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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. 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