Companies are some of the biggest influencers in modern society. Their actions and business processes affect people and communities across the globe. For the local community or employees of these enterprises, particularly those in emerging markets, the consequences may sometimes be grave: the violation of their human rights. The 2013 Rana Plaza collapse in Bangladesh, which caused the death of over 1.200 people and injured 2.000 more, serves as the prime example of the ultimate consequences of human rights violations and the potential of arbitration within business and human rights cases.
With the creation of The Hague Rules on Business and Human Rights Arbitration (The Hague Rules), an important step has been taken to encourage companies to “put people over profit” by providing them (and those affected by human rights abuses) with a new, flexible and consensual remedy mechanism to resolve human rights disputes. These new arbitration rules were written with a focus on the special requirements of human rights disputes and in accordance with the UN Guiding principles on Business and Human Rights.
On 12 December 2019, during the week of Human Rights Day, The Hague Rules were launched at the Peace Palace in the Hague and first copies were handed out by Judge Bruno Simma to the Netherlands Human Rights Ambassador, Dr. Bahia Tahzib-Lie and the Deputy Mayor of The Hague, Ms. Saskia Bruines. In her keynote address, Dr. Bahia Tahzib-Lie, emphasized the need to solve persisting human rights challenges in the global supply chains of businesses and contribute to sustainable development for all. Accordingly, a paradigm shift is required ‘’from business and human rights to the business of human rights’’ whereby companies acknowledge that respecting human rights is a good thing for business. Corporations must be held more accountable and be able to show how they respect human rights. The Hague Rules provides a new and promising tool to this end.
During the launch, two members of the Drafting Team of The Hague Rules, Prof. Ursula Kriebaum and Prof. Steven Ratner provided insight into the innovative process that resulted in the creation of these rules. They shared the various issues the Drafting Team had to navigate in order to develop a set of rules that can be used in a broad range of situations and that are flexible enough to cope with a patchwork of norms.
A multistakeholder panel, chaired by Drafting Team member Prof. Anne van Aaken, then discussed the salient issues for the respective stakeholders and addressed possible wider roll-out of the rules. Several questions from the audience related to ensuring the use of and compliance with The Hague Rules by companies. This concern was echoed by one of the panel members, Dr. Mariette van Huijstee, Senior Researcher at SOMO who added that more can be done to make The Hague Rules appeal to companies. A concrete suggestion was to include The Hague Rules within national procurement procedures or terms and conditions for multilateral financing as a mandatory judicial remedy mechanism for resolving human rights disputes. Others reminded us of the relatively new concept of “nudging” – a motivation approach of positive reinforcement and rewarding and indirect suggestion to change behavior rather than using legislation or enforcement – as a tool to encourage companies to apply the new arbitration rules.
With the launch of The Hague Rules, we have contributed to the paradigm shift mentioned by Dr. Bahia Tahzib-Lie and look forward to further engaging with all relevant stakeholders in how these arbitration rules can be used in practice whether through new legal rules, nudging or both.
You can access the digital copy of The Hague Rules on Business and Human Rights Arbitration here.
Check out this video below for a snapshot of the launch event: