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Business and Human Rights Menno Kamminga

Business and Human Rights Menno Kamminga. Emergence of non-state actors. IGOs NGOs Individuals MNEs. Race to the bottom. Elimination of boundaries Freedom of foreign direct investment (FDI) Competition between states to attract investment produces lowering of standards

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Business and Human Rights Menno Kamminga

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  1. Business and Human Rights Menno Kamminga

  2. Emergence of non-state actors • IGOs • NGOs • Individuals • MNEs

  3. Race to the bottom • Elimination of boundaries • Freedom of foreign direct investment (FDI) • Competition between states to attract investment produces lowering of standards • Investment protection

  4. Accountability (or governance) gap • Not subject to one legal system • One brand and one profit but limited liability • Rights but no duties under international law • States unable or unwilling to hold companies accountable • Market provides ineffective accountability mechanism

  5. Positive impact of MNEs • Jobs • Technology transfer • Revenues • Schools/medical facilities

  6. Union Carbide (Bhopal) • Explosion in 1984 • 16.000 killed, 50.000 permanently disabled • Lawsuits in New York and India • $470 million out of court settlement

  7. Curse of the minerals • Extractive industries • Collusion with host state government • Revenues to Swiss bank accounts • Lack of transparency • Angola, Congo, Nigeria, Sudan, Myanmar

  8. Who is responsible under int. law? • Host state • Home state • Multinational enterprise

  9. 1. Host state responsibility • Traditional approach • Positive obligations. Due diligence • But doesn’t work if government is unable or unwilling • Myanmar(Burma) and the ILO

  10. 2. Home state responsibility • Examples of extraterritorial legislation • Problems with this approach • Except if home state actively supports foreign investment e.g. through export credits

  11. 3. Direct corporate responsibility • Preferred approach • Just as for states and individuals • International minimum standards • International supervision • International Criminal Court?

  12. Three types of corporate liability • Direct abuses (e.g. by security guards) • Taking advantages of abuses (e.g. involuntary resettlement or abuses in supply chain) • Failing to speak out against abuses (sphere of influence)

  13. International codes of conduct • ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (1977) • OECD Declaration on International Investment and Multinational Enterprises (1976, revised several times) • UN Global Compact (2000) • But vague language and limited supervision systems

  14. Corporate codes of conduct • Impressive texts on corporate websites • But usually lack of supervision • Impact on consumers? • Legal significance?

  15. Multistakeholder initiatives • Characteristics • Extractive Industries Transparency Initiative • Voluntary Principles on Security and Human Rights • Kimberley Process Certification Scheme • Advantages and disadvantages

  16. UN Special Representative John Ruggie • Mandate (since 2005): “identify and clarify” international standards • Fantastic networker • Managed to establish global consensus • Ruggie framework: Protect, Respect and Remedy • Guiding Principles (2011)

  17. Guiding Principles on Business and Human Rights (2011) • Adopted by UN Human Rights Council without any change (!) • Not binding • Don’t cover home state obligations • Corporate due diligence obligation: ticking the boxes; obligation of effort

  18. Lawsuits • Purpose: relief for victims and establish precedents by bottom-up approach • So far mainly in USA (ATCA) • But increasingly also in other countries: no ATCA required

  19. Legal hurdle 1: Competent court • Forum non conveniens • EU Regulation 44/2001 on Jurisdiction and Enforcement of Judgments in Civil Matters (EEX): company may be sued where it has its statutory seat • ECJ case C-281/102, Owusuwu, par. 46

  20. Legal hurdle 2: Applicable law • Lex loci delicti • Public policy exception • Customary international law (Unocal) • But see Kiobel v. Shell

  21. Legal hurdle 3: Imputability • Limited liability of subsidiary • Lifting corporate veil • Enterprise (or corporate group) liability

  22. Out of court settlements • Union Carbide/Dow Chemicals (India): $470 million • Unocal (Myanmar/Burma): secret amount • Trafigura (Cote d’Ivoire): app. $250 million • Wiwa v. Shell (Nigeria): $15.5 million • Texaco/Chevron (Ecuador) next? • Problems with settlements

  23. The future • Disasters needed? • Demand for level playing field? • A convention codifying international corporate obligations • With a binding enforcement mechanism

  24. Want to know more?

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