A Treaty to End Corporate Immunity?

By Hans WetzelsReprint | |

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Hans Wetzels is a writer for Africa Renewal* published by the United Nations

Claimant Eric Dooh shows the crude oil that has damaged the banks of the creek through his village in Ogoniland, Nigeria.

UNITED NATIONS, Apr 25 2019 (IPS) - When Ecuadorean diplomat Luis Gallegos first proposed a “Binding Treaty on Business and Human Rights,” many countries and environmental activists welcomed the idea with open arms.

Backed by South Africa, Mr. Gallegos urged the UN Human Rights Council in Geneva, Switzerland, to immediately begin negotiations to end human rights violations and environmental damage by transnational corporations.

In October 2018, 94 countries drew up a draft text for the binding treaty, which could address the issue of the complex global supply chain that currently makes it difficult to determine who is responsible for environmental damage or human rights violations. It should also give victims access to justice.

For two decades, Mr. Gallegos’s birth place of Ecuador waged a court battle to hold Chevron (formerly Texaco), a US-based multinational, accountable for oil spills and for allegedly dumping 16 billion gallons of toxic waste into waterways and open pits in the country’s Amazon jungle, affecting 30,000 indigenous people and campesinos in the area. The South American country tried without success to seek redress in American, Ecuadorian, Brazilian and Canadian courts.

130 oil spills in Nigeria’s Niger Delta in 2015 were reported by Amnesty International

Chevron in turn dragged Ecuador before the Permanent Court of Arbitration in The Hague, Netherlands, for violating a 1997 bilateral investment treaty, and was awarded a hefty $112 million. A binding treaty on environmental damage might have prevented this kind of outcome.

Currently, there are voluntary guidelines for international businesses. One such set of guidelines is the United Nations Guiding Principles on Business and Human Rights, which instruct corporations to respect human rights but leaves en-forcement in the hands of states.

In high-risk sectors such as agriculture, mining and the garment industry, most companies disregard these principles, says Corporate Human Rights Benchmark, a newly established research initiative funded by the Dutch, British and Swiss governments.

Multinationals easily avoid prosecution because no international legal framework exists to hold them accountable, Mr. Gallegos argues. A majority of UN member states and the African Union concur.

Ecuador is not the only country whose citizens or government is trying to keep multinationals in check. In 2016, some 40,000 Nigerian fishermen took Royal Dutch Shell, an oil company, to a British court over oil spillage in the Niger Delta region.

But the court ruled that a conflict with the company’s Nigerian subsidiary, Shell Petroleum Development Company (SPDC), could not be adjudicated in the United Kingdom.

Amnesty International reported in 2016 that SPDC’s operations in Nigeria’s Niger Delta region in 2015 alone had resulted in about 130 oil spills.

“There are few places on the planet where the impact of multinational companies on the environment are more visible than in the Niger Delta,” Nigerian diplomat Hashimu Abubakar told the Human Rights Council in Geneva.

After several rounds of consultations, the first draft of a Binding Treaty on Business and Human Rights was finally presented to the Human Rights Council in July 2018, raising hopes of adoption.

“Big multinationals always use their legal and financial firepower at the cost of people who don’t have a lot of resources,” Nigerian activist Esther Kiobel told Africa Renewal.

Ms. Kiobel is the widow of Dr. Barinem Kiobel, a former government official and one of the nine environmental campaigners executed by hanging in 1995 by Nigeria’s military government for protesting against oil pollution in the Niger Delta. She was a plaintiff in a landmark suit against the oil giant Shell.

“A new international treaty might give me the opportunity to get compensation and rehabilitate the name of my late husband,” adds Ms. Kiobel.

After fleeing Nigeria and gaining US citizenship, Ms. Kiobel took Shell before an American federal court in 2002. After years of litigation, the court dismissed the case in 2013, claiming that a conflict between a Nigerian business, the SPDC, and Nigerian claimants cannot be heard in an American court.

Undeterred, Ms. Kiobel has now filed a civil case in a Dutch court. “At this point we’re waiting for the Dutch court to set a date. Instead of facing me in court, they have been trying to prevent this case from even being heard before a judge,” says Ms. Kiobel.

Although the idea of a treaty draws huge international support, bringing EU countries and others in the West on board may be difficult if not impossible. So far, both powerful players in international diplomacy have yet to back the effort.

European diplomats are concerned that binding obligations for international business could harm international trade, documents retrieved in Brussels through a Freedom of Information request reveal.

“We were a little surprised by the vigour of European resistance against this treaty,” says Jane Nalunga of the Uganda-based nongovernmental organization (NGO) Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI).

SEATINI was established in 1996 to lobby policy makers and consult with western NGOs, the UN and other international organisations to push an agenda of sustainable and inclusive development.

“The problem is that African governments… fear that laws on human rights or the environment might chase away international investors,” said Ms. Nalunga.

“In Uganda a foreign company needs to take an environmental assessment. But the outcome is not legally binding. International legislation could make these assessments mandatory on the international level, thus ending the dynamic of African states competing for investment and neglecting their human rights responsibilities.”

The Binding Treaty on Business and Human Rights will not immediately lead to the land of milk and honey, argues Lucas Roorda, a policy adviser at the College for Human Rights in Utrecht, the Netherlands. Mr. Roorda wrote a dissertation on the liability of multinational corporations.

“A set of international rules would of course directly impact cases like Kiobel versus Shell,” he says. “But there’s also a lot of wishful thinking around this treaty. International rules can establish better access to justice for activists but wouldn’t solve the power discrepancy between multinationals and poor communities.”

He doubts that a full-fledged human rights court will be realized through international negotiations. “Setting up an international tribunal for human rights abuses costs a lot of money, while rich countries in Europe and the US are opposed to such a tribunal.”

Mr. Roorda prefers a treaty that lays out international norms that member states would then be obliged to legally adopt, adding, “That could actually make it easier to bring a case involving the Nigerian subsidiary of Shell before a Dutch court.”

While Ecuador’s treaty would make rules binding on an international level (through a tribunal, fines or some other mechanism), Mr. Roorda would like member states to adopt international rules agreed upon in the treaty but not create an international court.

The long-term impact of international legislation goes beyond the establishment of a tribunal, explains Ms. Nalunga. “Besides adjusting the direct power imbalance between international investors and the poor communities in which they operate, this treaty could end the discrepancy between trade agreements and human rights.”

Environmental and human rights activists and countries experiencing the impact of the activities of some multinationals may debate the best way to achieve the goal of holding multinationals accountable. What is not debatable is the need to end impunity.

*Africa Renewal is published in English and French by the Strategic Communications Division of the United Nations Department of Global Communications. Its contents do not necessarily reflect the views of the United Nations or the publication’s.