UN Guiding Principles on Business and Human Rights

November 11, 2021

Project Seeks Legal Consultant to Assist with Feasibility Study of DOVE Fund

Background

There is the potential to create regional or sub-regional frameworks, which through agreements can handle claims against companies within their territories. This may strengthen local regional capacity, alleviate the allegations of complicity of the state and exemplify the cooperative spirit embodied in more recent collaborative African action. It would demonstrate an attempt at African solutions which are not dependent on home states. Nevertheless, it may not be enough to counter the lack of legally binding responsibility grounded in international law, as it would not be able to bring parent companies, who reside outside the African jurisdiction, within its scope.

Despite the increasing popularity of MSIs, it is clear that self-regulation through this governance model is not the answer to driving corporate accountability for matters of public concern such as human rights protection. In a report released in July 2020 by MSI Integrity, a non-profit originally dedicated to understanding the human rights impact and value of MSIs, it was found that MSIs are not effective tools for holding corporations accountable for abuses, protecting rights holders against human rights violations, or providing survivors and victims’ with access to remedy. The report showed that we need to rethink the role of MSIs and the presence of an MSI in an industry should not be a substitute for public regulation.

This online symposium is the outcome of a workshop on ‘GVCs, Trade and Development’ hosted by the Kent Law School and IEL collective in July 2020 and supported by the British Academy (Grant no. MD19\190020). The workshop engaged with the policy research literature produced by the World Trade Organisation and World Bank since 2013, in particular their Global Value Chain Development (GVCD) reports of 2017 and 2019.

On May 8, 2020, the Mozambique Constitutional Council decided that non-concessional loans totaling 622 million USD borrowed from two London-based banks – Credit Suisse and Russian VTB - was illegal, null and void. The Mozambican borrowers were three State Owned Enterprises that at the time did not been formally constituted. The basis of the Constitutional Council’s decision was that this loan was obtained without approval of Parliament. Further, the Council held that amount was in excess of the borrowing limit permissible under the Constitution and laws of Mozambique.

The purpose of this post is to examine the concept of due diligence.  By building on a notion common to the fields of corporate law and human rights law, due diligence became a bridge for the business and human rights (BHR). In order to meet with the expectations from victims of corporate abuses, a BHR due diligence must develop its proper concept, particularly in the field of reparations and access to remedies.

The question of a regulatory framework for this type of CSR at the African Union level is paramount. Such regulatory frameworks could be meta-regulatory in nature and thus embrace a mix of soft law and hard law rules with incentives. This need for policy and regulation is recognised in the African Union Agenda 2063 framework document both in order to effectively finance development objectives and to enable full exploitation of the partnership capabilities in the interest of Africa. The African Union has also pursued this set goal for agribusiness as a result of the Malabo declaration on accelerated agricultural growth commitments

I recommend that ALIC put forward that investment in land should be subject to a comprehensive human rights impact assessment and that all on-going effects, responsibilities, and duties be continuously monitored. The task would then be to spell out what a comprehensive human rights report should comprise.

By bringing forward this interlegal sensibility, ALIC invites the investor to think of their own best interest in broad term and to take the time to understand already-existing, pluralist socio-legal expectations and practices. It also implicitly reminds the investor to take the time to build a relationship with local communities that is buttressed by an iterative understanding of fairness (a core tenet of commercial law). Without such a relationship and appropriate due diligence, ALIC in effect recommends to the investor and the local community to not pursue the deal – no one benefits from a land transaction that is only made possible by disrupting local people’s lives or dislocating them from their homeland.