To what extent are, or should, Transnational Corporations be recognized as subjects of
international law?
Introduction
In the period of globalization, the traditional concept that gave legal personality only for states
have changed and observed increasing number of non-state entities including individuals,
transnational corporations, international non-governmental organizations and international
organizations as subjects of international law.1 This is mainly because of the rise of international
organization, globalized business and international human rights law.2 Transnational
Corporations are “economic entity operating in more than one country or a cluster of economic
entities operating in two or more countries – whatever their legal form, whether in their home
country or country of activity, and whether taken individually or collectively.”3 These big
companies have great contribution for the economic and technological development of a state. In
mean time, they violate human rights, pollute the environment and even commits crimes.4
Usually states specially developing countries are unable to regulate these issues and take actions
against the TNCs for their wrong actions. This is mainly because many developing countries are
economically weaker that makes them to depend on the TNCs.5 Moreover, they are unwilling to
enact strict environmental and human rights standards because usually foreign investors prefer
less strict laws as one of investment attraction.6
This essay employs both doctrinal and critical approach in which examine the extent of TNC
recognition as subject of international law under different legal instruments, cases and scholastic
articles. It’s structured into 5 sections. The first section is introduction. The second section
discuss about subject of international law mean. The third section examine the TNC’s subject
ability under different international laws and the fourth and fifth section is suggestions and
conclusion.
The essay argues TNCs to recognized as subject of international law they should possess rights
and obligation under international law and capacity to bring claim under international law and
tribunal or court. Consequently, TNCs are recognized as subject of international law only under
Katrina Weilert, ‘Taming the Untamable? Transnational Corporation in United Nation Law and Practice,’ (2010) 14
Max Planck Yearbook of United Nation Law 447
2
Jan Wouters and Anna-Luise Chané, ‘Multinational Corporations In International Law,’ (2013) KU Leuven Working
Paper 129, 6 Available at SSRN: https://ssrn.com/abstract=2371216 accessed 1 January 2020
3
Ibid 5
4
Ibid 1
5
Menno T. Kamminga, ‘Corporate Obligations under International Law’, (2004) paper presented on 71
International Law Association Conference.
6
Ibid
1
international investment law. The international investment law recognized TNC as partial legal
personality by giving rights and duties under multilateral and BITs and by allowing them to
bring claims under international tribunals. Moreover, the essay contend that international human
rights law recognized TNC only under soft laws with exception to the regional human rights
system in which the ECHR allowing them to bring claim to the European Court of Human
Rights. Furthermore, both international criminal and environment laws failed to recognize TNC
as subject of international law because there is no binding instrument that shows their direct
liability rather it gives states to regulate in national law. Also, the essay suggest that international
law should directly regulate TNCs because host states may not regulate international standards
effectively.
What does legal personality or subjects of international law mean?
There is no general accepted definition of what subject of international law mean consequently
the definition is still controversial.7 It’s argued by some scholars that to be subject of
international law the mere possession of rights and duties under international law is enough.8
Whereas, others argue that in addition to the possession of rights and obligation the entity should
have some capacity of producing legal effects.9 However, many authors agree on its agreed on
the idea that subject of international law can be defined as entity able of holding both
international rights and duties and ability to bring international claims whenever there rights are
violated.10 This include the capacity to enter in agreements, to bring legal actions to maintain
their rights and to take legal responsibility for their wrong doing.11
Under the traditionally Westphalia idea, international law was considered to have jurisdiction
and applicable only to govern relation between states. However, the concept of subjects of
international law which was limited to state has expand to include other non-state entities in the
ICJ advisory opinion in the Reparations for Injuries case.12 In this case the ICJ has conclude that
in addition to states international organizations such as the UN can be subjects of international
law. Specifically, the court stated that “the subjects of law in any legal system are not necessarily
identical in their nature or in the extent of their rights, and their nature depends upon the needs of
the community.”13
Davor Muhvić, ‘Legal Personality as a Theoretical Approach to Non-State Entities in International Law: The
Example of Transnational Corporations’, (2017) I Pécs Journal of International and European Law, 9
8
Christian Walter, ‘Subjects of International Law’ in R. Wolfrum (Ed.), The Max Planck Encyclopedia of Public
International Law, (OUP, Vol. IX 2012), para 22, see also Bin Cheng, ‘Introduction to Subjects of International Law’,
in M. Bedjaoui (Ed.), International Law: Achievements and
Prospects, UNESCO – Martinus Nijhoff Publishers, (1991) 33
9
Davor Muhvić, (n7) 9
10
Ibid see also James R Crawford, ‘Principles of Public International Law,’ (8th edn, OUP 2012)115
11
Ibid
12
Reparation for Injuries Suffered in the Service of the U.N., Order, 1948 I.C.J. 121 (Dec. 11)
13
Ibid para178
7
Regarding the TNCs the subjectivity of this entities under international law is controversial.
Some argue that even if they are benefited from some international laws, they don’t possess
rights and obligations under international law, and they can’t be considered as subjects of
international law. On the other hand, some argue that these entities have recognized as
participant of international law under some human rights and investment laws that can make
them subjects of international law.14 In addition to the above, there are some authors take an
alternative position that is far from the traditional classification of subject/object dichotomy.
Authors such as Judge Rosalyn Higgins,15 Clapham16 and Klabbers17 argue that it’s better to
focus on the roles, right and duties of these TNCs under international law than labeling as object
and subject. Then once a TNC has rights and obligations it considered as having legal
personality.18
Rights and obligations of TNCs under International Laws
Therefore, to decide whether TNCs are subjects of international law we need to examine the
rights and obligations under different international laws and their competency to bring claims for
maintaining its rights.
I. International Investment Law
The current international investment laws are mostly based on the treaties which are multilateral
and bilateral treaties.19 The bilateral agreements can be entered between the host state and the
original state of TNC then based on pacta in favorem tertii principle the TNC will acquire rights
or between the TNC itself and host state.20 Usually this kind of agreements contains different
rights such as the “right to compensation in case of expropriation, currency transfer, fair and
equitable treatment such as national and most-favored-nation treatment and full protection and
security.”21 In addition to these the BITs usually provides clauses for dispute settlement so that
the investors can bring claim against the host state either in the domestic court or international
tribunals.22 There are also multilateral treaties that provides direct duties on TNCs such as the
Karsten Nowrot, ‘Reconceptualising International Legal Personality of Influential Non-State Actors: Towards a
Rebuttable Presumption of Normative Responsibilities “, (2005-2006) 80 Phil. L.J 570, 576
15
Rosalyn Higgins, ‘Problems and Process: International Law and How We Use It’ (OUP 1994) 49
16
Andrew Clapham, ‘Human Rights Obligations of Non-State Actors” (OUP 2006)199
17
Jan Klabbers, An Introduction to International Institutional Law’ (2nd ed, Cambridge University Press 2009) 52.
18
Jan Wouters and Anna-Luise Chané (n 2) 7
19
Karsten Nowrot, ‘Transnational Corporations as Steering Subjects in International Economic Law: Two
Competing Visions of the,’ (2011) 18 Indiana Journal of Global Legal Studies 814, 821
20
Davor Muhvić, (n7) 10
21
Jan Wouters and Anna-Luise Chané (n 2) 11
22
Karsten Nowrot (n20) 823
14
International Convention on Civil Liability for Oil Pollution Damage23International Convention
on the Law of the Sea and the Convention on Civil Liability for Damage Resulting from
Activities Dangerous to the Environment24
In addition to the above the dispute settlement section in a treaty will allow the investors or the
host state to choose both the forum and the laws that are applicable for the settlement. This allow
the TNCs to have capacity to enforce their rights provided under certain treaty. Most tribunals
such as International Center for the Settlement of Investment Disputes (ICSID), WTO dispute
settlement mechanism for trade related issues and North American Free Trade Agreement’s
(NAFTA) dispute settlement mechanism allow TNCs to bring claims including compensations
for illegal interference by the host state with their rights.25 This shows that TNCs has both rights
to claim and to be sued by the host states whenever they breach the agreement and that they have
limited capacity.26
Therefore, TNCs have both the rights and obligations under international investment law which
they are bind by multilateral, bilateral and customary international laws. Moreover, they have the
capacity to bring their investment related claims according to their contract or multilateral
treaties under international tribunals to enforce their rights. This proved that TNCs have legal
personality under international investment law. However, unlike states TNC doesn’t own full
legal personality. Rather, they have partial legal personality which is only limited to the rights
and obligations provided either in the BITs or multilateral treaties. This means for example
TNCs can’t sign multilateral treaties.
II. International Human Rights Law
The rights of TNCs under regional human rights law can be found under the European
Convention on Human rights and the practice of the European Court of Human Rights. Article
34 of the ECHR provide that the European Court of Human Rights “may receive applications
from any person, nongovernmental organization or group of individuals claiming to be the victim
of a violation by one of the Contracting Parties of the rights set forth in the Convention or the
Protocols thereto.”27 It’s observed from the court practice that the term ‘non-governmental’
23
International Convention on Civil Liberty for Oil Pollution Damage, (adopted on Nov. 29, 1969, entered into force
June 19, 1975)14097 UNTC 973 Art. 1, para. 2
24
Convention on Civil Liability for Damage Resulting from Activities Dangerous to the Environment (adopted June
21, 1993) European Treaty Series - No. 150 Art 2
25
Karsten Nowrot (n20) 824
26
Robert McCorquodale, ‘The Individual and The International Legal System’ in Malcolm D.Evans (eds,)
International Law, (3th edn OUP, 2010) 297
27
Convention for the Protection of Human Rights and Fundamental Freedoms (European Convention on Human
Rights, as amended) (ECHR) art 34
encompass any transnational or other companies.28 Consequently, many companies including
TNC has successfully brought claims to the court. The court has entertained cases brought by the
corporation against host states based on different abuses of human rights such as the right to a
fair trial,29 right to non-discrimination, freedom of expression30, the right to respect for private
life31 and protection of property. In addition to European Court practice the UN Human Rights
Committee, on its general comment provide that legal persons can be benefited from some rights
under ICCPR such as the right to association and freedom of religion.32 However, the applicant
who can bring claim to the Human Right Committee is limited by the optional protocol only to
individuals.33
For the last 50 years there are several movements under the UN and different international
organization such as ILO to regulate the TNC responsibility under the international human rights
law.34 However, these attempts didn’t come up with binding document that can make the TNCs
liable for their human rights violation. The attempts came up with the 1976 OECD Guidelines
for Multinational Enterprises,35 ILO Tripartite Declaration of Principles Concerning
Multinational Enterprises and Social Policy 1977,36 United Nation's Global Compact,37 Norms
on the Responsibilities of Transnational Corporations and Other Business Enterprises regarding
Human Rights (UN Norm 2003),38 the 2011 Guiding Principles for Business and Human Rights:
Implementing the United Nations 'Protect, Respect and Remedy' Framework.39And the recent
one is the Human Rights Council binding Resolution 26/9 which established working group on
TNC and other business enterprises regarding human rights tasked with expounding legally
28
Jan Wouters and Anna-Luise Chané (n 2) 8
Sovtransavto Holding v Ukraine ECHR 2002-VII 95
30
Sunday Times v The United Kingdom (1979) Series A no 30.
31
Société Colas Est and Others v. France (App. no. 37971/97) ECtHR (2002), para. 49
32
UN Human Rights Committee, General Comment No 31, ‘The Nature of the General Legal Obligation
Imposed on States Parties to the Covenant’ (2004) UN Doc CCPR/C/21/Rev.1/Add.13 para 9.
33
UN General Assembly, Optional Protocol to the International Covenant on Civil and Political Rights, (adopted
on19 December 1966 and entered to force on 23 March 1976), 999 UNTS 171
34
Jan Wouters and Anna-Luise Chané (n 2) 12
35
OECD, ‘Declaration on International Investment and Multinational Enterprises C(76)99/FINAL (1976)
36
ILO, ‘Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy’
240th Sess., O.B.Vol.LXI, Series A, No. 1, ILO.Doc.28197701 (1978)
37
UN Global Compact (July 2000) available at
https://www.unglobalcompact.org/what-is-gc/mission/principles
38
Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to
Human Rights’, UN Doc E/CN.4/Sub.2/2003/12/Rev.2, 3 (13 August 2003)
39
OHCHR, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations
“Protect, Respect and Remedy” Framework’ HR/Pub/11/04 (2011).
29
binding international instrument related with this.40 The working group came up with draft
resolution on business activity and human right which is revised and discussed with members on
October 2019.41
Despite all the attempt to make TNCs responsible for the human rights violation or to enjoy
some rights under the international human right regime there is no binding legal instrument that
shows the legal personality of TNC except the European Court on Human Rights and the ECHR.
Only the European Human Rights system recognized TNC’s as right and duty bearer and allow
them to claim their rights. Therefore, it’s clear that there is a need to make TNCs to observe
international human rights standards, however, we can’t say that they have legal personality
under international human rights law except the regional European Human Rights system.
III. International Criminal Law
International criminal law used to be limited only to individuals and didn’t have jurisdiction over
legal person.42 It was believed that “crimes against international law aren’t committed by abstract
entities rather its committed by men and international criminal law can only punish
individuals.”43 There are international instruments that provide the criminal liability of legal
persons, such as the European Convention on the Protection of the Environment through
Criminal Law under Art 9,44 United Nations Convention against Corruption of Art 12 and45 the
United Nations Convention on the Suppression of the Financing of Terrorism.46 However, these
international instruments only provide duties on member states to make TNCs liable for their
criminal act in their respective national laws. In addition to the instruments, in IG Farben Case
the US Military Tribunal in Nuremberg held Germany company for criminally liable for
committing war crime.47 However, there is no any other case decided by the Tribunals
established by the United Nation Security Council against TNC. 48
40
UNGA Resolution 26/9 adopted by the Human Rights Council on Elaboration of an international legally binding
instrument on transnational corporations and other business enterprises with respect to human rights
A/HRC/RES/26/9
41
‘UN Working Group on Business and Human Rights: December 2019 Newsletter’, (December 2019) available at
https://www.business-humanrights.org/en/un-working-group-on-business-and-human-rights-2019-highlights-andopportunities-for-the-new-year
42
Peter Muchinski, ‘Corporations under International Law’ (OUP 2012) para 47
43
Jan Wouters and Anna-Luise Chané (n 2) 22
44
Convention on the Protection of Environment through Criminal Law, 04 November,1998 ETS No.172
45
United Nations Convention against Corruption, (adopted in October 2003, entered to force December 2005)
available at https://www.unodc.org/documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf
46
UNGA International Convention for the Suppression of the Financing of Terrorism (adopted 9 December 1999,
opened for signature 10 January 2000) (2000) 39 ILM 270
47
The I.G. Farben Trial, Case No. 57, US Military Tribunal, Nuremberg, 14 August – 29 July 1948, Law Reports of
Trials of War Criminals, Vol. X, p. 1.
48
Jan Wouters and Anna-Luise Chané (n 2) 22
There was also an attempt to make legal person liable for international crime under the Draft
statute of International Criminal Court. On the conference, which was held in Rome 1998 to
establish ICC, was proposed to include companies including TNCs under the court jurisdiction.49
However, this attempt failed, and the ICC has no jurisdiction on legal persons. On the other
hand, there is development under some states national law such as Australia, Belgium, India, the
Netherlands Japan, United States, the United Kingdom, and South Africa the to make legal
corporations liable for criminal acts.50
It’s clear that there are some developments under different international instruments and
domestic state practice to make corporations liable for their criminal act. However, this is only
limited to national laws. Therefore, we can conclude that till now the TNCs are not liable and not
under the jurisdiction of international criminal law.
IV. International Environmental Law
Under the international environment law there are multilateral treaties and soft documents that
makes TNCs liable for their environmental damages. However, the multilateral environment
agreements addressed only states to regulate TNCs and individuals’ activities on environment in
their domestic laws.51 It’s also worth to see International Convention on Civil Liability for Oil
Pollution Damage52 Kyoto Protocol to the UN Framework Convention on Climate Change,53 the
Convention on Civil Liability for Damage Resulting from Activities Dangerous to the
Environment54 and the Protocol to the Basel Convention on Liability and Compensation for
Damage Resulting from Transboundary Movements of Waste and Their Disposal55 that provide
indirect liability on TNCs. Apart from these, soft laws such as Agenda 21 which is adopted on
the 1992 UN conference on Environment and Development56 and the OECD Guidelines on
49
Ibid
Ibid
51
Peter Muchinski, (n 42) para 43
52. International Convention on Civil Liberty for Oil Pollution Damage, Nov. 29, 1969, art. 1, para. 2 (entered into
force June 19, 1975), available at http://www.admiraltylawguide.com/ conven/civilpol1969.html.
53
Kyoto Protocol to the United Nations Framework Convention on Climate Change (adopted 11 December 1997
and entered in force 16 February 2005) UN Doc. FCCC/CP/1997/7/Add.2
54. Convention on Civil Liability for Damage Resulting from Activities Dangerous to the Environment, (June 21,
1993) ETS. No. 150, Art. 2, available at http://conventions. coe.int/treaty/en/Treaties/Word/150.doc.
55
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal,
(adopted on 22 March, 1989,) 28 I.L.M. 657, 1673 U.N.T.S. 57
56
United Nations Conference on Environment and Development. (1992). Agenda 21, Rio Declaration, Forest
Principles. New York: United Nations.
50
Multinational Enterprises57 provides non-binding obligations for TNCs on the environmental
protection.
Even though, it’s true that TNCs caused huge environmental damages they can be only liable
under states national law. The above evidence shows that TNCs have no direct binding
obligation under international environment law and they can’t be liable for any environmental
damage.
Further Suggestions
Its clear from the above discussion that TNCs are only subjects of international investment law.
Studies reveal that currently different systematic and gross human rights violations and criminal
acts such as financing terrorism, death, torture, forced and child labour, forced displacement and
environmental pollutions committed by TNCs than dictator governments.58 These companies are
by their nature trans-border and huge multinational corporation which makes them more
powerful in terms of financial and political than host states.59 In addition to this, many trans
national companies operated in developing countries which the states need the benefits of this
large investments. This may lead the host states to be less powerful and ineffective to take
measures so that they fail regulating the activities of the TNCs in their state.
Therefore, this essay suggests that international law including the human rights, criminal and
environment should regulate the activities of the TNCs directly. We need to move on from the
state centric system that let host states to regulate TNCs activities in their state. The state-centric
system that we are using let the TNCs to be free from human rights obligations and no
accountability under international law. Moreover, even though there are some developments in
terms of the soft laws under different international laws that regulate TNCs activities directly
they are non- binding. Soft laws can of course be developed to treaties and customary
international law if states start to observe them. However, it takes time to develop to such
binding instruments and still these mechanisms are ineffective and weak to regulate directly the
TNCs activities. Therefore, we need to develop binding instruments which is treaties under the
International Human Rights, Environmental Law and Criminal Law.
Conclusion
Its controversial issue whether Transnational corporation are subjects of international law.
International investment law, Human rights law, Criminal law and Environmental law shows that
there are many developments in terms of treaties, soft laws and cases that make TNCs duty and
OECD, ‘Declaration on International Investment and Multinational Enterprises (n 35)
Susanne Prochazka, ‘Did You Ever Expect a Corporation to Have a Conscience?’: Human Rights Obligations of
Transnational Corporations’ (2015) 2 QMHRR 84, 84
59
Ibid
57
58
right bearer and allow them to claim their right under international courts or tribunals. However,
the development of TNC as a subject of international law but limited to the investment law and
human rights law only in European Human Right system. But this doesn’t mean that they
shouldn’t be responsible for their human right, environment and criminal law violations.
International law has to directly regulate TNCs since they have to enjoy some rights and at the
meantime, they may affect human rights, environment and may commit criminal.
Bibliography
Books
Clapham A., ‘Human Rights Obligations of Non-State Actors” (OUP 2006)
Crawford R J., ‘Principles of Public International Law,’ (8th edn, OUP 2012)
Higgins R., ‘Problems and Process: International Law and How We Use It’ (OUP 1994)
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Contribution in Edited Collection
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Journals
Kamminga T. M., ‘Corporate Obligations under International Law’, (2004) paper presented on
71 International Law Association Conference
Nowrot K., ‘Reconceptualizing International Legal Personality of Influential Non-State Actors:
Towards a Rebuttable Presumption of Normative Responsibilities “, (2005-2006) 80 Phil. L.J.
Nowrot K., ‘Transnational Corporations as Steering Subjects in International Economic Law:
Two Competing Visions of the,’ (2011) 18 Indiana Journal of Global Legal Studies
Muhvić D., ‘Legal Personality as a Theoretical Approach to Non-State Entities in International
Law: The Example of Transnational Corporations’, (2017) I Pécs Journal of International and
European Law
Prochazka S., ‘Did You Ever Expect a Corporation to Have a Conscience?’: Human Rights
Obligations of Transnational Corporations’ (2015) 2 QMHRR 84
Weilert K., ‘Taming the Untamable? Transnational Corporation in United Nation Law and
Practice,’ (2010) 14 Max Planck Yearbook of United Nation Law 447
Wouters J. and Chané -Luise A., ‘Multinational Corporations In International Law,’ (2013) KU
Leuven Working Paper 129, 6 Available at SSRN: https://ssrn.com/abstract=2371216
Laws
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their
Disposal, (adopted on 22 March 1989,) 28 I.L.M. 657, 1673 U.N.T.S. 57
Convention on Civil Liability for Damage Resulting from Activities Dangerous to the
Environment (adopted June 21, 1993) European Treaty Series - No. 150
Convention for the Protection of Human Rights and Fundamental Freedoms (European
Convention on Human Rights, as amended) (ECHR)
International Convention on Civil Liberty for Oil Pollution Damage, (adopted on Nov. 29, 1969,
entered into force June 19, 1975)14097 UNTC 973
Kyoto Protocol to the United Nations Framework Convention on Climate Change (adopted 11
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UN General Assembly, Optional Protocol to the International Covenant on Civil and Political
Rights, (adopted on19 December 1966 and entered to force on 23 March 1976), 999 UNTS 171
UNGA Resolution 26/9 adopted by the Human Rights Council on Elaboration of an international
legally binding instrument on transnational corporations and other business enterprises with
respect to human rights A/HRC/RES/26/9 Convention on the Protection of Environment through
Criminal Law, 04 November,1998 ETS No.172
United Nations Convention against Corruption, (adopted in October 2003, entered to force
December 2005)
UNGA International Convention for the Suppression of the Financing of Terrorism (adopted 9
December 1999, opened for signature 10 January 2000) (2000) 39 ILM 270
Soft laws
Human Rights’, UN Doc E/CN.4/Sub.2/2003/12/Rev.2, 3 (13 August 2003)
ILO, ‘Tripartite Declaration of Principles Concerning Multinational Enterprises and Social
Policy’
240th Sess., O.B.Vol.LXI, Series A, No. 1, ILO.Doc.28197701 (1978)
Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises
with Regard to
OHCHR, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations
“Protect, Respect and Remedy” Framework’ HR/Pub/11/04 (2011).
OECD, ‘Declaration on International Investment and Multinational Enterprises C(76)99/FINAL
(1976)
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Obligation
Imposed on States Parties to the Covenant’ (2004) UN Doc CCPR/C/21/Rev.1/Add.13
UN Global Compact (July 2000)
Cases
Sunday Times v The United Kingdom (1979) Series A no 30.
Société Colas Est and Others v. France (App. no. 37971/97) ECtHR (2002),
The I.G. Farben Trial, Case No. 57, US Military Tribunal, Nuremberg, 14 August – 29 July
1948, Law Reports of Trials of War Criminals, Vol. X, p. 1
Reparation for Injuries Suffered in the Service of the U.N., Order, 1948 I.C.J. 121 (Dec. 11)
Sovtransavto Holding v Ukraine ECHR 2002-VII 95
Websites and blogs
‘UN Working Group on Business and Human Rights: December 2019 Newsletter’, (December
2019) available at https://www.business-humanrights.org/en/un-working-group-on-business-andhuman-rights-2019-highlights-and-opportunities-for-the-new-year