The Impact of Multinational Corporations on Human Rights

Under international law, the protection of human rights is primarily seen as a State responsibility. For example, the Occupational Health and Safety Convention, 1981 (no. 155), forces ratifying States to implement an adequate national policy on occupational safety and health to protect workers. In practice, multinational corporations can be more powerful than some States. 157 of the richest 200 entities in the world are corporations, not governments. Some multinational corporations such as Walmart, Shell and Apple generated more revenue in 2017 than relatively rich countries such as Russia, South Korea and Sweden. 

Corporations can have a negative influence on human rights through their business activities. According to the ILO, fifty million people around the world are currently living in modern slavery. This number has increased by ten million in the past five years. Multinational corporations profit from these illegal labour practices. The ILO has estimated that forced labour generates about one-hundred fifty billion dollars per year for the private, worldwide economy.

International norms for multinational corporations with respect to human rights do exist. The two most well-known documents are the UN Global Compact and the UN Guiding Principles on Business and Human Rights. These documents encourage corporations to respect and protect human rights. However, these documents are not legally binding and corporations must join these initiatives voluntarily. This phenomenon is called soft law. 

In the past, the UN has attempted to draft legally binding rules for transnational companies. In 1997 a subcommission of the United Nations Commission on Human Rights (UNCHR) committed itself to this issue. It came up with a concept for a general Code of Conduct for multinational corporations called the ‘Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights’. The subcommission adopted these Norms. Unfortunately the Norms were never adopted by the UNCHR and currently have no legal status. 

In 2014 several African and Arab States submitted a resolution to the United Nations Human Rights Commission (UNHCR). This resolution was adopted and led to the creation of the ‘open-ended intergovernmental working group on transnational corporations and other business enterprises with respect to human rights’. This working group was instructed to draft a legally binding instrument that would require transnational corporations to respect human rights. 

Two and a half months ago, from October 24th to 28th 2022, States, civil society and representatives from other communities gathered for the working groups 8th session to discuss the draft Treaty on Business and Human Rights. The latest version can be found here. Hopefully the Treaty will be adopted by the UN in the future. A binding Treaty might finally regulate corporate activities and could significantly add to the protection of human rights across the world.