Multinational Corporations in World Development: 40 years on

Abstract

In light of the 2014 Ecuador-sponsored resolution at the UN Human Rights Council to examine the link between Transnational Corporations and Human Rights, in this paper I review the first major discussion at the United Nations of the role of multinational corporations. The report on Multinational Corporations in World Development (1973) for the UN Department of Economic and Social affair launched the (then) new UN Centre on Transnational Corporations. I examine the report in some detail, compare and contrast this with the Ecuadorian resolution from 2014, and reflect on the continuities and changes in attempts to regulate the conduct of global corporations over the 40 years between these two moments.

Keywords:

• Codes of conduct
• global political economy
• international law
• Transnational Corporations
• United Nations

Acknowledgments

This paper was originally presented at the BISA International Political Economy Group Annual Conference at Leeds Beckett University on 15 October 2016 and I thank all those who engaged in the discussion during the panel.

Notes

1. May, The Rule of Law, 17–32, passim.

2. Archer, Realist Social Theory, 250.

3. Ibid., 196, her emphasis.

4. Ibid., 259–260.

5. Ibid., 258.

6. Ibid., 191.

7. Ibid., 215.

8. Wettstein, Multinational Corporations and Global Justice, 355.

9. Ruggie, Just Business, 171, passim.

10. May, “Who’s in Charge.”

11. Backer, “Evolving Relationship between TNCs and Political Actors.”

12. Bernaz, Business and Human Rights, 296.

13. Bernaz, Business and Human Rights, 204.

14. Bernaz, Business and Human Rights, 9.

15. For a parallel discussion of how critical academic research on MNCs developed between these two points see Radice, “Transnational Corporations.”

16. Wettstein, Multinational Corporations and Global Justice, 348.

17. Multinational Corporations in World Development, xxii.

18. Braithwaite and Drahos, Global Business Regulation, 193 [MNCs substituted for TNCs in quote for consistency only]; see also Bair, “Taking Aim,” 367; Hamdani and Ruffing, United Nations Centre on Transnational Corporations, 8; Sauvant, “Negotiations of UN Code,” 13–14; Bernaz, Business and Human Rights, 164–165.

19. I owe this point to Hugo Radice.

20. Multinational Corporations in World Development, v.

21. Hamdani and Ruffing, United Nations Centre on Transnational Corporations, 44.

22. Muchlinski, Multinational Enterprises and The Law, 119, 660. For a comprehensive discussion of the UNCTC (including participant reflections) see Hamdani and Ruffing, United Nations Centre on Transnational Corporations; for a contemporary report on its initial sessions see Rubin, “Developments in Law and Institutions.”

23. Sagafi-Nejad and Dunning, UN and Transnational Corporations, 60, 63.

24. Bernaz, Business and Human Rights, 166.

25. Multinational Corporations in World Development, 4.

26. Ibid., 16.

27. Ibid., 27–28.

28. Ibid., 29.

29. Ibid., 34–36.

30. Ibid., 40.

31. Ibid., 45.

32. Ibid., 45.

33. Ibid., 49.

34. Ibid., 52–53.

35. Ibid., 54.

36. Ibid., 58.

37. Ibid., 60.

38. Ibid., 64.

39. Ibid., 66–70.

40. Ibid., 71–72.

41. Ibid., 77.

42. Ibid., 87–88.

43. Ibid., 109.

44. Ibid., 98.

45. Ibid., 110.

46. Ibid., 110–111.

47. For an extensive discussion of the lengthy negotiations towards a UN Code of Conduct on Transnational Corporations, see Sauvant, “Negotiations of UN Code.”

48. Clapham, Human Rights Obligations, 201.

49. Bair, “Taking Aim.”

50. Ibid., 369–372.

51. Braithwaite and Drahos, Global Business Regulation, 567.

52. Zammit, Development at Risk.

53. This is Hugo Radice’s assessment with which I concur.

54. See Müller-Hoff, “Human Rights Challenges Posed by Transnational Corporation,” 340–341; Ricardo Patiño, “Transnational Misconduct Must End,” Huffington Post, 24 October 2014 (updated 24 December 2014) https://www.huffingtonpost.co.uk/ricardo-patino/ecuador-ricardo-patino_b_6040920.html

55. A relatively neutral narrative of the case(s) can be found in Gaukrodger, “State-to-State Dispute Settlement,” 20–28.

56. Dhooge, Yaiguaje v. Chevron Corporation, 95, 111.

57. For an extensive (alternative) overview of this case see James North, “Ecuador’s Battle for Environmental Justice Against Chevron,” The Nation, 22–29 June 2015 https://www.thenation.com/article/ecuadors-battle-environmental-justice-against-chevron/

58. Becker, “Rafael Correa and Social Movements in Ecuador”; Rosales, “Going Underground,” 1451–1452.

59. Schilling-Vacaflor and Kuppe, “Plurinational Constititionalism,” 360, fn.19.

60. Ruggie, Just Business, 159.

61. Ibid., 192–200.

62. The resolution can be downloaded from http://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/26/L.22/Rev.1.

from which all quotes are taken unless otherwise stated.

63. The Norwegian resolution is available at https://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/26/L.1

64. The first report is available as a download https://business-humanrights.org/en/binding-treaty/un-human-rights-council-sessions

65. Valencia’s blog is available at https://dplfblog.files.wordpress.com/2015/07/blog20igw20english_kv207-27.pdf

66. The note is available at https://www.ohchr.org/EN/HRBodies/HRC/WGTransCorp/Pages/Session1.aspx

67. Ibid., emphasis added.

68. The report is available at https://ap.ohchr.org/documents/dpage_e.aspx?si=A/HRC/31/50

69. A full list is available at Annex II of the report listed in note 68.

70. Ibid., 13.

71. Ibid., 16.

72. Sagafi-Nejad and Dunning, UN and Transnational Corporations, 97–100.

73. Hamdani and Ruffing, United Nations Centre on Transnational Corporations, 48.

74. Bergsten et al., American Multinationals and American Interests, 31.

75. Pentikäinen, “Changing International ‘Subjectivity,’ 152–154.

76. Nowrot, “Reconceptualising International Legal Personality,” 572, 585.

77. Tienhaara, “Investor–State Dispute Settlement,” 681.