Ref. Ares(2018)4886443 - 24/09/2018
EU Position Paper on a Legally Binding instrument on Business and Human Rights
Objective
1. Following up on the Non-Paper on business and human rights presented to COHOM
in March 2016 (024/16), this document aims to help prepare the EU's position on a
potential draft treaty that will be discussed at the open ended intergovernmental
group on transnational corporations and other business enterprises with respect to
human rights” (OEIWG) which will meet on 23-24 October.
Background/State of Play
3. The EU is committed to making progress on the issue of human rights and business
and is a strong supporter of the UNGPs endorsed by Consensus by the Human Rights
Council in 2011. The EU has supported and engaged with the UN Working Group on
Business and Human Rights which is tasked with promoting the effective
implementation of the UNGPs.
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EU position on any potential draft – General Principles
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A good story to tell that could help the treaty process…
12. The EU has been increasingly active in the area of business and human rights by
adopting strategies, policies, guidance and legislation. The EU and MS are also
strongly committed to the implementation of the UNGPs, as well as other
instruments such as the 2016 Council of Europe Recommendation on human rights
and business.
13. As a sign of this commitment, in June 2016, EU MS adopted Council Conclusions on
human rights and business outlining clear steps towards the implementation of the
UNGPs. At present, 13 EU Member States have adopted national action plans on
human rights and business.3
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14. In 2015, the European Commission published A Commission Staff Working Document
on implementing the UN Guiding Principles on Business and Human Rights. This
comprehensive document outlines the different internal and external initiatives and
legislative framework on this issue4. Some examples include:
Guiding material to companies adopted in 2013 outlining the responsibility of
business to respect human rights in three key business sectors (employment and
recruitment agencies, ICT companies, and oil and gas companies)5. The Sector
Guides are consistent with the UNGPs and take account of the experience of EU
companies, but aim to be as globally applicable as possible. A separate guide was
elaborated to help SMEs translate human rights in their operations6.
Accounting Directive on non-financial information disclosure: the Council
adopted a proposal in September 2014 according to which companies with more
than 500 employees will be required to disclose certain non-financial information
in their management reports. The Directive leaves significant flexibility for
companies to disclose relevant information in the way that they consider most
useful, or in a separate report. Companies will need to disclose information on
policies, risks and outcomes as regards environmental matters, social and
employee-related aspects, respect for human rights, anti-corruption and bribery
issues, and diversity in their board of directors. The scope includes approximately
6,000 large companies and groups across the EU. MS will have two years to
transpose the Directive into national legislation. Companies will start reporting in
2017.
Public Procurement: The new EU Directives on public procurement and
concessions (Directives 2014/24/EU, 2014/25/EU and Directive 2014/23/EU),
which have been ratified by MS and were adopted on 26 February 2014, have to
be transposed into national law by Member States at the latest by 18 April 2016.
They allow public authorities to take social, labour and environmental concerns
into account in the award decisions, exclusion grounds, rejection of a tender and
conditions for the performance of contracts. These new Directives cover all HR
aspects relevant for public procurement and now include child labour and human
trafficking.
Country-by-country reporting (Directive 2013/34/EU on the annual financial
statements, consolidated financial statements and related reports of certain
types of undertakings): to enhance transparency in the sensitive oil, gas, mining
and forestry sectors, the European Union adopted in June 2013 a Directive
according to which companies in these sectors are obliged to report payments of
more than €100,000 made to the government in the country in which they
4 SWD(2015) 144 final
5 https://ec.europa.eu/anti-trafficking/publications/european-commission-sector-guides-implementing-un-guiding-
principles-business-and-hum-0_en
6 https://business-humanrights.org/sites/default/files/documents/SME-BHR-guide-EU.pdf
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operate, including taxes levied on their income, production or profits, royalties,
and license fees.
Access to EU courts if human rights violations occur outside the EU: The Brussels I
Regulation establishes rules regulating the allocation of jurisdiction in civil or
commercial disputes of a cross border nature, including civil liability disputes
concerning the violation of HR. The Regulation ensures the recognition and
enforcement of judgements among MS, and means that a person domiciled in a
MS can generally be sued in the courts of that MS. Opens up the possibility of EU-
based transnational corporations being sued for violations of HR committed
abroad.
When a court in a MS has jurisdiction in a case with a cross-border element, it has
to determine which country's law is applicable to the dispute. Related rules have
been harmonised at EU level by Rome I Regulation for contractual obligations and
by Rome II Regulation for non-contractual obligations. The case of four Nigerian
farmers against Royal Dutch Shell, which is currently heard in the Netherlands, is
an example of the application of these EU provisions.
Externally, business and Human Rights is also one of the priorities of the
2015/2019 EU Action Plan on Human Rights and Democracy. The main priorities
in this area: 1) increased role (and training) of DELs to promote actively B&HR
around the world; 2) Increased seminar and awareness-raising activities with
Third countries on top of regular HR dialogues; 3) co-ordination with COM work
(including domestic EU strategy) on SCR and Business rights; 4) continued work
on NAPs, both at EU level in our external policy.
As for EU External action, in addition to commitments to respect core labour
standards and Conventions, all EU’s recent Trade and Sustainable Development
Chapters (TSD) in EU trade agreements contain provisions on internationally
agreed principles and guidelines on CSR, including the OECD Guidelines for
Multinational Enterprises, the UN Global Compact and the ILO Tripartite
Declaration of Principles concerning Multinational Enterprises and social policy.
At bilateral levels, the EU is increasingly discussing and exchanging experience on
Business and Human Rights in EU human rights dialogues and dedicated seminars
and workshops with a number of partner countries. This has been the case with
China, South Africa, or Brazil to list a few. The EU has also established a strong
partnership with the African Union (AU), and is financing a project to support the
AU to develop a framework to implement the UNGPs. Support is also being given
to the development of national Action Plans in CELAC countries.
15. Technical support is also provided by the European Instrument for Democracy and
Human Rights.
Conclusion
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