DISCUSSION PAPER: A Convention on Corporate Accountability

SUMMARY

This discussion paper presents a proposal for a Convention on Corporate Accountability to be established at Rio+20, involving the creation of binding legal mechanisms that mandate oversight of corporations, and implement a binding international framework that provides effective access to remedies for victims of human and labour rights violations.

In providing access for resolving human rights and labour-related disputes between people and companies, the proposed Convention should consider a UN function that:

Is given investigative and monitoring power. The follow-up mechanism should be in a position to analyse cases, to undertake its own investigations, to make country visits and to monitor performance of States and companies.

• Can receive complaints both against States and individual companies from victims of human rights abuses and to propose remedies. This grievance mechanism should be able to investigate complaints and allow victims and/or their representatives to sue for remedies. The mechanism should have the power to decide on remedies and to monitor whether the remedies have been implemented.
• Is provided with the power to make recommendations to States and companies, to review the fulfilment of these recommendations and to regularly report to the UN General Assembly.

One of the initial objectives of the UN Centre on Transnational Corporations (UNCTC) was to formulate a Code of Conduct on Transnational Corporations. In the 1980’s however, the focus of the UN changed towards the positive impacts of foreign direct investment and large companies on development. This change meant a stalling of the UNCTC Code negotiations, and subsequently, following the dissolution of the UNCTC in 1993, the Programme on corporations was transferred to UNCTAD.

The issue of corporate accountability remains unsolved today, although the role of business in global governance has dramatically increased. Over recent years, the range of voluntary CSR standards has expanded in both number and form (e.g. ILO declarations, OECD Guidelines, and the Guiding Principles on Business and Human Rights). At present, international CSR standards are almost uniformly voluntary and so exist as a unique dimension of soft law, posing a critical challenge in ensuring that companies actually comply with these guidelines, principles and convention.

Concerns exist over the fact that many multinational corporations rely on the support of numerous subsidiaries and subcontractors, for which they have no positive legal duty to supervise any adverse impacts, or carry out risk-based due diligence in response. The current framework is also flawed by the lack of accessible methods for resolving CSR-related disputes between people and companies. All too often, claimants seeking enforceable remedies to these problems, including the prevention of future harm, have virtually nowhere (or nowhere suitable) to go.

An intergovernmental corporate accountability framework would include accessible methods of resolving human rights and labour-related disputes. It would also provide an avenue for national institutions specifically tasked with responding to social and environmental challenges posed by business to ensure policy coherence at domestic level.

 

HOW YOU CAN CONTRIBUTE

The full paper is available here. We are very interested in receiving input and comments on our papers to help guide and inform the Dialogue process. We are interested to know:

• How can corporate sustainability reporting strengthen private sector responsibility and accountability?
• What can governments do to advance this agenda and develop the role of the corporations in sustainable development?
• Do you have any suggestions to strengthen this particular proposal?
• What do you consider a successful corporate social responsibility and accountability outcome at Rio+20?

Please go to our Forum to voice your opinions on these topics, and any other aspects you consider relevant to the Dialogue. We hope to encourage discussion to successfully integrate this knowledge into the Dialogue.