Law, Social Justice & Global Development

Legal and Pseudo-Legal Experiences

Download 147.78 Kb.
Size147.78 Kb.
1   2   3   4   5   6   7   8   9

2. Legal and Pseudo-Legal Experiences

Opening presentations by Menno Kamminga, of the Faculty of Law at Maastricht University, and Saman Zia-Zarifi, of the Department of International Law at the Erasmus University, Rotterdam, outlined the general legal context in which cases against MNCs can currently be pursued. Multinational corporations can be held accountable for their operations in other countries either directly or through the governments of countries where they operate, and under either domestic or international law, but corporations also have an armoury of avoidance strategies and countermoves which they can bring into play. The question of whether it is more fruitful to pursue legal action in the state where abuses are committed (the host state) or the state where the parent MNC has its headquarters (the home state) is also crucial.

2.1 Holding Governments to Account for MNC Behaviour

States are obliged to protect the rights of people in their jurisdiction, and this implies that they must regulate companies operating or domiciled in their jurisdiction. It is therefore important not to lose sight of states’ responsibility by always targeting MNCs directly. Working at the level of governments means getting governments of both home and host states to formulate and implement legislation, regulatory mechanisms, monitoring and supervision to ensure that they can control and regulate the activities of MNCs in their jurisdiction. It means exposing and challenging collusion between governments and MNCs in both home and host countries. In parallel, international instruments which are directly binding on MNCs are necessary, together with effective international institutional mechanisms to enforce them.
In the context of the shrinking state and the privatisation of public services, states are increasingly trying to shift responsibilities, e.g. to provide water, onto private companies, usually resulting in a poorer service especially for poorer citizens living in less profitable areas. In many countries governments bend or waive their own labour and environmental legislation to allow MNCs a freer rein, or turn a blind eye to violations. States such as Sri Lanka have created free trade zones (FTZs), within which the state allows a separate system of law or waivers of national law. At worst, MNCs and governments actively collude: in Burma, for instance, the state oil and gas company MOGE was part of a joint venture with UNOCAL accused of serious human rights violations, carried out by the Burmese security forces, to clear territory and obtain forced labour for the construction of a gas pipeline; while in Nigeria, even under the new civilian government, state security forces are still being used to repress protest by local people at the activities of Shell and other oil companies in the Niger river delta. In such cases, collusion produces a legal vacuum. Who can be held accountable? Whom can claimants sue?
Bringing states to account on these responsibilities can force them to put pressure on companies. So it is important to pressure both MNCs’ home states to ensure that they act responsibly in other countries, and the host states where MNCs operate to formulate and implement appropriate legislation regulating business activity in their jurisdiction and not to collude with MNCs. On the other hand, MNCs have ways of avoiding being pressured through governments: they can move their headquarters to a more compliant state, or they can use their vague national identity to declare themselves free of the law of any country in which they operate.

2.2 Holding MNCs to Account Directly

Although it removes the spotlight from states’ responsibilities to provide an adequate regulatory framework for MNC operations, the shift of attention away from dealing with states towards dealing with corporations, calling corporations directly to account, offers greater possibilities for winning actual redress for victims of abuses by MNCs. Here, however, MNCs use their ephemeral and shifting legal nature, existing in many countries at once, to argue that they exist in none and are therefore free from regulation by any government other than that of the country they happen to be in – the host country. When approaches in the host country are fruitless, which is usually the case, approaches can be made under either domestic or international law:

  • at the level of the MNC’s home state;

  • at the regional level;

  • at the international level.

2.2.1 Home or Host State?

There were differences of opinion over whether cases should be put forward in the home or the host state. Existing experiences suggest that claims are less likely to succeed in host states, for a variety of reasons. Access to justice for victims/claimants may be more difficult in their own countries. In South Africa, for instance, employees are banned by law from suing employers, this right being replaced with ‘no-fault compensation’, and the relatives of claimants who have died cannot bring a claim at all in South Africa, though they can do so in the UK against a UK-domiciled company. Collusion is likely to be greater, partly because developing countries, which are usually host states, need MNCs in the globalised economy. Many small, weak national economies are dependent on MNCs, and it is understandable, if regrettable, that they fear alienating them.
On the other hand, having recourse to MNCs’ home states raises the question of sovereignty. In the past, home states have exercised diplomatic protection on behalf of corporations against the host state, but this became seen as a colonial practice and an infringement of the host state’s sovereignty. Arguments on the grounds of sovereignty, however, are double-edged. Companies often use (or abuse) sovereignty as a pretext for devolving responsibility to host states, hoping to benefit from less adequate legal protection of victims, lower costs, or less judicial rigour. In many cases, claimants have insisted on bringing their cases in the offending MNC’s home country.
Yet host governments’ laws should not be ignored out of hand. One participant mentioned that hundreds of cases involving oil spills have been brought successfully against Shell in Nigeria, resulting in damages payouts of about $0.5 million. With the arrival of the civilian government in Nigeria there are hopes that the judiciary will be more independent; but even under Gen. Abacha judges were prepared to rule against oil companies, often because they were themselves from communities affected by the companies’ operations. However, it was pointed out that these cases resulted from a very specific contract signed between Shell and the former Nigerian government granting Nigerians the right to sue Shell only on oil spills, so human rights violations cannot be addressed.

Download 147.78 Kb.

Share with your friends:
1   2   3   4   5   6   7   8   9

The database is protected by copyright © 2022
send message

    Main page