The relationship between transnational business and human rights, especially in developing countries, has figured prominently in the broader debate surrounding economic globalization. The benefits of globalization could be spread more fairly to address the extreme poverty and lack of opportunities in less developed countries where 1.2 billion people live on less than $ 1 a day and an additional 1.6 billion live on less than $2 a day. To many, transnational corporations (TNCs) appear as spearheads and disproportionate beneficiaries of the widespread regulatory changes that emphasize the merits of favourable conditions for investment and freer trade.
Corporate accountability for human rights violations
Debates about the responsibilities of businesses to respect and protect human rights within their spheres of influence have intensified in the mid-1990s. The more prominent human rights issues involved relate to the treatment of local communities living in the vicinity of natural resource operations, and the protection of workers in certain labour-intensive consumer goods industries.
In 1995 Shell Group, despite its significant leverage with the Nigerian government, stood aside during the unfair trial that resulted in the execution of several community representatives critical of the social and environmental impacts of oil exploitations. At the time the corporation considered that it was not its role to interfere with what appeared to be the internal affairs of a sovereign state. The ensuing public backlash has awakened some businesses to the need to identify and manage the risks presented by human rights issues. By the nature of their business, the extractive industries are highly exposed due to their long-term investments in states with often unaccountable governments. Particularly sensitive issues are the human rights abuses committed by governmental or private security forces protecting corporate operations: evidence of beatings, torture, rape, forced labour, forced relocations perpetrated by the armed forces controlled by the government have been documented in connection with UNOCAL'S activities in Burma. Pollution associated with the exploitation of natural resources has sometimes been so severe as to result in loss of livelihood for the local communities. In such cases, the central governments have neglected the rights and interests of affected communities, and they have failed to provide effective remedies and adequate development strategies. Against the background of a deficit of democratic accountability compounded by the pecuniary interest of state officials in uninterrupted operations, the exploitation of oil and gas, diamonds and other minerals have proved a curse, rather than a blessing for impoverished local communities.
The case of labour intensive industries (clothing, sport equipment and toy industries) is epitomized by Nike, which was confronted with evidence of sweatshop
A Better World for All, Progress Towards the International Development Goals, IMF,
OECD, UN, WB, 2000, p. 2 .