Replacing the corporate ‘architecture of impunity’ with an...

Tuesday 15^th March 2022.

On the International Day of Action to advance the UN Binding Treaty on Transnational Corporations – the Corporate Justice Coalition is standing with civil society groups worldwide to mark the occasion and join calls for an end to corporate impunity.

The idea that we need to hold increasingly powerful corporations and investors to account for the human rights abuses and environmental destruction they cause is nothing new. Yet, despite decades of struggle, progress in stopping corporate abuses of rights has been slow and mainly centred around voluntary standards that have been proven wholly ineffective at ensuring that either abuses cease or that victims of corporate harm receive the remedy they deserve.

Dissatisfied with the laissez-faire attitude of the current and past UK Governments towards the regulation of business, investors and the public sector, civil society groups are standing together to call for a new corporate accountability law to bring an end to corporate impunity for abuses in supply chains – a ‘Business, Human Rights and Environment Act’.

Civil society groups are simultaneously asking the UK Government to support the UN Binding Treaty on Transnational Corporations (UNBT) – an attempt to set internationally binding rules on transnational corporations and other business enterprises whose current business practices fall through regulatory gaps and exploit legal loopholes to their benefit.

An international instrument would hold transnational and other corporations to account for human rights and environmental abuses wherever they occur and would be complementary to the law civil society groups seek at the national level in the UK: both proposals include legal liability for a ‘failure to prevent’ mechanism, as found in the UK’s ground breaking Bribery Act, 2010.

From the point of view of businesses, the liability provisions in the UK’s Bribery Act have led to increased legal clarity and certainty of what is expected of them. For civil society groups and rights-holders securing the same liability provisions in new legislation are a key means towards achieving accountability and remedy. Human rights and environmental violations deserve the same treatment in law as bribery and corruption.

From fast fashion, food, electric car batteries to rubber gloves used for PPE – when we investigate products used daily in the UK it doesn’t take long to uncover the stories of human rights abuses at the point of production and surrounding area.

Abuses are also on the end of products exported from the UK abroad, with examples including the use of JCB’s equipment to destroy homes in occupied Palestinian territories, and the sale of toxic pesticides abroad that are banned from use in the UK.

Underscoring this is the shocking reality that many transnational corporations are richer and more powerful than some nation states; they enjoy extraordinary privileges which are handed to them during the negotiation of trade and investment agreements. Paired with this is the preferred approach of many multinationals to pursue profits in countries with weak labour laws and low wages and under-resourced and consequently ineffective judiciaries.

Power has been ceded to corporations over centuries – since trans-national trading boomed during the advent of the industrial age and its associated imperialist expansion. The modern ‘investor-state dispute settlement’ (ISDS) system is just one of a number of structural advantages corporations enjoy as part of the ‘architecture of impunity’, which includes tax breaks, ‘corporate capture’ – the privileged ability to lobby governments behind closed doors for policies favourable to their business interests – and their capacity to endlessly fight legal cases.

There is no doubt that the current international trade system is skewed by design in favour of businesses and investors who are able to sue states through the secretive arbitration tribunals that make up the ISDS system for any decision made by the state that may make a dent in their bottom-line.

With ISDS cases on the rise, never has it been so clearly laid bare that trade deals are underpinned by a logic that privileges the accumulation of material wealth by some, with all the associated abuses that entails, over the interests and well-being of the majority of people worldwide.

The UN Binding Treaty for Transnational Corporations is desperately needed to help us begin to rebalance the structure in our – rights-holders’ – favour. It would do this by plugging the legal vacuum arising from the cross-border activities of corporations, affirming the primacy of human rights, and emphasising the need to provide meaningful justice to those impacted by transnational and other types of business.

It comes as no surprise that the groundswell of support for international legal regulations on corporate actors is coming from the Global South. Remedy and reparations are overdue to so many of the most politically, economically and socially marginalised peoples worldwide, including indigenous peoples, afro-descendants, ethnic minorities, women and migrant workers.

Today, on the International Day of Action to advance the UN Binding Treaty on Transnational Corporations, we stand with people and groups worldwide to call on the UK Government to step up and meaningfully engage with negotiations on the UNBT, and to lay down its plans to introduce binding domestic obligations to stop human rights and environmental abuses by businesses, investors and public procurement.

We urgently need to replace the ‘architecture of impunity’ with an ‘architecture of accountability’: new binding rules for corporations need to recognise that administrative, civil and criminal liability are mutually reinforcing, at the heart of a new era of accountability, and that they can only end our system of impunity and deliver vital remedy to rightsholders together as part of a package of binding laws spanning the national and international.

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