Council of Europe to hold firms accountable

Article as analysis
In a recent recommendation, the Council of Europe urges its Member States to enact legislation requiring business enterprises to carry out human rights due diligence.

The Council of Europe is relatively seldom discussed. Yet, as an intergovernmental body comprising 47 States – including Switzerland – it is an international standard-setting organization in human rights matters. On 2 March 2016, its Committee of Ministers adopted a recommendation on human rights and business. The aim is "to contribute to the effective implementation" of the UN Guiding Principles on Business and Human Rights and to fill the gaps existing at the European level.

Using language that "requires" as much as it "encourages", the text is surprisingly forthright, especially as regards the justiciability of business enterprises. Member States should thus apply legislative measures “to ensure that human rights abuses caused by business enterprises within their jurisdiction give rise to civil liability” (§32). The Committee of Ministers goes even further by underlining the problem of legal separation between parent companies and their subsidiaries, a potential obstacle to justice. The Committee believes that to remedy this, Member States' domestic courts should be allowed to “exercise jurisdiction over civil claims concerning business-related human rights abuses against subsidiaries, wherever they are based" (§35). Moreover, "if no other effective forum guaranteeing a fair trial is available", the same courts should be able to exercise jurisdiction over civil claims concerning abuses caused by other enterprises not domiciled within the Member State (§36).

Because the mere existence of a legal standard does not yet guarantee that victims can enforce their rights, the Committee of Ministers advocates measures that allow entities such as NGOs and trade unions to bring claims on behalf of victims (§39). Consideration should be given to “possible solutions for the collective determination of similar cases in respect of business-related human rights abuses” (par. 42) and "equality of arms" ensured between the parties – through legal aid schemes (§41) and access to vital information in the possession of the defendant (§43). These are all points regarding which Switzerland stands out for its shortcomings.

Consistent "smart mix"

These examples are telling: the Council of Europe clearly sanctions the "smart mix" of voluntary and binding measures recommended in the UN Guiding Principles. Member States should therefore apply such measures as may be necessary to require, as appropriate, business enterprises domiciled in their jurisdiction to respect human rights throughout their operations abroad (§13). In so doing they must apply "human rights due diligence throughout their operations" (§20). When they own or control business enterprises, provide support and services (credits or export guarantees) or conclude public procurement contracts, States should apply "additional measures" and provide for "adequate consequences" in case of failure to respect human rights (§22).

This Council of Europe recommendation is not binding. Switzerland has nonetheless negotiated and adopted it. It must now implement it. One simple and efficient way would be to follow up on the initiative for responsible multinationals.