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An Overview of the Hague Rules in Context by Femi Omere*

3 May 2021 8:31 AM | Anonymous member (Administrator)

Presented at the AfAA 2nd Annual International Arbitration Conference, 15th - 16th April 2021 on the Protection of Human Rights through Arbitration[1]  

As a prologue to the written adaptation of the presentation I delivered at the AfAA Conference, it is worth recapping on some truisms.  That is to say the continent of Africa continues to be endowed with a very sizeable amount of the world’s most precious and strategically important natural resources; and moreover, she is often regarded as the final frontier in which new extraction and market opportunities can be formed in order to maintain the growth story that symbolises the industrial / post-industrial ages.  As we passage through the so-called 4th industrial revolution, it may be prudent for us on the continent of Africa to ponder as to whether we have seen this before; and as such, what might it all mean for our futures? A question that naturally follows is what are we doing to develop the real-life narratives that we wish to unfold? The AfCFTA and the unified approach to the continent’s affairs that this could garner, is potentially a massive step forward that may answer the last question posed. The devil of course shall be in the detail and importantly, the instruments we devise, deploy, and implement to secure equitable outcomes, shall be critical. 

In considering the global attempts at addressing and furthering Human and Peoples Rights (HPRs), the historical African context, in so far as the last 500 years are concerned, are germane; these include slavery, colonialism, the struggle for independence, neo-colonialism and Africa’s attempts to unify, and ought to be imprinted on the global consciousness. A priori, any discussion and/or development of HPRs discourse and practices, must place the experiences of African states as central points of reference. 

The Hague Rules, within the context mentioned and in light of broader contemporary developments, where issues of racial justice and equity have gained prominence, provide a supporting opportunity to the continent in the arbitration sphere.  That is to say, the Hague Rules provide a powerful symbol and trajectory toward inculcating practices that go hand in hand with the centrality of human dignity, equity and justice, with its corresponding call to global corporate business to become firmly rooted within this endeavor. 

The Hague Rules are a mechanism for balancing commercial goals and the impact on HPRs, in response to what we have seen over history: namely, a continued trend where the practices of business, including within their supply chain operations, and particularly those of large multinational corporations, have led to the abuse of HPRs. 

The journey towards building an internationally workable framework to hold businesses accountable is relatively recent, and there have been attempts to reach these goals that have experienced varying degrees of success and failure. Such noteworthy attempts can be seen in the form of the UN Global Compact launched in 2000, and thereafter, the U.N. Sub-Commission on Human Rights, with its attempt at establishing binding, treaty-based HPRs obligations.[2]  These developments are seen as key moments that paved the way for subsequent evaluations, comprising wider stakeholder involvement, and which ultimately culminated in the establishment of a broadly accepted set of standards in the form of the influential, though non-binding, UN Guiding Principles on BHR. The enumerated principles are founded on the pillars that are articulated within the document itself, namely: to protect, respect, remedy. Building out from the ‘Remedy’ pillar is where the Hague Rules become relevant, in facilitating access to an effective remedy to alleged HPRs violations.

The Hague Rules are based on the UNCITRAL Rules and create a broad basis on which parties can resolve their dispute.  Their mission is to remove barriers to addressing breaches (e.g. competence of domestic courts, standing in national courts, prohibitive costs of litigation, excessive influence of states in judicial processes). The aim of the Rules is not to demonise businesses but to provide them with a framework within which to address the question of HPRs within their operations. They provide an avenue for individuals (as well as investors) to frame the mechanism for resolving disputes and/or to bring a claim, on the basis that:

i.      Party autonomy is sacrosanct.

ii.     Article 6 tackles inequality of arms and balance of power issues that are often prohibitive in arbitration.

iii.  Article 5 addresses potential barriers to access, requiring effective opportunity to present a case, which is clearly a circle back to the UN Guiding Principles.

Other rules are BHR-specific, for example Article 32 provides for more flexible rules around evidence that are rights compatible and take into account fairness, and particular sensitivities of parties (e.g. scope, burden of proof, adverse inferences) and Article 11 regarding selection of arbitrators. Remedies are also adapted to be BHR-relevant, including non-monetary relief like specific performance and the power of tribunals to make additional orders (which are culturally appropriate).

In the final analysis, when one considers the issues of efficacy and uptake, the optional quality of the rules perhaps speaks for itself and as such we may not see significant usage of the rules for some time.  It is in this light therefore, that the symbolism and evolutionary status of the Rules, as a living instrument, becomes all important, influencing expectations and other substantive methods by which HPRs may be protected, for example, at the treaty and contractual levels. That said, HPRs protection within the arbitration sphere provides added impetus to what appears to be a fast-developing trend running alongside public opinion, which asserts that there are certain foundational issues of our human existence (HPRs falling into this category) that can never be bypassed, dispute resolution fora included.  How this plays out in the arbitration space remains to be seen.

_________________________ 

* Founder & Managing Director Hosted in Africa

[1] Main References:  United Nations Guiding Principles on Business and Human Rights; Hague Rules on Business And Human Rights Arbitration; IBA Consultation response to OCHR Accountability and Remedy Project III; New Kid on the Bloc: An Introduction to the Hague Rules on Business And Human Rights Arbitration (Bhavya Mahajan) Cardozo J. Of Conflict Resolution [Vol. 22:221] 

[2] 2003 Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights



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