, which gently encourages businesses to act responsibly.
For the first time, the UN Treaty goes beyond guidelines. If ratified and implemented, it will hold states and companies legally accountable for respecting, promoting and providing remedy for human rights abuses.
Power imbalances and differentiated impacts
One aspect of the revised draft UN Treaty released in July 2019 that the ACT Alliance particularly welcomes is the recognition of differentiated corporate impacts on groups that are marginalised such as women, children, people with disabilities and indigenous peoples. It recognises the need to analyse existing and underlying power imbalances between genders, which are often reinforced and exacerbated by the economic system and corporate practices. These include, for example, gender pay gaps and gender-based violence in the workplace which are consequences of discriminatory norms and structures that already exist in society.
Yet, recognising the need for analysis on power imbalances is not enough. The treaty must go further to ensure that states and corporations conduct mandatory human rights due diligence and gender impact assessments, and that corporations use their influence with states to prevent abuses.
Transnational corporations are often made up by subsidiaries, affiliates and related entities. It is not unusual for a subsidiary to be involved with or aware of human rights abuses. For example, if modern slavery is practiced within the value chain of a transnational corporation – perhaps clothes sold in London are produced using forced migrant labour in Bangladesh – then that corporation has the obligation to exert influence through its subsidiary to prevent future abuse, by making sure all service providers abide by human right standards.
This is just one example of how corporations need to use their influence to promote an enabling environment for the enjoyment of human rights. Corporations can also work with communities, civil society and the government to make sure violations do not take place.
A good start, but more is needed
Under the UN Treaty there are provisions for the establishment of a committee to review compliance and issue recommendations. However, as the Treaty does not yet recognise corporations as single entities with a legal personality, the jurisdiction of the law is limited to states. This must be changed so that states, under universal jurisdiction or international law, can hold corporations directly to account for rights abuses.
We hope that the development of the Treaty will gain wide-ranging support from governments and corporations in the coming months. If it is ratified and implemented, the international community will be able to look back on this decade as contributing to a fundamental shift in legal standards that support a just economic system and true equality for future generations.
Download ACT Alliance’s briefing paper on applying a ‘Gender Lens to the UN Treaty on Business and Human Rights’ here.