By Maria Cecilia Olivet
July 20, 2010
Share the Worlds Resources
Such movements have not only questioned the legitimacy of the operations of European TNCs for their systematic violations of human rights, but have also developed proposals for regulation and control of corporations. These regulations would aim to address the imbalance created by the new Lex Mercatoria [i] by establishing a system where corporations are accountable, do not hold more power than states, can no longer define for themselves their responsibilities and where their profits are not being prioritised over the well-being of the people and the environment. In this way, they have joined the growing international movements calling for binding obligations on TNCs to force them to submit to international norms.
Over the last 2 years, the Enlazando Alternativas network, in conjunction with the Permanent People's Tribunal, has identified some proposals for regulating the investment activities of TNCs.
The need for an International legal binding code
Based on the failure of voluntary mechanisms of conduct for TNCs, the bi-regional network has identified the need for an international normative code, which would define the limits of corporations' legal responsibilities for the consequences of their activities. This binding legal framework must be of a coercive, sanctioning and binding nature. The content of this code should be the result of a synthesis of the ad hoc codes of the ILO, the OECD and the proposals for binding codes discussed at the UN in the 1970s.
Other criteria should include the extension of the parent company's responsibilities to its subsidiaries, suppliers, contractors and sub-contractors. TNCs priorities should be subordinated to Host States' sovereignty in ways that are coherent with the right to development and the civil and penal responsibility of its owners and directors. In any case, a central premise requires doing away with the notion of voluntarism.
The concept of economic crimes
Whilst a wide range of instruments and rules have been adopted - and international bodies created - to judge perpetrators of war crimes and human rights violations, international law has no jurisdiction over economic crimes. In actual fact, the concept of economic crime has no international legal definition. Therefore, most crimes committed by TNCs go unpunished.
There is no doubt that TNCs are a source of economic and environmental crime across the entire planet; a fact established by the substantive evidence presented to the Permanent People's Tribunals sessions on Transnational Corportations [ii]. In light of this, the Enlazando Alternativas network advocates that economic and environmental crimes committed by TNCs should be categorised as "crimes against humanity".
A Tribunal on Economic Crimes
A new legal framework will require the creation of an International Economic Tribunal that can judge transnational companies, be responsible for defending the fundamental rights of people affected by TNC's activities and impose appropriate sanctions.
A Tribunal with these characteristics is both feasible and necessary. Some proposals have already been made in this direction. For instance, UN Rapporteurs have made a proposal for the creation of an International Court on human rights with the power to judge multinationals although the proposal was made in the context of a project that did not belong to the UN, called the "Swiss Initiative". Proposals also have been made on broadening the jurisdiction of the current International Criminal Court to include legal persons (such as corporations) and violations of economic, social and environmental rights.
Other proposals advanced by the network include: a) the creation of a Centre on Transnationals Corporations as part of the UN system, which would audit TNCs practices and investigate their failure to comply; b) advocacy for the extraterritoriality of the responsibility of TNCs; c) denouncing the Free Trade Agreements (FTAs), Bilateral Investment Treaties (BITs) and the practices of the International Centre for Settlement of Investment Disputes (ICSID); d) re-establishing, following the Calvo doctrine, the competence of national tribunals over international ones; e) banning states from financially supporting their TNC's projects that violate human rights.
These proposals have emerged from the process of preparation of the Sessions of the Permanent People's Tribunal (PPT) on Transnational Corporations and have been endorsed by the Verdict of the PPT Session in Madrid (May 2010). They are still in a development stage. The Enlazando Alternativas network is committed to further work on the conceptualisation as well as the campaigning of these proposals, which are understood as being part of a broader social and political strategy to dismantle the power of the TNCs as a way of protecting the peoples and the planet on which we live. A campaign to impose binding mechanisms of regulation on TNCs and an International Tribunal that punishes corporate violations will require the crucial support of social movements and trade unions worldwide in order to succeed.
