NYU School of Law

Global Law Working Papers
2005 Series

GLWP 01/05

Symposium: Transnational Corporations and Human Rights

Introduction

• Olivier De Schutter "The Challenge of Imposing Human Rights Norms on Corporate Actors"
  
  This series of papers offers a broad overview of the questions raised by the imposition of human rights obligations on transnational corporations. The debate on this question is hardly new. The papers collected in this volume deal with the most important issues which the Special Representative of the UN Secretary General will be facing in his duties, on which he is to report back to the UN Commission on Human Rights in 2007. The series can be divided into four main issues: "The Responsibilities of States in Controlling Transnational Corporations," "Self-regulation by Transnational Corporations," "Imposing Direct Obligations on Transnational Corporations under International Law," and "Incentivizing Socially Responsible Corporate Conduct." The symposium concludes that it is crucial that, in the course of identifying the human rights of corporations, the primary responsibility of States under the current international law of human rights be recalled and emphasized. An improved regulation of transnational corporations by initiatives adopted at a global level should not be seen as a substitute for the obligations of States towards human rights: such initiatives should be seen, rather, as complementing such obligations, and as facilitating the fulfillment by all States of their human rights obligations.

  These papers were prepared and discussed in the context of the seminar entitled Transnational Corporations and Human Rights, taught by Professor Olivier De Schutter at New York University School of Law during the Fall Term of 2004.

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  Email olivier.deschutter@cpdr.ucl.ac.be

Part I: The Responsibilities of States in Controlling Transnational Corporations

• Andrew Wilson "Beyond Unocal: Conceptual Problems in Using International Norms to Hold Transnational Corporations Liable in the Alien Tort Claims Act"
  
  In a field in which there is a critical lack of genuine accountability, the Alien Tort Claims Act may represent something of an oasis. Or perhaps not. The time is approaching when the Supreme Court will hear an ATCA case against a transnational corporation; it will then be faced with the choice whether to "gut" the statute vis-à-vis corporate defendants. In this paper I examine some conceptual issues involved in using the Act against a corporation. The approach taken is resolutely anchored in public international law, as I argue the statute requires. I focus on questions arising at the stage of 'attachment' of liability to the defendant: whether corporations might be able to violate norms of international law relevant to ATCA acting alone; whether they might be capable of so doing by means of participation in the wrongful acts of a State; and in what circumstances responsibility might percolate up through a corporate group to the ultimate parent (which, presumably, has the deepest pockets and is most likely to be subject to the in personam jurisdiction of the U.S. federal courts). Finally, I tackle the policy aspects of the ATCA as a tool against corporate misconduct in the field of human rights. The eventual conclusion is that ATCA has the potential to be useful against corporations, albeit in fairly specific circumstances; that for the sake of its political credibility and hence its preservation the surrounding jurisprudence must be clarified as a matter of urgency; and that the way to achieve this is to opt decisively for an honestly international law-based approach.

  
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  Email aj_wilson82@hotmail.com

• Ryan Suda "The Effect of Bilateral Investment Treaties on Human Rights Enforcement and Realization"
  
  Bilateral investment treaties (BITs) comprise a legal regime that is widespread and growing, but one that has attracted little public notoriety. The treaties, which grant strong protections to investors of either state party who are operating in the territory of the other party, may impinge upon human rights enforcement and realization in several ways. This paper surveys each of the nodes of intersection before using a recent arbitration as a case study to demonstrate how a state could aver to a human rights obligation as a defense to an investor claim in a BIT arbitration. The analysis brings home the need for the investment treaty regime to be reformed to take better account of the human rights regime, ameliorating situations in which states face conflicting international legal obligations under the two regimes.

  
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  Email ryan.suda@nyu.edu

• Chu Yun Juliana Nam "Competing for FDI through the Creation of Export Processing Zones: The Impact on Human Rights"
  
  Despite the lack of data supporting the hypothesis that Export Processing Zones have a depressive influence on the observance of human rights norms in host States, there has been a great attention paid to this issue. This paper considers how international law may regulate the use of EPZs by host States. The paper argues that the 1998 ILO Declaration on Fundamental Principles and Rights at Work may provide the starting point for formulating a rules-based system that regulates how States use EPZs. The paper then explores the potential for the World Trade Organization and the International Labor Organization to conceive such a system, concluding that at this stage, the ILO remains as the more appropriate forum to deal with such issues.

  
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  Email cyn204@nyu.edu

• Ana A. Piquer "NAALC: An Effective Compromise?"
  
  The North American Agreement on Labor Cooperation (NAALC), a side agreement to the 1992 North American Free Trade Agreement (NAFTA), was a "second-best" compromise, between the possibility of harmonization of labor standards of the NAFTA countries, and not linking NAFTA to labor issues at all. The paper attempts to evaluate whether this compromise was effective, reviewing the main arguments surrounding the NAALC model as well as empirical studies. The ultimate question is if the workers are "better off" thanks to the NAALC. The paper concludes that there is not a clear answer to that question, which should be of concern since the model has been repeated in several bilateral FTAs and is proposed to be used in the FTAA.

  
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  Email ana.piquer@nyu.edu

Part II: Self-regulation by Transnational Corporations

• Fiona McLeay "Corporate Codes of Conduct and the Human Rights Accountability of Transnational Corporations--A Small Piece of a Large Puzzle"
  
  The cross border operations of businesses are now conducted under heightened public scrutiny. This has led in turn to calls for transnational corporations ("TNCs") to be held accountable for human rights abuses associated with their operations. A variety of mechanisms have been proposed to achieve this. This paper focuses on one of these - individual company codes of conduct - and considers the efficacy of such codes as a method of involving TNCs in the promotion, protection and realization of human rights.  It looks in more detail at the operation of the codes of conduct of several TNCs operating in China and reviews the benefits and limitations of codes, particularly as a means of protecting and realizing labor rights.

  
  While acknowledging their limitations, the paper recognizes a small but important role for codes in promoting and realizing these rights. It identifies ways in which their implementation can have a direct positive impact on the human rights of workers. It also discusses indirect benefits which are possible as the culture of companies is improved and awareness about human rights is raised among both workers and countries in the developing world.  It concludes that codes should be encouraged with a view to maximizing these benefits and for their value as practical examples of the way in which human rights norms can be integrated into business activity. However, codes should not be seen as a panacea for the complex problem of human rights abuses which are connected with the activities of TNCs in the developing world. The use of codes should not be encouraged at the expense of other mechanisms for remedying these problems, including taking account of the inequities inherent in the process of globalization itself.

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  Email fmcleay@claytonutz.com

• Lisa Rudikoff "International Framework Agreements: A Collaborative Paradigm for Labor Relations"
  
  This paper examines the recent development of international framework agreements (IFAs) negotiated between global unions and transnational corporations, which may be seen as illustrative of the emergence of a new paradigm in the regulation of labor rights in the era of globalization. In the new paradigm, adequate regulation depends on involving a variety of actors in voluntary initiatives, both at the local and at the global level. This paper will discuss the promise that IFAs have for preventing the risk of abusive practices in the workplace. Part I will describe the new collaborative paradigm for labor relations which IFAs exhibit. Part II will define IFAs and discuss their brief history.  Part III will explore the theoretical underpinnings behind the agreements, placing them further within the context of the collaborative paradigm. Part IV will consider several IFAs that have been tested, evaluating the degree to which they have operated successfully in practice. Finally, Part V will identify the problems that continue to plague these agreements. These agreements, the paper argues, should be seen as a way of building partnerships, developing corporate social awareness and, eventually, increasing accountability for labor rights in the long term.

  
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  Email lisa.rudikoff@nyu.edu

Part III: Imposing Direct Obligations on Transnational Corporations under International Law

• Asimina-Manto Papaioannou "The Illegal Exploitation of Natural Resources in the Democratic Republic of Congo: A Case Study on Corporate Complicity in Human Rights Abuses"
  
  The focus of this paper is on the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo that was established by the United Nations Security Council in order to examine the link between the plunder of the country's lucrative resources and the continuation of the conflict. Emphasis is placed on its pronouncements with regard to the involvement of corporations in the area, while the paper also proceeds into an evaluation of the Panel's working methods and results. Reference is also made to the way the governments of the countries in which the corporations involved are registered followed up on the Panel's findings.

  
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  Email amp424@nyu.edu

• Cristina Chiomenti "Corporations and the International Criminal Court"
  
  Under the present Statute of the International Criminal Court (ICC) legal persons are not included in its jurisdiction. However, national and international legislation increasingly contemplates the criminal liability of corporations; and the involvement of corporations in ICC crimes can be generally imagined in the form of complicity. This paper therefore explores whether the jurisdiction of the ICC should not be extended to legal persons, in order to include such most serious forms of corporate criminal conduct. A concern raised about ICC is the possible political use of the Court; in this connection it is important to observe that ICC jurisdiction is complementary to national jurisdictions, so that a State fearing the political nature of an ICC procedure, specifically one involving a domestic corporation, may have the matter tried by its national Courts. The issues concerning mens rea are the most delicate for the criminal liability of corporations. Further, complicity is a complex area in general and more specifically in respect of conduct of transnational corporations operating in foreign countries. Therefore, should the jurisdiction of ICC extend to legal persons, specific rules and criteria would be required in those two areas. An amendment of the Statute to include corporations would be consistent with the present social and legislative trend but will not be easy considering the complexity of the debate and the high majorities required for such amendments. ICC will be in any case a deterrent against criminal conduct of corporations.

  
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  Email cc1705@nyu.edu

• Jacob Gelfand "The Lack of Enforcement in the UN Draft Norms: Benefit or Disadvantage?"
  
  On 12 August 2003, the UN Sub-Commission for the Promotion and Protection of Human Rights formally adopted the "Draft Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights." Two years later, there is still complete uncertainty as to whether these Norms will form the basis for a legally binding instrument, or which monitoring mechanisms will be set up in order to ensure that they are complied with by the actors, both State actors and non-State actors, to whom they are addressed. This chapter examines the potential of these Norms, and the different directions the future debate on their implementation and monitoring may take.

  
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  Email jgg220@nyu.edu

• Ines Tofalo "Overt and Hidden Accomplices: Transnational Corporations' Range of Complicity for Human Rights Violations"
  
  This paper outlines the spectrum of situations in which transnational corporations may be said to be complicit in the human rights violations committed by the States in which they have invested. It introduces a structure and a consistent vocabulary as tools to argue distinctions across different types of complicity. The working typology of complicity ranges from direct complicity, where TNCs are committing human rights abuses jointly with State agents or are otherwise participating in those abuses, to indirect complicity, in situations where a TNC finances or provides tools facilitating violations of human rights, to incidental complicity, including the situation where complicity would result from the mere presence of the TNC in an area where human rights abuses are pandemic.

  
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  Email imt209@nyu.edu

Part IV: Incentivizing Socially Responsible Corporate Conduct

• Kathy Zeisel "The Promotion of Human Rights by Selective Public Procurement under International Trade Law"
  
  Selective public procurement seeks to ensure fulfillment of international human rights obligations by requiring companies that wish to bid on public contracts to make a specific level of commitment to protecting human rights, thereby creating an incentive for companies and their host states to improve human rights conditions. This paper examines whether states may have selective public procurement policies, not if international human rights law requires them to do so. It argues that selective public procurement policies by states are permissible under international law, including under international trade generally and the GATT/WTO agreements specifically. After providing a background on selective public procurement, including a typology of the types of selective public procurement, it examines examples of selective public procurement in practice in the United States and the European Union as well as the perspective of developing states and international institutions. It then examines the legitimacy of selective public procurement through discussion of theoretical and pragmatic justifications for and against selective public procurement. It finally proceeds to analyze the legality of selective public procurement under the law of the World Trade Organization.

  
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  Email kiz202@nyu.edu

• Terre-Eve Lawson-Remer "A Role for the IFC in Integrating Environmental & Human Rights Standards into Core Project Covenants: Case Study of the Baku-Tbilisi-Ceyhan Oil Pipeline Project"
  
  The purpose of this paper is to argue that the International Finance Corporation (the member of the World Bank Group responsible for financing private-sector projects) can and should require inclusion of commitments regarding sustainable development and human rights in the legal covenants that often govern large private-sector investments.

  The Baku-Tbilisi-Ceyhan Pipeline Project illustrates both the risk of States being pressured by foreign investors wishing to obtain government guarantees that insulate their investment from risk, and the potential role multilateral lending institutions might play in limiting the detrimental effects of such imbalance in bargaining power. In this paper I explore the relationship (or lack thereof) between the legal framework underlying the Baku-Tbilisi-Ceyhan (BTC) oil pipeline project and the International Finance Corporation, and argue that the IFC would more effectively further its purported mission of promoting environmentally and socially sustainable development by requiring this legal framework to be compatible with the effective enforcement of evolving international environmental and human rights norms.

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  Email tlr229@nyu.edu

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