[IRPCoalition] FW: Economic Power, Democracy and Human Rights: A New International Debate on Human Rights and Corporations

[joy]

Thanks Michael, that's helpful.
I can follow up offlist, but wondering if JustNet is participating in
those HRC discussions at all?
Cheers

Joy
On 21/07/2014 3:48 p.m., michael gurstein wrote:
> Hi Joy,
>
> I believe this is the initiative you were asking about (along with a useful
> commentary...
>
> M
>
> -----Original Message-----
> From: Sally Burch - ALAI
> Sent: Tuesday, June 24, 2014 8:41 PM
> Subject: Another article on the bid to regulate corporate power
>
> http://www.tni.org/article/economic-power-democracy-and-human-rights
>
> Economic Power, Democracy and Human Rights: A New International Debate on
> Human Rights and Corporations
>
> Gonzalo Berrón
>
> The 26th Session of the United Nations Human Rights Council (UNHRC) opened
> in Geneva on June 10th. A major focus on the UNHRC agenda is the issue of
> binding regulations for Transnational Corporations (TNCs). This demand has
> been raised by Ecuador and 84 other governments in a Statement to the UNHRC
> last September 2013.
>
> The urgent need for such a Binding Treaty has been on the agenda of social
> movements and human rights organisations for a long time who have recently
> converged in a Treaty Alliance whose statement is supported by more than 500
> movements and networks from all regions of the world. There are indications
> that this demand for a Binding Treaty on TNCs will be a matter of intense
> negotiations at the UNHRC (as some governments including the US and the EU,
> seem determined to block this demand. This article places the political
> tensions converging in Geneva in the context of the broader agenda of
> corporate capture of political power and the privatisation of democracy.
>
> Economic interests in contemporary global capitalism: a new phase in the
> privatisation of democracy
>
> We are currently in a phase of global capitalism where certain tendencies
> appear to be converging to conspire against the ability of several
> generations to exercise democracy and human rights. On the one hand, the
> growing concentration of private economic power is overlapping the old
> North-South geopolitical division and is expressed at the global level in
> the form of transnational "mega-corporations" and the arrival of the
> "translatinas"1 and other corporations based in "emerging" economies. On the
> other hand, there is a new kind of interdependence between the world of
> money and the world of politics in what some describe as "corporate
> capture", or the capture of politics/democracy by economic power. These
> phenomena cannot be simply reduced to the participation of the "rich" in
> politics - the old Weberian plutocracy.
>
> Instead, they are the result of greater promiscuity between both worlds due
> to the dependency of politicians in competitive democratic systems. In other
> words, politicians' chances of getting elected depend on the economic means
> at their disposal for election campaigns, while their performance in
> positions of power (executive and legislative) is conditioned by the
> commitments they make to guarantee their re-election or a "dignified
> withdrawal" from public service. Several former European premieres currently
> act as consultants for major corporations. The growth of economic power
> arising from its concentration also has impacts on the international level:
> these mechanisms of capture can also be found in international
> institutions2. Furthermore, to the traditional geopolitical calculations of
> power on the international scene, one can add the economic calculations of
> actors from the business world who have organically penetrated mechanisms of
> the so-called "global governance". They do so actively through the
> construction of what some call the "architecture of impunity"3 - a framework
> of free trade agreements and investment treaties, and laws that expand the
> rights of "businesses" - or by directly occupying positions in international
> institutions, or exerting pressure via national governments defending the
> economic interests of their corporations4.
>
> Hyper-concentration, the “1%” and rights
>
> Popularised after the 2008 crisis as the "1%", the high concentration of
> wealth, property and decision-making power in the hands of an increasingly
> smaller number of actors has been the focus of a growing number of studies
> published in recent years. If we examine each of these three dimensions, in
> terms of the concentration of wealth, recent studies report that in the
> United States, 1% of the population owns 45% of total wealth5. According to
> ECLAC, in Latin America, the "richest quintile owns on average 46%, which
> ranges from 35% (in Uruguay) to 55% (in Brazil)”6. In Europe, in 2012, the
> income of the 20% of the population with the highest income was 5.1 times
> higher than that of the 20% of the population with the lowest income; in
> 2003, this ratio was 4.67. As for the ownership of corporations, the famous
> ETH Zurich study showed that the global network of companies is currently
> managed by 17 mega-corporations9.
>
> The intensification of certain changes in the morphology of corporate
> management and ownership has implications for decision-making processes,
> which increase the probability that human rights violations will occur.
> Investment funds and the idea of mega-corporations (corporations that are
> owners of corporations, which are owners of other corporations, and so
> forth) render responsibility for decision-making increasingly invisible and
> distance even more those who make decisions from those who are directly
> affected by them. Moreover, outsourcing the management of corporations by
> hiring CEOs and executives has the added effect of diluting responsibility
> and immunizing corporations' real owners against the illegal acts of their
> managers. The second aspect of this morphology is the pressure to earn
> profit either through the economic performance of the funds - in which,
> paradoxically, active and retired workers own bonds - or the performance of
> executive directors whose success depends on their ability to generate more
> and more profit.
>
> Political and social actions and responses
>
> We are not dealing with an entirely new phenomenon, but rather a
> configuration of contemporary capitalism that, as it consolidates in this
> new morphology, generates distinct and novel effects and reactions. In the
> process of defending their rights, new and old affected actors - workers,
> users and consumers, people in general, communities and even States -
> identify the different types of responsibility involved. They also help to
> elaborate on the type of problems, gaps and shortcomings that exist in the
> legal systems that are supposed to protect them. In countries like Brazil,
> there is a growing social awareness on the role of the abuses of
> international economic power, due to the privatisations in the 1990s, the
> globalisation of investments and emblematic cases of corruption and
> environmental disasters. Similar impacts of corporate operations are also
> hitting public consciousness - such as massive layoffs and the
> flexibilisation of labour through relocation (or the threat to relocate),
> and more recently, the aggressive role of investment and corporations in
> "extractivist"10 complexes (agricultural or mineral) and pressure on the
> environment and natural resources.
>
> In Brazil, the introduction of genetically modified organisms, the Forestry
> Code reform, the debate on the Mining Code, initiatives to change the method
> used to demarcate indigenous land, the construction of massive
> infrastructure projects, and tax exemptions are but some of the
> manifestations of economic pressure on the State that affect people's
> rights. The recent case of hosting the Soccer World Cup provides cross
> cutting exposure of some of the most perverse forms of this phenomenon:
> violations of state sovereignty by obliging the State to adopt reforms to
> laws and imposing demands for tax exemptions that are exclusively for the
> FIFA (laws 12.663 and 12.350); the explosion of infrastructure projects and
> pressures to meet deadlines that left public administrators in the hands of
> construction firms, as authorities were forced to accept their exorbitant
> over pricing, while the supposed beneficial legacy of these works - that is,
> new social and transportation infrastructure and benefits for urban areas in
> general - took the back seat. Government authorities also failed to stop the
> displacement of neighbourhoods and major increases in stadium entrance fees,
> which have resulted in the privatisation of access to sports stadia that
> previously were accessible to the public.
>
> This increase in social conflict is an expression of the new contradictions
> emerging in this recent phase of global capitalism. These contradictions are
> also present in countries whose governments emerged as a political response
> to the period immediately prior to the current one, dominated by the
> hegemony of the so-called Washington Consensus. Though not entirely removed
> from the resistance movements of that period, new struggles can be
> characterised as being in direct confrontation with capital, whose systemic
> responsibility was emblematically exposed by the crisis that erupted in
> 2008. And, as in the previous period, this conflict is developing on several
> levels: within States and on the international scene, which I will address
> below.
>
> The "Ruggie peace" lasted only 3 years: new tensions in the international
> debate on human rights and corporations
>
> Not long after the victory of corporate interests in the last major round of
> discussions on the issue of "human rights and business" in the UN, the
> system is currently in the midst of a new debate that gives hope to those
> who defend binding rules for corporations. Currently, the UN system has the
> "Guiding Principles”, approved by the UN Human Rights Council (UNHRC) in
> 2011. These principles developed in the period 2006-2011, were presented to
> the UN in the "Guiding Principles on Business and Human Rights: Implementing
> the United Nations 'Protect, Respect and Remedy' Framework" report, by the
> Special Representative of the UN Secretary General, John Ruggie. Defended by
> "optimists", these Guiding Principles (GPs) are general voluntary guidelines
> on human rights and corporations. They are organised into the three pillars:
> "protect, respect and remedy". In 2011, in addition to adopting the
> guidelines, the Council resolved to implement a program to promote them.
> This program includes various actions and the creation of a Working Group
> composed of 5 experts (chosen according to the usual UN criteria and
> balancing "business" affinities with academic and social ones. Among these
> actions, it is worth highlighting national implementation plans and annual
> and regional forums. The resolution gave the working group a three-year
> mandate, which ends in June 201411.
>
> The Working Group began its work in what appeared to be a period of calm
> surrounding the "implementation" of the GPs. However, "Ruggie's peace" came
> to an abrupt end: in September 2013, when Ecuador, together with another 84
> governments12, presented a declaration, in which these governments affirm
> that:
>
> "The endorsement by the UN Human Rights Council in June 2011 of the “Guiding
> Principles on Business and Human Rights: Implementing the United Nations
> Protect, Respect, and Remedy Framework” was a first step, but without a
> legally binding instrument, it will remain only as such: a “first step”
> without further consequence. A legally binding instrument would provide the
> framework for enhanced State action to protect rights and prevent the
> occurrence of violations.”13
>
> This declaration reopens the 40-year debate on the need to effectively
> regulate the operations and conduct of corporations and protect people and
> communities from the violations they commit. In this dispute and conflict of
> interests, corporations and the governments that protect them have won all
> of the battles so far, blocking attempts to get initiatives on binding norms
> approved14. At the same time, as a way to draw attention away from what
> really counts in terms of protections, corporations promote various
> initiatives on soft or voluntary codes. These codes, like "corporate social
> responsibility", offer a response to society that aims to downplay both the
> exorbitant profits and wealth they obtain from their activities and the
> violations they usually commit to obtain it.
>
> Those who defend the Ruggie process argue that one has to give the Guiding
> Principles time and that now is not the time to start discussing this issue
> again. They try to deny that Ecuador's declaration expresses a demand,
> always present in society, for the establishment of control over those whose
> irresponsible actions are seen as being responsible for the global crises
> (financial, economic, social, energy, environmental and food prices). To
> defend their position, GP defendants use four main arguments, almost all
> based on practical or pragmatic issues:
>
>     1- The consensus that was possible: the voluntary GPs are an important
> advance in relation to what there was before. For the first time, the UN
> unanimously adopted norms on "business and human rights". This was the
> consensus that it was possible to attain and we must respect it. It is not
> possible to go beyond this point.
>     2- Complexity: Generating binding rules for corporations is a Herculean
> task and, due to the complexity of the international system, it is
> practically impossible to do.
>     3- Implementation: Since this is such a complex task, initiating a
> negotiating process that could take years would reduce efforts to
> effectively implement the Ruggie Principles and, along with it, delay the
> concrete, albeit voluntary, enforcement of human rights in situations where
> they are violated.
>     4- It is the responsibility of nation-states: it is ultimately states
> that must ensure that human rights are respected in their jurisdictions. The
> role of the international community, as the Guiding Principles indicate, is
> to help strengthen their capacity to enforce them. Therefore, these
> voluntary principles are sufficient.
>
> One can surely add to this list the arguments that diplomats in New York or
> Geneva do not reveal in public. Their arguments are undoubtedly much more
> pragmatic and real than the ones listed above, and are related to the
> obstacles that this type of legislation could create for the free
> circulation of investment and further market liberalisation. As for host
> countries, the majority being the poorest or developing countries, they are
> concerned with the risk of corporations being discouraged from investing in
> their countries if binding obligations are adopted. It is clear that this
> kind of binding rules goes against the logic that allowed what we referred
> to earlier as the "architecture of impunity" to be built, as it implies
> taking a step towards reversing the excessive widening of mechanisms that
> protect the "rights" of foreign investors - i.e. transnational corporations
> and international investment funding instruments and mechanisms.
>
> Not only do these arguments ignore the tradition of robust theoretical
> debates and the principles that have historically characterised the
> discussion on human rights in international fora, their weak arguments are
> staggering. How can the international community tolerate this? And how can
> the members of the UN Working Group on Business and Human Rights who have
> assumed the defence of the Ruggie Principles as if they were rules set in
> stone on human rights and corporations.
>
> The first issue we should address is that, by definition, there is no
> measure of time that indicates when it is an appropriate moment to address
> an initiative like the one led by Ecuador. Political timing is determined by
> a set of factors, such as the will of the actors involved. In this case,
> even though the debate had apparently ended in 2011, there is an important
> group of States and social organisations that want to put the issue back on
> the agenda of the UNHRC. Therefore, we can say that we are before a new
> "moment" - one that demands that the debate on this issue be reopened. The
> fact that other actors do not want to do so reveals that they are
> comfortable with the status quo that many – especially the affected
> communities - have been questioning for the past four decades. What is more,
> there is nothing preventing advance on both processes simultaneously. In
> other words, it is possible to discuss a treaty with binding obligations for
> corporations and promote the Ruggie principles at the same time. The
> argument on the "consensus that was possible" is also dynamic and depends on
> the historical context. There are no elements indicating that the world is
> not mature enough to reach a consensus on stricter enforcement of rules on
> human rights. Or, to put it differently, the level of tolerance towards the
> human rights violations of major corporations and their exorbitant profits
> has fallen in the public opinion, and therefore, there is now less political
> space to sustain a global laissez faire human rights policy for corporations
> on the world.
>
> The task of elaborating this kind of Treaty is indeed complex. It implies
> making decisions on: what crimes are to be judged; about who and what
> framework will judge them; what the penalties are; how to organize the
> various branches of human rights; the level of applicability and detail; the
> extraterritorial application of the law; who is responsible; how to combine
> this kind of treaty with those already in effect; identifying judicial gaps;
> and many other issues. It is, without a doubt, a complicated task, yet its
> complexity does not eliminate the urgent need for it. Protecting people and
> communities, defending their rights and providing remedy in case of their
> violation are also complex tasks, but they are just as complex and vital for
> humanity as the development of a vaccine against AIDS, for example, or
> finding a cure for cancer. The complexity of these tasks does not make them
> less urgent or necessary for people. The issue of States' responsibilities
> has been examined at great length. By now, everyone knows that where the
> nation-state falters, only international norms and/or the international
> community can protect people. Moreover, as Martin Kohr from the South
> Center15 argues in relation to the abuses of transnational corporations -
> asymmetry is greater due to the fact that developed countries possess the
> institutional means they need to more effectively process violators of the
> law and human rights, and therefore, are able to better enforce the rule of
> law. Powerful states have a greater capacity to exert control over powerful
> economic interests in their territory. As for poor countries, with low
> levels of institutionalisation and States that are weak in comparison to
> transnational mega-corporations, for example, the defence of peoples' rights
> and access to justice are limited. Economic powers are able to use various
> extra-judicial mechanisms to circumvent the law, escape punishment or make
> it difficult to enforce sanctions. In the case of the contamination of the
> Gulf of Mexico, British Petroleum was condemned to paying several billions
> of dollars in fines by the United States government. The Bophal disaster in
> India or the recent Chevron case in Ecuador, on the other hand, provide
> telling examples of the difficulties that the communities affected by
> violations of human rights face in States with less economic power.
>
> “Shielding” the rights of people, not of corporations
>
> An international armour is needed to help protect people from the asymmetry
> of power produced by the accumulation of wealth and the political advantages
> it creates. For this, we must overturn the system mounted through
> international arbitration tribunals that protect investors' rights (ICSID
> and WTO dispute panels) - that is, the rights of major transnational
> corporations, which are responsible for the majority of international trade
> and investment flows.
>
> The creation of a legal framework that, through one or more treaties, can
> serve as an international reference on a new vision on economic and
> political relations and rights in the contemporary world is fundamental. By
> doing so, the fight for human rights can provide a fundamental tool that -
> when complemented by the mobilisations of affected communities and social
> organisations, movements and networks - can expand the frontier of the
> applicability of human rights throughout the world. 
>
> 1. Translatinas refers to transnational corporations from Latin America.
> 2. Friends of the Earth International, “Reclaim the UN from corporate
> capture” (2012) and more recently, Oxfam Internacional, “Working for the
> few. Political capture and economic inequality” (2014).
> 3. Brennan, Brid and Berrón, Gonzalo “Hacia una respuesta sistemica al
> capital transnacionalizado”, en Capital Transnacional vs Resistencia de los
> Pueblos, América Latina en Movimineto, ALAI, Quito, June 2012.
> 4. Joseph Stiglitz, “On the Wrong Side of Globalization”, New York Times,
> March 15, 2014,
> http://opinionator.blogs.nytimes.com/2014/03/15/on-the-wrong-side-of-glo...
> 5. Wealth inequality in America” by Wondershare
> https://www.youtube.com/watch?v=QPKKQnijnsM&feature=share
> 6. “Panorama Economico y Social de la Comunidad de Estados Latinoamericanos
> y Caribeños, 2013”, ECLAC, January 2014:
> http://www.cepal.org/publicaciones/xml/7/52077/PanoramaEconomicoySocial.pdf
> Data for EU-15, Eurostat:
> http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&plugin=1&languag...
> 8. Stefania Vitali, James B. Glattfelder, Stefano Battiston “The Network of
> Global Corporate Control”, 2011 9. They rule, Eles Mandam, Proprietários do
> Brasil, … 10. For an analysis on “extractivism”, see Gudynas, Eduardo (2009)
> «Diez tesis urgentes sobre el nuevo extractivismo. Contextos y demandas bajo
> el progresismo sudamericano actual» en VV.AA, Extractivismo, política y
> sociedad, CAAP / CLAES, Quito.
> 11. UN Human Rights Council Resolution 17/4, June 16, 2011.
> 12. African Group, the group of Arab Countries, Pakistan, Sri Lanka,
> Kyrgyzstan, Cuba, Nicaragua, Bolivia, Venezuela, Peru and Ecuador 13.
> "Statement on behalf of a Group of Countries at the 24th Session of the
> Human Rights Council", Geneva, September 2013:
> http://business-humanrights.org/media/documents/statement-unhrc-legally-...
> 14. The initiative of a UN Code of Conduct for Transnational Corporations
> (1983) and the Draft Norms on the responsibilities of transnational
> corporations approved in 2003 by the UN Sub-commission on the Promotion and
> Protection of Human Rights are of particular importance.
> 15. Intervention in the Seminar on Transnational Corporations and Human
> Rights, March 11 and 12, 2014, Palais des Nations, Geneva
>
>
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