Embed Size (px)
Citation preview
Multinational Corporations in International Law:A treaty to “rule” them all
A study on a progressive development towards corporate accountability in inter-national law
Tromvoukis Konstantinos
Student number: 11316195
University of Amsterdam
LLM in International and European Law: Public International Law
Supervisor: prof. dr. J. E. Nijman
word count: 128741
Abstract
International law has traditionally viewed the states as the main bearers of international obliga-
tions. In modern society, however, many multinational corporations are equally powerful and influen-
tial as states. Being solely regulated by states that are for various reasons unwilling to firmly stand
against them, corporation enjoy a wide freedom. With annual turnovers that in many cases exceed the
GDPs of many states it is argued that corporations should bear responsibility for their actions. Lack of
relevant and applicable legislation inevitably leads to corporate impunity, which in turn results in vic-
tims of violations remaining without any form of redress.
As proven by the constant human rights violations perpetrated or orchestrated by corporations,
the contemporary regulatory framework seems ineffective and in need for a change. Previous regula-
tory attempts have paved the way for the current negotiations, by providing references on the contro-
versial issues as well as the diverging interests. My argument in this thesis is that the currently debated
upon treaty initiative on corporations and human rights can help bridge the existing accountability
gap. This thesis concerns an ongoing law making process that is highly dependent on political inter-
ests. The issue, however, remains in the end a legal one. The examination of the reasons that resulted
in the accountability gap and the new initiatives potential for bridging it are argued to be paramount in
an evolution of international law, that follows the changes in modern society.
2
Table of Contents
Abstract.........................................................................................................................................2
1.Chapter – Introduction...............................................................................................................4
1.1 - Factual Background on Human Rights and Multinational Corporations.............................4
1.2 - Theoretical framework..........................................................................................................5
1.3 - Research Question................................................................................................................7
1.4 Research Methodology...........................................................................................................7
1.5 Research Structure..................................................................................................................8
2.Chapter - Business and Human rights international regulatory framework and case studies..10
2.1 An overview of MNCs and human rights- A “tricky terrain”...............................................10
2.2 Binding international regulations on MNCs with respect to human rights...........................12
2.3 Non-binding international regulations..................................................................................14
3.Chapter - Past UN-driven regulation attempts' analysis and lessons learned- UNCTC, Com-
mission on Human Rights, UNCTAD, Special Representative on Human Rights................................16
3.1 UNCTC- Code of Conduct...................................................................................................16
3.2 UNCTAD's regulatory endeavors.........................................................................................20
3.3 UN Commission on Human Rights- Draft Norms................................................................22
3.4 UN Special Representative of the Secretary General- The Guiding Principles....................25
4.Chapter - Application scope of the newly proposed binding treaty- ratione personae, ratione
materiae..................................................................................................................................................28
4.1 Contemporary Treaty negotiations........................................................................................29
4.2 Bridging the accountability gap............................................................................................34
5.Chapter - Concluding observations..........................................................................................37
Bibliography...............................................................................................................................38
a) Literature.................................................................................................................................38
b) Articles....................................................................................................................................39
c) Websites and other sources.....................................................................................................43
ANNEX.......................................................................................................................................44
a) Table of international and national Jurisprudense...................................................................44
b) Table of international Treaties and other Documents.............................................................44
3
1. Chapter – Introduction
1.1 - Factual Background on Human Rights and Multinational Corporations
Ever since the establishment of the UN, human rights never seized to evolve. Treaties are being
drafted and revised constantly, and the most prominent international covenants have been ratified by
almost every state- member to the UN. What best indicates the state of evolution is the Universal Dec-
laration of Human Rights of 1948, which was only adopted as a “common standard of achievement
for all peoples of all nations1”. Some decades later scholars argue the same document resulted in be-
coming “part of customary international law, and that it is the most valid interpretation of the human
rights and freedoms which the Members of the United Nations pledge to promote.”2
Despite the human rights evolution and the numerous treaties and conventions drafted seeking
to uphold them, we are still witnessing a large number of human rights violations perpetrated by actors
outside the contemporary regulatory scope of any international binding document. Child labor, mini-
mal salaries, unhealthy and dangerous working environment, environmental harm, government coer-
cion into land grabbings are just few of the violations that are still being witnessed at a regular basis.
The actors in question are the Multinational Corporations (hereinafter cited as: MNCs).
There are several important factors that result in the human rights harm caused by activities of
MNCs not being internationally regulated. To enumerate the most crucial factors, not in order of im-
portance, one can mention the status of the multinational corporations' international legal personality,
the inability or unwillingness of states to regulate the corporations and enforce their legislation, and
the lack of a unified and specific international regulatory framework that results in the lack of MNCs'
accountability under international law.
The debate concerning possible regulatory limitations on the activities of MNCs cannot be con-
sidered as something entirely new, but is nevertheless of an extremely high importance as evidenced
by the huge amount of scholarly research and concerns voiced by news reporters, NGOs, states and
also corporations. Furthermore, Human Rights Council's resolution A/HRC/RES/26/9 in June 2014,
1E. Schelb, The Influence of the Universal Declaration of Human rights on International and national Law, in H. Hannum,
S. James Anaya and D. L. Shelton, International Human Rights: Problems of Law, Policy and Practice, 5th edition, 2011,
p. 138
2P. Thornberry, International Law and the rights of minorities, Clarendon Press, 1991, pp. 237-384
once again lighted up the discussions concerning the international regulation of Multinational Corpo-
rations through an international binding treaty.
1.2 - Theoretical framework
The concept of accountability is one of the most debated upon issues in contemporary interna-
tional law. It can be broadly understood as justifying one actor's actions towards others, that are con-
trary to certain established standards. It also includes potential repercussions if these actions are
deemed to be wrongful3. However, even though the mentioning of accountability in the context of in-
ternational law is constantly increasing, it has not yet “acquired a clearly defined legal meaning”4. In-
ternational law is still predominantly favoring the traditional state-centric notions of state responsibil-
ity. The articles of ILC on state responsibility state that for an action to give rise to state responsibility
this action must firstly be wrongful under international law, and secondly that this same action must
be attributable to a state. The accountability of individuals and more specifically Multinational Corpo-
rations is, however, much more complex. As J. Brunee notes the most important reason that no formal
system of international legal accountability of corporations exists to date is that they are not yet recog-
nized as a subject of International Law5, nor have any norms to regulate them emerged6.
The legislation gap that exists does not come as a shock. This precise gap has been identified
for more than 50 years now, but has yet to close. The reason such a gap in legislation becomes increas-
ingly important, is the emergence of shifts of powers away from the state. Alternative accountability
regimes, such as complaint mechanisms and compliance mechanisms in environmental agreements,
were established in order to alleviate potential problems resulting from these shifts of powers7.
It is without a doubt that multinational corporations, do not yet consist a subject of interna-
tional law. It is also not disputed that their international law obligations are mainly of an indirect char-
3R. Grant and R. Keohane, Accountability and Abuses of Power in World Politics, 99 American Political Science Review,
2005, pp. 29-43, at p. 29 et seq.
4J. Brunee, International legal accountability through the lens of state responsibility, Netherlands Yearbook of International
Law , vol. 36, 2007, p. 4
5Ibid p. 23
6Ibid. p. 30
7P. A. Nollkaemper, P. A., & D. Curtin, Conceptualizing Accountability in International and European Law, Netherlands
Yearbook of International Law, vol. 36, pp. 3-20, at p. 65
acter. The difficulty in regulating MNCs by no means justifies any inaction towards a potential solu-
tion. Former Special Representative of the Secretary General J. Ruggie asserted that the negotiations
towards a new binding instrument would either be abandoned, or that the final document will not be
ratified by any of the immediately concerned stakeholders8. Even though this assertion is seemingly
depicting the harsh reality in the sphere of political and diplomatic affairs, it also seems rather conser-
vative. Major steps towards the formation of what we today characterize as international law were
based on preliminary lack of consensus, which later grew stronger. Important examples that showcase
this statement include the Additional Protocol II to the Geneva Conventions and the development of
the International Criminal Court9.
Setting the question of international legal personality aside, which also is a very important is-
sue but will not fall within the scope of the present thesis, international law consists of a particular set
of norms. What is universally regarded “the source of sources” of international law, even though it
was just drafted as a jurisdiction clause for the International Court of Justice Statute, is article 38. Arti-
cle 38 sums up the international law norms that are accepted before the ICJ and lists: a) international
treaties, b) international customary rules, c) general principles of law and d) international jurispru-
dence and scholarship.
The process, by which these norms come into being, although in some cases self-explanatory,
is not stipulated in a. 38 of the ICJ Statute. The concerns about the development of international law
first found their way in a. 13 of the UN Charter, where the General Assembly decided to take mea-
sures so as to encourage the “progressive development” of international law. Following the Charter
obligation the International Law Commission was founded with the mandate of promoting the pro-
gressive development and codification of international law10. The precise meaning of the notion of
“progressive development”, is stipulated in a. 15 of the ILC Statute, which states that progressive de-
velopment means norms on subjects which have yet to be sufficiently developed in state practice. This
ability to dynamically change and evolve is a very vital part of international law and in the words of
8J. Ruggie, Life in the Global Public Domain: Response to Commentaries on the UN Guiding Principles and the Proposed
Treaty on Business and Human Rights (January 23, 2015). Available online at: https://ssrn.com/abstract=2554726
9S. Deva, D. Bilchitz (eds), Building a Treaty on Business and Human Rights: Context and Contours, Cambridge Univer-
sity Press, 2017, p. 20
10a. 1 of the ILC Statute, available online at: http://legal.un.org/ilc/texts/instruments/english/statute/statute.pdf6
the drafters of the Vienna Convention on the law of treaties in the second to last preambulatory clause
can “promote the purposes of the United Nations as set forth in the Charter”.
1.3 - Research Question
As the open-ended intergovernmental working group's on transnational corporations and other
business enterprises negotiations successfully concluded its 3rd session of negotiations on a new inter-
national legal framework governing the conduct of businesses with respect to human rights in October
2017, the main question the present thesis aims to answer is the following: “how does the new binding
treaty initiative address the accountability gap of multinational corporations under international law”.
In order to respond to the aforementioned question the present thesis will focus on: 1) What is the con-
temporary legal framework in international law with respect multinational corporations and what do
multinational corporations need to be held accountable for? 2) Why multinational corporations still
cannot be held internationally accountable for human rights violations? 3) How does the new treaty
initiative's scope of application bridge the accountability gap in the context of multinational corpora-
tions and human rights?
1.4 Research Methodology
The research question at hand revolves around an ongoing law-making process. The nature of
this topic essentially limits the source materials, as more in-depth academic contributions will cover
and evaluate the present debate, but will only do so further in the future. The website portal of Busi-
ness and human rights resource center proved to be one of the few reliable resources, as it keeps track
and gathers all the contributions being made by various stakeholders of the ongoing debate, such as
NGOs, states, corporations and also academics with respect to their preliminary observations.
Analyzing the preparatory works of a potentially future instrument with respect corporations
and human rights is only possible if done in conjunction with already existing legal principles that can
be found on a national and international level with respect to international treaties. Thus the Vienna
Convention on the Law of Treaties of 1969 and the way human rights courts interpret its provision
will be of great significance in addressing the thesis' research question. In order to address the core el-
ements of the proposed treaty on corporations and human rights this thesis will take a doctrinal and
7
descriptive approach, so as to provide a systematic overview of the development and application of
the existing legal framework. The doctrinal approach, or black-letter law approach, is based on utiliz-
ing judicial decisions and statutes to provide a clearer and more thorough understanding of the law11.
In order to do so, doctrinal research seeks to find a specific statement in law. The black letter approach
describes the current status of the law, clarifies ambiguities within its rules, and places all relevant
rules within a logical structural framework12. Therefore, this approach is adopted in the present thesis
so as to systematize and clarify the legal rules that define the problem under investigation through the
use of authoritative texts that are of both primary and secondary nature. The descriptive approach will
be used so as to take a neutral standpoint, relying on facts such as case studies and stakeholders opin-
ions to describe the current state of affairs with respect to the application scope of an international
treaty that aims to regulate MNCs. Draft articles, scholarly contributions and official documents and
reports will also be utilized to as to create a wider, thus more systematized and neutral, information
basis.
A historical evaluation of examples of past regulatory attempts will be used so as to better
showcase the current status of the international regulatory framework and the gaps within the interna-
tional legislation. Past regulatory undertakings and the reasons these failed are vital to understand not
only the legal framework itself, but can also serve as an objective point of reference to discern the
state of a possible evolution of international law norms, as well as the state of stakeholders' (un)will -
ingness to reach a consensus.
International law making procedures is almost inextricably linked with political science and
also sociology. The present thesis will touch upon these disciplines but will do so only to better de-
scribe the process of creating international legislation and the reasons the researched upon account-
ability gap in international law exists.
1.5 Research Structure
The debate on the possibility of regulating multinational corporations on an international level
has historically taken places in numerous fora. The present study will examine two issues before ad-
11M. McConville and W. Chui, Research Methods for Law, Edinburgh University Press, 2007, p. 3
12W. Bradley Wendel, “Essay Explanation in Legal Scholarship: The Inferential Structure of Doctrinal Legal Analysis”
(2010-2011) 96 Cornell Law Review 10358
dressing the matter of a contemporary final and binding instrument that seeks to hold MNCs account-
able for human rights violations. The first issue will be what is the current regulatory framework re-
garding the multinational corporations under international law. This issue will be addressed by exam-
ining the existence of direct and indirect human rights obligations of multinational corporations in
treaties, authoritative statements of human rights bodies and soft law documents. Examples of corpo-
rate activities violating basic human rights will also be provided, so as to showcase the extent to which
the current framework succeeds in protecting people against corporate activities.
The second issue that the present study will address will be the historical evolution of interna-
tional law attempting to regulate multinational corporations. The reasons behind the assumed failure
of which, will firstly be used to ascertain the existence of a gap in multinational corporations’ account-
ability for human rights violations. Secondly they will prove helpful in understanding whether the new
treaty initiative can succeed in bridging the accountability gap in international legislation. The histori-
cal recollection of past regulatory endeavors will also provide indications regarding the change in atti-
tude of the implicated stakeholders, which will be the determining factor of whether a new legislative
attempt would prove to be more successful.
In the last part of the present study the application scope of the newly proposed treaty will be
examined, on the grounds of whether or not it moves forward in the attempt to create a legal frame-
work that can establish corporate accountability under international law. The notions of a treaty’s
scope of application will be explained in accordance with the sources of international law. Further-
more, documents and statements from the latest round of negotiations will be presented, in an attempt
to determine whether a progressive development of international law is in fact occurring or whether
this is but an idealistic delusion.
9
2. Chapter - Business and Human rights international regulatory frame-
work and case studies
2.1 An overview of MNCs and human rights- A “tricky terrain”
Up until the present day human rights appear to be one of the most dynamic fields within pub-
lic international law. The process, however, of establishing corporate accountability for human rights
violations is very slow. As striking as it may be, establishing accountability without prior establish-
ment of binding obligations is not feasible.
Despite some scholarly opposition13, to the present date, no general human rights obligations
have been imposed on corporations under public international law. Multinational Corporations' in-
creased role and influence, which is a direct result of their economic power14, makes them an impor-
tant actor in the governance field around the globe. The economic power and the political influence of
MNCs gives them the ability to contribute to a positive social and economic development, but also en-
ables them to harm certain established international environmental and human rights15. Even though it
is true that corporations are not directly bound by international rules and regulations this does not
13D. Weissbrod and m. Kruger, Norms on the Responsibilities of Transnational Corporations and Other Business Corpora-
tions and Other Business Enterprises with regard to human rights, American Journal of international law, 97, 2003, p. 901,
at p. 921; D. Kinley and J. Tadaki, From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations
at International Law. Virginia Journal of International Law, Vol. 44, No. 4, pp. 931-1023, 2004, available at https://ssrn.-
com/abstract=923360
14J. Mikler, ‘Global Companies as Actors in Global Policy and Governance’ in John Mikler (ed), The Handbook of Global
Companies, Wiley-Blackwell, 2013, vol. 1, p. 4
15Concerning the activities of Shell in Nigeria see: The New York Times, Shell game in Nigeria, December the 3rd 1995
available online at: http://www.nytimes.com/1995/12/03/opinion/shell-game-in-nigeria.html ; Kiobel et al. v. Royal Dutch
Petroleum Company, US Ct. of Appeals 2nd Circuit, 621 F. 3rd 111, Decision of the 17th September 2010 ; Wiwa v. Royal
Dutch Petroleum Co., US Ct. of Appeals 2nd Cicuit, 226 F. 3rd 88, Summary issued oon June 3rd 2009; Shell still not having
paid the compensation for oil spill in the Niger Delta: see E. Gosden, Why Shell's Bodo oil spill still hasn't been cleaned
up, The Telegraph, January 8th 2017, at: http://www.telegraph.co.uk/business/2017/01/08/yet-clean-nige-
rian-oil-spills-two-years-compensation-deal/ 10
mean that corporations can for example freely pollute the environment, promote child labor and adopt
discriminatory salary policies. Certain standards of behavior are ought to be observed16.
International law's traditional state-centric view with regards to duty bearers of international
obligations is heavily challenged by MNCs' involvement in terrible tragedies. Historical evidence
proves that the increased public awareness that is triggered by scandals and violations of human rights
norms often results in legislative -or at least regulatory- initiatives17. In a brief case study that show-
cases the involvement of MNCs to human rights violations around the globe, one can list the follow-
ing examples.
More specifically, in December 1984 in the city of Bhopal, the methyl gas leak out of one of
TNC Union Carbide Corporation's storage tanks resulted in the tragic end of more than 20.000 people,
while it also affected several hundreds of thousands more18. The struggles of Nigerian Ogoni people
with Shell date back in the 1960s and various judicial proceedings have been initiated against the
Dutch company especially before US courts under the Alien Tort Claims Act, regarding the pollution
of Niger River and also its alleged complicity in executions and crimes against humanity. Chevron's
oil drilling activities in Ecuador19 and Total's involvement with the military regime in Myanmar20 were
also heavily discussed in judicial fora, but little to no satisfaction was provided to the victims of those
alleged violations.
16J. Paust, The Other Side of Right: Private Duties Under Human Rights Law, 5 HARv. HUM. RTS. J. 51, 1992
17W. Mattli & N. Woods, In Whose Benefit? Explaining Regulatory Change in Global Politics, in W. Mattli & N. Woods
(eds.), The Politics of Global Regulation, Princeton University Press, 2009 pp. 1- 43, 2009, at p. 22 et seq. ; for the Water-
gate scandal triggering the implementation of the Foreign Corrupt Practices Act of 1977 and facilitating the way towards
the negotiations and adoption of the OECD Anti- Bribery Convention of 1997 see: C. Rose, International Anti- Corruption
Norms: Their creation and influence on domestic, Oxford University Press, 2015, p. 1 ; for the Enron scandal leading to
Sarbanes- Oxley Act of 2002: R. Peavler, Sarbanes-Oxley Act and the Enron Scandal - Why Are They Important?, October
18th 2016, available online at: https://www.thebalance.com/sarbanes-oxley-act-and-the-enron-scandal-393497
18S. Deva, “Bhopal: The Saga Continues 31 Years On”, in D. Baumann-Pauly & J, Nolan (eds), Business and Human
Rights: From Principles to Practice, United Kingdom, 2016, pp. 22-26, p. 22
19Regarding Chevron's activities and the judicial proceedings the followed: https://business-humanrights.org/en/texa-
cochevron-lawsuits-re-ecuador
20Regarding the activities of Total and the belgian Court's dismissal of the lawsuit against the corporation: https://busi-
ness-humanrights.org/en/total-lawsuit-in-belgium-re-myanmar11
The increase in the number of human rights abuses by MNCs has been recognized by many ac-
tors and attempts to address this problematic and complex under public international law issue have
been made, varying from voluntary Codes of Conduct to draft norms and treaties. The problems that
all these initiatives face are, however, numerous and not easy to tackle.
2.2 Binding international regulations on MNCs with respect to human rights
With regards to internationally binding norms under international human rights law, the first
point of attention should indisputably be the international human rights treaties. Pursuant to the schol-
arships’ interpretations of article 38 of the International Court of Justice’s Statute being the “source of
sources”, treaties should be regarded as the primary source of law when determining one’s obligations.
At this point of time international treaties do not contain any specific and explicit provisions that ad-
dress the possibility of MNCs violating human rights.
It is submitted that certain steps towards regulating some “gross violations of human rights”, as
former SRSG Ruggie so eloquently put it21, have already began to take shape. One of the admittedly
not many good examples illustrating such norms, is illustrated in article 25 par. 2 of the Statute of the
International Criminal Court, where the Statute explicitly accepts the responsibility of individuals for
actions within the Court’s jurisdiction22. For this article, however, to take effect, the violations of hu-
man rights by an individual must be of a certain a gravity, so as to fulfill the requirements of a crime
under the statute, as these are described in articles 5 et seq.
Even though obligations under international law still fall primarily on the states23, the possibil-
ity of non-state entities like MNCs to also act as a duty bearer is also being debated24. Common article
21J. Ruggie, ‘Quo Vadis? Unsolicited Advice to Business and Human Rights Treaty Sponsors’ (9 September 2014), avail-
able at http://www.ihrb.org/commentary/quo-vadis-unsolicited-advice-business.html
22The whole text of the Rome Statute of the International Criminal Court is available online at:
https://www.icc-cpi.int/nr/rdonlyres/ea9aeff7-5752-4f84-be94-0a655eb30e16/0/rome_statute_english.pdf
23M.D. Evans (ed.), International Law, Oxford University Press, 2014, p. 33
24See generally A. Clapham, Human rights obligations of Non-State Actors, Oxford University Press, 2006; S. Deva and
D. Bilchitz, Human Rights obligations of Business: Beyond Corporate Responsibility to respect?, Cambridge University
Press, 201312
3 of the Geneva Conventions of 1949 can further serve to demonstrate that the possibility of
duty-bearers of international treaties other than the states in fact exists25.
As far as human rights treaties are concerned the sources that should always first and foremost
be examined are the 2 major human rights conventions, namely ICCPR and ICESCR. Although not
explicit, the convention and the covenant, alongside with certain clarifications made by their respec-
tive Committees, do include certain provisions that are of relevance with regards to violations perpe-
trated by MNCs. One prominent example is reflected in a. 2.3(a) of the ICCPR, which reads as fol-
lows: states shall “ensure that any person whose rights or freedoms as herein recognized are violated
shall have an effective remedy, notwithstanding that the violation has been committed by persons act-
ing in an official capacity”. This article, however relevant, recognizes the possibility of violations oc-
curring as a result of activities undertaken by non-state actors including MNCs. It does not, however,
impose any obligations on them and merely reaffirms the state's duty of protecting human rights and
providing access to remedies in cases of violations. Furthermore, another problematic issue with re-
spect to a. 2 ICCPR is that its application scope is limited to “all individuals within its [the state's] ter-
ritory and subject to its jurisdiction”, thus creating a huge jurisdictional problem in cases that concern
the global operation of MNCs.
Similarly, ICESCR does not contain any explicit provisions that can address human rights vio-
lations by MNCs. An implicit reference could be drawn from a. 2 and the obligation of states to coop-
erate with one another so as to protect and promote human rights26.
It is worth noting that despite the lack of specific provisions that concern the human rights vio-
lations by MNCs, human rights treaty bodies do regard these activities as problematic and try to
strengthen the protection of human rights against such activities through statements and General Com-
ments. In a statement of the Committee on Economic, Social and Cultural Rights in 2011 on obliga-
tions of States Parties Regarding the Corporate Sector and Economic, Social and Cultural Rights27, the
Committee explicitly stated that “the obligation of states to ensure that all economic, social and cul-
25The text of the 4 Geneva Conventions of 1949 including common article 3 can be found online at: https://ihl-data-
bases.icrc.org/applic/ihl/ihl.nsf/vwTreaties1949.xsp
26M. Langford, Extraterritorial Duties in International Law, In Malcolm Langford, Martin Scheinin, Wouter Vandenhole
and Willem van Genugten (eds.) Global Justice, State Duties: The Extra-Territorial Scope of Economic, Social and Cul-
tural Rights in International Law, Cambridge University Press, 2012, pp. 51-113, p.112f
27 Committee on Economic, Social and Cultural Rights, Statement on the obligations of States Parties regarding the cor-porate sector and economic, social and cultural rights, 20 May 2011, E/C.12/2011/1
13
tural rights laid down in the ICESCR are fully respected and rights holders are adequately protected in
the context of corporate activities”28. Furthermore, the Committee stated that the states are also re-
quired to “take steps to prevent human rights contraventions abroad by corporations which have their
main offices under their jurisdiction, without infringing the sovereignty or diminishing the obligations
of the host States under the Covenant”29. A similar approach can also be found in General Comment
16 on State Obligations Regarding the Impact of the Business Sector on Children’s Rights in 201330.
From the aforementioned paradigms, one can only conclude that despite the increased efforts
of the human rights treaty bodies to confront the impact that corporate activities may have in the field
of human rights, there are currently no specific provisions that create a clear regulatory framework.
2.3 Non-binding international regulations
Alongside the international human rights treaties certain non-binding international standards
that require MNCs to respect human rights can be found in international soft law documents. The
most prominent soft law documents that touch upon human rights violations by MNCs are the UN
Universal Declaration of Human Rights, the UN Global Compact initiative and the UN Guiding Prin-
ciples.
According to the UDHR's preambel31, the responsibility to protect and promote respect for hu-
man rights is placed on “every individual and every organ of society”. With such broad wording, the
preambulatory clause can be interpreted as to include private individuals and third parties such as
Multinational Corporations.
The U.N.’s “Global Compact” initiative can be regarded as an initiative that shows the in-
creased interest of the global community on the potential effects that corporate activities may have in
the field of human rights. It has been cosigned in 2000 by 50 multinational firms, 12 labor unions, and
a plethora of NGOs and at that point of time there were already over 8,000 firms that supported it 32.
The principles that this initiative asks companies to respect, are quite extended and amongst others in-
28Para. 1
29Ibid. Para. 5
30UN Committee on the Rights of the Child (CRC), General comment No. 16 (2013) on State obligations regarding the impact of the business sector on children's rights, 17 April 2013, CRC/C/GC/1631guUN General Assembly, Universal Declaration of Human Rights, 10 December 1948, 217 A (III)
32Information concerning the Global Compact initiative can be found online at: https :// www . unglobalcompact . org /14
clude respect towards the environment, abolishment of child labor, abolishment of corruption and the
respect to human rights33.
The United Nations Guiding Principles, despite being internationally non-binding standards,
will be analyzed in the following chapter as they are in fact an attempt to regulate MNCs, circumvent-
ing certain problems that occur when stricter “hard law” regulations are being debated upon.
These standards and non-binding norms can hardly be considered as imposing obligations to
MNCs. MNCs' activities are therefore still being regulated almost exclussively by national laws,
which are object to corruption, bribery, economic pressure and furthermore can also be avoided
through the very nature extraterritorial activities and the limits of national jurisdiction. The problem of
MNCs lack of accountability under international law is known for a long time. In the following Chap-
ter previous regulation attempts will be analyzed so as to discern the reasons behind their failure.
33The principles of Global Compact are available online at: https :// www . unglobalcompact . org / what - is - gc / mission / princi-
ples15
3. Chapter - Past UN-driven regulation attempts' analysis and lessons
learned- UNCTC, Commission on Human Rights, UNCTAD, Special
Representative on Human Rights
As already stated in Chapter 2 of the present thesis, public international law and international
human rights law still appears to be mostly state-centric. Despite their increasing influence and impact
in the international state of affairs, the occasions when non-state entities, such as MNCs, bear direct
obligations under public international law are extremely limited34. Most scholars that contemplate on
the MNCs’ obligations under international law, mainly refer to indirectly opposable obligations, in the
sense that the states will be the ones ultimately responsible to implement and enforce regulations that
govern the activities of MNCs35. International law, however, does not seem to exclude, at least in the-
ory, the possibility of international regulation of private entities36. The required conceptual shift of in-
ternational law as a whole is what makes the issue of directly opposable to MNCs international obliga-
tions difficult and highly controversial.
The following chapter will seek to examine the reasons behind the past regulatory attempts'
supposed failure that prompted the current new round of negotiations on the topic of a binding instru-
ment with regards to MNCs and human rights. In order to do so it will provide an overview of the pre-
vious regulation initiatives examining their provisions and their practical effects.
3.1 UNCTC- Code of Conduct
The activities of MNCs and the suspected regulatory void with respect to the protection of hu-
man rights were the reasons behind the establishment by ECOSOC of the “Group of Eminent Per-
sons” in 1973. The purpose of this group was to examine the potential impact of the MNCs' activities
34C. Vasquez, Direct vs. Indirect Obligations of Corporations Under International Law, 43 Colum. J. Transnat’ L.
927-959, 2005, p. 930
35S. R. Ratner, Corporations and Human Rights: A Theory of Legal Responsibility, 111YALE L.J. 443, 2001, p. 485
36Ibid. p. 485; Lee McConell, Extracting Accountability from Non-state Actors in International Law: Assessing the Scope
for Direct Regulation, Routledge, 2016, p. 2116
on the process of international development37. It was under this Group's suggestion that that lead to the
creation of the UNs' Centre on Transnational Corporations in 1974, that was tasked to produce a code
of conduct for corporations38 of transnational character39. The UNs' Code of Conduct's ratione per-
sonae application scope was limited on TNCs' as these were defined in a. 1(a) of the final draft. As far
as the provisions included are concerned, these varied from environmental concerns to provisions
against corruption and respect of state's sovereignty. Despite the fact that the negotiations on the Code
of Conduct did not end up being fruitful, they do provide a rather important perspective on the objec-
tives of the various stakeholders as well as the obstacles that an international regulatory undertaking
has to overcome in order to be successful40.
The key issues that arose from the long negotiations procedures of the Code are thoroughly de-
scribed by the former director of UNCTAD's Investment division, Karl Sauvant in his article “The Ne-
gotiations of the United Nations Code of Conduct on Transnational Corporations: Experience and
Lessons Learned” and will be subsequently summarized as they comprise a set of issues many of
which have yet to be solved. At the time of the Code's negotiations the main negotiating parties were
divided in three blocks. The developed states, the developing states and the socialist states41.
The developing states in the 1970s and 1980s were in their vast majority in the receiving end of
the major MNCs' Foreign Direct Investment42. Therefore they strived to keep the social and political
effects that MNCs may have in their territories at a minimum, while at the same time retaining the
37J. Nolan, “Mapping the movement: the business and human rights regulatory framework”, Business and Human Rights
– From Principles to Practice, 2016, p. 39
38S. S. Deva and D, Bilchitz (note 24), p. 5
39The definition of TNCs according to the Draft United Nations Code of Conduct on Transnational Corporations, UN
Doc. E/1990/94, can be found in a. 1(a) of the Draft, which reads as follows: “The term ‘transnational corporations’ as
used in this Code means an enterprise, comprising entities in two or more countries, regardless of the legal form and fields
of activity of these entities, which operates under a system of decision-making, permitting coherent policies and a common
strategy through one or more decision-making centres, in which the entities are so linked, by ownership or otherwise, that
one or more of them may be able to exercise a significant influence over the activities of others, and, in particular, to share
knowledge, resources and responsibilities with the others.”
40K. Sauvant, Karl, ”The Negotiations of the United Nations Code of Conduct on Transnational Corporations: Experience
and Lessons Learned”, The Journal of World Investment & Trade, Vol 16, Issue 1, 2015, p. 12
41Ibid. p. 1942United Nations, World Investment Report 1992: Transnational Corporations as Engines of Growth (New York: United
Nations 1992), table I.1 and annex table 117
right to regulate MNCs at a domestic level. Furthermore, being home-states of almost no MNCs their
interest towards the protection of investors’ rights was minimal. Their major objective was to conclude
a set of multilateral behavioral rules for MNCs43.
The socialist states block's view of the Code's negotiations was mainly political, as they re-
garded the whole debate as a conflict between developed and developing countries44. The socialist
states did not allow at that period of time any foreign direct investment in their territories, and their
outward FDI was similarly insignificant. Their interest was, thus mainly focused on their position that
state controlled corporations should not be included in the ratione personae application scope of the
code of conduct45.
The developed states' position and interest was on the other hand rather different. Being home
states and host states of MNCs at the same time, they did have major interest in the protection of in-
vestors. They therefore, had already developed multilateral instruments and treaties to regulate the
rights of corporations and investors46. In their view, however, the protection of their corporations' in-
vestments in developing countries was all but guaranteed, especially after the series of nationalizations
that took place in the aftermath of decolonization47. They therefore wanted to draft a set of rules tar-
geted to the host states, with special interest to the developing ones, essentially protecting their corpo-
rations from local governments' interference48.
43K. Sauvant (note 40), p.19
44See Udo Papies Communication, 17 March 2014, “At the beginning, the socialist countries regarded the debate about
TNCs and the negotiations of a Code as a conflict between developed and developing countries. In the course of the nego-
tiations, however, they developed a broader interest in the Code as an instrument to reflect equality and mutual benefit in
international economic relations.”, as quoted by K. Sauvant (note 40), p. 19
45ibid
46e.g Treaty of Friendship, Commerce and Navigation Between the United States of America and Japan, signed 2 April
1953, 4 U.S.T. 2063, T.I.A.S. No. 2863, OECD's Code of Liberalisation of Capital Movements of 1961, which was later
reviewed in 2016, available online at: http://www.oecd.org/daf/inv/investment-policy/Code-Capital-Movements-EN.pdf;
International Labour Organization, Tripartite Declaration of Principles Concerning Multinational Enterprises and Social
Policy, adopted by the Governing Body of the ILO on 16 November 1977, available: http://www.ilo.org/public/english/em-
ployment/multi/download/english.pdf
47Stephen J. Kobrin, ‘Expropriation as an Attempt to Control Foreign Firms in LDCs: Trends from 1960 to 1979’ (1984)
28 International Studies Quarterly 329-334
48K. Sauvant (note 40), p. 21-2218
The aforementioned different and in many aspects colliding interests, resulted in several “core
difficulties” that remained to be resolved, but never did. One major difficulty was the legal nature of
the proposed Code of Conduct as the developing states advocated in favor of strict binding guidelines
for corporations but rejected an equal limitation to their own capacity with regards to regulating
MNCs, while developed states opposed this proposal out of consideration of potential harsh towards
their home corporations legislations. Finding a balanced solution to this problem was the only way to
move forward at that time, which may very well be feasible according to the Chairman of the negotiat-
ing Group on his presentation before the 8th Session of the Commission on Transnational Corpora-
tions49. Other similarly challenging to tackle problematic issues that were a direct result of the afore-
mentioned clash of interest amongst the states- parties to the negotiations, as listed in the information
paper issued by the UNCTC included: 1) the application scope of the Code, and whether it should in-
clude state owned corporations, 2) the treatment standards of host states towards the MNCs, and
whether certain universally recognized principles of international law that prescribe some minimum
treatment requirements are in existence, 3) provisions related to “international law” or “international
obligations”, 4) the implementation and dispute settlement mechanism of the Code of Conduct, 5) na-
tionalizations and compensation, 6) the respect of a state's national sovereignty and 7) the question of
jurisdiction50.
Despite the UNCTC's valiant efforts to facilitate the negotiations, the difference in the interests
of the parties could not be alleviated and in the words of the UN General Assembly President in Sep-
tember 1992: “no consensus was possible on the draft code at present”51. The formal ending of the ne-
gotiations on the Code of Conduct came one year later, with the ECOSOC's resolution on “Strength-
ening the role of the CTC”52.
49Presentation of the Chair of the Working Group, Sten Niklasson, to the eighth session of the Commission on Transna-
tional Corporations, as quoted in United Nations Commission on Transnational Corporations: Information Paper on the
Negotiations to complete the Code of Conduct on Transnational Corporations, UN Doc. E/C.10/1983/S/2 of January 4th
1983, reproduced in 22 ILM 177 (1983), par. 24
50Ibid, par. 24 et seq; K. Sauvant, pp 35 et seq
51Report of the Economic and Social Council: Note by the Secretary-General, A/47/446 of 15 September 1992
52ECOSOC resolution 1993/49 of 29 July 1993, para. 14, available online at: https://documents-dds-ny.un.org/doc/UN-
DOC/GEN/N94/932/99/PDF/N9493299.pdf?OpenElement19
3.2 UNCTAD's regulatory endeavors
After the foundation of UNCTC in the early 1970s, the Commission held the primary role of
dealing with the activities of transnational corporations up until its closing down in the early 1990s,
when its activities where transferred to UNCTAD53, which Braithwaite and Drahos consider as the
most prominent example of forum-shifting they encountered54. UNCTAD, despite not having the pri-
mary expert role on regulating corporations did undertake certain efforts towards that direction55.
The two main regulatory efforts that UNCTAD undertook and may have an impact on corpo-
rate activities on an international level were the international code of conduct on Transfer of Technol-
ogy and the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive
Business Practices. The negotiations on a potential code of conduct on the Transfer of Technology
started in 197456. As the issue concerned the the transfer of technology from developed to less devel-
oped states, the connection and also impact this code may have had to the TNCs becomes appar-
ent57.Despite the fact that the negotiations for that code collapsed and not even a finalized draft could
be agreed upon, the committee on Transfer of technology provided extensive studies on the impact of
the transfer of technology, and the various drafts submitted by two separate working groups that were
participating in the process can provide useful tools in determining the positions of the different stake-
holders58. A major obstacle in these negotiations was closely related to the subject of the negotiations
themselves, namely the technology transfer from developed to less developed states. This fact in-
evitably pushed the negotiations into a strict North- South division, where both parties where skeptical
53K. Weilert, Taming the Untamable: Transnational Corporations in UN Law and Practice, Bogdandy and Wolfrum (eds.),
Max Planck UNYB 14 , Brill, 2010, pp. 445-506, at p. 463
54J. Braithwaite and P. Drahos, Global Business Regulation, Cambridge University Press, 2000, available online at:
http://johnbraithwaite.com/wp-content/uploads/2016/06/Global-Business-Regulation.pdf, p. 567
55T. Fredriksson, 40 years of UNCTAD reasearch on FDI, Transnational Corporations Vol. 12 No.3, 2003, available online
at: http://unctad.org/en/docs/iteiit35v12n3a1_en.pdf, p 6
56UNCTAD, The Possibility and Feasibility of an International Code of Conduct on Transfer of Technology, U. N. Doc.
TD/B/AC.11/22; GE.74- 46032 (1974)
57Countess P. Jeffries, Regulation of Transfer of Technology: An Evaluation of the UNCTAD Code of Conduct, 18 inter-
national law journal, 1977, p. 309
58J. D. Kurek, Supranational Regulation of Transnational Corporations: The UNCTAD and CTC Efforts, 2 Mich. YBI Le-
gal Stud., p 268, at p. 27020
about the other and subsequently reaching a consensus was very difficult59. The negotiating parties
never really decided upon whether the code would include provisions of a binding or a voluntary na-
ture60. In retrospect, it is submitted that the final draft of the code61 despite including only non-binding
principles, it did pave the way for later multilateral regulatory undertakings, such as the TRIPS Agree-
ment62.
The work of UNCTAD in the area of restrictive business practices started around the same time
that UNCTC started working on its own Code of Conduct, to be more precise on May 19th 1972 63.
The Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Busi-
ness Practices was successfully adopted by the UNs' General Assembly on December 5th 198064, and
is has since been elaborated in seven Conferences65. The groups of interest during the negotiations of
the Set were exactly the same as the groups in the negotiations of UNCTC's Code as they were being
conducted virtually at the same time. The “multilaterally agreed upon rules and principles” faced
strong opposition by representatives of the developed states, which viewed the Set as an attempt to aid
the goals of NIEO, as well as a socialist undertaking to subtly impose anti-private rules for busi-
nesses66. This Set has a voluntary and non-binding legal status, as a result of a clash of interests be-
tween developed states -which favored the Set's voluntary status- and less developed states – which
59Gehl Sampath Padmashree and Roffe Pedro, Unpacking the International Technology Transfer Debate: Fifty Years and
Beyond, ICTSD Programme on Innovation, Technology and Intellectual Property, Working Paper, International Centre for
Trade and Sustainable Development, Geneva, 2012, available online at: https://www.ictsd.org/downloads/2012/07/unpack-
ing-the-international-technology-transfer-debate-fifty-years-and-beyond.pdf , p. 26
60Ton J. M. Zuijdwijk, The UNCTAD Code of Conduct on the Transfer of Technology, McGill Law Journal 24, 1978, p.
566
61UNCTAD, "Draft International Code of Conduct on the Transfer of Technology as of 5 June 1985" (TD/CODE/TECH-
NOLOGY TRANSFER/47, 1985)
62Padmashree (note 59), p. 28
63UNCTAD's Conference resolution 73 (III) of 19 May 1972 as quoted in “The history of UNCTAD 1964-1984”, avail-
able online at: http://unctad.org/en/Docs/osg286_en.pdf, p. 114
64Doc. TD/RBP/CONF/10 of May 2nd 1980 adopted by A/RES/35/63 of December 5th 1980, available online at:
http://unctad.org/en/docs/tdrbpconf10r2.en.pdf
65The Report of the Seventh United Nations Conference to Review All Aspects of the Set of Multilaterally Agreed Equi-
table Principles and Rules for the Control of Restrictive Business Practices, available online at:
http://unctad.org/meetings/en/SessionalDocuments/tdrbpconf8d11_en.pdf
66Cynthia D. Wallace, Legal Control of the Multinational Enterprise, Nijhoff, 1983, p. 23121
rather wished for a more binding set of rules67. Its importance, however, can easily be observed in the
decision of WTO's Panel in Mexico- Telecoms, where the Panel used the Set as a tool of interpretation
of “anti-competitive practices”68.
3.3 UN Commission on Human Rights- Draft Norms 69
The United Nations have constantly been paying attention to the complexities that arise from
the activities of MNCs in the international scene. Without having previously concluded to a successful
regulatory regime, in 1999 UNs' Sub-Commission on the Promotion and Protection of human rights
established a working group that would “work on a code for TNCs based on human rights stan-
dards”70, for an initial period of three years71. After a series of negotiations sessions without having
completed it task, in August 2001 the Sub-Commission decided on the extension of the working
groups mandate for another 3 years72. Two years later, following numerous informal and also public
meetings and deliberating upon all the suggestions received, the working group revised its previous
Norms and Commentary Drafts and sent them to the Sub-Commission for approval73. On August 13th
2003 the Norms were approved by the Sub-Commission in its resolution 2003/1674, thus becoming the
first initiative at the international level that was of a non-voluntary nature75.
67S. Griffin, United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive
Business Practices, General Assembly Resolution 35/63 (1980)., 11 Ga. J. Int’l & Comp. L. 709, 1981, p. 720
68Report of the Panel on Mexico – Measures affecting Telecommunications Services, WT/DS204/R of April 2nd 2004,
available online at: https://www.wto.org/english/tratop_e/dispu_e/204r_e.pdf, paras 7.236-7.238
69Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human
Rights, U.N. Doc. E/CN.4/Sub.2/2003/12/Rev.2 (2003), available online at:
http://hrlibrary.umn.edu/links/norms-Aug2003.html
70Doc. E/CN.4/Sub.2 of 12 August 1999, par. 32
71Sub-Commission Resolution 1998/8 of 20 August 1998, par. 4; Sub-Commission Decision 1999/101 of 3 August 1999
72Weissbrodt (note 13), p. 905 available onlinet at: http://scholarship.law.umn.edu/cgi/viewcontent.cgi?article=1247&con-
text=faculty_articles,
73Sub-Commission Report on the Working Methods and Activities of Transnational Corporations, UN Doc.
E/CN.4/Sub.2/2003/13
74Responsibilities of transnational corporations and other business enterprises with regard to human rights, U.N. Doc.
E/CN.4/Sub.2/2003/L.11 at 52 (2003), available online at: http://hrlibrary.umn.edu/links/res2003-16.html
75Weissbrodt (note 13), p. 90322
Following the adoption of the Norms, many NGOs expressed their strong support to this initia-
tive via public statements, and even transnational corporations stated that they would be willing to put
the Norms to the test, as evidence of their commitment to protect human rights76. The Norms, how-
ever, also faced strong opposition from organizations such as the International Chamber of Commerce
and the International Organization of Employers77, and several states were very hesitant to move away
from their traditional state- centric understanding of “subjects” in international law78. The Norms were
effectively abandoned in spring of 2004, when the Commission on Human Rights requested the
ECOSOC to affirm that the Norms had no legal standing and reduced them to “yet another statement
of voluntary, aspirational goals”79. The underlying reasons that the Norms failed are, however, a very
helpful tool in the attempt to evaluate the chances of success that future regulatory attempts may have.
Through careful observation and analysis of the states' reservations on the Norms, as well as
the legal scholarship that followed their abandonment, the reasons behind the failure of the Norms can
be largely divided in three categories. Firstly, the claim that the Norms constituted in fact a progres-
sive development80 of international law and not a codification of pre-existing rules as they appeared to
be. Secondly, the fact that the Norms moved away from the traditional understanding of international
law by making TNCs actual addressees of international law and thirdly certain vague provisions and
contradictions that could be found in specific provisions of the document.
76Ibid., p. 906 et seq.
77J. Ruggie, Business and human rights: The evolving Agenda, Corporate Social Responsibility Initiative, Working Paper
No. 31, JFK School of Government and Harvard University, 2007, p. 4, available online at:
https://sites.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_38_ruggie.pdf ; Joint views of the IOE and ICC on
the draft “Norms on the responsibilities of transnational corporations and other business enterprises with regard to human
rights”, available online at:
https://business-humanrights.org/sites/default/files/reports-and-materials/IOE-ICC-views-UN-norms-March-2004.doc
78Miretski and Bachmann, Global Business and Human Rights - The UN 'Norms on the Responsibility of Transnational
Corporations and Other Business Enterprises with Regard to Human Rights' - A Requiem (November 12, 2011), Deakin
Law Review, Vol. 17, No. 1, 2012, p. 9, available online at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1958537
79L. Backer, Multinational Corporations, Transnational Law: The United Nation's Norms on the Responsibilities of
Transnational Corporations as Harbinger of Corporate Responsibility in International Law, Columbia Human Rights Law
Review, Vol. 37, 2005, p.140, at footnote 186, available online at: https://papers.ssrn.com/sol3/papers.cfm?
abstract_id=695641
80C. M Vázquez, ‘Direct vs Indirect Obligations of Corporations under International Law’, Columbia Journal of Transna-
tional Law vol. 43, 2005, p. 927, p. 92823
It is submitted that the first two categories that hindered the eventual adoption of the Norms are
very closely interlinked. In order to establish the legal basis for the corporate obligations with respect
to human rights, the Preamble of the Norms listed numerous international treaties and conventions
starting from the UDHR. It is thus considered by some authors as “a restatement of existing interna-
tional human rights law, humanitarian law, international labor law, environmental law, anti-corruption
law and consumer protection law that already does or should apply to companies’ conduct”81. The
huge amount of references used even though it serves as a ground for legitimacy as some of the hu-
man rights described even are of jus cogens character82, for some scholars may even result in intelligi-
bility83. The main problematic issue that arose, is that the Norms did not only include negative provi-
sion, such as the obligation to refrain from certain human rights violations, but also provided positive
duties for the corporations84. These are situated in Part A of the Norms, under “General Obligations”
and are very similar to the obligations of the states described under the same section, which still are
recognized to have the primary obligation to ensure and promote the protection of human rights85. The
Norms, thus created a regime that essentially turned the corporations into “virtual state actors for pur-
poses of many normative requirements”86. The imposition of direct obligations on the corporations
drastically challenged the legal status quo of public international law. Furthermore the circumvention
of the mediating role of the state raised concerns of going against the national sovereignty of states87.
As far as the perceived ambiguity of the Norms is concerned, Deva submits- referencing the
provision concerning fair and reasonable remuneration- that this will create substantial obstacles to the
81C. Hillemanns, U.N. Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with
regard to Human Rights, German L.J. , vol. 4, p. 1065, 2003, at p. 1070
82S. Deva, UN’s Human Rights Norms for Transnational Corporations and Other Business Enterprises: An Imperfect Step
in the Right Direction’ (2004), 10 ILSA Journal of International & Comparative Law, p. 493, at p. 498
83U. Baxi, ‘Market Fundamentalisms: Business Ethics at the Altar of Human Rights’ (2005) 5(1) Human Rights Law Re-
view 1
84Miretski and Bachman (note 78), p. 19
85Sub-Commission on the Promotion and Protection of Human Rights, Commentary on the Norms on the Responsibilities
of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, UN ESCOR 55th sess 22nd
mtg Agenda Item 4, UN Doc E/CN.4/Sub.2/2003/38/Rev.2 (26 August 2003), available at:
http://hrlibrary.umn.edu/links/commentary-Aug2003.html
86C. Backer (note 79), p. 177
87Ibid, p 15524
achievement of the Norms' aspired goals, as it enables corporations to maneuver around the provisions
and not uphold them88.
Even though the Norms did not end up becoming a binding document and the responsibility to
create a regulatory framework for Corporations was transferred by the Commission on Human Rights
to the Special Representative of the Secretary-General for Business and Human Rights, their impact is
clearly visible not only on later international initiatives such as the UNGPs, but also on national legis -
lations89 and corporate initiatives90.
3.4 UN Special Representative of the Secretary General- The Guiding Principles
The increased attention towards the activities of MNCs and the both positive and negative ef-
fect these may have in the enjoyment of human rights resulted in HRC's request to the UNs' to appoint
a special representative on the issue of human rights and transnational corporations and other business
enterprises91. The one that was called to step up and fulfill this difficult task was Professor J. Ruggie,
whose mandate was rather restricted92.
88Deva (note 82), p. 506
89United Kingdom’s Modern Slavery Act is available online at: http://www.legislation.gov.uk/ukpga/2015/30/contents/en-
acted; The proposal of the french law of “The duty of vigilance of parent and subsidiary companies” is available online at:
http://www.assemblee-nationale.fr/14/ta/ta0924.asp; also see Wet zorgplicht kinderabeid (“Child Labor Due Diligence
Law”), No. 34 506 (2016-2017) text available at:
https://www.eerstekamer.nl/behandeling/20170207/gewijzigd_voorstel_van_wet/document3/f=/vkbkk8pud2zt.pdf
90Weissbrodt (note 13), p. 907 at footnote 38
91UN Office of the High Commissioner for Human Rights, Commission on Human Rights, Human rights and transna-
tional corporations and other business enterprises, Human Rights Resolution 2005/69 of April 20th 2005
92J. Ruggie's mandate as described in operative clause 1 of the resolution 2005/69 was: (a) To identify and clarify stan-
dards of corporate responsibility and accountability for transnational corporations and other business enterprises with re-
gard to human rights; (b) To elaborate on the role of States in effectively regulating and adjudicating the role of transna-
tional corporations and other business enterprises with regard to human rights, including through international cooperation;
(c) To research and clarify the implications for transnational corporations and other business enterprises of concepts such
as “complicity” and “sphere of influence”; (d)To develop materials and methodologies for undertaking human rights im-
pact assessments of the activities of transnational corporations and other business enterprises; (e) To compile a compen-
dium of best practices of States and transnational corporations and other business enterprises25
The difficulties the former SRSG Ruggie had to face where very similar to the ones that be-
came apparent during the negotiations of UNCTC's Code of Conduct and UNCHR's Norms. The
strong division of stakeholders' interests between developed and less developed states was still exist-
ing. Additionally, USA made abundantly clear that it would not support any further initiative towards
a Set of Norms or a Code of Conduct for TNCs93.
In order to achieve the much-coveted balance and circumvent the dilemma of binding or volun-
tary character94, Prof. Ruggie came up with a set of Principles, which was structured around three
main pillars. The states' primary duty to protect human rights even against third parties, the businesses'
responsibility to show due respect to human rights, and lastly the improvement of mechanisms that
would facilitate the access to appropriate and effective remedy to any injured party95. Going through
all the different and complex provisions that are included in the framework that Prof. Ruggie created,
does not facilitate the purpose of the present thesis. It is, however, worth noting that even though this
set of principles is not of a mandatory nature, its “normative contribution lies not in the creation of
new international law obligations but in the implications of existing standards and practices for states
and businesses; and identifying where the current regime falls short and how it should be improved”96.
Furthermore, even if the UNGPs are not “hard law”, they do have the potential to lead to a gradual
evolution of the international law provision that relate to human rights and businesses97. Since the en-
dorsement of the UNGPs only marks “the end of the beginning”98, it is submitted that the steps have
been taken towards the UNGPs' implementation99, cannot only be viewed as a successful implementa-
93Statement of Leonard Leo, member of the Delegation of USA, at the Commission on Human Rights on April 20th
2005, as partially quoted in “Digest of United States Practice in International Law”, pp. 328,329, available online at:
https://www.state.gov/documents/organization/138677.pdf
94J. Ruggie, Incorporating human rights: Lessons learned and next steps, in Baumann and Nolan (note 18), p. 65
95UNHRC, Report of the Special Representative of the Secretary General on the issue of human rights and transnational
corporations and other business enterprises, John Ruggie, Doc. A/HRC/17/31, par. 6
96Ibid, par. 14
97J. H. Knox, The Ruggie Rules: Applying Human Rights Law to Corporations (August 16, 2011), (R. Mares ed., 2012),
The UN Guiding Principles on Business and Human Rights, Wake Forest Univ. Legal Studies Paper No. 1916664, avail-
able online at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1916664 , p. 20
98J. Ruggie, A UN Business and Human Rights Treaty? An Issues Brief by John G. Ruggie, 28 January 2014, available
online at: https://sites.hks.harvard.edu/m-rcbg/CSRI/UNBusinessandHumanRightsTreaty.pdf, p.5
99Ibid, p.226
tion of the Guidelines per se, but also as an indication of a change of perspective with regards human
rights and corporate activities. That being said, the states that have already implemented National Ac-
tion Plans following the UNGPs are still up until today very few in number100.
100The exact number of states that have enacted National Action Plans can be found at:
https://business-humanrights.org/en/un-guiding-principles/implementation-tools-examples/implementation-by-govern-
ments/by-type-of-initiative/national-action-plans; see also European Coalition for Corporate Justice,5 Years of UNGPs: 5
Business & Human Rights issues to focus on, June 10th 2016, available at:
http://corporatejustice.org/news/135-5-years-of-ungps-5-business-human-rights-issues-to-focus-on27
4. Chapter - Application scope of the newly proposed binding treaty- ra-
tione personae, ratione materiae
Following the aforementioned analysis of previous norm-creating attempts, and the reasons
these have not yet created a stable framework that prevents human rights violations, or at the very
least provides access to remedies for those that have been harmed, it is submitted that the main objec-
tions that have been raised touch upon the core of the international treaties themselves, their scope of
application.
Questions regarding the ratione persone, ratione materie and ratione loci scope of the pro-
posed regulatory attempts, were the focal point of all the negotiations proceedings. At the time the
present thesis is being written, the application scope of the newly proposed binding treaty that is being
debated upon in the third session of the open-ended intergovernmental working group on transnational
corporations and other business enterprises with respect to human rights, was once again a matter that
sparked heated discussions. When examining the application scope of an international treaty, the first
point of reference is the Vienna Convention on the Law of the Treaties (hereinafter cited as: VCLT),
under articles 24-30.
With regards to the ratione personae scope of treaties, it is submitted that a textual interpreta-
tion of VCLT is a bit lacking. VCLT does not provide many informations concerning application ra-
tione personae of treaties, it does nevertheless reflect the traditional state-centric view of subject un-
der international law in article 2(g), where only states are recognized as states parties to the conven-
tion. Having no clear cut guidelines, regional human rights courts have created an independent system
of ascertaining responsibility under their respective conventions in cases the perpetrator is not a state,
either through general principles of international law or through the invocation of the rule on State re-
sponsibility101.
The question on ratione materiae scope of the treaty is complex, not on the basis of what is
covered by the the treaty and what is not, but rather on the basis of who has locus standi to bring a
case before the relevant court. In the cases of two of the most prominent regional human rights con-
ventions, namely ECHR and ACHR, private individuals play a very important role before the courts'
101For a thorough analysis see: F. Vaneste, Relationship between International Human Rights Law and General Interna-
tional Law: Assessing the Specialty Claims of International Human Rights Law, University of Leuven, PhD Thesis, 2008,
pp. 156-18528
proceedings. ACHR may not include a direct provision enabling individuals to bring a claim to the
IACtHR, but the individual's role is pivotal ever since 2001102. In the case of ECHR, a simple refer-
ence to a. 34 is enough to support Friedman's observation, that ECHR contributed in “a revolutionary
advance in the legal position of the individual”103
The application scope ratione loci of international treaties pertains the possible extraterritorial
effect of treaties, and the “human rightist” belief that all human rights treaties have an extraterritorial
effect. It is true that the wording of a. 29 VCLT104. is not strict, leaving States and Courts enough
room to navigate according to the factual background of each case105.
4.1 Contemporary Treaty negotiations
On June 2014 resolution 26/9 was adopted by the Human Rights Council with the purpose of
creating an intergovernmental working group that was tasked to “elaborate an international legally
binding instrument to regulate, in international human rights law, the activities of transnational corpo-
rations and other business enterprises”106. Currently UNs’ Human Rights Council working group on
102Article 44 § 1, 2001 Rules of Procedures of the IACommHR, entered into force on 1 May 2001, adopted by the IA-
CommHR at its hundred and ninth regular session held on 4-8 December 2000
103W. Friedman, The Changing Structure of International Law, London, Stevens & Sons, 1964, p. 244
104a. 29 VCLT read as follows: “Unless a different intention appears from the treaty or is otherwise established, a treaty
between one or more States and one or more international organizations is binding upon each State party in respect of its
entire territory”.
105To understand the complexity and different positions on the issue of extraterritoriality one can view F. Coomans and
M. Kamminga, Extraterritorial Application of Human Rights Treaties, Antwerp-Oxford, Intersentia, 2004; and EctHR's
and IACtHRs' sometimes conflicting jurisprudence inter alia: 4 IACommHR, Armando Alejandr Jr. et al. v. Cuba (“Broth-
ers to the Rescue”), decision of 29 September 1999, ACHR Report n° 86/99, Ann. Rep. ACHR 1999; IACommHR, Rafael
Ferrer-Masorra and Others v. the United States (‘US Detention in Guantanamo’), decision of 4 April 2001, ACHRH Re-
ports n° 51/01, Ann. Rep. ACHRH 2000; IACommHR, Victor Saldaño v. Argentina, decision of 11 March 1999, Report n°
38/99, Ann. Rep. ACHR 1998; ECommHR, ECtHR (GC), Bankovic v. Belgium and 16 other States, decision of 12 De-
cember 2001, Reports 2001-XII; ECtHR (GC), Bankovic v. Belgium and 16 other States, decision of 12 December 2001,
Reports 2001-XII; EctHR, Issa et al. v. Turkey, judgment of 16 November 2004; HRC, López v. Uruguay, decision of 29
July 1981, 68 ILR
106Human Rights Council, ‘Elaboration of an internationally legally binding instrument on transnational corporations and
other business enterprises with respect to human rights’ A/HRC/26/L.22/Rev.1 (25 June 2014)29
business and human rights is drafting another universally binding treaty and the third session of the
negotiations was concluded on October 27th 2017107, and the challenges it is facing are not easy to
overcome.
The significance of the current treaty negotiations for the law- field of Public International law
is major. The proposed treaty can be viewed as either modifying the currently existing international le-
gal framework or creating a whole new one with respect to businesses and human rights. In order to
assess a potential reform of international law, a series of questions must be answered, starting from the
proposed structure of the treaty and the issues that must be resolved concerning its application scope
and lastly its law-making or complementary character.
The treaty negotiations have so far unearthed multiple issues that create tension amongst the
negotiating parties and the various stakeholders. The treaty's scope of territorial, material and subjec-
tive scope of application is the most apparent example. To make things even more complex a huge de-
bate is currently revolving around the connection and interdependence between the proposed binding
treaty and the UNGPs.
Notwithstanding the potential outcome of the current regulatory endeavor, it is submitted that
substantial progress has been made. The example that better illustrates this progress is the active in-
volvement of the EU delegation in the third session of the negotiations, contrary to its stance during
the first session when it left the meeting on the second day. Furthermore, while the first two negotia-
tion rounds were merely “conducting constructive deliberations on the content, scope, nature and form
of the future international instrument”108, the third round was focused on the elements for the draft
legally binding instrument on transnational corporations and other business enterprises with respect to
human rights109.
The objections raised in the first two sessions of the working group with respect to the ratione
personae scope of the proposed instrument were in fact identical to the ones raised during the actual
107Transnational Corporation Working Group: Joint UN Statement, 9th March 2017, available online at:
https://www.icj.org/wp-content/uploads/2017/03/HRC34-Joint-Statement-IGWG-Transnational-Corporations-Advocacy-2
017.pdf
108HRC Resolution 26/09 of 2014, operative clause 2
109Ibid operative clause 3, The “draft elements” paper is available online at:
http://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session3/LegallyBindingInstrumentTNCs_OBEs.
pdf30
adoption of resolution 26/09110. The main controversy was the issue of the definitions of “transnational
corporations” and the inclusion or not of domestic corporations. Despite the strong opposition by de-
veloped countries the resolution adopted states under footnote 1 that other business enterprises “de-
notes all business enterprises that have a transnational character in their operational activities, and
does not apply to local businesses registered in terms of relevant domestic law”. The underlying rea-
soning behind this definition according to the delegates of the less developed states, who were the
main supporters of the resolution and the footnote's definition, was that domestic companies should
only be regulated by domestic legislation and that the proposed instrument should only focus on the
transnational corporations' ability to navigate amongst domestic legislations and ultimately avoid re-
sponsibility111. The voluntary narrowing of the scope in the search of a wider consensus amongst the
less developed states does, however complicate matters as it overlooks the fact that some states may
be unwilling or unable to regulate not only transnational but also their domestic corporations. As for-
mer SRSG Ruggie observed the governance gaps that are a direct result of the globalization process
create “the permissive environment for wrongful acts by companies of all kinds without adequate
sanctioning or reparation”112. Furthermore, the narrowing of the ratione personae also create legal
complexities, such as de facto hampering the protection of human rights, by violating the principles of
equality and non-discrimination. One recent example of this proposal's adverse effect, would be that in
the case of the “Rana Plaza” tragedy in Bangladesh the proposed treaty would cover the multinational
corporations that are stationed at the site but not the domestic corporation that had hired the 1135
workers who lost their lives113. The relevance of the respective provisions of the Norms and the
UNGPs is apparent and can be of help, as both texts include provisions that explicitly refer to all cor-
porations and enterprises114. In order to overcome this controversy, the suggestion of the elements doc-
110The adoptions of HRC resolution was done without a vote, with 20 votes in favour, 14 against and 13 abstentions,
HRC Resolution 26/09, p. 3
111M. Fasciglione, Towards a Human Rights Treaty on Transnational Corporations and Other Business Enterprises: The
First Session of the UN Open-ended Intergovernmental Working Group, Diritti umani e diritto internazionale. Vol 9, No.
3, pp. 673-680, p. 675
112UN Special Representative on Business and Human Rights, Protect, Respect and Remedy: A Framework for Business
and Human Rights, UN Doc. A/HRC/8/5, of 7 April 2008, para. 3
113J. Ruggie (note 21)
114Commentary on the Norms of Responsibility of Transnational Corporations and Other Business Enterprises with Re-
gard to Human Rights, U.N. Doc. E/CN.4/Sub.2/ 2003/38/Rev.2, 13 August 2003, para. 20; UNGPs, Principle 14 available31
ument that was debated upon in the third round of the negotiations in October 2017, was to actually
omit a definition of “transnational corporation” and focus on the “transnational activity” that a corpo-
ration may undertake. This suggestion draws back on the reasoning of the Norms and its wording is
also very much in line with principle 14 of the UNGPs as noted by both a panelist and delegations115.
Concerns were voiced about a further need of clarifications with regards to “business activity that has
a transnational character”116, which the delegate of Ecuador welcomed and further proposed a change
of wording to “corporate activities”117.
As far as the material scope of the newly proposed binding treaty is concerned, the issues seem
to be clearer, since most stakeholders agree that the new instrument should include all internationally
recognized human rights118, recognizing their universal, indivisible and interdependent character119.
However, a proposal that may be a starting point for further deliberation was made by the representa-
tive of the NGO IT4Change120. The representative argued that specific reference must be made to digi-
tal corporations and online activities. As a result of the contemporary way of life, technology and in-
ternet play a vital role in the lives of many people. Data protection and the right to privacy are closely
interlinked, since these have a high potentiality of being violated, without many people even notic-
ing121.
online at: http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf
115Chair-Rapporteur Guillaume Long, Draft report on the third session of the open-ended intergovernmental working
group on transnational corporations and other business enterprises with respect to human rights, available online at:
http://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session3/DraftReportThirdSession.docx, par. 48
116Ibid par. 53
117Panel 2: Scope of Application (Cont'd) - 3rd Session of Open-ended Intergovernmental Working Group on Transna-
tional Corporations available online at: http://webtv.un.org/search/panel-2-scope-of-application-contd-3rd-ses-
sion-of-open-ended-intergovernmental-working-group-on-transnational-corporations/5623214837001/?term=3rd%20Ses-
sion%20of%20Open-ended%20Intergovernmental%20Working%20Group%20on%20Transnational
%20Corporations&sort=date&page=3, at 25:30
118Report 2017 para 51
119Elements, Principles 1.2
120Panel 2 webcast at 1:15:00
121The examples given were the online applications of Facebook and Twitter32
The extraterritorial effect of human right treaties has always been a thorny issue, that created
heated debates and disagreements122. The UNGPs are able to provide an excellent starting point for
further binding deliberations. In particular, Principle 2 and 11 of the UNGPs set out the expectation,
that corporations “should respect human rights” “throughout their operations”, but this wording has
been often accused of not taking jurisdictional limitations into account, thus prohibiting any extraterri-
torial effect123. As stipulated in the previous chapter the UNGPs are only a set of voluntary principles
aiming to codify existing international law, but judging by the attitude of virtually all the delegations
taking part in the negotiations their importance is vital. Whenever the chance arises the more devel-
oped states stress the importance of not undermining the implementation of the UNGPs124, and the less
developed states put emphasis on the fact that a new binding instrument would only complement the
UNGPs and fill in certain voids in regulation125. The obligation of states to regulate natural and legal
persons when these operate outside their territory is not yet definite and very much resembles the rules
on state responsibility with regards activities that may cause damage to third parties outside of a state's
territory126. Human rights treaty bodies do acknowledge the implications of the activities outside the
borders of a state and have made their observations clear in several statements and general com-
ments127. Furthermore, in its most recent judgment, UNHRC stated that states are to ensure that human
122See in general: S.I. Skogly, “Extraterritoriality: Universal Human Rights without Universal Obligations?”, in Research
Handbook on International Human Rights Law, S. Joseph, A. Mcbeth (eds), Cheltenham, 2010, pp. 71-96; T. Meron, “Ex-
traterritoriality of Human Rights Treaties”, in American Journal of International Law 1995, pp. 78-82
123Report of the Open-ended intergovernmental working group on transnational corporations and other business enter-
prises with respect to human rights, 6–10 July 2015, par. 71
124Report of the Open-ended intergovernmental working group on transnational corporations and other business enter-
prises with respect to human rights, 24–28 October 2016, par. 14
125Ibid, par. 93 and 108
126I. a. Trail Smelter Case (United States v. Canada), 3 R.I.A.A. 1905 (1941), p. 1965; Corfu Channel Case (United King-
dom v. Albania) (Merits) 1949 I.C.J. 4 (9 Apr.), para. 22; and Legality of the Threat or Use of Nuclear Weapons, Advisory
Opinion, 1996 I.C.J. 226 (8 July), para. 29
127e.g. E/C.12/2011/1 (Statement on the obligations of States parties regarding the corporate sector and economic, social
and cultural rights), paras. 5-6; 2 E/C.12/2002/11 (General Comment No. 15 (2002): The right to water (arts. 11 and 12)),
paras. 31, 33; E/C.12/GC/18 (General Comment No. 18 (2006): The right to work (art. 6)), para. 52; E/C.12/GC/19 (Gen-
eral Comment No. 19 (2008): The right to social security (art. 9)), para. 54; E/C.1/GC/23 (General Comment No. 23
(2016)): on the right to just and favourable conditions of work, para. 70,33
rights under the ICCPR shall not be jeopardized by extraterritorial activities of corporations that fall
within its jurisdiction128.
There is no doubt that the ratione loci scope of the proposed treaty must be further clarified
and a consensus must be reached in order for this treaty attempt to have hopes of becoming a reality. It
is however important to point out, that the extraterritorial implications of corporate activities and the
need of a binding regulation have already found their way in domestic and regional legislations, creat-
ing a precedent that may potentially lead to the progressive development of international regula-
tions129.
4.2 Bridging the accountability gap
The most important thing that the new treaty proposal brings to the table in the struggle to-
wards international corporate accountability, is the establishment of binding international obligations.
One cannot even hope to talk about issues such as accountability and access to remedy without a prior
existing set of binding obligations. Some authors argue that, even though the introduction of norms in
hard law treaty documents makes these more specific, it may also deprive them from their effi-
ciency130. The legalization of a norm according to S. Percy may narrow its application scope and also
delegitimize the norm in case this stays unenforced. This, however, is an inherent risk in each and ev-
ery legislation process. Even though states and corporations may choose not to abide by a binding
norm, they can equally and even easier choose to disregard any number of non-binding recommenda-
tions.
128HRC Yassin et al v. Canada decision as quoted by Prof. O. De Schutter in Panel 3 of the 3rd Session of Open-ended In-
tergovernmental Working Group on Transnational Corporations on October 24th 2017, whole webcast can be found online
at: http://webtv.un.org/search/panel-3-general-obligations-3rd-session-of-open-ended-intergovernmental-work-
ing-group-on-transnational-corporations/5623746877001/?term=3rd%20Session%20of%20Open-ended%20Intergovern-
mental%20Working%20Group%20on%20Transnational%20Corporations&sort=date&page=3 at 1:15:00
129Most notable examples being: UK's Modern Slavery Act, French Due diligence law of 2017, EU directive 2014/95 of
22 October 2014 on disclosure of non-financial and diversity information by certain large undertakings and groups; Cali-
fornia Transparency in Supply Chains Act of 2010
130 Sarah V. Percy, Mercenaries: Strong Norm, Weak Law, International Organization vol. 61, issue 2, 2007, pp.367-39734
Several authors voice concerns about the ability of a hard law treaty to adapt to a constantly
changing international corporate environment131. This too however raises the question of a possible al-
ternative that can bring corporations committing human rights violations to justice, and give victims
some form of redress.
As described in the previous chapters, the contemporary legal framework that regulates corpo-
rate activities under international law is almost purely voluntary. This inevitably leads to corporate im-
punity. The elements document on the newly proposed treaty initiative does attempt to address the is-
sue of corporate accountability in Chapters 3 (General Obligations) and 9 (Mechanisms for promotion,
implementation and monitoring). Although not yet precise enough as it is only a negotiations tool, it
does include several proposals which if incorporated in a treaty will result in corporate accountability.
As explained by S. Deva and D. Bilchitz the two possible ways to establish an effective system
of corporate accountability are to either allow for extraterritorial jurisdiction, or establish an interna-
tional judicial mechanism132. As explained in the previous subchapter, enabling extraterritorial juris-
diction and cooperation on an international level is extremely controversial. However it can provide
the means to facilitate the efficiency of already existing national accountability mechanisms. Facilitat-
ing the appearance of witnesses and the international freezing of assets are just few of the possible im-
provements from such a provision133.
The most striking and perhaps most difficult to realize proposal is the potential establishment
of an international judicial mechanism on Transnational Corporations and human rights. This idea is
endorsed by a number of international lawyers seeking a centralized decision making process. Some
argue that even corporations have a lot to profit from such an institution, as it will decrease the ex-
penses they would have in a more fragmented litigation system134. The counter argument is that a cen-
tralized mechanism may not have a deterrent effect on corporate unlawful behavior, but rather give
corporations a clear understanding of “the price they must pay for any particular conduct”135. This
131A. G. C. Silva, Legal Innovations for Corporate Accountability under International Law: A Critique, Harvard Interna-
tional Law Journal, Vol. 57, available online at: http://www.harvardilj.org/wp-content/uploads/Angel_0615.pdf
132 S. Deva, D. Bilchitz (note 9), pp.14-16
133O. de Schutter, Towards a New Treaty on Business and Human Right, Business and Human Rights Journal, vol 1. issue
1, pp. 41-67, p. 65
134 Maya Steinitz, The Case for an International Court of Civil Justice, 67 STAN. L. REV. ONLINE 75 (2014)
135 Angel G. C. Silva (note 131)35
mechanism does not have to be the exclusive dispute settlement forum for each and every corporate
harm allegation. Provisions concerning prior depletion of local remedies alongside possible exceptions
are included in a large number of international tribunals.
S. Espinoza argues that a potential extension of human rights law to corporations does not suf-
fice to bridge the existing lack in accountability, as the enforcement of obligations is almost entirely
reliant on political will and state machinery136. However, she also acknowledges that the very same
problem also applies on international and national criminal law. The objection of implementation and
enforceability is very common in every area of public international law. Despite this fact, treaties are
constantly being drafted and issues are constantly being regulated. As the world evolves new problems
are surfacing and old problems change. Multinational corporations are a prominent example of this
change. It is therefore submitted that the law must also undergo some changes. Legal problems require
legal solutions, however hard these are to achieve. This is perhaps the most important contribution of
the current treaty initiative.
136S. A. Espinoza, Should International Human Rights Law Be Extended to Apply to Multinational Corporations and
Other Business Entities?, Phd Thesis, University College London, 2014, available online at:
http://discovery.ucl.ac.uk/1460404/1/PhD%20S%20A%20Espinoza.pdf , p. 24136
5. Chapter - Concluding observations
The aforementioned analysis serves an important goal. This is to address the problematic issue
of how MNC should be held accountable for activities that harm human rights under international law.
In order to do so, it seeks to clarify the status of MNCs' regulation under international law and its ef-
fectiveness. As indicated in the previous chapters some of the reasons that hindered almost every pre-
vious attempt to enact legislation on this topic are still in existence. As is the lack of rules to address
issues like international corporate violations. That being said, many things have also changed. In-
creased public awareness through the internet, immediate access to information around the globe and
a huge number of NGOs resulted in a gradual shift of the attitude of states and even corporations. The
change of attitude alone does not mean that the MNCs' regulation under international law is set in
stone. However, the active participation by almost all stakeholders in the 3rd session of the negotia-
tions towards a new binding to corporations international instrument in October 2017 calls for an opti-
mistic view of the future. Negotiations are progressing and as indicated in the previous chapters many
“shortcomings” and controversial issues that did not allow consensus previously are being addressed.
What is even more important is that despite the apparent “failure” of previous treaty-drafting attempts,
UN bodies show in practice their decision to remain seized of the matter.
The new treaty initiative negotiations are still in progress. It would be rushed and arbitrary to
say it provides a panacea for all the issues concerning businesses and human rights. It is, however,
submitted that the documents presented in the 3rd round of the negotiations on October 2017 are in-
deed a step forward from all previous attempts. The documents presented and the opinions voiced do
show much concern about corporations finally being able to be held internationally accountable for
their actions. Whether or not these opinions will be translated into a final treaty remains to be seen,
but the signs are submitted to be moderately optimistic.
37
Bibliography
a) Literature
A. Clapham, Human rights obligations of Non-State Actors, Oxford University Press, 2006;
C. Rose, International Anti- Corruption Norms: Their creation and influence on domestic, Oxford Uni-
versity Press, 2015
Cynthia D. Wallace, Legal Control of the Multinational Enterprise, Nijhoff, 1983
Dorothée Baumann-Pauly & Justine Nolan (eds), Business and Human Rights: From Principles to
Practice, United Kingdom, 2016
F. Vaneste, Relationship between International Human Rights Law and General International Law: As-
sessing the Specialty Claims of International Human Rights Law, University of Leuven, PhD Thesis,
2008
H. Hannum, S. James Anaya and D. L. Shelton, International Human Rights: Problems of Law, Policy
and Practice, 5th edition, 2011
Lee McConell, Extracting Accountability from Non-state Actors in International Law: Assessing the
Scope for Direct Regulation, Routledge, 2016
M. McConville and W. Chui, Research Methods for Law, Edinburgh University Press, 2007
M.D. Evans (ed.), International Law, Oxford University Press, 2014
Malcolm Langford, Martin Scheinin, Wouter Vandenhole and Willem van Genugten (eds.) Global Jus-
tice, State Duties: The Extra-Territorial Scope of Economic, Social and Cultural Rights in Interna-
tional Law, Cambridge University Press, 2012
P. Thornberry, International Law and the rights of minorities, Clarendon Press, 1991
S. A. Espinoza, Should International Human Rights Law Be Extended to Apply to Multinational Cor-
porations and Other Business Entities?, Phd Thesis, University College London, 2014, available on-
line at: http://discovery.ucl.ac.uk/1460404/1/PhD%20S%20A%20Espinoza.pdf
S. Deva and D. Bilchitz, Human Rights obligations of Business: Beyond Corporate Responsibility to
respect?, Cambridge University Press, 2013
38
S. Deva, D. Bilchitz (eds), Building a Treaty on Business and Human Rights: Context and Contours,
Cambridge University Press, 2017
W. Friedman, The Changing Structure of International Law, London, Stevens & Sons, 1964
W. Mattli & N. Woods (eds.), The Politics of Global Regulation, pp. 1- 43, 2009,
Walter Mattli and Ngaire Woods (eds) The Politics of Global Regulation, Princeton University Press,
2009
b) Articles
A. G. C. Silva, Legal Innovations for Corporate Accountability under International Law: A Critique,
Harvard International Law Journal, Vol. 57, available online at:
http://www.harvardilj.org/wp-content/uploads/Angel_0615.pdf
C. Hillemanns, U.N. Norms on the Responsibilities of Transnational Corporations and Other Business
Enterprises with regard to Human Rights, German L.J. , vol. 4, p. 1065, 2003
C. Vasquez, Direct vs. Indirect Obligations of Corporations Under International Law, 43 Colum. J.
Transnat’ L. 927-959, 2005
Carlos M Vázquez, ‘Direct vs Indirect Obligations of Corporations under International Law’ (2005)
43 Columbia Journal of Transnational Law 927
Countess P. Jeffries, Regulation of Transfer of Technology: An Evaluation of the UNCTAD Code of
Conduct, 18 international law journal, 1977
D. Kinley and J. Tadaki, From Talk to Walk: The Emergence of Human Rights Responsibilities for
Corporations at International Law. Virginia Journal of International Law, Vol. 44, No. 4, pp. 931-1023,
2004
D. Weissbrod and m. Kruger, Norms on the Responsibilities of Transnational Corporations and Other
Business Corporations and Other Business Enterprises with regard to human rights, American Journal
of international law, 97, 2003, p. 901
F. Coomans and M. Kamminga, Extraterritorial Application of Human Rights Treaties, Antwerp-Ox-
ford, Intersentia, 2004
39
Gehl Sampath Padmashree and Roffe Pedro, Unpacking the International Technology Transfer De-
bate: Fifty Years and Beyond, ICTSD Programme on Innovation, Technology and Intellectual Prop-
erty, Working Paper, International Centre for Trade and Sustainable Development, Geneva, 2012,
available online at: https://www.ictsd.org/downloads/2012/07/unpacking-the-international-technol-
ogy-transfer-debate-fifty-years-and-beyond.pdf
J. Braithwaite and P. Drahos, Global Business Regulation, Cambridge University Press, 2000, avail-
able online at: http://johnbraithwaite.com/wp-content/uploads/2016/06/Global-Business-Regula-
tion.pdf
J. Brunee, International legal accountability through the lens of state responsibility, in 36 Netherlands
Yearbook of International Law 2007
J. D. Kurek, Supranational Regulation of Transnational Corporations: The UNCTAD and CTC Efforts,
2 Mich. YBI Legal Stud., p 268
J. H. Knox, The Ruggie Rules: Applying Human Rights Law to Corporations (August 16, 2011), (R.
Mares ed., 2012), The UN Guiding Principles on Business and Human Rights, Wake Forest Univ. Le-
gal Studies Paper No. 1916664, available online at: https://papers.ssrn.com/sol3/papers.cfm?
abstract_id=1916664
J. Paust, The Other Side of Right: Private Duties Under Human Rights Law, 5 HARv. HUM. RTS. J.
51, 1992
J. Ruggie, ‘Quo Vadis? Unsolicited Advice to Business and Human Rights Treaty Sponsors’ (9 Sep-
tember 2014), available at http://www.ihrb.org/commentary/quo-vadis-unsolicited-advice-busi-
ness.html
J. Ruggie, A UN Business and Human Rights Treaty? An Issues Brief by John G. Ruggie, 28 January
2014, available online at: https://sites.hks.harvard.edu/m-rcbg/CSRI/UNBusinessandHumanRight-
sTreaty.pdf
J. Ruggie, Business and human rights: The evolving Agenda, Corporate Social Responsibility Initia-
tive, Working Paper No. 31, JFK School of Government and Harvard University, 2007, p. 4, available
online at: https://sites.hks.harvard.edu/m-rcbg/CSRI/publications/workingpaper_38_ruggie.pdf ;
J. Ruggie, Incorporating human rights: Lessons learned and next steps, in Baumann and Nolan Busi-
ness and Human Rights: From Principles to Practice, United Kingdom, 2016
40
J. Ruggie, Life in the Global Public Domain: Response to Commentaries on the UN Guiding Princi-
ples and the Proposed Treaty on Business and Human Rights (January 23, 2015). Available online at:
https://ssrn.com/abstract=2554726
John Mikler (ed), The Handbook of Global Companies, Wiley-Blackwell, 2013, vol. 1
K. Sauvant, Karl, ”The Negotiations of the United Nations Code of Conduct on Transnational Corpo-
rations: Experience and Lessons Learned”, The Journal of World Investment & Trade, Vol 16, Issue 1,
2015
K. Weilert, Taming the Untamable: Transnational Corporations in UN Law and Practice, Bogdandy
and Wolfrum (eds.), Max Planck UNYB 14 , Brill, 2010
L. Backer, Multinational Corporations, Transnational Law: The United Nation's Norms on the Re-
sponsibilities of Transnational Corporations as Harbinger of Corporate Responsibility in International
Law, Columbia Human Rights Law Review, Vol. 37, 2005, p.140, at footnote 186, available online at:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=695641
M. Fasciglione, Towards a Human Rights Treaty on Transnational Corporations and Other Business
Enterprises: The First Session of the UN Open-ended Intergovernmental Working Group, Diritti
umani e diritto internazionale. Vol 9, No. 3, pp. 673-680
Miretski and Bachmann, Global Business and Human Rights - The UN 'Norms on the Responsibility
of Transnational Corporations and Other Business Enterprises with Regard to Human Rights' - A Re-
quiem (November 12, 2011), Deakin Law Review, Vol. 17, No. 1, 2012, p. 9, available online at:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1958537
Netherlands Yearbook of International Law, vol. 36, pp. 3-20
O. de Schutter, Towards a New Treaty on Business and Human Right, Business and Human Rights
Journal, vol 1. issue 1, pp. 41-67
P. A. Nollkaemper, P. A., & D. Curtin, Conceptualizing Accountability in International and European
Law.
Presentation of the Chair of the Working Group, Sten Niklasson, to the eighth session of the Commis-
sion on Transnational Corporations, as quoted in United Nations Commission on Transnational Corpo-
rations: Information Paper on the Negotiations to complete the Code of Conduct on Transnational
Corporations, UN Doc. E/C.10/1983/S/2 of January 4th 1983, reproduced in 22 ILM 177 (1983), par.
2441
R. Grant and R. Keohane, Accountability and Abuses of Power in World Politics, 99 American Politi-
cal Science Review, 2005, pp. 29-43
R. Peavler, Sarbanes-Oxley Act and the Enron Scandal - Why Are They Important?, October 18th
2016, available online at:
https://www.thebalance.com/sarbanes-oxley-act-and-the-enron-scandal-393497
S V. .Percy, Mercenaries: Strong Norm, Weak Law, International Organization vol. 61, issue 2, 2007,
pp.367-397
S. Deva, UN’s Human Rights Norms for Transnational Corporations and Other Business Enterprises:
An Imperfect Step in the Right Direction’ (2004), 10 ILSA Journal of International & Comparative
Law, p. 49
S. Griffin, United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control
of Restrictive Business Practices, General Assembly Resolution 35/63 (1980)., 11 Ga. J. Int’l &
Comp. L. 709, 1981
S. R. Ratner, Corporations and Human Rights: A Theory of Legal Responsibility, 111YALE L.J. 443,
2001
S.I. Skogly, “Extraterritoriality: Universal Human Rights without Universal Obligations?”, in Re-
search Handbook on International Human Rights Law, S. Joseph, A. Mcbeth (eds), Cheltenham, 2010,
pp. 71-96
Stephen J. Kobrin, ‘Expropriation as an Attempt to Control Foreign Firms in LDCs: Trends from 1960
to 1979’ (1984) 28 International Studies Quarterly 329-334
T. Fredriksson, 40 years of UNCTAD reasearch on FDI, Transnational Corporations Vol. 12 No.3,
2003, available online at: http://unctad.org/en/docs/iteiit35v12n3a1_en.pdf
T. Meron, “Extraterritoriality of Human Rights Treaties”, in American Journal of International Law
1995, pp. 78-82
Ton J. M. Zuijdwijk, The UNCTAD Code of Conduct on the Transfer of Technology, McGill Law
Journal 24, 1978, p. 566
U. Baxi, ‘Market Fundamentalisms: Business Ethics at the Altar of Human Rights’ (2005) 5(1) Human
Rights Law Review 1
42
UNCTAD, The Possibility and Feasibility of an International Code of Conduct on Transfer of Tech-
nology, U. N. Doc. TD/B/AC.11/22; GE.74- 46032 (1974)
W. Bradley Wendel, “Essay Explanation in Legal Scholarship: The Inferential Structure of Doctrinal
Legal Analysis” (2010-2011) 96 Cornell Law Review 1035
c) Websites and other sources
Chair-Rapporteur Guillaume Long, Draft report on the third session of the open-ended intergovern-
mental working group on transnational corporations and other business enterprises with respect to hu-
man rights, available online at: http://www.ohchr.org/Documents/HRBodies/HRCouncil/WG-
TransCorp/Session3/DraftReportThirdSession.docx
E. Gosden, Why Shell's Bodo oil spill still hasn't been cleaned up, The Telegraph, January 8th 2017, at:
http://www.telegraph.co.uk/business/2017/01/08/yet-clean-nigerian-oil-spills-two-years-compensa-
tion-deal/
Joint views of the IOE and ICC on the draft “Norms on the responsibilities of transnational corpora-
tions and other business enterprises with regard to human rights”, available online at: https://busi-
ness-humanrights.org/sites/default/files/reports-and-materials/IOE-ICC-views-UN-norms-March-2004
.doc
Panel 2: Scope of Application (Cont'd) - 3rd Session of Open-ended Intergovernmental Working
Group on Transnational Corporations available online at:
http://webtv.un.org/search/panel-2-scope-of-application-contd-3rd-session-of-open-ended-intergovern-
mental-working-group-on-transnational-corporations/5623214837001/?term=3rd%20Session%20of
%20Open-ended%20Intergovernmental%20Working%20Group%20on%20Transnational%20Corpo-
rations&sort=date&page=3
Regarding Chevron's activities and the judicial proceedings the followed: https://business-humanright-
s.org/en/texacochevron-lawsuits-re-ecuador
Regarding the activities of Total and the belgian Court's dismissal of the lawsuit against the corpora-
tion: https://business-humanrights.org/en/total-lawsuit-in-belgium-re-myanmar
43
Statement of Leonard Leo, member of the Delegation of USA, at the Commission on Human Rights
on April 20th 2005, as partially quoted in “Digest of United States Practice in International Law”, pp.
328,329, available online at: https://www.state.gov/documents/organization/138677.pdf
The New York Times, Shell game in Nigeria, December the 3rd 1995 available online at:
http://www.nytimes.com/1995/12/03/opinion/shell-game-in-nigeria.html
United Nations, World Investment Report 1992: Transnational Corporations as Engines of Growth
(New York: United Nations 1992)
ANNEX
a) Table of international and national Jurisprudense
Kiobel et al. v. Royal Dutch Petroleum Company, US Ct. of Appeals 2nd Circuit, 621 F. 3rd 111, Deci-
sion of the 17th September 2010
Report of the Panel on Mexico – Measures affecting Telecommunications Services, WT/DS204/R of
April 2nd 2004, available online at: https://www.wto.org/english/tratop_e/dispu_e/204r_e.pdf
Wiwa v. Royal Dutch Petroleum Co., US Ct. of Appeals 2nd Cicuit, 226 F. 3rd 88, Summary issued on
June 3rd 2009
b) Table of international Treaties and other Documents
Document TD/RBP/CONF/10 of May 2nd 1980 adopted by UNGA resolution A/RES/35/63 of De-
cember 5th 1980, available online at: http://unctad.org/en/docs/tdrbpconf10r2.en.pdf
ECOSOC resolution 1993/49 of 29 July 1993, para. 14, available online at: https://docu-
ments-dds-ny.un.org/doc/UNDOC/GEN/N94/932/99/PDF/N9493299.pdf?OpenElement
Human Rights Council, ‘Elaboration of an internationally legally binding instrument on transnational
corporations and other business enterprises with respect to human rights’ A/HRC/26/L.22/Rev.1 (25
June 2014
44
Human Rights Council, ‘Elaboration of an internationally legally binding instrument on transnational
corporations and other business enterprises with respect to human rights’ A/HRC/26/L.22/Rev.1 (25
June 2014
ILC Statute, available online at: http://legal.un.org/ilc/texts/instruments/english/statute/statute.pdf
Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Re-
gard to Human Rights, U.N. Doc. E/CN.4/Sub.2/2003/12/Rev.2 (2003)
OECD's Code of Liberalization of Capital Movements of 1961, which was later reviewed in 2016,
available online at: http://www.oecd.org/daf/inv/investment-policy/Code-Capital-Movements-EN.pdf;
International Labour Organization, Tripartite Declaration of Principles Concerning Multinational En-
terprises and Social Policy, adopted by the Governing Body of the ILO on 16 November 1977, avail-
able: http://www.ilo.org/public/english/employment/multi/download/english.pdf
Report of the Economic and Social Council: Note by the Secretary-General, A/47/446 of 15 Septem-
ber 1992
Report of the Seventh United Nations Conference to Review All Aspects of the Set of Multilaterally
Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, available on-
line at: http://unctad.org/meetings/en/SessionalDocuments/tdrbpconf8d11_en.pdf
Rome Statute of the International Criminal Court is available online at:
https://www.icc-cpi.int/nr/rdonlyres/ea9aeff7-5752-4f84-be94-0a655eb30e16/0/rome_statute_eng-
lish.pdf
The “draft elements” paper on the newly proposed corporations and human rights treaty is available
online at: http://www.ohchr.org/Documents/HRBodies/HRCouncil/WGTransCorp/Session3/Legally-
BindingInstrumentTNCs_OBEs.pdf
The proposal of the french law of “The duty of vigilance of parent and subsidiary companies” is avail-
able online at: http://www.assemblee-nationale.fr/14/ta/ta0924.asp
The text of the 4 Geneva Conventions of 1949 including common article 3 can be found online at:
https://ihl-databases.icrc.org/applic/ihl/ihl.nsf/vwTreaties1949.xsp
Treaty of Friendship, Commerce and Navigation Between the United States of America and Japan,
signed 2 April 1953, 4 U.S.T. 2063, T.I.A.S. No. 2863
45
UNCTAD, "Draft International Code of Conduct on the Transfer of Technology as of 5 June 1985"
(TD/CODE/TECHNOLOGY TRANSFER/47, 1985)
UNCTAD's Conference resolution 73 (III) of 19 May 1972 as quoted in “The history of UNCTAD
1964-1984”, available online at: http://unctad.org/en/Docs/osg286_en.pdf
UNHRC, Report of the Special Representative of the Secretary General on the issue of human rights
and transnational corporations and other business enterprises, John Ruggie, Doc. A/HRC/17/31
United Kingdom’s Modern Slavery Act is available online at:
http://www.legislation.gov.uk/ukpga/2015/30/contents/enacted;
Wet zorgplicht kinderabeid (“Child Labor Due Diligence Law”), No. 34 506 (2016-2017) text avail-
able at:
https://www.eerstekamer.nl/behandeling/20170207/gewijzigd_voorstel_van_wet/document3/f=/vk-
bkk8pud2zt.pdf
46
