Editor's note: Sara Martinetto is a research intern at the T.M.C. Asser Institute. She has recently completed her LLM in Public International Law at the University of Amsterdam. She holds interests in Migration Law, Criminal Law, Human Rights and European Law, with a special focus on their transnational dimension.

Having explained the Italian legal trajectory of the Ilva case, this second post focuses on the transnational reach of the case. Two main actors have played (or play) a crucial role: the European Union (especially the EU Commission) and the European Court of Human Rights (ECtHR). Both have tackled the Ilva case from different perspectives, depending on their competences. The Commission even dealt with the case from two distinctive viewpoints, as it started infringement proceedings related environmental protection state and aid.

The European Union and the Ilva case

As previously discussed in Part I, the EU has a prominent role in determining the environmental policy of the Member States: in particular, the EU issued a number of Directives, which provide for a general legal framework with regard to industrial pollution. Yet, Taranto’s disaster has also attracted special attention from the EU institutions. Specifically, the Commission has opened several infringement procedures against Italy in the matter. The measures undertaken at the EU level can be divided in two categories: measures on environmental protection, and measures regarding state aid. 

Infringement of EU environmental law

The first infringement procedure opened by the European Commission relating to the Ilva steel plant dates back to 2008. The Commission submitted that Italy did not fulfil its obligations under the Integrated Pollution Prevention and Control (IPPC) Directive,[1] by failing to bring the old permits awarded to the Ilva plant in compliance with the new norms. The Commission referred the issue to the CJEU, which found a violation of Art. 5(1) of the Directive.[2]

Simultaneously to the first provisory measures in the ‘Environment for sale’ trial, the European Parliament adopted a Resolution, which called on both the Italian authorities and the EU institutions to tackle the situation in Taranto. In turn, the EU Commission opened another infringement procedure in 2013. According to the related press release, Italy was deemed again in violation of the IPPC Directive (which would then be replaced by the Industrial Emissions Directive (IED) from January 2014) and the Environmental Liability Directive (ELD) prescribing the ‘polluters pay’ principle. The Commission recalled the extensive evidence of pollution caused by Ilva, and submitted that IPPC permits should be issued only if plants comply with the specific requirements set out in the Directive. Moreover, it reminded that the ELD provides for strict liability in case of environmental damage: once a causal link is established between the activity and the damage, there is no need to prove fault. For these reasons, the Italian authorities had to take steps to bring the Ilva plant in compliance with EU law and adapt national legislation in order to provide redress for ongoing violations. After a second letter of formal notice in 2014, the Commission issued a reasoned opinion pursuant to Art. 258 TFEU, stating that violation of the IED and ELD Directives have not ceased. However, the CJEU has still not been seized on the matter.

Infringement of State aid rules

As previously stated, Ilva has been a State-owned enterprise for more than thirty years and it has always been considered part of Italian strategic national interests: for this reason, the financing of the plant with public funds has been a long standing problem, and it has become even more so with the latest temporary receivership.[3]

In 2016, the Commission opened an infringement procedure for State aid against Italy, which has allegedly granted Ilva around 2 billion € for the rehabilitation of the plant. This contributions are not only the result of direct funding, but also of a law granting loans to Ilva a priority status in case of bankruptcy, including over debt to public entities; a law allowing Ilva access to funds seized during ongoing criminal proceedings against Ilva's shareholders and former management before those proceedings have established who owns these funds; and the favourable settlement of a long standing dispute between State-owned Fintecna and Ilva.[4] The procedure was then extended to cover the new 300 million € subvention provided in Law Decree 191/2015.

In this regard, Commissioner Vestager has recognised the delicate state of the steel plant, and the urgent need to proceed with the depollution of the area. Theoretically, the State can provide funding to accelerate such process, but the funds must be reimbursed by Ilva, pursuant to the ‘polluters pay’ principle.

The procedures are still on-going. Indeed, there is no easy solution to both claims raised by the Commission, especially if the main goal of the Italian Government is to keep the plant open. Albeit the Government must implement EU Directives into national law, the issuing of the IPPC permit (AIA) partly depends on the margin of appreciation entrusted to administrative authorities. Such a margin is likely to be exploited to its full extent in order to avoid the shutdown of the factory. Furthermore, public financing seems necessary to proceed with the clean-up of the area. However, it is hard to see how this amount could be then reimbursed in the short run, since the plant was only recently sold to Am Investco Italy, a joint venture of Marcegaglia Group and ArcelorMittal. The new owner is planning to invest more than one billion euros tp depollute the area, in conformity with the new AIA, but it is likely to require some time. In the meantime, the multiple Government interventions have put Ilva in a privileged position.

The Ilva case at the European Court of Human Rights

The previous sections have shown the multiple conflicts caused by the Ilva case among institutions at different levels. However, the victims of the Ilva plant have not been able, up to now, to actually get redress or to see a significant improvement of their living conditions. That is what drew citizens to file recourse to the ECtHR, in an attempt to hold Italy responsible for the Ilva case.

A first application was filed by Ms Smaltini in 2009, who died of leukaemia during the proceeding. The applicant submitted there was a causal link between her disease and the Ilva emissions and hence Italy violated Art. 2 ECHR (right to life). However, the Court declared the case inadmissible because manifestly ill-founded. In its decision,[5] the ECtHR noted that the applicant had previously initiated a proceeding in domestic courts, which was then discontinued due to lack of evidence regarding the link between the polluting activities and her illness. In fact, the evidentiary report carried out by Italian authorities showed that the percentage of people affected from leukaemia in Taranto was not higher than in other areas. Therefore, the Court held that the applicant had access to a fair process, which was carried out in the light of the scientific data available at the time of the complaint. Thus, Ms Smaltini failed to prove Italian authorities breached the procedural aspects of her right to life, thus rendering the case inadmissible. Ms Smaltini failed to argue, more generally, that the State did not fulfil its positive obligation in ensuring her right to life, and limited her complaint to the determination of the causal link between her disease and Ilva’s activities.  The Court ruling was strongly criticised by many commentators,[6] who were unconvinced by its decision to limit its reasoning to the legal claims raised by the complainant. Indeed, in Guerra v. Italy,[7] the ECtHR stated that it is not bound by what the applicant asks, but that it can amend the legal characterisation given by the parties pursuant to the principle ‘iura novit curia’ (‘the Court knows the law’). Thus, theoretically, the Court could have rephrased the legal arguments brought by the applicant and applied its previous jurisprudence under Art. 2 and 8 ECHR vis-à-vis environmental matters.

Building on the legacy of this ruling, two other applications were filed to the ECtHR, and are now being examined jointly before the Court. The first recourse was filed in 2013 by a group of 52 applicants, represented by Sandro Maggio, and promoted by the Committee “Legamjonici”, a non-profit association dealing with environmental issues in Taranto. The second one was filed in 2015, and involves 130 citizens of Taranto, who are represented by the Roman law firm Saccucci & Partners. Due to the extreme importance and urgency of the case, the Court has decided – on 4^th February 2016 – to prioritize the case, pursuant to Art. 41 of the Rules of the Court. On 27^th April 2016, the Court found the case non-manifestly inadmissible and accepted to rule on the merit. However, the Italian Government has asked for multiple delays, lengthening the procedure. A final ruling is expected in 2017.

The aim of such applications is not only to obtain compensation for the victims but to compel Italy to create a legal framework to be applied in case of environmental disasters. The main legal argument of the complainants is that Italy has not put in place a normative and administrative structure capable to prevent and address the great damage generated by the Ilva plant. In order to do this, they submit the violation of Art. 2 (right to life), Art. 8 (right to family and private life), and Art. 13 ECHR (right to an effective remedy).

The claims under Art. 2 and 8 are supported by a great body of ECtHR jurisprudence in environmental cases: since the ECHR does not include an autonomous provision on the right to a healthy environment, the Court has progressively expanded its interpretation of these Articles to address claims connected to environmental damage. In this proceeding, Art. 2 came into play at a later stage: firstly, the Court focuses on including the right to a healthy environment into the right to private and family life under Art. 8 ECHR. The first case in this regard is Lopez Ostra v. Spain (1994), in which the Court found that the Spanish Government did not succeed in striking a fair balance between the rights of the applicant under Art. 8 and the economic well-being of the country (§58).

As far as Art. 2 is concerned, Öneryildiz v. Turkey (2004) should be regarded as the landmark case. Drawing from Osman v. United Kingdom (1998) (§115-116), the ECtHR held that Art. 2 entails “a primary duty on the State to put in place a legislative and administrative framework designed to provide effective deterrence against threats to the right to life” (§89). Moreover, the Court took up its previous jurisprudential distinction[8] between the substantial and procedural limbs of Art. 2: the State has not only the positive duty to safeguards lives within their jurisdiction, but also to set up a framework which would guarantee the prevention and punishment of violations (§91). This is where Art. 2 gets intertwined with Art. 13 ECHR, the right to an effective remedy. Indeed, in the Ilva case, the victims are still awaiting a final judgement and have not received any kind of compensation. Moreover, the judicial measures aimed at stopping production were seriously impaired by the Government.

Therefore, the ECtHR has in place the legal means to require Italy both to provide compensation for victims and to reform its national law, as well as further clarify the extent of State obligations with regard to environmental disasters caused by private actors incorporated in their territory.

Conclusions: Between national impotence and transnational redress

The more one dives into the Ilva case, the more worrisome the picture gets. Many actors have continuously tried to address a tragedy that has been dragging along for more than fifty years. However, the opposing interests in play have driven institutions to step on each other’s feet, to adopt measures in response of narrow concerns, and to the detriment of others. These conflicting instances are reflected in the infringement procedures initiated by the Commission. Ultimately, the European Court of Human Rights is called now to give victims an answer which is not likely to be granted at the national level. In particular, an ECtHR ruling could respond to different needs: it could grant relief to the victims; it could force the State to put in place an adequate normative framework to tackle this crisis; it could further elaborate on the State obligations related to environmental harm caused by private actors. There are great expectations upon non-national actors to break an impasse which national authorities seem incapable, or unwilling, to solve. While the Ilva case showcases the incapacity of Italian authorities to tackle an environmental matter of life and death, transnational legal interventions are an external disruption hopefully capable to drive change. To this extent, the additional level of protection offered by EU and ECHR rules can be of invaluable assistance to the victims of Ilva. In the meantime, the ‘Environment for sale’ trial will continue to try to determine the criminal responsibility of a network of public and private actors who contributed to harm Taranto and its citizens. 

[1] The Directive established that all industries presenting an environmental risk should be granted a permit by public authorities in order to produce. Such permit is conditional on the compliance with Best Available Techniques (BATs).

[2] Art. 5(1) obliges Member States to review all the permits previously issued in the light of the new requirements. In particular, the Court held that a mere revision of previous permit aimed at correcting only manifest violation of the new Directive could not be considered sufficient to fulfil the obligations therein prescribed (§36). CJEU, C-50/10, Commission v. Italy, 31 March 2011

[3] See the Commissions proceedings related to the financing of ILVA by IRI in 1993

[4] EU Commission, Press Release, State aid: Commission opens in-depth investigation into Italian support for steel producer Ilva in Taranto, Italy, 20 January 2016

[5] ECtHR, Smaltini v. Italy, 16 April 2015

[6] A. Mascia, Nel Caso Smaltini C. Italia La Corte Europea Dei Diritti Dell’uomo Ha Ritenuto Che Le Emissioni Provenienti Dallo Stabilimento Ilva Di Taranto Non Siano State La Causa Dell’insorgenza Della Malattia Mortale Contratta Dalla Ricorrente, 4 May 2015; M. Alagna, Smaltini C. Italia: Irricevibilità Del Ricorso O Rigidità Del Giudice?, in Ordine Internazionale e diritti umani, 2015

[7] ECtHR, Guerra v. Italy, 19 February 1998 (§44)

[8] Among others, see McCann v. United Kingdom, 25 September 1995

Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Background

At the United Nations Forum on Business and Human Rights from 27-29 November 2017 in Geneva, discussions focused on the central theme of Realizing Access to Effective Remedy. With an increasing focus on this third pillar of the United Nations Guiding Principles on Business and Human Rights, a working group of international law, human rights and conflict management specialists (Claes Cronstedt, Jan Eijsbouts, Adrienne Margolis, Steven Ratner, Martijn Scheltema and Robert C. Thompson) has spent several years exploring the use of arbitration to resolve business and human rights disputes. This culminated in the publication on 13 February 2017 of a proposal for International Business and Human Rights Arbitration. On 17 August 2017, a follow-up Questions and Answers document was published by the working group to address the principal questions raised about the proposal during the three-year consultation with stakeholders. Now, a drafting team is being assembled, chaired by Bruno Simma, to prepare a set of rules designed specifically for international business and human rights arbitration (the Hague International Business and Human Rights Arbitration Rules) in consultation with a wide range of business and human rights stakeholders. Once drafted, the rules will be offered to the Permanent Court of Arbitration and other international arbitration institutions and could be used in arbitration proceedings managed by parties on an ad hoc basis.

Introduction

Part 1 of this three-part blog series gave an overview introduction to the proposal for international business and human rights arbitration. This Part 2 focuses on (1) the potential advantages of using international arbitration to resolve such disputes, as well as (2) the substantial challenges the proposal will face in practice. Part 3 will then provide a case study of the Accord on Fire and Building Safety in Bangladesh’s binding arbitration process.

1.     The potential advantages of international business and human rights arbitration

The working group’s proposal to use international arbitration for the resolution of business and human rights disputes offers many potential advantages. As alluded to in Part 1 of this blog series, international arbitration can undoubtedly provide a more neutral forum, whereas domestic or international courts may face political pressure or judicial corruption. Arbitration would allow both parties to a dispute to select their own judges, who could, in theory, be impartial experts in business and human rights law and practice and accordingly more sensitive to the often complex issues at stake. This may particularly be welcomed in politically or emotionally charged human rights disputes. Additionally, international arbitration would allow for greater procedural flexibility and efficiency, as compared particularly to domestic court systems. Proceedings could be more tailor-made to fit both parties’ locations, means and resources, and resolved more swiftly than might otherwise be the case in business and human rights disputes. Other potential advantages include (a) the universal recognition of the arbitral award, and (b) an increase in supply chain responsibility.

a.     Universal recognition of the arbitral award

Final awards rendered in international business and human rights law arbitrations could include monetary damages, injunctive relief and close monitoring of future compliance. As the working group’s Questions and Answers document confirms, such awards could have the advantage of being enforceable under the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). The New York Convention provides for the recognition and enforcement of foreign arbitral awards within its 157 State parties. The courts of each member nation must recognise foreign arbitral awards as binding and enforce them, unless the party against whom the award is being invoked can prove that there is reason to refuse enforcement. The limited grounds for refusing this universal recognition are outlined in Article 5 of the New York Convention, notably that:

• The parties to the agreement to arbitrate were under some incapacity or the agreement to arbitrate is not valid under the governing law or the law of the country where the award was made.
• The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present its case.
• The award contains decisions on matters beyond the scope or terms of the submission to arbitration.
• The arbitral authority’s composition or arbitral procedure was not in accordance with the parties’ agreement or, failing such agreement, the law of the country where the arbitration took place.
• The award is not yet binding, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, the award was made.
• The dispute’s subject matter is not capable of settlement by arbitration under the law of the country in which enforcement is sought.
• The recognition or enforcement of the award would be contrary to the public policy of the country in which enforcement is sought.

Accordingly, parties have an established means by which to achieve the recognition and enforcement of final awards handed down by tribunals in business and human rights arbitrations.

Although this could provide a clear route by which parties can receive any monetary damages, it may however be found lacking when it comes to potential long term monitoring and supervision requirements of any business and human rights arbitration award. Business and human rights arbitration tribunals might well require in the award that a party’s actions to remedy a particular human rights breach are supervised, and that its future compliance with human rights obligations is closely monitored. In this vein, additional mechanisms of enforcement and monitoring may need to be developed, perhaps along the lines of the Permanent Court of Arbitration’s Optional Rules for Conciliation of Disputes Relating to Natural Resources and/or the Environment.

b.    Increase in supply chain responsibility

As the working group explains, international business and human rights arbitration has the potential to “reinforce global governance” and might encourage and assist businesses to better manage their supply chains in order to avoid rights abuses. Businesses are increasingly altering their supply chain contracts to observe human rights norms, particularly in line with the United Nations Guiding Principles on Business and Human Rights. In this manner, international arbitration for the resolution of any human rights disputes could be inserted into the contractual terms and conditions between companies and their immediate business partners.

Precedent contracts between parent companies, subsidiaries, suppliers and contractors could simply be amended to include business and human rights commitments along with a business and human rights arbitration clause. They might include clauses requiring business partners to observe specific norms or to refrain from particular practices which might lead to human rights abuses. They could also include clauses granting potential victims, workers or members of affected communities the right to enforce the human rights clauses. Parent companies might use perpetual clauses to ensure effective supply chain responsibility, meaning that parties throughout their entire chain of subsidiaries, suppliers, contractors and subcontractors are required to insert the same provisions into their own contracts. As the working group’s Questions and Answers document explains, any defaulting party could then be subject to a binding business and human rights arbitration process brought by any party empowered under the contract to invoke proceedings.

These steps would create a chain of contracts that protect victims from human rights abuses and provide businesses with an avenue to reduce or eliminate the risk of abuse for which they may share a degree of responsibility (see previous blog: Lungowe v Vedanta and the loi relative au devoir de vigilance: Reassessing parent company liability for human rights violations). The availability of international arbitration could allow businesses to better manage their supply chains and facilitate responsible conflict management in the event of any human rights abuses.

2.     The challenges facing international business and human rights arbitration

The working group’s proposal to use international arbitration for the resolution of business and human rights disputes also raises many potential challenges. Careful consideration must be given to the existing limitations of international arbitration. For instance, compared to domestic court systems, arbitration offers limited options for the summary dismissal of spurious claims. The recourse mechanisms available to defendant corporations must be reassessed when developing business and human rights arbitration to enable the early dismissal of unfounded allegations. Another key area for debate, is which norms or laws would be applied by the arbitral tribunal in business and human rights disputes, and indeed whether they would recognise corporate liability for human rights violations. As evidenced through Kiobel v Royal Dutch Petroleum, Jesner v Arab Bank and Lungowe v Vedanta, the question of corporate liability for human rights violations under international and domestic law remains open in many jurisdictions. As for the possibility of incorporating voluntary guidelines such as the United Nations Guiding Principles on Business and Human Rights, attention must be paid to the potential implications of making soft law a binding and contractually enforceable obligation. A successful business and human rights arbitration mechanism must also work to overcome the existing criticisms of international arbitration, often focusing on cost and efficiency. Moreover, in contemplating whether party appointed arbitrators or a permanent standing arbitral tribunal is more appropriate, the working group must consider issues such as the role of arbitrator bias and experience, as well as the feasibility of having multiple decentralised offices if a Court of Arbitration for Sport model were to be followed. As briefly mentioned in Part 1 of this blog series, other potential challenges include (a) an inequality of arms between parties, and (b) the transparency of arbitration proceedings.

a.     Inequality of arms between parties

As the working group’s Questions and Answers document explains, often victims of businesses’ human rights abuses are poor and accordingly cannot compete on equal terms in disputes against well-resourced business opponents. Unfortunately, this inequality of arms issue might be compounded through the use of international arbitration, as its high party and common costs, alongside procedural complexity, could place victims at a significant disadvantage.

International arbitration has been described as a “rich man’s game, best left to large companies, insurers and organs of sovereign states”. Both parties to international arbitral proceedings generally incur:

• Administrative charges by the arbitral tribunal.
• Fees and expenses of the tribunal, external counsel, experts and specialist services, such as transcribers and interpreters.
• Hiring fees for hearing room(s) and facilities.
• Expenses of testifying witnesses.
• Significant costs for legal representation.

Accordingly, in promoting the international arbitration of business and human rights disputes, efforts must be made to deal with the inequality of arms that victims of rights violations may face when attempting to assert their rights, and how they might afford the costs associated with arbitration proceedings.

Indeed, the working group’s proposal explicitly recognises that victims may need assistance to help defray their arbitration costs and legal fees. Proposals for cost reduction in future international business and human rights arbitrations include:

• Facilitating representation of victims by human rights non-governmental organisations, labour unions and pro bono lawyers.
• Supporting arbitration proceedings in the same way as domestic litigation, through legal aid or the provision of third-party funding.
• The establishment of dedicated grants or the advance of funds (to be repaid from the proceeds of final settlements or arbitral awards) for the arbitration of business and human rights disputes. For instance:
• Private corporations, individuals, foundations and States could contribute to the establishment of a dedicated private trust fund. This would promote better access to justice for victims whilst also contributing to businesses’ corporate social responsibility objectives.
• A dedicated fund could be established by arbitral institutions which adopt the Hague International Business and Human Rights Arbitration Rules. One funding model would be the Financial Assistance Fund established by the Permanent Court of Arbitration, which aims at helping developing countries meet part of the costs involved in international arbitration.
• Centralised funds could be created, for instance within the European Union, by which access to common markets is contingent upon fixed contributions to support victims of businesses’ human rights violations.

In terms of costs and legal expenses allocation, a number of proposals have been put forward to ensure a greater equality of arms. These include:

• Contractual requirements in business and human rights arbitration clauses mandating that a losing company pay the arbitration costs and legal fees of winning victims.
• The granting of additional powers to international business and human rights arbitrators, allowing them to allocate costs and legal fees to winning victims or with consideration of the degree of fault demonstrated.
• Examining the use of fee-shifting arrangements. Traditionally this could mean that the loser pays the winner’s legal fees and costs, which may reduce initial hurdles for victims seeking to litigate but also increases their potential risk and exposure post-judgment. Another idea would be implementing reverse fee shifting, whereby successful victims are awarded their legal fees and costs without winning businesses being afforded the same luxury. The concept has previously been implemented in environmental suits bought by citizens in the United States to help overcome often prohibitive litigation costs.

Given the widespread interest in access to justice for business and human rights victims, there is certainly the potential for means of reducing and reallocating the costs involved in international arbitration proceedings. However, more thought must be given by the working group, the drafters of new arbitration rules and the business and human rights community as a whole to overcome the inequality of arms between well-resourced business corporations and their potential victims.

b.    Transparency of arbitration proceedings

One key factor behind the success of international commercial arbitration is confidentiality. The potential privacy of arbitral proceedings is a distinct motivator for business parties to resort to this means of dispute resolution over more public domestic litigation proceedings. However, when considering the arbitration of business and human rights disputes, the expedient element of arbitral confidentiality is challenged by an inconsistent concern for ensuring transparency in human rights cases. When adjudicating on disputes involving human rights violations of international concern, the public interest lies in having open, transparent proceedings. Additionally, as Justice Scalia recognised in AT&T Mobility LLC v Concepcion, 131 S. Ct. 1740 (2011), confidentiality “becomes more difficult” with class action arbitrations involving absent parties and potentially higher stakes. Accordingly, any rules for arbitrating business and human rights disputes must rethink standard arbitration provisions dictating party privacy, and take account of a need for greater transparency. Indeed, the working group’s proposal identifies as an issue for drafters of new arbitration rules, how “transparent the proceedings and awards should be and how to accommodate any confidentiality concerns that either side might have”.

The working group’s Questions and Answers document identifies greater transparency as a prerequisite for business and human rights arbitration, including the possibility of open proceedings for disputes as well as the potential for publication of human rights arbitral awards. When reassessing arbitral confidentiality, it is suggested that drafters of new arbitration rules will turn to the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules and the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration. These rules recognise “the need for provisions on transparency in the settlement of such treaty-based investor-State disputes to take account of the public interest involved in such arbitrations”, in a similar vein to the public interest in human rights litigation. They also explain that “that rules on transparency in treaty-based investor-State arbitration would contribute significantly to the establishment of a harmonized legal framework for a fair and efficient settlement of international investment disputes, increase transparency and accountability and promote good governance”. Such harmonisation in a legal framework for business and human rights arbitration would similarly augment accountability and promote good governance in the resolution of disputes.

The UNCITRAL Rules increase the public transparency of investor-state arbitration proceedings, notably authorising arbitrators to protect confidential business information and permitting the submission of amicus curiae briefs by third parties. They also require that repositories make all documents, including exhibits and expert reports, available in a timely manner, in the form and language in which they are received. Future rules governing business and human rights disputes might incorporate these principles, as well as considering public entry to, and online streaming of, arbitration hearings and the publication of pleadings and arbitral awards. This will necessitate consultations with international arbitration institutions, which do not routinely create public venues for observation of their proceedings and often decline to publically state the number and kinds of claims with which they deal. It will also be critical that arbitrators are fully informed of the legal and policy issues surrounding confidentiality in business and human rights cases, in order to appropriately resolve disputes arising between parties about privacy provisions.

As Judith Resnik has highlighted, publicity in courts can discipline businesses and governments by making visible how they treat judicial procedures and the claimants against them. Only through such “public processes, one learns whether individuals of all kinds [...] are understood to be persons equally entitled to the forms of procedure offered others to mark their dignity and to accord them respect and fairness”. Public access to the resolution of business and human rights disputes is paramount, and great attention must be paid by drafters to balancing the protection of sensitive business information with the need for transparent arbitral proceedings.

Conclusions

The working group’s proposal for international business and human rights arbitration is not intended to replace any existing means of redress. Its desire is to offer a potentially more effective alternative to current means of dispute resolution, rather than remove access to any existing remedies. Providing parties with a greater range of options to resolve business and human rights disputes will undoubtedly improve their ability to select a method most appropriate to their cause. The availability of international business and human rights arbitration would bring with it many potential advantages, including the universal recognition of arbitral awards, an increase in supply chain responsibility and responsible conflict management. However, the concept still has some way to go before it could succeed in practice. International arbitration proceedings must be heavily adapted, accounting for, amongst other factors, a likely inequality of arms between parties and the need for transparency in human rights proceedings, whilst the existing limitations of international arbitration must be reconsidered. Commentators from business, human rights and arbitration communities have reacted to the proposal with questions and concerns, and the working group, drafters of new arbitration rules and the business and human rights community as a whole face substantial challenges moving from concept to reality. Part 3 of this blog series will further discuss the arbitration of business and human rights disputes through a case study of the Accord on Fire and Building Safety in Bangladesh’s binding arbitration process.