Lecture Slides: Non-State Actors - MNCs (PDF)

Non-State Actors in International law: Globalisation and Multinational Corporations Public International Law Dr. Federica Violi Today’s lecture The notion of globalization and its consequences on the role of non-state actors The notion and variety of non-state actors...

Non-State Actors in International law: Globalisation and Multinational Corporations Public International Law Dr. Federica Violi Today’s lecture The notion of globalization and its consequences on the role of non-state actors The notion and variety of non-state actors The notion of MNCs Attempts at regulating MNCs conduct  Globalisation …entails four distinct types of changes: 1) Stretching of social, political, and economic activities across political frontiers, regions and continents. 2) Intensifying our dependence on each other, as flows of trade, investment, finance, migration and culture increase. 3) New systems of transport and communication mean that ideas, goods, information, capital and people move more quickly. 4) Distant events have a deeper impact on our lives. Even the most local developments may come to have enormous global consequences. (David Held et al, ‘Globalization’ (1999) 5 Global Governance 483-496) © Sophia Paulini  The Benefits and Challenges of Globalisation Globalisation poses conceptual challenges to the discipline of international law – For example, it has a dynamic impact on the further development of the role of non-state actors in shaping politics and law. © Sophia Paulini  Non-State Actors in International Law ▪ The main subjects of international law are states. ▪ However, non-state actors also play important roles and enjoy direct rights and obligations under international law. They are thus argued to be no longer just objects of international law. Such non-state actors are, for example: International Organisations, Individuals, NGOs, Multinational Corporations etc. ▪ Note: There are no formal criteria in international law to determine the status ‘subject of international law’ Practice Question: International law is changing because the world is changing as a result of globalisation. Over the past decades, international law is said to have evolved with respect to matters, such as the sources of international law as well as actors involved in international law. Elaborate what has changed specifically regarding the actors involved. Today’s lecture The notion of globalization and its consequences on the role of non-state actors The notion and variety of non-state actors The notion of MNCs Attempts at regulating MNCs conduct Potential answer to practice question: In the traditional understanding of international law, states are considered the primary and sole actors of international law. They alone possess international legal personality and international rights and responsibilities. However, increasingly, non-state actors – traditionally understood as only objects of international law - are also being recognised as actors in international law, albeit without the exact same set of rights and obligations as states. The main examples in this regard are international organizations, such as the UN, which are now regarded as having international legal personality. Other non-state actors such as NGOs and individuals also increasingly play a role in international law. Individuals are now possessing certain rights (e.g. human rights) and obligations (international criminal responsibility). Similarly, corporations can under international investment agreements bring claims against states for a violation of their rights. Multinational Corporations (MNCs): Beneficiaries and agents of globalisation “They [MNCs] usually comprise companies or other entities established in more than one country and so linked that they may coordinate their operations in various ways. While one or more of these entities may be able to exercise a significant influence over the activities of others, their degree of autonomy within the enterprise may vary widely from one multinational enterprise to another.” (Organisation for Economic Co-operation [OECD] 2011) Different types of company segments of an MNC Source: Todeva and Rakhmatullin, ‘Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies’ (2016) JRC Science for Policy Report, European Union  Multinational Corporations (MNCs) in (international) law Limited liability of parent company - ‘the corporate veil’ - the corporate parent is generally not liable for risks incurred and damages caused by a subsidiary International law does not generally regard the MNC as having a unity. Rather, international law sees the MNC as a series of distinct persons, corporate nationals of their respectives places of incorporation and lacking in collective agency.  The economic influence of MNCs Source: Global Justice Now, ‘69 of the richest 100 entities on the planet are corporations, not governments, figures show’  Corporations as bearers of rights International Investment Agreements - Concluded between states to protect and attract foreign investments. Corporations are typically given the right under International Investment Agreements to take host states to international arbitration in case of a dispute. European Convention on Human Rights (ECHR) – The European Court of Human Rights (ECtHR) has granted corporations protection under a number of rights under the ECHR, e.g. the right to a fair hearing and the right to freedom of expression Potential remedies against MNCs abuses Domestic judges of either host or home State -> e.g. Vedanta (UK) – Shell (NL, 2021) (Nigeria, 2005) Human rights judicial and quasi-judicial mechanisms State-to-State dispute settlement Mediatic reputational campaigns  Filling the ‘Governance Gap’ with Soft Law? 1/2 Guiding Principles on Business and Human Rights – ‘Ruggie Framework’: Three pillars: (1) the state duty to respect, protect and fulfil human rights, (2) the corporate responsibility to respect human rights, and (3) the need for effective remedy for victims of human rights abuses Operationalised by a number of ‘Guiding Principles’ Principles include: In order to identify, prevent, mitigate and account for how they address their adverse human rights impacts, business enterprises should carry out human rights due diligence Business enterprises should identify and assess any actual or potential adverse human rights impacts with which they may be involved either through their own activities or as a result of their business relationships  Filling the ‘Governance Gap’ with Soft Law? 2/2 OECD Guidelines for Multinational Enterprises: Recommendations addressed by governments to multinational enterprises operating in or from the adhering countries. For example, Enterprises should contribute to economic, environmental and social progress with a view to achieving sustainable development. Enterprises should respect the internationally recognised human rights of those affected by their activities. Complaint mechanism – National Contact Points (NCPs)  Something new on the horizon: The Business and Human Rights Treaty: Intergovernmental working group was established within the United Nations framework with the task of drafting a binding treaty on human rights and business Mandate: creating an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises  To conclude… Globalisation requires us to rethink the traditional conceptions of international law as, for example, non-state actors are fulfilling increasingly important functions. MNCs operate internationally and assert economic, political and social influence globally without being properly captured by international law. However, attempts to regulate MNCs remain state-centred.