Forthcoming Chatham House and Herbert Smith Freehills Symposium: “TTIP: shaping the future for investor-state dispute settlement” – 4 March 2015

The proposed Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, two of the world’s largest economies, is intended to remove trade barriers, create wealth and promote investment.  On 13 January, the European Commission published the results of its public consultation on investment protection and investor-state dispute settlement (ISDS) in  TTIP.  Of the 150,000 responses, 97 per cent were negative.  Critics have stated that the ISDS proposals would allow corporates to undermine regulation by governments in fields such as environmental protection.  A further consultation is promised.

But why has ISDS in TTIP aroused such opposition?  Can it be improved to strike a balance between investment protection and the right of governments to regulate?  And, if TTIP is a blueprint for future free trade agreements (FTAs), what lies in store for this form of dispute resolution?

Chatham House in partnership with Herbert Smith Freehills are holding a symposium to bring together voices from across a broad range of stakeholders.

Participants:

Sapfo Constantatos, Senior Group Legal Counsel, Dispute Resolution in the General Counsel’s Office, Standard Chartered Bank
Andrew Coop, Senior Legal Adviser, EU and International Trade, Department for Business, Innovation and Skills
Lorenzo Cotula, Principal Researcher, Law and Sustainable Development, International Institute for Environment and Development
Andrea Shemberg, Lead, Investment and Human Rights Project, London School of Economics; Legal Adviser to UN Secretary-General’s Special Representative for Business and Human Rights (2007-11)
Christian Leathley, Partner, International Arbitration and Public International Law, Herbert Smith Freehills LLP, London

Chair:
Andrew Cannon, Partner, International Arbitration and Public International Law, Herbert Smith Freehills LLP, London

For further information, please click here.

Christian Leathley
Christian Leathley
Partner
+44 20 7466 2532
Andrew Cannon
Andrew Cannon
Partner
+33 1 53 57 65 52

Towards a Treaty on Business and Human Rights?

The Human Rights Council has adopted a resolution establishing a new working group with a mandate to elaborate “an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights”. In this note, we briefly summarise the background to the resolution and its implications for the future of the business and human rights agenda at the UN.

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European Commission publishes employment and recruitment sector guide: Corporate responsibility to respect human rights

The European Commission has published guidance for the employment and recruitment sector on meeting the corporate responsibility to respect human rights under the UN Guiding Principles on Business and Human Rights (UNGPs). The guidance sets out the steps required under the UNGPs to “know and show” a respect for human rights and has translated this into the particular context of employment and recruitment agencies.

The guidance is of relevance not only to employment and recruitment agencies, but to all companies globally, who rely on agencies for the recruitment of direct hire employees or the supply of workers. The sector guide will be particularly relevant for personnel engaged in corporate governance, ethics and compliance or human resources functions, and those whose role includes managing business relationships with employment and recruitment agencies. It is also intended to be helpful to groups who are interested in promoting respect for human rights in this business sector, including trade unions.

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European Commission publishes oil and gas sector guide: corporate responsibility to respect human rights

The European Commission has published guidance for companies in the oil and gas sector on meeting the corporate responsibility to respect human rights under the UN Guiding Principles on Business and Human Rights (UNGPs). The guidance sets out the steps required under the UNGPs to “know and show” a respect for human rights and translates this into the particular context of the oil and gas sector.

The guidance is of relevance to all companies globally in the oil and gas sector. The sector guide will be particularly relevant for personnel engaged in corporate governance and ethics and compliance functions, and whose role includes managing business relationships with contractors, suppliers and joint venture partners. It is also intended to be helpful to groups who are interested in promoting respect for human rights in this business sector, including governments, industry associations, NGOs and trade unions. The guidance builds on a draft published for public consultation in December 2012 (see our e-bulletin on the draft guidance here) and focuses on upstream activities, albeit not exclusively.

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Why IOCs are paying attention to soft law on human rights

Given the increasing importance that multinational corporations attach to human rights obligations, we have published an article entitled ‘Why IOCs are paying attention to soft law on human rights’ in the Herbert Smith Freehills journal, Energy Exchange. Please click here to view the article. It focuses on the oil and gas sector and the soft law obligations which apply to International Oil Companies and the increasing social, political and contractual pressure to observe international standards of best practice, including in relation to human rights. It explains how infringements of soft law often have hard consequences. The article is authored by Stephanie Lomax, an associate in our energy department.

For more information about business and human rights more generally, please see the resources under the Public International Law tab on this blog and contact Matthew Weiniger, Stéfane Brabant, Andrew Cannon or Johanna Hull.

Matthew Weiniger
Matthew Weiniger
Partner
+44 20 7466 2364
Stéphane Brabant
Stéphane Brabant
Partner
+33 1 53 57 78 32
Andrew Cannon
Andrew Cannon
Senior Associate
+44 20 7466 2852
Johanna Hull
Johanna Hull
Associate
+44 20 7466 2986

Equator Principles III released

The Equator Principles Association (EPA) has released the third version of the Equator Principles (EPs) for managing environmental and social risks in financing projects. They are largely the same as the draft EPs released for public consultation in August 2012 (see our e-bulletin here which discusses the draft in detail), but there have been some changes of which lenders and borrowers should be aware, particularly in relation to express exclusions of certain financial instruments from scope, relaxed public disclosure requirements, and human rights due diligence. The new EPs will come into effect on 4 June 2013, but the EPA will allow the previous version of the EPs to be used where the arrangement mandate is signed before the end of 2013.

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Business & Human Rights – EC Draft Guidance for oil & gas sector on implementing the UN Guiding Principles

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

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UN Annual Forum on Business and Human Rights

The first annual UN Forum on Business and Human Rights will be held in Geneva on 4-5 December 2012.  The UN Forum will bring together governments, national human rights institutions, business associations, companies, NGOs and UN bodies to discuss the implementation of the UN Guiding Principles on Business and Human Rights. A provisional agenda for the UN Forum can be found at here. Herbert Smith Freehills will be attending the Forum and we will be posting a report on the Forum on this arbitration blog shortly after the event. A webinar discussing recent developments in the field of business and human rights is planned for the New Year.

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Equator Principles that are adopted by key financial institutions to be extended to further promote human rights

The Equator Principles Association (EPA) has released a third version of the Equator Principles (EPs) for public consultation and comment (available here). Amongst the key changes proposed by the draft are a greater emphasis on human rights and climate change.  According to the EPA, this amendment acknowledges the second pillar of the UN’s Protect, Respect and Remedy Framework for Business and Human Rights developed by Professor John Ruggie, urging businesses to “act with due diligence to avoid infringing on the rights of others and to address adverse impacts with which they are involved.”

The Equator Principles were launched by 10 financial institutions and the International Finance Corporation (IFC) in 2003. They establish an environmental and social risk management framework, and a minimum due diligence standard for identifying, assessing and managing environmental and social impacts in project finance transactions. They have been adopted by 77 financial institutions to date, which together are responsible for the vast majority of project financings around the world.

The principles, whilst not legally binding, are widely followed and of real practical significance.  Banks will refuse to fund or accelerate funding in relation to projects that do not demonstrably comply with the principles, since otherwise banks themselves will be exposed to reputational risk.  The proposed changes demonstrate the increasing regard that companies operating in the international sphere, and particularly in emerging markets, should have to human rights.  Moreover, it is likely that they will establish an internationally recognised standard and that other entities will follow suit.

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Kiobel v Royal Dutch Petroleum: a lesson on business and human rights?

On 1 October 2012, the United States Supreme Court will hear further arguments in the case of Kiobel v Royal Dutch Petroleum Co, bringing the issue of business and human rights to the fore and raising the question of how businesses can protect themselves against allegations of complicity in governmental human rights abuses in connection with their operations.

The case of Kiobel concerns a claim by a group of Nigerian citizens that Shell aided and abetted the commission of gross human rights violations by the Nigerian military dictatorship in the 1990s in order to suppress lawful protests against the exploitation of oil in the Niger Delta. The claim is brought under the Alien Tort Statute (“ATS“), a law from 1789, which allows foreign nationals to bring a civil claim for violations of international law in US courts.  The Court was initially concerned with the issue of whether the liability of a corporation for human rights violations can be founded under the ATS. The Court however broadened the question and the arguments on 1 October will concern the extraterritorial application of the ATS.

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