International Arbitration & the Remedy Gap for Victims of Business-Related Human Rights Abuses

 Prof. Katerina Yiannibas | katerina.yiannibas@deusto.es

In a legal utopia, every jurisdiction in the world could boast of efficient and affordable access to justice that would provide appropriate remedy to victims of human rights abuses. There would be equal protection and enforcement of international human rights, responsible cross-border business conduct, fair and unbiased adjudicative processes with effective assistance of counsel, and never any reprisals against victims or their defenders. Regrettably, this is not the world we live in. The contemporary legal reality instead evidences widespread legal and practical barriers to access remedy for victims of business-related human rights abuses.

The development of a global standard for preventing and addressing the risk of business-related human rights abuses is work that has been undertaken by the United Nations Human Rights Council. The policy framework for access to remedy for victims of business-related human rights abuses is set out in the United Nations Guiding Principles on Business and Human Rights (UNGP). Adopted in 2011, the UNGP is a set of thirty-one, non-binding principles that clarify the responsibilities of States, businesses and those affected by business-related human rights abuses. One of the foundational principles of the UNGP is that States must ensure effective access to remedy for victims of business-related human rights abuses, which includes facilitating access to both State-based and non-State-based non-judicial mechanisms. The UNGP provide that non-judicial mechanisms be legitimate, accessible, predictable, equitable, transparent, rights-compatible, and a sources of continuous learning so as to ensure effectiveness in a business and human rights context (UNGP Principle 31). Within the spectrum of non-judicial mechanisms is international arbitration: an adjudicative process based on party consent, which provides a final and binding resolution by one or more appointed arbitrators.

Considering the remedy gap for victims of business-related human rights abuse, the question is what can arbitration add to the spectrum of conflict management mechanisms? A gap-filling measure for one, but to be clear, arbitration cannot entirely close the gap that domestic courts are in the best position to solve. States are still the ultimate guarantors of human rights. It is States that regulate business activity and enforce human rights. And indeed, States have taken strides to address some of the legal barriers but the road ahead is long. Consider for instance that the European Economic and Social Committee has been calling for a European framework for collective redress for over twenty years. What arbitration delivers is an adaptable mechanism whose flexibility can provide solutions to some of the problems present in human rights adjudication (see full article). The wider advantage of arbitration is that it can provide direct access in a neutral forum where national jurisdictions are unavailable or difficult to access with nearly universal recognition and enforcement of arbitral awards (there are currently 159 State parties to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, ‘New York Convention’). The default international arbitration mechanism however, was contemplated for the resolution of commercial disputes and has in fact become a prolific mechanism for cross-border commercial and investment disputes worldwide. The adjudication of human rights disputes in a cross-border business context presents a particular set of challenges that would require some necessary rethinking of the default arbitration mechanism; including but not limited to striking the balance between transparency in the public interest and protecting witnesses or confidential business information, the equality of arms and financial assistance, collective redress, the application of human rights laws and standards, rights-compatibility and the sufficiency of applicable law, types of remedies, specialized arbitrators. Some of these issues could be resolved in the adoption of arbitration rules while others would have to be resolved in substantive law.

To consider the arbitration mechanism’s potential to provide access to remedy for victims of business-related human rights abuses, a group of international lawyers and academics formed the Working Group on International Business and Human Rights Arbitration. The first aim of the Working Group is to create a set of rules to make international arbitration available to resolve disputes arising from human rights abuses occurring in supply chains and other settings. A Drafting Team has been assembled, chaired by Bruno Simma and consisting of a diverse group of experts in arbitration, human rights, global business operations, and country-specific challenges. The Drafting Team held its first meeting in January 2018 to identify and hold initial discussions of some key issues relevant to the preparation of a set of arbitral rules in international disputes concerning business-related human rights abuses. The Drafting Team is currently preparing an Elements Paper to guide the project’s first public consultation procedure. The consultation procedure is designed to garner input and inform the next phase of the project: the drafting of arbitration rules on business and human rights. The work is not without challenges; the Drafting Team will have to balance the tension between party autonomy (a salient feature of arbitration) and concerns over due process and substantive human rights protection. Furthermore, there is the particular challenge of designing rules flexible enough to deal with multiple situations and parties.

Filling the remedy gap for victims of business-related human rights abuses is a call to action for international jurists and a reason to widen the scope of possible solutions to this global problem. To this end, it is important to recognize that solutions are not mutually exclusive but rather form a fabric to serve a common goal: justice.

Katerina Yiannibas is Assistant Professor of Public International Law at the University of Deusto, San Sebastian, Spain; Lecturer-in-Law at Columbia Law School in New York City, USA; and a member of the Working Group and the Drafting Team of the International Arbitration Business and Human Rights project.