1. Business and Human Rights Menno Kamminga

2. Faculty of Law 2 Emergence of non-state actors IGOs NGOs Individuals MNEs

3. Faculty of Law 3 Race to the bottom Elimination of boundaries Freedom of foreign direct investment (FDI) Competition between states to attract investment produces lowering of standards Investment protection

4. Faculty of Law 4 Accountability (or governance) gap Not subject to one legal system One brand and one profit but limited liability Rights but no duties under international law States unable or unwilling to hold companies accountable Market provides ineffective accountability mechanism

5. Faculty of Law 5 Positive impact of MNEs Jobs Technology transfer Revenues Schools/medical facilities

6. Faculty of Law 6

7. 7

8. 8 Union Carbide (Bhopal) Explosion in 1984 16.000 killed, 50.000 permanently disabled Lawsuits in New York and India $470 million out of court settlement

9. Faculty of Law 9 Curse of the minerals Extractive industries Collusion with host state government Revenues to Swiss bank accounts Lack of transparency Angola, Congo, Nigeria, Sudan, Myanmar

10. Faculty of Law 10 Who is responsible under int. law? 1.Host state 2.Home state 3.Multinational enterprise

11. Faculty of Law 11 1. Host state responsibility Traditional approach Positive obligations. Due diligence But doesn’t work if government is unable or unwilling Myanmar(Burma) and the ILO

12. Faculty of Law 12 2. Home state responsibility Examples of extraterritorial legislation Problems with this approach Except if home state actively supports foreign investment e.g. through export credits

13. Faculty of Law 13 3. Direct corporate responsibility Preferred approach Just as for states and individuals International minimum standards International supervision International Criminal Court?

14. Faculty of Law 14 Three types of corporate liability 1.Direct abuses (e.g. by security guards) 2.Taking advantages of abuses (e.g. involuntary resettlement or abuses in supply chain) 3.Failing to speak out against abuses (sphere of influence)

15. Faculty of Law 15 International codes of conduct ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy (1977) OECD Declaration on International Investment and Multinational Enterprises (1976, revised several times) UN Global Compact (2000) But vague language and limited supervision systems

16. Faculty of Law 16 Corporate codes of conduct Impressive texts on corporate websites But usually lack of supervision Impact on consumers? Legal significance?

17. Faculty of Law 17 Multistakeholder initiatives Characteristics Extractive Industries Transparency Initiative Voluntary Principles on Security and Human Rights Kimberley Process Certification Scheme Advantages and disadvantages

18. Faculty of Law 18 UN Special Representative John Ruggie Mandate (since 2005): “identify and clarify” international standards Fantastic networker Managed to establish global consensus Ruggie framework: Protect, Respect and Remedy Guiding Principles (2011)

19. Faculty of Law 19 Guiding Principles on Business and Human Rights (2011) Adopted by UN Human Rights Council without any change (!) Not binding Don’t cover home state obligations Corporate due diligence obligation: ticking the boxes; obligation of effort

20. Faculty of Law 20 Lawsuits Purpose: relief for victims and establish precedents by bottom-up approach So far mainly in USA (ATCA) But increasingly also in other countries: no ATCA required

21. Faculty of Law 21 Legal hurdle 1: Competent court Forum non conveniens EU Regulation 44/2001 on Jurisdiction and Enforcement of Judgments in Civil Matters (EEX): company may be sued where it has its statutory seat ECJ case C-281/102, Owusuwu, par. 46

22. Faculty of Law 22 Legal hurdle 2: Applicable law Lex loci delicti Public policy exception Customary international law (Unocal) But see Kiobel v. Shell

23. Faculty of Law 23 Legal hurdle 3: Imputability Limited liability of subsidiary Lifting corporate veil Enterprise (or corporate group) liability

24. Faculty of Law 24 Out of court settlements Union Carbide/Dow Chemicals (India): $470 million Unocal (Myanmar/Burma): secret amount Trafigura (Cote d’Ivoire): app. $250 million Wiwa v. Shell (Nigeria): $15.5 million Texaco/Chevron (Ecuador) next? Problems with settlements

25. Faculty of Law 25 The future Disasters needed? Demand for level playing field? A convention codifying international corporate obligations With a binding enforcement mechanism

26. Faculty of Law 26 Want to know more?