28 January 2016 - 12:19 PM
Take the Power Back! Ecuador Takes Lead to Curb Corporate Power
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While transnational corporations have long committed human rights abuses with impunity, a new U.N. initiative championed by Ecuador aims to hold multinationals accountable at the international level.

A U.N. iniative looks to hold transnational corporations accountable for environmental and human rights abuses.

As Ecuadorean sociologist and writer Irene Leon explained to teleSUR, the sheer power that corporations wield in a globalized world points to the urgency of having clear rules to regulate them.

“More and more, the power of transnationals in the world even surpasses the internal powers of countries, their regulations, and international norms on international rights,” Leon told teleSUR by phone from the CELAC Summit in Quito, Ecuador. “In short, it's an extra-territorial power that dominates everything.”

The United Nations Human Rights Council adopted a resolution in July 2014 to create an “international legally binding instrument” to hold transnational corporations responsible when it comes to human rights. The initiative, which is still in development, is based on a proposal presented by Ecuador with the support of South Africa and other countries. Advocates of the proposal argue that international rules that actually hold corporations accountable are long overdue to counterbalance the extensive protections of corporate profits afforded to multinationals through free trade agreements and World Bank policy.

“The main nucleus of the idea is that transnational companies be made responsible for the respect of human rights and observance of human rights that already exist (in international law),” Leon explained, adding that civil and environmental rights could be among the rights on the agenda in ensuring that corporations are not acting arbitrarily.

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The Human Rights Council decision created an Intergovernmental Working Group tasked with developing mechanisms to regulate transnational corporations and other companies with respect to international human rights law, the Universal Declaration on Human Rights, and other relevant U.N. conventions. The working group initially met one year later, in July 2015, for preliminary planning on how to go about holding corporations responsible for human rights abuses. In 2016, the working group is expected to make further progress toward getting the initiative up and running.

Toward Ending Corporate Impunity

While the exact form of the mechanism being developed is still unclear, the goal is to set up a well-defined agreement at the international level to hold transnational corporations accountable, rather than answering to their own - often weak - self-regulation regimes.

Leon explained that talk around a binding instrument for transnational corporations has so far focused on responsibilities and has not touched on potential punishments for corporations.

But some have speculated that an international treaty could give way to other possibilities, such as a mechanism similar to the Hague International Court of Justice, but with a focus on transnational corporations and human rights. Such a body could act as a counterweight to the World Back investor-state arbitration that allows corporations to level lawsuits against countries.

Such corporate dispute settlement mechanisms through the World Bank allow corporations to sue governments in so-called “corporate courts” for infringing on future profits through public policies such limiting mining or fossil fuel extraction. These corporate trials unfold in trade tribunals widely condemned as unaccountable. There have already been over 600 such corporate challenges to over 100 government policies through these mechanisms in various trade deals, such as NAFTA, and the controversial Trans-Pacific Partnership is set to further expand these corporate rights.

According to Leon, many countries already have concrete proposals related to regulating transnational corporations. Ecuador, for example, has stressed the importance not only of the U.N. binding instrument, but also processes to define and resolve problems between corporations and states.

“Ecuador has proposed, along with other countries, the creation of a sovereign arbitration body in the framework of UNASUR,” Leon explained, adding that CELAC is also considering how to create clear rules for transnational corporations.

Aside from trade policies that go to great lengths to protect corporate profits, one of the challenges of holding transnational corporations responsible for human rights violations is the cross-border nature of their business operations, which creates a legal complexity in terms of which country has jurisdiction and power to corporate giants responsible.

Canadian mining corporations, for example, have notorious human rights records in Latin America and Africa, but justice is rare when local judiciary systems are often weak and corrupt. While there is a burgeoning precedent for trying Canadian companies in Canadian courts for abuses committed abroad, such as the lawsuits filed in Canada by Mayan Q’eqchi’ plaintiffs for abuses committed by HudBay Minerals in Guatemala, the road to international justice remains is long and highly uncertain.

“In exercising their search for profits, corporations have committed abuses even against entire communities, against states, and governments find themselves in many cases subsumed under corporations in this power relation,” Leon said. “Now is the time to think about power relations and rules of the game between different actors. Power in the world has transformed, and transnational corporations should have human rights responsibilities.”

Transnational Corporations’ Dirty Human Rights Record

The track record of corporate crimes is case in point to the need for strong international regulations to hold multinationals responsible.

In Ecuador, Chevron - formerly Texaco - was found guilty of causing one of the world’s largest environmental disasters while drilling for oil in the Amazon between 1954 and 1990. Contamination left behind in billions of gallons of toxic waste has impacted close to 30,000 people, mostly Indigenous. Ecuador’s Supreme Court ordered Chevron in 2013 to pay US$9.5 billion in damages and cleanup costs, but the oil giant has refused to comply.

Similarly in Peru, the Camisea gas project headed by Argentine oil giant Pluspetrol in the Amazon has put at risk one of the most richly biodiverse areas of the world and the rights of isolated Indigenous peoples that have only made “initial contact” with the rest of the country. NGO reports have found that gas project threatens the “very existence and survival” of these groups as Indigenous peoples.

Meanwhile, neighboring Colombia has proved to be a hotbed for corporate abuses. Between 1990 and 2002, Coca-Cola allegedly hired hitmen from the far-right paramilitary group United Self Defence Forces of Colombia (AUC) to murder at least 10 labor union leaders linked to organizing the company’s plants. Similarly, a Colombian union leader who survived kidnapping and torture at the hands of paramilitaries in 2002 claims U.K. oil giant BP ordered his capture and murder.

U.S.-based fruit company Chiquita Brands has also been linked to right-wing paramilitary violence in Colombia. By the company’s own account, it made at least 100 payments totaling US$1.7 million to the AUC between 1997 and 2004. Chiquita had lawsuits launched by the families of victims Chiquita-backed paramilitary violence thrown out of U.S. courts, arguing that the cases did not belong in the U.S. justice system and should be dismissed.

Many countries in Latin America have been particularly hard hit by the impacts of corporate abuses. But human rights abuses at the hands of corporations are not limited to the Global South, and there needs to be an international priority for regulation to be effective.

“What we see more and more is that it is no longer only the countries of the south that are affected by the rules of the game that companies impose for themselves, but also northern countries,” Leon said. “What is mainly being done is establishing clear rules of the game and responsibilities.”

Confronting Transnationals by Learning From Experience

This year, the U.N. work group on transnational corporations and human rights will build on its first session in 2015 and continue developing the binding instrument.

Part of the task will be to hold consultations on each continent as part of an investigative mission to inform the development of the initiative based on diverse experiences and criteria. As Leon noted, the consultations follow a model that has been championed by several Latin American countries in recent years of involving diverse sectors in participative processes in the name of developing inclusive and representative initiatives.

“There’s no doubt that these consultations in the five continents will represent an opportunity for social movements, experts, academic sectors, media, different actors apart from the governments involved, to express their opinions, interests, and visions on this problem,” Leon said, adding that the consultations will also hopefully ensure that the development of the U.N. document is not a closed-door process.

“It's a very dynamic proposals that enjoys broad support from movements and social organizations around the world,” said Leon. “So it may raise an opportunity to have better awareness of the impact of transnational corporations in countries and in the world.”

Human rights defenders, social movements, and frontline affected communities who have seen first hand the consequences of corporate impunity for decades are hopeful that a binding international mechanism will be able to sanction transnational corporations for rights violations and reclaim access to justice.

And with new international trade pacts like the TPP looming large and threatening an unprecedented expansion of transnational corporate power, the fight to finally uphold human rights over unfettered corporate profits may now be more urgent than ever.

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