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Norms on the Responsibilities of Transnational Corporations
and Other Business Enterprises with Regard to Human Rights |
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Draft United Nations Code of Conduct on Transnational Corporations [1] |
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Draft U.N. Code of Conduct
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-> Provide soft law norms for
transnational corporations (TNCs)[2] and other business
enterprises[3] to promote and protect human rights on an
international scale. These Norms may be viewed as a
basis for the potential development of a treaty,
establishing and confirming the rudimentary
obligation of States, individuals and corporations to
respect, ensure respect for, prevent abuses of, and
promote human rights.
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-> Never
adopted, but attempted to provide either mandatory requirements or
voluntary guidelines[4] for transnational
corporations (TNCs)[5] to follow, by encouraging contribution to the development
goals and objectives of the countries in which they
operated. The Code also attempted to facilitate
co-operation with and among States on issues relating
to TNCs; and to alleviate difficulties derived from
the international character of such corporations and
the resulting diversity of laws and cultures.
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Who: TNCs, all other business
enterprises, and their officers.
-> Both documents address national
sovereignty, respect for social and cultural
objectives and policies, human rights,
non-discrimination, corruption, consumer protection,
and environmental issues.
->The Norms additionally address child
labor, working environments, adequate wages, worker's
rights, and the right to security of persons.
The Norms are broad statements within specific areas,
which enable the almost universal application to TNCs
and business enterprises of any size or reach.
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Who: TNCs, participating governments,
and the U.N.
-> Both documents address national
sovereignty, respect for social and cultural
objectives and policies, human rights,
non-discrimination, corruption, consumer protection,
and environmental issues.
->The Code additionally addressed
contract negotiation and implementation,
non-collaboration with racist regimes,
non-interference with political affairs and
intergovernmental relations, training facilitation,
financial transactions and investments, transfer
pricing, taxation, competition, technology, and
information disclosure.
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-> The
Norms are to be viewed as soft law
norms, beginning as recommendations, and later
building as the basis of a possible treaty; differing
from a company code of conduct that might be changed
or altered easily. Intended to establish soft law,
the Norms interpret human rights obligations. The
Norms also set forth basic implementation approaches.
Specific Methods/Techniques:
-> TNCs and business enterprises: are to
adopt, disseminate and implement internal rules of
operation in compliance with the Norms. They must also perform
self-evaluations, record claims of Norm violations,
incorporate the principles into their contracts with
business partners, and provide reparations to those
negatively affected.
-> Governments: should implement the
Norms by using them as a model for legislation or
administrative provisions for enterprises acting in
their country, perform monitoring including labor
inspections, and utilize their national courts for
determining responsibility for violations.
-> U.N.: should monitor implementation
of the Norms by creating State reporting requirements
and additional implementation techniques, by
receiving complaints and giving businesses the
opportunity to reply, by possibly engaging a group of
experts to take action for failure to comply, and by
raising concerns about continued human rights abuse
by TNCs and business enterprises. In addition, the
U.N. may use the Norms to develop procurement
standards.
-> NGOs: perform monitoring and
reporting on the efforts and potential violations of
the Norms.
-> The
Sub-Commission’s Working Group on the Working Methods
and Activities of Transnational Corporations: receive information
concerning the possible negative impact of the activities of
TNCs and other business enterprises on human rights, and particularly
affecting the implementation of the Norms on the Responsibilities
of Transnational Corporations and Other Business Enterprises
with Regard to Human Rights. The Working Group will invite
any TNCs or other business enterprises concerned, to provide
whatever comments they may wish to provide within a reasonable
time. In addition, the Working Group shall study submitted
information and transmit comments and recommendations to the
appropriate parties. Finally, the Working Group will also consider
other methods to encourage full implementation of the Norms.
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-> The
Code was never officially adopted, and its legal nature was never
established. There were
proponents of both a universally applicable, legally
binding Code and a voluntary Code. If binding, it
would have served as a Convention with both national
and international mechanisms for implementation. If
voluntary, it would have merely served as a set of
broad guidelines to be observed by participating
parties.
Specific Methods/Techniques:
-> TNCs: were to
cooperate with the governments of the countries in
which they operated with a view to contributing to
the development process and were to be responsive to
requests for consultation in this respect.
-> Governments: were to publicize, disseminate, and implement the Code
within their territories. They were to report to the
United Nations Commission on Transnational
Corporations as to national action taken to promote
the Code, and the effect of such promotion. In
addition, they were to take the Code into account
when implementing, reviewing, and creating
legislation and administrative
practices.
-> U.N. Commission on Transnational
Corporations: was to serve as the international
mechanism for implementation of the Code. It was to
establish and maintain contacts with other U.N.
organizations and agencies dealing with Code related
matters. It was to hold annual sessions to discuss
Code matters, facilitate intergovernmental
consultations and agreements, periodically assess
Code implementation based on reports submitted by
governments, and clarify provisions
as to applicability and implications of the
Code.
The Commission was to also report annually to the
General Assembly [through the Economic and Social
Council] on its activities regarding the
implementation of the Code.
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In 1999, the Working Group on the Working Methods and
Activities of TNCs started developing the Norms based
on human rights standards. The Working Group prepared
a preliminary draft, and with each new draft
thereafter, they sought and incorporated comments
from businesses, NGOs, unions, and others. Throughout
the entire drafting process, the Working Group has
continually sought and accepted outside perspectives
and comments, including posting the drafts on the
internet to ensure full accessibility and comments
from all interested parties. The Working Group
currently seeks additional comments, as it expects to
submit a draft to the Sub-Commission in July/August
2003.
-> Originating Documents:
The Norms rely heavily upon the Universal
Declaration of Human Rights; the International
Covenant on Civil and Political Rights; and the
International Covenant on Economic, Social and
Cultural Rights. It also takes into account the
International Labor Organization (ILO) Tripartite
Declaration of Principles Concerning MNEs and Social
Policy, the ILO Declaration on Fundamental Principles
and the Rights at Work, the OECD Guidelines, and the
U.N. Global Compact in addition to many other
influential international legal documents.[6]
The Norms reflect the binding norms within
these documents, but incorporate the most commonly
used provisions in the less binding documents as
well.
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The Intergovernmental Working Group on a Code of
Conduct created a draft code of conduct as was
requested by the Economic and Social Council in its
resolution 1982/68 of 27 October 1982. The Commission
on TNCs held a special session, open to all States,
to complete work on the draft code of conduct. They
were unable to resolve all outstanding issues, so a
report was filed for further action. The report was
later presented to the General Assembly, and then
reconvened to address other issues and to further
include State participation. At present, the
Commission on TNCs no longer exists and the Draft
Code was indefinitely abandoned, and was never
adopted or otherwise put into effect.
-> Originating Documents:
The Code considers a variety of resolutions adopted
by the General Assembly and Economic Social Council,
and it applies the ILO Tripartite Declaration of Principles concerning
Multinational Enterprises and Social Policy in the
field of employment, training, conditions of work and
life and industrial relations.
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[1]U.N. Code of Conduct on Transnational Corporations, 23 I.L.M. 626 (1984).
[2] Transnational Corporations: an entity
operating in more than one country or a cluster of economic entities
operating in two or more countries whatever their legal
form. (Norms, § I, 19.)
[3] Business Enterprise: any business
entity, regardless of the international or domestic nature of activities
or legal
form used to establish the entity. (Norms §I,
20.)
[4] See "Document Status" section
below for explanation regarding voluntary versus binding application
of the Code.
[5] Transnational Corporations (according
to the Code): an enterprise comprising entities in two or more countries,
regardless of the legal form and fields of activity of those entities;
which operates under a system of decision-making, permitting coherent
policies and a common strategy through one or more decision-making centers;
in which the entities are so linked, by ownership or otherwise, that
one or more of them may be able to exercise a significant influence over
the activities of others and, in particular, to share knowledge, resources
and responsibilities with the others. (Code of Conduct, ¶ 9.)
[6]See preambular paragraph 4 of the Responsibilities for additional
documents.
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