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The application of human rights in oppressive/dictatorial countries and its consequences for investment policies

Philip Nauwelaerts

University of Antwerp

Globalization since 1989

• 1989 Glasnost / Tienanmen• Global Company Investment• New responsibilities• ILO • UDHR

Bedrijven en mensenrechten

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Some examples

• Oil and land rights in Peru

- Amazonian Indians block roads

- Petroperu shut pipeline (40.000 barrels each day)

- Armed police to clear the road and retake pumping station at Bagua

- Police killed by Indians armed with spears and machetes

- more than 40 Indians killed

- President Alan Garcia: Venezuela and Bolivia behind the violence

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-Government produced 99 decrees to speed the implementation of a free-trade agreement with the US.-Government measures intended to allow the development of “unproductive” land in the jungle-Also PERENCO, an Anglo-French oil company, plans to invest up to $ 2 billion, but overlaps a proposed reserve for an Indian tribe

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- Some 330.000 Indians are concerned- Peru has a long tradition of conflicts between foreign

mining and oil companies against local population. Violent conflict was necessary to resolve the problems

- UN Declaration on Indigenous Peoples, voted by Peru, guarantee for control over their traditional land and resources

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• Shell in Nigeria

- June 8th,2009 Shell will pay $ 15.5 million

- Shell denies any wrongdoing

- oil spills still untended making agriculture impossible

- Nigeria more violent now than it was back in the 1990s

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- Court battles also possible invoking the “Alien Tort Act” of the US (intended to counter piracy / 1789)

- Most lawsuits against big companies settled out of court, setting no clear precedents

- Pfizer arranging payout of $ 75 million (meningitis)

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• D.R. of Congo

- some 80 companies on a UN list for corruption or illegal exploitation of natural ressources

- payments are not transparant

- international protest: many companies left, leaving not necessarily the best

- 4-5 million people died due directly or indirectly to conflicts in Congo

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• Google: censored in China

• MSN: expelled Zhao Jing from its MSN spaces website on demand of China

• Yahoo: Shi Tao was betrayed and put in jail for ten years

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Accountability for companies

• Responsibility in the first place with governments, but what if they fail?

Human rights as a competitive disadvantage?

• Need for simple rules instead of a code of conduct

• UN Human Rights Norms for Business (2003)

• Rejection by “failed states” and companies• No coalition of the willing, but code of conduct

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UN Norms for Business• Adopted by the UN subcommission for human rights in

2003 and later stopped by the Commission• Report of the Special representative of the Secretary

General “Business and Human Rights” April 22th, 2009

– State duty to protect

– State not responsible for corporate-related human rights abuse; but they can try to prevent or punish

– Extraterritorial dimension: unsettled in international law

– Strong policy reasons for home States to encourage their companies to respect rights abroad – especially when State itself is involved

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Code of conduct

• Every company has its own (glossy) code• Coordinated codes per economic sector or industry

are more effective with their broader support, e.g.

1. Voluntary Principles on Security and Human Rights for the Extractive Sector

2. Kimberley Process• UN Global Compact

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OECD Guidelines for Multinational Enterprises• National Contact Points

European Union an CSR• Where are the initiatives?• EU Commission versus EU Parliament

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Role of NGOs

• NGOs have proposed guidelines

“Publish What You Pay” campaign• Irene Khan

Companies have supported international law when investments had to be protected and should support transforming the Global Compact from voluntary to binding standards

• Cooperation between companies and NGOs

is improving but still far from perfect

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Conclusion

• Voluntarism is not enough

code of conduct as a supplement in addition to norms

• Companies prefer simple and clear rules. Why not for human rights?

• Are failed states and companies “partners in crime” against more regulation?