Corporate Lobbies Seek to Expand Binding Treaty’s Scope to “All Business Enterprises” – Why It’s Problematic
The Global Campaign to Reclaim People’s Sovereignty, Dismantle Corporate Power, and Stop Impunity (also known as the Global Campaign) has published a paper on the efforts by corporate lobbies to expand the scope of the future Legally Binding Instrument (LBI) on Transnational Corporations and Human Rights.
The paper argues that the proposed expansion to include “all businesses”—including state-run enterprises without a transnational character—would severely undermine the future instrument’s effectiveness, allowing transnational corporations (TNCs) to deflect their responsibilities and evade cross-border liabilities...
It is important to note that UN Resolution 26/9, adopted by the UN Human Rights Council in 2014, called for the “elaboration of an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights.”...
The reference to “other business enterprises” in Resolution 26/9 is clarified in a footnote, which defines these enterprises as those with a transnational character in their operational activities, excluding local businesses registered under relevant domestic law. Thus, “other business enterprises” refers to those components of TNC-controlled global value and production chains, specifically excluding businesses that operate exclusively within national borders and are not part of these chains...
This expansion allows corporations to execute a dual strategy:
- The future instrument would not focus on cross-border liability, weakening its provisions and allowing for the regulation of all types of corporate structures, including those that are not transnational.
- Liability would continue to be pushed down to the smaller, weaker links in the global value and production chains, typically SMEs or local enterprises.
Ironically, these same actors advocating for the scope expansion are often the ones arguing against similar regulations at the national or regional levels...
Domestic legal systems, in general, are not equipped to address these transnational issues, and there are currently no international mechanisms specifically designed to handle legal claims or enforce judgments concerning corporate activities in third-party countries. This is why social movements have called for a specific, legally binding instrument that can address human rights violations perpetrated by TNCs...