Transnational Corporations and Other Business Enterprises.

Transnational Corporations and Other Business Enterprises Introduction

There is no doubt that globalisation has changed the world we live in and that it presents new and complex challenges for the protection of human rights. For instance, economic players, especially transnational corporations that operate across national borders, have gained unprecedented and unregulated power and influence across the globe.

Transnational Corporations and Other Business Enterprises Introduction

Companies have an enormous impact upon people’s lives and the communities in which they operate. Therefore, whilst this may sometimes be a positive impact – jobs created or the emergence of new technology that improves lives and investment in the community that in turn translates into real benefits for those who live there – in SHRGs opinion millions of adults and children around the world suffer abuses as workers obtaining raw materials, toiling on farms and making products for the global market.

The crux of the issue lies in the fact that they are often at the bottom of global supply chains, for everything from everyday goods like groceries to luxury items like jewellery and designer clothing that end up in stores worldwide. However, don’t just take our word for it, according to Amnesty International and Human Rights Watch in 2013 over 1,100 workers died and 2,000 workers were injured when the Rana Plaza building, which housed five garment factories, collapsed in Dhaka (Bangladesh). Since then, some progress has been made in making factories safer in Bangladesh, but to date the Government has failed to enact any substantive or sustainable reforms. However, it is extremely important to remember that this is a global issue or is by no means solely limited to Bangladesh.

Sikh Human Rights Groups Objectives.
  • Prevention: All transnational corporations and other businesses should be required by law to take steps to identify, prevent and address human rights abuses (known as due diligence). However, the SHRG believes that this MUST go beyond merely a tick box exercise.
  • Accountability: Companies must be held to account for their human rights abuses across the globe.
  • Remedy: People whose rights have been abused by companies must be able to access justice and effective remedies.
  • Protect rights beyond borders: Transnational corporations operate across borders, so the law must also operate across borders to protect people’s rights.
  • International Accountability: Establish an international regulatory bod or an international judicial body or otherwise to hold transnational corporations and other business enterprises accountable for their human rights violations.
Transnational Corporations and Other Business Enterprises Introduction
The Problem.

United Nations Member State Governments have a duty and responsibility to protect human rights. However, in SHRGs opinion many State Governments are failing to do this, especially when it comes to company operations – whether because of lack of capacity, dependence on the company as an investor or outright corruption.

Transnational Corporations and Other Business Enterprises Introduction

Therefore, this has led to many companies that operate across national borders (transnational corporations otherwise known as TNCs) to become involved in sever human rights abuses, such as forced labour or forcibly relocating communities from their lands.  Unsurprisingly, abuses are particularly severe in the extractive industries, where companies are racing against one another to mine scarce and valuable resources. That in turn leads to traditional livelihoods, such as farming, being destroyed as the famers land becomes contaminated and their water supplies polluted.

Furthermore, there is no doubt that this impact can be particularly severe for Indigenous Peoples because their way of life and their identity is often closely related to their lands. For example, affected communities are frequently denied access to information about the impact of company operations, that in turn means that they are excluded from participating in decisions that directly affect their lives, lands and livelihoods.

Although it is widely accepted that corporations have a responsibility to respect human rights, too many times profits are built on the back of human rights abuses. Despite laws in many countries that allow companies to be prosecuted, State Governments rarely investigate corporate wrongdoing. For example, when individuals or communities from our global society attempt to obtain justice for the human rights violations they have suffered they are often thwarted by ineffective legal systems, a lack of access to information, corruption and extremely powerful State-corporate alliances. The latter is clearly supported by the fact that transnational corporations are some of the wealthiest and most powerful entities in the world. For instance, and according to Human Rights Watch, 69 of the richest 100 entities in the world are corporations, not States. Consequently, this has allowed them to routinely escape legal accountability even when their operations have hurt workers, indigenous communities and the environment that we all share.

The UN Guiding Principles on Business and Human Rights (UNGPs) provide voluntary guidelines for companies on their human rights responsibilities, but they aren’t enforceable. Whilst we are not suggesting that industry driven voluntary standards and certification schemes, which have grown in recent years, can be useful they are clearly not sufficient to tackle the rising trend in severe human rights violations being committed by transnational corporations and other business enterprises on an annual basis. In other words, it is an indisputable fact that the large majority of transnational corporations will only act to prevent and remedy human rights violations that they have caused, either directly or indirectly, when they are required to do so by law – whether by domestic or international legislation it matters not. Furthermore, the UNGPs and the universal standards contained therein clearly do not encompass key human rights and environmental issues in transnational corporations supply chains, and the systems for monitoring compliance with the standards are clearly failing to rectify the ongoing issues.

Consequently, the era in which voluntary initiatives were the only way to encourage companies to respect human rights is starting to give way to the recognition that new, legally enforceable laws and the establishment of a cross-jurisdictional international UN Working Group, judicial body or otherwise is the only way in which we as a global society will push transnational corporations and other business enterprises towards respecting human rights and addressing human rights violations that they have caused or contributed to. For instance, and although debates vary by country, the overall trend is promising for the workers and communities that are part of the transnational corporation supply chains. Increasingly, State legislatures are acknowledging that transnational corporations need to take human rights – including the freedom from unsafe working conditions and forced labour – into account and are beginning to enact laws that require them to do so. For instance, and over the last decade France, the Netherlands, Australia  and the UK have all passed laws regarding corporate human rights abuses. However, a large majority of the laws are failing to gain momentum in terms of widely accepted industry standards or serving as adequate preventative measures. For instance, the UK and Australian Governments merely require companies to be transparent about their supply chains and report any actions they may have taken to address issues like forced or child labour, but the current legislation does not actually require them to prevent or remedy these issues. Furthermore, neither country has penalties in place for companies who do not comply with the law.

Nevertheless, a ray of hope may be found within the French legal system. France’s Duty of Vigilance law 2017 is the broadest and most rigorous regulation currently in effect. For example, it not only requires companies to identify and prevent both human rights and environmental impacts in their supply chains, but this applies equally to them as it does to companies that they control directly or with whom they work. Companies in France published their first ‘vigilance plans’ under this new law in 2018 and failing to comply can result in lawsuits. For instance, in October 2019 the first legal action under the new duty of vigilance law was filled. Therefore, in SHRGs opinion laws like the one in France, with requirements for company action, consequences when they fail to follow through, and a way for workers to hold companies accountable, opens the door to greater protections for workers and our shared environment. However, it is extremely important to remember that no law no matter how broad, both in terms of its scope and application, is wholly ineffective unless there is a robust, jurisdictionally competent and independent juridical body, regulatory body or otherwise in place to ensure its enforcement.

Therefore, the SHRG believes that there is clearly a long way to go but above all else State Governments need to seriously consider or in some instances reconsider their political positions when it comes to enacting policies and laws that change the way that transnational corporations and other business enterprises as a whole deal with human rights in their global operations, going beyond transparency and reporting to requirements that positively require them identify human rights risks in corporate supply chains and to take positive actions to prevent them. Only then will we see a fair, just and equitable global society and an international expectation for responsible behaviour from transnational corporations and other business enterprises starting to emerge. The worldwide COVID-19 pandemic has caused change for us all so let us ride this wave to affect the change that we would all like to see at an international, national and regional level but especially for those who are currently struggling to survive in our mines, factories and fields.

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