A/HRC/34/47
D.
Panel IV. Open debate on different approaches and criteria for the
future definition of the scope of the international legally binding
instrument
93.
The first panellist argued that the changing character of transnational corporations
made it difficult to define them. While he cited the pragmatic approach of the OECD
guidelines, he considered that a precise definition of transnational corporations or other
business enterprises was not required. According to UNCTAD, from a universe of 200
million enterprises registered worldwide, only 3,200 had operations of a transnational
character, accounting for less than 1 per cent of all enterprises. According to OECD, the
remaining 99 per cent were domestic small and medium-sized enterprises. Thus
transnational corporations were clearly a distinct group within the universe of business
enterprises. The treaty should be complementary to the Guiding Principles, committing
States, transnational corporations and other business enterprises to put the principles into
practice, with a view to, among other things, supporting the implementation of the
Sustainable Development Goals and creating new models of business and investment.
94.
The second panellist, referring to a call for the treaty to cover all businesses, recalled
that the scope used for certain national and regional laws was much more narrowly defined,
citing, for example, the draft law on duty of care in France and the non-financial reporting
initiative of the European Union, which covered only companies with over 500 employees.
Nevertheless, the priority focus of the treaty should be on transnational corporations,
applying to all their subsidiaries and business relationships, as well as to all the companies
in their global supply chains, including subcontractors and financers, and eventually to all
companies that perpetrated, or were complicit in, human rights violations. Many
transnational corporations were more wealthy and powerful than the States trying to
regulate them. They could influence judicial institutions or block binding regulation
through heavy lobbying, or simply relocate to other countries, leaving victims without
redress. The panellist defended the need to address the role of public finance and foreign
investment, as well as investor-State dispute settlement proceedings.
95.
The third panellist made reference to the Guiding Principles as a step in the right
direction. However, he deplored the fact that they were voluntary, including with respect to
issues such as the obligation of transnational corporations to pay their fair share of taxes,
which could be interpreted as part of due diligence, but nevertheless was not included in the
Guiding Principles. With respect to promoting the right of access to information, the
panellist recalled his recommendation to the General Assembly for States to provide
protection for whistle-blowers. He also invited States to put teeth in the Guiding Principles,
to develop monitoring mechanisms and to prohibit aggressive tax avoidance and tax
havens, in order to ensure transparency and accountability.
96.
The fourth panellist recalled OECD and ILO efforts to define transnational
corporations; the subjective scope of the treaty was clearly defined in the footnote in
resolution 26/9. He criticized the arguments against such a footnote, quoting the common
practice in the jurisprudence of the World Trade Organization and other frameworks that
assigned footnotes the same legal weight as the paragraphs of an instrument, resolution or
decision. He posited that focusing the treaty on transnational corporations would not entail
any discrimination, as local companies were already subject to regulation and did not have
the possibility to evade their responsibilities in the same way as transnational corporations.
In terms of which human rights should be included, he had observed an emerging
consensus around the core human rights covenants and the need to ensure broad coverage.
97.
The fifth panellist claimed that the Guiding Principles did not provide robust
remedies in cases of human rights abuses by transnational corporations, and mentioned the
plurilateral agreements of the World Trade Organization as an example of relevant
16
Select target paragraph3
Connect to a paragraph
Connect to an entity
Disable highlights
Add to table of contents