In 1995, nine activists from the Ogoni community in the Niger Delta basin were executed without a fair trial by the Nigerian military government, a brutal method of silencing their protests against Shell’s oil extraction operations in the area. Relatives of the victims brought a class action suit against the oil company, alleging that via its Nigerian subsidiary, Shell was complicit in horrific violations of human rights, including extrajudicial killings and torture. Unfortunately, this deeply concerning case is not the only instance where a transnational corporation (TNC) has been implicated in serious human rights abuses.
How are some TNCs able to adversely impact human rights while evading legal consequences? To start with, many governments in developing nations have repeatedly failed to stop TNCs operating within their borders from violating human rights. Evidently, because investments and business activities can have a major impact on a developing economy, TNCs may exploit power disparities between themselves and host governments. The former have the ability to use their considerable economic power to influence the latter, perhaps by encouraging a more lax regulatory system for human rights.
And since by definition a TNC’s activities are extraterritorial in nature, jurisdiction is another key barrier to the enforcement of international human rights law. TNCs are effectively able to jump from one jurisdiction to another. Where a host state fails to regulate corporate violations, the home state (where the corporation is registered or headquartered) may also choose not to act, allowing the TNC to avoid liability for harmful conduct.
It’s clear that TNCs can and do negatively impact human rights, but relying on states alone to deal with corporate violations is problematic. The lawsuit against Shell — brought under the Alien Tort Claims Act in the USA — was dismissed, with the Court restricting the scope of the Act by indicating that it does not apply extraterritorially. TNCs can slip through the cracks in our fragmented assortment of national legislation and jurisdictions, which is why international law could have an important role to play.
Several significant attempts have been made to address these challenges at the international level since the start of this century. The 2003 “Draft Norms” on business and human rights attempted to go beyond the existing corpus of international human rights law, placing obligations directly on TNCs (as opposed to indirectly via states’ obligations). This controversial endeavour led to strong criticism from the corporate lobby and ultimately did not succeed; the document never progressed beyond the draft stage. Fast-forward to 2011, and the binding nature of the Draft Norms had been ditched in favour of the Guiding Principles on Business and Human Rights, the content of which was much more readily accepted than that of its predecessor. But the wording was weak, with the Principles essentially constituting “voluntary obligations” for TNCs vis-à-vis human rights.
In 2014, the Human Rights Council adopted a resolution to establish an Open-Ended Intergovernmental Working Group on Transnational Corporations and Other Business Enterprises with Respect to Human Rights (endorsed by the UN Sub-Committee on Unnecessarily Lengthy Titles). Not everyone was on board with this, though. The working group’s mandate is to elaborate a new instrument on business and human rights, but the home states of many of the world’s largest TNCs — France, Germany, Japan, the UK and the USA — voted against the adoption of the resolution. At the working group’s first session held in July last year, several states remained silent during the discussions, while others did not attend at all. This lack of serious participation on the part of TNC home states poses a significant impediment to the working group’s progress.
As an aside, it’s important to acknowledge that it’s not all bad news when it comes to TNCs and human rights. For example, it is undeniable that TNCs’ activities can create employment opportunities, facilitating the realisation of rights such as the right to work. However, such benefits are often eclipsed by the catastrophic scale of the violations that continue to occur.
The second session of the working group will be held this October. While it remains to be seen what progress will be made in closing the accountability gap for TNCs, we can hope that it will be an important step toward providing access to long-awaited and much-needed remedies for victims.
Lauren Carmody is a student of both International Law at UWA and Language Studies (French) at ECU. She considers her greatest achievement to be that time she managed to get her winged eyeliner perfectly even.