Item 4: Economic, Social and Cultural Rights (part 2)
Working Group on Transnational Corporations (TNCs): Corporate Accountability
Mr Chairperson,
Pax Romana appreciates the foundational work carried out by the working group, following `extensive` consultations and discussions. We have listened to the interactive debate yesterday which indicated clearly that there is much work to be done to arrive at legally binding principles of human rights responsibilities with adequate legal supervisory mechanisms at national and interventional levels.
Pax Romana prefers to address these concerns under the title `corporate accountability` that's is predicated on the need for binding regulations and disclosure requirements for companies wherever they operate. Such `measures amount to structural safeguards against the kind of social sins public deception, privileged political access and mass erosion of retirement savings. To use some Enron examples that unregulated corporations can commit`. In that respect, human rights principles is `the ultimate source of business ethics`, specifically given the discussion in the Sub commission on global economic governance, last year.
Mr Chair,
This year's Human Development Report 2002 of the UNDP has clearly outlines `Corporate Influence on Politics` (Box 3.3, page 33), and states `people are increasingly concerned that corporations are not held accountable for their actions, either because laws are weak or are weakly enforced. Indeed, even when domestic legislation is adequate, it is often not implemented`. So we are not only addressing questions of economic nature, but also that concerning political activity of corporations. These activities, specifically structural violations impede the full enjoyment of all rights by individuals and groups within the context of economic globalisation, which `is an unfair game with rules written by rich advanced industrial countries for rich industrial countries ` (Stiglitz). We are well aware of the asymmetry of bargaining power between TNCs and small, poor developing countries, including the LDCs. In asking for legally binding principles we are also keeping in focus, the concerns of one half of the world's people who still depend on their own agricultural production to feed their families and generate income. At the same time, 60% of extreme poverty is located in rural areas. Here, a handful of global corporations control agricultural input, financing and processing markets. They do use their money and access to shape domestic legislation and international trade rules.
In this connection, global warming is equally important as extreme poverty. As we know why the Kyoto Protocol is facing severe obstacles in the USA and Australia due to influence of huge energy corporations.
Equally alarming are some of the labour policies and practices of large corporations in the USA. The legislation in 36 states of the USA allow commercial enterprises to convict labour and prisoners get much less than the minimum wage. And 68% of prisoners in the USA are African Americans and Hispanic people. The corporations include Microsoft, McDonalds, Starbucks, Nintendo, Honda etc... Honda pays 2 US Dollars per hour for prison labour, whereas outside it pays 20 -30 US Dollars per hour for auto workers. The prisoner have no other benefits, so when framing the rules, we are also addressing the policies and practices of large TNCs. `Monsanto dumped carcinogenic POBs into the creeks around Anniston, Alabama for decades, with full knowledge of how seriously they would contaminate the area, rather than absorb additional costs for responsible disposal`. Monsanto violated a number of principles of the Rio Declaration. Hence we urge the Working Group to include the Rio Declaration in the preamble, which also affirms that `the right to development must be fulfilled`.
Mr Chair,
From these severe violations of a structural nature, by TNCs in all countries, we call for a specific operating paragraph on access to information and the right to information with emphasis on peoples' participation. This is crucial when we look at the MOUs (Memorandum of Understanding) governments sign up with TNCs in the current paradigm of disinvestments and privatisation, very much fostered by the Bretton Woods Institutions. These MOUs should include Human Rights Impact Assessment. Particularly, when TNCs are seen as deliverers of sustainable development, while their unsustainable policies and practices persist.
Mr Chair,
Pax Romana draws your attention to the forthcoming World Summit for Sustainable Development, where all the major groups excluding the business groups, will be campaigning for a legally binding framework/ convention for corporate accountability and liability under aegis of UN, with independent mechanisms for monitoring progress and enforcement. `For many of the major groups, except for the Human Rights oriented NGOs, the work done by the Sub Commission on Corporate Accountability is unknown. It is imperative that the Working Group on TNCs, consider ways and means through the OHCHR to disseminate the current draft principles at the WSSD in Johannesburg. Already the CESAR did submit a background paper at the PC IV in Bali, pointing out the regressive trends in negotiation when it comes to Human Rights obligations.
Lastly, we ask the Working Group to examine three key issues:
- Question of penalties/sanctions for default or breach of legal obligations mentioned by a number of experts and UNRISD.
- Question of affirmative action by TNCs in the spirit of CERD and CEDAW concerning employment opportunities for vulnerable groups with capacity building initiatives. Already, South Africa is attempting transfer of assets within such companies to black south Africans who still remain deprived of such wealth sharing.
- Question of implementation in a more substantive manner, seeing implementation as fulfilment of obligations.
