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Inter-American Elements for a Systemic Approach to State-Owned Enterprises’ Human Rights Obligations

Published online by Cambridge University Press:  10 August 2022

Judith Schönsteiner Open the ORCID record for Judith Schönsteiner [Opens in a new window]
Judith Schönsteiner*
Affiliation:
Reader at Universidad Diego Portales Human Rights Centre, Santiago de Chile, Chile
*
*Corresponding author. Email: [email protected]
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Abstract

This article addresses the lack of clarity regarding obligations of state-owned enterprises in the UN Guiding Principles on Business and Human Rights. Starting from the Inter-American Commission of Human Rights’ latest report on the topic, it develops the scope of human rights obligations for state-owned enterprises in the Americas, framing them in a systemic approach that calls for using both governance and regulatory tools to achieve respect for human rights. The article furthermore argues that there are good reasons for limiting the application of due diligence to the relationships with a company’s private business partners, excluding the relationship with its (public) owner where direct responsibility applies. Finally, the article spells out several specific issues that need to be addressed when assessing SOE human rights governance and shows that the enhanced human rights accountability of state-owned enterprises need not contradict a level playing field between public and private business.

Keywords

Due diligenceInter-American Commission of Human Rightsobligations of resultscope of obligationsstate-owned enterprises
Type
Scholarly Article
Information
Business and Human Rights Journal , Volume 7 , Issue 3: Special Issue: Business and Human Rights in Latin America , October 2022 , pp. 397 - 417
Copyright
© The Author(s), 2022. Published by Cambridge University Press

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References

1 UN Working Group on Business and Human Rights, Report to the Human Rights Council, Leading by Example-the State, State-owned Enterprises and Human Rights 2016, A/HRC/32/45. See for discussion, Backer, Larry Catá, ‘The Human Rights Obligations of State-Owned Enterprises: Emerging Conceptual Structures and Principles in National and International Law and Policy’ (2017) 51 Vanderbilt Journal of Transnational Law 827 Google Scholar; Mihaela Barnes, ‘The United Nations Guiding Principles on Business and Human Rights, the State Duty to Protect Human Rights and the State-Business Nexus’ (2018) 15 Revista de Direito Internacional 41. Camila Wee, ‘Regulating Human Rights Impact of State-Owned Enterprises: Tendencies of Corporate Accountability and State Responsibility’, International Commission of Jurists, 2008. Debate on corporate social responsibility in SOEs has been more abundant, see Raquel Garde-Sánchez et al, ‘Current Trends in Research on Social Responsibility in State-Owned Enterprises: a Review of the Literature from 2000 to 2017’ (2018) 10 Sustainability 2403, doi: 10.3390/su10072403.

2 G20/OECD Principles on Corporate Governance (2015), 38.

3 OECD Recommendation of the Council on Principles of Corporate Governance, 8 July 2015, printed in Principles note 2, 55.

4 See Musacchio, Aldo and Pineda, Emilio (eds), Fixing State-Owned Enterprises. New Policy Solutions to Old Problems (Washington: Inter-American Development Bank, 2019).CrossRefGoogle Scholar

5 OECD, OECD Guidelines on Corporate Governance of State-Owned Enterprises (Paris: OECD Publishing, 2015) 60.Google Scholar

6 Backer, note 1, 837.

7 Schönsteiner, Judith, Martínez, Vicente and Miranda, Carlos, ‘Atribuibilidad al Estado de Chile de Actos y Omisiones de sus Empresas Públicas del Sector Extractivo a la Luz de la Jurisprudencia de Tribunales Regionales de Derechos Humanos’ (2020) 47 Revista Chilena de Derecho 757.CrossRefGoogle Scholar

8 See for such a reading, based on European jurisprudence, Daelman, Charline, ‘State-Owned Enterprises and Human Rights: The Qualification and the Responsibility of the State’, in Letnar Černič, Jernej and Van Ho, Tara (eds), Human Rights and Business: Direct Corporate Accountability for Human Rights (Oisterwijk: Wolf Publishers, 2015), 421.Google Scholar

9 For those approaches, Badia, Albert, Piercing the Veil of State Enterprises in International Arbitration (Alphen aan den Rijn: Wolters Kluwer, 2014)Google Scholar; Mikko Rajavuori, ‘How Should States Own? Heinisch v Germany and the Emergence of Human Rights Sensitive State Ownership’ (2015) 26 European Journal of International Law 727; Carlo de Stefano, Attribution in International Law and Arbitration (Oxford: Oxford University Press, 2020), 79; see also Judith Schönsteiner, ‘Attribution of State Responsibility for Actions or Omissions of State-Owned Enterprises in Human Rights Matters’ (2019) 40 University of Pennsylvania Journal of International Law 895.

10 Muelle Flores v Peru, IACtHR Series C 375 (2019).

11 Nolan, Justine, ‘The Corporate Responsibility to Respect Human Rights’, in Deva, Surya and Bilchitz, David (eds), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect (Cambridge: Cambridge University Press, 2013), 138 CrossRefGoogle Scholar; and David Bilchitz, ‘A Chasm Between ‘is’ and ‘ought’? A Critique of the Normative Foundations of the SRSG’s Framework and the Guiding Principles’, ibid, 107.

12 For a debate, ibid, and contributions in Letnar and Van Ho, note 8.

13 For example, Krajewski, Markus, ‘The State Duty to Protect Against Human Rights Violations through Transnational Business Activities’ (2018) 23 Deakin Law Review 13.Google Scholar

14 Schönsteiner et al, note 7, 910.

15 Generally, Barnes, note 1, 50.

16 UN Working Group, note 1, para 26.

17 Barnes, note 1, 58.

18 Backer, note 1.

19 For example, SEP Chile was identified as an example of good practice, but at the time did not have a human rights policy or statement. The term derechos humanos was not mentioned in any official document at the time. The Chilean government reported, in a survey carried out by the UN Working Group, that the SEP committed to have 100 per cent sustainability reports by 2018, and that there is a gender balance policy. These are elements towards a human rights approach but cannot replace a due diligence assessment of negative impacts. It should be noted that one member of the Working Group at the time works in a consultancy on sustainability, and corporate social responsibility, that was hired for advising SEP on sustainability and human rights issues. The draft of the Annual Report was written by the same consultancy. Working Group HRC Report 2016, note 1, paras 59, 66, 70 and 71 without explicit sources; maybe all refer to Code of Conduct SEP.

20 UN Working Group, note 1, para 98.

21 Ibid, para 38ff, especially, para 39.

22 Backer, note 1, 855.

23 Ibid, 869.

24 Ibid, 863 and 876.

25 There is one single reference in General Comment 24, for example, indicating that the document applies to both privately and state-owned enterprises; Committee on Economic Social and Cultural Rights, ‘General Comment No. 24: State Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities’, E/C.12/GC/24 (10 August 2017), para 3.

26 For example, Sarayaku v Ecuador, IACtHR Series C 245 (2012), para 76. Ecuadorian law entrusts FPIC to Petroecuador, for all licences on oil projects.

27 Trabajadores Cesados de Petroperú et al v Peru, IACtHR Series C 344 (2017), paras 81, 162, 172 and 193.

28 Muelle Flores v Peru, note 10, paras 59 and 60.

29 Inter-American Commission of Human Rights, Business and Human Rights: Inter-American Standards, OEA/Ser.L/V/II, CIDH/REDESCA/INF.1/19 (1 November 2019), para 50.

30 Barnes, note 1, 58.

31 Ibid, para 307.

32 Dereje, Jonas, Staatsnahe Unternehmen. Die Zurechnungsproblematik im Internationalen Investitionsrecht und weiteren Bereichen des Völkerrechts (Baden-Baden: Nomos, 2016)Google Scholar; Jaemin Lee, ‘State Responsibility and Government Affiliated Entities in International Economic Law’ (2015) 49 Journal of World Trade 117.

33 Inter-American Commission of Human Rights, note 29, para 312.

34 Ibid.

35 Ibid.

36 OECD, note 5, para II.B, 18.

37 Ibid, para II.F, 18.

38 Ibid, para II.F.3, 18.

39 Ibid, para II.F.4, 19.

40 Ibid, para II.F.5, 19.

41 Ibid, 41.

42 Ibid, 60.

43 Ibid, 60.

44 Ibid, 60.

45 Ibid, 59. Human rights impact assessment is not mentioned explicitly.

46 Inter-American Commission of Human Rights, note 29, recommendation 18, 207.

47 Ibid, para 312, emphasis added.

48 Ibid, para 310: ‘in the context of extractive industries and development projects, the Commission has already emphasized that when it is the State itself implementing such activities, the state has direct obligations to respect and guarantee the human rights involved, with due diligence’, citing Inter-American Commission of Human Rights, ‘Indigenous Peoples, Afro-Descendent Communities and Natural Resources: Human Rights Protection in the Context of Extraction, Exploitation, and Development Activities, OEA/Ser.L/V/II. Doc.47/15 (31 December 2015), para 85.

49 Ibid, para 85, emphasis added.

50 Bonnitcha, Jonathan and McCorquodale, Robert, ‘The Concept of “Due Diligence” in the UN Guiding Principles on Business and Human Rights’ (2017) 28 European Journal of International Law 899 CrossRefGoogle Scholar. Critically, John Ruggie, ‘The Concept of “Due Diligence” in the UN Guiding Principles on Business and Human Rights: a Reply to Jonathan Bonnitcha and Robert McCorquodale’ (2017) 28 European Journal of International Law 924.

51 Inter-American Commission of Human Rights, note 29, para 167.

52 International Covenant on Economic, Social and Cultural Rights, UN Doc A/RES/21/2200 (adopted on 16 December 1966, entered into force on 3 January 1976), art 2.

53 Backer, note 1; Schönsteiner et al, note 7.

54 Backer, note 1, 861, 863.

55 Denunciations have focused on indigenous rights and environmental issues, see for example, COICA et al, Vulneraciones a los derechos de los pueblos indígenas en la Cuenca amazónica por inversiones chinas, Informe EPU 2018.

56 For an overview regarding human rights law, Schönsteiner et al, note 7.

57 IACHR does not exclude such a reading, and the IACtHR has never found to the contrary, but has not issued any explicit affirmation either.

58 But see Backer, note 1, 863–864.

59 As a starting point for the debate which international human rights norms would amount to international customary law, Hugh Thirlway, ‘Human Rights in Customary Law: An Attempt to Define Some of the Issues’ (2015) 28 Leiden Journal of International Law 495–506. See also, in relation to the problems that arise from the definition of customary international law, Brian D. Lepard, ‘Why Customary International Law Matters in Protecting Human Rights’, Völkerrechtsblog, 25 February 2019, doi: 10.17176/20190225-133150-0 (accessed 25 March 2021).

60 Dire Tladi, Special Rapporteur to the International Law Commission, Fourth Report on peremptory norms of general international law (jus cogens), A/CN.4/727 (31 January 2019), draft conclusion 24.

61 Backer, note 1, 864.

62 Environment and Human Rights, OC-23/17, IACtHR Series A 23 (2017), see especially, UN General Assembly, Prevention of Transboundary Harm from Hazardous Activities, adopted through resolution A/RES/62/68 (6 December 2007).

63 For such an exercise regarding the Chilean drinking water sector, in which both regulators and a state-owned enterprise can be defined as ‘appropriate means’ to bring about respect and guarantee for human rights, Contreras, Macarena and Schönsteiner, Judith, ‘Derecho al Agua, Emergencias y Responsabilidades del Estado y de las Empresas Sanitarias’, in Vial, Tomás (ed), Informe Anual sobre Derechos Humanos en Chile (Santiago: Ediciones UDP, 2017), 99.Google Scholar

64 Backer might have had such an approach in mind when suggesting a ‘unitary approach to state duty’, Backer, note 1, 860.

65 For a concrete case, Comisión Nacional de los Derechos Humanos de México, Inicia CNDH queja de oficio para investigar presuntas violaciones a derechos humanos en el caso de dos pacientes fallecidos y 42 afectados por el suministro de un medicamento contaminado en el Hospital Regional de Pemex en Villahermosa, Tabasco (4 March 2020), Comunicado de Prensa DGC/067/2020.

66 Ximenes Lópes v Brazil, IACtHR Series C 149 (2006).

67 Contreras and Schönsteiner, note 63.

68 Badia, note 9; Dereje, note 32.

69 Inter-American Commission of Human Rights, note 48.

70 International Law Commission, Draft Articles on State Responsibility for Internationally Wrongful Acts, art 7 and commentary (A/56/10).

71 For a different reading, subsuming concepts as diverse as proportionality, duty of care, and positive obligations of protection against the acts of private actors under the concept of due diligence, see Riccardo Pisillo Mazzeschi, Responsabilité de l’état pour violation des obligations positives relatives aux droits de l’homme, 333, Collected Courses of the Hague Academy of International Law (2008), chapter IV. Pisillo Mazzeschi only considers certain, exceptional, state obligations regarding risk or accidental variables as obligations of result. This reading does not conform itself, I argue, with the long-standing jurisprudence of the Court since Velásquez Rodríguez. I therefore prefer Shelton and Gould’s classification, see note 97.

72 Osman v United Kingdom, Application No. 23452/94, Judgment E.Ct.H.R. (28 October1998), para 116. Ebert and Sijniensky have – I submit correctly – criticized several conceptual confusions regarding the application of the Osman test to cases where the state itself contributed to the risk the victim was exposed to. See note 90.

73 Medina, Cecilia, The American Convention on Human Rights. Crucial Rights and Their Theory and Practice (Cambridge: Intersentia, 2016)CrossRefGoogle Scholar. The debate about overlap between duty to protect and positive obligations needs not be addressed here. See for an in-depth-discussion, Sandra Stahl, Schutzpflichten im Völkerrecht. Ansatz einer Dogmatik, 232 Beiträge zum ausländischen öffentlichen Recht und Völkerrecht (Heidelberg: Springer, 2012).

74 See Guiding Principle 19.

75 Inter-American Commission of Human Rights, note 48, para 85.

76 Ibid.

77 Ibid, para 86. Pisillo Mazzeschi, note 71, 334.

78 Commentary to Guiding Principle 19.

79 Bonnitcha and McCorquodale, note 50.

80 IACtHR, note 62.

81 Bonnitcha and McCorquodale, note 50.

82 Compare Guiding Principles 17 and 19 and IACtHR, note 62.

83 Inter-American Commission of Human Rights, note 48.

84 IACtHR, note 62.

85 Convention on the Prevention and Punishment of the Crime of Genocide, UN Treaty Series No. 1021, (adopted on 9 December 1948, entered into force on 12 January 1951).

86 UN Convention on the Elimination of All Forms of Discrimination against Women, UN Treaty Series No. 20378 (adopted on 18 December 1979, entered into force on 3 September 1981); Inter-American Convention on the Prevention, Punishment and Eradication of Violence Against Women, OAS Treaty Series, ‘Convention of Belem do Pará’ (adopted on 6 September 1994, entered into force on 3 May 1995).

87 Inter-American Convention to Prevent and Punish Torture, OAS Treaty Series No. 67 (adopted on 12 September 1985, entered into force on 28 February 1987); UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, UN Treaty Series 24841 (adopted on 10 December 1984, entered into force on 26 June 1987).

88 UN General Assembly, Prevention of transboundary harm from hazardous activities, adopted through resolution A/RES/62/68 (6 December 2007), Articles 2 and 3, taken up by IACtHR, note 62.

89 Dimitris Xenos, Positive Obligations under the European Convention on Human Rights (Abingdon: Routledge, 2012). Similarly, Stahl note 73, 154: ‘Zudem kommt dem Präventivschutz im Bereich der Menschenrechte ein sehr hoher Stellenwert zu.’

90 Ebert, Franz and Sijnienski, Romina, ‘Preventing Violations of the Right to Life in the European and the Inter-American Human Rights Courts: From the Osman Test to a Coherent Doctrine on Risk Prevention?’, (2015) 15 Human Rights Law Review 343, 352.Google Scholar

91 IACtHR, note 62, section B.1.c.

92 Hacienda Brasil Verde v Brazil, IACtHR Series C 318 (2016).

93 Pueblo Bello v Colombia, IACtHR Series C 140 (2006).

94 González et al (Cotton Field) v Mexico, IACtHR Series C 205 (2009).

95 Ebert and Sijniensky, note 90.

96 IACtHR, note 62, para 165.

97 Shelton, Dinah and Gould, Ariel, ‘Positive and negative obligations’, in Shelton, Dinah (ed.), The Oxford Handbook of International Human Rights Law (Oxford: Oxford University Press, 2013), 562, 577.Google Scholar

98 Similarly, for the second point, Larry Catá Backer, ‘Un Somaro Piumato’ – Rethinking the Scope and Nature of State Liability for Acts of their Commercial Instrumentalities: State Owned Enterprises and State-Owner Liability in the Post-Global (2021), draft available at https://ssrn.com/abstract=3878303 (accessed 15 October 2021), discussing Weidemaier, Mark, ‘Piercing the (Sovereign) Veil: The Role of Limited Liability in State Owned Enterprises’ (2021) 46:3 Brigham Young University Law Review 795 Google Scholar. See also, mutatis mutandi, Badia, note 9.

99 Rajavuori, note 9.

100 Heinisch v Germany, Application no. 28274/08, Judgment, E.Ct.H.R. (21 July 2011). The reasoning was not confirmed in later jurisprudence of the European Court. That might have led to the perception that the ECtHR does not treat public and private enterprises differently, see Daelman, note 7, 421.

101 IACHR, note 29, para 312.

102 OECD, note 5, section on information.

103 Ximenes Lópes, note 66.

104 There are only a few explicit standards on budgets in international human rights law. See especially, Committee on the Rights of the Child, General Comment 19, CRC/C/GC/19 (20 July 2016), paras 40–63.

105 La Oroya v Peru, Admissibility Decision, IACHR, P-1473-06 (2009), para 68.

106 Law 13.196 Ley Reservada del Cobre (Chile), and Law 21.174 of 2019 derogating Ley Reservada del Cobre (Chile).

107 For a general overview, Londoño, Carmelina, Las Garantías de no-repetición en la jurisprudencia interamericana (Madrid: Tirant Lo Blanch, 2014)Google Scholar; Marcela Zúñiga, ‘Garantías de no repetición y reformas legislativas: causas de la falta de pronunciamiento y denegación de reparaciones en la jurisprudencia de la Corte Interamericana de Derechos Humanos a partir del caso Cinco Pensionistas vs. Perú’ (2020) 46 Revista Derecho del Estado 25.

108 IACHR, note 29.

109 Decision of wind-down is for the state as an owner. Therefore, even in the OECD’s independence model, accountability through ‘effective exercise of ownership rights’, OECD 2015, note 5, 38.

110 For an analysis of the German situation, Richter, Wolf, ‘Ökologische Altlasten und Sanierungen im Treuhandnachfolgebereich’, in Depenheuer, Otto and Kahl, Bruno (eds.), Staatseigentum. Legitimation und Grenzen (Heidelberg: Springer, 2014), 319.Google Scholar

111 IACHR, note 29, para 50.

112 Committee on ESCR, note 25; IACtHR, note 62.

113 Backer, note 98, 8.

114 Schönsteiner, note 9.

115 Backer, note 98, 17.

116 Ibid, 18.

117 IACHR, note 29, para 299.

118 Backer, note 99, 33.

119 van Aaken, Anne, ‘Blurring boundaries between sovereign acts and commercial activities’, in Peters, Anne (ed.), Immunities in the Age of Global Constitutionalism (Leiden: Brill, 2015), 131–81.Google Scholar

120 Ruggie, John, ‘Multinationals as Global Institution: Power, Authority and Relative Autonomy’ (2017) 12:3 Regulation and Governance 317–33.CrossRefGoogle Scholar