A/HRC/43/55 Annex III Summary of statements by experts Negotiation of the revised draft legally binding instrument A. Preamble and articles 1 and 2 1. The first expert discussed the distinction between “violation” (which refers to a State breach of an obligation) and “abuse” (which can refer to business conduct). The International Law Commission has already clarified the concept of violation, though the expert noted a need for further reflection on what constitutes “abuse” and the standards applicable thereto. He also called for clarification on the relationship between “harm” and the concepts of “violation” and “abuse”, as there could be instances where a violation or abuse occurs without there necessarily being harm. With respect to article 2, the expert noted it was unusual for there to be an article stating the purposes of an instrument in human rights treaties, though this could be found in other types of treaties. He asked the working group to consider moving the contents of article 2 to the preamble. 2. Recognizing the enhanced alignment of the revised draft legally binding instrument with the Guiding Principles on Business and Human Rights, the second expert welcomed the draft as a strong basis for negotiations. He expressed concern at the lack of a gender perspective in the draft and suggested that prominent references to women, gender-based violence, discrimination and harassment be included in the text. He further proposed the inclusion of explicit references to climate change and to the Declaration on Human Rights Defenders in the preamble. Additionally, the second expert called for greater clarity about which entities were to be covered by the treaty and counselled for including State-owned enterprises, international organizations, development finance institutions as well as public procurement and export credit agencies. He also made suggestions to replace “victim” with “rights holder”, and “human rights violation or abuse” with “adverse human rights impact”. 3. The third expert noted that the notion of “contractual relationship” as defined in article 1 presented a non-exhaustive list of potential relationships that suits the dynamic and evolving nature of business activities. However, she expressed concern that the use of the word “contractual” could lead to a restrictive interpretation, narrowing the scope of the legally binding instrument. To ensure that other types of relationships beyond contractual are covered, she recommended the use of the phrase “business relationship”, which is the phrase used in the Guiding Principles on Business and Human Rights. B. Articles 3 and 4 4. The first expert welcomed the expanded scope found in article 3 (1), noting this was more in line with the Guiding Principles on Business and Human Rights, and questioned the necessity of defining “business activities” in article 1 (3) given this expansion. He called for greater precision in article 3 (3) as some States recognize different rights. Recognizing that individuals, communities and organizations could all be negatively affected by business activities, he recommended using the term “rights holder” instead of “victim” in article 4 (as well as throughout the legally binding instrument). Additionally, he called for the instrument to require States to strengthen both judicial and non-judicial mechanisms by vesting them with independence, suitable jurisdiction, adequate powers and necessary resources. 5. The second expert noted that, given the expanded scope provided for in article 3 (1), the description of business activity of a transnational character in article 3 (2) could cause confusion and questioned whether it needed to be retained. Instead, particular provisions within the instrument could address specific issues related to transnational activities. Pointing to the importance of considering the substance of a relationship over its form, he emphasized the need to avoid the possibility of corporations evading liability by changing their formal name or ownership. Finally, he welcomed article 4 (16) covering the reversal of the burden 24