A draft of the European Commission’s Guidance for the oil and gas sector on implementing the UN Guiding Principles on Business and Human Rights (UN Guiding Principles) has been published for public consultation.

The purpose of the Guidance is to provide practical and useful guidance on the responsibility of oil and gas companies to respect internationally recognised human rights as set out in the UN Guiding Principles.

The Guidance is not intended to be legally binding and aims to be relevant to oil and gas companies’ global operations and not just those within the EU

Background to UN Guiding Principles

In June 2011 the UN Human Rights Council unanimously endorsed the UN Guiding Principles. This establishes a global reference point on the respective role of business and government in preventing and addressing the risk of adverse impacts on human rights linked to business activity. The UN Guiding Principles seek to implement the three pillars of the UN “Protect, Respect and Remedy” Framework on business and human rights, which are:

  • The state duty to protect against human rights abuses by third parties, including businesses, through appropriate policies, regulation and adjudication;
  • The corporate responsibility to respect human rights, meaning that businesses need to avoid infringing on the human rights of others and address adverse impacts with which they may be involved; and
  • The need for greater access to effective remedy for victims of business-related human rights abuses, through both judicial and non-judicial means.

European Commission’s approach to implementing the UN Guiding Principles

The European Commission has expressed its expectation that all businesses should meet the corporate responsibility to respect human rights, as defined by the UN Guiding Principles. To assist companies with this, the Commission committed to producing certain sector-specific guidance on implementation. The sectors chosen were oil and gas, employment and recruitment agencies and ICT/telecommunications. The project is being led by the Institute for Human Rights and Business and the Shift Project, together with an advisory group, which for the oil and gas guidance includes IPIECA (the global oil and gas industry association for environmental and social issues).

Draft Guidance for oil & gas businesses published for consultation

The draft Guidance for the oil and gas sector focuses mainly on upstream activities, including the activities of international oil companies, national oil companies, joint ventures, oil services companies, exploration companies, suppliers and contractors. Of particular interest is the guidance on:

  • implications of a company’s policy commitment to respect human rights on those responsible for negotiating and concluding contracts with business partners, host governments and suppliers and contractors;
  • how assessing human rights impacts relates to other existing impact assessment processes, including social impact assessments;
  • the consideration of human rights risks as part of the due diligence process prior to an acquisition of a project, licence or company;
  • integrating human rights considerations into joint venture arrangements; and
  • the requirement for a company to provide for, or cooperate in, the remediation of adverse human rights impacts that the company has caused or contributed to.

The draft Guidance is available on the website of the Institute for Human Rights and Business (click here).

The consultation period ends on 1 February 2013 and Herbert Smith Freehills is attending a roundtable organised by the European Commission to discuss the draft Guidance on 29 January.

About Herbert Smith Freehills’ Business and Human Rights Team

Herbert Smith Freehills has a dedicated business and human rights team. Made up of practitioners across our global network and from all industry sectors, we specialise in providing practical advice to clients on the broad range of issues that can arise in the business and human rights context. For further information please contact Stéphane Brabant, Louise Moore or Adam Johnson.