Human Rights Law & Business Essay


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Human Rights Law & Business

It has become evident in recent years that human rights violations occur not only from states, but also from various other actors such as transnational corporations (TNCs) (Habegger & Roland 2). TNCs play an important role in global economy and can use their economic capability to achieve political objectives (Habegger & Roland 2). Consequently, some TNCs may misuse their influence to the extent of violating human rights in various forms (Habegger & Roland 2). To avoid this, there have been various efforts, such as United Nations’ conventions, by the international community to make TNCs and other businesses promote and protect human rights.  To evaluate the effective enforceability of those conventions, it is essential to focus on the human rights issues that the conventions look after, and their strengths and weaknesses of in doing so.

            The number of initiatives and standards that are meant for corporate social responsibility has increased over the years (Report 4). They include international instruments such as treaties and declarations; nationally based standards such as constitutional provisions and national laws; certification schemes such as the Worldwide Responsible Apparel Production (WRAP); and voluntary initiatives that are adopted by businesses on a voluntary basis (Report 4). However, most of these initiatives except for some national standards are non-binding on companies, as they do not have any legal authority to regulate companies (Report 9).  Moreover, nationally based standards may not often control the extraterritorial acts of TNCs (Business & Human Rights 8).

            International laws can regulate corporations with regards to human rights issues in two ways, namely indirect and direct (Beyond Voluntarism 1). In contrast to various laws pertaining to companies, such as personal jury law, criminal law, company law and consumer law, International human rights law provides a universal benchmark to objectively measure the behaviour of companies (Beyond Voluntarism 3). Indirect form requires states to observe that companies respect human rights and that failure to do so result in legal consequences, whereas direct form imposes direct obligations on companies (Beyond Voluntarism 3).

            Accordingly, various conventions, which are listed below, serve in observing the compliance of TNCs with human rights issues.

  1. International Covenant on the Elimination of All Forms of Racial
  2. Discrimination (ICERD – 1965) (Beyond Voluntarism 22)
  3. International Covenant on Economic, Social and Cultural Rights (ICESCR
    1. 1966) (Beyond Voluntarism 22)        
  4. International Covenant on Civil and Political Rights (ICCPR – 1966) (Beyond Voluntarism 22)
  5. Convention on the Elimination of All Forms of Discrimination against
  6. Women (CEDAW – 1979) (Beyond Voluntarism 22)
  7. Convention against Torture and Other Cruel, Inhuman or Degrading (Beyond Voluntarism 22) (Beyond Voluntarism 22)
  8. Treatment or Punishment (CAT – 1984) (Beyond Voluntarism 22)
  9. Convention on the Rights of the Child (CRC – 989) (Beyond Voluntarism 22)
  10. International Convention on the Protection of the Rights of All Migrant

Workers and Members of Their Families (ICPRMW – 1990) (Beyond Voluntarism 22) 

            Apart from these, the International Labour Organisation (ILO) has formed many treaties to cover various rights for workers, especially concerning health and safety issues, prohibitions on forced and child labour, and the right to organize unions (Beyond Voluntarism 22).

            These conventions help in regulating companies with respect to various aspects of the human rights, such as non-discrimination; women’s rights; life, liberty and physical integrity of the person; civic freedoms; employee’s rights; child labour; slavery, forced and bonded labour; economic, social and cultural rights; and voluntarism and market forces(Beyond Voluntarism 7-34).

            Conventions require states to regulate and adjudicate corporate activities with regard to rights capable of abuse by private parties (Background Paper 2). However, these conventions do not often direct obligations to corporations.  Instead, they focus on measures to be taken by states to control any corporate abuses with respect to human rights (Background Paper 2). Nevertheless, conventions related to most recently adopted treaties such as ICRMW and ICRPD specifically mention businesses in this regard (Background Paper 3).

Different treaty bodies related to respective conventions focus more on certain types of companies and businesses than others that states need to formulate regulations to protect against abuse with respect to human rights by those companies (Background Paper 3). To be precise, states need to take necessary steps to regulate the acts of logging and property development companies in the context of resource exploitation in the lands of indigenous people (Background Paper 3). Also, focus on healthcare does not pertain only to private healthcare providers but also includes pharmaceutical and manufacturing companies that perform activities, which may threaten food and water resources (Background Paper 3). However, they need to have adequate and appropriate focus on other sectors and companies as well (Background Paper 3).

Also, conventions require that states need to have various measures to effectively regulate and adjudicate corporate activities (Background Paper 3). The measures may range from legislative measures, to prohibit abuse and proscribe certain behaviour to administrative and judicial mechanisms to effectively investigate all complaints of human rights violations by companies (Background Paper 3). However, implementation of conventions’ guidelines depends on states’ own discretion (Background Paper 3). Also, states have to provide with appropriate remedial measures in case of human rights violations (Background Paper 3).  However, there is no clarity in conventions whether regulation and adjudication should direct at respective corporate entity itself or natural persons acting on behalf of that company (Background Paper 4).  Moreover, there is no clear distinction in this regard between state and non-sate owned companies (Background Paper 4). Though some treaty bodies such as CESCR mentioned about ‘state-owned facilities’, it is not clear whether these facilities are similar to state-owned corporations (Background Paper 4).

Territorial factor is crucial in regulating transnational corporations, as the convention do not directly control except for requiring respective states to do so. In view of this, states may control the activities of companies outside the states’ national territories through a legislation called ‘prescriptive extraterritorial jurisdiction’ (Background Paper 5). However, such control needs to consider various aspects such as the nationality of offenders and/or victims, territory where the company has violated human rights, and non-intervention of other state’s internal affairs (Background Paper 4).

            From the above discussion, there are certain weaknesses for conventions that prevent them from being effectively enforceable. Conventions are mostly non-binding on companies. The system only works when the potential violators of human rights prefer it to work. Also, states can follow the guidelines of those conventions on their own discretion. In the current state, conventions do not give adequate reference to all sectors and/or companies. Moreover, there is no clarity on the roles of the states in dealing with the acts of state-owned and non-state owned companies.

As conventions do not directly influence and/or regulate transnational corporations, states cannot effectively regulate and adjudicate the acts of companies outside states’ national territories for various reasons such as trans-border limitations. Also, states may be reluctant in enforcing the spirit of conventions states when there is connivance between a state and a TNC in which the state may benefit from the failure to enforce human rights obligations (Deva 26). States may ignore human rights obligations to attract foreign investments (Deva 26). Also, some developing states may not have adequate legal and/or economic capability to enforce HR obligations (Deva 26). Furthermore, differences in legal systems among states may be another problem (Deva 26). Above all, there are no clear sanctions that are enforceable by any convention when a transnational corporation violates human rights (Deva 10).

            There are several examples to explain the ineffectiveness of conventions in enforcing human rights obligations.

            To start with, Malaysia became a signor to the UN’s CRC in 1995 (qtd. in Shirali 1). After five years, the Malaysian government started to contravene the convention with the flow of foreign investments into the country (Shirali 1). Transnational companies like Nike and Reebok were allowed to exploit Malaysia’s children, making them work for long hours, often twelve hours a day, with scheduled bathroom breaks (Shirali 1). This is in absolute contrast with Section 1 of Article 19 of the convention that reads: “State Parties shall take all appropriate legislative, administrative, social and educational measures to protect the child from all forms of physical or mental violence, injury or abuse, neglect or negligent treatment, maltreatment, or exploitation” (qtd. in Shirali 1).

            Thus, the above mentioned act was a clear violation of the convention. However, neither the Malaysian government nor respective transnational companies had to face economic or any other kind of sanctions (Shirali 1). It explains that the indirect approach of conventions, in which states are required to regulate transnational companies and other businesses at their own discretion, is not effective in protecting human rights.

            In another example of human rights violation, Banco Santander Central Hispano (SCH) is Spanish bank, which is the largest private bank in Latin America and the Caribbean (Banco Santander 1). SCH is accused as a co-responsible entity in relation to the displacement of 1.4 million local people most of who are rubber producers, nut collectors and fishermen (Banco Santander 1). Nearly 5,000 families will become landless due to the lack of any plans for their resettlement or compensation (Banco Santander 1). Also, the construction will impact the drinking water in that region, increasing the malaria cases simultaneously (Banco Santander 1).

In spite of its intensive corporate responsibility drive, SCH has failed to achieve compliance with weak international laws that regulate the actions of an international bank (Banco Santander 1). The United Nations’ ICESCR and ILO's 169 Convention lack the necessary enforceability to address the grievances of respective indigenous people (Banco Santander 1).

            To address the issues of ineffectiveness of conventions UN has proposed some ‘norms’ to protect human rights from potential violations of TNCs. Accordingly, TNCs need to be compliant with the norms and submit to monitoring by the UN and other entities on their application of the Norms (Braaten 6). Though the mechanism seems like encouraging a direct approach by making TNCs directly responsible with human rights obligations, it still lacks clarity on how to implement the mechanism and the judicial validity of it (Braaten 7). 

            To conclude, conventions are helpful in providing guideline to states on protecting and promoting human rights with regard to transnational corporations and other businesses. However, the lack of a direct approach and other related mechanisms to treat companies as directly responsible entities makes these conventions not so effective in protecting human rights.   

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