Business and human rights: States’ duties don’t end at
the national borders
GENEVA (23 June 2017) – States should control
corporations across national borders to protect communities from the negative
impacts of their activities, UN human rights experts have said in an
authoritative new guidance * on the Obligations of States parties to the
International Covenant on Economic, Social and Cultural Rights (CESCR) in the
context of business activities.
“States should regulate corporations that are domiciled
in their territory and/or jurisdiction. This refers to corporations which have
their statutory seat, central administration or principal place of business on
their national territory,” the experts of the UN Committee on Economic, Social
and Cultural rights say in the guidance*, officially termed the General
Comment, published today.
In practice, the Committee expects home States of
transnational corporations to establish appropriate remedies, guaranteeing
effective access to justice for victims of business-related human rights abuses
when more than one country is involved.
In light of the practices revealed by the Panama Papers
and the Bahamas Leaks, the General Comment emphasizes that States should ensure
corporate strategies do not undermine their efforts to fully realize the rights
set out in the Covenant.
"To combat abusive tax practices by transnational
corporations, States should combat transfer pricing practices and deepen
international tax cooperation,” the guidance states.
“Lowering the rates of corporate taxes with a sole view
to attracting investors encourages a race to the bottom that ultimately
undermines the ability of all States to mobilize resources domestically to
realize Covenant rights.”
"This practice is inconsistent with the duties of
the States parties to the Covenant. Providing excessive protection to bank
secrecy and permissive rules on corporate tax may affect the ability of States
where economic activities are taking place to mobilize the maximum available
resources for the implementation of economic, social and cultural rights.”
The new General Comment sets out what States can and must
do in order to ensure that companies do not violate rights such as the right to
food, housing, health or work, which the States themselves are bound to
respect.
“If States take seriously their duties to ensure
businesses comply with economic, social and cultural rights, markets can
gradually contribute to the aims of the Covenant. They will be more sustainable
and move societies in the right direction. Communities will also be better
protected from the negative impacts of corporate activities where they have had
the most damaging consequences, such as in the extractive industry,” said
Virginia Bràs Gomes, Chairperson of the UN Committee on Economic, Social and
Cultural rights.
The Co-Rapporteur of the General Comment, Olivier de
Schutter, emphasized: “Businesses cannot ignore that the expectations of
society are changing. The first ones to change shall be rewarded by consumers,
whose purchasing choices are increasingly driven by immaterial aspects — the
reputation of the company, and the ethical and sustainability dimensions
associated with its products.”
The experts highlighted that the issue of business and
human rights had been addressed recently in different forums, including the
Human Rights Council and the International Labour Conference, and through a
combination of tools — regulations, self-imposed codes of conduct, economic
incentives and action plans.
“These initiatives show how the field is fast-growing,
and this is welcome. It entails the risk, however, that States lose sight of
what is obligatory, as opposed to what is simply recommended as a good
practice,” added Zdzislaw Kedzia, the Vice-Chair of the UN Committee on
Economic, Social and Cultural rights.
“It also may be tempting for States to seek refuge behind
the initiatives taken by the corporate sector, rather than adopting the
appropriate regulatory and policy initiatives that they must adopt. Our General
Comment seeks to recall their obligations under the Covenant and define the
role they must assume in regulating corporate conduct.”
ENDS
For media requests please contact:
Nicoleta Panta, +41(0) 22 9179310/npanta@ohchr.org
Background
* The General Comment provides guidance for the 165
States parties to the Covenant and defines their duties based on the experience
gained by the Committee in the examination of State reports since 30
years.
The adoption of the General Comment followed a widespread
consultation with States, academic research institutes and civil society
organisations, as well as international organisations such as the Council of
Europe and the International Labour Organisation.
Read the General Comment here.
Members of the Committee on Economic, Social and Cultural
Rights are independent human rights experts drawn from around the world, who
serve in their personal capacity and not as representatives of States parties.
The Committee’s concluding observations are an independent assessment of
States’ compliance with their human rights obligations under the treaty. More
information:
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