Draft 25 OCT 2015

BRIEFING PAPER FOR CONSULTATION:

Extraterritorial Obligations

Marcos Orellana

for the ESCR-Net & FIDH Joint Treaty Initiative Project

  1. Context

In June 2014the Human Rights Council adopted resolution 26/9, establishing an Open-ended Intergovernmental Working Group (OEIWG) to produce, “a legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises.”[1]The first session of the OEIWG was held in Geneva from July 6-10, 2015.

The purpose of the first two sessions of the OEIWGis to conduct“constructive deliberations on the content, scope, nature and form of the future international instrument.”[2] This document outlinesan important item of content to be included in the legally binding instrument: the extraterritorial obligation(ETO) of States to protect human rights.

  1. Extraterritorial Obligations to Protect

The State's obligation to protect human rights from interference by private parties, including business enterprises, is widely recognized in international human rights law. The extraterritorial dimension of this obligation, however, remains contested by a few States. ETOs have been generally conceptualized in human rights law as “the human rights obligations of Governments toward people living outside of its own territory.”[3] While the application of ETOs to transnational corporations (TNCs) and other business enterprises is supported by the opinions of international tribunals, treaty bodies, and U.N. Special Procedures, serious gaps currently remain as to their effective implementation. For this reason, the discussions at the OEIWG are addressing whether and how an international legally binding instrument on TNCs and human rights can effectively address ETOs.

  1. Current State of Play of ETOs under International Law

With regard to ETOs, the Guiding Principles on Business and Human Rights,[4]concluded: “At present, states are not generally required under international human rights law to regulate the extra-territorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a jurisdictional basis.”[5]

This conclusion, however,has been criticized on the grounds that it does not accurately reflect the opinions of U.N. treaty bodies and special mandate holders regarding ETOs. Many U.N. treaty bodies and special procedures hold that States are bound by ETOs to protect human rights with respect to business activity.

III.i. Opinions of U.N. Treaty Bodies

Treaty bodies overseeing compliance and implementation of their respect human rights instruments have addressed ETOs in their general comments outlining their interpretation of their respective instruments, as well as in concluding observations regarding the examination of particular States. The following is an illustrative list of opinions of UN Treaty Bodies.

The Committee on the Rights of the Child (CRC) has explicitly stated that “home States have [human rights] obligations . . . in the context of businesses’ extraterritorial activities and operations, provided that there is a reasonable link between the State and the conduct concerned.”[6] According to the CRC, said ‘reasonable link’ exists where “a business enterprise has its centre of activity, is registered or domiciled, or has its main place of business or substantial business activities in the State concerned.”[7]

The Committee for Economic, Social and Cultural Rights (CESCR) has expressed the obligation of States Parties to the International Covenant on Economic, Social and Cultural Rights (ICESCR) “to ensure that all economic, social and cultural rights laid down in the Covenant are fully respected and rights holders adequately protected in the context of corporate activities.”[8]In elaborating on this obligation, the CESCR has stated that “States Parties should take steps to prevent human rights contraventions abroad by corporations which have their main seat under their jurisdiction, without infringing the sovereignty or diminishing the obligations of the host States under the Covenant.”[9]

The Human Rights Committee has stated that “a State party must respect and ensure the rights laid down in the [International Covenant on Civil and Political Rights] to anyone within the power or effective control of that State Party, even if not situated within the territory of the State Party.”[10]

The Committee Against Torture (CAT) has similarly stated that States should regulate “in all areas where the State party exercises, directly or indirectly, in whole or in part, de jure or de facto effective control, in accordance with international law.”[11]

III.ii. Special Procedures of the Human Rights Council

The Special Procedures of the Human Rights Council, which have the mandate of reporting and advising on human rights from a thematic or country-specific perspective, have likewise expressed support for the application of ETOs.

The Special Rapporteur on the Right to Food in 2006 acknowledged that, “The extraterritorial obligation to protect the right to food requires States to ensure that third parties subject to their jurisdiction (such as their own citizens or transnational corporations), do not violate the right to food of people living in other countries.”[12] In 2013, the Special Rapporteur explicitly stated that, “the duties associated with the right to food extend to all situations, whether located on a State’s national territory or abroad, over which a State may exercise influence without infringing on the sovereignty of the territorial State.”[13]

Special Rapporteur on Extreme Poverty and Human Rights stated in a 2014 report: “As part of international cooperation and assistance, States have an obligation to respect and protect the enjoyment of human rights everywhere, which involves avoiding conduct that would foreseeably risk impairing the enjoyment of human rights by persons beyond their borders, and conducting assessments of the extraterritorial impact of laws, policies and practices.”[14]

The Independent Expert on the Issue of Human Rights Obligations Relating to the Enjoyment of a Safe, Clean, Healthy and Sustainable Environment has stated: “Although work remains to be done to clarify the content of extraterritorial human rights obligations pertaining to the environment, the lack of complete clarity should not obscure a basic point: States have an obligation of international cooperation with respect to human rights.”[15]

  1. Possible Tests for Invoking the Extraterritorial Obligation to Protect

International human rights law, as seen in thework of special procedures mandate holders as well as the treaty bodies, reveals threepossible tests for determining the circumstances under whichthe extraterritorial obligations to protect may be invoked:

1)Effective Control Test:This test establishesan ETO to protect where the State exerts ‘effective control’ over the private parties or their operations. Under this narrow test, States only have an ETO to protect when the control over the private actors by the State is such that the private actor may be equated with an organ of the government or as acting on behalf of the government.[16]

2)Decisive Influence Test:This test imposes an ETO to protectwhen the State exerts ‘decisive influence’ over the private parties or their operations. A State may be said to have ‘decisive influence’ over a private actor when the existence of the private organization or its activities are dependent upon the State’s support. This support may be economic, financial, political, military, etc.[17] This test is particularly relevant in the context of business and human rights in light of the relationship that States have vis-à-vis their TNCs. Home-States often provide economic, financial, political, and other forms of support for TNC activities abroad, for example in the form of diplomatic efforts, negotiation and ratification of investment agreements, and political influence in international financial institutions. Further, home-States enable TNCs’ legal existence and exert control and influence over TNCs through their own domestic corporate law.

3)Reasonable Link Test. A broader test than the other two outlined above, this test imposes anETO to protect on a State if there is a ‘reasonable link’ between the State and the conduct of the private actors. A ‘reasonable link’ may be said to exist where the private actor, e.g., a business enterprise, has its center of activity, is registered or domiciled, or if the private actor carries out substantial activity in the State concerned.[18]

  1. The Maastricht Principles on the Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights

Each of the above standards has been incorporated into the Maastricht Principles on the Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights,[19]which is an instrument drafted by a group of world-renowned experts in international and human rights law to articulate the current state of international law regarding ETOs.

The Maastricht Principles comprehensively lay out the content and scope of ETOs as reflected in international human rights law, andas such provide a legal basis for the codification of ETOs in an internationally legally binding instrument.

V.i. Definition of ETOs under the Maastricht Principles

Maastricht Principle 8 defines two types of obligations as extraterritorial. The first type includes obligations relating to the acts and omissions of a State, within or beyond its territory, that have effects on the enjoyment of human rights outside of that State’s territory.[20] The second type includes obligations of a global character, as set out in the Charter of the United Nations and in human rights instruments, to take action separately and jointly through international cooperation, to realize human rights universally.[21]

V.ii. Scope of ETOs under the Maastricht Principles

Maastricht Principle 9 provides that these ETOs are triggered in three jurisdictional situations.

  1. First, the State has ETOs in situations over which the State exercises authority or effective control, whether or not such control is exercised in accordance with international law.[22]
  2. Second, the State has ETOs in situations over which State acts or omissions bring about foreseeable effects on the enjoyment of rights, whether within or outside its territory.[23] The obligation of a State in this situation would arise where State authorities knew or should have known that the presence or conduct of TNCs in a particular location would bring about substantial human rights abuses there.[24]
  3. Third, the State has ETOs in situations in which the State, acting separately or jointly, whether through its executive, legislative, or judicial branches, is in a position to exercise decisive influence or to take measures to realize economic, social and cultural rights extraterritorially, in accordance with international law.[25]

Maastricht Principle 10 sets out limitations on the scope of extraterritorial jurisdiction, providing that a State’s obligation to respect, protect, and fulfil extraterritorially does not authorize a State to act in violation of the U.N. Charter or general international law.[26]

V.iii. Extraterritorial Obligation to Protect under the Maastricht Principles

The Maastricht Principles comprehensively lay out the content and scope of ETOs as reflected in international human rights law, thereby providing the legal basis for the operationalization of ETOs with respect to all human rights.

Maastricht Principle 24 provides that “All States must take necessary measures to ensure that non-State actors which they are in a position to regulate, . . . such as private individuals and organizations, and transnational corporations and other business enterprises, do not nullify or impair the enjoyment of economic, social, and cultural rights.”[27] These measures include administrative, legislative, investigative, adjudicatory and other measures.[28]

Maastricht Principle 25 prescribes the circumstances which elicit ETOs. Under Principle 25, “States must adopt and enforce measures to protect” in circumstances where “the harm or threat of harm originates or occurs on its territory;”[29] where “the non-State actor has the nationality of the State concerned;”[30] or where “any conduct impairing . . . rights constitutes a violation of a peremptory norm of international law.”[31]Principle 25 also includes the ‘reasonable link’ test, providing that states must adopt and enforce measures to protect “where there is a reasonable link between the State concerned and the conduct it seeks to regulate, including where relevant aspects of a non-State actor’s activities are carried out in that State’s territory.”[32] This Principle further elaborates that “where any conduct impairing . . . rights constitutes a crime under international law, States must exercise universal jurisdiction over those bearing a responsibility or lawfully transfer them to an appropriate jurisdiction.”[33]

Maastricht Principle 26 provides that if the State is “ina position to influence the conduct of non-State actors, even if they are not in a position to regulate such conduct, such as through their public procurement system or international diplomacy, [the State] should exercise such influence, in accordance with the Charter of the United Nations and general international law, in order to protect [human] rights.”[34] This is consistent with the principles of international cooperation set out in the U.N. Charter[35]

  1. Implications of ETOs for the Treaty on TNCs and Human Rights

Effective operationalization of ETOs under human rights law is critical to closing existing gaps of protection with regard to corporate accountability for human rights abuses. The articulation of ETOs in an internationally legally binding instrument on TNCs and other business enterprises with respect to human rights would also confront the structural imbalance apparent in the international legal order which privileges business interests above human rights protections.

  1. Options

Provided that the treaty on TNCs and Human Rights contemplates ETOs, one key question before the OEIWG concerns the tests under which ETOs may arise. In particular, the question whether a choice should be made from among the three tests described above,i.e., effective control, decisive influence or reasonable link, or whether ETO regulation should encompass all three tests, as articulated in the Maastricht Principles.

TO CONTRIBUTE COMMENTS ON THIS DRAFT PLEASE SEND CONTRIBUTIONS TO:

  • Marcos Orellana

Email Title: “Treaty Content Consultation: ETOs”

1

[1] H.R.C. Res. 26/9, Elaboration of an International Legally Binding Instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights, U.N. Doc. A/HRC/26/L.22/Rev.1 (June 25, 2014).

[2]Id.

[3] Jean Ziegler, Report of the Special Rapporteur on the Right to Food, ¶ 35, U.N. Doc. E/CN.4/2005/47 (Jan. 24, 2005).

[4] John Ruggie, Special Representative on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, U.N. Guiding Principles on Business and Human Rights: Implementing the Respect, Protect and Remedy Framework, U.N. Doc. A/HRC/17/31 (March 21, 2011) [hereinafter U.N. Guiding Principles].

[5]Id., ¶ 2 cmt.

[6] Comm. On Rights of the Child [CRC], General Comment No. 16 on State Obligations Regarding the Impact of the Business Sector on Children’s Rights, U.N. Doc.CRC/C/GC/16 (April 17, 2013), ¶ 43.

[7]Id.

[8] UN Committee on Economic, Social and Cultural Rights [CESCR], Statement on the Obligations of States Parties Regarding the Corporate Sector and Economic, Social, and Cultural Rights, ¶ 1, U.N. Doc. E/C.12/2011/1 (July 12, 2011).

[9]Id.,¶ 5.

[10] Human Rights Committee, General Comment No. 31: Nature of the General Legal Obligation on States Parties to the Covenant, ¶ 10, U.N. Doc. CCPR/C/21/Rev.1/Add.13 (2004).

[11] Committee Against Torture [CAT], General Comment No. 2: Implementation of Article 2 by States Parties, ¶ 16, CAT/C/GC/2 (Nov. 23, 2007).

[12] Jean Ziegler, Rep. of the Special Rapporteur on the Right to Food, ¶ 36, U.N. Doc. E/CN.4/2006/44 (March 16, 2006).

[13] Olivier De Schutter, Right to Food:Interim Rep. of the Special Rapporteur on the Right to Food, ¶ 9, U.N. Doc. A/68/288 (Aug. 7, 2013).

[14] Magdalena Sepulveda Carmona, Rep. of the Special Rapporteur on Extreme Poverty and Human Rights, ¶ 30, U.N. Doc. A/HRC/26/28 (May 22, 2014). Specifically, the Special Rapporteur has applied the ETO to tax evasion, stating that States should take “concerted and coordinated measures against tax evasion globally as part of their domestic and extraterritorial human rights obligations and their duty to protect people from human rights violations by third parties, including business enterprises.” Id. ¶ 62.

[15] John Knox, Rep. of the Independent Expert on the Issue of Human Rights Obligations Relating to the Enjoyment of a Safe, Clean, Healthy and Sustainable Environment [Mapping Report], ¶ 67, U.N. Doc. A/HRC/25/53 (30 Dec. 2013).

[16]See Military and Paramilitary Activities in and Against Nicaragua (Nicar. v. U.S.), 1986 I.C.J. 14, 181 (June 27), ¶VII.4.

[17]See Ilascu & Others v. Moldova and Russia, 2004-VII Eur. Ct. H.R. 179 (July 8), ¶ 392; Application of the Convention on the Prevention and Punishment of the Crime of Genocide (Bosn. & Herz. v. Serb. & Montenegro), 2007 I.C.J. 43 (Feb. 26), ¶ 435.

[18]See Comm. On Rights of the Child [CRC], General Comment No. 16 on State Obligations Regarding the Impact of the Business Sector on Children’s Rights, U.N. Doc.CRC/C/GC/16 (April 17, 2013), ¶ 43.

[19] Maastricht Principles on Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights, 29 NETH. Q. HUMAN RIGHTS 578 (2011), [hereinafter Maastricht Principles] available at

[20]Id., ¶ 8(a).

[21]Id., ¶ 8(b).

[22]Id., ¶ 9(a).

[23]Id., ¶ 9(b).

[24]See Olivier De Schutter, Asbjørn Eide, Ashfaq Khalfan, Marcos Orellana, Margot Salomon, & Ian Seiderman, Commentary to the Maastricht Principles on Extraterritorial Obligations of States in the Area of Economic, Social and Cultural Rights, 34 Human Rights Q. 1084, 1136 (2012).

[25] Maastricht Principles, supra note 19, ¶ 9(c).

[26]Id. ¶ 10.

[27] Maastricht Principles, supra note 19, ¶ 24.

[28]Id.

[29]Id., ¶ 25(a).

[30]Id., ¶ 25(b).

[31]Id., ¶ 25(e).

[32]Id., ¶ 25(d).

[33]Id., ¶ 25(e).

[34]Id., ¶ 26.

[35]See U.N. Charter arts. 55, 56.