Transnational coprorations and human rights: critics of the draft norms of the Working Group

11/11/2003
Human Rights Sub-Commission

Statement on Item 4: Economic, social and cultural rights. Joint Written Statement by CETIM and AAJ.

E/CN.4/Sub.2/NGO/37

Access the statement in PDF

Draft Norms on Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights of the Working Group on Transnational Corporations and its mandate given by the Sub-Commission on the Promotion and Protection of Human Rights.

I. INTRODUCTION

In the last version of its project (April 2003) the Working Group on Transnational Corporations (TNC) has come to the following conclusions:

In comparison with the preceding version, notwithstanding the addition in the preamble of the notion of equality between men and women, a mention to bioethics and the principle of precaution in article 14, as well as the new article 17 where it is said that States should reinforce their legislation, none of the AAJ and CETIM’s proposals dealing with the structure, form or contents of the project have been taken into account.

We consider that many essential issues remain to be solved. This is the low-key result of a four-year debate, of a multidisciplinary seminar1, of the production of numerous documents, as well as of the meeting of the American Association of Jurists (AAJ) and the Europe- Third World Centre (CETIM) with the Working Group at the Wilson Palace in Geneva (United Nations High Commissioner for Human Rights) on March 6th and 7th 20032.

II. THE WORKING GROUP KEEPS ON IGNORING PROPOSALS AND OBSERVATIONS MADE BY THE AAJ AND THE CETIM WHICH ARE ESSENTIAL IF THE PROJECT IS TO COME UP WITH A SERIOUS AND COHERENT ANSWER TO THE PROBLEMS RAISED BY TNCs.

1. The project deals not only with TNCs but also with all type of businesses, a fact which weakens and distorts the Sub-Commission’s original mandate.
The proposed text should concern TNCs and “other businesses” only in so far as these “other businesses” are, de facto or de jure, subsidiaries of TNCs, even if they appear to be independent national companies.
The suppliers, licensees and subcontractors should also be covered by these draft norms in connection with their relationships with one or several TNCs in order to make TNCs assume joint and several liability for human rights violations (in particular regarding labour law) committed by their suppliers, subcontractors or licensees within the framework of the contract they have signed.

TNCs constitute a phenomenon of great magnitude and they raise specific economical, financial, legal, social and human problems. Their transnational aspect, their economic and legal flexibility, their great economic and financial power and their political and social influence are not the least important ones.
These elements constitute obstacles to an effective control of TNCs activities.
The uniqueness of TNCs explains why Sub-Commission resolution 1998/8 targeted the activities and working methods of TNCs (and not of any businesses) in relation to the enjoyment of economic, social and cultural rights as well as the right to development That resolution pointed out that the major obstacle to the exercise of those rights consists of the concentration of economic and political power in the hands of leading transnational corporations.
On the basis of this resolution, the SCHR established the Working Group and defined its mandate.
This mandate should be interpreted in the light of the proposal formulated by the SCHR to the Commission on Human Rights in 1999 concerning its principal tasks. Among these are the repercussions of globalisation, including the working methods and activities of TNCs and their relationship to human rights (see E/CN.4/Sub.2/1999/47 page 2 of 25/08/99).
This document constitutes in a sense an approval of the main orientation of resolution 1998/8.

2. In the project the notion of joint and several liability of TNCs for the human right violations committed by their branches, as well as by their suppliers, subcontractors and licensees remains absent. This liability of TNCs stems from the principle of collective liability – including by omission – for every person that takes part in any way in an incident and therefore creates a shared obligation. The basis of this principle is that any prejudice is to be made up for and that a victim can claim reparation to all people collectively responsible, to some of them and if they are not solvent, to the solvent one/s.
The principle of joint and several liability for TNCs is a major issue, considering that TNCs are used to outsource costs and risks as well as the corresponding responsibilities – which are assumed almost entirely by the suppliers, subcontractors and licensees and the branches– while TNCs make extraordinary profits3. The omission of this principle in the project empties it of its whole meaning by guaranteeing TNCs’ impunity.

3.The notion of civil and criminal liability for executives of TNCs (managers, CEO, members of the administrative board…) who –according to statutes- are empowered to take decisions on behalf of the company, still does not appear in the project.
On the contrary, the Working Group has rejected a proposal to remove from the project the liability of high-ranking employees and workers, assuming that they do not actually take the decisions but undergo them. Indeed, high-ranking employees and workers are personally responsible for their own acts before the law but cannot be held responsible for the decisions of the company. The project deals with the company’s liability not the one of individuals, except for employees who embody the company’s will like the CEO or the administrative board.

4. Despite the fact that the sub-commission and the Economic, Social and Cultural Rights Committee have recently expressed a similar opinion4 on these matters, the Working Group has ignored the following proposals:
TNCs, their suppliers, subcontractors and licensees, as well as “other businesses” (subsidiaries de jure or de facto) should acknowledge the principle of primacy of human rights and public interest over particular economic interest.

States should adopt legal measures, and others, in order to give priority to the notion of public interest, especially in the fields of health, food (including drinking water), education and housing, so as to prevent the constitution of private oligopolies and monopolies in these areas.
States should prohibit patents on any form of life and establish a legal public priority on inventions and discoveries fundamental to health.

The addition, in paragraph 10 of the last version of the project, of the sentence: “TNCs must acknowledge and respect public interest” is by no means equivalent to the previous proposal which dealt with the “primacy of public interest and human rights”.

5. The Working Group has also ignored the following proposals aimed at protecting TNCs employees and shareholders as well as their suppliers, subcontractors and licensees and their employees.

States should establish or reinforce the legal and regulatory clauses on the civil and criminal liability of the TNCs executive staff and of “other businesses” (subsidiaries de jure or de facto) as well as that of the executive staff of their suppliers, subcontractors and licensees, in all that concerns financial and commercial operations including the management of pension funds, in front of their shareholders and employees that hold shares of the enterprise pension funds and should also reinforce legislation dealing with these companies’ transparency on these matters (reports and periodic controls).

TNCs shall pay their suppliers, subcontractors and licensees reasonable prices for goods and services so as to allow them to pay their employees and workers decent wages and assure them and their families an adequate standard of living, and to permit suppliers and subcontractors to offer good working conditions, while allowing for reasonable profit margins for suppliers and subcontractors. Royalties asked by transnational corporations to their licensees should remain within reasonable limits in order to allow licensees to pay their employees and workers decent wages so as to assure them and their families an adequate standard of living, and to provide good working conditions, while, allowing for reasonable profit margins for the licensees.

6. The Working Group has omitted the following proposal:

In order to guarantee freedom of speech and the right to have access to an objective and impartial information, states should adopt legal measures, and others, to prohibit the constitution of media monopolies, as well as agreements and the formation of groups and inter-companies agreement, etc. between communication companies and industrial, financial or commercial firms.

III. OTHER PROPOSALS FROM THE AAJ AND THE CETIM IGNORED BY THE WORKING GROUP

1. Security staff employed by TNCs, their suppliers, subcontractors and licensees as well as security staff from other companies cannot work outside the site of the company for which they work. This proposal tends to avoid security staff from becoming a private militia that also work in public areas.

2. TNCs, their suppliers, subcontractors and licensees, as well as “other businesses”, are not allowed to make use of the armed and security forces of a state, nor to engage private militia.

3. TNCs must respect national and international laws that prohibit discrimination and must use affirmative action, when previewed by the law and/or in directives… The aim of this amendment is to avoid an interpretation of the project which could lead to justify that differences are established between workers only on the basis of productivity.

IV. CONCLUSION

The last version of the project contains appreciable improvements in comparison with the initial draft presented to the Working Group four years ago which had serious omissions and was characterized by a general approach of “soft” law, i.e. not compulsory for TNCs. However, as previously mentioned, several fundamental question remain to be settled.

In order to come out of the dead end, the sub-commission should adopt a resolution containing the following instructions to the Working Group:

1) Its mandate is to take care of TNCs and “other businesses” insofar as they are subsidiaries de jure or de facto of a TNC, as well as their suppliers, subcontractors and licensees in the framework of the contracts that link them to transnational companies;

2) At least the following points must be added to the project:

a) Joint and several liability of TNCs with its subsidiaries, de jure or de facto, as well as with its subcontractors, suppliers and licensees.

b) Civil and criminal liability for executives of transnational companies (managers, executives or Board of Directors) who are authorized to take decisions in the name of the enterprise;

c) The principle of primacy of human rights and public interest;

d) Protective measures for TNCs’ staff benefiting from pension funds of the company, as well as shareholders.

e) The obligation for the TNC to pay reasonable prices to their suppliers and subcontractors

f) The promotion of measures to avoid the creation of monopolies in the mass media.

g) The interdiction to security employees to have an activity outside the site of the enterprise.

h) The interdiction for enterprises to make contracts with armed and/or security forces and to engage a private militia.

i) The explicit introduction of the principle of affirmative action.

3) The liability of high-ranking employees and of workers for the activities of the enterprise which depend on decisions taken by the executive directors should be excluded from the project.

Finally the sub-commission should encourage the creation of a follow-up mechanism, which could be either a Working Group of the Commission for Human Rights dealing with TNCs – whose attributions would be similar to those of the Working Group on arbitrary detentions or of the Working Group on forced or non-voluntary disappearances- or to suggest the appointment of a Special Rapporteur.

Moreover, the sub-commission should suggest to the Committees of the international covenants on civil and political and on economic social and cultural rights that the activities of transnational companies be controlled, not only in the country of their headquarters, but also in the countries were they develop their activities5.


1) American Association of Jurists (AAJ), Europe Third-World Centre (CETIM); "The activities of TNCs and the necessity of their legal control" International multidisciplinary seminar, Celigny, Switzerland, May 4-5 2001, and Geneva, Switzerland, June 2001.
2) The members of the Working Group were invited to Geneva by the AAJ and the CETIM. Mrs Laurence André, researcher at the Catholic University of Louvain and Professor Eric David from the Université Libre de Bruxelles were also present at the meeting together with the members of the Working Group,. The AAJ and the CETIM presented an extensive document with detailed proposals to reform the project ("Proposals by the AAJ and the CETIM of modifications to the project of responsibility norms for TNCs and other companies regarding human rights")
In the document by the Working Group, the meeting of March 6th and 7th is being referred to but there is no mention about the organisations that decided, organised and financed it. This omission has not been repaired, despite it has been pointed out to the Secretary and to the members of the Working Group.
3) For instance, quite often big oil TNCs transport their oil in freighters belonging to a sort of "ghost" shipowners and thus, they avoid to undertake the liability of the frequent environmental catastrophes provoked by those boats as we recently saw with the "Prestige"
4) In its Resolution 2000/7 of 17/08/2000, the Sub-Commission on the Promotion and Protection of Human Rights has declared, among other things:
"Affirms that the right to protection of the moral and material interests resulting from any scientific, literary or artistic production of which one is the author is, in accordance with article 27, paragraph 2, of the Universal Declaration of Human Rights and article 15, paragraph 1 (c), of the International Covenant on Economic, Social and Cultural Rights, a human right, subject to limitations in the public interest; Declares, however, that since the implementation of the TRIPS Agreement does not adequately reflect the fundamental nature and indivisibility of all human rights, including the right of everyone to enjoy the benefits of scientific progress and its applications, the right to health, the right to food and the right to self-determination, there are apparent conflicts between the intellectual property rights regime embodied in the TRIPS Agreement, on the one hand, and international human rights law, on the other;
Reminds all Governments of the primacy of human rights obligations over economic policies and agreements”;
The Economic, Social and Cultural Rights Committee declares: "(...) In opposition to human rights, intellectual property rights are in general provisory and can be removed ,or conceded to someone else. If intellectual property rights can be conceded, have a limited duration, can be negotiated, limited or lost; human rights on the contrary are everlasting and constitute the expression of fundamental prerogatives that belong to the human being (..)"
(Paragraph 6 of the Declaration of the Economic, Social and Cultural Rights Committee on " Human rights and intellectual propriety", E/C.12/2001/15 adopted on December 14th 2001.
5)The comparative texts of the penultimate and final (April 2003) versions of the project of the Working Group, as well as the observations and the detailed amendment proposals made by the AAJ and the CETIM, are to be found in the document “Proposals of amendments by the AAJ and the CETIM to the “project on responsibility norms concerning human rights matters for transnational companies” (April 2003 version), elaborated by the Working Group dealing with the working methods and activities of transnational companies of the Sub-Commission for the promotion and protection of human rights of the UN, Geneva, July 2003.

Categories Campaigns Human Rights Statements Transnational Corporations
Tags