PHM-Exch> Business and human rights: States’ duties don’t end at the national borders A new UN General Comment

[Claudio Schuftan]

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 at ohchr.org
<9179310/npanta at 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
<http://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=E/C.12/GC/24&Lang=en>
.

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:
http://www.ohchr.org/en/hrbodies/cescr/pages/cescrindex.aspx

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