Clifford Chance: businesses will face pressure to remedy human rights abuses

Large companies will come under increased pressure during 2017 to provide effective ‘remedies’ to victims of business-related human rights abuses, according to a report by magic circle law firm Clifford Chance.

The report, published this week, is based on an analysis of developing law, action by UN bodies, and legislative changes planned in key jurisdictions. It was co-authored with the Global Business Initiative on Human Rights.

Referencing the UN Guiding Principles on Business and Human Rights (UNGP), the report’s authors noted widespread adoption of ‘policies and due diligence processes aimed at respecting human rights’. But, they added: ‘Less progress has been made to implement the UNGP’s framework for victims of business-related human rights abuse. This so-called “forgotten pillar” will receive specific attention in 2017.’

Professor John Ruggie, architect of the principles, has described the ‘patchwork of mechanisms’ as ‘incomplete and flawed’. Measures to correct this are now accelerating, the report concluded.

Last year the UN’s Office of the High Commissioner for Human Rights issued guidelines for states detailing urgent areas for attention for member states. Guidelines demanded ‘domestic law tests for corporate legal liability’, ‘criminal sanctions’ and action on ‘financial obstacles for legal claims’.

An intergovernmental working group, established in October 2016, has made progress in developing ‘an international legally binding instrument to regulate, in international human right law, the activities of transnational corporations and other business enterprises’. 47 UN member states support its position.

In a separate development, eight EU member states are backing calls for legislative action on business and human rights to be taken by the European Commission.

Jurisprudence referenced as cross-border business liability for human rights abuses should receive close attention, the report said. Notable cases included Canadian cases Araya v Nevsun and Choc and others v Hudbay, and England and Wales case Lungowe v Vedanta.