Extraterritorial obligations in relation to TNCs/OBEs discussed during second day of IGWG on Transnational Corporations and other Business Enterprises

The second day of the Intergovernmental Working Group consisted of a panel on Primary obligations of States. The main theme discussed was on extraterritorial obligations in relation to TNCs and other Business Enterprises (OBEs).

Panellist Ana Maria Suárez from FIAN International emphasised on the importance of taking into account the Maastricht Principles when elaborating the binding Treaty. The Principles are not themselves human rights legal standards, but they can provide some guidance when considering incorporating extraterritorial obligations into the Treaty.

Another important issue was raised by Juan Hernández-Zubizarreta who underlined the normative inequality between the rights and the obligations of TNCs and OBEs. He highlighted that their rights are protected through the contracts they sign with states, while their responsibilities are only guided by soft code of conducts and self-monitoring.

Mr Meyerstein from the US Council for International Business caused discord when he claimed that ISDS was a form of Human Rights protection. The delegation of Bolivia and Mrs Suárez openly disagreed with such statement, as did civil society representatives. Indonesian Focal Point stated: “ISDS only protect the interests of investors.”

The representative of the US Council clarified later that individual investors, if they were individual human beings (called “natural persons”) might be able to make a claim before an ISDS mechanism. However, Dominic Renfrey, representative of ECSR-Net stated: “This ignores the fact that ISDS is exclusively used by corporate entities (known as 'legal persons') to defend their economic priorities, and companies do not have human rights.”

It could be argued that ISDS mechanisms in fact further protect the rights of individual investors, rather than the rights of victims of human rights violations perpetrated by TNCs and OBEs; this echoes the normative inequality raised by Mr Hernández-Zubizarreta.

In the evening meeting, one of the highlights was in relation to limiting competition between states with regards to investments and investors. Article 5.3 of The Framework Convention on Tobacco Control was mentioned by (…) as a possible provision for the future Treaty to avoid conflict of interest between company representatives influencing state policies and legislations in favour of corporate interest.

Mr Tognoni, Secretary General of the Permanent Peoples’ Tribunal said that preventive measures should be included in all trade or investment agreements to avoid potential violations of human rights.

The important message to be retained from today’s meetings is perhaps that currently, companies’ reponsibilities are monitored by soft mechanisms. States who have interests in hosting such companies, fail to efficiently implement human rights standards and legislation that would effectively protect victims rather than favour TNCs and OBEs, especially when it involves extraterritorial activities.

“Neo-liberalistas”, as Ethiopia called private stakeholders, should not have their rights and interests put above those of victims of abuses by TNCs/OBEs

Closing the day, in the final contribution from the panel, David Bilschitz called on the IGWG to remember the foundation of human rights and that the UDHR calls for all organs of society to respect human rights, and that includes all actors with the ability to abuse human rights, including corporations.

He added, in defence of the idea for a robust international mechanism to implement the Treaty, that sometimes extraterritorial jurisdiction fails without a complementary international system to ensure accountability and remedy for affected people.

Elise Golay, RIDH http://ridh.org/