New international treaty: will the UN finally be able to protect us from multinationals?

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Who hasn't heard of at least one company-related scandal? Precarious and dangerous work, child labor, displacement and poisoning of populations, tax evasion, financing of armed groups… The list of human rights violations committed directly or indirectly by multinationals is long and worrying. Just like the line of victims demanding justice. Citizens are paying the price of companies, which have become more and more powerful and less and less controllable, including by States. Faced with this impunity resulting from numerous legal obstacles, will the treaty currently being negotiated at the United Nations (UN) on corporate responsibility finally be the solution?

The omnipotence of multinationals Since the globalization of the economy, and particularly since the end of the 1980s, companies have entered new markets, merged and extended their influence. In 2016, according to the British NGO Global Justice Now, 69 of the 100 largest global economic entities were companies rather than countries. Even more confusing: the 10 largest multinationals currently weigh more financially than 180 states. A phenomenon of concentration which is accelerating and escapes the control of States. We are thus witnessing the emergence of new forms of power which shape current international relations. But who is responsible? States, seeking to retain businesses on their territory or attract new investors, have created tax regimes, negotiated trade agreements and granted extremely favorable aid programs to businesses. They have thus, in part, allowed this rise in power leading to deregulation. Often at their expense [1]New free trade treaties increasingly protect investors, now allowing them to sue a state before an arbitration court. To get an idea: there is… Continue reading. Result: our economic system benefits an increasingly restricted number [2]According to the latest Oxfam report on inequality, in 2017 82 % of wealth created benefited the 1 % richest of the world's population, while the 3.7 billion… Continue reading and generates ever more victims, considered the “big losers of globalization”. Multinational or transnational companies? What is the difference ? Both terms refer to economic entities operating in several countries through production or controlling subsidiaries. Their legal and commercial structures which transcend states are often very complex. This makes it sometimes difficult to determine who is responsible for what and where. Legal vagueness that some companies play with. The term multinational has until now been more commonly used. On the other hand, the UN uses the term transnational, preferred by Southern states and better reflecting the reality of these large companies. In this analysis the two terms are used interchangeably. Generalized impunity This race for profits is to the detriment of the fundamental rights of millions of people for whom access to justice remains very problematic. The reasons are numerous, among which we can cite: the difficulties in identifying the competent jurisdiction in the case of a transnational company, the lack of recognition of criminal liability of companies by certain States, the colossal cost of trials, intimidation and even the murders of the plaintiffs [3]The UN Business and Human Rights Working Group notes a significant increase in murders, attacks, threats and harassment against rights defenders... Continue reading. In the case of Rana Plaza for example, all legal attempts by the thousands of victims of the collapse of the textile factory have gone unanswered. In addition to these obstacles, the slowness of trials pushes some victims to give up during the procedure or have to wait their whole lives without obtaining a judgment. And in the rare cases where companies are ordered to pay fines, these are usually marginal compared to the vast resources available to the company. They therefore have no repressive or dissuasive effect. Finally, some companies also escape justice by paying victims of litigation compensation, the price of their silence. [4]For a more detailed case study, see Blackburn D. (2017), Removing Barriers to Justice – How a treaty on business and human rights could improve access to remedy for victims, ICTUR.. A good number of companies never admit their guilt. This therefore results in a double injustice: in the violation of human rights as such, then in the absence of real and moral reparation. Limited rules Faced with these legal and political challenges, major international bodies addressed this problem towards the end of the 20th century. The Organization for Economic Co-operation and Development (OECD) thus adopted in 1976 the Guiding Principles for Multinational Enterprises. The OECD also took on a specific sector by adopting a Due Diligence Guidance for Responsible Supply Chains for Minerals from Conflict or High-Risk Areas in 2010. This guide has since been approved by 42 OECD member and non-member countries. The UN Human Rights Council, for its part, adopted in 2011 the Guiding Principles on Human Rights and Business which apply to all States and all commercial, transnational or others, regardless of their size, sector and location. These aim, theoretically, to improve standards and practices regarding business and human rights. Although representing an important step forward and a good basis for consensus, these principles are not obligatory and are not accompanied by any monitoring mechanism. [5]These “soft law” rules live up to their name.. Their implementation is therefore left to the complete discretion of the companies. Unfortunately, experience shows that we cannot rely solely on the goodwill of States and companies who call for regulation by ethics rather than by law. On the contrary, seven years after the adoption of the Guiding Principles, only 18 countries have transposed them into their national legislation (e.g. in the form of National Action Plan) and very few companies actually implement their obligations [6]The 2018 Responsible Mining Report shows, for example, that out of 30 mining companies analyzed, only half have formally committed to aligning with… Continue reading. Human rights violations therefore persist with impunity. In 2017, after long years of advocacy and parliamentary debates, France was the first country in the world to have adopted a law that concretely obliges multinationals to respect human and environmental rights, including in the context of their activities. of their subsidiaries, subcontractors and suppliers. Although it is still too early to assess its impacts, this law remains an example to follow for other European countries; including Belgium which still shines with a clear lack of ambition on the theme. The solution for these principles to become a reality After a first failed attempt at regularization, the UN Human Rights Council responded to insistent calls from Civil society by creating an intergovernmental working group in 2014. This last one is mandated to develop an international legally binding instrument to regulate the activities of transnational corporations and other businesses. Although ambitious and requiring several years of negotiations to succeed, the adoption of such a treaty is entirely realistic. Indeed, despite the initial obstruction from a certain number of countries and the European Union, the conclusions of the October 2017 negotiating session confirm it: there will indeed be a mandatory treaty on businesses! It is now up to the Member States to make their first proposals and move forward at the negotiating table. For Justice and Peace, the UN treaty must imperatively :
  • Recognize the primacy of human rights on commercial and investment law through a responsibility of all companies (not just transnationals);
  • Apply to all sectors (minerals, textiles, agri-food, etc.) and all the rights recognized, including ILO international labor standards;
  • Detail all the stages of the duty of care by providing a special emphasis on preventive measures ;
  • Include extraterritorial obligations in order to prevent a company from taking advantage of its “multinational” character to escape justice;
  • Recognize the corporate criminal liability in national penal codes;
  • Protecting whistleblowers and human rights defenders ;
  • Shift the burden of proof onto companies : currently, it is up to the victim to prove the existence of damage, the fault causing it and the causal link between the two. Given the obvious difference in resources, it would be fairer if the stronger party, therefore the company, bears the burden of proof;
  • Facilitate access to justice by reducing the costs of procedures and create a fund financed by signatory states to help the poorest victims file a claim for compensation.
Regardless of the number of proposals retained in the final version, this treaty must in no way slow down the adoption or improvement of national and European legislation. On the contrary, these are complementary and must make it possible to define fair rules of the game, more adapted to the era of globalization. Belgian citizens, direct actors We are not always aware of it but we contribute in a certain way to perpetuating this vicious circle. At the other end of the production chain and sometimes on the other side of the world, we buy products without always knowing their origin or their manufacturing conditions. The example of new technologies is eloquent: ever more fond of high-tech objects, we often forget their direct impact on the people involved in the production process. These objects become obsolete very quickly [7]Every year, more than 100 million mobile phones are abandoned in Europe after having been used for only a few months., have painful consequences, both on a human and environmental level. Our mobile phones, for example, contain no less than 60 minerals. From extraction in artisanal mines in the Democratic Republic of Congo where children work and armed groups operate, to Malaysian production factories where migrants work in conditions sometimes close to the serfdom, right into our pockets: throughout the supply chain many people have no choice but to accept indecent wages, precarious and dangerous working conditions in an attempt to survive. We can therefore no longer turn a blind eye to the human issues linked to our consumption. On the contrary, as responsible citizens and consumers, we can have a positive impact by consuming less, better and above all, by demanding more guarantees and transparency from transnational companies. The industry must adapt to more aware, more demanding consumer demand. If we decide, our mode of consumption could therefore become a political act and push companies to radically change their operating methods. What can I do as a citizen?
  • Find out about the brand, origin and production conditions of what I buy. Possibly boycott certain brands known for violating human rights. For example, the NGO achACT website (http://www.achact.be/) and the “Fair Fashion” application contain interesting information on clothing companies;
  • Sign the UN Treaty Alliance petition;
  • Exert pressure on political leaders by sending an email or a letter to the Minister of Foreign Affairs. Justice and Peace can provide models for this purpose;
  • Make noise, talk about it around me, with family and friends, share the information on social networks.
For more ideas Conclusion The process is now underway, and it is a step in the right direction. Now, everyone at their level, politicians, members of civil society and citizens must remain vigilant and be aware of the very powerful lobby of companies which will try to evade their obligations. We must therefore maintain national and international attention so that this draft treaty comes to fruition quickly with a minimum of binding and effective rules. This treaty would allow the “big losers of globalization”, made even more vulnerable, to finally be protected and have access to justice and the reparation they deserve. The fate of thousands of people today depends on these negotiations. Agatha Smyth

Attachments

New international treaty

Notes

Notes
↑1 New free trade treaties increasingly protect investors, now allowing them to sue a state before an arbitration court. To get an idea: there are currently more than 700 arbitration cases pending and each one costs an average of $8 million in legal fees. See on this subject David E. and Lefèvre G. (2015), Juger les multinationales, Mardaga-GRIP.
↑2 According to the latest Oxfam report on inequality, in 2017 82 % of wealth created benefited the richest 1 % of the world's population, while the 3.7 billion people who constitute the poorest half of the humanity received nothing.
↑3 The UN Working Group on Business and Human Rights has noted a significant increase in killings, attacks, threats and harassment against human rights defenders who speak out against businesses.
↑4 For a more detailed case study, see Blackburn D. (2017), Removing Barriers to Justice – How a treaty on business and human rights could improve access to remedy for victims, ICTUR.
↑5 These “soft law” rules live up to their name.
↑6 The Responsible Mining Report of 2018 shows for example that out of 30 mining companies analyzed, only half have formally committed to aligning with the UN Guiding Principles. And only 30 % actually have systems in place to assess risks and prevent negative impacts on human rights.
↑7 Every year, more than 100 million mobile phones are abandoned in Europe after having been used for only a few months.
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