International commerce and human rights

Transcription

1 International commerce and human rights

2 Responsible business conduct - Channels 1. International human rights law 2. Corporate social responsibility (CSR) 3. Home state laws 4. Trade (WTO & FTAs) 5. Investment (BITs) 6. International Financial Organizations 7. Development cooperation 8. SDGs

3 1. International human rights law

4 UDHR a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance

5 Current discussions (IHRL) Established: state obligations to respect/protect/fulfil Obligations of home states? Territorial (within jurisdiction) or even extraterritorial (some argue) Obligations of private actors? Indirect (mediated by states) or even direct obligations (some argue)

6 Maastricht Principles on Extraterritorial Obligations of States All States have obligations to respect, protect and fulfil human rights, both within their territories and extraterritorially. Extraterritorial obligations encompass: a) obligations relating to the acts and omissions of a State, within or beyond its territory, that have effects on the enjoyment of human rights outside of that State s territory; b) obligations of a global character to take action through international cooperation, to realize human rights universally.

7 Maastricht Principles (continued) Respect no direct/indirect interference - States must refrain from any conduct which impairs the ability of another State to comply with HR obligations Protect obligation to regulate ensure that non-state actors which they are in a position to regulate (TNCs) do not nullify or impair the enjoyment of HR Fulfill - Obligation to create an international enabling environment - matters relating to trade, investment, taxation, finance, environmental protection, and development cooperation.

8 Knox, Horizontal Human Rights Law, American Journal of International Law, January, 2008

9 Level of involvement by IL/IHRL Enforcement (direct duties) Placement (direct duties) Specification (indirect duties) Contemplation (indirect duties) Source: John H. Knox, The Ruggie Rules: Applying Human Rights Law to Corporations, in R. Mares (ed.), The UN Guiding Principles on Business and Human Rights Foundations and Implementation, Martinus Nijhoff Publishers (2012) pp

10 2. Corporate social responsibilities (CSR)

11 What is CSR? About Profitability Doing well while doing good Voluntarism (self-regulation) On a voluntary basis Responsible business conduct Manage impacts on society (respond to a policy mix )

12 CSR and BHR For our course, CSR is about Responsible business conduct achieved voluntarily, by civil society pressure, by market demands, by public regulation/policy and in the vast majority of cases by a combination of these. Law and CSR or Law or CSR? Law in smart policy mixes, not merely command & control regulation

13 3. Home state laws

14 Home state laws Transnational litigation HR due diligence obligations (France) Reporting obligations Company law (obligations of managers)

15 4. International trade law

16 Free Trade Agreements (FTAs) Classic FTAs -> Tarriff reductions Modern FTAs -> Tarriff reductions + labour/human rights protections (EU, US, Canada)

17 WTO (multilateral trade) & HR We renew our commitment to the observance of internationally recognized core labour standards. The International Labour Organization (ILO) is the competent body to set and deal with these standards, and we affirm our support for its work in promoting them. We believe that economic growth and development fostered by increased trade and further trade liberalization contribute to the promotion of these standards. We reject the use of labour standards for protectionist purposes, and agree that the comparative advantage of countries, particularly low-wage developing countries, must in no way be put into question... Singapore Ministerial Declaration (1996) para 4 PRESS BRIEF: TRADE AND LABOUR STANDARDS (undated)

18 Social dumping concerns The failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations which desire to improve the conditions in their own countries. ILO Constitution (1919) The Members recognize that unfair labour conditions [wages and working conditions], particularly in production for export, create difficulties in international trade... ITO Havana Charter (1948)

19 Bilateral/regional agreements (FTAs) & HR Social clauses in trade agreements Trend: From 4 (1995) to 58 (2013) to 75 (2016) FTAs with labor clauses 80 per cent of FTAs entering into force since 2013 include labour clauses. Sources: ILO, Social dimensions of free trade agreements (2013); ILO, Assessment of labour provisions in trade and investment arrangements (2016)

20 Social clauses in FTAs Content: Compliance with domestic labour laws (1994 NAFTA approach) or international standards of ILO (2009 US-Peru FTA) Enforcement: 2 implementation strategies: conditional ( conditionalities in terms of economic sanction/benefit for (non)compliance with labour standards promotional (framework for dialogue, cooperation, and/or monitoring). Social dimensions of free trade agreements, ILO,

21 HRIAs of Trade and Investment Agreements The duty to prepare HR Impact Assessments (HRIAs) of trade & investment agreements States expected to: prepare HRIAs prior to the conclusion of trade and investment agreements ensure the agreement does not impose obligations inconsistent with pre-existing IHRL obligations (respect, protect and fulfil human rights) where an incompatibility is found, act: (a) Termination of the agreement; (b) Amendment of the agreement; (c) Insertion of safeguards in the agreement; (d) Provision of compensation by third-state parties; (e) Adoption of mitigation measures. Guiding Principles on Human Rights Impact Assessments of Trade and Investment Agreements (2012), by Olivier De Schutter, UN Special Rapporteur on the right to food

22 5. International investment law

23 International economic law: some concerns

24 TPP

25 TPP Rights included: freedom of association (union rights); no forced labor; no child labor; no discrimination in employment. minimum wages, hours of work, and occupational safety and health. Enforcement: cooperation & trade sanctions

26 UNCTAD s Investment Policy Framework for Sustainable Development (2012-)

27 Right to regulate (I) strengthen HR Preservation Of Regulatory Authority 1. Each Party retains all authority under its laws to interpret and implement its mandatory requirements. 2. This Chapter shall not: (a) prevent a Party from adopting or maintaining, in accordance with its international rights and obligations, mandatory requirements, as appropriate to its particular national circumstances; (b) prevent a Party from adopting mandatory requirements to determine the level of protection it considers necessary to ensure the quality of its imports, or for the protection of human, animal or plant life or health, or the environment, or for the prevention of deceptive practices or to fulfil other legitimate objectives, at the levels it considers appropriate (New Zealand-Singapore) The Parties reaffirm each Party s sovereign right to establish its own levels of environmental protection and its own environmental development priorities, and to adopt or modify its environmental laws and policies. (China Korea)

28 Right to regulate (II) weaken HR The Parties recognize that it is inappropriate to encourage investment by weakening or reducing the protections afforded in domestic labor laws. (Japan Philippines) each Party shall strive to ensure that it does not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such laws in a manner that weakens or reduces adherence to the internationally recognized labor rights as an encouragement for the establishment, acquisition, expansion or retention of an investment... (Japan Philippines FTA) If a Party considers that the other Party has offered such an encouragement, it may request consultations with the other Party and the Parties shall consult with a view to avoiding any such encouragement. (Japan Philippines FTA)

29 CSR in economic agreements Each Party shall endeavour to encourage enterprises to voluntarily adopt corporate social responsibility initiatives on labour issues that have been endorsed or are supported by that Party. (TPP, art 19.7 (2016))

30 Bilateral Investment Treaties (BITs) and HR Concern: imbalance between rights and responsibilities of investors Current design of BITs: State obligations, rights of investors, no responsibilities of investors for HR impacts, investors have recourse to international arbitration Future design of BITs? Insert references to HR and establish jurisdiction of tribunal over HR claims made by host state. Options for BITs design Conditional protection: investor s protection conditioned on respect for HR (-> investor claim is inadmissible) Counterclaim by state: state raises human rights allegations against investor (->assessment of compensation)

31 6. International Financial Organizations

32 World Bank Group International Financial Corporation Performance Standards (2006/2012) Formerly Safeguard Policies (1986-)

33 IFC s Performance Standards Eight Performance Standards for sustainable development: PS 1: Assessment and Management of Environmental and Social Risks and Impacts PS 2: Labor and Working Conditions PS 3: Resource Efficiency and Pollution Prevention PS 4: Community Health, Safety, and Security PS 5: Land Acquisition and Involuntary Resettlement PS 6: Biodiversity Conservation PS 7: Indigenous Peoples PS 8: Cultural Heritage

34 IFC Performance Standards (2011) Business should respect human rights, which means to avoid infringing on the human rights of others and address adverse human rights impacts business may cause or contribute to. (PS 1, para. 3)

35 Mitigation hierarchy The mitigation hierarchy to address identified risks and impacts will favor the avoidance of impacts over minimization, and, where residual impacts remain, compensation/offset, wherever technically and financially feasible. (PS1)

36 7. Development cooperation

37 Development cooperation and CSR Support for CSR at strategic points of the MNE value chain: directly for suppliers (SMEs) in developing countries to gain access to international markets to watchdog NGOs working the CSR field to multistakeholder initiatives (for ex. DFID support for Ethical Trading Initiative) to standardization efforts given the essential role of standards in global trade (SIDA funds the Global Reporting Initiative).

38 8. Sustainable Development Goals

39 Relationship business SDGs 1. Compliance (reduce negative impacts) do no harm 2. Contribution (positive impacts)

40 Private sector in SDGs Private business activity, investment and innovation are major drivers of productivity, inclusive economic growth and job creation. We acknowledge the diversity of the private sector, ranging from microenterprises to cooperatives to multinationals. We call upon all businesses to apply their creativity and innovation to solving sustainable development challenges. We will foster a dynamic and well functioning business sector, while protecting labour rights and environmental and health standards in accordance with relevant international standards and agreements and other ongoing initiatives in this regard, such as the Guiding Principles on Business and Human Rights and the labour standards of the International Labour Organization, the Convention on the Rights of the Child and key multilateral environmental agreements, for parties to those agreements. (para 67 in 2030 Agenda)

41 SDG 17: Global Partnership for Sustainable Development Multistakeholder partnerships o Enhance the Global Partnership for Sustainable Development, complemented by multistakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources o Encourage and promote effective public, public-private and civil society partnerships 2030 Agenda

42 UN database on SDG partnerships 2,161 partnerships (dec 2016) partnerships (march 2018) Partnerships for the SDGs: A legacy review towards realizing the 2030 Agenda, UN, UN Guidelines on Cooperation the United Nations and the Business Sector (2015)

43 Global economy Multinational enterprises and global value chains

44 Telecommunications & information technologies

45 Transportation & logistics

46 Trade liberalization - WTO 1994

47 Example of GVCs (Responsible Sourcing Network, Slave Labour, 2017)

48 Example of MNEs (UNCTAD, WIR 2016)

49 Global value chains Internationalization of production: Lead firms & parent companies + millions of subsidiaries, contractors, suppliers are complex, diverse, fragmented, dynamic and evolving organizational structures ILO - Decent work in global supply chains (2016) UNCTAD WIR (2013)

50 Rana Plaza 2013 (Bangladesh) dead

51 BIGGER PICTURE Towards a fairer globalization and inclusive economy International human rights law CSR SDGs (responsibilities and roles of private sector) Investment law (arbitration) Trade law (free trade) International financial institutions (AIIB, World Bank, IMF)