Missed Opportunity in Rio
Ten Years After Rio
Corporate Response - Voluntary Codes and Initiatives
Binding International Rules
Citizen and Community Rights
Corporate Duties and Obligations
Support for Public Policies on Corporations
Liability and Implementation Mechanisms

Missed Opportunity in Rio

Ten years after the Rio Earth Summit, there can be no doubt that a primary cause of the failure to implement the Rio's full sustainable development agenda has been the lack of binding international measures to address the practices of multinational corporations. Rio failed to set a climate to deliver sustainable development because it missed the opportunity to hold big business accountable. The United Nations Centre on Transnational Corporations was closed and a proposed Code on TNCs was scrapped. Rio did set a clear agenda in Principle 13 of the Rio Declaration, but that objective has simply not been delivered.

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Ten Years After Rio

Over the past decade, the scale and impact of corporate activities has increased dramatically, and - as the recent US accounting scandals have demonstrated - self-regulation hasn't been sufficient. Friends of the Earth International, together with many other non-governmental organizations has concluded that it is time for a binding international framework to secure corporate accountability (including liability) for environmental and social practices.

As an international confederation of 70 groups in 66 countries, Friends of the Earth International (FoEI) has a broad experience of harmful corporate behaviour. Biodiversity loss, climate change, water, and agriculture are all areas in which multinational corporations have created significant negative impacts. Delivering sustainable development, securing environmental justice, recognizing and acting on ecological debt and on issues such as climate change will all require governments to ensure that citizens have rights to hold corporations accountable for their actions.

It is no longer possible to address these issues effectively solely at the national level. The growth of truly global companies means it has become more difficult for citizens and communities to seek redress for harm, and the growing scale of multinationals has consolidated their power and economic influence while greatly increasing distance between corporate leadership and the communities and lives that their activities affect.

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Corporate Response - Voluntary Codes and Initiatives

In response to concerns about corporate practices, some corporations and governments have developed voluntary codes and initiatives. These efforts are insufficient to address corporate abuses because they are generally self-regulated, are not enforceable, and do not create a level playing field for all businesses. Most importantly, voluntary initiatives fail to reign in bad corporate actors that choose to continue externalizing environmental and social costs onto society.

Meanwhile, institutions such as the World Trade Organization and international financial institutions have provided multinational corporations far-reaching legal rights and benefits without any corresponding obligations to ensure responsible corporate behavior or measures to safeguard citizen rights. These trade and finance policies have been incorporated into the negotiating text for the Johannesburg Summit, further reinforcing unbalanced agreements that provide rights without accountability.

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Binding International Rules

A binding international framework for corporate accountability must:

· Establish rights and mechanisms for adversely affected stakeholders to obtain redress for harm caused by multinational corporations;
· Establish social and environmental obligations for multinational corporations;
· Support and defend public policies to ensure environmental and social protection; and
· Ensure that these measures are backed up by effective liability and implementation mechanisms in order to ensure environmental justice for communities threatened with or exposed to environmental or social injustice.

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Citizen and Community Rights

Citizens and communities must be guaranteed certain basic rights in relation to transnational corporations, emanating from their basic rights to development and a clean and healthy environment, including:

· Rights of access to information on business activities as a current, or potential, affected stakeholder, and participation in decision making;
· Legal redress for citizens and communities in both the home and host countries of corporations;
· Legal aid mechanisms to provide public funds to support challenges;
· Workplace and consumer rights; and
· Community rights to land and resources.

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Corporate Duties and Obligations

Transnational corporations must be required to fulfill certain basic duties, including obligations to:

· Conduct comprehensive social and environmental impact assessments;
· Report to the public in the areas of the environment, human rights and labor conditions;
· Ensure public participation and engagement, especially of affected communities;
· Take social and environmental considerations fully into account in corporate decision-making; and
· Abide by high environmental, social, human rights and labor standards that are reflected in international agreements and consensus, including ILO
· Core Standards, Universal Declaration of Human Rights, and multilateral environmental and social agreements.

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Support for Public Policies on Corporations

A framework binding agreement must support public policies to ensure that multinational investment is socially and environmentally responsible, including through:

· The right to regulate corporate behavior, including through environmental and social protections and the creation of local partnerships and performance requirements; and
· The ability to attach corporate responsibility criteria to financial instruments such as subsidies and inward and outward investment incentives.

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Liability and Implementation Mechanisms

To be effective, a legally binding framework must require:

· Legal liability for corporations, including their directors, in both host and home countries;
· Availability of sanctions to ensure compliance; and
· Independent monitoring and verification mechanisms

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