CYIL vol. 11 (2020)

MONIKA FEIGERLOVÁ CYIL 11 (2020) potential impact on human rights resulting from size, nature, and context of risks associated with the business activities. 48 Human rights due diligence shall include activities such as carrying out environmental and human rights impact assessment, taking appropriate actions, carrying consultations, reporting publicly, and setting up a complaint mechanism. The obligation to conduct due diligence is further broadened to cover not only a company’s own business activities but also activities from its “contractual relationships”. 49 The text is, however, unclear whether only the company’s immediate contractors are included (i.e. direct contractors) or the obligation of the company spreads over the entire supply chain. The obligation to conduct human rights due diligence is the most important measure to be taken on the part of businesses that the Revised Draft envisages. The Revised Draft focuses on the conduct of the due diligence rather than its result. Unfortunately, the Revised Draft does not specify the scope of the due diligence procedures to be established. Moreover, it is not entirely clear whether conducting human rights due diligence could automatically absolve a company from liability. The alignment between the failure to comply with the human rights’ due diligence provisions and the liability of the company needs to be clearly established in the next draft of the proposed treaty. 3.3 Legal Liability Pursuant to the Revised Draft the State Parties shall effectively regulate the activities of business enterprises within their territory and jurisdiction and shall ensure that companies respect human rights and prevent human rights violations or abuses. 50 The concept of legal liability is the core of the binding treaty and these provisions underwent major changes since the Zero Draft. As the Revised Draft refrains from establishing direct legal liability for violations of human rights in the context of business activities, it is left to the states to ensure that their domestic law provides for “ a comprehensive and adequate system of legal liability ”. 51 As some experts pointed out, this term is too vague and it is not entirely clear what legal standards apply and to whom 52 and how the national regimes of civil, administrative, and criminal liability shall look like. It may cover various modalities from tortious liability based on negligence to strict liability. The implementation in domestic systems can be quite diverse and further guidance on setting international standards is crucial. The Revised Draft also envisages liability of a business for its contribution or participation in an abuse committed by another entity, in other words, for its failure to prevent another entity from causing harm to third parties. Such liability shall be limited to the activities of entities with whom the relevant company has a contractual relation, and by the criteria of foreseeability of the risk of human rights violations or abuses in the conduct of business activities, and/or of sufficient control or supervision over the relevant activity that caused the harm. 53 In practice, victims usually try to establish the liability of the foreign parent or 48 Article 5(2) and (3) of the Revised Draft.

49 Article 5(2) of the Revised Draft. 50 Article 5(1) of the Revised Draft. 51 Article 6(1) of the Revised Draft.

52 See Report on the fifth session of the open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights. 09/01/2020, A/HRC/43/55, p. 25, para. 10. One expert underlined that some areas of international humanitarian law already apply to non-state actors. 53 Article 6(6) of the Revised Draft.

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