Redress and Corporate Human Rights Harms: An Analysis of New Governance and the POSCO Odisha Project

Abstract

Human rights harms caused by transnational business in the global South are increasingly being addressed using ‘new governance’ tools and their cooperative problem-solving processes. Such an approach is employed by OECD National Contact Points (NCPs), which received a complaint regarding Korean steel giant POSCO in India. This article explains the contested aspects of the POSCO project in its politico-economic context and shows how the NCP process sacrificed elements essential to an effective new governance approach. This case highlights the challenges facing new governance tools in advancing human rights in the global South raising significant questions about their usefulness in this context.

Keywords:

• new governance
• POSCO
• India
• business and human rights
• OECD National Contact Points

Acknowledgements

Thanks to Jonathan Schultz for invaluable research assistance, and Kate Macdonald for comments on early analysis. Particular thanks to research participants in India, Europe, and Korea.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1 This case study is part of a larger research project evaluating over 20 transnational non-judicial grievance mechanisms.

2 This category does not denote indigenous status.

3 Some pro-POSCO villagers moved to a ‘POSCO transit camp’, built by POSCO, but have since returned to their villages because of poor living conditions (Asher, 2009; IHRC & ESCR-Net, 2013, pp. 63–68). According to interviewees in Odisha, differences between villagers with possible land rights, and those without have been one source of division in the community, while another has been pressure from POSCO and government officials to support the company.

4 The Dutch Pension Fund, Stichting Pensioenfonds ABP (National Civil Pension Fund) is for employees in the government, public, and education sectors. APG administers approximately 2.6 million pensions. They are referred to as ABP/APG. In October 2012, ABP/APG had an investment of 0.084% in POSCO. Norges Bank Investment Management (NBIM) is the asset management wing of the Norwegian Central Bank, managing the Norwegian Government Pension Fund Global on behalf of the Norwegian Ministry of Finance, and is one of the world's largest investment funds, with a portfolio value of approximately US$650 billion. In December 2012, NBIM had an investment of 0.9% of POSCO.

5 Public documents on NCP complaints are available at http://www.oecdwatch.org/cases/Case_260, and additional documents are on file with authors.

6 The only unequivocal success of the NCP process, from the complainants' perspective, was the confirmation that minority shareholders have obligations regarding human rights due diligence and the exercise of leverage to prevent or mitigate adverse human rights impacts.

Additional information

Funding

This work was supported by the Australian Research Council [grant number LP110100426].

Notes on contributors

Samantha Balaton-Chrimes

Samantha Balaton-Chrimes is a Lecturer in International Studies at Deakin University. Her research is concerned with enduring political questions about how difference is negotiated in contexts of power asymmetries. Her work is interdisciplinary in nature, engaging political theory, anthropology, and development studies. Her most recent research focuses on international development and global north/south relationships as they play out ‘on the ground’, particularly through practices of participation, consultation, consent-giving, and complaint-making as tools for the management of disagreement over development. She is author of Ethnicity, democracy and citizenship in Africa (Ashgate, 2015).

Fiona Haines

Fiona Haines is Professor of Criminology in the School of Social and Political Sciences at the University of Melbourne, and Adjunct Professor at RegNet School of Regulation and Global Governance at the Australian National University. Her work encompasses white collar and corporate crime, globalisation, risk, and regulation. Her most recent research analyses economic globalisation and its impact on accountability of multinational corporations for human rights abuse.