Contents:
“Transnational Corporations Liability on Environmental Harms”
- Introduction
- Norms controlling activities of TNC’s in UDHR and ICESCR
- Why and how these TNC’s are responsible for environmental damages and harms.
- Three catastrophic disasters in human history
- International Guidelines controlling TNC’s activities
- Are these Norms and guidelines are enough to hold these TNC’s liable
- Need of international binding regulations
- Recommendations
- Concluding remarks
Transnational corporation liability for environmental harm
Before starting my presentation on present topic that is transnational corporation liability for environmental harm, I would like to say that this seminar presentation is only an approach paper presenting set of issues involved which in the course of direction take us to the steps of suggestions as far as the TNC’s liability for environmental harms are concerned. Or I can say that this is the first step of my research work.
To begin with let me first briefly explain to you, what TNC’s or MNC’s basically are?
Transnational corporation(TNC), also calledmultinational enterprise(MNE),is acorporationor enterprise that managesproductionor deliversservicesin more than one country. It can also be referred to as aninternational enterprise.
The Norms specifically define a "transnational corporation" as "an economic entity operating in more than one country or a cluster of economic entities operating in two or more countries-- whatever their legal form, whether in their home country or country of activity, and whether taken individually or collectively." The working group defines the phrase "other business enterprise" as "any business entity, regardless of the international or domestic nature of its activities, including a transnational corporation, contractor, subcontractor, supplier, licensee or distributor; the corporate, partnership, or other legal form used to establish the business entity; and the nature of the ownership of the entity."
Very large multinationals have budgets that exceed some national GDPs. Multinational corporations can have a powerful influence in local economies as well as the world economy and play an important role in international relations and globalization. It is beyond dispute that TNC’s are now the leading vehicles for economic globalization. According to UN Conference on Trade And Development (UNCTAD). In 2002, global sales of TNC’s reached $18 trillion for world exports.
Throughout the past half century, states and international organizations have continued to expand the codification of international human rights law protecting the rights of individuals against governmental violations. In parallel with increasing attention to the development of international criminal law as a response to war crimes, genocide, and other crimes against humanity, there has been growing attention to individual responsibility for grave human rights abuses. The creators of this ever-larger web of human rights obligations, however, failed to pay sufficient attention to some of the most powerful non state actors in the world, that is, transnational corporations and other business enterprises.With power should come responsibility and international human rights law needs to focus adequately on these extremely potent international nonstate actors.
Transnational corporations evoke particular concern in relation to recent global trends because they are active in some of the most dynamic sectors of national economies, such as extractive industries, telecommunications, information technology, electronic consumer goods, footwear and apparel, transport, banking and finance, insurance, and securities trading. They bring new jobs, capital, and technology. Some corporations make real efforts to achieve international standards by improving working conditions and raising local living conditions. They certainly are capable of exerting a positive influence in fostering development.
Some transnational corporations, however, do not respect minimum international human rights standards and can thus be implicated in abuses such as employing child labourers, discriminating against certain groups of employees, failing to provide safe and healthy working conditions, attempting to repress independent trade unions, discouraging the right to bargain collectively, limiting the broad dissemination of appropriate technology and intellectual property, and dumping toxic wastes. Some of these abuses disproportionately affect developing countries, children, minorities, and women who work in unsafe and poorly paid production jobs, as well as indigenous communities and other vulnerable groups.
It is no doubt that environmental consequences of TNC’s behaviour are multiple and substantial, and here I am going to discuss these environmental consequences of TNC’s.
To start with, the question came, why and how TNC’s are responsible for transboundary environmental harms and damages? An emerging doctrinal elaboration refers to States asprimaryholders of human rights obligations , as opposed to the traditional understanding of States asexclusiveduty-holders—an understanding that is still supported by those who consider human rights from a strictly state-centric perspective. The new doctrine seems consistent with human rights instruments such as the Universal Declaration of Human Rights (UDHR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR) which, even though embedded in the state-centered tradition and focused mainly on the duties of States, specifically refer to “any . . . group or person” as having duties. In fact, no group or person has any right to engage in activities that would result in the violation of the rights recognized in these instruments. If the UDHR offers a starting point for the liability of transnational corporations (TNCs) under international human rights law, the ICESCR reaffirms this proposition, particularly when involving operations in States that ratified this treaty.
International law has also not been successful in controlling the environmental practices of transnational corporations (TNC). The efforts in the late 1970s and early 1980s to establish a draft Code of Conduct ultimately failed. In 1990 there was another attempt by G-77 and the United Nations Centre on Transnational Corporations (UNCTC) to revive these efforts, but this went nowhere because of opposition from the Organization for Economic Cooperation and Development (OECD) countries and the United States. In 1992, the UNCTC was closed and its activities integrated into the office of the United Nations Conference on Trade and Development (UNCTAD). In addition to these failed efforts internationally, industrialized countries have made little attempt to apply domestic restrictions to the environmental practices of their own corporations operating in other lands. Where there have been some major advances in this area has been with regard to the transportation of hazardous and radioactive materials. Publicity over scandals concerning disposal of toxic chemical wastes in Africa brought this problem to the United Nations’ agenda. Law occupied the forefront of all debates because the lack ofinternationallaw enabled the evasion of strict national laws by moving the problem, together with the toxic waste, to developing countries that had no protective legislation. The crucial role of law has been described succinctly by the WHO’s Regional Office for Europe: “A comprehensive system for the disposal of hazardous waste will not develop unless its basic requirements are prescribed and enforced by law.” The General Assembly affirmed the importance of law by urging governments to “take the necessary legal and technical measures in order to halt and prevent” illegal international traffic in and dumping of toxic wastes, and recognized “the necessity of developing rules of international law, as early as practicable, on liability and compensation for damage resulting from the transboundary movement and disposal of hazardous wastes.”.
- However, when the international community joins together, with each country taking an active part in drafting a code of conduct, the document has a much greater chance of being a success. A healthy environment involves a multitude of private and government actors in many countries, therefore, the mechanism to properly implement the right must be created at the international level.
- Considering that prior to the Norms the United Nations had not developed any legal obligations, its actions show it finds binding law is unnecessary.
Four catastrophic disasters in Human History:
Factual settings of disasters:
- Unioncarbide, Bhopal(India)
It is true that Indian government to a larger extent is responsible for the Bhopal disaster but the liability of MNC’s incorporated in US also entail some responsibility.
There is no similar attempt to regulate the health, safety and environmental practices of these corporations by US government. Thus, if the host country does not regulate these areas, U.S. multi corporations are essentially able to operate in a completely lawless manner. What this has lead to, in turn, are allegations that U.S. multinational corporations have engaged in a series of practices that would be illegal under United States law-- from systematic environmental degradation to exposing foreign field workers to pesticides known to be harmful; from the use of production plants that emit levels of sulphur dioxide that are fifteen to twenty times above what is permissible under U.S. law to the brazen shipment of leaded paint and glue commonly abused by desperate young children to Central American countries.
Perhaps the most unsettling example of the nonfeasance of U.S. law involved the sale of a nuclear power reactor to the Philippines by the Westinghouse corporation. The plant was to be situated above an earthquake fault line, and below an active volcano. In addition to these logistical considerations, the technical design of the plant did not meet domestic (U.S.) standards. Despite these grave flaws, the Nuclear Regulatory Commission (NRC) voted to issue the plant's license. The Board took the position that it did not have jurisdiction under domestic statutes to consider the health, safety and environmental impacts on the citizens of a recipient nation, or even to consider the effects of an exported reactor on U.S. interests and U.S. citizens abroad. The District of Columbia Circuit affirmed the NRC licensing decision, holding that the agency had properly approved the exported reactor without evaluating the health, safety, and environmental impacts.
It is ironic that American law bars the "corrupt practices" of U.S. multinational corporations doing business in other countries based on the idea that bribery is immoral, but it somehow refuses to address other actions of U.S. corporations that is every bit as immoral as bribery, if not more so. How does one explain this result? One answer might be that we are able to compartmentalize our morality, and that we are aided in this by the divisions that exist in our law. Another explanation, one that we will address in the next section, is that there is a decided purpose behind the anomalies created by the manner in which U.S. law has been applied extraterritorially, namely, to promote the national interests of the United States and its corporate entities.
Lessons from Bhopal and Seveso Accidents:
Bhopal and Seveso raised entirelydifferent issues about how to effectively regulate, control, and mitigate the effects of an industrial disaster. In the case of Seveso, the subsidiary of a foreign parent company was willing to settle the case by paying damages. In the case of Bhopal, the attack initially focused on the foreign parent corporation to find fault with, and lay claim on, a TNC. This situation highlights the problems faced by developing countries that frequently import hazardous substances and technology for much needed developmental projects.
The Bhopal and Seveso incidents raised a number of issues that need further investigation: how to regulate and subject TNCs operating in foreign countries to a definite regulatory regime; how to establish and enforce international standards on the corporations involved in the export and import of hazardous substances and technology to prevent such accidents in developing countries; and what kind of dispute settlement mechanisms should be developed to find just compensation to redress the damage caused to human victims, state economies, and global ecology. Also, why not inject the sense of a fair social system and environmental justice into aninternational setting?
Perhaps what is required is an attempt to build an international regulatory regime that takes into account the political and economical realities of the contemporary world, including the interdependence of the global economy, the global implications of environmental hazards, the global reach of the activities of TNCs, and the existence of third world countries who need assisted development without the additional cost of environmental damage. The latter half of the twentieth century has seen the disregard of national boundaries with regard to technology and economics. Recent rapid integration of the European and South Asian economies strongly indicates that uniform values, standards, and mechanisms for the control and regulation of TNCs are needed in an increasingly borderless society to develop and sustain a relatively risk-free global community that addresses the need of both the developing and developed countries.
- Differences between the two accidents discussed earlier and the Chernobyl explosion are numerous: 1) Chernobyl involved a government-owned operation with no TNC or foreign ownership in question; 2) the plant was subject to the local laws of the former Soviet Union; 3) the former Soviet government ran the operation with no foreign corporate involvement; 4) the accident perfectly demonstrated the concept of the public international law of state responsibility because the former Soviet Union as a state was responsible for both the ecological and financial damage incurred by injured countries; 5) interestingly, the question of damage compensation was raised by the European Parliament and not by individual countries in any court of law; 6) the transboundary effect of the accident was felt all over Europe; and 7) the main damages from the accident came in the form of long-term radiation pollution, ecological damage, dislocation of economic activity and long term health problems.
5.Newmount Mining corporation,2005
Recently in Buyat Pantai, one of Indonesia's most impoverished coastal communities where people live with only a single dirt road and without electricity or running water, something went wrong. Villagers were afflicted by a variety of illnesses that had never been seen before in this area. They began complaining of dizziness, breathing difficulties, tumours, skin rashes, and diseases. Water and air quality tests, conducted to determine the source of the illnesses, revealed a dramatic increase in arsenic and mercury to levels never before seen in the region. What had changed in this tiny, isolated, and autonomous coastal village? The answer is the arrival of Newmont Mining Corporation (Newmont), a U.S.-based multi-billion dollar gold producer, and its gold mine near Buyat Bay.
- The company's executives deny any wrongdoing and insist that everywhere Newmont does business, it adheres to U.S. environmental laws, which are often more stringent than those of developing countries.
Environmental concerns particular to Afghanistan and Iraq that must be addressed:
This land is your land & this land is my land--sure--but the world is run by those that never listen to music anyway.
- The presence of foreign nationals in the two States strains the already depleted resources of the environments and highlights the lack of international environmental law applicable to military and peace keeping forces.
These catastrophes draw attention to larger issues arising in international law. Specifically, there is a lack of certainty regarding what law controlstransnationalcorporations (TNCs), and what regulations are in place to safeguard the people and natural resources of countries hosting TNCs. Each nation has its own set of laws to protect theenvironmentand the health of its citizens.However, when a TNC exploits a host country's natural resources andharmsits land, developing countries often fail to enforce these laws because they fear the company will leave and take its jobs and dollars with it. Today, developing countries are asked to trade health and safety for the progress and prosperity promis
