Newsletter No 10

Date: 31 March 2025

 

A business and human rights treaty

This month on Critical Takes, Sikho Luthango looked at the negotiations for a UN treaty on business and human rights, which moved further at the end of last year but have yet to resolve fundamental questions about the scope and ambition of a treaty.

Sikho sees some improvements in process, which should help the ten-year-old talks to proceed more smoothly from now on, and notes a big question about what the European Union (EU) will do when it officially joins the talks, which is expected to happen this year.

On the one hand, the formal entry of the EU into the talks should widen global buy-in to what has largely been a Southern-driven process.

On the other hand, the EU is expected to base its negotiating position on its own due human rights diligence law, the CSDDD, which is in the process of being watered down under pressure from European big business.

(I heard this week of one large and well-known drinks company which, having proclaimed its support for the CSDDD, has now pivoted without apparent signs of shame to arguing that the directive should be weakened.)

So if Southern states want a strong treaty to emerge, which many of them evidently do, they will have to push back against any European pressure to make it less ambitious.

If you’re at all legally minded, then it’s worth looking at the current negotiating text of the UN treaty (clicking on this link opens a pdf). You can see that if the treaty were to become law in the way that its drafters currently intend, then it could be a very effectual legal instrument.

It’s also interesting to look at the mark-ups on the negotiating text which show what various countries are calling for. As Sikho points out, differences between countries can’t be reduced to a simple North-South split, including on the central question of whether a treaty should apply to multinationals alone, or to all businesses.

 

The two faces of the European Union

I’ve just attended a global convening by SOMO in the Netherlands of civil society organisations which are working to curb corporate monopoly power. It was a highly informed and lively discussion among people from various countries in Europe, North America and the global South.

As you might expect, there was much talk about the threat to democracy and national sovereignty from the political convergence of US Big Tech, Trump and the far right.

In contrast to its approach to business and human rights, which is being severely hobbled by deference to European big business, the EU has quite strong regulations to prevent mostly US digital platform companies from using their market power to exploit smaller companies and consumers. The key EU regulation here is the Digital Markets Act, which some other countries are looking at as a model.

It is evident that Big Tech and the Trump government greatly dislike such regulations and the constraints they can impose on the market power of the biggest corporations.

The political challenge will be to persuade the EU and its member states not to allow these rules (or their implementation) to be watered down. Max Bank of LobbyControl talked to Critical Takes in January about the nature of this threat (from 08:34 onwards).

The UK, where I live, is not doing well on this front. Ministers are so desperate for a trade deal with Trump’s US that they are reportedly offering to scrap the UK’s digital services tax which, like similar instruments in other countries, was introduced to deal with the problem that the profits made by digital corporations from their customers are often hard to tax in more traditional ways.

Our government has also just announced a large cut in social security benefits for people with disabilities and mental health problems, so scrapping the digital services tax would mean, in effect, a transfer of public money from poor and vulnerable people to US Big Tech.  We’ll see if they actually go ahead with such a move, which would not be popular at all in the UK.

 

Coming up on Critical Takes: corporate power and food, lessons on how different campaigns can work together and thinking about multinationals at the UN.

Until next month, good luck with your work!

Diarmid