-
Helps manage corporate risk:
Increasingly, investors are concerned
with avoiding and
managing the risks
associated with potential rights violations and
environmental impacts.
Foreign
investors operating in a state with a robust
regulatory environment are less likely
to face strikes or public protests that
may disrupt operations. They are also less likely
to
be the target of NGO campaigns that
can expose them to reputational damage, or to be
the
subject of civil or administrative
claims for violations of rights or environmental
harm. In
addition, investors are also
increasingly concerned with avoiding corruption in
connection
with their investments. Not
only may contracts procured through bribery and
other forms
of corruption be
unenforceable, but investors also risk being
prosecuted in the host state,
their
home state or both. As discussed in the preceding
section,
a
even where
investors are
not convicted, an
investigation and the media attention that
accompanies a prosecution
can result in
reputational damage, which in turn can result in a
decrease in share value.
Operating in a
state with strong anti-corruption legislation can
reduce the risk that
investors will get
caught up in corrupt activities.
a See Section 4.4.2.
5
(Obligations to Refrain from Acts or Complicity in
Acts of Bribery and Corruption).).
b
See Section 4.4.2.
5 (Obligations to
Refrain from Acts or Complicity in Acts of Bribery
and Corruption).
Implements states’ international
obligations and supports sustainable development:
Introducing new stronger domestic laws
and regulations, or amending existing laws and
regulations in the areas of human
rights (including labour rights and indigenous
peoples’
rights), anti-corruption and
environmental protection, allows states the
opportunity to
bring their laws into
compliance (where they are not already) with their
international
obligations. States
considering introducing such regulatory measures
may wish to
consider their
international obligations. The most widely
accepted international
obligations in
these areas are surveyed below.
Anti-corruption and environmental
protection obligations
As
discussed in the previous section, most
Commonwealth states are parties to one or
more anti-corruption
treaties.
b
In addition, most
states have ratified the following major
international environmental treaties,
and may be parties to a range of others, and
therefore
have obligations under such
agreements:
?
C
onvention on International
Trade in Endangered Species of Wild Fauna and
Flora
,
1973
501
?
F
ramework Convention on
Climate Change
, 1992
502
?
K
yoto Protocol to the
Framework Convention on Climate Change
,
1997
503
?
C
onvention on Biological
Diversity
, 1992
504
(353 | P a g e
?
Cartagena Protocol on
Biosafety
, 2000
505
?
V
ienna Convention for the
Protection of the Ozone Layer
,
1988
506
?
M
ontreal Protocol on
Substances that deplete the Ozone
Layer
, 1989
507
?
S
tockholm Convention on
Persistent Organic Pollutants
,
2001
508
?
C
onvention on the Law of the
Sea
, 1982
509
?
C
onvention to Combat
Desertification
, 1994
510
Only three
Commonwealth member states are parties to the
Convention on Long-Range
Transboundary Air Pollution
,
1979
511
and the
Convention on Access to Information,
Public Participation in Decision-making
and Access to Justice in Environmental
Matters
,
1998
(
Aarhus
Convention
).
512
However, states may wish to consider
the standards set out
in these
instruments. In particular, the norms set out in
the
Aarhus Convention
are
relevant to states interested in
pursuing sustainable development. This treaty
recognises,
among other things, the
importance of protecting the environment as
necessary for human
well-being and the
enjoyment of human rights and to protect the
interest of future
generations.
513
It provides rights and protections
regarding access to environmental
information,
514
meaningful participation in
environmental decision-making,
515
and rights
to challenge
environmental decisions in both judicial and non-
judicial fora.
516
Human rights standards
In determining the adequacy of existing
domestic law, states should consider their human
rights obligations under customary
international law and under the core UN human
rights
treaties discussed
above.
a
They may also wish
to refer to the measures proposed in the
section on investors’ human rights
oblig
ations,
b
which if implemented in domestic law
would go some way to satisfying the
international human rights law obligation to
protect
human rights.
a
See Section 4.4.2.2
(Obligation to Respect Internationally Recognized
Human Rights).
b See Section 4.4.2.2
(Obligation to Respect Internationally Recognized
Human Rights).
Labour rights standards
States’ labour rights obligations
include those entrenched in customary
international law
and the following
obligations:
?
The ILO conventions to which states a
re
parties;
517
and
(354 | P a g e
?
Other relevant international
instruments, including general human rights
treaties
which protect labour rights to
which states are parties, such as the
ICERD
,
ICCPR
,
ICESCR
,
CEDAW
,
CRC
,
ICMW
and
ICPD
.
In addition,
the labour protections put in place by states
which are members of the ILO
518
should also reflect the principles of
ILO
Declaration on Social Justice for a
Fair
Globalization
,
2008.
519
Together with the
ILO Constitution
, 1919, the
Philadelphia
Declaration
, 1944 and the
Declaration on Fundamental Principles
and Rights at Work
,
1998,
the
Declaration on Social Justice for a
Fair Globalization
provides the basis
and
method of implementation for the
constitutional objectives of the
ILO.
520
The 2008
Declaration
institutionalises the Decent Work
Agenda, and requires that ILO member
states ‘place full and productive
employment and decent work at the centre of
economic
and social policies’ pursuant
to four ‘inseparable, interrelated and mutually
supportive’
strategic objectives. These
are set out in Box 44.4 below.
Box 44.4. Objectives of the ILO
Declaration on Social Justice for a
Fair Globalization
(i)
Promoting employment by creating a sustainable
institutional and economic
environment
in which:
?
Individuals can
d
evelop and
update the necessary capacities and skills they
need to
enable them to be productively
occupied for their personal fulfilment and the
common
well-being;
?
All
enterprises, public or private, are sustainable to
enable growth and the generation
of greater employment and income
opportunities and prospects for all; and
?
Societies can achieve their goals of economic
development, good living standards and
social progress;
(ii) Developing and
enhancing measures of social protection
–
social security and labour
protection
–
which are sustainable and adapted to national
circumstances, including:
?
The extension of social
security to all, including measures to provide
basic income to
all in need of such
protection, and adapting its scope and coverage to
meet the new needs
and uncertainties
generated by the rapidity of technological,
societal, demographic and
economic
changes;
?
Healthy and safe working
conditions; and
?
Policies in regard to
wages and earnings, hours and other conditions of
work
, designed
to ensure a
just share of the fruits of progress to all and a
minimum living wage to all
employed and
in need of such protection;
(355 | P a g e
(iii) Promoting social dialogue and
tripartism as the most appropriate methods for:
?
Adapting
t
h
e implementation of the
strategic objectives to the needs and
circumstances
of each country;
?
Translating economic development into social
progress, and social progress into
economic development;
?
Facilitating
consensus building on relevant national
and international policies that
impact on employment and decent work
strategies and programmes; and
?
Making labour
law and institutions effective, including in
respect of the recognition of
the
employment relationship, the promotion of good
industrial relations and the building
of effective labour inspection systems;
and
(iv)
Respecting, promoting and realizing the
fundamental principles and rights at work,
which are of particular significance,
as both rights and enabling conditions that are
necessary for the full realization of
all of the strategic objectives, noting:
?
That freedom
of association and the effective recognition of
the right to collective
bargaining are
particularly important to enable the attainment of
the four strategic
objectives; and
?
That the violation of fundamental principles and
rights at work cannot be invoked or
otherwise used as a legitimate
comparative advantage and that labour standards
should
not be used for protectionist
trade purposes.
521
The
Declaration
emphasises that how states attain these
objectives is a matter to be
determined
by each state, taking into account its
international obligations, the
fundamental principles and rights at
work, and in light of international labour
standards, a
state’s circumstances
an
d priorities and the co-operation
among ILO member states.
522
Rights of indigenous peoples
No international instrument
currently exists that specifically articulates the
rights of
indigenous peoples or the
corresponding responsibilities of states,
corporations or
individuals in relation
to investment. However, relevant rights and their
related
responsibilities can be
extracted from international instruments
pertaining to indigenous
peoples,
including the UN
Declaration on the
Rights of Indigenous Peoples
and the
ILO
Convention (No. 169) Concerning
Indigenous and Tribal Peoples in Independent
Countries
,
1989.
523
To date, 38
Commonwealth states have endorsed the non-binding
UN
Declaration
, while only
two Commonwealth member states are parties to the
ILO
Convention
. (356 | P a g
e
The primary
concern that arises regarding IIAs from the
perspective of indigenous
peoples is
ensuring that none of the state’s obligations in
relation to investors limits the
state’s ability to adopt and enforce
laws, regulations o
r policies that
implement its
international obligations
towards indigenous peoples or that secure the
rights of these
peoples. In particular,
states that have endorsed the UNDRIP have
committed to protect
the rights set out
in Box 4.45 below.
Box
4.45. Overview of
United Nations
Declaration on the Rights of Indigenous
Peoples
?
The right to the full
enjoyment, as a collective or individuals of all
human rights and
fundamental freedoms
recognized in the UN Charter, the Universal
Declaration on
Human Rights and
international human rights law (Article 1);
?
The right to
be free from discrimination (Article 2);
?
The right to
self
-determination (Article 3);
?
The right to
autonomy or self
-government in matters
relating to their internal and local
affairs (Article 4);
?
The right to life,
physical and mental integrity, liberty and
security of the person and
the right
not to be subjected to any act of genocide or
violence (Article 7);
?
The right not to be
forcibly removed from their lands or territories
or
r
elocated without
free, prior and informed consent
(Article 10);
?
The right to restitution of cultural,
intellectual, religious and spiritual property
taken
without their free and informed
consent (Article 11);
?
The right to practice and
revitalize the
ir cultural traditions
and customs, including
maintaining and
protecting past, present and future archaeological
and historical sites,
artifacts,
designs, ceremonies, technologies, visual and
performing arts and literature
(Article
11);
?
The
labour right
s
established in
international and national law (Article 17);
?
The right to
full participation at all levels of
decision
-making in matters that affect
them and their rights and to good faith
consultation to obtain their free prior and
informed
consent before adoption and
implementation of laws and administrative measures
that
may affect them (Arts. 18 and 19);
?
The right to
develop their political, economic and social
systems or institutions, to be
secure
in the enjoyment of their own means of subsistence
and development, and to
engage freely
in all their traditional and other economic
activities (Article 20);
?
The right to determine,
develop and administer health, housing and other
economic
and social programmes
affecting them (Article 23);
?
The rig
ht to
protection of traditional medicines and health
practices, including the
protection of
vital medicinal plants, animals and minerals, to
access to all social and
(357 | P a g e