Urgent need for binding obligations on Transnational Corporations raised at the UN

01 June 2011

John Ruggie's proposed guidelines to the UN on Human Rights and Transnational Corporations fail to bring TNCs under any binding law, thefore enabling human rights and environmental crimes to continue with impunity.

The Transnational Institute has joined many civil society organisations and social movements urging the UN Human Rights Council to reject the “Guiding Principles” by Mr. John Ruggie, Special Representative of the UN Secretary General (SRSG) on Human Rights and Transnational Corporations (TNCs) and other business enterprises.

The Guiding Principles fail to make any recommendation for binding regulations on Transnational Corporations, even though Ruggie received many proposals on the need for such regulation from civil society organisations. The respect-protect-remedy framework proposed by the SRSG instead relies on voluntary action by TNCs.

The  BP Horizon Deepwater blow-out and the role of major banks in the global economic crisis are just two recent public cases, which have demonstrated the urgent need for binding regulation of TNCs.

The need to address the lack of legal structure to enforce human R=rights obligations on TNCs was also addressed in the Judgment of the Permanent Peoples Tribunal (PPT) which examined 48 cases of human rights violations by European TNCs in Latin America during its Sessions in Vienna (2006), Lima (2008) and Madrid (2010).

The 2010 PPT Verdict called on the “the United Nations Human Rights Council to draw up a compulsory code of conduct for transnational corporations, which takes into account the provisions of the ILO, the OECD and the UN (…) Likewise, to request the provision of an appropriate international mechanism to monitor compliance, which could take the form of an International Economic Court that deals with human rights violations in any shape or form and awards reparations for these by determining liability; and, when relevant, criminal liability. A body, in short, before which individual or collective victims could bring their claims and demands for justice”.

The call of the PPT to the UN Human Rights Council came in response to the social movements and organisations from Latin America and Europe, in the network known as Enlazando Alternativas, which had exposed how voluntary codes of conduct, which form part of the Corporate Social Responsibility (CSR) approach, have failed to tackle human rights and environmental violations of Transnational Corporations (TNCs).

These movements denounce the current system, where the rights of TNCs are guaranteed by the judicial fortress of the Lex Mercatoria  [trade and commercial law and treaties], but responsibilities and obligations are omitted, left to the good will of corporations.

Download the verdict and the statement [PDF 

Español: veredicto y declaración