Business and Human Rights in Europe

International Law Challenges

Angelica Bonfanti, Angelica Bonfanti

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429811258
• Edition: 1
• Topic: Law
• Subtopic: International Law
• Index: Law

Transnational business activities are important drivers of growth for developing and the least developed countries. However, they can also negatively impact the enjoyment of human rights. In some cases, multinational enterprises (MNEs) have even been accused of grave human rights abuses in the territory of the states where their subsidiaries operate. Since the parent companies of many MNEs are incorporated under the law of European states, those countries' domestic law and the European legal framework play a crucial role in establishing how their activities should be conducted – also throughout their supply chains – and which remedies will be available when corporate human rights violations occur. In recent years, the European Union, the Council of Europe and their Member States have been adopting policies and legislation to ensure respect for human rights by businesses and have developed a body of related case law. These legal instruments can be considered the European responses to the challenges posed at international-law level, and they constitute the focus of research of this book. Through its collected chapters – written by scholars and practitioners under the direction of the editor, Angelica Bonfanti – the book identifies the European solutions to the business and human rights international legal issues, provides an overall assessment of their effectiveness, and examines their potential evolution.

1 Introduction

Angelica Bonfanti

Transnational business activities are important drivers of growth for developing and least-developed countries. However, business activities can also negatively impact the enjoyment of human rights. In some cases, multinational corporations (MNCs) have even been accused of grave human rights abuses in the territory of the states where their subsidiaries operate.

The relationship that exists between the development of business activities and the protection of human rights is ruled at international-law level. In addition to the customary and treaty-based human rights legal framework, some international soft-law instruments have blazed the trail in this field. Among them there are the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (hereinafter ‘ILO Tripartite Declaration’),¹ the UN Global Compact,² the OECD Guidelines for Multinational Enterprises (hereinafter ‘OECD Guidelines’),³ and the UN Guiding Principles on Business and Human Rights (hereinafter ‘UNGPs’).⁴ Their adoption has contributed to the development of international law, through the identification of standards specifically tailored to business activities and the interpretation of international law in such a way as to adapt its rules to the specific actors involved and the abuses likely to occur within the development of economic activities.

Since the parent companies of many MNCs are incorporated under the law of European states, those countries’ domestic legislation and the European legal framework should be given specific consideration. Indeed they play a crucial role in establishing how the business activities of European MNCs should be conducted and which remedies will be available when corporate human rights violations occur, thus providing specific responses to the challenges posed at international level. Against this backdrop, this book aims at identifying the solutions offered in Europe to the business and human rights (B&HR) international legal issues and at providing an overall assessment of their effectiveness.

To this extent, it should be premised that the EU has developed a specific root in the field of B&HR. The approach followed by the EU essentially focuses on the notion of Corporate Social Responsibility (hereinafter ‘CSR’), originally conceived as ‘a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment’,⁵ and thus ‘integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’.⁶

However, starting from 2011 the European Commission put forward a new definition of Corporate Social Responsibility (CSR): ‘the responsibility of enterprises for their impacts on society’,⁷ which goes beyond the mere voluntary commitment to contribute to a better society or the compliance with applicable legislation, in order to encompass the adoption by corporations of processes

to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, with the aim of: maximizing the creation of shared value for their owners/shareholders and for their other stakeholders and society at large⁸

and ‘identifying, preventing and mitigating their possible adverse impacts’.⁹

The European Commission acknowledges that

internationally recognized principles and guidelines, in particular the recently updated OECD Guidelines for Multinational Enterprises, the ten principles of the United Nations Global Compact, the ISO 26000 Guidance Standard on Social Responsibility, the ILO Tri-partite Declaration of Principles Concerning Multinational Enterprises and Social Policy, and the United Nations Guiding Principles on Business and Human Rights¹⁰

provide corporations, especially MNCs, with ‘authoritative guidance’.¹¹ In light of this, in 2011, the EU committed to ensure the integration of internationally recognized principles and guidelines into its own CSR policies, promote respect for them, foster consistency between them, monitor their respect by the European enterprises, and encourage all large European corporations to make a commitment to comply with them. As regards specifically the UNGPs, the EU declared to expect ‘all European enterprises to meet the corporate responsibility to respect human rights’¹² and invited all ‘EU Member States to develop by the end of 2012 national plans’,¹³ the state of play of which, assessed later by the EU itself, ¹⁴ will be examined by this book.

Under the influence of the EU, several EU Member States have adopted National Action Plans (NAPs) and pertinent legislation.¹⁵ The EU itself has proceeded to enact specific legislation directly or indirectly addressing B&HR. The example has also been followed by several non-EU members, and by the Council of Europe (CoE), whose Committee of Ministers’ 2016 Recommendation on Human Rights and Business¹⁶ provides useful indications as to the application of the European Convention on Human Rights and Fundamental Freedoms (ECHR) on this subject.¹⁷

This book comes from the position that the EU, the CoE, and their Member States in recent years have been adopting policies and legislation aimed at granting the respect of human rights by business activities, paying specific attention to the need (and corresponding duties) of transparency, disclosure of information, human rights due diligence, duty of care over the supply chain, and access to remedies.¹⁸ These legislations and the related case law can be considered the European responses to the legal challenges posed at international-law level on B&HR and constitute the focus of the research developed by this book.

As a methodological remark, it is worth noting that the research developed herein follows the three-pillar structure of the UNGPs: the state duty to protect human rights, the corporate responsibility to respect human rights, and the victims’ access to remedies.

The UNGPs were adopted in 2011 by the UN Special Representative of the Secretary General on Business and Human Rights (SRSGBHR), Professor John Ruggie, at the end of the mandate conferred in 2005¹⁹ and renewed in 2008.²⁰ As concerns the first pillar, UNGP 1 establishes that ‘States must protect against human rights abuse within their territory and/or jurisdiction by third parties, including business enterprises’.²¹ The state duty to protect is a standard of conduct that implies an obligation of due diligence that leaves states the discretion to select the appropriate measures among the full range of permissible ‘preventative and remedial measures, including policies, legislation, regulations and adjudication’.²² States are not responsible for the human rights abuses committed by corporations, but breach their international human rights law obligations if such abuses can be attributed to them, or if they fail to take appropriate measures to prevent, investigate, punish, and redress them. More specifically, it is established that ‘States should exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights’,²³ including public procurement.

As far as extraterritorial protection of human rights is concerned, it is acknowledged – not without attracting a certain criticism²⁴ – that ‘States should set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations’.²⁵ This recommendation is based on the legal presumption that ‘States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a recognized jurisdictional basis’.²⁶

The corporate responsibility to respect human rights is conceived as ‘a global standard of expected conduct for all business enterprises wherever they operate’.²⁷ Pursuant thereto, companies ‘should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved’.²⁸ The corporate responsibility to respect human rights refers to the entire spectrum of international human rights, with specific attention to those at greater risk, depending on the sector and context of operation. Pursuant to UNGP 15, the tools to implement the corporate responsibility to protect human rights are: the policy commitment to meet the responsibility to respect human rights; the human rights due diligence process to identify, prevent the risks and mitigate their impacts on human rights; and the processes to enable the remediation of any adverse human rights impacts. Of specific relevance is the control over the supply chain and the adverse human rights impacts with which the corporations may be involved ‘either through their own activities or as a result of their business relationships’.²⁹

Finally, states ‘must take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory and/or jurisdiction those affected have access to effective remedy’.³⁰ Effective remedies include: state-based judicial mechanism (i.e. civil, criminal and administrative judicial means) and the provision for remedies such as ‘apologies, restitution, rehabilitation, financial or non-financial compensation and punitive sanctions […] as well as the prevention of harm through, ...