The United Nations Human Rights Council (UNHRC) has resolved to develop an international legally binding instrument to regulate the activities of multinational corporations (MNCs), but countries that host MNCs voted against the decision.
The resolution, presented by Ecuador and South Africa and adopted on 26 June, establishes an intergovernmental working group with the mandate of developing binding norms on the human rights responsibilities of MNCs. The vote was 20 for, 14 against and 13 abstentions in the 47-member UNHRC. The United States and EU members, including France, Germany, the UK, Italy, Austria, and the Czech Republic, together with South Korea and Japan, voted against the resolution which was supported by China, India, Indonesia, Kenya, Pakistan, Philippines and Algeria, amongst others, setting the stage for a major battle between developing countries and industrialised countries with powerful MNC interests.
Developing an international system to regulate corporations for their human rights violations has been attempted twice before. The first effort , begun in 1972, ended in 1992 when some counties opposed a ratification requirement of the code for it to be applied in domestic law.
The second effort began in 1998 when a working group was established to examine the effects of transnational corporations on human rights and to draft norms for a monitoring mechanism that would apply sanctions to MNCs. In 2003 these norms, designed as a 'non-voluntary' international system of regulation for corporate violations of human rights, were sent to the Commission for Human Rights for their approval. The norms were broadly supported by civil society, but rigidly opposed by some from the business sector and in 2004 the Commission on Human Rights declared them to have 'no legal standing'.
However, the gaping hole in human rights redress for those affected by the operations of multinationals could not be ignored and in 2008 the UNHRC adopted the Respect, Protect and Remedy Framework developed by Professor John Ruggie which was operationalized in 2011 as the UN Guiding Principles on Business and Human Rights. The Ruggie Framework has become increasingly influential, giving greater legitimacy to a host of different multilateral, bilateral and unilateral mechanisms but it does not offer binding standards against which a corporation can be judged for human rights violations.
No doubt, this third attempt will face stiff opposition at the UN by governments representing large capital interests, especially from the EU and US. The US has already stated that countries that voted against the UNHRC resolution will not be required to respect it (which is not the case).
Binding, enforceable standards on MNCs will give unions a powerful tool to address rights violations and to halt the global race to the bottom. Unions will need to cooperate with broader civil society to achieve meaningful and not lowest common denominator standards as well as to counter resistance from those serving the interests of MNCs that have successfully held back a binding instrument for over 40 years.