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2017 could be the year that brings us a binding international treaty on the respect of human rights by transnational corporations and other business enterprises. It would, logically, take priority over other bilateral or multilateral trade agreements because it would set out the minimum conditions to be met.

Given the contractual power of the multinationals and the control they exert over the value chains, this prospective treaty that regulates and sanctions their behaviour is needed more than ever. These corporations wield disproportionate economic power compared to the weakness of states, whose governments have succumbed to the power of the multinationals. This can be clearly seen from the pre-eminence of investment and free trade treaties with their dispute settlement mechanisms, over the contractual capacity of citizens or states and by the limited acknowledgement of the serious problems affecting the environment and degrading social and labour conditions on the production chain, with no-one accepting responsibility. There is an urgent need to restore balance between the different sides.

The build up to this treaty has been rapid, in terms of the diplomatic calendar. It became the subject of international debate in 2013 and in 2014 resolution A/HRC/RES/26/9, co-sponsored by Ecuador and South Africa, was approved at the United Nations Human Rights Council, agreeing to the creation of an inter-governmental working group on the elaboration of an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights.

Ecuador’s initiative to introduce a treaty affecting transnational corporations was supported by a number of countries with few or no multinationals and has been making steady progress since 2014. In accordance with the resolution a Working Group was set up and met in 2015 and in October 2016, with hearings involving interest groups, including NGOs such as the Transnational Institute chaired by Susan George, the International Trade Union Confederation, business leaders and UN agencies such as the International Labour Organisation.

The European Union finally joined the discussion, together with 80 states, after initially refusing to do so, accepting two elements that had been easily accepted and taken on board by the other states, once it had overcome its initial opposition driven by the employers’ lobby. The treaty covered not only transnational corporations but also ‘other business enterprises’, so that it would encompass local enterprises and others, regardless of the shareholders’ ownership. The other element was that until the prospective treaty came into force, the UN’s (voluntary) Guiding Principles on Business and Human Rights (2011), drawn up by Professor John Ruggie within the framework of corporate social responsibility, would apply.

There was an attempt in Spain in 2013 to come up with a Plan for Human Rights and Business, mainly regarding cooperation, but also covering the investment behaviour of Spanish businesses abroad. No agreement was reached however owing to disagreements between business and the rest, resulting in a watered down draft that has not even been approved by the government to date. Like the European Union, the Spanish government is dragging its feet on this, hence the need for all other interested parties, the trade unions, business and other organisations to give some positive impetus to the discussion and contribute their grain of sand to moving forward with this tool.

Alfred de Zayas, a US citizen and a UN international expert said in his report on the promotion of a democratic and equitable international order that self-regulation had simply never worked, and that voluntary guidelines for transnational corporations had their limits, which was why binding standards were needed, with national and international controls.

If this binding treaty comes into force and is not watered down for the sake of a sterile consensus, its very existence will have a preventive effect on the violation of standards because the treaty will have to contain provisions to monitor and investigate behaviour, and ensure effective reparation and compensation for the victims of bad practices by business. The authority or mechanism that will be set up to decide whether there has been a violation of human rights will also have to have extraterritorial powers to be able to judge this behaviour, regardless of where the events took place or where the transnational is based. The treaty will enable access to justice, will set out the rules of international trade and will serve to regulate globalisation.

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