BUSINESS COMMUNITIES

AND HUMAN RIGHTS

 INTRODUCTION
One of the most significant changes in the human rights debate in the
21st Century is the increased recognition of the link between business
and human rights.
In this era of privatisation of public services, private entities are
taking on roles previously held by the state.
More than half of world’s 100 largest economies are now transnational
corporations (TNCs).
Globalization has contributed to, and in part been driven by, the
increasingly central role of transnational corporations (TNCs) in the
international economic order.
The types of human rights issues in which corporations are typically
involved vary considerably, and particularly from sector to sector.
 WHAT ARE TRANSNATIONAL
CORPORATIONS?
“The term 'transnational corporation' refers to an economic
entity or a group of economic entities operating in two or
more countries, whatever the legal framework, the country of
origin or the country or countries of activity, whether its
activity be considered individually or collectively.
Transnational corporations are legal persons in private law
with multiple territorial implantations but with a single center
for strategic decision making.
 DEFINITION OF TNCs
Commission on Transnational Corporations of the ECOSOC
defines TNC’s as:
“…enterprises, irrespective of their country of origin and their
ownership, including private, public or mixed, comprising entities
in two or more countries, regardless of the legal form and fields of
activities of these entities, which operate under a system of
decision-making permitting coherent policies and a common
strategy through one or more decision-making centers, 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.”
 CORPORATE HUMAN RIGHTS ABUSES
Businesses can take various forms.
Businesses can negatively impact human rights.
Negative impacts or human rights harms linked to business
activities can be called “corporate human rights abuses”.
Business do have legal obligations under national laws, which
may relate to human rights. If a business breaches a provision of
national law, it could be legally liable and held accountable.
Businesses do not have legal obligations under international
human rights law but they should respect human rights – the
“corporate responsibility to respect human rights”.
 HUMAN RIGHTS VIOLATIONS BY THE TNCs
- damage to the environment;
- child labor;
-financial crime;
- inhuman working conditions;
- ignoring of workers’ and trade union rights;
- attacks on the rights of workers and the murder of union leaders;
- the corruption and illegal financing of political parties;
- forced labor;
- the denial of the rights of peoples;
- perversion of government functions;
- the non-observance of the precautionary principle;
- criminal neglect entailing the death of thousands of persons;
 DUTY OF THE STATE
TNCs and businesses, as organs of society, have an important role
to play in securing observance of human rights.
It is the state’s duty to protect anyone in its jurisdiction against
human rights abuses by business communities.
This includes:
1. Creating and enforcing national laws to prevent businesses from
negatively impacting your rights.
2. Investigating and punishing serious human rights abuses
committed by businesses.
3. Providing access to legal remedies for persons affected by
business activities through the courts
 INTERNATIONAL EFFORTS
Efforts have been made to formulate the responsibilities of
businesses in regard to their working environment and several
specific international standards, declarations and codes of
conduct have been adopted.
The ILO Conventions and Recommendations on labour standards;
 The ILO Declaration on Fundamental Principles and Rights at
Work;
 The UN Secretary-General’s Global Compact, 1999
 The UN Norms on the Responsibilities of Transnational
Corporations and Other Business Enterprises with regard to
Human Rights;
 INTERNATIONAL EFFORTS
The Equator Principles;
 The European Parliament Code of Conduct for European
enterprises operating in developing countries;
 The Global Reporting Initiative: Sustainability Reporting
Guidelines;
 Kimberley Process Certification Scheme;
 Millennium Development Goals;
 UN Sub-Commission Norms on business and human rights;
 Voluntary Principles on Security and Human Rights; and
 The Principles for Responsible Investment.
International standards relating to businesses’ human rights
responsibilities are also found in the following sources:
 OECD Guidelines for Multinational Enterprises
 ILO Tripartite Declaration on Multinational Enterprises and Social
Policy
 Voluntary Principles on Security and Human Rights (human rights
guidelines specifically for extractive sector companies)
 International Finance Corporation and its Human Rights Impact and
Management tool
 The UN Norms on the Responsibilities of Transnational Corporations
and Other Business Enterprises with Regard to Human Rights
(2003).
 UN Guiding Principles on Business and Human Rights (UNGPs),
2011.
 ACCOUNTABILITY OF TNCs
Accountability of TNCs is a very complex issue.
Most states are in dire need of foreign investment.
No means to ensure compliance by TNCs.
Reluctant to restrain TNCs as they fear that such companies move to
countries where less stringent human rights regulations apply.
Economic gains brought by investment by these companies
contribute to the promotion of economic and social rights and that
enjoyment of other rights will follow automatically.
At times governments actively assist companies by deploying
security forces.
In extreme cases, governments grant corporations de facto control
over territories and the repressive governments accept the funds and
materials supplied by the transnational corporations to stay in power.
 ACCOUNTABILITY OF TNCs
The complexity of the operations of transnational corporations
results in it being difficult to hold them accountable.
Companies are becoming ever more multifarious; headquartered in
one country, with shareholders in another and operating globally.
It is increasingly difficult for states to regulate their activity or to
identify who is responsible for what and where.
This leads to reluctance to regulate, and when the host-state does not
regulate the company, others, including the state of nationality, may
abstain from regulation, based on the extraterritorial nature of the
acts.