Transnational corporations have emerged in the second half of the twentieth century. occupied a key place in the world economy and to this day set the dynamics of its modern development. TNCs act as a mechanism for maximizing profits, because the spread of activities to the territory of various countries provides obvious advantages - both economic (availability of certain resources) and legal (imperfection of the legislation of some countries, which makes it possible to exempt from customs, tax and other restrictions). TNCs literally move the modern economy, create jobs, their activities make available numerous benefits for poor countries. At the same time, it was TNCs that became the main target of criticism from trade unions, human rights defenders and environmentalists.
What are the TNCs guilty of?
With capital that often exceeds the budgets of developed European countries, multinational companies try to dominate the markets, violating the rules of fair trade and fair competition. By developing their production in underdeveloped countries with imperfect legislation, TNCs avoid responsibility for numerous offenses.
Officials from such firms have admitted that “over-exploitation, child labor, harassment of trade unions, and negative environmental impacts have taken place in certain factories. In fact, crimes against human rights are commonplace for many enterprises in the Third World, and firms have tried to hide these facts until the moment of the deployment of international scandals. It is worth examining the conditions that contributed to corporate misconduct. Even then, negative phenomena were revealed: corporations tried to influence many political and social processes, put pressure on the governments of countries and encroachment on the national sovereignty of states.
In the mid-1970s, evidence was found that the German corporation “maintains a partnership with the warring parties in the Congo. The military formations that controlled the regions with natural resources sold oil, silver, tantalum, as well as "blood diamonds" to the German concern. The proceeds are used to purchase military equipment and weapons. The UN has imposed a ban on any trading operations with "blood diamonds", but they still end up on the international trading exchanges in Geneva, New York and Tel Aviv. Thus, an international corporation supports the largest conflict since the Second World War, which claimed the lives of almost 2 million people. The civilian population is the victims of the war, and minors are involved in the hostilities themselves.
In Argentina, between 1976 and 1983, the Ford automobile concern pursued a brutal anti-union policy, backed by the ruling military junta. “Unprofitable” workers' activists were kidnapped and exterminated.
The Shell Corporation, which produces petroleum products, has been repeatedly accused of harming the environment through its economic activities. In 1995, only thanks to large-scale protests and calls for a boycott of the company's products, it was possible to prevent the flooding of an oil platform in the North Sea. In 1970, there was an oil breakthrough in Nigeria, for which the corporation has not yet been held responsible. According to experts, the amount of compensation for all environmental crimes of Shell corresponds to the state budget of Nigeria, which has a population of 120 million.
The issues of legal restrictions on the activities of transnational corporations arose back in the 70s. XX centuryand it immediately became a source of collision between the highly developed countries of the West and countries that had just freed themselves from the colonial yoke. Both sides, trying to create a new legal framework, pursued diametrically opposed interests, although they formally tried to reach an agreement.
The developed capitalist states and a number of international organizations under the control of these states (the Organization for Economic Cooperation and Development, the World Trade Organization, the World Bank) lobbied for the interests of transnational corporations. In particular, this party demanded limitation of influence on TNCs from the host states, protection of investments from nationalization or expropriation.
On the other hand, the post-colonial countries of Asia, Africa and Latin America put forward demands for increased control by national states over the activities of TNCs, the development of reliable mechanisms for the responsibility of transnational corporations for their offenses (environmental pollution, abuse of monopolistic position in the markets, violation of human rights), as well as increasing control over the business activities of TNCs by international organizations, in particular the United Nations.
Later, with the help of the UN, both sides began to take steps towards the development of an international legal framework for TNCs.
As you know, one of the first international legal acts that enshrined the general principles of limiting the activities of TNCs was the Charter of Economic Rights and Duties of States (1974). However, this act was not enough to develop a unified system of generally accepted rules of behavior for TNCs. In 1974, the UN intergovernmental commissions on transnational corporations and the Center for TNCs were created, which began to develop a draft code of conduct for TNCs. A special “group 77” (a group of developing countries) began its activities to study and summarize materials that reveal the content, forms and methods of TNCs. TNCs were discovered that interfere in the internal affairs of the countries where their branches are located, and it was proved that they are trying to extend the laws of the countries where their control centers are located in these territories, and in other cases, on the contrary, they took advantage of local legislation. In order to evade supervision of their activities, TNCs hide data about themselves. All of this, of course, required the appropriate intervention of the international community.
An important step towards creating a legal framework for the functioning of TNCs was the development by UN members of the TNC Code of Conduct. An intergovernmental working group began its work on the draft Code in January 1977. However, the development of the Code was hampered by constant discussions between the developed countries and the countries of the “group of 77”, since they pursued different goals and this was expressed in constant disputes over the wording of the content of certain norms.
The delegations of the leading countries adhered to the principled positions: the norms of the Code should not contradict the Agreement on TNCs of the OECD countries. Developed countries argued that the Deal was based on historical international law binding on all countries, although the OECD was and remains a limited membership organization.
During the negotiations, the parties reached a compromise, and it was decided that the Code would contain two equal parts: the first - regulating the activities of TNCs; the second is the relationship of TNCs with the governments of host countries.
In the 90s of the twentieth century, the balance of forces changed significantly, this is due not least to the collapse of the USSR and the collapse of the socialist camp. At the same time, the countries of the “Group of 77” have lost the opportunity to influence the policy towards TNCs within the UN framework, including the adoption of the TNC Code of Conduct.
An indisputable fact is that transnational corporations and industrialized countries, defended the interests of TNCs, at the same time lost interest in the adoption of this codified act, although it presupposed numerous norms that would consolidate the position of global corporations in world markets and introduce positive orderliness in their legal regulation. This was due to the fact that even without any legal confirmation, TNCs felt themselves masters in the world and did not need, in fact, to formalize their position.
And to this day, the governments of post-colonial countries demand from the UN to develop effective mechanisms that will help prevent abuse by TNCs. In particular, there is a proposal for the use of sanctions by the governments of the states from which TNCs originate in favor of the affected countries. Since the majority of TNCs come from the countries of the “golden billion”, the governments of these countries are trying to avoid conflicts with TNCs so as not to burden themselves with new obligations. That is why they often defend the thesis that TNCs are “cut off” from the state of origin, deprived of “nationality” in the international legal sense of this term and have an absolutely cosmopolitan nature of activity, thereby leaving the issue of TNC responsibility open. At the same time, underdeveloped states clearly associate leading countries with corporations, which is also wrong, since corporations themselves are not controlled by the population of leading countries, so the question arises why firms should pay for crimes from state budgets.
All these facts indicate that within the global system, where big money rules, it is difficult to find a “golden mean” between the interests of developed countries and postcolonial ones, so the law will only play the role of a more or less veiled exponent of economic interests. However, the crimes of TNCs do not go unnoticed. Thousands of people around the world organize and monitor corporate activities, report violations in the media and often achieve results. Repeatedly TNK made concessions under pressure from the public, they were forced to compensate for losses, suppress dangerous industries, and publish certain information. Perhaps the people themselves, without the help of politicians, will be able to resist the most rude offender of the era of globalization?
The activity of fighters for ethical consumption and boycotting of TNCs results in the fact that more and more companies appear, for which their own reputation is in the first place, and not superprofits. There are international trade organizations, such as "Trans Fair", which monitor the observance of the rules of fair trade, fair pay and working conditions, and environmental safety of production. With their purchases, these organizations ensure the restoration of backward agrarian structures and thus the survival of small peasants. However, it is unlikely that the charity of individual subjects will be able to put an end to the global system, which puts profit-making above all human values …