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Take the Power Back! Ecuador Takes Lead to Curb Corporate Power*


While transnational corporations have long committed human rights abuses with impunity, a new U.N. initiative championed by Ecuador aims to hold multinationals accountable at the international level.

As Ecuadorean sociologist and writer Irene Leon explained to teleSUR, the sheer power that corporations wield in a globalized world points to the urgency of having clear rules to regulate them.

“More and more, the power of transnationals in the world even surpasses the internal powers of countries, their regulations, and international norms on international rights,” Leon told teleSUR by phone from the CELAC Summit in Quito, Ecuador. “In short, it’s an extra-territorial power that dominates everything.”

The United Nations Human Rights Council adopted a resolution in July 2014 to create an “international legally binding instrument” to hold transnational corporations responsible when it comes to human rights. The initiative, which is still in development, is based on a proposal presented by Ecuador with the support of South Africa and other countries. Advocates of the proposal argue that international rules that actually hold corporations accountable are long overdue to counterbalance the extensive protections of corporate profits afforded to multinationals through free trade agreements and World Bank policy.

“The main nucleus of the idea is that transnational companies be made responsible for the respect of human rights and observance of human rights that already exist (in international law),” Leon explained, adding that civil and environmental rights could be among the rights on the agenda in ensuring that corporations are not acting arbitrarily.

The Human Rights Council decision created an Intergovernmental Working Group tasked with developing mechanisms to regulate transnational corporations and other companies with respect to international human rights law, the Universal Declaration on Human Rights, and other relevant U.N. conventions. The working group initially met one year later, in July 2015, for preliminary planning on how to go about holding corporations responsible for human rights abuses. In 2016, the working group is expected to make further progress toward getting the initiative up and running.

Toward Ending Corporate Impunity

While the exact form of the mechanism being developed is still unclear, the goal is to set up a well-defined agreement at the international level to hold transnational corporations accountable, rather than answering to their own - often weak - self-regulation regimes.

Leon explained that talk around a binding instrument for transnational corporations has so far focused on responsibilities and has not touched on potential punishments for corporations.

But some have speculated that an international treaty could give way to other possibilities, such as a mechanism similar to the Hague International Court of Justice, but with a focus on transnational corporations and human rights. Such a body could act as a counterweight to the World Back investor-state arbitration that allows corporations to level lawsuits against countries.

Such corporate dispute settlement mechanisms through the World Bank allow corporations to sue governments in so-called “corporate courts” for infringing on future profits through public policies such limiting mining or fossil fuel extraction. These corporate trials unfold in trade tribunals widely condemned as unaccountable. There have already been over 600 such corporate challenges to over 100 government policies through these mechanisms in various trade deals, such as NAFTA, and the controversial Trans-Pacific Partnership is set to further expand these corporate rights.

According to Leon, many countries already have concrete proposals related to regulating transnational corporations. Ecuador, for example, has stressed the importance not only of the U.N. binding instrument, but also processes to define and resolve problems between corporations and states.

“Ecuador has proposed, along with other countries, the creation of a sovereign arbitration body in the framework of UNASUR,” Leon explained, adding that CELAC is also considering how to create clear rules for transnational corporations.

Aside from trade policies that go to great lengths to protect corporate profits, one of the challenges of holding transnational corporations responsible for human rights violations is the cross-border nature of their business operations, which creates a legal complexity in terms of which country has jurisdiction and power to corporate giants responsible.

Canadian mining corporations, for example, have notorious human rights records in Latin America and Africa, but justice is rare when local judiciary systems are often weak and corrupt. While there is a burgeoning precedent for trying Canadian companies in Canadian courts for abuses committed abroad, such as the lawsuits filed in Canada by Mayan Q’eqchi’ plaintiffs for abuses committed by HudBay Minerals in Guatemala, the road to international justice remains is long and highly uncertain.

“In exercising their search for profits, corporations have committed abuses even against entire communities, against states, and governments find themselves in many cases subsumed under corporations in this power relation,” Leon said. “Now is the time to think about power relations and rules of the game between different actors. Power in the world has transformed, and transnational corporations should have human rights responsibilities.”

* This article was originally published in, on January 28th. For the complete text visit:


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