A/HRC/32/45 I. Introduction A. Background, aims and outline of the report 1. In the present report, the Working Group on the issue of human rights and transnational corporations and other business enterprises examines the duty of States to protect against human rights abuses involving those business enterprises that they own or control, which are generally referred to as State-owned enterprises. 2. The starting point for the present discussion is the Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework.1 Since their unanimous endorsement by the Human Rights Council in 2011, the Guiding Principles have become the authoritative global reference for preventing and addressing adverse human rights impacts arising from business-related activity, including by State-owned enterprises. Guiding principle 4 provides that States should take “additional” steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, as well as by other entities such as export credit agencies that are seen as being closely associated with the State. Guiding principle 4 does not, however, clarify what these steps might be. 3. Why are States explicitly expected to take additional action to protect against human rights abuses by State-owned enterprises? Is it not sufficient that States are required to take appropriate steps to ensure that all companies, irrespective of structure and ownership, respect human rights? And what are the normative, policy and practical implications of guiding principle 4? These are some of the questions that the present report will address. 4. The Working Group considers that it is important to clarify the particular duties of States with respect to the enterprises that they own or control. This goes to the core of how a State should behave in its role as owner of companies and the ways in which its ownership model is aligned with its international human rights obligations. In the present report, the Working Group will highlight the compelling reasons why States should take additional action in this regard, including policy coherence, legal obligations, reputation and credibility. 5. The Working Group notes a general lack of attention, in practice, on the part of States and other actors to the implications of guiding principle 4 with respect to Stateowned enterprises. Policies, guidelines and good practices are lacking at both the national and international levels. Governance and protection gaps exist, which must be addressed. 6. Thus, the present report has two objectives: first, to call attention to and clarify what States are expected to do under the Guiding Principles regarding the enterprises that they own or control and why; and second, to help States to better implement the Guiding Principles by suggesting a range of measures that they could take to operationalize the requirement of additional steps to ensure that State-owned enterprises respect human rights. 7. Section I of the report discusses the state of play of State-owned enterprises, their definitions and the scope of the report. Section II discusses the normative and policy implications of guiding principle 4 and the reasons behind the call on States to take additional steps. Section III highlights a range of measures that States could and should take to operationalize the call to take additional steps. The report ends with concrete recommendations to States and other stakeholders. 1 See A/HRC/17/31, annex. 3