Business

Corporations in International Law: A Tale of Atrocities and Accountability

Story Highlights
  • How did Businesses Become International Entities?
  • Some Examples of these Violations
  • Corporate Social Responsibility
  • Business Human Rights
  • What is Stopping the Enforcement of these Rules?

In its early years, international law dealt mostly with states and their relations. However, with the development of the Western world, businesses also began to gain footing in the international community, and it became pertinent to include them in the umbrella of international law. But their place in the field is interesting.

How did Businesses Become International Entities?

You may be familiar with a company called the Dutch East India Company (DEIC), which, alongside similar companies from Britain and France, conducted business between India and their countries of origin.

In doing so, the DEIC became the first multinational corporation. It may also ring a bell that these companies have mercenaries and are responsible for establishing governments and committing atrocities in India.

As the corporations continued to expand with only one purpose—profit at all costs—the value of human life fell compared to the benefit that could be gained. This resulted in violations of human rights on an entirely new spectrum, forcing the international community to step up and attempt to hold these corporations responsible for their activity’s impact.

Some Examples of these Violations

There is no shortage of examples to point toward in this case. Firstly, the Rana Plaza incident in Bangladesh in 2013, where 1,100 underpaid and overworked workers died in the collapse of a factory where products were being made for many well-known clothing brands.

In 1984, a gas leak occurred at a chemical plant owned by Union Carbide. It ended up killing an estimated 10,000 people and continues to affect the air quality to this day. Companies like IBM and Mercedes Benz supported the Nazis and were also party to the Holocaust. These are only a few examples.

Cases like these happen daily and have been going on for decades in many cases.

Corporate Social Responsibility

At some point, as these atrocities began to be exposed, none other than the consumers of the products that these corporations sell began to boycott these products until the violations were stopped. To combat this and the scrutiny they were receiving on higher platforms, they began adopting practices of Corporate Social Responsibility (CSR), which is their way of giving back to the communities they benefit from.

This may include food distribution drives to building or financing schools or hospitals. However, the latter only happens sometimes. The issue here is that CSR is only enforceable under social pressure. It is voluntary and done solely to create a more “presentable image” for the company in question. For most of them, it was simple enough to convince their consumers back in the west that they were treating their workers in the developing countries better.

Business Human Rights

Considering the failure of the CSR system, the concept of Business Human Rights (BHR) began to be introduced by the United Nations. This is a series of rules set by the UN to regulate the behavior of businesses, with sanctions to be enforced in case of any violations. Many of these documents were put forth, but in international law, these decisions need to be ratified by a majority of the countries involved, and they will enforce these rules through their local laws.

However, as with most international law issues, these rules have yet to be ratified or respected. Neither by the states, these corporations belong to nor by the developing states where most of these violations occur. The reasons for this are manifold.

What is Stopping the Enforcement of these Rules?

Again, these corporations and their operations affect two kinds of states. The home states they belong to, and the host states where the operations and violations occur. The issue for the home states (mostly developed Western states) is that these corporations run their economies practically. If one of them were to upset them, the corporation may move its headquarters to another state where it would be more feasible.

The host states provide the corporations with cheap labor with little to no regulation on how that labor is taken. If any of them were to tighten up the regulation of this labor, it would no longer be as profitable for the corporation. Lucky for them, dozens of states would give anything for the marginal benefit that these operations bring, and the corporation may move to another.

But apart from purely economic reasons, these corporations’ sheer power cannot be ignored. Take Shell’s operations in Nigeria as an example. Shell was laying a pipeline in Nigeria under an agreement with the government that required the relocation of some of the residents. The residents were not compensated for this and were forced to leave. In retaliation, these people started sabotaging the operations, which led to Shell hiring mercenaries, and subsequently, mass murder, torture, and rape against the Nigerians began.

Shell was never held responsible for any of these atrocities; Union Carbide never had to pay for the Bhopal incident. Corporations like H&M, Zara, and Adidas never had to pay for the Rana Plaza incident. It is clear that this issue needs to be curbed, but how these corporations do all this and what options we have for controlling them may be discussed in another article.

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