The corporate entity has been described as the most effective structure for capital accumulation because it allows for the separation of ownership from management. The transnational corporation (TNC) in particular, is a significant social and economic presence. International law has not, however, advanced to the point where TNCs are considered to have human rights obligations because of the international order created after the Peace of Westphalia. The latest salvo in the attempt to foster corporate accountability is the proposal for a binding treaty on business and human rights under Resolution 26/9 of the Human Rights Council. This state of affairs is indicative of the frustration resulting from continued impunity in a field littered with voluntary, non-binding standards.
While such frustration is understandable, some restraint on the call for such a treaty is warranted. Oona Hathaway recounts a cautionary tale on the effects of treaties. She posits that although the ratings of human rights practices of countries that have ratified human rights treaties are generally better than those of countries that have not, noncompliance with treaty obligations is common, as countries that take the relatively costless step of treaty ratification offset pressure for costly changes in policies and do not actually change their behaviour. While her study has been questioned, the basic point that treaties do not result in necessarily better behaviour by those they are meant to regulate remains a valid one.
The obvious elephant in the room is that there are already global standards that seek to address the risk of adverse impact of business activity on human rights. If faithfully executed, the Guiding Principles on Business and Human Rights would address the problem of corporate impunity. It could be further be argued that states which have taken steps to comply with the Guiding Principles have already signalled their commitment to reigning in errant corporations, and do not require a binding treaty. Those states that have not taken such steps, do not intend to abide by any international standards, and are unlikely to abide by a treaty anyway, leaving victims in the same situation.
The field of business and human rights is doubly ill suited to a single binding treaty due to the sheer numbers involved. In 2010, there were 77,000 transnational corporations, with about 800,000 subsidiaries. It is difficult to imagine how the human rights system would cope-financially and logistically with the avalanche of reports from these entities. In a comprehensive cost review of the treaty body system, the Office of the High Commissioner for Human Rights analysed the actual costs of the system in 2012, which amounted to USD 49.16 million.
Given these odds, one is reminded of the definition of insanity often attributed to Einstein: doing the same thing over and over again and expecting a different result. It is contended that history does not augur well for a binding treaty, should it come to pass.
Perhaps a more feasible solution lies in local level organisation and grassroot agitation for corporate responsibility. Who but the victims would know their plight better? Victims of corporate abuse have begun taking matters into their own hands, with some measure of success. In India, a movement of 6,000 barely educated women labourers took on a tea plantation largely controlled by Tata, and demanded the reinstatement of a bonus, a hike in daily wages and better living conditions. In Zambia, striking miners pushed a mine trolley at a Chinese manager during a riot at a coal mine in the south of the country, spurring governmental action on their situation. While in Spain, workers successfully challenged plans for a mass lay off by Coca-Cola.
Real accountability should be fostered at local level, and not left to bureaucrats in Geneva. With the passage of a treaty, it will become easier for governments and corporations alike to abdicate their obligations and responsibilities to a ubiquitous international body. What they cannot ignore is the rallying cry of an empowered people, demanding accountability for corporate wrongdoing. It is time to think outside the box and consider how to foster local level interventions, and tread away from the hackneyed treaty route.