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Businesses are important to communities. They can provide investment, jobs and much needed services. But business does not always benefit people. Sometimes businesses harm people, communities and the environment.
If a business harms your human rights, there are options for you to enforce your rights. You could take a case to court or try to negotiate a resolution to find a solution.
There are difficulties in obtaining a remedy for business human rights abuses.
But there are ways to overcome these barriers and hold businesses accountable if they abuse your human rights, take your land or pollute your environment.
This Guide outlines tools and mechanisms you can use to seek a remedy for corporate human rights abuses and to protect your human rights if they are threatened or harmed by business activity.
Human rights are the rights and freedoms held by every human being without discrimination. Human rights protect our basic needs and freedoms.
Human rights include rights like:
a) Human rights instruments
Human rights are protected in various international human rights instruments which create legal obligations for states to do things and stop doing things in order to respect, protect and fulfil your human rights.
The main international human rights instruments include:
You can find a full list of international human rights instruments here.
b) Human rights obligations
States bear the primary obligation to ensure human rights are guaranteed. In some countries, international human rights norms become part of national law as soon as the state ratifies the relevant human rights treaty. In other countries, the state will need to reform national law to “internalise” its human rights commitments.
Your human rights may be set out in your country’s constitution or public laws to create legally binding obligations for the state.
As part of their human rights obligations, states must pass laws to protect human rights. This means ensuring businesses or other people do not harm your rights.
Although businesses don’t have human rights obligations under international law, they do have a responsibility to respect human rights. The responsibility to respect human rights is the standard of conduct expected of businesses not to harm human rights. This will be covered in more detail in “Do Businesses Have Human Rights Responsibilities?”
States have legal obligations under international human rights law.
The term “human rights violations” can be used where a state does not fulfil or violates these obligations.
Businesses do not have legal obligations under international human rights law but they should respect human rights – the “corporate responsibility to respect human rights”.
Negative impacts or human rights harms linked to business activities can be called “corporate human rights abuses”.
Business do have legal obligations under national laws, which may relate to human rights. If a business breaches a provision of national law, it could be legally liable and held accountable.
The term “human rights abuse” is a general term used to refer to human rights harms whether caused by a public or private actor.
A business can be any organisation that engages in commercial activity (generally activity to make money or a profit). Businesses can take many forms. All businesses can negatively impact human rights.
If you want to take legal action against a business, it’s important to know what type of business is involved. Here are the key types of businesses and features to bear in mind when considering legal action:
a) Sole traders and business partnerships
These are small businesses, run or owned by one individual (a sole trader) or a couple of people (a business partnership).
Key features include:
b) Private and public limited companies
These are usually big domestic businesses. A public limited company (plc) is a limited liability company that has offered shares to the general public and is listed on a stock exchange.
Where a company owns the majority of shares in another company, it may be called a “parent company” with the other company known as its “subsidiary”. These could be domestic subsidiaries or overseas subsidiaries, in which case the business is a TNC (discussed below).
The principles of separate legal personality and limited liability shield shareholders from some of the risks of doing business, such as the company facing a legal claim.
Where a business is formed of separate companies operating in different countries, it can be called a transnational corporation (TNC) or multinational corporation (MNC).
These businesses can operate as:
TNC groups are made up of two types of companies:
Example: Lungowe v Vedanta
Vedanta Resources plc (Vedanta) is the parent company of a UK mining TNC. Vedanta owns a majority shareholding in its overseas subsidiary Konkola Copper Mines plc (KCM) (a public company incorporated in Zambia). The Zambian government has a minority shareholding in KCM.
Zambian rural farmers are bringing a legal action in the UK (Vedanta’s home country) against Vedanta and KCM for pollution and damage to their lands, health and livelihood. The UK courts have accepted to hear the case against both companies even though the harm occurred in the host company, Zambia.
This case will be discussed more in “How Can I Bring a Civil Claim Against a Business in a Foreign Court?”
Transnational Corporate Groups
TNC groups are managed as a single business enterprise while remaining a collection of separately incorporated companies possessing the nationality of their place of incorporation.
As big international businesses, TNCs are more likely to have the resources to pay compensation for human rights harms.
However, there can be obstacles when trying to hold parent companies legally accountable for the actions of their subsidiaries:
In addition, TNCs often try and avoid liability by adding several layers of holding companies (companies that don’t produce goods or services but have the sole purpose of owning shares) between the parent and its operating subsidiaries and by channelling business through subsidiaries in tax havens and other regulatory haven jurisdictions.
d) State-Owned Enterprises
State-owned enterprises (SOEs) are companies set up and controlled by national governments to run commercial activities.
A key obstacle when trying to hold SOEs accountable is state immunity:
e) Global Value Chains
Businesses will typically receive, produce, distribute goods and services through their supply chain (this is the sequence of activities and actors involved in bringing goods or services to the market, from the raw materials to final use).
The supply chain can be called a Global Value Chain (GVC) as it represents all activities adding value to the business. This may include business relationships e.g. sales to customers.
Example: Apple iPhone 6
In 2014, components in the Apple iPhone 6 were produced by 785 suppliers in 31 countries. The iPhone 6 is designed in the US and assembled in China and Brazil while companies in Japan and Taiwan supply components for the phone.
These companies may in turn sub-contract work to companies in other countries with lower labour costs.
TNCs that control GVCs may not own shares in the participating companies. Rather they may have contractual arrangements with these companies (who are sub-contractors) that allow the TNC to coordinate goods production or service provision across borders. These contractual arrangements can shift the risk of liability onto sub-contractors and leave important aspects of business operations to them.
This guide will give you practical guidance and help you answer the following questions:
If you want to learn more or seek support, further resources and helpful organisations will be outlined the end of the guide.
Action4Justice would like to thank the following individuals and organisations for their contributions to the Action4Justice Business and Human Rights Guide: