A/HRC/34/47
corporations and other corporate actors accountable for human rights violations resulting
from their operations, including in their global value chains, and that would allow for the
individual liability of leaders involved in the decision-making process. Such a treaty would
be tantamount to a right of appeal and should make that right accessible to individuals,
groups, trade unions and communities free of charge, with costs covered by a tax to be paid
by transnational corporations. In addition to recognizing the standards set by the
International Labour Organization (ILO) and by the World Health Organization (WHO),
those participating in the treaty process should recognize the need for an international court
on climate issues.
24.
The second panellist noted that the working group process was relevant to the
implementation of the 2030 Agenda for Sustainable Development. Modern development
had seen close collusion between financial and corporate actors, since investment for
delivering the 2030 Agenda was not based on credit, but on the reinvestment of corporate
profits. While large companies had great potential for delivering social progress, they often
contributed to a race to the bottom with regard to taxes and labour costs. Similarly, free
trade agreements carried downstream economic risks and might transfer control of some
factors of the economy from the public sector to the private sector. A binding instrument
would address those issues and provide an alternative to trade agreements negotiated
behind closed doors.
25.
The third panellist identified the need to address the structure of transnational
corporations and their supply chains, acknowledging the failure of soft law and voluntary
approaches and expressing support for the development of an instrument that would build
on, and not undermine, the Guiding Principles. Such an instrument must cover workers’
rights, particularly those set out in the ILO Declaration on Fundamental Principles and
Rights at Work, and should be applicable to transnational corporations but not exclude
other businesses, in order to avoid accountability gaps. A treaty should include an
obligation on States to adopt measures on human rights due diligence and clarify the steps
that companies should take in that regard, and should establish legal liability and
extraterritorial jurisdiction for human rights abuses.
26.
The fourth panellist stressed that corporate legal structures rendered it difficult to
hold corporations accountable. She pointed to the problem of enhanced protection of
investor rights, which often went further than national law and provided investors with a
right to have their claims settled by international arbitration rather than in national courts.
Investment treaties could clash with States’ obligations to protect human rights, and the
threat of international investor-State dispute settlement proceedings had a chilling effect on
developing countries in terms of regulatory measures. Investor-State dispute settlement
proceedings resulted in an imbalance of power because they provided a remedy only for
business stakeholders. One solution would be to allow victims access to courts of the
investors’ home States, which was often where assets of transnational corporations were
located. A binding instrument could provide guidance for the development of trade and
investment instruments, including by stipulating the requirement of ex ante and ex post
facto human rights impact assessments and setting out appropriate investor obligations.
Such principles were reflected in the Investment Policy Framework for Sustainable
Development of the United Nations Conference on Trade and Development (UNCTAD)
and in South African and Indian law.
27.
The fifth panellist noted that the corporate law principles of separate legal identity
and limited responsibility were often applied together in relation to the acts of subsidiaries,
allowing the mother company to escape responsibility. Certain legal doctrines, such as
piercing the corporate veil, were designed to resolve such problems. A binding instrument
could set out standards for operationalizing such principles, and the identification of those
standards did not require a unique understanding of what a transnational corporation was.
7
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