The Human Rights Accountability of Business

How do we define the human rights accountability of business entities, especially that of transnational corporations (TNCs)?

When you frame your arguments relating to the general structure of international legal system (subjectivity, jus standi, personality etc.), think about following facts, rules and views:

1. So far, no binding international (human rights) agreement directly addressing corporations exists.

2. The early TNCs, such as the Dutch United East India Company and English East India Company, could occupy land, wage wars and conclude treaties.

3. At 17th century and even till much later, international law was concerned mainly with State issues, such as the delimitation of State jurisdictions, the immunity of States, diplomatic representatives and the law of war, etc.

4. In The Free City of Danzig case (1923), the PCIJ recognized that The Free City of Danzig had international personality; and in the Jurisdiction of the Courts of Danzig case (1928), the PCIJ affirmed that practical needs can override theoretical considerations in regard to international legal personality. States can grant entities certain rights and duties making them subjects of international law, if they feel the practical need to do so.

5. In the Reparations case (1948), the ICJ concluded that the United Nations had legal personality as “the Organization was intended to exercise and enjoy, and is in fact exercising and enjoying, functions and rights which can only be explained on the basis of the possession of a large measure of international personality and the capacity to operate upon an international plane”. The ICJ further held that the United Nations is a “subject of international law and capable of possessing international rights and duties, and that is has the capacity to maintain its rights by bringing international claims”. ICJ also pointed out in this case “the subjects of law in any legal system are not necessarily identical in their nature or in the extent of their rights, and the nature depends on the needs of the community”.

6. International tribunals, such as the Nuremberg Tribunal and Tokyo Tribunal, the ICTY and ICTR, and the International Criminal Court, all have established the international responsibilities for war crimes of individuals.

7. Before the European Court of Human Rights, individuals can bring claims against States to effectuate their rights contained in the ECHR.

8. Under the Geneva Conventions of 1949 and the two additional protocols of 1977, insurgent forces as well as State armies are obliged to respect prohibitions such as those on attacking civilians, taking hostages and etc.

9. Rosalyn Higgins has considered the concept of legal personality “an intellectual prison” and “the whole notion of subjects and objects has no credible reality and…no functional purpose”, and “individuals are participants, along with states, international organizations…multinational corporations and indeed private non-governmental groups”.

10. For Brownlie, a subject of international law is “an entity capable of possessing international rights and duties and having the capacity to maintain its rights by bringing international claims”.

11. Under the North American Free Trade Agreement (NAFTA), corporations have access to a panel for dispute settlement.

12. The International Agreement Doctrine: internationalized contracts concluded between a host-state and a corporation (particularly in the filed of oil concessions and development agreements) confer rights on corporations; these agreements usually contain an “applicable law clause” stating that the contract is governed by “general principles of law” or “principles of the law of the concessionary state not inconsistent with international law”. These contracts often provide that in case of disputes, international arbitration will be used.

13. However, is the recognition of the personality of a corporation by one single state enough to elevate the corporation to a subject of international law? What if the state unilaterally withdraws such legal personality?

14. Corporations are organizations which have no inherent ability to suffer from human rights violations. On the other hand, corporations do enjoy the benefit of a number of human rights such as, for example, the right to own property, the right to freedom of expression and the right to a fair trail.

15. Article 34 of the European Convention on Human Rights states “the Court may receive applications from any person, non-governmental organizations or group of individuals claiming to be victims…” In the case Autronic v. Switzerland the Court held that “Article [10] applies to ‘everyone’, whether natural or legal persons’. Moreover, Article 1 of Protocol 1 to ECHR states “Every natural or legal person is entitled to the peaceful enjoyment of his possessions”.

16. Proceedings: Before the Iran-United States Claims Tribunal, corporations have legal standing under certain conditions. In the procedure before the United Nations Compensation Commission set up after the defeat of Iraq in 1991, corporations can bring claims for compensation against Iraq. The ‘Seabed Disputes Chamber’ under the United Nations Convention on the Law of the Sea has jurisdiction relating to disputes between parties to a contract, which can be states, natural or legal persons. Article 25(1) of the Conventions establishing the International Center for the Settlement of Investment Disputes states “the jurisdiction of the Center shall extend to any legal dispute arising directly out of an investment between a Contracting State…and a national”.

17. Duties: In the field of environmental protection several treaties contain binding duties for corporations, for example, under the International Convention on Civil Liability for Oil Pollution Damage, direct liability for oil pollution is placed on the owner of a ship. UN General Assembly resolutions concerning the apartheid system in South Africa during the 1980s mentioned corporations as the addressees of international duties.

18. Responsibilities: Article 2 of the OECD Convention on the Combat of Foreign Public Officials in International Business Transactions states that “Each Party shall take such measures…to establish the liability of legal persons for the bribery of a foreign official’. The Global Convention on the Control of Transboundary Movements of Hazardous Wastes requires State Parties to outlaw such “legal traffic” by legal persons in its national laws.