A/HRC/43/55
character”. Another delegation proposed expanding the definition to include “economic or
other activity”.
37.
Several delegations and non-governmental organizations called for careful
consideration of the definition of the term “contractual relationship” in article 1 (4). In the
view of some, there was a danger that the term could be interpreted narrowly, excluding
certain relevant relationships (e.g., equity-based relationships). Many delegations and nongovernmental organizations recommended replacing the phrase with “business relationship”,
as contained in the Guiding Principles on Business and Human Rights, while another
proposed “economic relationship”. Another delegation warned that that definition was
already too broad and could inappropriately extend legal responsibility.
38.
Some delegations had differing views as to whether article 1 (5) was necessary, with
one asking for its removal, another asking for more clarification, and another asking for the
definition to be expanded.
39.
At least one delegation and one non-governmental organization recommended that
article 2 be moved from the operative part of the legally binding instrument to the preamble.
Other delegations welcomed article 2, but thought the language could be brought more into
line with that used in Council resolution 26/9, or that the article should go beyond the scope
of the Guiding Principles on Business and Human Rights by creating positive, justiciable
obligations for transnational corporations and other business enterprises.
B.
Articles 3 and 4
40.
The Chair-Rapporteur noted that, in order to strengthen the protection of human rights
throughout global supply chains, and in response to the requests of several States and other
relevant stakeholders, the scope of the instrument, as covered in article 3, had been expanded
to cover all business activities, including, inter alia, those of a transnational character, and all
human rights. Article 4 reaffirmed and clarified victims’ minimal procedural rights and
States’ existing obligations with regard to access to justice. He highlighted the fact that article
4 now included provisions on the protection of human rights defenders, gender-sensitive
support services, non-judicial grievance mechanisms and the reversal of the burden of proof.
41.
Delegations had differing views on the scope covered in article 3. Several argued that
the scope of article 3 (1) was much too broad since it covered more than just transnational
corporations. In their view, the focus of the legally binding instrument should be limited to
the specific terms used in Council resolution 26/9, which referred to transnational
corporations and other business enterprises that had a transnational character in their
operational activities. However, several other delegations and organizations welcomed the
expanded scope, with some thanking the Chair-Rapporteur for addressing one of their major
concerns with the zero draft. In their view, a distinction between transnational corporations
and other business enterprises would be difficult to maintain in practice. Moreover, it would
create gaps in the coverage of the legally binding instrument as corporate structures could be
created so as to avoid falling within the scope of the instrument. Furthermore, it was
immaterial to persons affected by business activities whether the entity that had harmed them
was a transnational or a domestic company. One delegation suggested removing the reference
in article 3 (1) to business activities of a transnational character and another proposed
emphasizing that the scope apply to business activities “regardless of their size, sector,
operational context, ownership and structure”. However, other delegations and at least one
non-governmental organization argued that it would be beneficial to retain a focus on
transnational corporations even if the legally binding instrument applied to all business
activities. Some delegations and organizations also requested that article 3 (1) more clearly
address State-owned enterprises, development finance institutions and the role of parent
companies.
42.
Some delegations questioned the necessity of article 3 (2), given the expanded scope
of the legally binding instrument, while others proposed moving the provision into article 1
on definitions. One delegation noted that the reference to “any contractual relationship” in
article 3 (2) (b) was limiting. Another found the references in the same provision to
“direction”, “control” and “designing” to be problematic. Several delegations sought
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