9.3.1 Background and developments on the application of human rights to companies

We are nowadays facing a situation where some multinational companies - the giant Shell among others possess and control resources more extensively than certain States and where their decisions shape the international political landscape. As an effective way of illustrating their growing part in the world's economy, it is commonly reported that companies represent 51 of the top 100 largest economies worldwide (Institute for Policy Studies, 2000).1 Therefore, their effective powers permit them to negotiate, agree, including on concession agreements, and litigate as equals with governments. Moreover, companies ' freely' exploit and control economic, natural as well as human resources of several States. From this initial consideration, one may consider that States are even losing powers to these corporate entities and it then justifies the need to affect these multinational companies with corresponding responsibility on an international plane. In fact, corporate responsibility and the accountability of multinational companies are of growing concern among the international community considering this perception that the ability of States to act in the public interest, including securing human rights within their jurisdiction, has been weakened by the consequences of globalisation. In other words: everybody wants to see multinational companies held responsible for their actions, and especially in the case of human rights violations. Nevertheless, States remain the sole parties to international conventions under international law, including human rights treaties.

As this section will underline, this issue has been extensively discussed by legal scholars and human rights activists with specific reference to respecting obligations formulated under human rights instruments, such as the UDHR. Some current academic developments on the application of human rights treaties to companies will be further explored. It will also be evaluated whether ius cogens norms apply directly to companies. As an important development in this matter, a review of the UN 'Ruggie Report' is inserted. Following a current trend, it will be followed by an analysis of the scope and legal effects of the adoption of Voluntary Codes of Conduct by companies with respect to human rights, which is based on the fact that the observance of human rights is now considered to be 'Good for Business'.2

It has become commonly accepted that individuals possess some international rights and obligations under international law. Since World War II, the establishment of international supervisory organs allows individuals to bring claims against a State for violations of human rights. With the establishment of the International Criminal Tribunals for the Former Yugoslavia and Rwanda, individuals can be prosecuted at an international level, and it is accepted that individuals are subject to duties under international law.3

Whether international rights and obligations should be extended to a legal person, such as multinational companies, has been the subject of great debate.4 Concerning their rights, it has been rightfully suggested that this question should be centred "not so much [on] whether, as a conceptual matter, corporations should enjoy the benefit of human rights protection, but whether, given the nature, characteristics, and functions of corporations, they should enjoy the same human rights and to the same extent as natural persons".5 Obviously, there are some violations which can only be suffered by natural persons (e.g. torture, rape). Nevertheless, some rights may be enjoyed by both entities, including the legal person, "although the precise nature of the right may need to be modified to take account of realities of corporate activity".6 For instance, a company may enjoy the right to own property, to fair trial or the right to free speech. The question remains: What is the scope of their parallel obligations based on existing human rights treaties?