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

michael gurstein gurstein at gmail.com
Mon Jul 21 13:35:53 EEST 2014

Hi Joy,

JNC isn't participating directly in the HRC as, it is my understanding, an
organization needs to be in existence for 2 years before it can apply for
ECOSOC observer status. We are connected indirectly through various of the
JNC's participating organizations and individuals.



-----Original Message-----
From: joy [mailto:joy at apc.org] 
Sent: Monday, July 21, 2014 9:33 AM
To: michael gurstein; IRP
Subject: Re: FW: Economic Power, Democracy and Human Rights: A New
International Debate on Human Rights and Corporations

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

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
> 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
> 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
> 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, 
> 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/PanoramaEconomicoySocia
> l.pdf
> Data for EU-15, Eurostat:
> 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:
> 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
> _______________________________________________
> Members mailing list

More information about the IRP mailing list