Introduction
Multinational corporations in the field of Human Rights have great power, force, potency or effect in the entities of the current world order. Without a doubt, it is trite to comprehend that the possession of controlling influence of some multinational corporations, go far ahead of the power of some nation-states. In 2000, the Institute for policy Studies after careful assessment announced that multinational corporations made up 51 of the top 100 economies in the world. However, given the tremendous economic and consequent existing fact whether with lawful authority or not political power exerted by Multinational corporations, which is assisted by the improved rate of globalised economic reciprocal relation between interdependent entities and more independent international markets, it is not unexpected that multinational corporations can and do influence the exercise of the legal right to enjoy the benefits of internationally recognized human rights by a wide range of people, including employees, consumers, people who live in the area of their operations, and other stakeholders.
As might be expected, corporate activity can smooth the progress of the increased enjoyment of human rights worldwide. For example, Multinational corporations may encourage economic development, which enhances a population’s enjoyment of most human right. On the other hand, there is no hesitation that multinational corporations can and do perform negative connotation of human rights abuses.
For example, Multinational corporations can maltreat and take advantage of their workforces, thereby breaching labour rights. Multinational corporations may have lack rigour or strictness rules regarding workers safety, which threatens workers, rights to health and at worst, their rights to life.
Human right is a justified right established by law or contract that any person may powerfully state categorically or assert because of being human and must be socially given surety or assume responsibility.
In line with this, some human rights are regarded as justified claims to essential and basic individual Immunity from random use of right. However, the standard liberal analysis, in which the most important threat to citizen’s rights seems to come from an opposing state, draw attention to these civil and political rights, sometimes to the segregation of others.
However, human rights create ethical responsibilities toward individuals because they are human. Some rights give special importance or significance to economic and social right granted by law or contract (especially a right to benefits) like the right to employment, living, or to logical habitation.
Economic and social rights can as a result be psychologically detected by instinct or inference as a further illustration or clarification of human rights. Civil and political rights will not lend a hand to someone in despair about his or her next meal, health, or where to sleep and live. There are human rights that are on the whole collective more willingly than individual claim against others, or all that represents a pleasant life.
Nevertheless, Human rights are about the basic immunity from an obligation or duty and, the social and personal requirements for a life of insignificant quality of being worthy of esteem or respect. They are concerned with motivating human beings to perform or accomplish their chosen goals.
Additionally, Human rights at times are examined carefully and methodically as justified claims to basic individual immunity from arbitrary exercise of authority. The traditional liberal view, in which the primary threat to citizens’ rights seem to come from an unjust severity or arbitrary behavioural state, draw attention to these civil and political rights, sometimes to the segregation of others.
These right granted by law or contract are without outside help experienced but require positive acts by others, mostly the state, if they are to be given surety or assume responsibility. Consequently, there are human rights that are mainly shared rather than individual. One has long been generally accepted, and without a far more comprehensive range of rights, a civilized and ethical life is not possible, but without these two, no other right can be derived or receive pleasure from.
In line with this, basic rights then are those human rights without which no other rights can within the realm of future prospect or potential be enjoyed. However, by basic it means:
- the right to basic means of surviving and related needs required for sustaining life;
- The condition of being free; the power to act, speak or think without externally imposed restraints from arbitrary arrest and custody without trial;
- freedom from torture; and
- freedom from legally unwarranted execution.
Australia’s Obligations
We come to the first of the harder question; do people have duties beyond their country’s border in comparison with other basic rights? Australia has this sort and this is the general view of the contributors.
International realities present some support for the analysis that states should be left to employ their responsibilities for human rights within their borders. Kim Nossal argues that value for control has left Australian officials hesitant to stress human rights in unfamiliar policy. He in an easily perceptible manner finds this view convincing. Australia has an ethical obligation to put together high status established in order of importance or urgency in order to help strengthen international recognition of the Human rights. Moreover, this process of giving careful thought on the issue of human right is paramount, and it is given added strength or support by other arguments of different kind.
Additionally, a world in which human rights are generally respected is preferable for political or social views favouring reform, progress and pacific centred powers such as Australia. Promotion of such an order is therefore in Canada’s interest. As is often argued, a country’s foreign policy should reflect its fundamental values. These values may not remain vital and compelling within Canadian society if they are not reflected in Canada’s international role.
Ways to define and to promote the responsibility of multinational corporations in the field of Human Rights
The notion of enhanced responsibility on the part of multinational corporations, in its most basic form, must meet three conditions.
MNCs must deal with all of their stakeholders, and not merely stock holders, in a fair and equitable manner. This is especially so in the case of developing countries and among the poor people, who lack the necessary economic and political power to bargain with MNCs on more equitable terms.
MNCs must act as positive and proactive agents of change through the use of their enormous economic power, and, where necessary, even against the express wishes or prevailing customs of host countries, so as to protect the foster basic human rights and democratic value that are the foundation of the MNCs own economic strength and prosperity in their home countries.
MNCs must not consider these actions either as discretionary matters or as necessary inconveniences, such as a cost of doing business. Instead, these actions must be treated as minimum standards of behaviour, compliance with which must be mandatory, transparent, and subject to external validation. The abuse of human rights has never been the sole preserve of governments, although attention has only recently focused on private actors such as transnational corporations. Our existing regulatory mechanisms fail to protect the rights of individuals and communities in an increasingly globalised economy where the turnover of some corporations is greater than that of many countries.
The list of abuses by companies extends from the use of slave labour in Burma, repression of opposition groups, dangerous working conditions in factories, intimidation of trade unionists, rights of indigenous communities threatened by companies. The issue is not to stop multinationals operating in the Third World-they are here to stay, and what’s more they could have a beneficial impact. But we have to recognise that multinationals are frequently abusing their power and that the international nature of their operations presents us with new challenges.
Legal and political worlds are still based on the nation state while economic activity is globalised. Our challenge then is to modernise the way in which we protect human rights recognising the international nature of corporations, while strengthening rather than weakening the legal force of the nation state.
Regulations
The problems we face are manifold. Multinationals could play a valuable role in pro-poor economic development providing jobs, capital and technical know-how, but in reality their positive impact is often limited. There is mounting evidence that multinationals, registered in the North are causing harm in the Third World. In some cases multinational corporations are moving to the Third World precisely because they can get away with bad practice prohibited elsewhere.
Responsibilities of multinational corporations for respecting human rights
The responsibilities of multinational corporations for human rights are not the product of a particular legal system or multilateral framework. The Universal Declaration of Human Rights (UDHR) was proclaimed as a common standard for all people, regardless of whether they are lucky enough to live in a community with functioning democratic institutions. The UDHR addresses itself to every individual and every organ of society.
The human rights responsibility of an organization is greatest in circumstances where its power over people is not effectively overseen and regulated by a legitimate governmental authority. Multinational corporations employing, operating near, or producing essential goods for people who are unprotected by a legitimate functioning government clearly have human rights responsibilities toward those people. If a multinational corporation assumes governmental roles, such as community health care, education, and security in a company town, it assumes the human rights responsibilities associated with the role.
The absence of any sovereign or democratic legitimacy to do so should not shield a multinational corporation from human rights responsibilities if it chooses to take on governmental roles.
If a multinational corporation so involves itself in the domestic politics of a country in which it operates that it acquires the powers significantly to influence government policy, serious responsibilities accompany that power as well. Some of the most alarming accusations of human rights violations by multinational corporations involve complicity in human rights abuses by governments or communities that lack adequate institutional mechanisms to protect human rights.
If a multinational corporation carries out activities that directly assist a government in perpetrating human rights abuses, it is guilty of complicity in those human rights violations, regardless of whether the company actually wanted those violations to take place. It is less obvious under the current principles of international human rights law whether a multinational corporation could be considered complicit in human rights violations if it accepts business benefits resulting from government activities that violate human rights but some level of responsibility in that regard is emerging in practice.
Multinational Corporations and the Ethics of Global Responsibility
The global economy and forces of globalization have become well-known characteristics of current world politics. In this set of facts or circumstances that surround Multinational Corporation as regards Human right, the political focus has rested on the balancing claims and criticism of the multinational corporation. However what makes Multinational corporations a relevant subject is their self-motivated growth and influence; they affect the life chances of millions of people around the world.
Human right groups and organizations insists that free trade and its rules, or lack thereof, are not enough to promote a fair game and that the push for greater social responsibility of the multinational corporations is compulsory given their increasing influence and general direction toward further privatization. Because multinational corporations have gained powers customarily fixed and absolute and without contingency only in states, they should arguably be held to the same standards that international law presently imposed upon states. As Garth Meintjes has put it, “the idea of a corporation as a legal fiction without responsibilities is no more sacred or accurate than the idea of unfettered state sovereignty” (Garth 2000, p.87).
The Multinational Corporation’s power to be in command of international investments has had tremendous bearing on the economies of developing countries. Faced with pressures to attract such investments, world governments have had little or no alternative but to be receptive to the terms of multinational corporations, a lack of leverage that has meant, for example, that the minimum wage has been set unrealistically low in developing countries to attract foreign investment. A related criticism of the multinational corporations is that their overall strategies relocated has kept wages and living conditions down and resulted in the expansion of sweatshops. This has led to the view that globalization is a euphemism for sweatshop global economy.
Consequently, multinational corporations have provoked considerable debate around the conflicting issues of efficiency and fairness, and the resultant balance of economic growth and social injustice.
The simultaneous surge in economic growth and inequality has led to serious implications for human rights in the developing world. The multinational corporation’s advocates, in contrast, regard them as benign engines of prosperity-enhancing local living conditions by generating employment, income, wealth, as well as by introducing advanced technology to the developing world Mahmood, Claude and Evans.
Corporate Regulation in an Era of Globalization
Many people believe it is necessary to bring multinational corporations under the authority of international rights frameworks. Traditionally, international law conforms to a state-centric view of world politics. States are viewed as the primary actors in the international system, with international law acting to regulate relations between states.
The strengthening of international legal commitments to human rights can be seen as another aspect of the multi-faceted nature of globalization. States have lost authority to supranational bodies at the same time as they have privatized many of their domestic functions. But it is economic globalization that is generally presented as the major challenge to state sovereignty. The challenge comes on particular from financial speculation in deregulated currency markets and the growing economic power of multinational corporations. With intergovernmental aid now largely overtaken by foreign direct investment, the temptation for host countries to attract investors with minimal human rights standards is often difficult to resist. Human rights abuses can occur whether the outsourcing takes place via wholly or partly owned subsidiary or through use of supply contracts.
Although there is no general accepted definition of the term “Globalization,” it is about the way in which the world is changing (Allan & Pain, 2000, p.21). A simple description is offered by Allan Cochrane and Pain Kathy: Cultures, economies and politics appear to merge across the globe through the rapid exchange of information, ideas and knowledge, and the investment strategies of global corporations (Allan & Pain, 2000, p.20).
Some popular interpretations of globalization include the view that it is an evolutionary process of change driven by technology and scientific progress in the modern era (Mahmood & Reza, 2002).
A force behind this definition is the recent communication and information technology revolution, from which corporations operate in a world market outside of national boundaries.
Another popular definition of globalization maintains that it magnifies and intensifies the level of interaction and interdependence among nation-states and societies. As markets become available on a worldwide level, once separate societies deepen their relationships, politically and economically. From a realist perspective, globalization is a new hegemonic system upheld by the world’s major capitalist economies to promote their own political and economic interests, a tool of the wealthy nations used to maintain their economic dominance.
Finally, globalization is viewed as a paradigm shift, in which values, lifestyles, tolerance for diversity, and individual choice are simultaneously undergoing transformations on a global scale.
Globalization as such relates not only to an increased interconnectedness between markets, but also to a shared culture, often affecting a social shift away from some traditional values.
Respecting Human Rights in the Work Place
The most direct relationship multinational companies have with people in the employment relationship. The fundamental human rights associated with employment are those set forth in the ILO Declaration on Fundamental Principles and Rights at Work. The work place responsibilities for multinational corporations that flow from these principles are well established.
Any direct employment of forced or child labor by a multinational corporation would be a human rights violation per se. Freedom of association, collective bargaining, and the elimination of discrimination require more analysis on their application. Fortunately, they are specifically addressed in the ILO’s Tripartite Declaration. The OECD Guidelines for Multinational Enterprises also address collective bargaining discrimination in the multinational company context. Those guidelines reflect a quarter century of revisions and coordinated input through advisory bodies representing business, labor, and civil society, giving them a balance similar to the ILO declaration.
Companies also have direct responsibility for occupational health and safety in their operations. Although specific standards vary from one industry to another, health safety practices of companies are among the most widely operative company metrics after financial reporting, and industry associations often set the minimum relevant standards. A multinational corporation’s responsibility for health and safety of its employees while they are on its premises working for the company is not diminished simply because the environment away from company premises is unhealthy, dangerous, or without adequate healthcare services.
Work place is an important social setting where companies play a major role in the functioning of other civic freedoms besides assembly and association. Company policies affecting freedom of expression, freedom of practice religion, and privacy must not be arbitrary or repressive but reconcile needs of the business be appropriate. Supervisors represent the company, thus they must be trained in how to deal with employees and understand that corporal punishment and physical coercion are not acceptable.
Respecting Human Rights of Others in the Community
The operations of a multinational corporation have an impact on many people besides its employees. Physical operations of a business can affect the community’s health and safety, and local business practices can affect social and economic development in a community. The assimilation of responsibilities for these sorts of effects into the UN framework for human rights is more recent and less complete than responsibilities for employees. One must look beyond the international Bill of Rights for guidance.
Environment related responsibilities for local operations are the most developed in human rights field. The UN General Assembly formally recognized that all individuals are entitled to live in an environment adequate for their health and well being. A company that knowingly releases toxic substances in a manner that is hazardous to people bears responsibility for the resulting health conditions and human rights violations.
Setting up company facilities in a particular location also involves local property rights and possibly the rights of vulnerable groups requiring use of the land, such as indigenous peoples. In the absence of government institutions to protect affected people, multinational corporations must do everything required to ensure they are respecting such rights. Human rights responsibilities of multinational corporations that require extensive private security arrangements for their local operations can be particularly complex.
Respecting Human Rights of Consumers
In addition to their employees and the residents of the communities in which they operate, multinational corporations can have significant impact on the consumers of the products or services that they produce or contribute to. Food is particularly important in this respect. The UN Committee on Economic, Social and Cultural Rights makes one of its most explicit statements about business responsibilities for the right to adequate food in its General Comment on that part ICESCR. Private business sector have responsibilities in the realization of the right to adequate food.
The trade part, of multinational organizations must practice its activities in the structure of some set of conventional principles and expectations that are conducive to value of the right to sufficient food, agreed upon in cooperation with the Government and social society. To be adequate, the food must be free of contamination or naturally occurring toxins. Adequacy also means in sufficient quantity, so that unfair business practices creating scarcity in order to boost prices could violate this human right if it deprived people of adequate food.
Responsibility for Human Rights across the Value Chain
Design, production, sales, integration, installation, and support are distinct activities in the value chain, which may be the responsibility of several independent business entities tied together with contracts. The multinational corporations may be positioned at different points in the chain, with different types of relationships with suppliers of raw materials, components, and services and with distributors of their products or services. The more power a particular company has a long a value chain, the more responsibility it bears for the human rights implications of activities up the supply side of the chain or down the distribution side of the chain.
A multinational company’s ability to ensure respect for human rights through its distribution channels will also depend on a range of factors analogous to the supply chain factors, that is, the industry, the number of distribution channel alternatives involved, the structure and complexity of distribution, and the firm’s market position. As a general rule, the party that owns the brand that primarily determines the customer’s choice has the most relative power, and therefore the most assurance responsibility, along the distribution chain.
Accountability of Multinational Corporations for Human Right Violations
The UN-sponsored international human rights framework is designed primarily to protect people from human rights violations by the military, the police, and other institutions of the state. Direct enforcement of these rules by international legal institutions is generally limited to the individuals responsible for the actions, rather than the corporations that they manage. They are also focused on activities that are so serious that they constitute international crimes, such as slavery, torture, genocide, war, crimes, and crimes against humanity. For human issues below that very high threshold, national governments are the main source of oversight and enforcement under the framework.
The obligations of national governments under this system include preventing individuals, organizations, or enterprises from violating many of those rights, but this is an evolving and as yet incomplete area of international human rights law. Where the relevant UN body reviewing human rights complaints finds that a state to supply information on the steps it has taken to give effect to that body’s findings. This is not a system equipped to ensure vigorous enforcement of the human rights responsibilities of multinational corporations in places where the local authorities are not capable of, or interested in doing so.
Enforcement in National Courts
In jurisdictions with human rights appropriately written into their domestic law and an independent, functioning judiciary that offers recourse to victims against the perpetrators of human rights violations, the system should generally work. Unfortunately, widespread cases of the worst sort of human rights abuses often take place in countries without adequate judicial institutions.
The United States has offered the possibility of jurisdiction in US district courts for ‘civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States’.
Accountability to NGOs
Human rights cases against multinational corporations began appearing in US courts under the ATCA in the mid-1990s, and with increasing frequency since then. Many of these cases have been initiated by or strongly supported by NGOs hoping to stop activities that they disapprove of human rights grounds. While the lawsuits can be costly for companies concerned, and present the risk of damages claims if the plaintiffs prevail, they are employed by NGOs primarily as one of several ways to engage in media campaigns attacking the reputation of the multinational corporation. Damage to reputation rather than court awarded damages is often the more serious threat to the company.
Another sanction employed by NGOs for human rights violations by multinational corporations is the consumer boycott, a potent weapon against multinational corporations with significant dependent dependence on consumer sales. It might be a corporation selling directly to the consumer, such as a major supermarket chain. More likely it is a company with a single, all-important consumer brand, often corresponding to name the company. They can always exercise more power to ensure compliance with human rights norms among the various companies in supply and distribution chains that they purchase from and sell to.
Opportunities for Multinational Corporations to Promote Human Rights
During the explosive growth of technology companies in the late 1990s, the ability to recruit talent and motivate and retain their highest performing employees began to be as important to those companies as reputation among consumers is for consumer brand companies. They also became preoccupied with the development of social and human capital within their organizations through investment in education and training, through developing a culture of teamwork and creating learning networks, and through promoting a working culture that emphasizes quality and merit.
The human and social-capital-building initiatives embraced by technology companies are directly applicable to capacity building and encouraging entrepreneurship on developing economies. The best of these companies believe that their search for the best recruits should include every country where a company operates, that management systems should emphasize local decision making, that adaptation of products and services to local markets should take place locally, that local joint ventures should be run with the same corporate governance principles as govern the multinational organization as a whole, and that earning a local reputation as a force of good should be a goal pervading the organization. Just doing what is in the best interests of the organization can be beneficial for the communities in which they do business.
Although the company has operated for decades in some of the most difficult human rights environments in the world, it has never been the target of human rights litigation or any media campaigns regarding the human rights impact of its activities. Yet many of its employees in those dispersed locations felt a strong desire to make a difference in the communities where they were working.
Corporate social responsibilities
There are three up and coming views that inform corporate social responsibilities. First is the so-called “reputation capital” view that sees corporate social responsibility as a strategy to reduce investment risk and maximize profits. The second view, referred to as the “eco-social” view, considers social and environmental sustainability crucial to the sustainability of the market. The third is the “rights-based” view, which underscores the importance of accountability, transparency, and social/environmental investment as key aspects of corporate social responsibility.
Multinational Corporation Fair Share Theory
Multinational corporations often have a direct relationship to human victims. Firms may be the employers of the victims or of their family members. Moreover, a firm may have extensive operations within the rights-violating nation, thereby establishing a physical closeness with the human rights victims even if no direct employer-employee relationship exists. Multinational corporations most certainly derive great benefits from operating in societies in which human rights are violated. For all of these reasons, there can be no doubt that multinational corporations should have important human duties.
The potential effectiveness of a multinational firm varies, depending on what kind of duty it is asked to carry out. Multinational corporations are in a potent position to uphold human rights, particularly the labor rights of workers, because they can control and direct their own personnel actions and those of their business partners. Multinational corporations are not, however, particularly effective at general criticism of the human rights practices of their host governments. Discussion and debate about human rights evoke controversies with grand cultural and political implications. The vast majority of corporate executives simply aren’t good at understanding the many nuances of human rights controversies. As a result, they are unlikely to be effective as vocal critics of general human rights conditions in their host countries. For multinational corporations, action speaks louder than words.
Another constraint on the multinational corporation’s ability to criticize the human rights practices by their host governments is economic vulnerability.
In certain rare instances, a firm may be so important to the economy of a particular nation that it has the power to influence the policies of the host government.
Multinational Corporation Human Rights Abuses
Multinational corporations frequently infringe on human rights indirectly, but sometimes they are directly complicit in abuses.
Williams H. Meyer argues that Multinational Corporations have the responsibility-complicity based duties to avoid any situation that would lead to abuse. The duties of corporations are directly linked to their capacity to harm human dignity. In some cases, private actors prevent their employees from leaving the country, as evidenced by the problem of forced prostitution. Likewise, corporations are liable if they fail to exercise due diligence over their agents, including by not attempting corrective measures after the fact (William, 1998, p.198).
In conclusion, the primary focus of employee relations in global workforce management is on the nature in which employees; personal interests, rights, and needs are protected and served by multinational corporations, which also are influenced by other external factors such as unions and government legislation. Critical challenges for human and workers rights in today’s global workplace include forced labor, harmful child labor, workplace discrimination, health and safety hazards, and job insecurity and displacement. As part of their corporate responsibility, organizations should work hard to address and resolve these serious challenges, including cooperating and working closely with government and other non-profit organizations. Multinational corporations also can do much to optimize the effectiveness of their ER policies and practices related to employee involvement and development, effective management of discipline, and, where necessary, termination.
As the analysis of human right spin-off, multinational corporations are also in a unique position to educate, albeit indirectly and for self-interested reasons, their workers and business partners about the values underpinning human rights.
Multinational firms are not, however, particularly well positioned to exert economic pressure to enforce human rights. They do not have sufficient economic pressure to enforce human rights. They do not have sufficient economic power to do so, and they are too vulnerable to economic retaliation. Nevertheless, multinational firms are more effective if they uphold human rights on a case-by-case basis as opportunities present themselves.
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