Law, Social Justice & Global Development

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5.4 World Trade Organization

The WTO is the only international body with real power to enforce, but, from the point of view of challenging MNCs, its devotion to free trade makes it on the whole part of the problem rather than part of the solution. The less power national governments have, the more necessary international regulation is; but unfortunately the WTO, the one organization most involved in international regulation, is also the one coming under the strongest criticism, as the uproar at Seattle shows.
The WTO authorises victims of unfair trade practices to impose sanctions on companies up to a certain maximum amount, and there are several cases in the WTO of states both paying and being paid. Corporations have had to change their behaviour, and ultimately bear costs, in a number of cases. However, most WTO cases are between industries or corporations. In practice, civil society has no meaningful access to the WTO, and the institution does not present itself as a defender of the economic rights of citizens. In fact, protection of some rights by States can result in a violation of WTO rules. Thus the WTO in itself raises a series of human rights questions.

6. NGOs and Legal Action

While NGOs generally choose to challenge corporate power by non-legal means such as campaigns, public awareness-raising, and advocacy, some have taken the legal route and others are considering it as a strategy. In Belgium, Oxfam Magasins du Monde/Clean Clothes Campaign is campaigning for the rights of employees of Adidas, a sponsor of the Euro 2000 football tournament starting in June 2000, and would like to pursue legal actions (see box, p10). In Germany, the Bayerwatch campaign, which, as its name suggests, monitors the activities of the powerful German pharmaceuticals MNC, Bayer, has tried to bring many cases against the company, but has had limited success and was itself sued by Bayer in the late 1980s. After a seven-year legal battle that went right to the German supreme court, Bayerwatch won the case, but at enormous expense.
Amnesty International’s Netherlands section is exploring the possibilities and problems of legal actions with lawyers and other NGOs. In the UK, World Development Movement has been working with Richard Meeran on the Cape case, but is still trying to clarify the most effective role it can play as a campaigning organization; this may be most usefully defined on the basis of public interest.

6.1 Non-Legal Means: Campaigns and Advocacy

Semi-legal and non-legal means of pressuring companies are also very important, and can lead to economic punishment for companies, which is a good deterrent. NGO activities such as working on standards and codes, raising public awareness, solidarity with claimants, research and evidence-gathering, advocacy with governments and companies, can complement legal work. The various NGDOs and campaigning organisations at the seminar represented a wide range of experience of this kind of work.

6.1.1 Public hearings

In 1999, as a result of the Howitt report and resolution (see above, section II 4), the European Parliament decided to hold public hearings where victims of abuses by MNCs could complain publicly before MEPs and in the presence of representatives of the MNCs, who would reply. The press and media would also be invited. Hearings in the EP are decided on by presidencies, but are brought forward by the parliamentary committees. It requires a lot of lobbying to obtain an EP hearing, and so far only the Committee on Development and Co-operation has agreed to hold a hearing on MNCs. The big advantage of EP hearings is that the facts speak for themselves, and that the mechanisms confronts industries with complainants.
The Permanent Peoples’ Tribunal on Global Corporations and Human Wrongs, based in Rome, works on important test cases such as that involving Union Carbide at Bhopal in 1984, which has been described as the world’s worst industrial disaster. It also holds periodic Tribunal hearings to receive the testimony of those who have suffered from the activities of MNCs. The present seminar preceded one such Tribunal (also held at the University of Warwick, 22–25 March 2000), at which a panel of 5–7 persons selected to represent the international community, sitting in a public hearing, heard and examined evidence against Freeport McMoran/Rio Tinto, Monsanto and Union Carbide. Representatives of industry were not invited to respond at this stage. PPT secretary Gianni Tognoni explained that this was deliberate; historically corporations have refused to come to tribunals, so the PPT organisers wanted to use this session as the start of ongoing proceedings in which MNCs would be presented at the next session with all the evidence gathered at this one.

6.1.2 Shareholding

Corporations’ main legal responsibilities are to their shareholders, and they often insist on this when called to account for putting profits before the welfare of workers and consumers or environmental considerations. Holding a few shares in a company theoretically gives the holder a limited say in how the company operates. Some human rights and environmental organisations and activists have tried to use shareholding in the past as a strategy for promoting accountability of companies, but the companies can mobilise far greater resources for influencing other shareholders than individual small shareholders can. UNOCAL, for instance, has shareholder resolutions pending against it for about US$400 million, but has responded by writing to all shareholders calling on them to dissociate themselves from the resolution.

6.1.3 Codes of Conduct and Standard-setting

The formulation and promotion of codes of conduct and standards, including the awarding of social or environmental labels such as Rugmark (a social label for carpets produced in India and Nepal without the use of child labour), is perhaps the most common NGO activity aimed at making MNCs more accountable. While the effectiveness of this strategy is debated (see below, section IV), one result is that there is now a large array of codes of conduct, dealing with the same broad issues. An interesting example of work in this area is the set of Principles for the conduct of company operations within the oil and gas industry elaborated by Bread for the World. BfW realised that although there is no shortage of codes there is a need for principles that allow such codes to become operational, meaningful, and verifiable. The Principles form a comprehensive list of regulations covering people’s participation in planning oil and gas extraction projects, sustainable development, respect for indigenous peoples and their traditions, environmental standards, including intergenerational equity, and human and labour rights, and enjoining independent monitoring, auditing and verification of codes of conduct and an independent and accessible mechanism for receiving complaints.

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