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CONTROLLING CORPORATE WRONGS: THE LIABILITY OF MULTINATIONAL CORPORATIONS Legal possibilities, initiatives and strategies for civil society Report of the international IRENE seminar on corporate liability and workers' rights held at the University of Warwick, Coventry, United Kingdom, 20 and 21 March 2000

II LEGAL & PSEUDO-LEGAL EXPERIENCES

Opening presentations by Menno Kamminga, of the Faculty of Law at Maastricht University, and Saman Zia-Zarifi, of the Department of International Law at the Erasmus University, Rotterdam, outlined the general legal context in which cases against MNCs can currently be pursued. Multinational corporations can be held accountable for their operations in other countries either directly or through the governments of countries where they operate, and under either domestic or international law. But corporations also have an armoury of avoidance strategies and countermoves which they can bring into play. The question of whether it is more fruitful to pursue legal action in the state where abuses are committed (the host state) or the state where the parent MNC has its headquarters (the home state) is also crucial.

1 Holding governments to account for MNC behaviour
States are obliged to protect the rights of people in their jurisdiction, and this implies that they must regulate companies operating or domiciled in their jurisdiction. It is therefore important not to lose sight of states' responsibility by always targeting MNCs directly. Working at the level of governments means getting governments of both home and host states to formulate and implement legislation, regulatory mechanisms, monitoring and supervision to ensure that they can control and regulate the activities of MNCs in their jurisdiction. It means exposing and challenging collusion between governments and MNCs in both home and host countries. In parallel, international instruments which are directly binding on MNCs are necessary, together with effective international institutional mechanisms to enforce them.

In the context of the shrinking state and the privatization of public services, states are increasingly trying to shift responsibilities, e.g. to provide water, onto private companies, usually resulting in a poorer service especially for poorer citizens living in less profitable areas. In many countries governments bend or waive their own labour and environmental legislation to allow MNCs a freer rein, or turn a blind eye to violations. States such as Sri Lanka have created free trade zones (FTZs), within which the state allows a separate system of law or waivers of national law. At worst, MNCs and governments actively collude: in Burma, for instance, the state oil and gas company MOGE was part of a joint venture with UNOCAL accused of serious human rights violations, carried out by the Burmese security forces, to clear territory and obtain forced labour for the construction of a gas pipeline; while in Nigeria, even under the new civilian government, state security forces are still being used to repress protest by local people at the activities of Shell and other oil companies in the Niger river delta. In such cases, collusion produces a legal vacuum. Who can be held accountable? Whom can claimants sue?

Bringing states to account on these responsibilities can force them to put pressure on companies. So it is important to pressure both MNCs' home states to ensure that they act responsibly in other countries, and the host states where MNCs operate to formulate and implement appropriate legislation regulating business activity in their jurisdiction and not to collude with MNCs. On the other hand, MNCs have ways of avoiding being pressured through governments: they can move their headquarters to a more compliant state, or they can use their vague national identity to declare themselves free of the law of any country in which they operate.