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Globalization, human rights and business: Why a treaty is a moral and legal necessity

Thousands of people have had their lives destroyed by the activities of multi-national corporations. Oil spills in Nigeria and gas leaks in India have killed, maimed and caused lasting environmental damage. Yet, these people and their families have struggled to hold the perpetrators to account and receive damages to ameliorate their suffering. This lamentable situation could be addressed by consensus between states around the world to develop a treaty that ensures human rights violations do not go unpunished (or, at least uncompensated). In the 21st century such a treaty is both a legal and moral necessity. Here is why.

After the devastation of the Second World War and the horrors of the Holocaust, the mood was ripe to create an international order with certain basic moral principles at its core. Human rights were the key concept that created a bridge between law and morality. The intrinsic ‘dignity’ or worth of the human person was seen to give rise to certain entitlements that protect the most basic interests of people: the right to free speech, bodily integrity, food and housing. These protections could only be effective, however, if they created obligations for other actors. The focus at the time was on the obligations of states for realizing human rights.

Since then, the world has changed. Trade has exploded across international borders as have multi-national corporations with a common identity operating in multiple states. The wealth and power of some corporations is said to rival that of states. A legal paradigm of fundamental rights that ignores these significant development will lack the power adequately to protect the rights of individuals. Difficult problems, however, arise in holding corporations to account for rights violations.

First, international law has traditionally been built on the idea that each state is sovereign within its own domain and responsible for holding accountable those who commit wrongs within its domain. It is less well equipped to address wrong-doers who cross borders: where, for instance, an environmentally destructive strategy is planned in one country and executed in another. Suing a corporation in the country where a wrong is committed may thus fail to affect the real centre of power or wealth.

This problem is compounded by a second difficulty in that, in law, each corporation is regarded as a ‘separate legal person.’ As such, a multinational corporation does not in fact exist: it is rather a network of different entities all formed in terms of the laws of different countries. When a corporation in one country commits a wrong, the related corporations in other countries can disavow responsibility for its actions as they are distinct ‘persons’ in law.

The possibility of justice for victims of human rights violations diminishes even further when we consider that multi-nationals often commit violations in countries with weak legal systems and where the independence of the judiciary is in doubt. The likelihood of successful prosecutions or claims for compensation is very limited in these jurisdictions.

Taken together, these three challenges create opportunities for multinationals to evade responsibility for wrongs they commit. To address them, it is necessary to devise an international solution which requires the collective action of states. This could be done in one of two ways.

The first approach would be for multi-national corporations to become capable of being sued for wrongs they commit across the world in any state where they have offices. This would mean that victims who can find no succour in their local courts could approach foreign courts to provide them with a remedy. The United States, until recently, pioneered this solution with the creative use of an old statute known as the Alien Tort Claims Act (the ATCA). Unfortunately, the Supreme Court in the recent Kiobel decision severely limited the potential uses of ATCA for these purposes, allowing such actions to succeed only where there is a strong link to the territory of the United States.

A treaty on business and human rights could require all states to adopt laws permitting them to hold corporations to account for violations of fundamental rights they commit across the world. Such an approach has been adopted in the United Nations Convention against Corruption (UNCAC) and would help address the problem that no single state wishes to be seen as the sole enforcer of human rights norms, thus rendering it less attractive to business.

The second and most ambitious solution would be to establish an international court that could adjudicate cases where corporations violate fundamental rights across international borders. Such a court would be truly global in nature and be able to address the lacunae that arise in international law from the challenges discussed above. It would allow for the development of specific case law in this area and enable a deeper understanding of the obligations corporations owe in relation to fundamental rights. Its construction would need to be thought about carefully to ensure that it is not swamped by cases and that it does not replace the role of national courts.

There are many good reasons for a global treaty on business and human rights: one of the most significant is its ability to ensure that a remedy is found for victims of human rights violations by corporations. The current initiatives at the global level – such as the United Nations Guiding Principles on Business and Human rights – lack the necessary legal status to offer a clear solution.

Objections thus far have been largely pragmatic, recognising significant division between developed and developing states on the need for such an international instrument. In June 2014, the Human Rights Council, in an initiative spearheaded by Ecuador and South Africa, agreed to commence discussions surrounding the possibility of such a treaty. The first meeting of this inter-governmental working group occurred in July in Geneva and drew in a range of experts from across the world. The treaty initiative has also stimulated many NGO initiatives across the world which are engaging directly with the people are affected by human rights violations of corporations. It is a great shame, however, that the United States and European Union countries – which profess to take human rights seriously – oppose this initiative. Their opposition increasingly strikes one as simply based on the self-interested expediency of their business interests and displays a callous disregard for the very real suffering of individuals that arises from inadequate regulation at the international level.

In the face of such strong division, it is necessary to stand up quietly and forcefully for why such a treaty is needed. Many visionary international developments – such as the formation of an international criminal court – have emerged in the face of initial division between states, because they fill a clear moral and legal vacuum. A new global consensus needs to be forged too on business and human rights: the starting point is to recognize the moral and legal necessity for a treaty in this area. Expediency of the powerful should not be allowed to trump the basic principle of justice: anyone whose fundamental rights are violated by corporations must be able to ensure the perpetrator is punished and compensates them for their loss.

David Bilchitz is a Professor at the University of Johannesburg and Director of the South African Institute for Advanced Constitutional, Public, Human Rights and International Law. He is also Secretary-General of the International Association of Constitutional Law. Click here for a more detailed version of his case for the treaty.


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February 2017
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