Wednesday

17th Aug 2022

Opinion

It's time for the EU to stand up to transnational corporations

  • 1,100 workers died in the Bangladesh factory disaster. Yet none of the transnational corporations which were sourcing from the plant were held accountable in a court of law (Photo: Trades Union Congress)

This week the United Nations will negotiate a treaty that seeks to hold transnational corporations accountable for human rights violations.

The European Union should actively endorse it and demonstrate its commitment to human rights standards.

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Five years ago a building collapsed in Bangladesh. More than 1,100 workers died and countless others were injured. Rana Plaza shocked the world. 'Never again' became the motto.

Since then, health and safety conditions in the Bangladeshi garment industry have improved, thanks to some voluntary initiatives. Yet, none of the transnational corporations (TNC), which were sourcing from the plant, were held accountable in a court of law or forced to pay damages to the victims.

TNCs are experts in abusing the many freedoms that our globalised economic and legal systems offer.

As various leaks have shown, they barely pay taxes in the countries in which they operate.

Accounting tricks and the willingness of some states to support these semi-legal schemes, facilitate it.

TNCs thus erode the capacity of states to provide the public goods that societies need to thrive. But they are also pushing other corporations to do their dirty work for them, while hiding behind the corporate veil.

The involvement of many TNCs in various kinds of human rights violations is simply unjustifiable and has to stop.

Driven by economic interests and feigning ignorance, TNCs often tolerate human rights violations occurring far down their global supply chains.

'Don't Ask, Don't Tell'

While they can be very strict when negotiating prices or controlling the quality of their products, TNCs are generally happy to exercise lax oversight on the human rights effects of their subsidiaries or business partners.

This 'don't ask, don't tell' policy is bolstered by a widespread sense of impunity.

A new treaty, which will be negotiated in the coming week (15-19 October) at the UN Human Rights Council in Geneva, aims to put an end to this organised irresponsibility.

It follows the steps of the UN Guiding Principles on Business and Human Rights, which the Council unanimously endorsed in 2011.

The treaty proposes to impose a duty on TNCs to restructure their internal operations to fully account for the human rights risks connected with their operations.

It also allows victims to turn to the home courts of the TNCs, which are currently systematically refusing to deal with such cases, thus facilitating access to justice.

Over to you, EU

The European Union, according to its founding treaties, is committed to furthering human rights throughout its external policies.

Yet, until today, its political energy and muscle have been focused primarily on extracting trade concessions from other states to promote business across borders.

It is high time for the EU to invest the same determination in negotiating a treaty that regulates the worst consequences of globalisation.

With the EU on board, such a treaty would significantly affect the way business is conducted across the globe, as it would cover a critical mass of TNCs' home countries.

The European Parliament has grasped the political urgency of the UN treaty and called on the Commission and the Council to engage in constructive negotiations.

At times in which globalisation and the European project are at a crossroads and citizens are clearly tempted to reject both, the EU ought to follow the advice of its democratically elected parliament.

It should seize this opportunity to showcase that it is not an economic project detached from its citizens' concerns, but instead a potent vehicle to regain sovereignty over the unfettered economic power of transnational corporations.

Dr Antoine Duval is a senior researcher in international and European law at the Asser Institute in The Hague, and coordinator of the Doing Business Right project

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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