the office of the united nations high …inclusion in its final report to the human rights council...

CONSULTATIONDRAFTFORSTAKEHOLDERFEEDBACK

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TheOfficeoftheUnitedNationsHighCommissionerforHumanRights

BusinessandHumanRights:

‘TheAccountabilityandRemedyProject’

CONSULTATIONDRAFT

ConsultationdraftoffinalguidancepreparedbyOHCHRforthepurposesofinclusioninitsfinalreporttotheHumanRightsCouncilpursuantto

A/HRC/Res/22/26,para.7

Writtencommentsonthisconsultationdraftshouldbeaddressedto

[email protected]+41229179008

Theclosingdateforwrittencommentsonthisconsultationdraftis

18March2016

TheOfficeoftheHighCommissionerforHumanRightsinvitescommentsfromallstakeholdersonthedraftguidancecontainedinthispaper.Stakeholdersare

particularlyinvitedtocommentonthefollowingquestions:

(i) DoyouagreewiththeelementsofgoodStatepracticesetoutinthisconsultationdocument?Ifnot,pleaseexplainwhynot.

(ii) WouldyouliketosuggestanyfurtherelementsofgoodStatepractice?(iii) Wouldyouliketosuggestany“illustrativeexamples”tobeincludedunder

anyoftheelementsofgoodStatepractice?

Forafullintroductiontothebackground,scopeandmethodologyoftheAccountabilityandRemedyProject,aswellasasummaryofhigh-levelfindings,

pleaserefertotheaccompanyingBackgroundPaper,availablevia:ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx


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AboutofthisconsultationpaperThis consultation document sets out draft guidance by the Office of the HighCommissionerforHumanRights(OHCHR)arisingfromthe‘AccountabilityandRemedyProject,’aprojectwhichaimstoenhanceaccountabilityandaccesstoremedyincasesofbusiness-relatedhumanrightsabuses,withaparticularfocusonthemostseverecasesofabuse.ThepurposeofthisdocumentistoinviteStatesandallrelevantstakeholderstoprovidecommentsonthedraftguidance.ThefinalversionoftheguidancewillbepresentedtotheHumanRightsCouncil,foritsconsiderationatitsthirty-secondsessioninJune2016,pursuanttoOHCHR’smandatefromtheCouncilinresolution26/22.TheguidanceinthisdocumentisaccompaniedbyaBackgroundPaper1,whichexplainsfurther the background, choice of scope, and methodology of the Accountability andRemedyProject,andprovidesfurthercontexttotheguidancecontainedinthisdocument.

StructureandformatofdraftguidanceandrecommendationsTheAccountabilityandRemedyProject(ARP)waslaunchedinNovember2014,infollow-uptoamandatefromtheHumanRightsCouncilandbuildingonpriorOHCHRresearchand consultations regarding challenges thatprevent victims frombeing able to accesseffectiveremediesinsituationswherebusinessesareinvolvedinhumanrightsabuses.TheARPcomprisessix‘ProjectComponents’,whichaddressdifferentareasidentifiedinresearch as preventing accountability and access to effective remedy, and for whichadditionalclarificationisneeded.TheseProjectComponentshavebeenselectedfortheirstrategic value and potential to enhance accountability and access to remedy from apractical,victim-centredperspectiveintheshorttomediumterm.ThedraftguidancecontainedinthisconsultationdocumentisstructuredaroundthesixProjectComponentsoftheARP.Theguidancehasbeendevelopedbasedonanextensiveresearchprocess,whichhasincludedinformationsubmittedbystakeholderswithrespectto60different jurisdictionsaroundtheworld.Theguidance isdesignedtohelpStatesadopt a more effective and comprehensive approach to judicial remedy andaccountabilityincasesofbusiness-relatedhumanrightsabuses,particularlyincasesofsevereabuses.Tothisend,theguidancetakesaccountofthedifferentlinkagesthatexistbetweendifferentchallenges.WhileeachProjectComponentaddressesaspecificsetofthemesandproblems,theguidancearisingfromthesixProjectComponentsaddsuptoacoherentwhole.Takentogetheritoffersapackageofoptionsthatcanbeimplementedinamannerthatisresponsivetolocalneeds,challengesandcontexts.The draft guidance largely takes the form of a series of “Policy Objectives” and“elementsof goodStatepractice”. ThePolicyObjectives andelementsof goodStatepracticeareidentifiedbasedonOHCHR’scomparativeresearchasexpressingthemesandobjectivesthatwouldberecognizableinmany,ifnotmost,domesticlegalsystems.InthereportpresentedtotheHumanRightsCouncil,theseelementsofgoodStatepracticewillbesupplementedandelaboratedthroughgeneralizedillustrativeexamplestakenfromOHCHR’sevidence-gatheringprocess.

1Availablevia:www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx


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However,forthepurposesofthisconsultation,thePolicyObjectivesandelementsofgoodState practice are presented without accompanying examples, in order to make theConsultationDraftassimpleandaccessibleaspossible.Itishopedthatwiththisformat,stakeholderswillbeabletomoreeasilyidentifyandcommentspecificallyontheactualguidancetoStatesmadeinthisdocument,i.e.thePolicyObjectivesandelementsofgoodState practice. Stakeholders are also invited to suggest potential illustrative examplesfromexistingStatepracticeaspartoftheircommentstothispaper.Recognizingthegreatvarietyoflegalstructures,cultures,traditions,resourcesandstagesofdevelopmentthatexist,theguidanceinthisreportisexpressedinawaythatrendersit readily adaptable to different kinds of domestic legal systems. The PolicyObjectivesandelementsofgoodStatepracticeexpressbroadobjectivesthatmaybemetindifferentlegalsystemsindifferentways,dependingonprevailinglocalstructuresandconditions.Thisguidancehasalsobeendesignedtoaccountofthefactthat,insomecases,solutionstoproblemsmaynotbe“humanrightsspecific”andmaynotbeaccomplishedwithoutmorewide-ranginglegalreforms.Theguidance isdesignedtobe“purpose-built” for thespecific issuesaddressedundereachProjectComponent.Thus, forProjectComponents1 and2, the elementsof goodStatepracticeareorganizedaccordingtobroaderPolicyObjectives,reflectingthepolicy-orientednatureoftheseissueareas,andtheirbroaderscopeandcomplexity.ForProjectComponents 3-6, the guidance focuses on elements of good State practice withoutorganizing Policy Objectives, as the Policy Objectives for these components are self-explanatory.Furthermore,whereastheguidanceforthevariousProjectComponentsislargely outcome-oriented, the guidance in relation to roles and responsibilities ofinterestedStatesincross-bordercases(ProjectComponent2)ismoreprocess-orientedinnature,inviewoftheneedforcooperationbetweenStatesaswellasdomesticactions.Theguidancealsovariesinthelevelofdetaildependingonthecomplexityoftheissuesthatitisdesignedtoaddress,andthespecificchallengesthatpreventaccesstoremedyuncoveredinOHCHR’sresearch.Note:FocusonseverehumanrightsabusesandapplicationofthisguidanceForthepurposesofcollectingreadilycomparabledata,OHCHR’sdata-gatheringprocessfortheAccountabilityandRemedyProjecthasfocussedon“severehumanrightsabuses.”Thischoice was made in view of time and resource constraints (including the timetable forreporting under the Human Rights Council resolution 26/22), the particular attentionwarrantedbytheseverityofsuchabusesforvictims,andtoensurethatOHCHR’sresearchresulted in directly comparable data and information from different legal systems.Consequently, information-gathering focussed on a defined set of categories of offences,abusesandharms,whicharefurtherdescribedintheBackgroundPaper.However, asbusiness enterprises canhavean impacton virtually the entire spectrumofinternationally-recognisedhumanrights,2therecommendationsandguidancethatappearin this reportaregenerallynot limited to “severe”humanrightsabuses.Nevertheless, insomecontexts(forinstanceincertaincross-bordercontexts,andinthecontextofpoliciesandpractices relating todomesticprosecutionofbusiness-relatedhumanrightsabuses),prioritizing severeabuses iswarranted,and thus theguidancenotes thisdistinction.Forfurtherinformationaboutthechoiceofscopeandthefocusonseverehumanrightsabusesininformation-gatheringandresearch,seetheexplanationintheBackgroundPaper.

2UNGuidingPrinciplesonBusinessandHumanRights,A/HRC/17/31,Principle12,Commentary.


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Draftguidance

1. ProjectComponent1:Domesticlawtestsforcorporatelegalliability3

ThiscomponentoftheAccountabilityandRemedyProjectaimedtoclarifyhowdifferentdomesticlegalsystemsattributeandassesscorporatelegalliabilityincasesofbusiness-relatedhumanrightsabuses,withaparticularfocusoncasesofsevereabuses.The lack of clear and coherent tests for corporate liability in many, if not most,jurisdictionsunderminestheusefulnessandeffectivenessofdomesticlegalregimes,both as a formof deterrence and as ameansof obtaining redress. Inmany cases thismeansthatStateagencies,victimsandtheirrepresentatives,andbusinessenterprises,lackaclearbasisfordecision-makingaboutappropriatelegalactionandresponses.Itfurthercangreatlycomplicateanddrawoutlegalproceedings,whichaddstothecostsand financial risks of litigation and prosecutions (see further Project Component 3,below).Finally, lackofclarityandcoherenceunderminesthelegalcertaintyneededforsound,sustainableandstableinvestmentandeconomicgrowth.BasedonthefindingsofOHCHR’sresearch,thissectionpresentsgoodpracticeguidanceforStatesinrelationtothefactorstotakeintoaccountinthejudicialdeterminationofcorporateliabilityincasesofbusinessinvolvementinhumanrightsabuses,particularlyincasesofsevereabuse.EmpiricalresearchcarriedoutbyOHCHRconfirmsthatthere isconsiderablediversityboth in the way different domestic legal systems presently approach questions ofcorporatelegalliabilityinsuchcasesand,withinindividualjurisdictions,inthewaythattestsforcorporatelegalliabilityareconstructed,dependingonthenatureofthehumanright(s)affectedandthebusinessactivitiesinvolved.Atthesametime,itispossibletoidentifycommonthemes,underpinnedbypolicyideasandprinciplesthattranscenddifferentlegalsystems,structures,culturesandstagesofeconomicdevelopment. Thesepolicy ideas andprinciples form thebasis of the PolicyObjectivesusedtoorganisetheguidanceinthissection.

PolicyObjective1:Toensurethatthereisthepossibilityofcorporatelegalliabilityforcorporateconductthatresultsinhumanrightsabuses.PolicyObjective1:Importantissuesofcontext

• A“corporation”isdefined,forthepurposesofthisguidance,asanorganisationofpeoplerecognisedinlawasalegalentity(ora“legalperson”).Acorporationhasa legalexistence that isseparate fromitsowners.This featureofcompany lawregimes is often referred to as “separate legal personality”. Corporate legalliabilityreferstothelegalliabilityofacorporationasawhole,asopposedtothelegalliabilityofindividualofficersandemployees.

• Alljurisdictionsrecognisethepossibilityofcorporatelegalliabilityforwrongfulcorporateacts,althoughtherearedifferencesfromjurisdictiontojurisdictionin

3Foradditionalbackgroundandcontexttothisprojectcomponent,seetheBackgroundPaper.


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thetypeoflegalliabilitythatacorporationcanattract.Insomejurisdictionsthismaybecriminalliability,quasi-criminalliability4andliabilityunderprivatelaw5(or“civil liability”).However,insomejurisdictions,corporationsmayonlyattract administrative (or “quasi-criminal”) and civil liability, because criminalliability isonlyapplicable tonaturalpersons. In those jurisdictions thatdonotpermitcriminalliabilityforcorporationsas“legalpersons”,individualofficersinacompanymaybeliableiftheyhavecommittedorbeencomplicitinacriminalact,butthecorporationitselfcannotbeconvictedundercriminallaw.

• A finding of corporate legal liability for business-related human rights abusesundercriminalorquasi-criminalregimesgivesrisetothepossibilityofcriminalorquasi-criminalsanctionsbeingimposedaccordingtothelawsofthedomesticlegalsystem(seefurtherProjectComponent4below).Afindingofcorporatelegalliability forbusiness-relatedhumanrightsabusesunderprivate(or“civil”) lawregimesgivesrisetothepossibilityofprivatelawremediesbeingawardedtotheclaimantaccordingtothelawsofthedomesticlegalsystem(seefurtherProjectComponent5below).

PolicyObjective1:ElementsofgoodStatepractice 1.1.1. Corporateconductthatamountstohumanrightsabusesbyabusinessenterprisecarriesthepossibilityofcorporatecriminalorquasi-criminalliability.

1.1.2. Corporateconductthatamountstohumanrightsabusesbyabusinessenterprisecarriesthepossibilityofcorporateliabilityunderprivatelaw.

1.1.3. Testsforcorporatelegalliabilityareclearlyexpressed,arerelevanttodifferenttypes,sizesandstructuresofbusinessenterprisesandtakeaccountofdevelopmentsincorporatemanagementbestpractice.6

1.1.4. Corporate criminal or quasi-criminal legal liability doesnot dependon a priorsuccessfulconvictionofanindividualoffender.

4Criminalorquasi-criminalregimesdependfortheirenforcementonpubliclawenforcementauthoritiesandregulatorybodies.Inthisconsultationdocument,theterm“quasi-criminal”liabilityisusedinterchangeablywith“administrativeliability”andreferstoliabilityforbreachesoflegalstandardsthatusuallyhavesome,butnotall,ofthequalitiesofcriminaloffences.Forinstance,itmaynotbenecessaryforasuccessfulprosecutionofa“quasi-criminal”or“administrative”offencetoprovethelevelofintentormentalblameworthinessthatwouldbenecessarytoestablishthatacriminaloffencehadbeencommitted.Quasi-criminal,or“administrative”offencestendtohaveamore“regulatory”characterthancriminaloffences.5Inthisconsultationdocument,theterm“privatelaw”isusedinterchangeablywith“civillaw”forthebranchoflawthatisconcernedwithrelationshipsbetweenprivateactors,ratherthanbetweentheauthoritiesandprivateactors,andwhichareenforcedbywayofprivatelegalaction(“privatelaw”regimes).6See,forexample,thevariousteststhatfocusonthequalityofacompany’smanagement,ratherthantheactionsandintentionsofspecificindividuals,suchasthe“corporateculture”testtodetermine“corporatefault”;a“collectivefault”approachwherebyknowledge,intentionsandactionsofagroupofindividualscanbe“aggregated”;andteststhatallowinferencestobedrawnaboutcorporateintentionorcausality,basedonsurroundingcircumstances(includingmanagementissues).SeealsoPolicyObjective3,whichexploresfurtherthepotentialforconnectionstobemadebetweenthequalityofcorporatemanagementandcorporateliability.


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PolicyObjective2:Toensurethatthereisthepossibilityofcorporatelegalliabilityforcorporatecomplicityinhumanrightsabusescarriedoutbyathirdparty.PolicyObjective2:Importantissuesofcontext

• “Secondaryliability”,sometimesreferredtoas“complicityliability”,referstotheliabilityofapersonfortheactsofanotherpersonbyvirtueofthefactthatthefirstpersonhascontributedto,orbeencomplicitin,theactsofthesecondpersoninsomeway.

• TheUnitedNationsGuidingPrinciplesonBusinessandHumanRights(the ‘UN

GuidingPrinciples’)notethat“mostnationaljurisdictionsprohibitcomplicityinthecommissionofacrime,andanumberallowforcriminalliabilityofbusinessenterprises in such cases. Typically, civil actions can also be based on anenterprise’sallegedcontributiontoaharm,althoughthesemaynotbeframedinhuman rights terms. The weight of international criminal law jurisprudenceindicates that the relevant standard for aiding and abetting is knowinglyprovidingpracticalassistanceorencouragementthathasasubstantialeffectonthecommissionofacrime.”7

• There are many differences between domestic law jurisdictions as to: (a) the

typesofoffences forwhicha companycanbecriminallyor civilly liableundertheories of secondary liability; (b) the nature of that secondary liability (e.g.whethercriminalorquasi-criminal);(c)theextenttowhichsecondaryliabilityisdependent upon a prior finding of primary liability on the part of the mainperpetrator; and (d) the matters that must be proved in order to achieve asuccessfulprosecutionorprivatelawclaimonthebasisoftheoriesof“secondaryliability”or“complicity”.

PolicyObjective2:ElementsofgoodStatepractice

1.2.1. Intentional, reckless or negligent contributions by business enterprises to thehumanrightsabusesofthirdpartiescarrythepossibilityofcorporatecriminalorquasi-criminalliability.

1.2.2. Intentional, reckless or negligent contributions by business enterprises to thehuman rights abuses of third parties carry the possibility of corporate liability underprivatelaw.

1.2.3. Tests for corporate legal liability on the basis of theories of “secondary” or“complicity”liability(i.e.causingorcontributingtohumanrightsabusescommittedbyanotherpersonororganisation)areclearlyexpressed.

1.2.4. The domestic legal system makes it clear that offences based on theories ofsecondaryorcomplicityliability(whethercriminalorquasi-criminal)aretobetreatedwiththesamelevelofseriousnessasprimaryliabilityoffences.

1.2.5. Tests for corporate legal liability on the basis of theories of “secondary” or“complicity” liability are relevant to different types, sizes and structures of businessenterprisesandtakeaccountofdevelopmentsincorporatemanagementbestpractice.8

7A/HRC/17/31.SeeGuidingPrinciple17,Commentary.8SeefurtherPolicyObjective3below.


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1.2.6. Corporate legal liability (whether under criminal law, quasi-criminal law orprivatelaw)doesnotdependonapriorsuccessfulconvictionoftheprimaryperpetratororperpetrators.

PolicyObjective3:Toensurethattests forcorporate liabilityareproperlyalignedwith the need for sound human rights risk management practices by businessenterprises.PolicyObjective3:Importantissuesofcontext

• The UN Guiding Principles on Business and Human Rights emphasise theimportanceofsoundmanagementtoaddressactualandpotentialadversehumanrights impacts.9 The UN Guiding Principles state that all business enterprisesshould carry out human rights due diligence “in order to identify, prevent,mitigateandaccountforhowtheyaddresstheiradversehumanrightsimpacts”.

• Furthermore,theUNGuidingPrinciplesmakeitclearthatprovidingsupportandguidance to companies with respect to the technical requirements of humanrights due diligence is part of the State’s duty to protect human rights. TheCommentarytoGuidingPrinciple3notesthat“[g]uidancetobusinessenterprisesonrespectinghumanrights should indicateexpectedoutcomesandhelpsharebestpractice. Itshouldadviseonappropriatemethods, includinghumanrightsduediligence,andhowtoconsidereffectivelyissuesofgender,vulnerabilityandmarginalization, recognizing the specific challenges that may be faced byindigenouspeoples,women,nationalorethnicminorities,religiousandlinguisticminorities, children, persons with disabilities, and migrant workers and theirfamilies.”

• Theduediligencestandardisakeyfeatureofmanydomesticlegalregimes.Thereareanumberofdifferentways inwhichdomestic legalregimescanencouragebusinessenterprisestouseduediligencetoidentify,preventandmitigateadversehumanrightsimpacts.Forinstance,theexerciseofduediligencemaybeaspecificlegalrequirement,thelackofwhichcouldbeusedasabasisforcorporatelegalliability. In the area of civil (or “private”) law, whether or not a businessenterprise has exercised due diligence will be a key factual issue in adeterminationofwhetherthatbusinessenterpriseshouldbeheld legally liableunder legal theories of negligence. Alternatively, in other contexts, the fact ofhavingexercisedduediligence(ornot)toavoidaprohibitedstateofaffairsmaybe relevant to whether the business enterprise can invoke a legal defence incriminal or quasi-criminal proceedings, depending on the provisions of therelevantcriminalorquasi-criminalregime.


1.3.1. Tests for corporate legal liability under criminal and quasi-criminal regimesprovideappropriateincentivestocompaniestoexerciseduediligencetoidentify,preventandmitigaterisksofadversehumanrightsimpactsarisingfromtheirownactivities.

9See,inparticular,GuidingPrinciples15-20.


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1.3.2. Testsforcorporatelegalliabilityunderprivatelawregimesprovideappropriateincentivestocompaniestoexerciseduediligencetoidentify,preventandmitigaterisksofadversehumanrightsimpactsarisingfromtheirownactivities.

1.3.3. Testsforcorporatelegalliability(undercriminal,quasi-criminalandprivatelawregimes) provide appropriate incentives to companies to effectively supervise theirofficers andemployees in suchaway that ensures that risksof adversehuman rightsimpactsarisingfromtherelevantbusinessactivitiesareproperlyidentified,preventedandmitigated.

1.3.4. Testsforcorporatelegalliabilityundercriminalandquasi-criminallawregimesprovideappropriateincentivestocompaniestoexerciseduediligencetoidentify,preventandmitigaterisksofadversehumanrightsimpactsthattheymaycontributeto,includingthroughtheirbusinessrelationships.

1.3.5. Testsforcorporatelegalliabilityunderprivatelawregimesprovideappropriateincentives to companies to exercise due diligence to identify, prevent and mitigateadverse human rights impacts that they may contribute to through their businessrelationships.

1.3.6. RelevantStateagencies(e.g.regulatoryauthoritiesanddomesticlawenforcementbodies) have access to clear, consistent, workable (and, where appropriate sector-specific)guidanceastothetechnicalrequirementsofhumanrightsduediligence,anditsrelevanceinvariouslegalandlawenforcementcontexts.

Policy Objective 4: To ensure that tests for corporate legal liability are properlyalignedwiththeneedforhigherlevelsofvigilanceinspecificcontexts,suchaswheretherisksofcorporationscausingorcontributingtoorbecomingcomplicitinseverehumanrightsabusesareparticularlyhigh.PolicyObjective4:Importantissuesofcontext

• TheUNGuidingPrinciplesonBusinessandHumanRightsnotethat“thescaleandcomplexityofthemeansthroughwhichenterprisesmeetthatresponsibility[i.e.the responsibility of business enterprises to respect human rights] may varyaccording to these factors [i.e. size, sector, operational context, ownership andstructure], and with the severity of the enterprise’s adverse human rightsimpacts.”10

• Domestic legal regimes use various techniques to encourage higher levels of

vigilancefrombusinessactorsincertainsectorsandcontexts,particularlywherethe relevant business activities carry particularly serious risks of harm to theenvironmentor tohumanhealth.These techniques include theuseof strictorabsoluteliabilityforcertainregulatoryoffences,orreversalsofburdensofproofincertaincases.

10SeeGuidingPrinciple14.


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PolicyObjective4:ElementsofgoodStatepractice1.4.1. The domestic criminal law regimemakes appropriate use of strict or absoluteliability as a means of encouraging greater levels of vigilance in relation to businessactivitiesthatcarryparticularlyhighrisksofinvolvement(whetherdirectlyorbyreasonofcomplicity)inseverehumanrightsabuses.11 1.4.2. Thedomesticlegalregimemakesappropriateuseofstrictorabsoluteliabilityasameansofreducinglegal,practicalandotherrelevantbarriersthatcouldotherwiseleadtoadenialofaccesstoremedy.

11Toestablishliabilityunderastrictorabsolutecriminal(orquasi-criminal)offence,itisnotnecessarytoshowthatthecompanyintendedtheprohibitedconductoroutcome;onlythattheprohibitedconductoroutcomeinfactoccurred.Dependingontherelevantlegislativeprovisions,itmaybepossibleforacompanytoraiseadefencebyshowingthatithadinfactusedduediligence.Alternatelyitmaybethatliabilitywillautomaticallyfollowtheoccurrenceofharm,irrespectiveofwhetherornotthecompanycanprovethatduediligencewasinfactexercisedinthespecificcase.


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2. ProjectComponent2:RolesandresponsibilitiesofinterestedStatesincross-bordercases12

This component of the Accountability and Remedy Project aimed to explore Statepracticesandattitudeswithrespecttotheappropriateuseofextraterritorialjurisdictionand domestic measures with extraterritorial implications in cross-border cases ofbusiness related human rights abuses, and to consider the different ways in whichinternational cooperation (at bothdiplomatic andoperational levels) can improve theabilityofvictimstoaccessremediesinsuchcases.Because trade and investment cross national boundaries, allegations of businessinvolvementinhumanrightsabusesmaygiverisetolegalissues(andhencethepotentialforlegalliability)underthelawsofmorethanoneState.Whileoverlappingdomesticlegalregimesareinevitableinaglobalizingworld,theycangiverisetojurisdictionalconflicts,aswellasdisjointedandinconsistentdomesticlegalresponses.OHCHR research and consultations in the course of the Accountability and RemedyProjecthaveidentifiedtwokeyproblemsthatarepresentlyunderminingtheabilityofdomesticlegalregimestorespondeffectivelytocross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses.Thefirstisalackofclarityatinternationallevelas to the appropriate use of extraterritorial jurisdiction in such cases. This is asignificantsourceoflegaluncertaintyforaffectedpersonsaswellasbusinessenterprises.The second, related to the first, is a lack of cooperation and coordinationbetweeninterested States with respect to the detection, investigation, prosecution andenforcementof cross-border cases.This lackof cooperationand coordinationhashadnegativeeffectsonaccess to remedy inanumberof individual cross-bordercases, forinstancebyhamperingtheabilityofprosecutorstoactonsomecomplaints,byaddingtothecostsandproceduralcomplexityofcross-bordercases,andbyintroducingdelaysthathavesignificantlyreducedthelikelihoodofasuccessfulprosecution.In addition, lack of coordination between States with respect to the use of domesticmeasureswithextraterritorialimplications13canunderminetheeffortsofregulatoryanddomestic law enforcement bodies with respect to the prevention, detection andinvestigationofcross-bordercasesofbusinessinvolvementinhumanrightsabuses.ClarificationoftherolesandresponsibilitiesofinterestedStatesincross-borderbusinessand human rights cases is a necessary precondition to better and more effectivecooperationandcoordinationbetweentherelevantStateagencies(includingdomesticlawenforcementbodies),and,ultimately,betteraccesstoremedyatdomesticlevel.BasedonOHCHR’sresearchandconsultations,thissectionsetsoutdraft“goodpractice”guidance for States in relation the management of cross-border cases and outlinespossiblestrategiesforbetterandmoreextensiveinternationalandbilateralcooperation.

12Foradditionalbackgroundandcontexttothisprojectcomponent,seetheBackgroundPaper.13DomesticmeasureswithextraterritorialimplicationsaredefinedasmeasurestakenbyaStatetoregulatepeople,companiesoractivitieswithinitsownterritorialboundariesbutwhichhave(orareintendedtohave)implicationsbeyondtheterritorialboundariesofthatState.


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PolicyObjective1:Toestablishanoverviewoftherangeofdifferent legalregimesthrough which the State may exercise extraterritorial jurisdiction and engage incross-bordercooperation(andwhichareofpotentialrelevancetocross-bordercasesconcerning business involvement in human rights abuses), and to identify andaddressanyweaknessesorgapsinapproach.PolicyObjective1:Importantissuesofcontext

• There are a range of domestic and international legal regimes that directly orindirectly regulate business respect for human rights. These include regimesrelatingtonon-discrimination,labourrights,childprotection,humantrafficking,environmentalprotection,consumerrights,property,privacy,andanti-bribery.14Inaddition,domesticlegalregimesrelatingtocivil(or“privatelaw”)claimsmayset out a number of possible causes of action for legal remedies for business-relatedhumanrightsimpacts.

• International legal regimes (including international legal regimes aimed at

regulating business respect for human rights) may require that participatingStates carry out direct extraterritorial enforcement in respect of businessoperations or activities outside their own territory (for example, by virtue ofbeing the State of domicile of a parent company of a business enterprise). Inaddition, international legal regimes may require or authorise the use byparticipating States of extraterritorial jurisdiction over foreign businessenterprisesoractivitiesonotherbases(forexampleonthebasisthatvictimsofhuman rights abuses were nationals or residents of the regulating State).Internationallegalregimesmayalsorequire,authoriseorrecommendtheuseofdomesticmeasureswithextraterritorialimplications.

• Stateshaveenteredintoarangeofinternationaltreatiestosupport,facilitateand

enableinternationalcooperationwithrespecttolegalassistanceandenforcementof judgements in cross-border cases, including (though not limited to) cross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses.15


2.1.1. TheStatehasidentifiedtheextenttowhichitsvariousdomesticlegalregimesthatdirectly or indirectly regulate business respect for human rights (a) have potentialrelevance for cross-border cases concerning business involvement in human rightsabuses (b) requireorprovide for theuseof extraterritorial jurisdiction (c) requireor

14Notethattheguidanceinthissectionoftheconsultationdocumentisintendedtocoverdomesticlegalregimeswhichhavebeenestablishedunilaterally,aswellastodomesticlegalregimesthathavebeendevelopedpursuanttobilateralormultilateraltreaties.15Someofthesetreatiesaredesignedtohavebroadapplication,suchastheEuropeanConventiononMutualAssistanceinCriminalMatters,andvariousbi-lateralmutuallegalassistancetreaties.SeealsotheCouncilofEuropeConventiononLaundering,Search,SeizureandConfiscationoftheProceedsfromCrime.Inthecivil(i.e.“privatelaw”)contextseetheHagueConventionontheTakingofEvidenceAbroadandtheHagueConventionontheEnforcementofJudgmentsinCivilandCommercialMatters.Otherinternationallegalregimeshavebeenestablishedtofacilitategreaterinternationalcooperationwithrespecttospecifickindsofcrime,seeforexampletheUNConventionAgainstTransnationalOrganisedCrime,whichincludesprovisionsrelatingtomutuallegalassistanceandtheuseofjointinvestigationteams.SeefurtherPolicyObjective2below.


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provide for the use of domestic measures with extraterritorial implications and (d)requireorprovideforinternationalcooperation.16

2.1.2. The State has identified, and periodically evaluates the effectiveness of itsimplementationof,(a)thevariousinternationallegalregimestowhichitisapartythatdirectly or indirectly regulate business respect for human rights and (b) the variousinternational legalregimestowhichit isapartywhichhavepotentialrelevanceforitscooperationwithotherStatesincross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses.

2.1.3. TheStatehasevaluated,andkeepsunderreview,theextenttowhichitsrelevantdomesticlegalregimes(see2.1.1above)anditsimplementationofrelevantinternationallegalregimes(see2.1.2above)provideacoherentandrobustresponsetocross-borderbusiness and human rights challenges, prioritising those areas of business activitieswheretherisksofinvolvementinadversehumanrightsimpactsarethemostsevere,andtakesthenecessarystepstoaddressanyweaknessesorgapsinapproach.

2.1.4. The State has identified thebilateral and/ormultilateral treaties and/or otherinternationalarrangementstowhichitisnotyetapartybutwhichhavethepotentialto(a)enhancetheeffectivenessofdomesticlegalregimesthatdirectlyorindirectlyregulatebusiness respect for human rights in a cross-border context and (b) enhance theeffectiveness of its cooperation with other States in relation to cross-border casesconcerning business involvement in human rights abuses and has considered thepotentialadvantagesofjoiningthosetreatiesand/orotherinternationalarrangements.

2.1.5. TheStatehasclearlycommunicatedtoallrelevantStateagencies,andhasmadepublicly available, its policies and expectations relating to the use of extraterritorialjurisdictionanddomesticmeasureswithextraterritorialimplicationsindifferentfactualand legal contexts, or pursuant to different domestic regimes, which have potentialrelevance for cross-border cases concerning business involvement in human rightsabuses.

PolicyObjective2:Toenabledomesticlawenforcementandjudicialbodiesreadilyand rapidly to seek legal assistance from and respond to requests from theircounterparts in other States in respect of thedetection, investigation, prosecutionand enforcement of cross-border cases concerningbusiness involvement in severehumanrightsabuses.PolicyObjective2:Importantissuesofcontext

• TheabilityoftherelevantStateagencies(forinstance,domesticlawenforcement,investigative and judicial bodies) to rapidly and readily seek and obtaininformation and assistance with respect to cross-border cases concerningbusinessinvolvementinhumanrightsabuses,andtheabilityandwillingnessoftheir counterparts in other States to respond rapidly and readily to thoserequests, can have a crucial bearing on whether there is access to remedy inindividual cross-border cases, including the ability of prosecutors to pursue acase. Where abuses are ongoing, delays resulting from the inability to accessrelevantinformationcanalsocompoundtheharmssufferedbyvictims.

• Anumberofinternationaltreatiesexisttoenablegreatercross-borderexchange

of information between domestic law enforcement and judicial bodies and to16Seenote3above.


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facilitateandsupportmutuallegalassistancebetweendomesticlawenforcementandjudicialbodiesofdifferentStates.Someoftheseinternationallegalregimeshavebeencreatedinresponsetospecificcross-borderhumanrightschallengeswith a business connection (e.g. organised crime, forced labour, humantrafficking,protectionofrightsofmigrantlabourers,protectionofchildrenfromexploitation).17 Other international legal regimes providing for mutual legalassistancebetweenStateshavemoregeneralapplication.18Someoftheserelatespecificallytothecriminallawcontext,19whereasothersaredesignedtoprovideaframeworkforlegalcooperationincivilandcommercialcases.20

• However, evenwhere the relevant lawsand international treatyarrangements

are in place, State agencies can experience a range of practical difficulties andchallenges which can undermine the treaty objectives, including a lack ofinformationabouthowandwheretomakearequestfromStateagenciesinotherinterestedStates,alackofopportunitiesandforaforcross-borderconsultationandcoordination,differencesofapproachwithrespectto issuesofprivacyandthe protection of sensitive information, a lack of resources needed to processrequestsinatimelymanner,andalackofawarenessofinvestigativestandardsinotherStates.21

PolicyObjective2:ElementsofgoodStatepractice2.2.1. TheStateensuresthatthenecessarybilateralandmultilateralagreementsareinplacetoenable(a)domesticlawenforcementandjudicialbodiesand(b)partiestocivilproceedings (through the relevant domestic judicial bodies) to request mutual legalassistance from the relevant State agencies of other States in cross-border casesconcerningbusinessinvolvementinseverehumanrightsabuses.Suchagreementsshouldaddresscommonchallengesinthecontextofcross-bordercasessuchasenablingeasierevidence-sharing,promotingagreementsontheallocationofthecostsofinvestigationorenforcement, ensuring appropriate levels of protection of personal data andcommercially sensitive information, protection of witnesses andwhistle-blowers, andestablishingwheninformalchannelsmayappropriatelybeusedtospeedupcooperation.2.2.2. TheStateenables itsdomestic lawenforcementand judicialbodies involved inthe investigationand/orprosecutionofcriminal (orquasi-criminal)cases tocarryoutcross-borderinvestigationsandprosecutionsthroughJointInvestigationTeamsorother

17SeeforinstancetheUNConventionAgainstTransnationalOrganizedCrime(includingtheProtocoltothatConventiontoPrevent,SuppressandPunishtheTraffickingofPersons);theILOConventionontheWorstFormsofChildLabor;theILOConventiononForcedLabor(includingthe2014Protocol);theConventionontheRightsoftheChild(includingtheProtocolontheSaleofChildren,ChildProstitutionandChildPornography).18See,forexample,theEuropeanConventiononMutualAssistanceinCriminalMatters,andvariousbi-lateralmutuallegalassistancetreaties.Seefurthernote4above.19SeeforinstancetheUNConventionAgainstTransnationalOrganizedCrime(includingtheProtocoltothatConventiontoPrevent,SuppressandPunishtheTraffickingofPersons.SeealsoSee,theEuropeanConventiononMutualAssistanceinCriminalMatters,andvariousbilateralmutuallegalassistancetreaties.20Inthecivil(i.e.“privatelaw”)contextseetheHagueConventionontheTakingofEvidenceAbroadandtheHagueConventionontheEnforcementofJudgmentsinCivilandCommercialMatters.21Seealsosection6,below,regardingelementsofgoodStatepracticetoaddressgeneralchallengesexperiencedbydomesticprosecutionbodiesinthecontextofinvestigatingandprosecutingbusinessinvolvementincasesofseverehumanrightsabuses.


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suitablearrangementsthatenablethoseinvolvedtoagreewhereverpossibleonajointwayforward.2.2.3. TheStatesetsoutaclearpolicyexpectationthatdomesticlegalandjudicialbodieswill beappropriately responsive to requests from the relevantState agenciesofotherStates in cross-border cases concerning business involvement in severe human rightsabuses.2.2.4. The State ensures that its domestic law enforcement and judicial bodies haveaccesstothenecessaryinformation,support,training,andresourcestoenablepersonneltomakethebestpossibleuseofarrangementswithotherStatesforcooperationincross-bordercasesconcerningbusinessinvolvementinseverehumanrightsabuses.2.2.5. TheStatekeepsunder review the scope andadequacyof its arrangements formutual legalassistancewithotherStates in lightofthekeycross-borderhumanrightsrisksassociatedwithbusinessenterpriseseitherdomiciledwithin,oroperatingwithin,its territory and/or jurisdiction, and takes relevant steps to add to or improve sucharrangementsasnecessary.2.2.6. TheStateensuresthatthereispolicycoherencebetweenitsarrangementswithother States for mutual legal assistance and its policies on matters such as exportassistanceandtheencouragementofinwardinvestment.Policy Objective 3: To work through relevant multilateral fora—at international,regionalandsub-regionallevels—toagreeanddevelopcommonapproachestothetechnical modalities that can help facilitate and speed up cooperation betweendomestic law enforcement and judicial bodies in cross-border cases concerningbusinessinvolvementinseverehumanrightsabuses.PolicyObjective3:Importantissuesofcontext

• Seethe‘importantissuesofcontext’sectionforPolicyObjective2,above.PolicyObjective3:ElementsofgoodStatepractice2.3.1. TheStateisinvolvedwith,andactivelypromotes,multilateralinitiativesaimedatimprovingtheeaseandspeedwithwhich(a)requestsformutuallegalassistancecanbemade and responded to and (b) information can be exchanged between domesticenforcementorjudicialbodiesincross-bordercasesconcerningbusinessinvolvementinsevere human rights abuses, including through mentoring, “peer review” and othercapacity-building approaches, and also through information repositories that provideclarity on points of contact, core process requirements and systems for updates onoutstandingrequests.2.3.2. TheStateencouragesandactivelypromotestheparticipationbyitsdomesticlawenforcementand judicialbodies (and their representatives) in international initiativesandnetworksaimedatpromotingawarenessofdifferentopportunitiesfor,andoptionsfor,internationalcooperationandtheprovisionoflegalassistanceincross-bordercasesofbusinessinvolvementinseverehumanrightsabuses.


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PolicyObjective4:Toworkthroughrelevantbilateralandmultilateralforatoagreeand develop common approaches aimed at improving access to information forvictims and their legal representatives in cross-border cases concerning businessinvolvementinhumanrightsabuses

PolicyObjective4:Importantissuesofcontext

• Inacaseconcerningallegationsofbusinessinvolvementinhumanrightsabuses,theclaimants(incivilor“privatelaw”case)orcomplainants(incriminalorquasi-criminal case) may wish to refer to information held by State agencies (forexample, licensing bodies, environmental authorities, workplace health andsafetyagencies,orconsumerprotectionbodies)inordertosupporttheirclaimthatanapplicable legal standardhasbeenbreached. Inaddition, theremaybeotherinformationinthepublicdomain,forinstancerelatingtoregulatorypolicieswith respect to a particular business sector, which may have relevance to acriminal (or “quasi-criminal”) complaint or civil (or “private law”) claim.However,inmanycases(andparticularlyincross-bordercases),thisinformationcanbedifficultandexpensivetoaccess.

• A further challenge to accessing regulatory information in cross-border cases

arisesfromdifferencesbetweenStatesintheextenttowhichdifferentdomesticlegal regimes create legal rights of public access to regulatory information(including information about the human rights-related risks and impacts ofbusiness activities), and the extent to which exemptions are given for certainclassesofinformation,suchascommerciallysensitiveorconfidentialinformation.

PolicyObjective4:ElementsofgoodStatepractice2.4.1. The State engages in, and actively promotes, multilateral initiatives aimed atimprovingtheeaseandspeedwithwhichinformationcanbeexchangedbetweenvictims(andtheirlegalrepresentatives)andtherelevantStateagenciesofotherStatesincross-bordercasesconcerningbusinessinvolvementinseverehumanrightsabuses,includingthrough mentoring, peer review and other capacity-building approaches, and takingaccount of the need for appropriate safeguards with respect to issues such as theprotectionofpersonaldataandcommerciallysensitiveandconfidentialinformation,andprotectionofwitnessesandwhistle-blowers.2.4.2. TheStateengagesin,andactivelypromotes,bilateralandmultilateralinitiativesrelatingtocross-borderaccesstoinformationregardingthehumanrights-relatedrisksand impacts of different business activities andwhich are aimed at achieving greateralignment between different domestic legal regimes with respect to issues such ascommercial confidentiality, data protection and the protection of victims andwhistle-blowers.PolicyObjective5:Toworkthroughrelevantbilateralandmultilateralforatoagreeanddevelopmethodsandsystemsfortheprogressiveimprovementofdomesticandinternational legal regimeswhichareofpotential relevance tocross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses.PolicyObjective5:Importantissuesofcontext

• The UN Guiding Principles call on all States, when acting as members ofmultilateral institutions that dealwith business-related issues, to “[e]ncourage


16

those institutions,within their respectivemandatesandcapacities, topromotebusinessrespectforhumanrightsand,whererequested,tohelpStatesmeettheirduty to protect against human rights abuse by business enterprises, includingthroughassistance,capacity–buildingandawareness-raising”.22

• Anumberofinternationaltreatieshavebeencreatedinresponsetospecificcross-

borderhumanrightschallengeswithabusinessconnection(e.g.organisedcrime,forced labour, human trafficking, protection of rights of migrant labourers,protection of children from exploitation).23 These international regimesfrequently provide for international cooperation, not only in individual cross-bordercases,butalsowithaviewtoimprovingtheeffectivenessofdomesticlegalresponsesinallparticipatingStates.Suchinternationalcooperationmaytaketheform of sharing of analytical information to help evaluate the nature of cross-borderbusiness-relatedhuman rights challenges as an aid todetection, or thesharingofexperiencesinspecificcasestohelpdevelopconsensusastoregulatorybest practice. Special provision may be made for capacity-building and theprovision of technical assistance to developing States. These provisions reflectrecognitionbyparticipatingStatesofthepotentialbenefitsofgreateralignmentofregulatoryandinvestigativestandardsandcapacities,notonlyintermsoftheoverall performance of individual domestic regulators and law enforcementbodies,butasabasisforbetterinternationalcooperationincross-bordercases.


2.5.1. The State actively participates in, and actively promotes, through a range ofbilateral,sub-regional,regional,andinternationalfora,internationalinitiativesaimedatimproving thedomestic legal responsesof participating States to cross-borderhumanrights challenges with a business connection, including through the exchange ofinformation and know-how, participation in “peer review” evaluation exercises ofregulatory effectiveness and capacity, capacity-building activities and the provision oftechnicalassistance.2.5.2. TheStateproactivelyencouragesandfacilitatesparticipationbyitsvariousStateagencies with responsibility for regulating business respect for human rights in sub-regional, regional and international networks of regulators with a view to achievingbettercommunicationandcoordinationbetweenitsdomesticregulatorybodiesandtheircounterpartsinotherStateswithrespecttocross-borderissuesandchallenges.

PolicyObjective6:Toidentifytheexistingdomesticadministrativemechanismsthatprovideforadjudicationorotherdisputeresolutionprocessesandwhichdoorcouldaddresscross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses,and to build or strengthen thosemechanisms, including their ability to cooperatewithsimilarmechanismsoperatinginotherStates.

PolicyObjective6:Importantissuesofcontext

• Domestic administrative regimes (e.g. regimes for the licensing of certainbusiness activities, environmental protection regimes, consumer protectionregimes)mayincludenon-judicialdisputeresolutionmechanismswhichmaybeactivatedincasesofallegationsofbusinessinvolvementinhumanrightsabuses.

22UNGuidingPrinciplesonBusinessandHumanRights,GuidingPrinciple10.23Seenote16above.


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Theremaybeothernon-judicialavenuesforspecificallyraisingcomplaintsabouttheadversehumanrightsimpactsofbusinessenterprises(suchasthesystemofNationalContactPointsundertheOCEDGuidelinesonMultinationalEnterprises).

• Suchmechanisms,where they are effective,may have certain benefits in non-

criminalcases,forexamplebecausetheycanofferspeedierresolution,atlowercost,withlighterbureaucraticprocedures.

• Casesreferredtosuchmechanismsmayhaveacross-borderelement.Wherethis

isthecase,itmaybenecessaryforthatmechanismtohaveaccesstoinformation,expertiseandassistanceinotherStates.


2.6.1. TheStatehas(a)identifiedthedomesticadministrativemechanismsthatcouldpotentiallybeinvokedincross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses(b)evaluatedtheireffectivenessagainsttheeffectivenesscriteriafornon-judicial grievance mechanisms set out in the UN Guiding Principles for Business andHumanRights24and(c)takenthenecessarystepstoaddressanyweaknessesorgapsinthosemechanismsidentifiedinthecourseofthatevaluation.2.6.2. The State proactively encourages and facilitates participation by the domesticadministrative mechanisms referred to in 2.6.1 above in sub-regional, regional andinternationalnetworkswithaviewtowithaviewtoachievingbettercommunicationandcoordinationbetweenitsdomesticadministrativemechanismsandtheircounterpartsinotherStateswithrespecttocross-borderissuesandchallenges,bothinspecificcasesandmorewidely.

24SeeUNGuidingPrinciplesonBusinessandHumanRights,GuidingPrinciple31.


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3. ProjectComponent3:Overcomingfinancialobstaclestolegalclaims25

TheaimofthiscomponentoftheARPwastosurveyStatepracticesandvarious‘packages’ofmeasures that canbeused toassist financiallydisadvantaged claimants inbringingclaimsrelatingtobusiness-relatedhumanrightsabuse.The information collected in the course of the Accountability and Remedy Projectconfirmsthatpeoplewhoareadverselyaffectedbybusiness-relatedhumanrightsabusescontinuetofaceserious,andsometimesinsurmountable,financialbarrierstoremedy.Ontheotherhand,theproblemsidentifiedbyrespondentsarenotnecessarilyconfinedtobusinessandhumanrightscases.Instead,theyarefrequentlytheconsequencesofwiderproblems, such as lack of available public funding for legal aid programmes, lack ofresources for courts, and inefficiencies in judicial processes, including because of theoperationofproceduralrules.ResearchcarriedoutinthecourseoftheAccountabilityandRemedyProjecthighlightedanumberofkeytrendsthathaveimplicationsforthefinancialobstaclesandrisksfacedby litigants. These include the contraction in the availability of legal aid in manyjurisdictions, but also a growing use of collective redressmechanisms and a growingflexibilityinmanyjurisdictionsaroundfinancialagreementsbetweenclaimantsandtheirlawyers,designedtoenhanceclaimants’abilitytofundalegitimateclaimeveninthefaceofconstrictionsinstate-basedaid.

BasedonthefindingsfromOHCHR’sresearch,thissectionsetsoutdraft“goodpracticeguidance” for Stateswith a view to reducing financial obstacles to remedy in cases ofbusiness-relatedhumanrightsabuses.ProjectComponent3:ElementsofgoodStatepractice

3.1. State funding is available for private claimants in business and human rights-relatedcaseswhoareabletoshowfinancialhardship,andsuchfundingisavailableontransparentandnon-discriminatoryterms.

3.2. Thedomesticlegalsystempermitsandencouragesprobonolegalservices.

3.3. Rules of civil procedure provide for the possibility of collective redressmechanisms,thecriteriaforwhichareclearlyexpressedandconsistentlyapplied.

3.4. Thereisthepossibilityofcivilenforcementoflegalstandardsbyregulators(i.e.actingonbehalfofaffectedindividualsorgroups)inappropriatecases.

3.5. Courtfees(includinginitialfilingfees,feesforobtainingandcopyingdocumentsetc.) are reasonable and proportionate, with the likelihood of waivers for claimantsshowingfinancialhardshipandincaseswherethereisapublicinterestinthelitigationtakingplace.

3.6. Court procedures include readily identifiable, realistic and affordableopportunitiesforearlymediationandsettlement.

3.7. Systems exist for the identification of, and transparency and judicialaccountabilityinrespectof,courtdelays.

25Foradditionalbackgroundandcontexttothisprojectcomponent,seetheBackgroundPaper.


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3.8. Thedomesticlegalsystempermitsthepossibilityoflitigationfundingbyprivatethirdpartiesincludingthirdpartylitigationfunders,firmsofsolicitors(e.g.pursuanttocontingencyfeeand“successfee”arrangements),andprovidersoflitigationinsurance.

3.9. Providersofthirdpartylitigationfunding,e.g.thirdpartylitigationfunders,firmsof solicitors (e.g. pursuant to contingency fee and “success fee” arrangements), andprovidersoflitigationinsurance,aresubjecttoappropriateregulationtoensureproperstandardsofservice,andtoguardagainstabusesandconflictsofinterest.

3.10. Rulesontheallocationofcourtandlegalcosts(includingattorney’sfees)attheconclusion of proceedings are designed to encourage reasonableness on the part oflitigants,efficientuseoflegalandotherresourcesinthepursuitofanyclaimordefencetoaclaim,and,asfarasispossible,theswiftconclusionoflegalclaims.

3.11. Rules on security for costs strike a proper balance between the needs of adefendant (i.e. with respect to the management of financial risks associated withlitigation)andconsiderationsofaccesstoremedyforclaimants.

3.12. Domesticlawcourtsmakeappropriateuseoftechnologies(includinginformationtechnologies and communications technologies) to operate in an efficient and cost-effectivemanner.

3.13. Potentialclaimantshaveaccesstoreadilyavailable,well-publicisedandreliablesources of help and advice on their options with respect to litigation funding andresourcing,intheirownlanguages.


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4. ProjectComponent4:Criminalandadministrativesanctions26This component of the ARP aimed to survey current and emerging State practice inrelationtocriminalsanctioningofcorporationsforbusiness-relatedhumanrightsabuses,withaparticularfocusonseverehumanrightsabuses.Effective enforcement of criminal laws is a vital aspect ofmeeting the State’s ‘duty toprotect’ (seeGuidingPrinciple 3).Access to remedy includes the ability to ensure theappropriateapplicationofcriminalorquasi-criminalsanctionswheretherehasbeenabreach of legal standards. Criminal law regimes should provide effective deterrenceagainst business related human rights abuses, and especially against involvement insevere abuses.However, in practice the imposition of individual criminal sanctions insuchcasesisextremelyrare,andtheimpositionofcorporatecriminalsanctionsrarerstill.Therearemanydifferencesbetweenjurisdictions(andalsobetweendifferentregulatoryregimeswithinjurisdictions)regardinghowfinancialpenaltiesareset(e.g. intermsoftheextenttowhichjudgeshavediscretioninthesettingoftheamountspayableasfines,the factors that must be taken into account, and the prioritisation of those factors).Financialpenaltiesforquasi-criminal(or“regulatory”)offencesarefrequentlysubjecttoamaximumstatutoryamount.Inmanycasesitisquestionablewhethertheseamountswould,ontheirown,besufficientlydissuasivetoactasacredibledeterrent.

While financial penalties are the most common form of criminal and quasi-criminalsanctioning of corporations, alternatives to financial penalties are increasingly beingexplored inmany jurisdictions and inmany legal contexts. These alternatives includeremedial orders, forfeiture of assets, disqualification from public procurementopportunities, disqualification from state support, cancellation of business licences tooperate,adversepublicityand,inextremecases,dissolution.Somedomesticlegalregimesprovideforthepossibilityoffinancialcompensationforvictimsofcorporatewrongdoing.Thereisalsoincreasingrecognitionoftheimportanceoffuturepreventionmeasures(e.g.through remedial orders, or “corporate probation”) as part of an effective sanctionsregime.

Criminal and quasi-criminal sanctions can and should reflect the objectives of thedomesticlegalregimeforwhichtheyareestablished.However,inmanydomesticregimesthatregulatebusinessrespectforhumanrights,insufficientattentionisgiventothegoalsof compensation and prevention in designing criminal and quasi-criminal sanctions,leading to a general over reliance on financial penalties and a lack of attention topotentiallyusefulalternatives.

BasedonOHCHR’sfindings,thissectionsetsoutdraft“‘goodpractice”guidanceforStatesin developing criminal and quasi-criminal sanctions for cases concerning businessinvolvementinhumanrightsabuses,takingintoaccountinnovationsfromotherareasofcriminallaw.2726Foradditionalbackgroundandcontexttothisprojectcomponent,seetheBackgroundPaper.27Notealsothattheguidanceinthissectioniscloselylinkedtotheguidanceinsection6‘DomesticProsecutionBodies’.


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ProjectComponent4:ElementsofgoodStatepractice

4.1. Criminal and/or quasi-criminal sanctions are sufficiently dissuasive to be acredibledeterrentfromengagingintheprohibitedbehaviour.

4.2. Criminaland/orquasicriminalsanctionsreflectthedegreeofculpabilityofthecorporatedefendant.

4.3. Withineachdomestic law jurisdiction,andacrossdifferentregulatoryregimes,criminaland/orquasi-criminalsanctions(includingthequantumoffines)reflectalogicalandconsistentapproach,takingintoaccounttherelevantregulatoryobjectives.

4.4. Where possible and appropriate, criminal and/or quasi-criminal sanctionsprovide opportunities for the financial compensation of victims and other restorativeremedies.

4.5. Financial penalties are applied, in part, towards future investigation andenforcementefforts.28

4.6. Where possible and appropriate, criminal and/or quasi-criminal sanctionsincludeelementsdesignedtoensurefuturecomplianceand/orpreventionoffutureharm.

4.7. Membersofthejudiciaryhaveaccesstoappropriateguidanceastosentencingofcorporatedefendantsinbusinessandhumanrights-relatedcases,whichclearlystatesthefactors that are to be taken into account in sentencing, and theprioritisationof thosefactors,andwhichisappliedconsistentlyandtransparently.

4.8. Victimsareproperlyconsultedinrespectof(a)thedesignandimplementationofcorporatecriminalandquasi-criminalsanctions,(b)anydecisiontoenterintoadelayedprosecutionagreement(andthetermsofanysuchagreement)and(c), inthecaseofasettlement,thesettlementterms.

4.9. Whereappropriate and relevant, genuineattemptsby corporatedefendants toidentify,preventandmitigatetheadversehumanrightsimpactsofbusinessactivitieswillbetakenintoaccountinthedeterminationofcriminallawsanctions.

4.10. Thedomesticlegalsystemdoesnotpermitthetaxdeductibilityofamountspaidasfinancialpenaltiesincriminalorquasi-criminalcasesinvolvingallegationsofbusinessinvolvementinhumanrightsabuses.

28SeealsoguidanceinSection6relatingtotheresourcingofprosecutorsandlawenforcementactivities.


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5. ProjectComponent5:Civillawremedies29ThisprojectcomponentaimedtosurveycurrentandemergingStatepracticeinrelationtocivillaw(private/tortlaw)damagesincasesofbusiness-relatedhumanrightsabuses,with a particular focus on severe abuses, and to explore the role of domestic judicialmechanismsinrelationtosupervisionandimplementationofsettlementsandawards.

Privatelawcausesofactionprovideamechanismbywhichvictimsofbusiness-relatedhuman rights abuses can seek a remedy directly from the business enterprise that isdetermined to be legally responsible the harm. However, cases alleging businessinvolvement inseverehumanrightsabusesrarelyproceedto judgment. Inmostcasesthey aredismissed at procedural stages, although anumberhave settledout of court.Whether there is a settlement, or a judicial determination of liability, the remediesobtained by claimants rarely (if ever) meet the international standard of “adequate,effectiveandpromptreparationforharmsuffered”.30

Extremedifferencesbetweenjurisdictionsinthekindsandamountsofcivilremediesthatcanbeawardedfurthercontributeto inequalitiesbetweendifferentgroupsofaffectedindividualsandcommunities in termsof the levelsof legalprotection theyenjoy.Thissituationalsohasseriousimplicationsforfundingoflegalclaimsand,inturn,accesstojudicialprocesses. Inaddition,problemshavebeen identifiedwithrespect toa lackofconsultationwithaffectedindividualsinsomecasesastothetypesofremediesneeded,resultingininappropriateorineffectivecompensatoryarrangements.Moreover,thereisa lackofclarity inmanyjurisdictionsastotheappropriatestandardsthatapplyinthedistributionofdamagesarisingfromgroupclaims(e.g.largeclassactions)withtheresultthat, inpractice,affectedindividualswhomaybelegallyentitledtocompensationmaynotreceiveadequate(orany)compensation.

Thissectionsetsoutdraft“goodpractice”guidanceforStatesinrelationtocivilremedies.

ProjectComponent5:ElementsofgoodStatepractice5.1. Thedomesticlegalsystemappliestheprinciplethat,consequentuponafindingof corporate legal liability under private law, there should be adequate, effective andpromptreparationforharmsuffered.

5.2. The methodology for assessing the quantum of financial damages (i.e.compensatory damages and, to the extent applicable, punitive damages) is clearlyexpressed,andconsistentlyandtransparentlyapplied.

5.3. The domestic legal system provides for alternative remedies to compensatorydamages, such as injunctions (e.g. where there is a risk of irremediable damage) orrestitution.

5.4. Victimsareproperlyconsultedinrespectof(a)thedesignandimplementationofcorporateprivatelawremediesand(b),inthecaseofasettlement,thesettlementterms.

5.5. Thedomesticlegalsystemensures,throughappropriateregulation,guidanceorprofessionalstandards,thatcompensatorydamagesaredistributedamongmembersofaffectedgroupsofclaimantsinafair,transparent,andnon-discriminatoryway.

29Foradditionalbackgroundandcontexttothisprojectcomponent,seetheBackgroundPaper.30SeetheUN2005BasicPrinciplesandGuidelinesontheRighttoaRemedyandReparationforVictimsofGrossViolationsofInternationalHumanRightsLawandSeriousViolationsofInternationalHumanitarianLaw,ArticlesI.2(b)andVII.


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6. ProjectComponent6:Domesticprosecutionbodies31 TheaimsofthiscomponentoftheAccountabilityandRemedyProjectweretoinvestigatethe reasonsbehind theapparentlyvery low levelsofactivityofdomestic criminal lawenforcementbodiesinrelationtocasesofallegedbusinessinvolvementinseverehumanrightsabusesandtoidentifythespecificchallengesfacedbydomesticlawprosecutorsinsuchcases.Effective enforcement of criminal laws is a vital aspect ofmeeting the State’s Duty toProtect.As is stated in theCommentary toGuidingPrinciple3, “the failure to enforceexistinglawsthatdirectlyorindirectlyregulatebusinessrespectforhumanrightsisoftenasignificantlegalgapinStatepractice[…]Therefore,itisimportantforStatestoconsiderwhethersuchlawsarecurrentlybeingenforcedeffectively,andifnot,whythisisthecaseandwhatmeasuresmayreasonablycorrectthesituation”.Atpresent,complaintstodomesticlawenforcementbodiesaboutbusinessinvolvementinseverehumanrightsabusesareunlikelytoresultinaformalcriminalinvestigationorprosecution.ResearchcarriedoutbyOHCHR,andthroughcollaborationwithAmnestyInternational and the International Corporate Accountability Roundtable,32 hasconfirmedthatlevelsofactivitybydomesticlawprosecutorsinthisarearemainverylow.Whileperformancevaries fromjurisdictionto jurisdictionandfromregulatoryareatoregulatory area (with generally higher levels of activity reported in relation to morecodifiedareasoflawsuchaslabourandenvironmentallaw),domesticlawenforcementbodiesandpractitionersreportarangeofchallengesthatinhibittheirabilitytorespondtobusinessandhumanrightscases.Keychallengesincludelackofresources,lackofthenecessaryspecialistknowledgeandexpertise, lack of suitable training, difficulties gathering evidence in relation to theoperationofcomplexcorporateandmanagerialstructures,concernsaboutintimidationof witnesses and fear of reprisals, lack of political or managerial support and legalcomplexity(whichcanaddtothefinancialandotherrisksofinvestigations).Challengesareparticularlyacuteinrelationtocross-bordercases.33Thissectionsetsoutdraft“elementsofgoodStatepractice”toenhancetheeffectivenessof domestic prosecution bodies in holding companies to account for involvement inhumanrightsabusesthatamounttocriminalorquasi-criminaloffences.ProjectComponent6:ElementsofgoodStatepractice

6.1. The State publicly acknowledges and supports the vital role of domesticprosecutionbodiesinmeetingtheStateDutytoProtectagainstbusiness-relatedhumanrightsabuses.

6.2. TheStatehastakenstepstoensureclosecommunicationandproperandeffectivecoordinationbetweendomesticprosecutionbodiesandothergovernmentdepartments,agencies and other State-based institutions that shape the business practices ofbusinessesdomiciledintheterritoryofthatState.

31Foradditionalbackgroundandcontexttothisprojectcomponent,seetheBackgroundPaper.32ohchr.org/Documents/Issues/Business/DomesticLawRemedies/ICAR_AI_JointStatement.pdf33Thechallengestoinvestigatingandprosecutingcross-bordercasesconcerningallegationsofbusinessinvolvementinhumanrightsabusesareexploredmorefullyinSection2above.


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6.3. Theuseofprosecutorialdiscretion,astowhethertoinvestigateand/orprosecuteallegationsofbusinessinvolvementinhumanrightsabuses(totheextentsuchdiscretionisprovided for in therelevantState) isexercised inaccordancewithacomprehensiveprosecutionpolicywhich(a)clearlysetsouthowdecisionsaboutwhethertoinvestigateorprosecuteacomplaintwillbemadeandthefactorsthatwillbetakenintoaccount(b)has been developed following proper consultationwith stakeholders and (c) ismadeavailabletothepublic.

6.4. Decisions by domestic prosecution bodies not to investigate or prosecuteallegationsofbusinessinvolvementinhumanrightsabusesthatwould,ifproved,amounttoacriminaloffenceunderdomesticlaw,aresubjecttoformalchallengethroughafairandtransparentprocess.

6.5. Domesticprosecutionbodiestakeproactivestepstoensurethat,inacasewherearequesttoinvestigateorprosecuteallegationsofbusinessinvolvementinhumanrightsabuses has been declined, the complainants in the relevant case and their legalrepresentativesareaware(a)oftheirrightsformallytochallengesuchadecision,and(b)of theprocedures thatwillapply in theevent that thecomplainantsand/ortheir legalrepresentativeschoosetoexercisetheirrightsofchallenge.

6.6. Domestic prosecutors have access to adequate resources with which toinvestigate andprosecute allegations of business involvement inhuman rights abusesthat,ifproved,wouldamounttoacriminalorquasi-criminaloffenceunderdomesticlaw.

6.7. The State has established specialist units (either within domestic prosecutionbodiesorpursuanttospecificlegalregimes)withspecificresponsibilityforthedetection,investigationandprosecutionofcasesofbusinessinvolvementinseverehumanrightsabuses.

6.8. The State ensures that the specialist units referred to in6.7 abovehave readyaccesstospecialistexpertiserelatingtothedetection, investigationandprosecutionofcasesofbusinessinvolvementinseverehumanrightsabuses.

6.9. TheStateensuresadequate training fordomesticprosecutors inrespectof thelegalandtechnicalaspectsofinvestigatingallegationsofbreachesofdomesticcriminal(and/or quasi-criminal) law by business enterprises, including allegations of businessinvolvementinseverehumanrightsabuses.

6.10. DomesticprosecutorsareawareofthesystemsthatareinplacetoenablethemreadilyandrapidlytoobtainassistancefromcounterpartsinotherStatesinrespectoftheinvestigationand/orprosecutionofallegationsofbusinessinvolvementinhumanrightsabuses where the case appears to have a cross-border element (e.g. because of thelocation of relevant alleged facts or acts, or because of the location of witnesses orevidence).34

6.11. TheStatetakesthestepsnecessarytoensurethatdomesticprosecutionbodieshave good working relationships and effective communication links and are able tocoordinatetheiractivitiesproperlyandeffectivelywithotherdomesticagencieshavingresponsibilityforthepromotionandprotectionofhumanrights,suchasNationalHumanRights Institutions, domestic agencies responsible for the enforcement of labour,consumer and environmental standards, agencies responsible for the enforcement of

34SeefurtherSection2,PolicyObjective3above.


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lawsrelatingtobriberyandcorruptionandagenciesresponsiblefortheinvestigationofothercriminalcomplaints(e.g.police).35

6.12. Systemsareinplacetoensurethatdomesticprosecutorstakeappropriatestepsto ensure the protection of whistle-blowers and potential witnesses from the risk ofintimidationandreprisals,andcompliancewiththoseproceduresisproperlymonitoredandevaluated.

6.13. Systemsareinplacetoensurethatdomesticprosecutorshaveawarenessof,andtakeproper accountof, issuesof gender, vulnerability and/ormarginalization in theirdealings with complainants and their representatives and actual and prospectivewitnesses,recognizingthespecificchallengesthatmaybefacedbyindigenouspeoples,women, national or ethnic minorities, religious and linguistic minorities, children,personswithdisabilities,andmigrantworkersandtheirfamilies,andcompliancewiththoseproceduresisproperlymonitored.

6.14. Domestic prosecution bodies have the ability to commence an investigationand/orprosecutionof cases concerningallegationsofbusiness involvement inhumanrightsabusesontheirowninitiative,withouttheneedforaformalcomplaintbyoronbehalfofanaffectedperson.

6.15. TheStateensuresthat(a)policiesandproceduresthatsetperformancetargetsfordomesticprosecutionbodies(b)andfinancialandotherperformanceincentivesforpersonnel are consistent with policies relating to the correct use of prosecutorialdiscretion in cases of allegations of business involvement in human rights abuses(includingincross-bordercases).36

6.16. Domesticprosecutionbodiessupportandencourageinvolvementofpersonnelininternational,inter-governmental,regional,multilateralandbilateralinitiativesaimedatfacilitating contact, networking and exchange of know-how between prosecutors andtheircounterpartsinotherStates.37

6.17. Domestic prosecutors are held to high standards of personal and professionalconductandlawsandstandardsrelatingtolegalethics,conflictsofinterest,briberyandcorruptionarerigorouslyenforced.

35SeefurtherSection2,PolicyObjective3above.36Ibid.37Ibid.