Influence of corporations in treaty process would undermine affected communities’ interests

Kate Lappin, co-authored with Haley Pedersen & Tessa Khan, Asia Pacific Forum on Women, Law and Development (APWLD)

Women_carrying_wood_Credit_APWLD

This blog is part of the debate blog series on the proposed treaty and its complementarity with the UN Guiding Principles. We believe that an inclusive and open debate is crucial to make sure these initiatives deliver for everyone, and that the business & human rights movement continues its 'unity in diversity'.

The environment of impunity transnational corporations are afforded globally remains grimly visible in the Asia Pacific Region, as business-related human rights violations such as mass displacement, destruction of lands and natural resources, slave-like wages, unsafe working conditions, and the increasing persecution and repression of human rights activists persist throughout the region.

Given the dire reality of past and on-going corporate human rights violations in Asia and the Pacific, the adoption by the UN Human Rights Council of a Resolution last year to elaborate a binding instrument “to regulate, in international human rights law, the activities of transnational corporations and other business enterprises” provides a critical opportunity to advance corporate accountability.

Civil society representatives from the Asia Pacific region gathered earlier this year to discuss how to ensure that the process of developing a treaty responds to the needs of communities that experience human rights violations caused by businesses.  One key issue resonated throughout these consultations: in order for the treaty to genuinely serve the priorities and interests of affected communities, corporate participation in the process of elaborating and adopting the treaty must be expressly prohibited.

That demand arises from the clear conflict of interest corporations have in influencing a system designed to increase regulation and accountability of the private sector.  It is also a response to the fundamental power imbalance that exists between the private sector and civil society.  The private sector already exercises influence very effectively through governments, and sees to it that government positions in international fora reinforce the global structures which channel power, wealth, and resources to the corporate sector and ensure lax regulation of the operations of transnational corporations.  Corporate influence greatly outweighs that of civil society, yet a powerful nexus of corporate interests have in the past repeatedly sought to actively undermine civil society by such extreme means as spying, harassing, and killing activists- a problem only worsening in recent years as the number of activists killed each year is increasing.

The corporate sector receives privileged access to and influence over multilateral negotiation processes, often through the inclusion of corporate lobbyists, groups, and associations as official advisors.  This type of multistakeholder approach positions corporations as rights holders entitled to a voice in negotiations, rather than entities whose prime interests are profit and pleasing shareholders.

This can be seen in the current multilateral negotiations on the post-2015 sustainable development agenda, wherein strong corporate influence in the shaping of the post-2015 architecture will likely result in financing and implementation of the post-2015 agenda being outsourced to the private sector. [1]  This threatens to place even more power in the hands of the corporate sector, while ignoring the responsibility of corporations for benefiting from and reinforcing global inequalities, human rights abuses, and environmental degradation.

The process of negotiating the US led preferential trade agreements provides a brazen example of corporate led global governance.  More than 600 corporate advisers have had access to negotiations while elected representatives, let alone civil society, have been denied access to text that will have far reaching human rights implications.  These agreements will cement the capacity of corporations to actively undermine human rights and development objectives of governments through the use of Investor State Dispute Settlement mechanisms to sue governments if a corporation deems regulatory changes as impeding on the profit of their investment.[2]

There have been rare examples of agreements that prevent corporations from influencing policy making at the international level. Article 5.3 of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), for example, requires states to protect health policy formation “…from commercial and other vested interests of the tobacco industry”.  The General Assembly specifically recognised “the fundamental conflict of interest between the tobacco industry and public health” in GA resolution 66/2 on public health.  Tobacco corporations are essentially no different to other multi-national corporations whose operations routinely cause human rights abuses.

The process of elaborating a new framework is an opportunity for civil society to challenge the narrative that assumes that corporate actors can be trusted—in the absence of binding regulation—to act in alignment with the objectives of equitable, sustainable development and human rights.

This treaty needs to reassert a clear distinction between those who should regulate and those who must be regulated- an intention that, history shows, is consistently undermined when the corporate sector plays a role in designing the regulatory mechanism.

The failures of previous attempts at legally binding mechanisms are likely the main drivers behind the huge amount of corporate participation invited in the process of formulating the UN Guiding Principles on Business and Human Rights.  The UN Guiding Principles (UNGPs), enacted in 2011, were designed by author John Ruggie through nearly 50 international consultations largely inclusive of corporate lobbyists and interest groups, and in consideration of hundreds of submissions and commentaries from business associations and TNCs.  The immense inclusion of corporate interests in the six-year drafting process resulted in the UNGPs being a voluntary initiative that established the clear distinction that, while corporations have the “responsibility” to respect human rights, the State is ultimately the duty-bearer in terms of protecting them.  This process, therefore, allowed the corporate sector to ensure a minimal level of regulation that in fact legitimized the ability of transnational corporations to operate without adherence to any established international human rights standards.[3]

The legally non-binding character of the Principles that resulted largely from the huge amount of corporate participation in the drafting process fails to address the severity of global business related-human rights violations.  As a partnership-based and growth and market-oriented sustainable development agenda is set to be enacted this year and as the enactment of two massive US-led free trade agreements will likely increase transnational business activity, there is an urgent and critical need for a legally binding framework to regulate the work of transnational corporations and to provide appropriate protection, justice and remedy to the victims of human rights abuses directly resulting from or related to the activities of some transnational corporations and other businesses enterprises.

History has shown that corporate participation through dialogue in a multi-stakeholder forum fails to manifest real changes in corporate practice.  The continuing and increasing cases of human rights abuses by some transnational corporations reminds us that the corporate sector must not be permitted to play a role in designing the mechanisms of its own regulation.  It is civil society and social movements, whose very purpose is to advance human rights, that must be provided a prominent role in this process to ensure the interests of affected communities remain at the core of developing and drafting a treaty on transnational corporations and human rights.

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Kate Lappin is the Regional Coordinator of the Asia Pacific Forum on Women, Law and Development (APWLD), a women's rights network comprising 195 organisations and diverse groups of feminist activists.  APWLD interrogates the structural causes of inequality originating in the fusion of Globalisation, Fundamentalisms and Militarism with Patriarchy and builds movements to advance women's human rights and Development Justice.  Follow APWLD on twitter @apwld




[1] “Financing for Development: The capture of development by corporate interests at the UN” Available at: https://csoforffd.wordpress.com/blogs-op-ed/the-capture-of-development-by-corporate-interests-at-the-un/

[2] Global Policy Forum, et al, Corporate Influence in the Post-2015 Process (2014).

[3] Ibid.