Global Policy Forum

HR Body to Scrutinise TNC Activities


By Gustavo Capdevila

Inter Press Service
August 3, 2000

The United Nations (UN) set up a new working group Tuesday to evaluate the effects of transnational business activity on human rights. El-Hadji Guisse, the working group's president, said transnational corporations have a presence in the vital sectors of the world economy and "are thus in a position to block any moves towards the respect for and protection of human rights."

[Several Human Rights and Development NGOs have been lobbying the Human Rights Commission and the sub-commission to bring the activities of the TNCs under UN scrutiny. The setting up of a working group brings a balance into the UN system which over the last decade or so has been promoting the TNCs. While in the 1970s, in the aftermath of the coup in Chile and involvement of TNCs in the coup, as well as in the internal affairs of several developing countries, the UN set up a Centre for Transnationals to focus on their behaviour. It began with efforts to establish a code of conduct for TNCs, but by late 1980s and early 1990s, as the neo-liberal ideological wave swept through the world, and the IMF and World Bank began pushing the 'Washington Consensus' on the developing world, the UNCTC gradually became an advocate of TNCs. After transfer as a unit to UNCTAD, the division has been an advocate of TNCs and their investment activities. It was to correct these tendencies, that NGOs began attempts to get the UN's Human Rights activities to focus on TNCs.]

In a preparatory study for the working group, Guisse, a magistrate from Senegal, recommended that nations create laws which "criminalise activities by transnational corporations that violate economic, social and cultural rights." The biggest problem is getting transnationals to submit to national or international law, stated Guisse. The new working group, which functions within the UN Subcommission on Human Rights, must establish the level of compatibility between international investment agreements and human rights law.

Asbjorn Eide, a Norwegian and one of the 26 independent members of the Subcommission on Human Rights, remarked with satisfaction on a group of industrialised nations' failed attempt to reach a Multilateral Agreement on Investment (MAI), though he predicted "this issue will resurface." The member-countries of the Organisation for Economic Co-operation and Development (OECD) attempted to create the MAI, but were frustrated in 1998 by "the reaction of human rights organisations," said Eide. Halima Embarek Warzazi, working group expert from Morocco, interpreted the OECD initiative as "an attempt by transnationals to gain free access to our countries." Among the traits of the transnationals, Guisse cited "conducting activities in several countries, the pooling of resources and the joint preparation and application of a co-ordinated strategy." Geographic diversity is a source of legal and jurisdictional conflict, which causes serious difficulties in exercising economic rights, whether individual or collective, said Guisse.

The power of the transnational corporations is evident in the fact that they hold 51 of the 100 greatest concentrations of wealth in the world, explained Guisse, while the remaining 49 concentrations are in the hands of governments. According to the preparatory report, Mitsubishi's trade volume is greater than the gross national product (GNP) of Indonesia, Ford's trade totals more than South Africa's GNP, and Royal Dutch Shell's income is more than Norway's. The working group's responsibilities also include analysing the role of governments and their human rights policies in relation to transnational corporations. The current session of the UN Subcommission on Human Rights, which lasts until August 27, will also study the effects of globalisation on human rights. Guisse warned that economic globalisation runs the risk of creating even wealthier transnational corporations and the impoverishment of even more people, especially in countries with weak economies.

Industrialised countries hold 97% of the world's registered patents. According to one working group member, this concentration is not healthy because it becomes an instrument transnationals can use to pressure less developed nations. Eide stated that agro-industrial transnationals have launched genetically modified seeds in the market, and as a result of the related intellectual property rights, they have altered farming methods that were based on thousands of years of traditional knowledge. U.S. expert David Weissbrodt stated that some transnationals that have begun to adopt voluntary codes of conduct, either on an individual basis, such as Shell oil company, or collectively, as companies from the textile industry have done. The working group, which has a three-year term, will also examine the functioning of the UN system in order to promote the compatibility of transnational activities and its human rights principles.

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