Human Rights and Transnational corporations: A Step Forward?

UN imageWe are delighted to welcome this guest post from Ntina Tzouvala who is Deputy Co-Convener of Law and Global Justice and a PhD candidate  at Durham Law School. She is currently researching on history and theory of public international law. You can contact her here or follow her on Twitter @ntinatzouvala  On the 25th of June the first round of the international campaign to create a legally binding framework for the protection of human rights by transnational and other corporations was concluded. The draft resolution tabled by Ecuador in the 26th Session of the UN Human Rights Council was adopted, since 20 states voted in favour, 14 against and 13 abstained. According to Resolution A/HRC/26/L.22/Rev.1 an open-ended working group needs to be established, with a mandate to prepare a legally binding instrument to regulate corporate responsibility regarding human rights violations. In this short blog post I will attempt to provide some context, in order to situate this advancement within the broader legal and political debate regarding both human rights and corporate power. Further, some attention will be given to the internal divisions of the HRC on the issue and finally, I will try to establish why this Resolution, despite certain problematic aspects, constitutes a significant and welcome development.

To begin with, this resolution came as the interim conclusion of a wide-spread campaign co-ordinated by social movements, NGOs and certain governments of the Global South, such as Ecuador , that have started to question the neo-liberal political and economic orthodoxy and, importantly turn to international law to promote these aspirations.  Thus, the Peoples’ Forum on Human Rights and Business issued a manifesto supported by more than 600 socially active groups that called for an international treaty which amongst others:

“Requires States Parties to monitor and regulate the operations of business enterprises under their jurisdiction, including when acting outside their national territory”

In my view there are three factors that enabled the movement to gain some momentum. First, as John Morrison has pointed out extra-territoriality constitutes a central issue when it comes to the regulation of transnational companies. Therefore, the outcome of the Kiobel case was a wake-up call for those insisting that already existing domestic law can be utilised to address grave human rights violations, like those committed in Ogoniland with the co-operation between Shell and Nigeria. Given that states seem reluctant to legislate in this direction an international treaty could push towards such legislative action. Secondly, the current regulatory framework seems to be in crisis, and quite deservedly so. The 2011 UN Guiding Principles on Business and Human Rights were non-binding and largely based on the idea of self-regulation. Admittedly, soft law and self-regulation have been the dominant legal paradigm both domestically and internationally in the regulation of business conduct during the last three decades. To bring but an example the Basel Committee was established in theUS  to ‘self-govern’ the financial sector through a hybrid mechanism of governance largely based on the premise that business can be better regulated if left alone under a flexible, non-enforceable set of guidelines. The disastrous consequences of this approach became evident with the break of the financial crisis and the inability of the Basel Committee not only to address it, but even to predict it. Hence, there has been some scepticism concerning the efficiency of soft law and self-regulation and the field of human rights was prone of accommodating this aspiring shift. Thirdly, and here come the bad news, the pressure to adopt such an instrument is concomitant of the ever-increasing power of transnational and other corporations and the gradual erosion of other legal means to control them. For instance, the proliferation of investment treaties and the inclusion of arbitration clauses has arguably been detrimental to states’ capacity to regulate the economy and society’s attempts to challenge corporate power in relation to labour rights, the protection of the environment, health concerns and redistributive goals[1]. Within this inimical international legal environment, human rights appear to be one of the last fora left to challenge the tide.

What is also notable is the polarisation within the HRC steered by Ecuador’s initiative. The voting patterns reveal a clear division between the Global North and the Global South with the former voting en bloc against the resolution. It might be of interest for the readers, that Ireland also voted against the motion arguing that the International Law Commission is a forum better situated to address the legal challenges of the issue at hand. This polarisation is worth taking a note of. First, given that the states that voted against the resolution are capital -exporting states, where most of the transnational companies in question are registered, their hostility or reluctance regarding the initiative is a bad omen for its future. Indeed, even if the treaty is drafted successfully lack of ratification by these states would be fatal to its efficiency. Secondly, what is revealed is the intention of certain states to move on with initiatives even when consensus or wide-spread agreement is not secured. This was lamented by the US delegation, but it might be encouraging to the degree that it might indicate the emergence of an alternative perspective of human rights.

This takes me to my final point which concerns the potentially positive implications of the Resolution. It is undeniable that we need not to get too optimistic prematurely, since both the final content and the efficiency of the potential treaty are unknown and indeed, they are going to be the subject of intense political confrontation. In any case, it is significant that the UN acknowledges that corporate power is something that needs to be addressed with a legally binding instrument. Besides the immense or moderate practical effects that this might have in the lives of deprived individuals and communities across the globe, this initiative might also demonstrate significant ideological impact. In a nutshell, the idea that corporations are people , that is vulnerable entities that need to be protected from an evil, arbitrary state and therefore must enjoy rights conceptually comparable to those of the individual, has deeply eroded international law and international legal thought. (See here for an argument in support of the arbitration clause in TTIP entirely based on an analogy between investment and human rights law)  Hence, any legal motion that recognises the fact that corporations, usually with the active collaboration of states, be it host or exporting states, are responsible for the violation of people’s rights is welcome. Finally, the drafting of the treaty could become an excellent forum for documenting in a systematic way the atrocities that are being committed around the globe.

Only future can tell what will be the fate of the newly passed resolution. Frederic Megret once asked if international law can be a law of resistance. My point here is that if international law is to be of some relevance in a time of rising tensions and inequalities both domestically and internationally, being a law of resistance is the only way forward.

[1] See: David Schneiderman “How to govern differently: neo-liberalism, new constitutionalism and international investment law” in Stephen Gill and A. Claire Culter, New Constitutionalism and World Order (CUP,2014)


Human Rights and Transnational corporations: A Step Forward?

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