background paper - ohchr · background paper accompanying consultation draft 4 a. background...

BACKGROUNDPAPERACCOMPANYINGCONSULTATIONDRAFT

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TheOfficeoftheUnitedNationsHighCommissionerforHumanRights

BusinessandHumanRights:

‘TheAccountabilityandRemedyProject’

BACKGROUNDPAPER

BackgroundpaperaccompanyingdraftguidancepreparedbyOHCHRforthepurposesofinclusioninitsfinalreporttotheHumanRightsCouncil

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

ThispaperaccompaniestheCONSULTATIONDRAFTcontainingthedraftguidanceinrelationtotheOHCHRAccountabilityandRemedyProject.This

paperhasbeenpreparedtoprovidestakeholderswithadditionalinformationandcontexttothecomponentsoftheAccountabilityand

RemedyProject.

TheConsultationDraftisavailablevia:

ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx


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Executivesummary

Ensuringaccesstoeffectiveremedyforthoseimpactedbybusiness-relatedhumanrightsabusesisoneofthethreepillarsoftheUnitedNationsGuidingPrinciplesonBusinessandHuman Rights: Implementing the Protect, Respect and Remedy Framework (‘the UNGuidingPrinciples’)andtherighttoaremedyisacoretenetoftheinternationalhumanrights system.However, access to effective remedy for business-relatedhuman rightsabusesisnotyetarealityformanyaffectedstakeholdersonthegroundandperpetratorsareinmanycasesnotheldtoaccount.Tohelpaddress this situation, theOfficeof theHighCommissioner forHumanRights(OHCHR)launchedthe“AccountabilityandRemedyProject”(ARP)inNovember2014,followinguponpreviousOHCHRresearchinthisareaandpursuanttomandatefromtheHumanRightsCouncil(HRCresolution26/22).TheaimoftheARPwastobuildupontheguidanceintheUNGuidingPrinciplesbyprovidingrecommendationsforpracticalactionby States to enhance accountability and access to remedy, adaptable to respond todifferentlegalstructures,traditions,economicconditionsandstagesofdevelopment.Thispaperexplainsthebackground,scopeandmethodologyoftheARP,andprovidesanoverviewofkeyfindingsinrelationtoitssixProjectComponents(orworkstreams).Itisintendedas a companion to the ‘ConsultationDraft’1which sets outdraft guidance toStates to enhance corporate accountability and access to remedy in cases of businessinvolvementinhumanrightsabuses,withparticularfocusonseverecasesofabuse.The ‘Consultation Draft’ provides guidance to States as to future action to enhanceaccountabilityandaccesstoremedyincasesofbusinessinvolvementwithhumanrightsabuses.Theguidancebuildsonmorethanoneyearofresearchandmulti-stakeholderconsultations undertaken for the Accountability and Remedy Project. To betterunderstand realities on the ground and help ensure that the guidance is both fit-for-purpose and capable of being implemented, OHCHR undertook a large-scale globalconsultationprocesscoupledwithmoretargeted,detailedresearch.ThefocusoftheARPresearchhasbeenongatheringdataonhowdomesticsystemscurrentlyfunctionwhencompaniesareinvolvedinseverehumanrightsabuses.TheARPhas focusedonaccess toremedy through judicialmechanisms,whichshouldform the backbone of a broader system of remedy, including also non-judicial andoperational-level grievance mechanisms. The project addresses specific issues thatresearchhasconfirmedmaypresentbarrierstoaccessingremedyincasesofbusinessinvolvement in human rights abuses, andwhere further clarification and guidance toStateswasneeded.Separatelyandtogether,theguidanceisintendedtoprovidepurpose-builtsolutionsthatare rooted in reality and adaptable to many different legal traditions, systems andcultures. The intention has been to provide a basis against which States cansystematicallyevaluatetheeffectivenessoftheirownlegalsystemswithrespecttotestsforcorporateliability,fundingoptionsforlegalclaims,civilremedies,criminalsanctionsaswellasspecificenforcementissuesandchallenges.Theycanbeusedtoidentifygapsandproblemareasindomesticlegalsystems,includingareaswheretechnicalassistanceorcapacitybuildingmaybenecessary.

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


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Tableofcontents

A.Background......................................................................................................................................4B.AimsoftheAccountabilityandRemedyProject..............................................................5C.ScopeoftheAccountabilityandRemedyProject............................................................5E.AccountabilityandRemedyProjectmethodology..........................................................8F.Structureandunderlyingrationaleforthedraftguidance.........................................9E.OverviewoftheAccountabilityandRemedyProjectcomponents.......................111. ProjectComponent1:Domesticlawtestsforcorporatelegalliability.....................112. Projectcomponent2:RolesandresponsibilitiesofinterestedStatesincross-bordercases..................................................................................................................................................173. ProjectComponent3:Overcomingfinancialobstaclestolegalclaims.....................214. ProjectComponent4:Criminalandadministrativesanctions.....................................225. ProjectComponent5:Civillawremedies..............................................................................236. ProjectComponent6:Domesticprosecutionbodies........................................................24

Annex1:Modellawreviewtermsofreference..................................................................26


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A.Background Ensuringaccesstoeffectiveremedyforthoseimpactedbybusiness-relatedhumanrightsabusesisoneofthethreepillarsoftheUnitedNationsGuidingPrinciplesonBusinessandHuman Rights: Implementing the Protect, Respect and Remedy Framework2 (‘the UNGuidingPrinciples’),endorsedbytheUnitedNationsHumanRightsCouncilinJune2011.3ThecentralroleofaccesstoeffectiveremedyintheUNGuidingPrinciplesreflectsthefactthatrighttoaremedyisacoretenetoftheinternationalhumanrightssystem.However,accesstoeffectiveremedyforbusiness-relatedhumanrightsabusesisnotyetarealityformanyaffectedstakeholdersontheground,andperpetratorsare inmanycasesnotheldtoaccount.Toaddressthisproblem,theOfficeoftheHighCommissionerforHumanRights(OHCHR),aspartofitsmandatetoadvancetheprotectionandpromotionofhumanrightsglobally,in2013commissionedastudyintotheeffectivenessofdomesticjudicialmechanismsincasesofallegedbusiness involvement ingrosshumanrightsabuses.4Thestudy foundthat victimsof such abuses face considerable legal, financial, practical andproceduralbarrierstoaccessingjudicialremedies,whichinmanycasescanproveinsurmountable.Furthermore,variationsbetweennationaljurisdictionsmayexacerbateinequalitiesandcreate legaluncertainty forcompaniesandaffectedpersons.Thestudyconcludedthatthe present system of domestic law remedies for these kinds of cases is “patchy,unpredictable, often ineffective and fragile”5 and outlined a number of areas wherefurtherclarificationofpolicyandprinciplewerenecessary.AtitsJune2014session,inrecognitionoftheneedforgreaterinternationalfocusontheissueofaccesstoremedyandoftheneedforadditionalguidanceonimplementationofthe Access to Remedy Pillar of the UN Guiding Principles, the Human Rights CouncilrequestedtheHighCommissionerto:

“continueworktofacilitatethesharingandexplorationofthefullrangeoflegaloptionsandpracticalmeasurestoimproveaccesstoremedyforvictimsofbusiness-relatedhumanrightsabuses, incollaborationwiththeWorkingGroup, to organize consultations with experts, States and other relevantstakeholders to facilitate mutual understanding and greater consensusamongdifferentviews,andtopublishaprogressreport thereonbefore thetwenty-ninthsessionoftheHumanRightsCouncil,andthefinalreporttobeconsideredbytheCouncilatitsthirty-secondsession”.6

InNovember2014,andpursuanttothismandatefromtheHumanRightsCouncil,OHCHRlaunchedthe“AccountabilityandRemedyProject”.Thisbackgroundpaperaccompaniesthe “Consultation Draft,”7 which sets out draft guidance to enhance corporateaccountabilityandaccess toremedy incasesofbusiness involvement inhumanrightsabuses, with particular focus on severe cases of abuse. This draft guidance is theculminationofoveroneyearofresearchandconsultations.2A/HRC/17/31.3HRC/Res/17/4.4Zerk,J.A.,‘CorporateLiabilityforGrossHumanRightsAbuses:TowardsaFairerandMoreEffectiveSystemofDomesticLawRemedies’,preparedforOHCHR,February2014.Availableat:http://www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx.Seepp.28-29.5Zerk,J.A,Ibid.,p.7.6A/HRC/Res/26/22,para.7.7See:ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx


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B.AimsoftheAccountabilityandRemedyProject

TheUNGuidingPrinciplesonBusinessandHumanRightsconfirmthat:

Aspartof theirduty toprotectagainstbusiness-relatedhumanrightsabuse,Statesmusttakeappropriatestepstoensure,throughjudicial,administrative,legislative or other appropriatemeans, that when such abuses occur withintheirterritoryand/orjurisdictionthoseaffectedhaveaccesstoeffectiveremedy(GuidingPrinciple25).

Moreover:

States should take appropriate steps to ensure the effectiveness of domesticjudicialmechanismswhen addressing business-related human rights abuses,including considering ways to reduce legal, practical and other relevantbarriersthatcouldleadtoadenialofaccesstoremedy(GuidingPrinciple26).

TheAccountabilityandRemedyProjectwasinitiatedbyOHCHRtohelpStatesidentifypracticalwaystoimprovetheirimplementationoftheUNGuidingPrinciples,particularlyin respectof the “ThirdPillar”,whichrelates toaccess to remedy incasesofbusinessrelatedhumanrightsabuses.TheaimwastobuildupontheguidanceintheUNGuidingPrinciples by providing further guidance for practical action by States, which aresufficiently adaptable to respond to different legal structures, traditions, economicconditionsandstagesofdevelopment.

C.ScopeoftheAccountabilityandRemedyProjectTherangeofissuescoveredbythe“ThirdPillar”oftheUNGuidingPrinciples,andthesheer diversity of legal responses and challenges in different jurisdictions around theworld,hasmeant thatsomeprioritisationof issuesandresourceshasbeenneeded todelivertheprojectaimsintherequiredtimeframe.The initial study commissioned by OHCHR8 outlined a number of areas wheremoreclarificationandconsultationwouldcontributetoenhancingaccountabilityandaccesstoremedy.Italsosuggestedaparticularfocusontheworkofdomesticprosecutionbodies,giventheapparentlyverylowlevelsofactivitybysuchbodiesinprosecutingbusinessenterprisesforinvolvementingrosshumanrightsabuses.Basedonthefindingsofthisinitialstudy,andinconsultationwithexperts,OHCHRchosesixdistinct,yetinterrelatedareas of focus that would together contribute to significantly enhancing corporateaccountabilityandaccesstoremedyintheshort-tomediumterm:

1. Domesticlawtestsforcorporatelegalliability2. RolesandresponsibilitiesofinterestedStatesincross-bordercases3. Overcomingfinancialobstaclestolegalclaims4. Goodpracticesincriminallawsanctions5. Goodpracticesincivillawremedies6. Improvingtheeffectivenessofdomesticprosecutionbodies

8Zerk,J.A.,note2above.


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Focusonsubstantiveandpracticalaspects

Thesixprojectcomponentswerechosenfollowingpreparatorywork,andinconsultationwithexperts,asissuesthaturgentlyrequiredeither(a)clarification(i.e.asaprecursortonecessarylegaldevelopment)or(b)actionbyStatestomaketheirexistingdomesticlegalsystemsworkmoreeffectivelyforvictimsofbusiness-relatedhumanrightsabusesintheshorttomediumterm.TheARP’sfocusonsubstantiveandpracticalaspectsisnottodiminishtheimportanceofproceduralreforms.Domesticlegalsystemspresentlycontainmanyproceduralobstaclesto remedy. Because of the influence of procedural issues on legal costs, the guidancerelated to overcoming financial obstacles to legal claims contains a number ofrecommendationsastoproceduralmatters.Focusondomesticjudicialmechanisms

Consistentwiththescopeoftheinitialstudy,thefocusoftheAccountabilityandRemedyProjecthasbeenonjudicialmechanisms.Thedecisiontofocusonjudicialmechanismsforthisprojectwasmadeinrecognitionofthefactthattheextenttowhichthereisaccessto remedy in any jurisdiction, including through non-judicial remedial mechanisms,depends ultimately on the existence of effective domestic judicial mechanisms. Thepresence of effective domestic judicial mechanisms in the background can greatlyenhance the effectiveness of non-judicial mechanisms by providing appropriateincentivestopartiestoparticipatefullyandingoodfaith,byofferingpotentialmeansofenforcementofagreementsandsettlements,andbyofferinganavenueforauthoritativeresolution of a claim in cases where a non-judicial mechanism does not result in anacceptable outcome for one or both parties to a case. As is stated in the UN GuidingPrinciples,“[e]ffectivejudicialmechanismsareatthecoreofensuringaccesstoremedy”.9TheUNGuidingPrinciplesmakesclearthatState-basedandoperational-levelgrievancemechanisms shouldbepart of a systemof remedy. 10The guidance resulting from theAccountabilityandRemedyProjectrecognisesthepotentialcontributionofnon-judicialmechanisms,forinstanceasawayofhelpingtoreducethefinancialobstaclestoremedyfaced by adversely affected individuals and groups and as one area where furtherinternationalcooperationandcoordinationmaybeneeded(seetheConsultationDraft,sections2,3and6).Focusonseverehumanrightsabusesininformationgatheringandresearch

For the purposes of its information gathering and research activities, OHCHR hasfocussed itsdata-gatheringeffortsona setof abuses thatmaybe classifiedas ‘severehumanrightsabuses.’Thischoicewasmadeforseveralreasons.First,inviewofthetighttimetable forresearchandreportingunderHumanRightsCouncil resolution26/22,adecision was taken to prioritise for study and action those abuses which are mostegregious in nature and which carry the severest consequences for victims. Second,severehumanrightsabusesoftentakeplaceinacontextthatmakesobstaclestoaccesstoremedyandaccountabilityparticularlychallengingandthereforewarrantparticularattention.Third,theselectionofadiscretesetofabusesforresearchpurposesenabledmeaningful comparative analysis and meaningful conclusions to be drawn about theeffectiveness of different approaches and strategies under different domestic legalregimes.9A/HRC/17/31,GuidingPrinciple26,Commentary.10Ibid.,GuidingPrinciple25,Commentary.


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Alistofthecategoriesofoffences,abusesandharmsforwhichdatawascollectedforthepurposesoftheAccountabilityandRemedyProjectappearsbelow.However,thislistisintendedtobeillustrativeonly.Itisnotintendedasadefinitiveorexhaustivelistofthecategoriesofabusesthatmayberegardedasseverehumanrightsabuses.Norshoulditbetakentosuggesttheexistenceofanyspecialcategoriesofhumanrightsorhumanrightsabuses.Box1:Categoriesofoffences,abusesandharmsforwhichdatawascollected

• murder• seriousphysicalassault• tortureandotherformsofcruel,inhumanordegradingtreatment• warcrimes• crimesagainsthumanity• genocide• summaryorarbitraryexecutions• enforceddisappearances• arbitraryandprolongeddetention• slavery• slaverylikepractices,includingforcedlabourandhumantrafficking• worstformsofchildlabour• graveandsystematicabusesoflabourrights• seriousviolationsofworkplacehealthandsafetystandardsresultinginwidespread

lossoflifeorseriousinjury• large-scaleenvironmentalpollutionordamage• other(a)graveor(b)largescaleabusesofeconomic,socialorculturalrights

Business enterprises can have an impact on virtually the entire spectrum ofinternationally-recognised human rights.11 Furthermore, the issues that OHCHR’sresearchuncovered,andwhichtheguidanceisdesignedtoaddress,areinmostcasesnotlimitedto‘severe’humanrightsabusesonly.Inmanycases,itwillalsobeinappropriateorimpracticaltocarveoutspecialregimesforaspecificsetofabuses.Thus,theguidancethatissetoutintheConsultationDraftisgenerallynotlimitedto‘severe’humanrightsabuses, and is not intended to be specific to the abuses that appear in the aboveillustrative list. Nevertheless, while the guidance as a whole is not limited to severehumanrightsabuses, insomecontexts(includinge.g. somecross-bordercontextsandsituations relating to domestic prosecution of business-related human rights abuses),prioritizing‘severe’abusesiswarranted,andthustheguidancenotesthisdistinction.TheAccountabilityandRemedyProjectagainstthebackgroundofwiderchallenges

Weakdomesticlegalsystemshavemanycauses.AsstatedintheCommentarytotheUNGuidingPrinciplesonBusinessandHumanRights,theeffectivenessofjudicialsystemscanbeunderminedbypoliticalproblems,suchascorruptionofjudicialprocesses,oralackof independence fromeconomicorpoliticalpressures fromotherStateagentsorfrom business actors. Even where appropriate legal regimes exist on paper, lack ofresourcescanseriouslyunderminetheabilityofdomesticprosecutors, regulatorsandindividual complainants to enforce the law inpractice.Domestic legal regimes canbe

11SeeGuidingPrinciple12,Commentary.


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furtherweakenedinpracticebyinsufficientprotectionsfromreprisals forvictimsandhumanrightsdefenders.Thesewiderpolitical,practical,proceduralandeconomicchallengestoruleof lawarebeyondthescopeoftheAccountabilityandRemedyProject.TheaimoftheAccountabilityand Remedy Project is to contribute to State efforts to more effectively ensureaccountabilityandaccesstoremedybyprovidingStateswith(a)guidanceinrespectofspecific policy themes, (b) a series of “elements” to guide more effectiveness andcoherencyoftheirownregimesand,(c)totheextentthatgapsandproblemsarefound,amenuofreformoptionstoconsider.Inotherwords,implementingtheguidancesetoutinthisreportisnotaguaranteethataStateisfulfillingits“DutytoProtect”assetoutinthe UNGuiding Principles. Rather, the guidance in this report is a tool to help Statestowards ensuring comprehensive protection of human rights and accountability forbusiness-relatedhumanrightsabuses,aspartofabroaderstrategytostrengthenruleoflawandaccesstojusticeinthedifferentdomesticlawjurisdictions.

E.AccountabilityandRemedyProjectmethodologyTobetterunderstand thechallenges thatexistatdomestic level,OHCHRhasgatheredinformation fromawiderangeof jurisdictionsabout the functioningofdomestic legalsystemsinpracticeinbusiness-relatedhumanrightscases.12Between1Mayand1August2015,OHCHRsoughtmulti-stakeholderinputsthroughthe‘OpenProcess’,aglobalonlineconsultationwhererespondentswereinvitedtoprovideinformationonhowdomesticlawsystemsfunctioninpracticeincasesofallegationsofbusiness involvement in severe human rights abuses. Respondents were invited toanswer a series of questions relating to tests for corporate legal liability applied incriminal, quasi-criminal and civil/private law regimes (project component 1), thefinancialrisksofcivillitigationandwaystohelpovercomethese(projectcomponent3),currentpracticeswithrespecttocriminallawsanctions(projectcomponent4)andcivillaw remedies (project component 5). OHCHR received approximately 130 responsesfrom60different jurisdictions,representingadiversityof legalsystemsandabalancebetweendifferentregionalgroups.TheDetailedComparativeProcesshassoughtmorein-depth, comparative information from legal experts and victims’ representatives inrelationto20+focusjurisdictionsfromUNdifferentregions,adiversityoflegaltraditionsanddifferentlevelsofeconomicdevelopment.Thiscomparativeresearchhasbeencomplementedbyreviewsofexistingstudiesandliterature, interviews with prosecutors, targeted research projects relating tointernational cooperation in business and human rights cases, multi-stakeholderconsultative meetings with experts, an interactive workshop with representatives ofStates,andconsultativeprocessesatkeymilestoneswhichhaveinvolvedbothface-to-facemeetingsandopportunitiestosubmitwrittencomments.Theintentionbehindgatheringinformationonhowdifferentjurisdictionsfunctionwhenbusinessenterprisesareinvolvedinhumanrightsabuseshasbeentobetterunderstandinpracticewhatguidancewouldbe‘fitforpurpose’butalsorealisticgiventhediversity

12Somelegaltermsmayhavedifferentmeaningsbetweendifferentlegalsystems.Fora‘glossary’ofhowOHCHRhasapplieddifferentlegaltermsinthecontextoftheARP,see:www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx


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oflegaltraditionsandapproaches.Theintentionhasnotbeentocompareandcontraststrengthsandweaknessesof specific jurisdictions,but rather todrawoutgeneralizedlessonsandfindingsthatyieldinsightsintowhatissuesneedattentioninmost,ifnotall,jurisdictions.

F.StructureandunderlyingrationaleforthedraftguidanceThe contents of the ‘Consultation Draft’ provide draft guidance to States as to futureactiontoenhanceaccountabilityandaccesstoremedyincasesofbusinessinvolvementwith human rights abuses. Separately and together, the guidance provides targetedsolutions that are rooted in reality and adaptable to many different legal traditions,systemsandcultures.StructureofguidanceandpotentialapplicationbyStates

TheguidancearisingfromthesixprojectcomponentsoftheAccountabilityandRemedyProject takes the form of a series of “elements of good State practice”. In relation todomestic law tests for corporate legal liability (Project Component 1) and roles andresponsibilitiesofinterestedStatesincross-bordercases(ProjectComponent2),theseelements of good State practice are arranged according to policy themes or ideas(referredtointheConsultationDraftas“PolicyObjectives”)whichreflectthemes,ideasandpolicygoalsthatwouldberecognizableinmany,ifnotmost,domesticlegalsystems.TheelementsofgoodStatepracticesetoutintheConsultationDraftareintendedasanindicationofthekindsof featuresthatwouldexist inadomestic legalsystemthathasdevelopedeffectiveresponsestochallengesofbusiness-relatedhumanrightsabusesintermsof corporate accountability and access to remedy. Theyprovide a basis againstwhichStatescansystematicallyevaluatetheeffectivenessoftheirownlegalsystemswithrespect to tests for corporate liability, fundingof legal claims, civil remedies, criminalsanctionsandspecificenforcementissuesandchallenges.Theycanbeusedtoidentifygaps and problem areas in domestic legal systems, including areas where technicalassistance or capacity building may be necessary. They are designed with a view toencouraging greater innovation, international dialogue and cross-fertilization of ideasbetweenjurisdictions.The elements of good State practice set out in the Consultation Draft will becomplemented by generalized illustrative examples taken from OHCHR’s extensiveresearchthatcanbeadaptedtospecificlocalneeds.However,forthesakeofbrevityandsimplicity and to allow stakeholders to more easily comment on the text of therecommendations,theConsultationDraftispresentedwithoutillustrativeexamples.Recognizingthediversityofdomesticlegalsystems

Therearemanydifferencesbetweenjurisdictionsintermsoflegalstructures,cultures,traditions,resourcesandstagesofdevelopment,allofwhichhave implicationsfortheissuesthatformthesubjectmatteroftheARP.Forinstance,somelegalsystemsarehighlycodified,whereasothersprovidetoagreaterextentforlegaldevelopmentthroughcase-law.Somedomesticlegalsystemsareadversarial,whereasothersareinquisitorial,andsomecontainelementsofboth.Insomejurisdictions,corporatecriminalliabilityisnotarecognisedlegalconcept,whileinotherscorporatecriminalliabilityisprovidedforonly


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onalimitedbasis,andinyetothersthereisapossibilityofcorporatecriminalliabilityforvirtuallyallcrimes.Differences between jurisdictions are to be expected. However, weak regulation andenforcementinmanyjurisdictionsposeschallenges,includingtotheeffectiveregulationof cross-border business activities, andhave contributed to an international remedialsystemthatis“patchy,unpredictable,oftenineffectiveandfragile.”13ProblemsofweakregulationandenforcementarenotconfinedtoanyoneStateorgroupofStates.Thereis scope for improvement inevery jurisdiction in termsof access to remedy forbusiness-relatedhumanrightsabuses.The‘elementsofgoodStatepractice’arethusdesignedtobeflexibleandtotakeaccountof structural, cultural, and resource differences between jurisdictions. The variouselementsoftheguidanceinthisreportareexpressedinawaythatrendersthemreadilyadaptable to different kinds of domestic legal systems. The elements of good Statepracticeexpressbroadobjectivesthatmaybemetindifferentlegalsystemsindifferentways, depending on prevailing local structures and conditions. It is hoped that theseexamplesofelementsofgoodStatepractice,togetherwithfurther“illustrativeexamples”will enable States to better evaluate the effectiveness of their own legal systems andprovideconcreteexamplesofhowtomeetpolicyobjectivesinwaysthatrespondtotheirspecificlegalcontexts.Statesmayimplementtheserecommendationsthroughvariousnational-levelprocesses,forexampleaspartofthedevelopmentofNationalActionPlansonbusinessandhumanrights, through formal legal review processes, as part of a review of human rightsprotection and access to remedy more generally, or other suitable processes. Theguidance may also feed into relevant processes at the sub-regional, regional orinternationallevelaimedatstrengtheningtheprotectionofhumanrightsagainstadverseimpactsbybusinessenterprisesorimprovingcoordinationbetweenStates.14Theneedforpolicycoherence

Inmanycases,legalandpolicyreformswillhavemoreimpactasapackageofmeasuresthanontheirown.Someoftheelementsof“goodStatepractice”usedinthisguidancewilldependfortheireffectivenessonothersupportingmeasuresandsomemaybeinter-dependent. Awareness of this inter-connectedness is needed to avoid the piece-mealdevelopmentof legal responses forbusinessandhumanrights related issues thathasthus far hampered the effectiveness of domestic judicial mechanisms in manyjurisdictions. As the UN Guiding Principles make clear, States should strive for bothverticalandhorizontalpolicycoherenceinthedevelopmentoflawandpolicythathasimplicationsforbusinessandhumanrights.Asanaidtothisanalysis,theintentionistohighlightkeylinkagesbetweendifferentelementsofgoodpractice,anddifferentaspectsof thisguidance, in the finalversionof thereport tobeprovidedtotheHumanRightsCouncil.Inmanycases,thebestwayofidentifyingareasforimprovementinthedomesticlegalresponse to business-related human rights abuses will be through a formal legalreview. Toassistwith this,OHCHRhasdevelopedamodel termsof reference for aformallegalreviewoftheeffectivenessofdomesticlegalregimesinrespectof:

13Seenote4above.14SeefurtherProjectComponent2below.


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• Testsforcorporatelegalliability(projectcomponent1);• Criminallawsanctions(projectcomponent4);and• Civillawremedies(projectcomponent5).

Themodel terms of reference for a formal legal review can be foundAnnex 1 to thisBackground paper. A legal review could be a standalone exercise, or it could beincorporatedaspartofaprocesstodeveloporupdateaNationalActionPlanorstrategyonbusiness andhuman rights, or as one component in a broader reviewof access toremedy at the national level. It is anticipated that thismodel terms of referencewillrequiresomeadaptationtorespondtolocalchallengesandneeds,andtofitwithexistinglocal structuresand traditions.However, Statesmaybenefit fromsharingexperienceswithusingthelegalreviewtemplate,ormayoffertechnicalorotherformsofcooperationtootherStates.

E.OverviewoftheAccountabilityandRemedyProjectcomponentsThissectionprovidesanoverviewoftheaimsandhigh-levelfindingsofeachofthesixcomponents of the Accountability and Remedy Project. It is intended to providestakeholderswithadditionalcontextandbackgroundtothedraftguidancepresentedintheConsultationDraft.Thissectionisdesignedtohelpstakeholdersfurtherunderstandtherationaleforthedifferentelementsofgoodpractice,andhowtheseelementswouldhelpovercomethechallengesandissuesthatwereidentifiedthroughOHCHR’sresearchandstakeholderconsultations.

1. ProjectComponent1:Domesticlawtestsforcorporatelegalliability

ThefirstcomponentoftheAccountabilityandRemedyProjectfocusedondomesticlawtestsforcorporatelegalliabilityforinvolvementinhumanrightsabuses,withaparticularfocus on severe abuses. Through its research, OHCHR aimed to clarify how differentdomesticlegalsystemsattributeandassesscorporatelegalliabilityincasesofbusiness-related human rights abuses and, based on these findings, to develop good practiceguidancetoStatesonfactorstotakeintoaccountinthejudicialdeterminationof legalliabilityinsuchcases.WhyisfurtheractionbyStatesneededinrelationtodomesticlawtestsforcorporatelegalliabilityforhumanrightsabuses?Ofthemanylegalbarrierstoremedyfacedbyvictimsofbusiness-relatedhumanrightsabuses,thelackofclearandcoherenttestsforcorporateliability inmany, ifnotmost,jurisdictions,isoneofthemostseriousandfundamental.Lackofclarityinlegaltests,andthe resultant lack of predictability as to how they may be applied in specific cases,seriouslyunderminestheusefulnessandeffectivenessofdomesticlegalregimes,bothasa formofdeterrenceandasameansofobtainingredress forvictims incasesofbusiness-relatedhumanrightsabuses.This lackofclarityandconsistencymeansthatforrelevantstakeholders(for instance,victims,victims’legalrepresentatives,prosecutors,regulatorsandcompanies),thereis


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noclearbasisfordecision-makingaboutappropriatelegalactionandresponses.Lackofclarityandcoherencealsohasthepotentialtogreatlycomplicateanddrawoutlegalproceedings,whichaddstothecostsandfinancialrisksoflitigationandprosecutionsandleadstofurtherinefficienciesintheuseofpubliclyfundedjudicialresources(seediscussion of Project Component 3, below). Finally, lack of clarity and coherence indomestictestsforcorporateliabilityinbusiness-relatedhumanrightscasesunderminesthelegalcertaintyneededforsoundinvestmentsbycompanies,efficientcorporatemanagement,andsustainableeconomicgrowth.EmpiricalresearchcarriedoutbyOHCHRinthecourseoftheAccountabilityandRemedyProject confirms that while there is considerable diversity or uncertainty in the waydifferentdomesticlegalsystemspresentlyapproachquestionsofcorporatelegalliability,it is possible to identify common themes in domestic law tests for corporate liability.Thesedomesticlawtestsareunderpinnedbypolicyideasandprinciplesthattranscenddifferentlegalsystems,structures,culturesandstagesofeconomicdevelopment.Thesepolicyideasandprinciplesformthebasisofthe“policyobjectives”usedtoorganisetheguidancepresentedintheConsultationDraft.Anoteonmethodology

Stakeholders were invited to submit information on how domestic legal systemscurrentlyfunctionwhencompaniesareinvolvedinseverehumanrightsabusesthroughtheOpenProcessonlineconsultation.Stakeholderswereaskedanumberofquestionsrelatingtothepossibilityintheoryandpracticeofcorporateliabilityforseverehumanrightsabusesundercriminalandquasi-criminallawandundercivil(or“private”)law.Further comparative information was sought from Detailed Comparative Process toenable a more granular understanding of approaches and challenges in differentdomesticlegalsystems,andtohelpidentifylessonsofgeneralapplication.Recognisingthedifferentfunctionsandpurposesofcriminal,quasi-criminalandcivilregimes,andtheinterrelationshipsbetweenthesedifferentregimes

ThescopeofthiscomponentoftheARPincludesliabilityundercriminal,quasi-criminalandcivil(or“private”)law.Thesedifferentlegalregimesservedifferentpurposeswithina domestic system. Criminal law concerns the protection of the public from conductdeemedtobeharmful,andregulatestheconductofprivateactorswithaviewtoprevent,punish and deter such behaviour. Quasi-criminal regimes regulate conduct that isdeemedharmfulorwhichisrequired(e.g.forreasonsofpublicsafety)tomeetcertainregulatory standards.However, the requirements thatmustbe satisfied to establishaquasi-criminaloffencemaynotbeasstringentasthoserequiredtoestablishacriminaloffence. Criminal law regimes and quasi-criminal law regimes are often described as“publiclaw”regimesbecausetheyaretypicallyenforcedbypublicauthorities.

Incontrast,privatelawregimesgovernrelationshipsbetweenprivateactors.Aprivatelaw claim in the context of corporate human rights abuses provides amechanism foraffected individualsorgrouptoseekaremedydirectly fromtheactor thatcausedtheharm.Asuccessfulcriminalconvictionwilltypicallydemandahigherstandardofproofthanthatrequiredforthepurposesofacivillawclaim.

However,suchdistinctionsarenotalwaysclear-cut.Somecriminallawregimesprovideforcompensationtovictims,andprivatelawregimesmaycontainpunitiveelements.Injurisdictionswherecriminalliabilityisnotpossibleforcompanies(i.e.as“legal”ratherthan “natural” persons), quasi-criminal regimes play a vital role in enforcing legalstandardsandsanctioningcorporatewrongdoing.


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Corporatelegalliability:keyissuesofcontext

A“corporation”isdefined,forthepurposesoftheConsultationDraft,asanorganisationofpeople recognised in lawasa legalentity (ora “legalperson”).A corporation (ora“company”)hasalegalexistencethatisseparatefromitsowners.Thisfeatureofcompanylawregimesisoftenreferredtoas“separatelegalpersonality”.Corporatelegalliabilityreferstothelegalliabilityofacorporationasawhole,asopposedtothelegalliabilityofindividualofficersandemployees.

All jurisdictions recognise the possibility of corporate legal liability for wrongfulcorporateacts,althoughtherearedifferencesfromjurisdictiontojurisdictioninthetypeof legal liability that a corporation can attract. In some jurisdictions this may becriminal liability, quasi-criminal liability15 and liability under private law16 (or “civilliability”).However,insomejurisdictions,corporationsmayonlyattractquasi-criminalandcivilliability,becausecriminalliabilityisonlyapplicabletonaturalpersons.Inthosejurisdictions that do not permit criminal liability for corporations as “legal persons”,individualofficersinacompanymaybeliableiftheyhavecommittedorbeencomplicitinacriminalact,butthecorporationcannotbeconvictedundercriminallaw.Some jurisdictions which recognise the concept of corporate criminal liability haveincluded general provisions in their criminal codes, introducing the possibility ofcorporateliabilityforallcriminaloffencesunderthelawofthejurisdiction(perhapswithlimited exceptions for specific offences). Alternatively, specific domestic criminal lawregimesmay include specific provisions clarifying the nature and extent of corporatecriminalliabilityunderthatregime.Inrecentyears,somejurisdictionswhichhavenottraditionallyrecognisedtheconceptofcorporatelegalliabilityhavemadeorconsideredchanges to domestic legal regimes to allow for the possibility of corporate criminalliability,ifnotgenerallythenforaseriesofexplicitlynamedoffences.Attributingfaulttoacorporateentity

Becausecompaniesarealegalconstruction,theapplicationoftraditionaltestsforfault,which have been designed for individuals, can be problematic. This is a particularprobleminrelationtocriminaloffencesandprivatelawsourcesofliabilitythatrequireproofthatthecorporationintendedtheharmorintendedtocommittheactsthatcausedtheharm.Inmanyjurisdictions,itisonlypossibletoprovethatacorporationintendedtheharmifitispossibletoidentifyindividuals(e.g.seniormanagers)workingonbehalfofthecompanywhothemselvesintendedtherelevantharm.Inthesecircumstances,theintentionsoftheseindividualscanbeattributedtothecompanytosupplythenecessaryelement of corporate criminal “intent”. This is referred to as the “identification”approachtocorporatecriminalliability.

15Criminalorquasi-criminalregimesdependfortheirenforcementonpubliclawenforcementauthoritiesandregulatorybodies.Forthepurposesofthisproject,theterm“quasi-criminal”liabilityisusedinterchangeablywith“administrativeliability”andreferstoliabilityforbreachesoflegalstandardsthatusuallyhavesome,butnotall,ofthequalitiesofcriminaloffences.Forinstance,itmaynotbenecessaryforasuccessfulprosecutionofa“quasi-criminal”or“administrative”offencetoprovethelevelofintentormentalblameworthinessthatwouldbenecessarytoestablishthatacriminaloffencehadbeencommitted.Quasi-criminal,or“administrative”offencestendtohaveamore“regulatory”characterthancriminaloffences.16Forthepurposesofthisdocument,theterm“privatelaw”isusedinterchangeablywith“civillaw”forthebranchoflawthatisconcernedwithrelationshipsbetweenprivateactors,ratherthanbetweentheauthoritiesandprivateactors,andwhichareenforcedbywayofprivatelegalaction.


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However,the“identification”approachhasbeencriticisedforitslimitationsinrespectofsystemic problems that may exist within companies, such as poor management andsupervision.Alternativeteststhatmaybeusedincludeteststhatfocusonthequalityofacompany’smanagement, rather than theactionsand intentionsof specific individuals,suchas testsbasedonprevailing ‘corporateculture’ todeterminewhether therehasbeen“corporatefault”;a“collectivefault”approachwherebyknowledge,intentionsandactions of a group of individuals can be “aggregated”; and inferring the necessaryelementsoffaultfromthesurroundingcircumstances(effectivelyshiftingtheburdenofproofontothecorporationtoshowwhyitshouldnotbeheldlegallyresponsibleaspecificcase).17Inmany jurisdictions, the prosecution of a corporate entity under criminal or quasi-criminallawcantakeplaceindependentlyofanyprosecutionofanyindividualoffenders.However, insome jurisdictions,corporate legal liability(especiallyundercriminal lawregimes) is dependent upon a prior finding of liability on the part of individualoffendersworkingonbehalfofthecompany.Thiscancreateaseriousbarriertoremedyincaseswheretheresponsibleindividualshaveabsconded,cannotbeidentified,orclaimthebenefitofsomeformofimmunityfromprosecution.

Corporatesecondaryliability:keyissuesofcontext

“Secondary liability”, sometimes referred to as “complicity liability”, refers to theliabilityofapersonfortheactsofanotherpersonbyvirtueofthefactthatthefirstpersonhascontributedto,orbeencomplicitin,theactsofthesecondpersoninsomeway.TheUNGuidingPrinciplesonBusinessandHumanRightsnotethat:

“mostnationaljurisdictionsprohibitcomplicityinthecommissionofacrime,andanumberallowforcriminalliabilityofbusinessenterprisesinsuchcases.Typically,civilactionscanalsobebasedonanenterprise’sallegedcontributiontoaharm,althoughthesemaynotbeframedinhumanrightsterms.”(GuidingPrinciple17,Commentary).

Tests for corporate legal liability on the basis of theories of secondary or complicityliabilitymaybelaiddowninageneralcriminalcode,specificcriminalstatutes,civilcodesand commercial codes. In many jurisdictions, general provisions on, or theories of,secondarycriminal(orquasi-criminal)liabilitycreatethepossibilityofsecondarylegalliabilityforcompanies.However,insomejurisdictions(especiallythosejurisdictionswheresecondaryliabilityisseparatelycodifiedinrelationtospecificoffences),therearegaps and inconsistencies in domestic legal approaches to the question of secondarycorporatecriminal(orquasi-criminal)liability.Lackofclarityandpredictabilityastotheapplicabletestsforsecondarycriminalorquasi-criminalliabilitymayalsobetheresultofinconsistentapproachesbetweendifferentregulatoryinstrumentsandareasoflaw.Providedthere isarecognised legalbasis foraprivate lawclaimagainst theprincipalperpetratorofseverehumanrightsabuses,theremayalsobethepossibilityofaclaimbased on theories of secondary liability against a company that has caused or hascontributedtothesevereabuse(providedtherequisiteelementsoftheapplicablelegal17 See also the further guidance under policy objective 3 which relates specifically to therelationshipbetweentestsforcorporatecriminalandquasi-criminalliabilityandthemanagementofhumanrightsrisksarisingfrombusinessactivities.


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tests for secondary liability are satisfied). However, there is a lack of clarity inmanyjurisdictions,andparticularlyincommonlawsystems,astothecircumstancesinwhichcompaniesmaybeliableunderprivatelawforbusiness-relatedhumanrightsabusesonthebasisoftheoriesofsecondaryorcomplicityliability.Teststoestablishsecondaryliability

Concepts that frequently appear in legal tests for corporate secondary or complicityliabilityincludeknowinginstigationofanoffence,knowingincitementorencouragementof an offence, aiding and abetting an offender, or providing knowing assistance to anoffenderafteranoffencehasbeencommitted.Inmany jurisdictionsa companymaybeheld legally liableon thebasisof theoriesofsecondary or complicity liability regardless of whether there has been a finding ofprimaryliabilityagainstaprimaryperpetrator.However,insomejurisdictions,corporatelegalliability(especiallyundercriminallawregimes)isindeeddependentuponapriorfindingofliabilityonthepartoftheprimaryperpetrator.Thispotentiallyposesaseriousbarriertoremedyincaseswheretheresponsibleindividualshaveabsconded,cannotbeidentified,orclaimthebenefitofsomeformofimmunityfromprosecution.Where there are uncertainties about how tests for secondary or complicity liabilityshouldbeinterpretedandappliedinspecificcriminal(andquasi-criminal)cases,itmaybe possible to provide the necessary clarification by way of additional guidance, e.g.guidancefromcentralprosecutionauthoritiestoprosecutors,orstatutoryguidancetoregulatorybodies.AllocatinglegalresponsibilitybetweenmembersofacorporategroupOHCHR’sresearchsuggeststhatisalackofclarityinvirtuallyeveryjurisdictionaboutthewaythattheoriesofsecondary(or“complicity”)liabilityoperatetoallocatelegalliabilityamongmembers of corporate groups, and specifically the inter-relationship betweentheories of secondary legal liability and the company law doctrine of “separate legalpersonality.”18There is also a lack of clarity concerning the operation of theories of secondary orcomplicity liability in cases concerning supply chains. The application of theories ofsecondary liability to cases involving corporate groups and supply chains requiresfurtherlegaldevelopmentand,totheextentpossiblewithinspecificdomesticregimes,furthercodification.The relationship between corporate legal liability and good human rights riskmanagementDomesticcriminalandquasi-criminallawregimesencouragegoodriskmanagementbycompaniesinanumberofdifferentways.Forinstance,inthecontextofspecificregimes(e.g. labour or environmental regimes) poor management can be an aspect of asubstantive offence (e.g. operating without sufficient care). Alternatively, in somejurisdictionsevidenceofpoormanagementcanbeusedasawayofprovingthenecessary

18 See also the further guidance under policy statement 3 which also has a bearing on theconstruction of tests for corporate legal liability on the basis of “secondary” or “complicity”liability.


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degreeofcorporatefaultundermoregeneraloffences.Somecriminalorquasi-criminaloffences may permit a “due diligence” defence, which, if the requisite elements areproved,willabsolvethecorporationofcriminalresponsibility.Statutory duties of care are sometimes used to clarify the nature and extent of themanagement and supervisory responsibilities of companies and their management.Under such a regime, breach of such statutory duties of carewould be a criminal (orquasi-criminal)offence.However,inmanyjurisdictionsthesetestsforcorporateliability(includingtheelementsofapplicableoffences)arenotsufficientlydevelopedordetailedtoensurethatcorporateresponsestohumanrightsrisksarethorough,consistentandcoherent.Forinstance,thereluctanceofmanydomesticcriminalregimesto impose liability foromissionsmeansthatdomestic lawtests forcorporatecriminal (orquasi-criminal) liabilityoften fail tosenda clearmessageas to theextent towhichcompaniesmust takepositive steps toidentifyandaddresshumanrights-relatedrisksarisinginthecontextoftheirbusinessrelationships.Poormanagementasasourceofprimaryliability

The “corporate culture” and “collective fault” tests for corporate criminal liability,discussedabove,focusdirectlyonthecompany’squalityofgovernance,supervisionandmanagement. In some jurisdictions, the concept of “wilful blindness” can be used toovercometheproblemofthedefendant’slackofknowledgewherethedefendantreallyought, in thecircumstances, tohavebeenawareof certain risks. Thismeans that thedefendant cannot avoid liability for failing to make reasonable enquiries and takeappropriatesteps,wheretherisksofaseriouscrimebeingcommittedshouldhavebeenapparent.Inmanyjurisdictions,thefactthatacompanyhascarriedouthumanrightsduediligence,thequalityofthathumanrightsduediligence,andthestepsithastakeninresponsetothoseduediligenceexercises,willberelevanttothequestionofwhetherthecompanyhadexercisedanddischargedanappropriatestandardofcareforthepurposesofcivillaw(or“privatelaw”)testsfornegligence.Poormanagementasasourceof secondaryor “complicity” liabilityunderprivatelawregimes

Inmostjurisdictions,totheextentthatcorporatelegalliabilitycanarisefromnegligentmanagement or supervision of a subsidiary, a supplier, or a contractor or businesspartner, this is conceptualised as a source of primary rather than secondary liability.However,aswithsecondarycriminalliability,positiveencouragementorinstigationtocarryouthumanrightsabusescouldpotentiallygiverisetosecondarycorporateliabilityundersomedomesticprivatelawregimes.Thishaspotentialrelevancetoanumberofdifferentcommercialcontextsincluding(a)supplychainrelationships(b)contractorandsupplierrelationships(c)relationshipsbetweenmembersofacorporategroup(suchasparentandsubsidiary), (d) relationshipsbetween jointventuresand (e) relationshipswithStateentitiesandagencies,includingStateownedcompanies.Companies are increasingly subject to requirements under domestic legal regimes toreport on human rights due diligence steps taken in respect of specific businessrelationships (such as supply chains) or in respect of specific issues (such asmodernslavery,orconflictminerals).However,thereisaneedforgreaterclarityandcoherence


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in many jurisdictions as regards (a) the technical requirements of human rights duediligencemoregenerallyand(b)thelegalconsequencesofhumanrightsduediligenceinboththecriminalandprivatelawcontexts.Furthermore,wheretheuseofduediligenceprovides a potential defence to criminal or quasi-criminal offences, or to a claim ofnegligenceunderprivatelaw,judicialassessmentsastowhetherduediligenceinrespectofhumanrights-relatedriskswasinfactexercisedshouldbedonebyreferencetoclear,accessibleandauthoritativestandards.Corporatehumanrightsriskmanagementinhigh-riskcontexts

Wherebusinessactivitiesposeparticularlyseriousrisks(forinstancetotheenvironmentortoworkplacehealthandsafety)domesticlegislaturesmaycreatespecialcriminalorquasi-criminaloffencestodealwithbreachesofstandardswhicharestrictorabsoluteinnature.Toestablish liabilityundera “strict”or “absolute”criminal (orquasi-criminal)offence,itisnotnecessarytoshowthatthecompanyintendedthesevereabuses;onlythatthesevereabusesinfactoccurred.Dependingontherelevantlegislativeprovisions,itmaybepossibleforacompanytoraiseadefencetospecificchargesbyshowingthatithadinfactusedduediligence.Alternatelyitmaybethatliabilitywillautomaticallyfollowtheoccurrenceofharm,irrespectiveofwhetherornotthecompanycanprovethatduediligencewasinfactexercisedinthespecificcase.In most criminal, quasi-criminal and private law cases, prosecutors and private lawclaimantswillhavetheinitialonusofproof,withtheburdenofprooftypicallyhigherincriminalcasesthaninprivatelawcases,toprotecttherightsofthedefendant.However,in some cases, State agenciesmay decide that certain considerations of public policy(including considerations such as access to justice and theneed for cost effective lawenforcement)justifyadeparturefromtraditionalallocationsofburdensofproof.Insuchcircumstances,itmaybeconcluded(usuallyonlyinthecaseofquasi-criminaloffences)that regulationof business activities through standards enforcedby strict or absoluteliabilityoffencesoffersabetterbalancebetweenthebusinessandcommunityinterestsconcerned.

2. Projectcomponent2:RolesandresponsibilitiesofinterestedStatesincross-bordercases

This component of the Accountability and Remedy Project aimed to explore Statepracticesandattitudeswithrespecttotheappropriateuseofextraterritorialjurisdictionanddomesticmeasureswithextraterritorialimplicationstoconsiderthedifferentwaysin which international cooperation (at both diplomatic and operational levels) canimprove the ability of victims to access remedies for business-related human rightsabusesinthestatewheretheabusesareallegedtohaveoccurred;and,basedonthesefindings, todevelop“goodpractice”guidance forStates inrelationthemanagementofcross-border cases and explore possible models of international and bilateralcooperation.WhyisfurtheractionfromStatesnecessarytoclarifytherolesandresponsibilitiesofinterestedStatesincross-bordercases?Because trade and investment cross national boundaries, allegations of businessinvolvement in human rights abusesmay give rise to legal issues (andhence and thepotentialforlegalliability)underthelawsofmorethanoneState.Whileoverlappinglegalregimesareinevitableinaglobalizingworld,theycangiverisetojurisdictionalconflicts,


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aswellasdisjointedandinconsistentdomesticlegalresponses.Recentyearshaveseentheemergenceofanumberofnewinstrumentstopromoteandfacilitateinternationalcooperation in cross-border cases in specific areas, such as in the area of humantraffickingandtheprotectionofchildrenfromexploitation.19Thesehavethepotentialtoimprovetheeffectivenessandefficiencyofcross-borderpreventative,investigativeandenforcementefforts.However, OHCHR research and consultations in the course of the Accountability andRemedyProjecthave identified twokeyproblems thatarepresentlyundermining theabilityofdomesticlegalregimestorespondeffectivelytocross-bordercasesconcerningbusiness involvement in human rights abuses. The first is a lack of clarity atinternational levelas to theappropriateuseof extraterritorial jurisdiction suchcases. This is a significant source of legal uncertainty for both affected persons andbusiness enterprises. The second, related to the first, is a lack of cooperation andcoordinationbetweeninterestedStateswithrespect tothe investigation,prosecutionandenforcementofcross-bordercases.Thislackofcooperationandcoordinationhashadnegativeeffectsonaccess toremedy inanumberof individualcross-bordercases, forinstancebyhamperingtheabilityofprosecutorstoactonsomecomplaints,byaddingtothecostsandproceduralcomplexityofcross-bordercases,andbyintroducingdelaysthathavesignificantlyreducedthelikelihoodofasuccessfulprosecution.In addition, lack of coordination between States with respect to the use of domesticmeasureswithextraterritorialimplications20canunderminetheeffortsofregulatoryanddomestic law enforcement bodies with respect to the prevention, detection andinvestigationofcross-bordercasesofbusinessinvolvementinhumanrightsabuses.Anoteonmethodology

Information from the Open Process and Detailed Comparative Process has beensupplemented by several preparatory studies that have reviewed specific questionsrelatingtostateapproachesandattitudestotheappropriaterolesandresponsibilitiesofinterestedStatesincross-bordercases.Theseinclude:(a)areviewofStatepracticewithrespect to implementation of two ILO conventions that address severe human rightsabuses with a business connection; (b) a review of State attitudes to the exercise ofextraterritorial jurisdiction as expressed through amicus curiae briefs filed by StateagenciesinAlienTortStatutecasesintheUSand(c)areviewofexperienceswiththeuseof Joint Investigation Teams in strengthening cross-border law enforcement andcooperationincriminalcases.21ThefindingsfromthisresearchhasbeenusedtoinformconsultationswithStatesandotherstakeholders.OHCHRhasalsoorganizedState-onlydiscussionworkshopstoexplorespecificquestionsandexperienceswithrepresentativesofStateagenciesinmoredetail.19SeeforinstanceUNConventionAgainstTransnationalOrganizedCrime(includingtheProtocoltothatConventiontoPrevent,SuppressandPunishtheTraffickingofPersons);theILOConventionontheWorstFormsofChildLabor;theILOConventiononForcedLabor(includingthe2014Protocol);theConventionontheRightsoftheChild(includingtheProtocolontheSaleofChildren,ChildProstitutionandChildPornography).20DomesticmeasureswithextraterritorialimplicationsaredefinedasmeasurestakenbyaStatetoregulatepeople,companiesoractivitieswithinitsownterritorialboundariesbutwhichhave(orareintendedtohave)implicationsbeyondtheterritorialboundariesofthatState.21Seehttp://www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx


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Whatisdifferentaboutcross-bordercases?

Theterm“cross-bordercases”isusedintheConsultationDrafttodescribecaseswheretherelevantfactshavetakenplacein,therelevantactorsarelocatedin,ortheevidenceneededtoproveacaseislocatedin,morethanoneState.SuchcasescanincludeinstanceswhereacompanydomiciledinoneStateisaccusedofcausingorcontributingtohumanrightsabusesinanotherState(forinstance,throughitscontrolrelationshipswithforeignsubsidiaries or contractors); and cases concerning cross-border human rights issuesarising from business activities (for instance cross-border pollution or public orconsumersafetyrisks).UseofextraterritorialjurisdictioninpracticePreviousresearchintoStatepracticeinotherregulatoryareashashelpedtoshedlightontheusebyStatesofextraterritorial jurisdictioninpractice.22Inrecentyears,Stateshavebeenincreasinglypreparedtousedirectextraterritorialjurisdictioninrelationtocriminalactivitysuchascorruption,moneylaundering,gravehumanrightsabusesandsexualoffencesagainstchildren.Lookingatthesedifferentareas,certainpatternscanbeidentified in relation to the State uses of, and State reactions, to extraterritorialjurisdictionanddomesticmeasureswithextraterritorialimplications.Forinstance,thesemeasuresaremorelikelytobeviewedbyaffectedStatesasreasonableiftheregulationisauthorizedunderabilateralormultilateralregime,isdesignedtodealwithanissueofinternationalconcern(ratherthanprimarilydomesticinterests),hasbeendevelopedinconsultation with and takes account of the interests of other States and includesproceduresfortheresolutionofcompetingjurisdictionalclaims.TheregulatoryrolesandresponsibilitiesofinterestedStates(includingtheusebyStatesof direct extraterritorial jurisdiction in certain cases) have been clarified in someregulatorycontextsthroughinternationallegalregimes.Forinstance,internationallegalregimes(includinginternationallegalregimesaimedatregulatingbusinessrespectforhuman rights) may require that participating States carry out direct extraterritorialenforcement inrespectofbusinessoperationsoractivitiesoutsidetheirownterritory(forexample,byvirtueofbeingtheStateofdomicileofaparentcompanyofabusinessenterprise).Inaddition,internationallegalregimesmayrequireorauthorisetheusebyparticipatingStatesofextraterritorial jurisdictionover foreignbusinessenterprisesoractivitiesonotherbases(forexampleonthebasisthatvictimsofhumanrightsabuseswerenationalsorresidentsoftheregulatingState).Internationallegalregimesmayalsorequire, authorise or recommend the use of domestic measures with extraterritorialimplications.However, research by OHCHR into State implementation of international regimesconcerned with specific categories of severe human rights abuses with a businessconnection(i.e.forcedlabourandworstformsofchildlabour)suggeststhattheusesbyStates of direct extraterritorial jurisdiction in relation to these areas, even whereauthorised under international legal regimes, are rare in practice and,where they dooccur,tendtobeconfinedtocasesinvolvingindividualratherthancorporateoffenders.Inpractice, Statesaremore likely to respond to cross-borderbusiness-relatedhuman

22J.Zerk,“Extraterritorialjurisdiction:lessonsforthebusinessandhumanrightsspherefromsixregulatoryareas”,June2010. www.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_59_zerk.pdf.


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rights challengeswithdomesticmeasureswith extraterritorial implications thanwithdirectextraterritorialenforcement.23Withrespecttoprivatelawcases,thereremainsalackofclarityandconsistencyabouttheappropriateuseofextraterritorial jurisdiction incross-borderhumanrightscases.OHCHR research has highlighted a number of areas of uncertainty and possibledifferencesofapproachbetweenStatesinrelationtokeyissuessuchas“universalciviljurisdiction”,theapplicabilityofadoctrineof“exhaustionoflegalremedies”,theextenttowhichafactualnexusisrequiredbetweentheclaimandtheStateinwhichthedisputeislitigatedforthecourtsoftheforumStatetobeabletoexercisejurisdictionatalland,finally,theextenttowhichthenatureandseverityoftheabusemayhaveabearingonthewaythatjurisdictionalrulesareapplied.24Internationalcooperationeffortspotentiallyrelevanttocross-borderbusinessandhumanrightscases

Stateshavealsoenteredintoarangeofinternationaltreatiestosupport,facilitateandenable international cooperation with respect to legal assistance and enforcement ofjudgementsincross-bordercases,including(thoughnotlimitedto)cross-bordercasesconcerningbusinessinvolvementinhumanrightsabuses.25

Sometreatieswithpotentialrelevancetocross-borderhumanrightscasesalsoincludeprovisions designed to facilitate greater cross-border exchange of informationbetweendomesticlawenforcementandjudicialbodies,forinstancetoenablebetteranalysisofthenatureandscaleofspecificcross-borderhumanrights-relatedrisksandasanaidtodetectionofpossiblecrimes.

However,evenwhererelevantlawsandinternationaltreatyarrangementsareinplace,Stateagenciescanexperiencearangeofpracticaldifficultiesandchallengeswhichcanunderminethetreatyobjectives,includingalackofinformationabouthowandwheretomakearequesttoStateagenciesinotherinterestedStates,alackofopportunitiesandforaforcross-borderconsultationandcoordination,differencesofapproachwithrespecttoissuesofprivacyandtheprotectionofsensitiveinformation,alackofresourcesneededtoprocessrequestsinatimelymanner,andalackofawarenessofinvestigativestandardsinotherStates.26

Afurtherchallengetoaccessingregulatoryinformationincross-bordercasesarisesfromdifferencesbetweenStatesintheextenttowhichdifferentdomesticlegalregimescreatelegalrightsofpublicaccesstoregulatoryinformation(includinginformationaboutthe

23ohchr.org/Documents/Issues/Business/DomesticLawRemedies/PreliminaryILOtreaties.pdf24SeefurtherA/HRC/29/39,pp.11-12.Seealso:ohchr.org/Documents/Issues/Business/DomesticLawRemedies/StateamicusATS-cases.pdf25Someofthesetreatiesaredesignedtohavebroadapplication,suchastheEuropeanConventiononMutualAssistanceinCriminalMatters,andvariousbi-lateralmutuallegalassistancetreaties.SeealsotheCouncilofEuropeConventiononLaundering,Search,SeizureandConfiscationoftheProceedsfromCrime.IntheprivatelawcontextseetheHagueConventionontheTakingofEvidenceAbroadandtheHagueConventionontheEnforcementofJudgmentsinCivilandCommercialMatters.Otherinternationallegalregimeshavebeenestablishedtofacilitategreaterinternationalcooperationwithrespecttospecifickindsofcrime,seee.g.theUNConventionAgainstTransnationalOrganisedCrime,whichincludesprovisionsrelatingtomutuallegalassistanceandtheuseofjointinvestigationteams.SeefurtherPolicyObjective2below.26Seealsosection6,below,regardingelementsofgoodStatepracticetoaddresschallengesexperiencedbydomesticprosecutionbodiesinthecontextofinvestigatingandprosecutingbusinessinvolvementincasesofseverehumanrightsabuses.


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humanrights-relatedrisksandimpactsofbusinessactivities),andtheextenttowhichexemptionsaregivenforcertainclassesofinformation,suchascommerciallysensitiveorconfidentialinformation.

3. ProjectComponent3:Overcomingfinancialobstaclestolegalclaims

Theaimsoftheprojectcomponent“overcomingfinancialobstaclestolegalclaims”weretosurveycurrentStatepracticesandvarious‘packages’ofmeasuresthatcanbeusedtoassistfinanciallydisadvantagedclaimantsinbringingclaimsrelatingtobusiness-relatedhuman rights abuse and, based on these findings develop ‘goodpractice guidance forStateswithaviewtoreducingfinancialobstaclestoremedyincasesofbusiness-relatedhumanrightsabuses.WhyisfurtheractionneededfromStateswithrespecttofinancialobstaclestolegalclaimsinbusinessandhumanrightscases?

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.Anoteaboutmethodology

TheresearchmethodologyusedbyOHCHRforthepurposesofprojectcomponent3hasbeeninformedbypastandongoinginvestigationsintothecostsof,andfundingof,civillitigationatdomesticlevel.PreparatoryworkincludedareviewofthedataandresearchfindingsofresearchersfromtheUniversityofOxfordduring2009,followingastudyofthecostsandfundingofcivillitigationinmorethan30jurisdictionsaroundtheworld.27Supplementaryempirical informationon litigationcostsandfundingwascollectedviathetwoinformation-gatheringprocessesdevisedspecificallyforOHCHR’sAccountabilityandRemedyProject;theOpenProcessandtheDetailedComparativeProcess,andbywayof written expert submissions to the OHCHR, and face-to-face consultations withstakeholdersatvariousstagesoftheproject.Keytrendsrelevanttotheavailabilityoffundingforlegalclaims

TherecommendationsinrelationtoProjectComponent3intheConsultationDraftaremadewithinthecontextofanumberoftrendsidentifiedthroughOHCHR’sresearchthathaveimplicationsforthefinancialobstaclesandrisksfacedbylitigants.These include the contraction in the availability of State-based legal aid. In response,thereappearstobeagrowingacceptanceofprivateformsoffundingandmechanismsthatallowformoreflexiblearrangementsbetweenclaimantsandtheirlawyers,whicharedesigned to increase theavailable funding forprivate lawclaimants.For instance,thereappearstobegrowinguseofcontingencyfeestructures,includinginjurisdictionswhichhavetraditionallyshownstrongculturalresistanceto the ideaof lawyersbeing27SeeC.Hodges,S.VogenauerandM.Tulibacka,TheCostsandFundingofCivilLitigation:AComparativePerspective,(HartPublishingLimited,2010).


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paid a percentage of civil damages, and growing opportunities for collective forms ofredress,including“group”or“class”actions.Thereisfurthermoreagrowthinmarketsfor third-party litigation funding in some jurisdictions; however, this developmentappearslargelyconfinedtocommercialcasesandverylargeclassactions.28

However, in many jurisdictions, non-governmental organizations (NGOs) remain themostimportant(andsometimesonlyviable)sourceofinformation,support(includinglegalsupport)andfundingforvictimsofallegedbusiness-relatedhumanrightsabuses.

Financial barriers faced by claimants in business and human rights cases are closelyconnectedwithwidereconomic,developmental,structural,procedural,andresourcingproblemsthatareobservedinmanyjurisdictions.Itisbeyondthescopeofthisprojecttoaddress thesewider issues. On the other hand, it is possible to identify a number offeatures of domestic legal regimes which have the potential to help reduce financialbarrierstoclaimantsinsuchcases.Thesefeaturesformthebasisofthe“elementsofgoodpractice”presentedintheConsultationDraft.

4. ProjectComponent4:CriminalandadministrativesanctionsThe aims of the project component ‘Criminal and administrative sanctions’ to surveycurrentandemergingStatepracticeinrelationtocriminalsanctioningofcorporationsforbusiness-relatedhumanrightsabuses(withaparticularfocusonseverehumanrightsabuses).Whyisfurtheractionneededinrelationtocriminalandadministrativesanctioningofcorporations?

Effective enforcementof criminal laws is a vital aspect ofmeeting the State’s ‘duty toprotect’ (seeGuidingPrinciple3).Access to remedy includes theability to ensure theappropriateapplicationofcriminalorquasi-criminalsanctions.29Criminallawregimesshouldprovideeffectivedeterrenceagainstbusinessrelatedhumanrightsabuses,andespeciallyagainstinvolvementinsevereabuses.However,inpracticetheimpositionofindividual criminal sanctions in such cases is extremely rare, and the imposition ofcorporatecriminalsanctionsrarerstill.Therearefurthermoremanydifferencesbetweenjurisdictions (and also between different regulatory regimes within jurisdictions)regardinghowfinancialpenaltiesareset(e.g.intermsoftheextenttowhichjudgeshavediscretioninthesettingoftheamountspayableasfinesandthefactorsthatmustbetakenintoaccount).

Anoteaboutmethodology

Empirical information on State practice and trends in criminal sanctioning ofcorporationswascollectedviatheOpenProcessandtheDetailedComparativeProcess.Respondents to the Open Process were invited to answer a series of multiple choicequestionsrelatingtothecriminalandquasi-criminalsanctioningofcorporationswithintheir own jurisdictions. More detailed information on criminal and quasi-criminalsanctionswassoughtfromlegalpractitionersworkingindifferentregionsthroughtheDetailed Comparative Process. This information was supplemented by furthercomparativeresearchcarriedoutwithaviewtoclarifycurrentandemergingtrendsin

28SeefurtherHodges,VogenauerandTulibacka,ibid,pp.3-28.29Foranexplanationofwhatismeantby“quasi-criminal”offencesand“quasi-criminal”liabilityseenote8above.


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relationtocriminalsanctioningofcorporationsinotherregulatoryareas,includinganti-corruption,moneylaundering,securitieslawandotherformsoffinancialcrimes.KeytrendsrelatingtocurrentStatepractice

Whilefinancialpenaltiesarethemostlikelysanctionstobeapplied,isitnotunusualforcriminalandquasi-criminalregulatoryregimestoalsoprovideforalternativeformsofsanctions, including remedial orders, forfeiture of assets, disqualification from publicprocurementopportunities,disqualificationfromstatesupport,cancellationofbusinesslicencestooperate,adversepublicityand,inextremecases,dissolution.

In addition to the requirements of deterrence and punishment, there appears to beincreasing recognition of the importance of future preventionmeasures (e.g. throughremedial orders, or “corporate probation”) as part of an effective sanctions regime.Similarly, in specific contexts such as trafficking and child labour cases, criminalsanctioningregimesappeartobeincreasinglyrespondingtotheneedtoensurethatthereiscompensationforvictims.

Inanumberof jurisdictions,andunderanumberofdifferentregimes,thequalityofacompany’smanagementandcomplianceefforts,andtheextenttowhichithadusedduediligencetoidentifyandpreventhumanrightsabuses,islikelytobetakenintoaccountindeterminingtheleveloffinancialpenalties.

5. ProjectComponent5:CivillawremediesThe ‘civil lawremedies’componentof theAccountabilityandRemedyProject (projectcomponent5)aimedtosurveycurrentandemergingStatepracticeinrelationtocivillaw(tortlaw)damagesincasesofbusiness-relatedhumanrightsabuses(withaparticularfocus on severe abuses); and to explore the role of domestic judicial mechanisms inrelationtosupervisionand implementationofsettlementsandawards,withaviewtoidentifying possible ‘good practicemodels’ for States, taking into account innovationsfromotherareasofprivatelaw.WhyisfurtheractionneededfromStatesinrelationtocivilremedies?

Cases alleging business involvement in severe human rights abuses rarely proceed tojudgment.Inmostcasestheyaredismissedatproceduralstages,althoughanumberhavesettledoutofcourt.Whetherthereisasettlement,orajudicialdeterminationofliability,theremediesobtainedbyclaimantsrarely(ifever)meetthe internationalstandardof“adequate,effectiveandpromptreparationforharmsuffered”.30Theextremedifferencesbetweendifferentjurisdictionsinthekindsandamountsofcivilremedies that can be awarded contribute to inequalities between different groups ofaffectedindividualsandcommunitiesintermsofthelevelsoflegalprotectiontheyenjoy.Thisalsohasseriousimplicationsforfundingoflegalclaimsand,inturn,accesstojudicialprocesses. In addition, problems have been identified with respect to a lack ofconsultationwithaffectedindividualsinsomecasesastothetypesofremediesneeded,resulting in inappropriate compensatory arrangements, and a lack of clarity inmany

30SeetheUN2005BasicPrinciplesandGuidelinesontheRighttoaRemedyandReparationforVictimsofGrossViolationsofInternationalHumanRightsLawandSeriousViolationsofInternationalHumanitarianLaw,ArticlesI.2(b)andVII.


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jurisdictionsastotheappropriatestandardsthatapply inthedistributionofdamagesarisingfromgroupclaims.Anoteonmethodology

EmpiricalinformationonStatepracticeandtrendsincivillawremediesinbusinessandhuman rights caseswas collected via theOpenProcess and theDetailedComparativeProcess.RespondentstotheOpenProcesswereinvitedtoanswerquestionsrelatingtocivillawremedieswithintheirownjurisdictions,whichincludedquestionsontypesofremedies thatmay be granted as a result of civil proceedings and factors taken intoaccount in the calculation of compensatory damages. More detailed information oncurrent practices with respect to civil remedies was sought from legal practitionersworkingindifferentjurisdictionsthroughtheDetailedComparativeProcess.In addition, further supplementary research has been carried out in relation to thestandards that govern the distribution of damages in large class actions in differentjurisdictions,withaviewtogainingabetterunderstandingof thepracticalchallengessurroundingthisspecificissue,andtheextenttowhichthereisanemergingconsensusregarding“goodpractice”.KeyfindingsrelatingtocurrentStatepractice

Themostcommonlyappliedformofremedyincivilcases(andtheonemostlikelytobeapplied in claims arising from alleged business involvement in severe human rightsabuses)iscompensatorydamages.Inaddition,punitivedamagesmaybeappliedinanumberofjurisdictionsincaseswherethedamagehasbeenparticularlyserious,wherethe degree of negligence or recklessness was particularly great, or where there wasintentiontocauseharm.Punitivedamagesappearlesslikelytobeafeatureofcivillawregimesthanofcommonlawregimes.Restitutionandinjunctionsarepossiblecivillawremediesinmanyjurisdictions.

In addition, some further alternative civil remedies may be available in somejurisdictions, including compliance orders, supervisory orders and requirements topublishcertain informationrelating to theclaimor tomakepublicapologies. Insomejurisdictions,itispossibleforregulatorstomakeuseofcivilprocessestoenforcecertainstatutoryorregulatorystandards,whichmayresultinfinancialcompensationforgroupsor individuals affected by breaches of standards by corporate entities, or complianceorders.

6. ProjectComponent6:DomesticprosecutionbodiesTheaimsofthiscomponentoftheAccountabilityandRemedyProjectweretoinvestigatethereasonsbehindtheapparentlyvery low levelsofactivityofdomesticcriminal lawenforcementbodiesinrelationtocasesofallegedbusinessinvolvementinseverehumanrightsabuses;andtoidentifythespecificchallengesfacedbydomesticlawprosecutorsinsuchcases,andtodevelopasetofrecommendations forStatesas toways tobeginaddressingthosechallenges.WhyisfurtheractionneededfromStatesinthisarea?

Effective enforcement of criminal laws is a vital aspect ofmeeting the State’sDuty toProtect.As is stated in theCommentary toGuidingPrinciple3, “the failure to enforceexistinglawsthatdirectlyorindirectlyregulatebusinessrespectforhumanrightsisoften


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asignificantlegalgapinStatepractice.Suchlawsmightrangefromnon-discriminationandlabourlawstoenvironmental,property,privacyandanti-briberylaws.Therefore,itis important for States to consider whether such laws are currently being enforcedeffectively,andifnot,whythisisthecaseandwhatmeasuresmayreasonablycorrectthesituation”.However, at present, complaints to domestic law enforcement bodies about businessinvolvement inserioushumanrightsabusesareunlikelytoresult inaformalcriminalinvestigationorprosecution.Researchhasconfirmedthatlevelsofactivitybydomesticlawprosecutorsinthisarearemainverylow.Whileperformancevariesfromjurisdictiontojurisdictionandfromregulatoryareatoregulatoryarea(withtypicallyhigherlevelsofactivity reported in relation to more codified areas of law such as labour andenvironmentallaw),domesticlawenforcementbodiesandpractitionersreportarangeofchallengesthatinhibittheirabilitytorespondeffectivelytobusinessandhumanrightscases.Anoteaboutmethodology

RespondentstotheOpenProcesswereinvitedtoanswerquestionsrelatingtostatusandprogressofcriminallawcasesrelatingtoallegationsofbusinessinvolvementinhumanrights abuses in their own jurisdiction. Issues raised in the course of stakeholderconsultationsandexpert reviewsabout the roleandcapacityofdomesticprosecutionbodies in respectofbusinessandhumanrights cases (includingcross-border cases)31havebeenexplored inmoredetail throughtelephoneandface-to-face interviewswithprosecutors from different countries and regions with a view to gaining a betterunderstandingof(a)thepracticalchallengesfacedbyprosecutorsinparticularcriminallawcasesinvolvingcorporatedefendants,and(b)theextenttowhichthesechallengesvarydependingondifferentlegalsystems,traditions,geographicregions,andcontexts.Keyfindingsrelevanttotheprosecutionofbusiness-relatedhumanrightsabuses

Prosecutorsfaceanarrayofchallengeswhichhampertheirabilitytorespondtocasesinvolving allegations of business involvement in severe human rights abuses. Thesechallengesincludelackofresources;lackofthenecessaryspecialistknowledge,expertiseand training; difficulties gathering evidence in relation to complex corporate andmanagerial structures; concernsabout intimidationofwitnessesand fearof reprisals;lack of political or managerial support; and legal complexity (which can add to thefinancialandotherrisksofinvestigations).Particular problems have been identified in relation to cross-border cases.32 Here,prosecutorshavehighlighted(a)differencesbetweentherelevantStatesincriminallawregimesandinregulatoryandinvestigativestandards(b)poorornon-existentsystemsforgainingassistancefromcounterpartsinotherStates,and(c)lackofcommunicationandcoordinationbetweendifferentStateagencieswithrespecttodomesticenforcementstrategies.

31SeefurtherProjectComponent2above.32Seealsothediscussioninsection2oftheConsultationDraft.


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Annex1:Modellawreviewtermsofreference

ModelTermsofReferenceaddressedtoaLawCommission(ordomesticequivalent)toenableatechnicalreviewofdomesticlegaltestsforcorporatelegalliabilityincasesofbusinessinvolvementinhumanrightsabuses1.The[LawCommission/reviewbody]isrequestedtoinvestigateandreportonthefollowingmatters:1.1 To what extent may corporate entities be criminally (or quasi-criminally) liable for differentcategoriesofhumanrightsabusesunderthelawsof[thejurisdiction],including‘severe’abuses?Aretherehumanrightsabusesforwhichcorporatecriminalliability(orquasi-criminalliability)isnotpresentlypossible?Ifso,(a)whatarethepolicyreasonsforsuchexceptionsorexclusionsand(b)arethesejustified?1.2 Totheextent thatcorporatecriminal (orquasi-criminal) liability is legallypossible,whattests forcriminal(orquasi-criminal) liabilityarecurrentlyappliedincasesofcorporatedefendants?Arethesetestssufficientlyclearforthepurposesof legalcertaintyandproperadministrationof justice?Dotheyrespondadequately to reported cases of alleged business involvement in severe human rights abuses? Do theyrespond adequately to cases involving allegations against corporate groups? Do they provide sufficientencouragementandincentivestocompaniestoensurethatrisksofcorporateinvolvementinhumanrightsabusesareproperlyidentifiedandpreventedormitigated,andthatworkers(includingtemporaryworkers),subsidiaries,contractors,suppliersandotherbusinessrelationshipsareproperlymanaged,supervisedandmonitored?1.3 Towhatextentmaycorporationsbeliableundertheprivatelawof[thejurisdiction]forhumanrightsabuses?Aretherehumanrightsabusesforwhichtherewouldpresentlybenocorporateliabilitytothevictimsofsuchabusesunderthelawsof[thejurisdiction],inparticularwithrespectto‘severe’abuses?Ifso(a)whatarethepolicyreasonsforsuchexceptionsorexclusionsand(b)arethesejustified?1.4 Totheextentthatthereiscorporatelegalliabilityforhumanrightsabusesundertheprivatelawof[the jurisdiction], are the legal tests for corporate legal liability sufficiently clear for thepurposesof legalcertainty and proper administration of justice? Do they respond adequately to cases of alleged businessinvolvement in severe human rights abuses? Do they respond adequately to cases involving allegationsagainstcorporategroups?Dotheyprovidesufficientencouragementandincentivestocompaniestoensurethatrisksofcorporateinvolvementinhumanrightsabusesareproperlyidentifiedandmitigated,andthatemployees, subsidiaries, contractors, suppliers and other business relationships are properly managed,supervisedandmonitored?2.The[LawCommission/reviewbody]isrequestedtomakerecommendationsthattakeintoaccount:

2.1 theUNGuidingPrinciplesonBusinessandHumanRights;2.2 [whererelevant]thecommitmentsmadeby[thejurisdiction]initsNationalActionPlan;2.3 itsfindingsinrelationtotheissuesdescribedatpara.1above3.The[LawCommission’s/reviewbody’s]reviewprocesswillbeopen,inclusiveandevidence-basedandwillinvolve:

3.1 areviewstructurethatwillprovideadequateopportunitiesforcontributionbykeystakeholders;3.2 properconsultationwithlegalprofessionals,criminal justicepractitioners,public interest lawyers,

members of the judiciary, parliamentarians, academics, representatives of victims’ groups,representativesoftradeunions,andrepresentativesofbusinesses;

3.2 anexaminationofevidencefromresearch,includingevidenceofexperiencesinothercountriesinthedevelopmentandimplementationofreformsofthelawsrelatingtocorporatelegalliabilityincasesofallegedbusinessinvolvementinhumanrightsabuses.