A/HRC/44/43/Add.1
business-related human rights abuses. The Government should take measures to extend the
applicability of the right to information to the private sector and require businesses
(including State-owned enterprises) to respect the freedom of association and the right to
collective bargaining.
82.
The Working Group found little evidence of business enterprises establishing or
operating effective operational-level grievance mechanisms in line with the Guiding
Principles on Business and Human Rights. The Government, the United Nations Global
Compact Network Georgia and business associations should raise awareness about the
importance of establishing effective grievance mechanisms to address concerns and adverse
human rights impacts at an early stage. State-owned enterprises should lead by example in
this area.
VII. The State as an economic actor
83.
Principle 4 of the Guiding Principles on Business and Human Rights provides that
States should take additional steps to protect against human rights abuses by business
enterprises that are owned or controlled by the State. State-owned enterprises, such as
Georgian Railways and Georgian Post, are among the largest employers in the country, and
the Government should set out a clear expectation that those enterprises respect human
rights. In this regard, relevant guidance is provided by the Working Group to ensure that
State-owned enterprises lead by example (see A/HRC/32/45).
84.
The Working Group also encouraged the Government to integrate the promotion of
responsible business conduct into its diplomatic trade missions and other forms of
economic diplomacy, such as export credits and trade missions. While the Government has
yet to take such steps, it should refer to the Working Group report on how economic
diplomacy should be used to promote responsible business conduct (A/HRC/38/48). As a
first step, the Government could require businesses to make a public commitment to respect
human rights as a condition for receiving any forms of official trade support.
85.
Public procurement offers another important means for the Government to
incentivize respect for human rights among businesses. Currently there are no mechanisms
to set out a requirement for contractors to respect human rights, except for a narrow focus
on employment conditions in some public procurement contracts. 20 The Working Group
encourages the State Procurement Agency to systematically integrate responsible business
conduct criteria into the bidding process. Through strategic sourcing decisions to increase
the diversity of their suppliers, public procurement can serve as an effective tool for
economic and social empowerment, including of women, migrants, lesbian, gay, bisexual,
transgender and intersex persons, and persons with disabilities.
VIII. Free industrial zones
86.
In Georgia, free industrial zones were created in Poti and Kutaisi in 2009, in Kulevi
in 2012, and in Kutaisi and Tbilisi in 2015. According to the current regulatory framework,
free industrial zones may be created on any plot of territory or area that exceeds 10
hectares, except protected territories defined by national legislation. Free industrial zones
may be created at the initiative of the Government of Georgia, or at the request of any
individual or legal entity.
87.
The profit or distribution of profit earned by a free industrial zone enterprise from
business permitted within the zone is exempt from corporate profit tax, while property
within such a zone is exempt from property tax for an indefinite period. Simplified
procedures for obtaining licences and permits apply, for example, for the issuance of a
construction permit. While the Working Group received reassurance from the Government
that all human rights standards, including labour rights, fully apply in free industrial zones,
20
16
Office of the Public Defender of Georgia, “National baseline study on business and human rights”
(2018), p. 229.
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