The updated draft business and human rights (BHR) treaty of July 2023, that forms the basis of negotiations for the ninth session of the Intergovernmental Working Group during the 9^th session of the OEIGWG meetings beginning the week of 23^rd October has had some interesting changes. These changes include some positive ones like making the language of the treaty more inclusive and necessitating consultation of victims by States in design and delivery of remedies. Talk about centring people in a BHR treaty!

However, many changes have rolled back previously existing provisions like the deletion of non-financial reporting and integration of human rights due diligence (HRDD) in contracts, removal of forum non conveniens as a named barrier of access to justice, deletion of the clarification that HRDD cannot be a safe harbour etc. One change among this long list of positive and negative changes is also the removal of half of the clause on investment law overlaps with the treaty, viz. that of new trade and investment treaties having to be compatible with the treaty obligations and other human rights instruments.

This provision is art. 14.5 of the treaty which I will discuss in this blogpost. In the third draft, there was an article art. 14.5(b) which read, ‘All new bilateral or multilateral trade and investment agreements shall be compatible with the States Parties’ human rights obligations’ under the treaty and also with other human rights instruments. What remains now in the updated draft is the text of (erstwhile) art. 14.5(a) which stated that existing trade and investment agreements will be interpreted in a manner that does not restrict state action under the treaty (for furthering human rights protection). Given that the there was a clear separation between past and future agreements, does the removal of the latter mean that future agreements need not be compatible with the treaty while past agreements are to be interpreted so? That interpretation would not seem reasonable given the object and purpose of the treaty, but the text does seem confusing. What is also troubling is why only the future-oriented part of the text disappeared in the updated draft. The development of this treaty provision  has been discussed in detail elsewhere. Nonetheless, it is interesting to note state positions on this particular provision from previous sessions.

In the seventh session, Brazil, Panama, Egypt, Pakistan, and Iran conveyed their reservations to the provision. While the reasons for Iran’s reservations were not explicitly laid down, the others based their reservations primarily on the position that there exists no hierarchy in international law and this treaty is not the correct place to be attempting to create one. Panama expressed another fear: will states signing trade and investment agreements be made responsible before international courts if such agreements were in friction with human rights? Liberia in the seventh session, and USA in the eighth session, both expressed concerns about the existing interpretation part of the text as to how all treaties were to be reinterpreted, especially in the case where a party to an investment agreement was not a party to the treaty. This is the part of the text that remains in the updated draft. Importantly, neither the hierarchy nor the interpretation issue are new and was expressed by Singapore, for example, even on the draft elements for the treaty in 2017.

In my view, what lies at stake is not the hierarchy of international law but the entrenchment of human rights law as separate from international economic law or economic concerns in general. The updated draft treaty, in its Preamble, contains the language, ‘Emphasizing that business enterprises play a crucial role in the social and economic development (…).’ Where is this development promised to come from, if not primarily from investment opportunities? This debate is also quite old even at the United Nations. One may recall Kissinger’s statement on the New International Economic Order (delivered on his behalf), where he says, ‘Transnational enterprises have been powerful instruments of modernization (…) and controversy over their role and conduct is itself an obstacle to economic development.’

In the context of the updated draft treaty, whether art. 14.5 survives further rounds is questionable given the aforementioned objections. The danger is that the status quo of a separation between human rights and investment would leave large loopholes open, like for example, an investment arbitration challenging national court decisions against human rights abuses of transnational corporations. This has happened before. That there is no hierarchy between international investment law and international human rights law is therefore a spurious argument: there is one, and investment law sits on top. This is especially in the context that it is possible to sue states for anti-tobacco measures or for ensuring access to water; whether a monetary compensation results from it or not is secondary.

Can you conceptualise the opposite? Can a state or person sue a corporation under this treaty or any other law for obtaining an investment tribunal award that threatens measures protecting the right to a healthy environment? Even given all the doctrinal hiccups that it may produce, the text of art. 14.5 from the previous third draft is meaningful to keep, in my opinion. If the treaty is to ‘emphasize’ the role of business in development, it should live up to this expectation. Keeping half the text from the third draft confuses more than it clarifies, and deleting the provision altogether would be a lost opportunity. The treaty is not just another attempt at an instrument of corporate responsibility: it is an embodiment of the hope that negotiating states are willing to work together towards the common goal of a better future for all which necessitates corporate responsibility. People over profit, as they say, and what better way to do so than an attempt at putting people at the heart of the law of profits, investment law.

Debadatta Bose is a doctoral candidate, Amsterdam Law School, University of Amsterdam.