March 2000, Report - CONTROLLING CORPORATE WRONGS - Approaches at the international level

		Index
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

5 Approaches at the international level

In parallel with national legislation, we need international standards which are directly binding on MNCs. States have long resisted these, because imposing such obligations would give companies status in international law, which they felt was dangerous. However, the OECD Convention on Corruption, currently the only international instrument which imposes obligations on MNCs, could be a useful precedent for setting similar obligations in the fields of human rights and environmental responsibility.

These instruments need to be accompanied by international institutions with the power to supervise and enforce the implementation of binding standards. With the failure of the MAI and of the attempt to make companies as well as individuals accountable before the International Criminal Court in Rome, there are only international codes of conduct, such as the ILO and OECD mechanisms. These are severely hampered by their non-binding nature and very weak supervisory mechanisms.

International human rights law, which can apply to international as well as national companies, offers some opportunities for calling companies to account, but to date has been more widely used in relation to states. However, the UN Subcommission on the Promotion and Protection of Human Rights, in the context of its work on economic, social and cultural rights, has begun looking at the activities of TNCs and their impact on human rights and is expected to produce a new code in 2001. The Subcommission is also interested in other economic areas, such as trade liberalization and globalization and their impact on human rights.

· UN Subcommission for the Promotion and Protection of Human Rights
The UN human rights mechanisms have begun to address the fact that many of the problems they deal with have their roots in corporate conduct, and the UN Subcommission for the Promotion and Protection of Human Rights has a working group dealing specifically with these issues. Françoise Hampson is a member of the group and reported upon its work.

Of the three principal focuses that human rights mechanisms can take - enforcement, monitoring, and standard-setting - the Subcommission's particular strength lies in standard-setting. Much of the standard-setting as regards civil and political rights is now considered to have been accomplished, and the Subcommission has been concentrating more on the realization of economic, social, and cultural rights.

The issue of MNCs' operations first came to the Subcommission's attention in a systematic way in 1998. The Subcommission established a three-year sessional working group, which is now putting together a document aiming to integrate all the measures and norms necessary to ensure that the activities of MNCs are consistent with the promotion and protection of human rights. The group is collecting data from as many constituencies as possible on how MNCs affect the enjoyment of civil, cultural, economic, political and social rights, including the rights to development and to a healthy environment. It aims to cover good as well as bad practice, and seeks input from NGOs, especially on the elaboration of sustainability reporting guidelines. A report on elaborating a possible code of conduct, with relevant human rights standards and a possible implementation mechanism, should be ready by the August 2000 session of the Subcommission and the group's final meeting in 2001 may result in a draft code, although the Subcommission would not itself be empowered to make this into a concrete obligation.

The working group wants the new code to have a binding character, but expects this will be difficult to achieve, since there is already considerable opposition to this in the Subcommission from various Western European governments which do not favour imposing obligations on businesses. It also wants to require MNCs to prepare regular impact assessments.

ILO conventions
Currently there are 180 ILO Conventions in existence, of which those addressing the five 'core' themes are:
- Conventions 29 and 105 on the abolition of forced labour;
- Conventions 87 and 98 on the rights to freedom of association and collective bargaining;
- Conventions 111 and 100 on the prevention of discrimination in employment and equal pay for work of equal value;
- Conventions 138 and 182 on the minimum age for employment and child labour;
- Conventions 174 and 176 on industrial accidents, safety and health.

ILO Conventions are international treaties, subject to ratification by ILO member states, and as such are held to be 'hard law', allowing claimants to proceed against governments for violation of them. They are negotiated between governments, workers and employers and, like the OECD instruments, are intended to promote rather than punish. The ILO also has a specific, less formal instrument related to MNCs, the Tripartite Declaration of Principles concerning multinational enterprises and social policy (1977), which it describes as a voluntary code.

The ILO is the principal international standard-setting body for labour relations, and many internal codes are based on ILO Conventions. As a legal instrument for obtaining corporate accountability, however, it suffers from many of the same limitations as the OECD, principally as regards implementation. There is a MNCs Committee, but it tends to be very slow and inconclusive in practice. Participants at the seminar who had tried to use it had found it frustrating.

World Bank
The World Bank was originally set up to eradicate poverty, so its guidelines do protect certain resource-poor groups such as indigenous people. These ideals have become somewhat diluted in the growth of the World Bank as a major development donor and a promoter of neoliberal economic principles through structural adjustment programmes. This makes it an unpromising partner in any challenge to corporate power; but in recent years NGDOs and people's organizations have started to take the Bank to task and press it to meet up to its founding principles, with some success. Now the IMF and WB are starting to put poverty reduction into their mandates alongside free trade imperatives. Although this may seem to ignore the inevitable contradictions, it opens up a space for calling on these institutions to fulfil their promises.
World Trade Organization
The WTO is the only international body with real power to enforce, but, from the point of view of challenging MNCs, its devotion to free trade makes it on the whole part of the problem rather than part of the solution. The less power national governments have, the more necessary international regulation is; but unfortunately the WTO, the one organization most involved in international regulation, is also the one coming under the strongest criticism, as the uproar at Seattle shows.

The WTO authorizes victims of unfair trade practices to impose sanctions on companies up to a certain maximum amount, and there are several cases in the WTO of states both paying and being paid. Corporations have had to change their behaviour, and ultimately bear costs, in a number of cases. However, most WTO cases are between industries or corporat-ions. In practice, civil society has no meaningful access to the WTO, and the institution does not present itself as a defender of the economic rights of citizens. In fact, protection of some rights by States can result in a violation of WTO rules. Thus the WTO in itself raises a series of human rights questions.