Human rights violations are a problem throughout the world. These violations take place in both developed and undeveloped countries. In some instances these they are committed by government and in other instances corporations are responsible for these atrocities. There have also been situations in which host governments and Multinational corporations have worked together to commit human rights abuses. The purpose of this discussion is to examine Multinational Corporations and human rights. The primary goal of the research will be to determine the preventative measures that can be taken to prevent human rights abuses among Multinational Corporations. The research will demonstrate that a combination of an extraterritorial model and self-regulation by multinational corporations will provide the proper foundation for the prevention of human rights abuses by multinational corporations.
Human Rights
On an international level, protecting basic human right has become a pressing issue that is difficult to resolve .
Prior to the second World war, there was very little regulation of human right in the realm of international law. Various nations offered very little in the way of forming actual human rights laws instead they made declarations of intent to conventions and treaties .
However in 1945 one of the most important aspects of international law was set into motion at the United Nations. This eventually became the Universal Declaration of Human rights on December 10, 1948. The preamble to the declaration recognizes the “inherent dignity” and “inalienable rights” of all human beings. The preamble also recognizes that failure to acknowledge human rights has caused certain barbarous acts to occur and in order to deter such acts from occurring again the member states are agreeing upon this declaration.
“THE GENERAL ASSEMBLY proclaims THIS UNIVERSAL
DECLARATION of HUMAN RIGHTS as a common standard of achievement for all peoples and all nations, to the end that every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction .”
This particular legislation allowed states and multinational organizations the opportunity to define human rights and develop international laws. According to Hefner-Burton & Tsutsui, (2005)”Today, these efforts have culminated in the creation and expansion of a worldwide system of international law designed to identify and protect a growing number of basic human rights.”
The authors further explains that for many scholars and activists the increase in the amount of legal commitments among various nations of the world mark a fundamental change in the global community .
The authors point put that at the current time many nations around the world have established international standards associated with human rights .
That is there is some sort of consensus that exist around the world as it pertains to the definition of human rights. In addition many nations have adapted policies that are designed to protect the rights of people as defined by universal consensus.
The authors point out that as an increased number of countries commit to acknowledging these universal standards, these standards will also begin to evolve to include additional rights that should be available to all human beings . The authors further explain that such treaties provide human rights monitors who serve the purpose of improving the practices of governments as it pertains to various aspect of human rights. These monitoring bodies are able to accomplish this by gathering and distributing information, with the cooperation of nongovernmental activists.
Obviously, the development international human rights laws is an ongoing process that has evolved over many years. As the world has become a more global place, certain standards have been developed concerning what human rights are and how to protect such rights. In some countries human rights violations are taken more seriously than in other countries. This is the case because some countries simply do not possess the resources needed to prevent human rights violations. In addition, some countries do have the resources to prevent such atrocities but they choose to ignore these violations because it interferes with the amount of revenue (taxes) they receive from the companies involved in such practices.
Types of Human rights violations
One of the most common types of human rights violations committed by multinational companies has to do with labor practices. Sweatshops, and child labor are amongst the most common human rights violations committed by multinational corporations.
Sweatshops are defined as “shops or factories in which employees work for long hours at low wages and under unhealthy conditions.
In most cases sweatshops are found in places where there is very little government oversight as it pertains to labor laws. In addition, most countries in which multinational corporations are caught operating sweatshops are poorer countries in which governments cannot afford to pay for oversight.
Child labor abuses are also a huge problem. According to UNICEF Child Labor is defined as “work that exceeds a minimum number of hours, depending on the age of a child and on the type of work .”
That is, child labor is allowed but is dependent of the age of the child and the type of work that is being done. According to Kolk & Tulder, (2002) there is a continuum as it pertains types of child labor which is also called child work. According to the authors tolerable work for children is defined as light work that will not be harmful to the development or health of the child. In addition the work cannot impede upon a child’s ability to attend school. In most cases the children that carryout this work must be 13 years or older.
Intolerable and unacceptable instances of child labor include work that exploits and is dangerous.
In addition the 1999 ILO Convention also establishes that,
“forms of slavery or practices similar to slavery, such as the sale and trafficking of children, debt bondage and serfdom and forced or compulsory labour, including forced or compulsory recruitment of children for use in armed conflict .”
The authors explain that the intolerable instances of child labor also includes the use of children for the purposes of prostitution and any other activities that are unsafe, immoral, or harmful to the health to anyone under the age of 18. The authors also explain that “Although perceptions on child labour also depend on cultural traditions, levels of economic development, and social conditions, a wide consensus exists on the unacceptability of the worst forms of child labour.”
Although they are separate violations, sweatshops and child labor often go hand in hand. That is in many cases children are working in sweatshops under deplorable conditions. However in many instances children and poor people are desperate for money and they are willing to work under very dangerous conditions. In many cases the wages that can be made in sweatshops are needed for survival.
Multinational corporations have to be particularly careful in ensuring that the people that they employ are not children. They must also be certain to investigate and ensure that the conditions under which employees work are not dangerous. Although this should always be the case, many multinational corporation have endured a great deal of scrutiny because they have not always been vigilant as it pertains to human rights. Over the next few paragraphs various human rights violations by multinational corporations will be discussed.
Violations and Multinational Corporations
Multinational corporations are those that conduct business in various nations. That is their products, services and even offices are present in different countries around the world. There are many multinational corporations that have strict human rights standards that are adhered to. However, there are also those multinational corporations that seem to ignore many of the internationally recognized human rights standards. In some cases these multinational companies work alone in violating human rights. However in other instances governments work with multinational companies to commit such abuses. According to a report published by the World Bank,
“A number of significant cases have been documented of apparent collusion between MNEs and host governments in major violations of human rights. These have been brought to public attention in the media through the actions of concerned individuals and groups, most notably by non-governmental
organizations (NGOs) concerned with human rights. Among the most publicized cases have been the operations of Shell in Ogoniland,1 BP in Colombia,2 and Unocal in Burma (Myanmar), the last of these having led to landmark litigation in the United States .”
Indeed, Several multinational corporations have been accused of violating human rights. Among these companies are some of America’s most well-known brands including Nike and Gap. In both cases, the human rights violations involved child workers. Also in both cases there was a great deal of outrage and concern shown from the international community.
In the case of Nike, the company has been caught running sweatshops and exploiting child workers in different places around the world. As it pertains to sweatshops, indications that the company was operating sweatshops came first in 1998. During this time sweatshops were found in Asia and the company was only paying workers 80 cents per day.
Nike’s behavior in both these instances created a backlash that is still present. Prior to the findings of human rights violations, Nike had a good reputation as an employer. However, after the presence of human rights violations were found consumers and human rights advocates alike begin to question Nike’s business practices and the company’s commitment to human rights. At the time Nike promised to “increase the minimum age for workers at Nike’s contract plants in Asia to 18, improve factory air quality, allow independent monitoring and provide free education for workers. But critics said the reforms did nothing to address the main problem — that workers at those plants aren’t paid a living wage. They say
U.S. companies in Asia pay workers in China and Vietnam $1.60 a day and workers in Indonesia less than $1 when these employees say they need $3 a day to maintain an adequate living standard.
Nike officials have said the company pays the minimum wage or the industry standard in whatever country they operate
in. “These factories are sweatshops,” said Medea Benjamin, spokeswoman for the San Francisco-based human rights group Global Exchange. “They’re clean, well-lighted sweatshops, but they’re still sweatshops.”
Nike’s treatment of workers in Asia was only one incident of many involving Nike and human rights violations. According to Spar & Burns (2002) throughout the 1980’s and 1990’s Nike was constantly under scrutiny as it pertained to the company’s human rights violations.
The author explains that these violations included underage workers in Indonesia, forced overtime in China and perilous working conditions in Vietnam. All of these human rights issues came to a head in the late 1990s when many interest groups and citizens of the world began to boycott Nike products.
Spar & Burns (2002) explains that Nike’s human rights violations were derived in some part by the overall business strategy of the company. This business strategy was developed in the late 1960s and included the practice of reducing costs by outsourcing all jobs involving manufacturers.
Today this is a very common practice and in some ways there is much more regulation of such outsourcing so that workers are better protected. However at the time this was unchartered territory especially as it pertained to a company the size of Nike. The lack of oversight and the lack of attention being paid to human rights at the time is what allowed Nike to operate in the manner in which it did.
The company’s cost saving strategy functioned by not paying workers a living wage. Although the company was paying what the workers in that area of the world were receiving for a day’s work, this wage was not a living wage. This is another problem that multinational company’s often have. When conducting business in a country outside of the United States that average cost of hiring a worker is much cheaper Even though many multinational companies can afford to pay employees more, they don’t because they don’t have to. Ultimately the ability of companies such as Nike to pay much less in labor costs can result in increased profitability. In addition, the government of many of the host countries do not have the capacity to oversee the treatment of workers, in addition, in some instances governments don’t complain even if they know that human rights violations are occurring because these company’s are providing some revenue for the host country and jobs for the people of the country. In the case of Nike all of these issues came into play as it pertained to the human rights violations of the company.
In addition to Nike other multinational companies have also been found committing human rights violations. One such company is Wal-Mart. Wal-Mart is the largest retailer in the world. The company has stores throughout the United States and all over the world. The main focus of Wal-Mart’s human rights violations has been focused on the company’s labor practices and child labor violations.
Unlike Nike, Wal-Mart’s human rights violations occurred not only overseas but also in America. This is unusual because human right violations usually occur in poorer countries that have very little oversight. However Wal-Mart’s relationship to the American workforce is unusual because of the size of the company and the position that it holds amongst American retailers.
Wal-Mart’s labor practices have been the source of a great deal of scrutiny over the years. One of the labor complaints about the company came in the form of violations of child labor laws
. Apparently, some minors working for Wal-Mart in Arkansas, New Hampshire and Connecticut were allowed to operate some hazardous equipment.
The company was forced to pay a $135,540 fine for violating child labor laws.
As a result of this violation and other violations at the company, Wal-Mart was forced to develop a labor deal with the United States government.
However, this deal was scrutinized because it placed a great deal of restrictions on the amount of oversight that the government would have as it pertained to monitoring the company for further labor violations. In fact the deal established and 15 day notification before any monitoring could take place. According to many critics the deal that was reached was nothing more than a sweetheart deal and that it would do little or nothing to deter the company from violating labor laws. The article explains,
“The Bush Labor Department chose to do an unprecedented favor for Wal-Mart,
despite the fact it is well-known for violating labor laws, including child labor laws,” Rep. George Miller (D-Calif.), the lawmaker who requested an investigation, said in a statement. He also said such an arrangement could allow the nation’s largest employer to cover up evidence of a violation and would discourage employees who might fear retribution from filing a complaint .”
Recent cases involving Human rights violations and the Alien Torts Act
The violation of human rights by multinational corporations have not occurred without . This is particularly true of cases involving the Alien Tort Claims Act (ATCA). In short the ATCA, originally adopted in 1789, asserts that “asserted that “the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”
The law of nations is basically a treatise between nations in the international community which establishes that the laws of nature will be acknowledge and adhered to.
The purpose of the law of nations is to establish and guarantee the safety of the world’s citizens. ATCA is a law that has been relatively unused but over the last few decades an increased awareness and enforcement of human rights has led many plaintiffs to address various grievances.
Specific cases in which ATCA was utilized include the consolidated cases of Ntsebeza v. Daimler a.G. And Khulumani v. Barclay’s National Bank Inc.
. In the case of Ntsebeza v. Daimler a.G. The plaintiffs charged that the defendants engaged in discriminatory actions that were consistent with the constructs of apartheid which was prevalent in South Africa during the time the plaintiffs were employed by Daimler, the defendant. This period of time extended from 1973 until 1994. The acts for which the plaintiffs were suing included geographic segregation, employment discrimination based on political beliefs, arbitrary denationalization, forced exile, extrajudicial killing of family members and torture.
As a result of this discrimination, a class action suit was brought on behalf of the workers and all black South Africans.
The suit claimed that the defendants had directly and indirectly violated the law of nations.
The other lawsuit involved Khulumani v. Barclay’s National Bank Inc.. This case also involved South African plaintiffs and designated four different classes of plaintiffs.
These classes included
1. The torture class-composed of those who were tortured and raped by South African security officials from 1960-1994.
2. The extrajudicial killing class-composed of survivors of persons killed by the South African security officials from 1960-1994.
3. The cruel treatment class- composed of all those who were subjected to cruel and inhuman treatment by the South African security officials from 1960-1994.
4. The detention class-composed of all those detained unlawfully and for periods of time by the South African security officials from 1960-1994.
Initially in 2004 the cases were dismissed on the grounds that the ATCA did not cover aiding and abetting liability, which would be associated with the companies involved in both of the aforementioned cases. However in 2007 the plaintiffs appealed to the second circuit and the decision of the previous court was affirmed in part and also reversed in part. The second Circuit upheld the dismissal of the plaintiffs case under TVPA. However, the second circuit reverse the decision of the court in regards to the ACA. The second court ruled instead that “a plaintiff may plead a theory of aiding and abetting liability under the ATCAMoreover, the Circuit vacated the lower court’s holding that prudential concerns warranted dismissal and remanded for further analysis.”
These particular consolidated cases still remain unresolved. There are currently three remaining claims that should be resolved in the future.
Preventing Human Rights violations by multinational companies
Although there has been a great deal of progress throughout the world as it pertains to human rights and the establishment of standards, many violations continue to occur. The prevention of such violations are difficult to deter because of the influence that these multinational companies have in various parts of the world. Because this influence exist change is sometimes stifled.
One of the main actions that can be taken is to implore the citizens of the world have to make a concerted effort to confront these companies and their practices. This means that if a company is found to be in violation of commonly held human rights standards boycotts of their products should be organized. Such boycotts must happen on a massive scale. If companies understand that the way that they conduct business and the way that they treat employees is important to consumers, their behavior will change. Many of these companies continue to violate human rights laws because there are no consequences to doing so, there is no accountability.
In addition to consumers confronting these corporations, governments around the world must have the proper oversight to ensure that the laws that have already been established are adhered to. In some cases this may mean a greater amount of oversight and monitoring. The governments of the world have to let corporations know that they are serious about preventing human rights violations and that citizens are not to be exploited.
To this end, governments must also establish clear penalties for any violations that are found. These penalties must no just constitute a slap on the hand. These penalties must be substantial enough to have some kind of effect on the bottom line of the corporations. Once corporations understand the stiffness of the penalties that will be leveled against them they will be more apt to operate their businesses in a manner that is consistent with human rights standards.
NGO Programs to prevent Human rights violations
In addition to the aforementioned prevention techniques NGO’s such as the United Nations, there are also programs that have been created and designed specifically to curtail child labor violations. Such programs attempt to ensure that children get an education. In some cases children can still work because in some countries families cannot do without the income the children make. However, the children are also required to go to school. The article explains
“Launched in 2000, the program is modeled after a similar initiative that has won international acclaim for reducing child labor in Sialkot’s booming soccer ball and sports equipment industry, which supplies companies like Nike and Adidas. When the program wraps up its second phase at the end of this year, it will have taken more than 2,600 of an estimated 5,000 child laborers out of the surgical tool industry. The next phase, through 2008, will target the remainder. “We felt it was our responsibility to do something,” said Syed Waseem Abbas, senior vice chairman of the surgical instrument manufacturers association, and chief executive of Professional Hospital Furnishers.”
These types of programs exist in various forms around the world and their ultimate goal is to reduce the number of child workers. These programs are good because they give children the opportunity to receive and education, Ultimately an education is what the children will need to contribute to economic development and growth in their countries.
Extraterritorial Regulation of MNC’s
Another suggestion in an effort to reduce human rights abuses is extraterritorial regulation. According to Deva (2004) “The principles of international law have traditionally been built upon the assumption of the equal and exclusive sovereignty of states over their respective territories, and “the exercise of jurisdiction by a state over activities occurring outside its borders” has been “seen to impinge upon the sovereignty of the country in which the conduct took place.” ”
Since this is the case extraterritoriality is only allowed in a limited number of cases and even in these cases some nations have blocked the legislation. The author also points out that home or host state extraterritorial regulation is not the best regulatory framework because it involves jurisdictional conflicts and also complex questions concerning the interest of various nations and priorities.
Although this is the case there are nations that have implemented laws that have extraterritorial constructs as it pertains to certain areas.
The author explains that even though the aforementioned problems exist as it pertains to extraterritorial regulation of MNCs, countries still have the capacity to regulate the behaviors of MNC’s as it pertains to their adherence to human rights standards. The author further asserts that there are several justifications for the support of extraterritorial regulation in the realm of human rights obligations of MNCs. According to the article there are four precise justifications which include the following
1. The extraterritorial construct can be designed to address specific issues between the concerned state and the multinational corporations. It does not regulate all MNCs only questionable ones. Past bills were designed to regulate the foreign activities of some aspects of their country’s corporations. With this in mind the enterprise theory, could supply the needed jurisprudence to this type “extended reach” of a national law. That is under the enterprise theory the laws of a nation can extend beyond the nation and serve as a regulatory tool for MNC’s operating in other countries.
The author further explains that
“the law need not be blind to business reality. Obligations that extend to the worldwide activities of the firm can be placed on the parent company and its directors, to the extent that these activities are under the parent company’s de facto control.”
2. Extraterritorial law has a stronger foundation because it is an international policy that dictates the human rights policies as opposed to national policy. It also has a more sure foundation than laws that are designated to encourage, national foreign policies. In addition Deva (2004) asserts that human rights are not rights that are simply a municipal point of interest. The author explains
“One might question how the many instances of state intervention — in blatant
disregard of municipal sovereignty — in internal affairs of other states to uphold human rights, can be distinguished from states acting extraterritorially to redress human rights violations abroad by corporations incorporated in their own territory.
In fact, one must ask whether the second situation is not less interventionist than the first.”
3. The extraterritorial construct is not as extraterritorial in nature as one might think initially.
This is because this type of construct only involves the parent company that is incorporated within the country but operating oversees via its corporate reach. As such extraterritorial laws encourage conformity to the appropriate human rights practices it would also regulate the inclination to implement double standards.
The author also insists that this type of construct would encourage MNCs to conduct themselves abroad in the same manner they would conduct themselves at home.
4. Both home and host nations have to adhere to international laws concerning human rights.
Not only do these nations have to adhere to international law they also have an obligation to adhere to their own constructions as it pertains to not violating human rights. International law and constitutional law obligations means that nations must guarantee that all corporations operating on their territory or under their control operate in a manner consistent with human rights laws.
The author explains that if a nation is to fulfill its obligation towards human rights there must be some amount of extraterritorial control. When such laws are not present Multinational corporation are able to circumvent the dictates of municipal law by relocating their business functions offshore where human rights laws are not enforced in such strict terms.
With this understood, if extraterritorial laws are enacted nations will just be reinforcing the human rights standards they have already established within the nation.
When this is done home countries are able to assist the host countries in ensuring that human rights violations do not occur. This is important because some countries simply cannot afford the monitoring of activities to ensure human rights violations are not occurring. In this way extraterritorial construct is a forms of global cooperation as it pertains to enforcing human rights violations.
The author again points out that the extraterritorial construct is not ideal but t does provide a solid foundation for reducing human right violations committed by multinational corporation. The author is not optimistic that such laws will be enacted because most countries do not possess the political will to implement extraterritorial laws. According to the author the lack of political will as it pertains to human rights is lacking because human rights are not in the forefront of most national agendas. The author asserts that “the likelihood of extraterritorial regulatory regimes relating to human rights being instituted is far less than those pertaining to areas such as national security, taxation and trade. It is also likely that MNCs and/or their representative bodies will resist any further moves by states to institute extraterritorial regulatory regimes.”
Indeed the use of an extraterritorial construct may provide a viable solution to the problem of Multinational corporations and human rights violations. Corporations must understand that the same laws that regulate their operations in their home countries should also regulate their operations in host countries. This creates continuity and assist corporations in avoiding any confusions. It seems that if companies such as Nike know that they same laws apply at home as they do oversees issues such as child labor will not be a problem for the company.
Is Self-regulation the answer?
Some multinational companies have recognized the error of their ways and attempted to regulate their business operations to ensure that human rights violations were not being committed. According to Bernstein
“For more than a decade, consumer-product and retail companies have been f ending off sweatshop critics by hiring auditors to inspect their overseas factories for labor violations. The companies use the reports to reassure consumers that they’re grappling with the sweatshop conditions prevalent in low-wage countries.
But the entire effort has been of limited public-relations value. For one thing, companies such as Nike, Wal-Mart Stores, and Walt Disney have largely refused to release the audits to the public. Essentially, they have asked critics to trust that they’re taking care of the problem — which of course few are willing to do.”
The author further reports that about five companies have actually publicized the findings of the aforementioned audits. In fact the factory labor audits of these companies were made public via that internet site of the Fair Labor association (FLA), which monitors sweatshops all over the world.
The article asserts that this degree of self-regulation should have occurred years ago. In fact the FLA committed to the idea of making public such findings concerning sweatshops many years ago.
Because such findings are now made public there is greater pressure placed in other companies that do not publicize the findings of their audits.
In addition, the author reports that publicizing such findings puts increased pressure on the organization to correct human rights violations.
Although the FLA companies are attempting to change their human rights practices, there are still human rights issues that are not addressed at all by the collaboration.
For instance, there is no effort to ensure that factories are paying workers a living wage.
This is a major issue as it pertains to human rights standards. In addition the FLA monitors do not report
“on whether factories respect the right to form independent unions in countries
like China that repress them. The FLA, under pressure from its member companies, also declined to require that the actual factories inspected be named, making it more difficult for watchdog groups to check up on the reports. In addition, some critics say the FLA has watered down its overall inspection regime
as it has struggled to get up and running Another complaint: Most of the FLA
monitoring is handled by for-profit auditing firms that don’t usually talk to workers off-site. Although this is considered the best way to uncover systematic labor abuses, it’s also more expensive, and many companies don’t want to spend the money.”
So then, self-regulation is also a problematic solution for reducing human rights violations. Corporations do not have a way of ensuring that the results of audits and other monitoring devices will yield accurate results. In addition, some self-monitoring plans only address one aspect of human rights abuses that are likely to occur. As such a multinational corporation may be adhering to human rights standards in one aspect and not be adhering to other aspects of human rights that are just as important.
Recommendations
Overall it seems that there is no perfect solution to the problem of preventing human rights violations amongst multinational corporations. An extraterritorial construct is difficult to establish because many nations lack to political will to do so. In addition, self-regulation can be problematic because in some cases companies do not investigate all the human rights issues that need to be addressed. So then the solution might be to combine these two strategies. Given a nation can find the political will to employ an extraterritorial construct, it can serve as a foundation for the manner in which people should be treated regardless of whether or not the corporation is operating at home or in a host country. Self-regulation can serve as a way to monitor human rights. If violations are found self-regulation can also assist in correcting the problems. If the problems cannot be resolved through self-regulation than the applicable punishments should go forth based on what has been decreed by the extraterritorial construct. The combining of these two strategies presents multinational corporations with a way to ensure that human rights violations are prevented.
Conclusion
The purpose of this discussion was to examine Multinational Corporations and human rights. The investigation found that many well-known multinational companies have committed human rights violations. The primary goal of the research was to determine the preventative measures that can be taken to prevent human rights abuses among Multinational Corporations. While no strategy is foolproof the research demonstrated that a combination of an extraterritorial model and self-regulation by multinational corporations will provide the proper foundation for the prevention of human rights abuses by multinational corporations.
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Bernstein, a. (2003). Sweatshops: Finally, Airing the Dirty Linen. Business WeekNumber 3838; Pg. 100
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Bernstein
Bernstein
Bernstein
Bernstein
Bernstein
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