TLDR (too long didn’t read): If you are reading this, chances are it behooves you. This Reader is about why it is high time to clamp down on corporate accountability vis-a vis HR. For a quick overview, just read the bolded text]. Traducir/traduire los/les Readers; usar/utiliser deepl.com
—The relevance of the United Nations Legally Binding Instrument to Regulate the Activities of Transnational Corporations and Other Business Enterprises is a structural lever for environmental Justice.
—Because of the lack of binding laws or their enforcement, corporations have been able to shape public policy, undermine regulation, as well as to influence standard settings and judicial decisions on human rights (HR). There is further a lack of enforceable pathways to ensure corporate accountability on environmental climate justice.
1. As climate disruption, biodiversity loss, pollution, and toxic exposure continue to worsen and intensify globally, the international debate on the ecological and HR obligations of business enterprises, especially of transnational corporations (TNCs), is gaining renewed urgency. In spite of an increasingly robust international HR and environmental legal framework, when it comes to trade and investment agreements, TNCs are often granted rights that are stronger than local communities’ tenure and collective rights, without including any corporate obligations, especially their obligations to respect and comply with remedies.
2. There are multiple examples of how corporate operations are causing severe environmental pollution in water, air, and soil, as well as damage to local agriculture, expropriation and displacement of communities. These refer to recent developments in international jurisprudence which have clarified states’ duties to regulate private actors, enforce compliance and ensure effective remedies (think about International Court of Justice (ICJ) and the Inter-American Court of Human Rights (IACtHR) rulings on climate emergencies and human rights).
3. Political compromise and corporate influence dilute environmental obligations and entrench weak compliance approaches that perpetuate corporate impunity. Moreover, international responses have shifted toward voluntary, multi‑stakeholder initiatives preeminently involving corporate actors. These frameworks have proven inadequate to deliver accountability. Their non‑binding nature, failure to impose enforceable and extraterritorial obligations, as well as the absence of effective investigative, sanctioning and remedial mechanisms severely limit their impact.
4. Negotiations of a legally binding instrument on transnational corporations and other business enterprises (LBI) have been shaped by tensions between the progressive ambitions and substantive proposals of many Global South states and civil society actors, and the efforts of some industrialized states and corporate interests to boycott, delay, narrow or weaken the text and process of the LBI. The negotiations are currently in their 11th year.
Natural resources, climate and ecosystems are increasingly affirmed as common goods
5. No binding global legal framework exists to regulate the activities and value chains of corporations. This allows them to escape accountability by exploiting jurisdictional loopholes and weak regulations.
6. The LBI process matters, not only because it seeks to close legal accountability gaps, but because the LBI presents an opportunity to turn the right to a clean, healthy and sustainable environment into enforceable obligations. It seeks strengthening avenues to guarantee prevention, liability, jurisdiction and enforceable remedies. For this, embedding corporate activity within a binding regulatory framework grounded in HR accountability is absolutely central.
Under international HR law, states are required to take positive steps to address the root causes of the planetary crises. The treaty intends to do that!
7. The LBI must play a pivotal role in operationalizing states’ obligations to respect, protect, and fulfill the right to a clean, healthy and sustainable environment. These measures will have to enable communities to exercise their “Right to Say No” and their right to self-determination. Its provisions will have to enable and require States to take timely action to modify, suspend, halt or refrain from violating HR.
8. The LBI text under negotiation also addresses structural barriers and power imbalances faced by individuals or communities to access justice, but there has been consistent resistance from powerful states to accept this during discussions. The measures being proposed in the text (but not yet accepted) pursue alleviating the disproportionate evidentiary burden currently borne by affected communities that frequently lack access to corporate data and information, and the capacity to obtain them.
9. Moreover, the LBI will have to clearly establish strict and joint civil, administrative and criminal liability for parent companies, controlling entities and lead firms within corporate groups throughout the value chains (from center to periphery).
- The LBI is to specifically recognize and incorporate rights for HR defenders (resisting corporate abuses) and obligations on States to protect them.
- It will have to stress that oversight must include the ability to investigate, prosecute, and sanction corporate non-compliance.
- It also must highlight the need to address corporate structures, enabling states to assign responsibilities to parent companies or entities exercising control, including for violations caused by subsidiaries or controlled companies, for instance, introducing the ‘polluters pay principle’ all along the chain.
- It will have to tackle investment treaties and contracts that allow investors to evade domestic liability. (This has excused corporations from local labor and environmental laws, leading to an increase in HR violations in global supply chains).
10. Taken together, these developments confirm what the LBI will have to deliver:
- Binding regulation of corporate conduct, and
- Harm prevention and secure access to justice and remedy in transnational contexts.
11. These provisions are expected to help close the gap between environmental recognition and real-world enforcement by creating a coherent accountability architecture that makes corporate obligations and access to justice actionable at the time that it ensures their fulfillment beyond national borders.
Bottom line
12. The LBI process is not an isolated negotiation. It is part of a broader transformation towards coherent global governance that protects both people and the planet.
13. Other processes related to sectors in which corporations play a powerful role include, among others:
- negotiations related to an international legally binding instrument on plastic pollution, including in the marine environment;
- the Global Framework on Chemicals (For a Planet Free of Harm from Chemicals and Dangerous Waste).
14. The LBI process opens up a historic path to confront corporate power, to ensure accountability across borders and sectors, to establish transnational and inter-generational responsibilities and obligations, as well as to contribute to a just transition grounded in HR, ecological protection and the primacy of people and planet over profit.
15. It is to address the challenge to ensure that the growing recognition of, for example, the right to health and the right to education across governance spaces are translated into enforceable and coherent obligations for states and corporations alike.
16. A UN legally binding instrument on transnational corporations and HR can indeed contribute to close the existing gaps and loopholes by ratifying binding regulations of corporate conduct. (extracted from FIAN op cit)
Claudio Schuftan, Ho Chi Minh City
Your comments are welcome at schuftan@gmail.com
Postscript/Marginalia
-Also see Corporate Impunity, Justice Paralysis (South Center)