The following article was published in the November 2024 issue of the International Review of Contemporary Law, the journal of the IADL, focusing on climate and social justice.
A UN Binding Treaty on Transnational Corporations and Human Rights to outrule false “green extractivism” solutions: Building a real tool in the struggle for climate and social justice
by Erika Mendes and Raffaele Morgantini
In today’s neoliberal globalized economy, transnational corporations – erected as main agents of development policies – exercise a monopolistic power over value and production chains. In fact, the dominant capitalistic model is fueled by the continuous accumulation of capital through the activities of these entities, which contribute to the exploitation of not only labor forces, but also of women and nature. In this context, it is impossible to dissociate the struggle for climate justice from the struggle to defend land, territories, and human rights. Environmental rights and human rights are inseparable, inextricably linked, especially in the framework of the current systemic multidimensional crisis, which is most of all a climate and social crisis.
What do environmental rights mean for social movements, affected communities and the rights holders?
Let’s start by saying that environmental rights necessarily include access to the unspoiled natural resources that enable survival, including land, shelter, food, water, and air. They also enshrine more purely ecological rights, including the right of specific species to survive and the right of ecosystems to thrive. And very importantly, our vision of environmental rights also includes political rights, such as the rights of indigenous peoples and other collectivities, the right to information and participation in decision-making process that may affect their environment; but it is also about freedom of opinion and expression and self-determination, and the right to resist or to say NO to harmful developments or projects in our territories.
Many of these rights, particularly the political ones, are well-established and enshrined in various international legal instruments and agreements. We can credit the establishment of some of these rights, as well as the acceptance of others that are not yet legally recognised, to past and ongoing struggles of communities and indigenous peoples around the world.
Local and traditional rural communities, the majority of the people in the Global South, are mutually dependent and protectors of the environment. Several studies show that traditional practices and knowledge are the most effective in protecting and restoring the environment, whereas the transnational agribusiness sector and transnational extractivist corporations are devastating our soils, rivers, forests, and ecosystems.
Some of the debates around environmental rights started with the recognition of the huge impacts and pollution from powerful transnational corporations. Therefore, to talk about environmental rights is also a quest to end corporate impunity and the destruction of our planet in the pursuit of profit.
From the climate crisis to “green” extractivism
The climate crisis shows us that there is a dysfunction in the system, which is not only the carbon dioxide in the atmosphere. Millions of peoples’ lives are at stake, and these are not the people who created the problem. There is an inherent injustice to the climate crisis which is the fact that it affects the poorest and most vulnerable people first, and hardest – exactly those who did the least to create the crisis. Big transnational corporations, mainly in the sector of oil, gas, cement, and coal extraction, are undoubtedly the leading drivers of the climate crisis[1]. According to the “Carbon Majors Database” study, only 57 corporations are directly linked to 80% of the world’s global greenhouse emissions.
We need to fight for climate justice, because we need to correct the dysfunction that created this system.
However, as the climate crisis unfolds, we notice that big corporations and western governments are trying to use this crisis to profit even more. In the past years, climate negotiations have been flooded with dangerous distractions, or what social movements and independent scientists label as “false climate solutions”. These include carbon markets, nature-based solutions (beautiful name, but in reality, a commodification of nature), REDD and REDD+ (reducing emissions from deforestation and forest degradation), and even mega-dams, which have been labelled as clean energy, but in fact contribute to methane emissions which is also a potent greenhouse gas.
For example, Mozambique was the first country to receive payments from a World Bank’s trust fund for reducing emissions from deforestation and forest degradation — commonly known as REDD+. So, what is the problem with these projects?
REDD type projects basically require vast amounts of land, often forests who have been protected and preserved by local and indigenous communities for many generations, to offset a given company’s emissions from fossil fuels projects, for example. As such, some companies ‘pay’ Global South governments to protect a specific forest or portion of a forest, which actually means removing local communities and indigenous peoples from the land they have always lived in. Instead of actually decreasing emissions, this type of projects enables polluters to continue polluting, as long as they pay for their carbon credits.
What we are witnessing now in many countries of the Global South is that the implementation of climate change policies is resulting in the emergence of green extractivism, a variation of extractivism that is based on the extraction, expropriation, and transfer of emissions rights from rural marginalized communities, in favour of external accumulation.
Emission rights are the rights to emit certain volumes of greenhouse gases, which in the context of rural communities, determine one’s ability to rightfully use and benefit from ecological assets. Through these “green” policies, rural communities are deprived of their resources and/or evicted from their land (which are determinant for their life and social reproduction), in order to transform these into carbon markets. The communities therefore lose their emission rights (by being prevented from collecting firewood and other forest resources) in favour of companies (which buy those carbon credits in order to increase their emission rights)[2].
External accumulation is therefore intended as the capitalist accumulation generated through these activities of transnational corporations, which buy these carbon credits to continue their polluting activities, aiming at maximizing profits and generating further capital accumulation.
Rather than a just transition that places peoples’ and environmental rights at the centre, what we are witnessing is the rise of new strategies of capital accumulation through the creation of new commodities, new markets where land is commodified, trees are seen as carbon sinks and forests are given a price.
These emerging processes of commodification bring along new waves of expropriation, further expropriating livelihoods and fueling capital accumulation in the name of the fight against climate change.
The same drivers that led us to the multiple crisis we are facing (the climate crisis, the democracy crisis, the biodiversity and food crisis) – placing profits above people and the planet – are thus replicated in this quest for the Global South’s land, forests and livelihoods.
Trade and investment regime: The trigger of corporate power and impunity
The above-mentioned situation is ensured not only by transnational corporations’ huge financial, economic and political power, conferring them the ability to influence and capture State structures, multilateral spaces and decision-making processes, but even by a coercive international trade and investment regime, whose norms outclass human and environmental rights systems. The primacy of human rights, a well-established principle in international law, is thus subjugated to the dominant capitalistic trade regime.
In fact, free trade agreements and investment treaties often include problematic binding provisions, such as the possibility for private entities to appeal to Investor-State Dispute Settlement (ISDS) mechanisms. ISDS is a private legal system that safeguards investors’ rights, including the right and the possibility of taking a State to court. Using ISDS, investors and companies can sue a sovereign State through a private arbitration tribunal and be awarded multi-million dollar penalties paid with taxpayers money, just by claiming that their expected profits were harmed by a specific government’s policy change or environmental legislation. Sometimes the companies don’t even have to file the case – the mere threat of an ISDS case has proven to be enough to discourage States from adopting progressive human rights, labor, climate or environmental legislation. This ‘chilling effect’ of ISDS’ mechanisms is therefore a clear obstacle to real climate action or bold environmental and human rights protection.
Transnational corporations are not only the drivers and the main beneficiaries of the multidimensional crises we are facing, they are also actively and deliberatively blocking the real solutions for these crises. International financial institutions, investment banks and other financial entities (insurance companies, pension funds, hedge funds, investment companies and brokerage firms) that contribute to TNCs’ activities and predatory strategies are also responsible and should therefore be hold accountable.
The climate justice angle is critical because it demands that the unjust capitalist system be dismantled to take care of the planet, push for a just energy transition, and provide redress for historical violations.
To confront this green-washed transnational architecture of impunity, new legal and political leverages are arising, which could effectively contribute to the struggle against corporate power, for social and climate justice. The UN Human Rights Council is currently negotiating the elaboration of an international legally binding instrument, in the form of a Binding Treaty, to regulate transnational corporations in international human rights law, thus filling a fundamental legal gap that allow TNCs to continue accumulating economic and political power, while violating human and environmental rights in impunity. Once adopted, a strong UN Binding Treaty will be an important tool to address the unregulated power of TNCs. When trying to access justice and remedy in the face of corporate human rights violations that have become systemic and systematic, it will be an important tool in the hands of social movements, affected communities, trade unions, indigenous peoples, civil society organizations and even States.
This is of course particularly important in the context of the climate and other inter-related crises.
The Global Campaign to Reclaim People’s Sovereignty, Dismantle Corporate Power and Stop Impunity (the Global Campaign), a network of more than 250 organizations, social movements and affected communities struggling against corporate power, has been advocating for the elaboration of a Binding Treaty, precisely in the perspective of creating a legal framework that could support people’s and social movements’ resistance in the face of the current dominant neoliberal system that uses TNCs as their main agents to pursue its quest for domination and dispossession of the
working classes. The Global Campaign has been actively participating in the negotiation sessions, bringing to the table concrete wording and legal proposals, in order to weight on in the process and ensure the elaboration of an instrument that reflects the needs from the directly concerned and affected people and communities. These proposals directly arise from the knowledge and experiences from the ground; an experience of building international law from below, with a progressive political stance, aiming at changing the correlation of forces at the institutional level so to influence the political struggle in the territories.
For the Global Campaign, in order to have a concrete say for grassroots’ strategies, among other things, the future Binding Treaty must:
– ensure concrete access to justice mechanisms and rights for those affected by corporate violations: this includes provisions such as Free Prior and Informed Consent, which must necessarily include the right to say no, provisions on access to justice and remedy, reversal of the burden of proof;
– include fundamental provisions to protect environmental and human rights defenders (EHRD), whistleblowers, community leaders and activists, who have been under increased repression and militarisation when resisting corporate greed;
– include strong provisions to ensure the future instrument is protected from corporate capture, so that corporate lobbies are not able to exercise undue influence over the process and weaken the content of the treaty, or impair its implementation;
– focus on TNCs and their global value and production chains, which is precisely where the legal gap lies; this joint and several liability must be established between the parent company and include all entities along the chain, including subcontractors, subsidiaries, and even international financial institutions, financial funds and banks that contribute to the company’s activities;
– clearly reaffirm the primacy of human rights instruments over trade and investment agreements;
– establish concrete and effective prevention and legal liability mechanisms for TNCs, based on proper obligations to respect human and environmental rights, which must be independent and separate from the primary obligations of States.
An International Tribunal on TNCs and human rights: Building a coercive enforcement mechanism for access to justice
Last but not least, in order to meet its objectives and overcome the challenges imposed by the corporate-oriented neoliberal system, the Binding Treaty must be accompanied by an effective enforcement mechanism to ensure the proper enforcement of the rights and obligations enshrined in it. This mechanism could take the form of an International Tribunal, as advocated by the Global Campaign and other organizations/legal experts, where affected people and communities would be able to bring TNCs that violate human and environmental rights to justice, seeking remedy and justice, sanctions for non-compliance with the obligations and provisions established in the Binding Treaty, thus ensuring to hold these entities fully accountable and avoid impunity.
In the same vein, back in 2016, the first Chair of the OEIGWG, Ambassador of the Republic of Ecuador Mr. Luis Gallegos, advocated for the creation of a “World Court on Business and Human Rights” in an article[3]. Subsequently, the first document presented on the table of negotiations of the process, the “Elements for a legally binding treaty”, published in 2017 by the Chair of the OEIGWG, included a first seed of this Tribunal: “States Parties may decide that international judicial mechanisms should be established, for instance, an International Court on Transnational Corporations and Human Rights”.
This first concrete commitment in favour of this fundamental proposal has however disappeared in the following years, and more precisely after Ecuador’s political shift in 2018. In fact, the newly elected government of Lenin Moreno distanced itself from the progressive stance that characterized Ecuador’s policies the previous years, thus cutting ties with social movements and embracing corporate-oriented neoliberal policies imposed from the dominant elites.
The following drafts presented by the Chair of the OEIGWG between 2018 and 2024 limited the enforcement of the Treaty to a weak UN Committee of the Human Rights Council and to national judicial systems, which are totally insufficient. Without a robust international enforcement mechanism, the effectiveness of the future instrument will not be guaranteed.
Nevertheless, the Global Campaign continues the advocacy efforts to claim for the institution of such a Tribunal. In October 2022, and building on an earlier proposal[4] from Friends of the Earth Africa (also members of the Global Campaign), it published a document titled “Elements for the Statute of an International Tribunal on Transnational Corporations and Human Rights, as a Mechanism of Enforcement and Guarantee of the Obligations of the Legally Binding Instrument on TNCs and Human Rights[5]”, which was presented during the 8th session of the OEIGWG.
This document intends to present a skeleton of what the Tribunal could look like, listing and explaining the essential elements of the future Statutes. The main elements, among others, identified to constitute the backbone of the Tribunal would be the following:
– The first element concerns the linkages of the future Tribunal with national judicial systems and the issue of hierarchy. The proposal is that the International Tribunal’s actions should be complementary to State’s jurisdictions, while at the same providing a “safe net” that would allow to exercise jurisdiction even when national mechanisms are not exhausted, if the State or States concerned do not act appropriately or in case of any type of inefficiency.
– The second element tackles the question of the nature of the mechanism, meaning the institution and seat of the future Tribunal. The proposal is to create a permanent tribunal in a country of the global South, but with an itinerant jurisdiction in order to facilitate access to those affected by the violations.
– The third element identified focuses on the fundamental issue of the jurisdiction of the Tribunal. The Global Campaign identified three types of jurisdictions that the Statute will necessarily have to provide for:
Personal jurisdiction: The personal jurisdiction looks at which type of entities and activities the Tribunal will be entitled to have jurisdiction. As per the original scope of the Binding Treaty, the Tribunal will cover the activities and violations of TNCs and other business enterprises of transnational character, both as legal and natural persons, recognizing the joint and several liability of parent companies with the entities along the value and production chains.
Material jurisdiction: The material jurisdiction looks at and clarifies which kind of crimes and violations the Tribunal is entitled to investigate. According to this, the future Tribunal should look at the compliance of TNCs with the obligations enshrined in the provisions of the Binding Treaty. The material jurisdiction also means looking at what rights should be protected by the future Tribunal. Also here, the latter should reflect the rights protected by the provisions of the future Binding Treaty, plus all the fundamental human rights and the obligations arising from other relevant human rights instruments, including those recognized in environmental norms.
Geographical jurisdiction: The geographical jurisdiction looks at the place where the violation has been committed, to establish if the Tribunal is competent or not. The fundamental proposal in this chapter is that the future Tribunal should have jurisdiction over violations and crimes occurring in a territory of a State that ratified the Binding Treaty and Party to the Statute of the Tribunal. However, the jurisdiction should be exercised also over entities whose siege is not necessarily in a State Party, if, and only if, the joint and several liability of this company has been established with the entity violator. Without this provision, the effectiveness of the future Treaty and Tribunal will be compromised. It is key to prevent that parent companies of a given TNC based in a non-State Party – which are joint and severally liable with one entity violator in a State Party – are able to evade justice.
– Other elements: the Tribunal would have the capacity to investigate and prosecute, imposing sanctions and penalties; the Tribunal would have to reaffirm the rights of the affected people and communities, including references to the reversal of the burden of proof, class actions and the promotion of prompt processes; the Tribunal would have to be governed by international cooperation mechanisms, to facilitate collaboration in the perspective of ensuring prompt, integral and full access to justice; the Tribunal would have to function and be accompanied by an International Public Monitoring Centre on Human Rights and TNCs.
The Global Campaign is fully aware that the proposal of an International Tribunal at this stage, and in the face of the current international political and economic conjuncture, is a complex claim. Nevertheless, the Global Campaign remains coherent to its commitments and is convinced that it bears the duty to fight for the most ambitious and effective instrument possible.
Radical social change in favour of grassroots communities and the environment will be the result of fierce struggle on the ground but also at the legal and institutional level. The advancement of strong legal proposals aiming at definitively putting an end to corporate impunity is part of a political strategy to confront the dominant transnational architecture of impunity through the construction of international law from below, from a progressive perspective.
This is a necessary condition if we want to advance towards a strong and effective UN Binding Treaty that will be able to stop the impunity of transnational corporations. If social movements and progressive States succeed – and we must succeed – we will finally have a long-awaited tool to protect the people, the climate and the environment, and to push us towards an urgently needed just transition, while counteracting greenwashing efforts.
Erika Mendes (Justiça Ambiental JA!- Friends of the Earth Mozambique) andRaffaele Morgantini (CETIM) as members of the Global Campaign to Reclaim People´s Sovereignty, Dismantle Corporate Power and Stop Impunity
[1]The Carbon Majors Database: Launch Report, April 2024: https://carbonmajors.org/briefing/The-Carbon-Majors-Database-26913
[2] Extractivism, Rural Livelihoods and Accumulation in a “Climate-Smart” World: The rise of green extractivism: https://repub.eur.nl/pub/137082/natacha-bruna-thesis-final.pdf
[3] GALLEGOS, Luis and URIBE, Daniel, «The Next Step against Corporate Impunity: A World Court on Business and Human Rights?», Harvard International Law Journal, Vol.57, 2016, https://harvardilj.org/2016/07/the-next-step-against-corporate-impunity-a-world-court-on-business-and-human-rights/
[4] A tribunal to live: https://www.foei.org/publication/a-tribunal-to-live/
[5] https://www.stopcorporateimpunity.org/wp-content/uploads/2022/10/Elements-Tribunal_Oct2022-1.pdf
All articles published in the International Review of Contemporary Law reflect only the position of their author and not the position of the journal, nor of the International Association of Democratic Lawyers.