Transnational Corporations and the International Human Rights Regime - Essay Example

? Transnational Corporations and the International Human Rights Regime Table of Contents Introduction 3 Background of the Problem 3 Human rights uponwhich business has an impact: standards of compliance 4 Accommodation of non-state actors by the International Human Rights Regime 5 Definition of non-state actors 6 Provisions on the State-business nexus in human rights accountability 7 Access to Remedies 10 Reactions to the UN Framework (The Ruggie Report, 2008) 11 Conclusion 12 Preliminary Bibliography 13 Appendix 19 Introduction This dissertation seeks to determine how transnational corporations can implement the responsibility to respect human rights in relation to worker’s labour rights. The issue shall be examined pursuant to the second pillar of Ruggie’s Framework, more formally referred to as “Protect, Respect, and Remedy: A Framework for Business and Human Rights”. I intend to answer the research problem by seeking the answers to the following research questions: (1) What are the provisions of the international human rights law, how were they formulated, and how were they intended to be implemented at the time they were promulgated? (2) Why are the UN Member-States the parties to whom the provisions directed, and what is the nature of the accountabilities of these states in the body of case law? (3) What is the rationale for expanding accountability for human rights violations to non-State actors such as multinational corporations, and what is the case law for this? (4) What are the remedies of aggrieved parties in the case of human rights violations? How may the provisions of the international human rights law be enforced upon Member-States and non-State actors, in the form of the litigation of claims and the enforcement of judgment? (5) How may the human rights law and its implementation be improved and enhanced? Background of the Problem The principal cause of the dilemma involving transnational business corporations and human rights violations is the vacuum in governance created by globalization. Multinational companies transacting across borders may circumvent the framework of governance imposed by national law, because the parties of to the contract or transaction are not totally within the rule of one nation. Thus, a gap in governance exists, between the scope and influence of economic actors and the market forces on the one hand, and the capability of societies to address and manage the harmful effects created by globalization, on the other hand.1 The UN’s Human Rights Council takes the position that ‘governance gaps’ created by the speed of globalization and the failure of states to keep pace in their capacities to provide the necessary regulatory frameworks enable the ‘permissive environment’ that allows for the ‘wrongful acts by companies of all kinds without adequate sanctioning or reparation.’ There is also a need to clearly define the standards against which the actions of transnational corporations are to be assessed, and the process in addressing perceived violations. It is necessary, prior to enforcement of sanctions, to identify the elements which determine the culpability of the accused corporation. In many cases, there is a lack of precedent according to which the new cases are to be judged. There is likewise uncertainty about the legal procedure to be followed, the vesting of jurisdiction in the proper authority, even the identification of the tribunal to hear the case. Light also needs to be shed on the protocol as to how claim may be made and the party with the personality to make it, and the protections which the accused corporation may avail itself of in warding off false claims and accusations. Human rights upon which business has an impact: standards of compliance Much will be said in the course of this discussion about those human rights upon which business has significant impact. An enumeration of these rights is shown in the appendix, and the rights are classified into two – the labour rights, and the non-labour rights.2 The list was compiled from more than 300 reports of alleged corporate-related human rights abuses, and the mere enumeration points to the realization that hardly are there any rights that business will not impact, or at least be perceived to do so. There is also the matter of defining the precise responsibilities which corporations are required to comply with in relation to these rights. Broadly, they are required to respect these rights, and to do so with due diligence. In the conduct of due diligence three sets of factors are to be considered: (1) the country contexts in which business activities take place, to underscore the particular human rights challenges posed in these contexts; (2) the human rights impacts which the business activity to be conducted may have within the identified contexts (that is, in the firm’s role as employer, producer, service provider and neighbour); and (3) whether or not the company might contribute to human rights abuse as a result of the relationships connected to their business activities (i.e. business partners, suppliers, state agencies, and other non-state actors).3 Accommodation of non-state actors by the International Human Rights Regime Traditionally, international human rights disputes are settled by the international human rights law through the United Nations framework, by holding the Member-State accountable for the actions of those agents who are responsible for such human rights abuses, such as transnational corporations, who are defined according to their relationship to the state. Traditional law views states as ‘dutyholders for the full-range of human rights, whether defined in treaties or customary law.’4 There is a limit, however, to the extent to which states may be held accountable for human rights violations committed by private parties who are presumed to be operating within the purview of state regulation. As acknowledged by Ratner,5 a system of accountability that imposes legal obligations solely on the state, even for the conduct of entities which it is incapable of restraining within its borders, is ‘not sufficient to protect human rights.’ Alston6 laments that this pursues a ‘monochromatic’ and ‘uni-dimensional’ perspective of the world that attributes a false pre-eminence to State sovereignty. Aside from failing to reflect the poly-centric realities of the world, it more importantly creates obstacles to the more effective observance of human rights enforcement in light of these realities. Non-state actors are gaining a greater importance because of the role they play globally that cut across state jurisdictions, and effectively transcend state sovereignty in the interest of advancing mutual economic interests. Because international law traditionally does not recognize the actions of non-state actors, a great many transnational corporations are able to evade compliance with the human rights ‘law’. Definition of non-state actors Granted that non-state actors are cognizable, the problem is not as simple as opening the doors of the international human rights law to all actors who are not-a-state, as there are some claims that infringe on human rights which could be pursued within the context of national law. One of the most inclusive and constructive definitions is that articulate by Josseline and Wallace,7 which includes all organizations that are: (1) Largely and entirely autonomous from central government funding and control; emanating from civil society, or from the market economy, or from political impulses beyond state control and direction; (2) Operating as or participating in networks which extend across the boundaries of two or more states – thus engaging in ‘transnational’ relations, linking political systems, economies, societies; (3) Acting in ways which affect political outcomes, either within one or more states or within international institutions – either purposefully or semi-purposefully, either as their primary objective or as one aspect of their activities. In the course of growing international economic collaboration, corporations have evolved into global actors that have as much or more power over individuals as their governments.8 Nor do governments sometimes have the desire or motivation to constrain particularly those foreign corporations whose direct investments they have courted into their country, for the purpose of spurring employment and economic growth. Provisions on the State-business nexus in human rights accountability According to the General Principles on Business and Human Rights,9 it is explicitly stated that the human rights regime recognizes ‘The role of business enterprises as specialized organs of society performing specialized functions, required to comply with all applicable laws and to respect human rights.’ The document emphasizes the primary role of the state in regulating the conduct of business, declaring that ‘States should take additional steps to protect against human rights abuses by business enterprises that are owned or controlled by the State, or that receive substantial support and services from State agencies…including, where appropriate, by requiring human rights due diligence.’10 The state therefore has more direct accountability over business organizations over which it has control, or which are closely related to it, or if it relies on statutory authority or taxpayer support. The state may exercise control over private corporations given certain circumstances, during which time it is responsible for the corporations’ actions. One instance is when the private corporation defaults on its taxes, in which case the government takes control of and runs the business. Government control also operates when it contracts a private corporation to undertake public infrastructure, in so far as that project is concerned. Government support extended to a private business in the form of taxpayer support also implies state oversight and, therefore, government liability for abuse of human rights in connection to its main business. The document also stresses the responsibility of states to ‘exercise adequate oversight in order to meet their international human rights obligations when they contract with, or legislate for, business enterprises to provide services that may impact upon the enjoyment of human rights.’11 The less stringent standard of ‘oversight’ therefore applies on the state where they merely contract or transact with the business enterprises who violate human rights, and only when those businesses are directly involved in providing services impacting on those rights.12 Failure to do so will ‘entail both reputational and legal consequences for the State itself.’13 . Legal consequences may redound to the state when it enters into a contract of commerce, because it assumes the nature of a private party to the contract; therefore, depending on its degree of control over the business, the state may be principally culpable if human rights abuses occur in the course of its regular business under government control. Where the government does not have control but merely oversees the private corporation as regulator, then it does not have legal culpability, but its reputation as an effective regulator of human rights abuses will suffer and the administration may risk precious votes in the next election. Finally, the state’s accountability falls even further in the next provision, which declares that ‘States should promote respect for human rights by business enterprises with which they conduct commercial transaction.’14 As earlier discussed, States have no further accountability than the promotion of respect for human rights, for those businesses which they do not control or legislate for, or whose businesses which do not provide services that directly impact on human rights.15 A special provision is included for those businesses operating in areas where open conflict takes place. Conflict-affected areas typically experience a heightened risk of gross human rights abuses. Where businesses are located in such areas, it is the responsibility of the state to ensure that such businesses are not involved in the human rights violations.16 An example would be the deployment of 15,000 personnel working for Blackwater USA, a private security firm, in Iraq, together with a host of other employees such as telephone engineers, oil-pipeline specialists, and similar private contractors whose jobs were involved in the building of Iraqi infrastructure. Understandably, the security personnel were those who were most likely to be involved in the human rights violations because they maintain sophisticated weapons systems, and other duties formerly accomplished by the military forces. In this situation, even though Iraq was under US occupation, there was little certainty as to what standards of legal conduct to follow. ‘The standards of proof required by an American court are unlikely to be met in Iraq – or in any other war zone, for that matter.’17 While the private contractors may be held liable for human rights abuses as war crimes in a conflict area, there is necessarily a very high threshold that should be met before charges could be filed.18 Access to Remedies A principal concern in the effort to make human rights claims judicially actionable is the matter of prescribing access to remedies, as per the UNHRC report finding that the State’s regulatory efforts would be of little use ‘without accompanying mechanisms to investigate, punish and redress abuses.’19 Examples abound where MNCs were thought to be instrumental in propagating human rights abuses in war-torn environments. NGOs and other human rights advocates, for instance, claimed that the MNCs in Sudan were complicit with the government military forces in propagating human rights abuses, and put added pressure on MNCs to ‘augment, suspend, or even outright end their operations.’20 The report comments that the various incoherent set of judicial and non-judicial procedures are ‘patchwork’ in nature and ‘remains incomplete and flawed.’21 That being said, it was observed that there had been some progress towards widening the access to judicial redress in the U.S.22 The possibility of a global ombudsman has also been suggested, although this raises the legal question as to the apparent conflict between universal accessibility and national sovereignty.23 Reactions to the UN Framework (The Ruggie Report, 2008) The report mandated by the UN Commission on Human Rights and prepared by John Ruggie, Special Representative of the Secretary-General, on the issue of human rights and transnational corporations,24 exhibited a more circumspect approach to the legal applicability of human rights law than studies that had preceded it. Ruggie argued that ‘while the obligations implicit in the Universal Declaration may be morally acceptable to juridical persons including companies, they are not legally enforceable.’25 In response to the report, Amnesty International Business Group founder Sir Geoffrey Chandler found the report does advance the debate on human rights enforcement, although he believed ‘it presupposes that companies are already sensitized to their broader responsibilities which has yet to be true of most.’26 On the other hand, some firms on Wall Street felt that the Ruggie reports was onerously burdensome on corporations. The concern for possible abuse of the right to claims against transnational corporations has been a growing concern in the legal community, a sentiment that has been growing even prior to the UN report. According to Schrage27 scored on the decisions of ‘activist U.S. courts’ who are increasingly accepting to litigate claims against U.S. multinational corporations where the complainants are individuals in developing countries where the corporation has its business. The perceived danger is in the increasingly willingness of U.S. courts to apply the standards of international human rights to corporate conduct, pursuant to the Alien Tort Statute of 1789. It was noted that while this law was given little attention to in 200 years, but which was resurrected in 1980 when it was applied by the Second Circuit Court of Appeals in New York.28 Conclusion The preliminary discussion that is presented above underscores the need to conduct a more indepth study of the issues surrounding transnational corporations and their role in the observance and enforcement of the international principles of human rights. While the general sentiment of all parties concerned favours giving greater effect to the Universal Declaration of Human Rights, there is much contention in the manner by which this is to be done. While it is important to secure the rights of individuals who are adversely affected by the economic activities of transnational corporation, there is also a valid interest in allowing for protections for these corporations against the abuses that may materialize. Foreign direct investments are crucial particularly to the advancement of developing economies,29 for which reason a process for giving due course to human rights claims must be arrived at in a manner perceived to be fair and acceptable to either side. Preliminary Bibliography Ahmad, Nisar Mohammad bin. "The Economic Globalisation and its Threat to Human Rights." International Journal Of Business & Social Science 2, no. 19 (October 15, 2011): 273-280. Business Source Complete, EBSCOhost (accessed February 3, 2013). 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Appendix Enumeration of rights upon which business may have an impact (UNHRC, 2008) Labour rights: Freedom of association Right to organize and participate in collective bargaining Right to non-discrimination Abolition of slavery and forced labour Abolition of child labour Right to work Right to equal pay for equal work Right to equality at work Right to just and favourable remuneration Right to a safe work environment Right to rest and leisure Right to family life. Non-labour rights Right to life, liberty and security of the person Freedom from torture or cruel, inhuman or degrading treatment Equal recognition and protection under the law Right to a fair trial Right to self-determination Freedom of movement Right of peaceful assembly Right to marry and form a family Freedom of thought, conscience and religion Right to hold opinions, freedom of information and expression Right to political life Right to privacy Right to an adequate standard of living (including food, clothing and housing) Right to physical and mental health; access to medical services Right to education Right to participate in cultural life, the benefits of scientific progress, and protection of authorial interests Right to social security Read More