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This article appeared in the Irrawaddy on 25 May 2017 here: https://www.irrawaddy.com/opinion/editorial/use-law-protect-human-rights-environment-irresponsible-investment.html

By DANIEL AGUIRRE 25 May 2017

Burma’s 2016 Investment Law and the implementing Investment Rules issued in April 2017 create space for the government and civil society to facilitate responsible investment and exclude investors that have track records of environmental destruction and human rights abuses.

This means that affected individuals and communities must now test Burma’s commitment to the rule of law. There are new opportunities for civil society to use law to hold them accountable. In this regard, both international law and Burma’s constitution guarantee access to justice for rights abuses.

The Investment Rules instruct the Myanmar Investment Commission (MIC) to consider whether investors have demonstrated a commitment to responsible investment. In considering the good character and reputation of the investor, the MIC may study whether the investor or any associate with an interest in the investment broke the law in Burma or any other jurisdiction. The rules explicitly mention environmental, labor, tax, anti-bribery and corruption or human rights law.

What this means is that if an investor is determined to have committed a crime, has violated environmental protection standards or was involved with human rights abuses, the MIC should not grant it a permit.  If such a company applies for an investment permit, civil society should bring its record to the attention of the MIC and advocate for the rejection of a permit.

Successive governments in Burma have focused on increased investment to develop the country and improve its people’s standard of living.

At the same time, human rights and environment proponents from civil society have opposed many investment projects, citing the impact on the environment and human rights of local communities. They complain that land rights are not adequately protected, that environmental impact assessments are not implemented and that they lack access to justice for corporate human rights abuses.

There are challenges to using the law to protect human rights in Burma. Disputes related to business activity are often considered sensitive political matters in which the courts are unable or unwilling to intervene. They are reluctant to review crucial decisions of administrative bodies or to hold rights abusers accountable.

But community activists, human rights defenders and lawyers have increased opportunities to pressure the courts to apply the law and should do so. Lawyers have an important role in protecting human rights by representing local communities.

Courts must become a venue to challenge administrative decisions that allow for irresponsible investment that does not comply with national law, and where appropriate, obtain remedies and reparations for victims of human rights violations.

The Investment Law and its rules, which govern both local and foreign investment except within special economic zones, provide legal guarantees for investors to access information and protections against expropriation including compensation and access to due process if changes in regulation affect their business. Investors can also access long-term rights to use land.

Civil society should help to ensure that only responsible investors benefit from these protections. According to the law, the MIC is the gatekeeper that issues permits and endorsements for many would-be national and international investments likely to cause a large impact on the environment and local community.

In order to ensure that the protective aspects of the law are effective, courts must have some power of review, at least to ensure that administrative bodies, such as the MIC, are acting reasonably and in accordance with the law, while respecting and protecting human rights. If the MIC grants permits for companies that do not meet the requirements outlined in the Investment Rules, their decisions must be subject to review by the judiciary.

Burma’s courts have the authority to review administrative decisions, particularly through the application of constitutional writs. Lawyers can use the writs of mandamusand certiorari to secure the performance of public duties and quash an illegal order already passed by public bodies such as the MIC. This would help ensure the MIC uses its mandate to prevent irresponsible investment.

Likewise, investors that fail to respect human rights or unlawfully cause damage to the environment must be held accountable; but there are few options to do so in Burma. Criminal prosecutions against companies, actions imposing administrative sanctions, and civil suits face a variety of procedural hurdles, particularly if involving joint ventures with state run enterprises.

For example, a negligence civil suit brought by villagers against the Heinda tin mine in Dawei District was unsuccessful because the 1909 Limitations Act demands complaints to be brought within one year of damage. Section 80 of the Civil Procedure Code requires prior notice and the names of plaintiffs to be given to the government two months before filing a suit against the government and allows small procedural defects to preclude a claim. Lawyers are sometimes unfamiliar with these procedures and communities are reluctant to put their names to such cases fearing reprisals.

Clearly there are significant challenges to ensuring that investment in Burma does not adversely affect human rights. To overcome these, civil society and lawyers must engage the administration—the MIC—to ensure only responsible investments is permitted and start to use the judiciary to review its actions. Likewise, cases must continue to be taken against investors that abuse human rights and harm the environment. Powerful investors must be constrained by the confines of the law, including human rights law.

Unless civil society and lawyers can use the legal framework to address these concerns, Burma’s judicial system is unlikely to develop; lawyers will not gain valuable experience and the public will remain distrustful. The process is long and arduous but necessary to protect human rights and the environment from irresponsible investment.

In February, 2017 the International Commission of Jurists released a comprehensive report on the Special Economic Zones and the corresponding laws in Myanmar. It examines the State duty to protect human rights and finds that the laws come up short. It  provides recommendations on how the government in Myanmar can take steps to avoid repeating mistakes of the past as it develops the SEZ in Kyauk Phyu, Rakhine State.

The Government of Myanmar should impose a moratorium on the development of Special Economic Zones (SEZs) until it can ensure SEZs can be developed inline with international human rights laws and standards, said the ICJ at a report launch held today in Yangon.

The 88-page report, entitled Special Economic Zones in Myanmar and the State Duty to Protect Human rights, assesses the laws governing Myanmar’s SEZs and finds that the legal framework is not consistent with the State’s duty to protect human rights.

For example, a case study examining the Kyauk Phyu SEZ in Rakhine State shows that the land acquisition process initiated in early 2016 lacks transparency, does not comply with national laws on land acquisition, and risks violating the rights of 20,000 residents facing displacement.

“The SEZ Law undermines the protection of human rights, and critical legal procedures are often poorly implemented, so the Kyauk Phyu project risks repeating the rights violations that have been associated with SEZs in the past,” said Sam Zarifi, the ICJ’s Asia Director.

“The NLD-led Government can make a break from the past by ensuring economic development projects benefit Myanmar’s people, rather than rushing to facilitate projects which result in human rights violations and ultimately undermine sustainable development,” he added.

Myanmar’s legal framework for SEZs is based on the 2014 SEZ Law and incorporating national laws governing land, labour and the environment.

The report shows that while national laws require Environmental Impact Assessments and the application of international standards on involuntary resettlement, the SEZ Law does not establish clear accountabilities for the implementation of these procedures.

This has contributed to human rights violations and abuses in each of Myanmar’s three SEZs, the report says.

“It has been encouraging that government officials have emphasized their commitment to protecting human rights in SEZs in line with the rule of law,” said Sean Bain, the ICJ’s Legal Consultant in Myanmar and lead author of the report.

“The legal reforms recommended in this report will be critical to meet these commitments while fulfilling the State’s duty to protect human rights in SEZs. We also suggest that investors take heightened due diligence measures to ensure they are not complicit in rights violations,” he added.

The report was based on extensive legal research as well as interviews with over 100 people, from affected communities to investors and government officials, during 2016.

Key recommendations to the Government of Myanmar

  • Protect human rights in Myanmar’s SEZs by amending the SEZ Law, through meaningful public consultation in accordance with international standards.
  • Order a moratorium on the development of SEZs, and on entering related investment agreements, until the SEZ Law has been amended to ensure conformity with international human rights law and standards.
  • Commission a Strategic Environmental Assessment for the Kyauk Phyu SEZ, in line with Myanmar’s environmental conservation laws. This would involve consultation to inform decision-making on the Kyauk Phyu SEZ and related projects, by identifying cumulative environmental and social impacts of all the developments in Kyauk Phyu, while considering conflict dynamics and economic development in Rakhine State.
  • Suspend land acquisition in Kyauk Phyu until after the completion of a resettlement plan that is in line with international standards, as required in the EIA Procedure.

Contact

Sean Bain, ICJ Legal Consultant in Myanmar, t: +95 9263533230 ; e: sean.bain(a)icj.org

Myanmar-SEZ assessment-Publications-Reports-Thematic reports-2017-ENG(full report, in PDF)

Myanmar-SEZ assessment SUMMARY-Publications-Reports-Thematic reports-2017-ENG (executive summary of the report, in PDF)

Myanmar-SEZ assessment full-Publications-Reports-Thematic reports-2017-BUR (Burmese version of full report, in PDF)

Myanmar-SEZ assessment-Publications-Reports-Thematic reports-2017-BUR(Burmese version of the executive summary, in PDF)

Dear Readers,

The draft policy has been prepared by MONREC and is being circulated. The draft policy is attached below. It is vital that civil society in Myanmar engage by providing comments and participating in upcoming consultation.

The purpose of this National Environmental Policy is to provide long-term guidance for government, civil society, the private sector and development partners in Myanmar on environment and sustainable development objectives in Myanmar. The Policy will guide detailed strategic frameworks and action plans for the environment sector, including green economic development, climate change and waste management strategies, as well as provide guidance for the mainstreaming of environmental considerations into all other plans and policies developed in Myanmar.

It proposes the following framework:

Vision 

By 2030, Myanmar will be activelyprotecting and managingthe environment in ways that maintain biodiversity, support inclusive social and economic progress, respect human rights, and enhance quality of life for all people now and in future generations. Myanmar will have prioritized low-carbon and green economic development, and in doing so have helped ensure healthy and functioning ecosystems and living environments for all people.

Mission 

To provide a practical framework for integrating environmental objectives in all policies, laws, regulations, plans, strategies, programmes and projects so that they contribute to environmental protection and sustainable development across Myanmar.

Objectives 

To articulate national environmental policy principles andguidance on incorporating environmental considerations into all sectoral policies and planning in order to:

– protect Myanmar’s important ecosystems, natural resources, and natural and cultural heritage, and ensure healthy living environments

– promote sustainable development in Myanmar and provide a practical framework for its pursuit

– improve environmental governance in Myanmar

The Full Policy is attached here: national-environmental-policy-statement-2016_eng_nov20_final_clean_ta

This article appeared on the Business and Human Rights Resource Centre’s Blog on a Binding Treaty for Business and Human Rights at: https://business-humanrights.org/en/regulating-investor-responsibility-not-just-investor’s-‘rights’

By Ludovic Courtès [CC BY-SA 3.0], via Wikimedia Commons

Recent political events like ‘Brexit’ and Donald Trump’s election have been in part fuelled by a backlash against a system of neoliberal international trade and investment. Its inherent inequality, injustice and environmental degradation have become clear. The status quo leaves too many behind to be sustainable.

It is clear that the international community’s priority is on promoting investment rather than regulating it.

Governments must confront the dominance of corporate interests over human rights and the environment. One way to address it is to ensure that international business – so well protected through investment and trade agreements and offshore tax havens – will also be regulated to protect and promote human rights.

THE REGULATORY GAP 

It is clear that the international community’s priority is on promoting investment rather than regulating it. Investment laws do not mention human rights. They require investors to follow national law. The problem is that many states do not have adequate human rights and environmental protections in place. In other cases, states are unwilling or unable to enforce existing laws. Transnational businesses are able to select a venue that makes its operations cheaper even if it undermines human rights or harms the environment.

A BINDING TREATY’S CONTENTS

A binding treaty must address this regulatory shortfall. Like the Convention on the Elimination of all Forms of Discrimination Against Women (CEDAW), the Convention on the Rights of the Child (CRC) or the Migrant Workers Convention, which elaborate on existing standards to address a particular need identified by the international community, a binding treaty on business and human rights should codify and develop the responsibility of states to protect human rights.

A business and human rights treaty needs to develop standards for preventative measures and build national capacity. States must be bound to adopt regulations and enforcement measures to ensure business enterprises fulfill their responsibilities, including adopting an approved policy or code of conduct and human rights due diligence processes. Many states are developing these policies in absence of an international framework. Civil society is calling out for binding standards by which to measure new laws.

The treaty should help states adopt effective legislative and administrative measures for criminal and civil liability of corporations for human rights abuses. Crimes for which international law requires the imposition of criminal sanctions should be incorporated into national corporate criminal law, expanding the jurisdiction of national tribunals and law enforcement bodies to deal with transnational corporate crime.

The regulatory process for approval of licenses and permits for some investments should include an obligation to obtain social license through fully informed community consent. It should also provide standards of public policy protection to be included in investment protection agreements.

The possibility for victims to initiate judicial complaints against companies directly in their domicile (whether it is in a host State or the home State) will further help to redress the inequality in rights and obligations that exist between companies on one side, and people on the other.

Access to justice, including the right to an effective remedy, is essential for business accountability for human rights abuses. The treaty should codify and develop provisions for access to an effective remedy for wrongful conduct against both states and business enterprises. For states, the remedy would be in relation to situations of complicity or participation in business abuses or for failing to discharge their duty to protect against the wrongful conduct of business enterprises.

The possibility for victims to initiate judicial complaints against companies directly in their domicile (whether it is in a host State or the home State) will further help to redress the inequality in rights and obligations that exist between companies on one side, and people on the other. It is clear that the international community’s priority is on promoting investment rather than regulating it.It is clear that the international community’s priority is on promoting investment rather than regulating it. The doctrine of forum non conveniens rings hollow as companies argue for human rights cases to be heard in host jurisdictions while their interests must be upheld in international arbitration.

REGULATION AND SOVEREIGNTY 

Some states claim that a binding treaty on business and human rights would interfere with domestic sovereignty, either through extraterritorial application of law, or by forcing developing states to adopt high standards that they cannot afford. Yet these same states are willing to sign binding investment treaties that apply international standards, sometimes overruling domestic regulatory sovereignty. This hypocritical stance helps fuel protest and opposition to economic globalisation.

International investment law faces little opposition from states and is promoted as encouraging legal certainty. But locking in bad law or discouraging new standards by allowing foreign investors to challenge changes is extremely unpopular. While states are reluctant to regulate their companies extraterritorially, they are happy to negotiate protections for them, even at the expense of human rights.

An international treaty that guarantees an enhanced remedy system for harm caused by companies including extraterritorially would serve as a corrective instrument in this respect.

The EU, the United States and the United Kingdom should support a binding business and human rights treaty to go along with their global investment agenda. It is advantageous for them to support the highest standards possible. Companies from Western states are increasingly held responsible by active civil societies and cannot compete in places where the rule of law does not exist. Other countries do not face such restrictions and their companies do not have the discerning glare of civil society back home upon them. It is in the developed home state’s interest to level the playing field. Ideological opposition to the regulation of markets no longer makes sense.

Try telling a local farmer or a worker that a foreign business enterprise will have access to justice and its interests protected by treaty while they will not. An international treaty that guarantees an enhanced remedy system for harm caused by companies including extraterritorially would serve as a corrective instrument in this respect. It might also convince people that globalisation is more than investment and includes the protection of human rights and the environment.

For more information see the ICJ’s Proposals for Elements of a Legally Binding Instrument on Transnational Corporations and Other Business Enterprises at: http://www.icj.org/wp-content/uploads/2016/10/Universal-OEWG-session-2-ICJ-submission-Advocacy-Analysis-brief-2016-ENG.pdf

This article was published in the Myanmar Times on 30 August 2013 at: http://www.mmtimes.com/index.php/opinion/22221-reconciling-investment-protection-and-human-rights.html 

This month the newly elected Myanmar government released its economic policy and announced that it will seek to attract even more foreign investment than under previous administrations. But the new policy did not outline how it will ensure that foreign investment will contribute to the protection of human rights and sustainable development.

Myanmar’s previous military government was committed to investment protection treaties. Will the new government follow suit? These treaties between states enable foreign investors to challenge new laws and policies by the host government – potentially including those protecting human rights and the environment – through international arbitration if they believe these may adversely affect their profits.

Foreign governments want their investors to benefit from the opening up of Myanmar’s economy. Myanmar has already entered into investment protection treaties with Japan, South Korea, the Philippines, China, Laos, Vietnam, Thailand, Israel and India and is party to the ASEAN Comprehensive Investment Agreement. Myanmar is negotiating a new treaty with the European Union and exploring options with Singapore, among others.

These investment treaties grant investors equal standing with Myanmar’s government in disputes over national laws and policy in international arbitration. Their broad provisions fail to reconcile investment protection with the host state’s right and duty to regulate for the benefit of human rights and sustainable development. Myanmar must ensure that provisions on the treatment of foreign investors limit their rights to challenge legitimate, non-discriminatory, public purpose legislation.

Seeking to attract investment by giving foreign businesses more economic security should not compromise government’s ability to regulate in favour of the rights of its people. Protection of investments must not be given priority over protection of human rights and the environment. The UN Guiding Principles on Business and Human Rights urge governments to maintain adequate domestic policy space to meet their human rights obligations when pursuing investment treaties.

Before agreeing to further investment treaties, Myanmar should commit to adopting and enforcing new laws in line with international human rights and environmental standards. It should evaluate whether these investment treaties are necessary to attract foreign investment to Myanmar. It should follow the regional trend and revisit old treaties that empower foreign investors at the expense of local rights holders.

The National League for Democracy-led government came to power promising change, to establish the rule of law and to protect human rights. In order to do so, the government will need to create new laws and policies in line with international laws and standards in the public’s interest. For example, Myanmar has recently signed the International Covenant on Economic Social and Cultural Rights, signalling its willingness to put in place policies to progressively achieve universal healthcare, education and social security. These rights are also protected in Myanmar’s constitution.

But new policies designed to fulfil these rights may give rise to disputes under investment treaties. For instance, it is possible that foreign investors will claim that a new policy on public health (for instance by requiring plain packaging for cigarettes) or minority rights (calling for affirmative action for minorities) or strict environmental protection standards (improved environmental impact assessment regulations) would harm their expected profits or other rights that are broadly defined in the investment protection agreement.

These are not outlandish examples. There are a number of cases where new laws and regulations passed by democratically elected governments have been challenged by foreign investors before arbitral tribunals. In Canada, a foreign investor successfully challenged an environmental impact assessment board’s decision to deny it a permit and asked for more than US$100 million in damages. Affirmative action policies in South Africa and environmental protection standards in Germany have been challenged. Just the threat of arbitration can lead to a “regulatory chill”, forcing back public interest legislation and preventing environmental protection measures.

These are costly disputes – some arbitral awards run into the billions of dollars against host governments. Recent challenges by tobacco giant Phillip Morris against Australian and Uruguay plain packaging cigarette laws, designed to protect public health, were unsuccessful but cost millions in lawyer’s fees. Australia reportedly paid $50 million to defend its law. Myanmar cannot defend repeated challenges by deep-pocketed investors. In Myanmar, this money could be better spent improving the dire state of health and education.

Around the world, people are demanding that negotiation and adoption of investment treaties be transparent; increasingly, people are opposing treaties that grossly favour the interests of investors over the interests of the public. Investment treaties are often negotiated behind closed doors with little public or parliamentary oversight. These are important decisions that impact on the rights of people in Myanmar. Myanmar’s civil society has not yet had the opportunity to participate in genuine and informed consultation.

Many states have turned against international dispute resolution in investment treaties. South Africa, Bolivia, Ecuador, Venezuela and Indonesia have started to cancel or phase out existing treaties. Others, including India, are reviewing current treaties and rethinking future negotiations. Brazil, Russia, India and China are considering an alternative system that considers issues relevant to emerging economies.

The Indian government intends to replace existing investment treaties with new ones designed to balance investor’s interests, regulatory space and investor responsibilities. It seeks to limit protections for foreign investors, drop controversial aspects of treaties and narrow the scope of others to reduce disputes. While it allows access to international dispute settlement, foreign investors will have to pass through the domestic courts first. The new investment treaties will also include an exhaustive list of economic, environmental and social measures to be exempt from challenge by foreign investors.

Myanmar would do well to follow this approach. Improving its human rights situation and maintaining sustainable development require sweeping legal reform. The threat of costly legal challenges by foreign investors could dissuade policy makers from making necessary changes, discouraging them from fulfilling human rights and environmental obligations in order to promote investment.

Dr. Daniel Aguirre, Panel VI: Lessons learned and challenges to access to remedy (selected cases from different sectors and regions).

Prosecuting Companies in Myanmar: Challenges and Opportunities

Thank you again, Madam Chair, Ecuador and the OHCHR for supporting this important week of fruitful discussion. I will begin where I left off on Tuesday, discussing some of the practical challenges and opportunities that a binding treaty on business and human rights could possibly address.

Let me state that I am not here to pick on Myanmar. Myanmar is undergoing tremendous political, economic and social change. The situation in Myanmar is much better than it was 5 years ago and almost unrecognisable from the darkest days of the military regime. The Economy has changed rapidly and politics progressively; yet reform of the legal system and the judiciary lag far behind and will likely not be resolved in a generation. Yet into this accountability void billions of dollars of new investment flows.

Failure to provide for effective remedies and redress, even where provided for in domestic law, has a range of causes, legal and political. Among the most common are: weakness in the rule of law (including the independence of the judiciary and the legal profession); inability or unwillingness of officials to counter resistance by powerful corporate interests against regulation; public officials who lack knowledge or capacity; corruption; limited resources; and other procedural hurdles that create a system of disincentives to litigation against companies.

So Myanmar is not alone in this regard. I present it as a case study because a Binding Treaty on BHR must address investment in weak governance zones and transitional countries emerging from dictatorship or conflict where the rule of law is weak. The situation in Myanmar provides useful examples to keep in mind during the process of developing this important treaty.

Prosecuting corporations in Myanmar is difficult as the very notion of legal accountability is in its nascent stages. The judicial system was undermined by the military regime over 50 years, destroying a system once regarded as among the finest in the region. While inherited colonial law recognises both criminal and civil liability for corporations as well as the possibility of class action suits, these provisions are not yet used to ensure corporate accountability.

The public does not trust the judiciary, which is under resourced, lacking in capacity and assumed to be corrupt. The only time a person goes to court in Myanmar is as a defendant. Disputes are resolved in any other means possible, with the courts avoided at all costs. This lack of the rule of law undermines the State duty to protect and provide remedy in the context of business and human rights.

 Access to Remedy

On Tuesday, in Panel 2, I outlined the challenges Myanmar faces in adopting regulation to protect human rights, in the context of business activity. Indeed, the international community overwhelmingly supports deregulation, which is reflected in Myanmar’s’ national investment law and investment treaties.

Myanmar, like other transitional states, does not provide adequate access to remedy for victims of business related human rights abuses. Myanmar is unable to take appropriate steps to ensure, through judicial, administrative, legislative or other appropriate means, that when such abuses occur within their territory those affected have access to effective remedy. The judiciary is not yet independent from the undue influence of other branches of government and the military, who themselves are connected to crony businessmen. This creates a public perception of injustice and undermines the rule of law.

Judges lack resources and capacity and are subject to pressure from the executive through the Attorney General’s Office and by direct intervention for the military in sensitive cases (ie Human Rights). Many Judges, including 4 of the 7 members of the Supreme Court, are military appointed officers. The courts are under resourced and require further support from the international community.

Lawyers do not have an independent bar association. The current legal body is headed by the Attorney General and has punished its members for taking on contentious cases.

Current land law creates administrative bodies to handle land disputes. These committees make vital decisions affecting human rights at the local level. Their decisions are perceived as final and have had not been subject to adequate judicial oversight despite the availability of constitutional writs as rights of citizens.

Yet there are positive signs. As you all know, there is a new government in Myanmar. There is an unprecedented opportunity to engage and cooperate. The Attorney General’s Office, the Supreme Court and the new government have all signaled their commitment to reform in line with the rule of law and human rights. There is a new Attorney General, appointed by the new government, who can take the lead on judicial reform. Lawyers are emboldened and increasingly willing to take on tough cases with less fear for their careers. The ICJ builds the capacity of and supports all of the above in the protection of human rights.

Under the current regulatory regime, it is unlikely criminal or civil litigation will hold powerful economic actors like corporations accountable. This is a generational change that will require reform of legal education, increased capacity building and support from the international community.

In the meantime, the state duty to protect and provide access to remedy cannot be fulfilled, bringing into question the utility of the corporate responsibility to respect human rights put forward by the UN Guidelines. Let’s face it, it is easy to respect rules and regulations that do not exist or are not enforced.

Access to justice, including the right to an effective remedy, is essential for business accountability for human rights abuses. The prospective treaty must require measures to ensure access to effective remedies and redress for persons and groups of persons that suffer abuse arising from the conduct of business enterprises.

The treaty should codify and develop provisions for access to an effective remedy for wrongful conduct against both States and business enterprises. For States, the remedy would be in respect of situations of complicity or participation in business activity or for failing to discharge their duty to protect against the conduct of business enterprises.

The possibility for victims to initiate judicial complaints against companies directly in their domicile (whether it is in a host State or the home State) will further help to redress the inequality in rights and obligations that exist as between companies on one side and people on the other side.

The growing web of bilateral or multilateral agreements on investments and free trade often grant business enterprises and investors in general the right to a very extensive set of protections including the right to sue governments before international arbitral tribunals, a right that individuals and communities do not have in relation to companies that abuse their human rights.

Try telling a farmer that a foreign company will have access to justice to protect its land while they have none. An international treaty that guarantees an enhanced remedy system for harm caused by companies including extraterritorially would serve as a corrective instrument in this respect.

Panel II: Primary obligations of States, including extraterritorial obligations related to TNCs and other business enterprises with respect to protecting human rights

screenshot-2016-10-25-17-32-07

Dr Daniel Aguirre, International Commission of Jurists

Thank you Madam Chairperson, Ecuador, South Africa and the OHCHR for organising and supporting this important initiative. Ladies and Gentlemen, it is an honour and privilege to be given the opportunity to contribute to this process and to address an audience of concerned states and NGOs. I congratulate the latter for braving the heavy rain in their protests this morning.

I encourage everyone to read the ICJ’s recently published proposals for Elements of a Legally Binding Instrument on Transnational Corporations and Other Business Enterprises.

Having researched the connection between international investment law and human rights for 15 years, I am delighted that BITs and ISDS have been mentioned repeatedly as the source of a power imbalance in the international community. It always amazes me that the same states that claim human rights interfere with their sovereignty are more than willing to sign a binding treaty – with international arbitration – on corporate ‘rights’ that directly interferes with their domestic regulatory sovereignty.

Today I have been asked to provide examples of national legislation and international instruments applicable to TNCs and other business enterprises with respect to human rights. Unfortunately, Myanmar, where I have worked for the ICJ for the last 3 years, provides more examples of problematic business and human rights regulation that indicate a need for a binding treaty.

Myanmar is an important example. It is basically the Petri dish of Business and Human Rights. How investment affects human rights and the environment in Myanmar – which is late comer to the global economy – will demonstrate if globalization can be tamed to support sustainable development or not.

In Myanmar the drafting of new law is accompanied by support from a variety of international organisations, especially the IFC, and with the encouragement of investors and their home states. The IFC provides a draft with full protection of rights and sponsored consultation with affected parties whose interests would be protected. The process takes into account International Treaties and customary international law to ensure the highest standards are reflected in a new national law.

I would be delighted to tell you that this was the normal legal drafting process and that it applied to environmental protection or human rights law. In fact, this process was for the adoption of a new investment law, which was the priority of the previous military government and also Aung San Su Kyi’s NLD. Other laws do not enjoy such support.

The new investment law was passed last week, to the delight of investors, reflecting Myanmar’s BIT standards. Thankfully, civil society – with the assistance of the ICJ – was able to convince the government to remove automatic access to ISDS for both domestic and international investors, which had been helpfully included by the IFC and would have been unprecedented in a national law.

Meanwhile, the drafting of human rights laws has been compromised by political considerations – there is a real fear about provoking the military and ending the democratic experiment. Rushed drafts have been quickly passed through parliament with little or no public consultation or international support. Many do not even reflect the principle of legality. Often they are construed to protect the majority from the minority.

It is clear that the priority is on promoting investment rather than regulating it. The new investment law does not mention human rights. It requires investors to follow national law. The problem is that Myanmar, like many other States, does not have adequate human rights protection – currently more than 50% of the population lacks legal tenure to the land they live on, for example. In other cases it is unwilling or unable to enforce laws. Myanmar has not ratified key human rights conventions such as the ICCPR or ICESCR, although it has recently signed the latter.

A Binding treaty must address this regulatory shortfall. Like CEDAW, the CRC or the Migrant Rights Treaty, which elaborate on existing standards to address a particular need identified by the international community, a Binding Treaty on Business and Human Rights should codify and develop the responsibility of States to protect human rights.

The binding treaty must build capacity; it should help states adopt effective legislative and administrative measures for the criminal and civil liability of corporations for human rights abuses. Certainly, crimes for which international law require the imposition of criminal sanctions should be incorporated in national corporate criminal law.

Myanmar has adopted an EIA procedure that includes social impact assessment. In the absence of human rights law, CSOs have begun attempting to find ways of addressing human rights through this mechanism. But there are no binding international standards on what constitutes appropriate regulation of corporate due diligence, public consultation, and accountability mechanisms for CSOs to measure their government’s regulation by, let alone implementation. CSOs find themselves quoting World Bank Guidelines!

A treaty needs to develop standards for national regulation of these preventative measures. States must be bound to adopt regulations and enforcement measures to ensure business enterprises fulfil their responsibilities, including adopting an approved policy or code of conduct and human rights due diligence processes. This could also be regulated extraterritorially. The regulatory process for approval of licenses and permits for some investments should include an obligation to obtain social license through fully informed community consent. It should also provide standards of public policy protection to be included in investment protection agreements.

Investment protection, by contrast, has plenty of applicable standards. Myanmar is a party to a number of bilateral and regional investment treaties. It is currently negotiating an investment protection agreement with the EU. The EU IPA has been promoted as encouraging legal certainty. But Locking in bad law or non-existent standards by allowing foreign investors to potentially challenge new laws that threaten their property or profits is extremely unpopular in a country where human rights are not afforded that kind of protection. The international community demonstrates that while it is reluctant to regulate its companies extraterritorially, it is happy to negotiate protections for them, even at the expense of human rights.

The EU would do well to support a binding Business and human rights treaty to go along with their IPA. It makes sense for North American and European states to support this treaty with the highest standards possible. Let’s face it, companies from these states are held to the highest standards by active civil society and cannot compete in places where the rule of law does not exist. Myanmar’s neighbouring countries do not face such restrictions and do not have the discerning glare of civil society back home upon them. It is in developed home state’s interest to level the playing field. Ideological opposition to the regulation of markets no longer makes sense.

Aside from many states’ unwillingness or inability to regulate for the protection of the environment and human rights, a binding treaty must address access to remedy. In, Myanmar, The Judiciary, despite having inherited British colonial law that recognises corporate liabilities, lacks capacity to deal with complex cases concerning business and human rights. I will speak more about access to remedy on Friday in Panel VI, so this discussion is to be continued.

I look forward to your comments and questions.

Thank you.

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