The purpose of private companies is to develop activities that report on economic benefits to their shareholders or owners. Few private companies, apart from seeking economic performance, have in their statutes an altruistic purpose that seeks the integral development of people or the protection of the environment.
The legal regulation of companies is always in conflict with their economic interests and ethical self-regulation of companies is erroneously associated with diminishing profits. It is considered that the more regulations a company must comply with, the greater its obligations, dedicating more material and human resources to it, and therefore it is assumed that the company receives a lower profit margin.
So far, transnational companies (TNCs), regarding human rights and the environment, are subject to the national legislation of the country in which they carry out their activities and in which they have their registered office. In the same way, international treaties or conventions that promote human rights and protect communities, oblige companies if the country has signed and ratified the said treaties.
States oversee making international treaties effective and applying them. Only in some issues are there International Courts of Justice with the capacity to judge certain crimes against humanity. However, there is no common human rights and environmental mandatory legislation for all transnationals regardless of the country in which they operate. Moreover, in the case of multinationals, when operating in different countries, they know how to avoid their civil or criminal liability. Until now, with few exceptions, the parent company of a European business group considered itself not responsible for the behaviour of its subsidiaries when they operate in Africa.
There are countless known cases in Africa of large transnationals (SHELL, TOTAL, GLENCORE, SOCFIN, FERONIA, etc.) that have systematically violated human rights with total impunity or breached international legislation on the environment without the states having the capacity to end such impunity.
But not only large transnational companies maintain this attitude, many other international small and medium-sized companies (SMEs) take advantage of the weak democratic institutions and corruption in developing countries to maintain behaviours that evade their obligation to respect fundamental rights of people and communities.
Even though international mechanisms on the behaviour of companies are increasingly demanding, these principles or guidelines are voluntary and leave their implementation to the discretion of the companies themselves. International conventions on human rights and the environment are often ignored and local populations and communities are left unprotected. National legal systems are insufficient to protect the fundamental rights and the environment, making it almost impossible for victims to access justice or request reparation for the damage caused by TNCs.
For this reason, international binding mechanisms are necessary requiring appropriated behaviour and control of transnationals.
Some transnationals flaunt the implementation of voluntary guidelines for Business and human rights as an advertisement for ethical behaviour that makes companies attractive to investors and shareholders. But there are also many cases discovered in which this advertising does not obey reality and the projected image is invented or falsified.
The United Nation legally binding treaty on Business and human rights is an opportunity to transform the voluntary mechanisms of respect for human rights and the environment into direct obligations of companies to which they must be accountable to society. Voluntary mechanisms are clearly insufficient and the treaty need to be united to the creation of an International Court of Justice established to judge non-compliance with direct obligations by companies. With such courts a multiple benefit would be achieved:
First, the creation of an international court of Justice for TNCs reinforces the task of States in the guarantee of human rights and the environment. It is a proactive policy on the part of companies that would no longer limit itself to avoiding certain conflicts but to acting proactively in favour of people’s rights, local communities, and the environment.
Second, the creation of an international court of Justice for TNCs would make it possible to reinforce the effectiveness of human rights. The UN binding treaty on Business and Human Rights must define which are the exact obligations of the companies and would help to classify for what actions and omissions of the companies, these could be judged, sanctioned and punished.
Third, an International Court of Justice for TNCs would guarantee access to justice for the victims and it would provide adequate compensation to those affected by human rights violations caused by transnational corporations. The obligations of the TNCs would not be simply an observance of legal measures but an action to defend and protect the workers’ rights and the health of the communities.
Finally, the International Court of Justice for TNCs would enhance the protection of the environment with concrete obligations. The companies would be obliged to repair the environmental damage caused by their economic activity, as well as the restoration of the environment once their business activity has ended.
The binding treaty must therefore include in its articles the creation of an International Court of Justice for TNCs with clear and concise powers that allow the implementation of the requirements of the treaty. Otherwise, we will be fighting for a clawless treaty in which states can continue to act without the zeal necessary to end the impunity of TNCs.
The International Court of Justice for transnationals is not a substitute for national justice but one more mechanism that helps nations to protect human dignity.
José Luis Gutiérrez Aranda,
Trade Policy Officer,
Africa Europe Faith and Justice Network (AEFJN)