The States realised that they should start doing more to protect fundamental rights only after the Second World War. This lead to the adoption of the Universal Declaration of Human Rights by the United Nations (UN) General Assembly in 1948 (Sepulveda et al., 2010). Even though it was adopted as a soft law instrument, it inspired the adoption of the two UN human rights conventions (Sepulveda et al., 2010), several regional human rights instruments, and multiple national bills of rights included in national Constitutions (Sepulveda et al., 2010).
At that time, it was considered that States are the holders of the duties and individuals are the holders of the rights (Jochnick, 1999). The duty to protect human rights falls exclusively on the States, as only they can be parties to international treaties. Additionally, sixty years ago, the states were the only holders of the economic power and no private entity could compete with any government. The States were the only ones that could assume responsibility to safeguard human rights, while individuals and private entities had the duty to respect the rights of others.
The doctrine and jurisprudence are now referring to three particular types of state obligations: to respect, to protect and to fulfil (Sepulveda et al., 2010). This means that the State is the one responsible for the protection of an individual against human rights violations caused by other individuals or private entities, and it will be held liable in front of an international Human Rights Court or Commission.
Nonetheless, the global economy has changed radically recently as we witnessed the growth of the trans-national corporations (TNC) into entities with revenues many times larger than the domestic economies of developing countries (Jochnick, 1999). This raised the question whether these entities should also have the responsibility to protect human rights, since they cannot be parties to international treaties, and claims against them can be brought only in front of national courts. The UN realised in the 90s that the impact that the TNCs have is so great that it calls for the creation of human rights standards for businesses (Human Rights Council Report, 1970) After nearly two decades, the UN Guiding Principles on Business and Human Rights (UNGPs) which discuss the corporate responsibility to protect human rights were adopted. The key concept introduced by the UNGPs is the human rights due diligence, which should seek to identify all the possible risks that an activity raises to all the right-holders that might be affected by that activity (UNGPs, 1970). The TNCs must act upon these findings and show through non-financial reports how they managed to address them. Of course, in case of human rights violations, they are responsible to offer remedies.
Even though the States have de jure power, the TNCs’ increasing economic growth gives them de facto power as they have a great influence over local laws and policies and can violate both directly and indirectly a wide range of human rights . Enforcing upon TNCs a duty to fulfil human rights would put a disproportionate burden upon them. But adding to their duty to respect a certain duty to protect could provide a solution to the issues raised by the de facto impunity they seem to enjoy in the current international human rights legal system.
An example is the case of Ecuador vs. Chevron. In 1964, Texaco began operations in Ecuador to search for oil, after signing a concession agreement with the State. In 1965, after discovering oil in the Amazon rainforest, Texaco signed a Joint Operating Agreement with Ecuador and started drilling for oil. In 1995, after a settlement agreement, the Government released Texaco from any liability for damages if they perform a remediation programme. Following this, from 1998 to the present date, Petroecuador, the state owned oil company, remained the only operator in the area (Lambooy et al. 2011).
The litigation started in 1993, when a group of Ecuadorians initiated a class action in the US, under the Alien Tort Claims Act (ATCA), which provided federal courts with jurisdiction over violations of “law of nations” (Collingsworth, 2011). The alleged victims of Texaco were claiming damages for human rights violations, particularly the right to health and the right to an adequate standard of living. They were claiming that their environment had been contaminated by Texaco and the cases of cancer had increased. However, the federal courts have interpreted that violations of “law of nations” refer only to genocide, war crimes, extrajudicial killing, slavery, torture, unlawful detention, and crimes against humanity (Collingsworth, 2003). After 8 years, the US court dismissed the case and requested Texaco to be bound by any ruling of the Ecuadorian courts. Chevron was found liable for $9.5 billion in total damages. The settlement did not exempt Chevron from third party claims; the liability was excluded only for claims coming from the Ecuadorian Government. The decision could not be enforced in Ecuador, as Chevron did not possess assets there anymore. As a response, Chevron brought the case before the Permanent Court of Arbitration, claiming that Ecuador violated the settlement agreement concluded in 1995. The arbitral tribunal ruled in favour of Chevron (Lambooy et al., 2011). Moreover, Chevron commenced a lawsuit in the US under the Racketeer Influenced and Corrupt Organisation Act. In 2014, a US court ruled in favour of Chevron, stating that the Ecuadorian judgement cannot be enforced in the US (Ax, 2014). The defence team of the Ecuadorian people started procedures in other countries where Chevron has assets (Ax, 2014), but the cases are still pending.
The main human rights issue raised was the violation of the right to health. Article 12 of the ICESCR states that everyone has the right to ‘the highest standards of physical and mental health’, which includes a healthy environment (Sepulveda et al., 2010). The victims claimed that Texaco dumped all the waste in the Amazon River and did not clean properly the entire area as it should have after the settlement in 1995. The claimants stated that Texaco violated the Ecuadorian, American and the International environmental standards (Lambooy et al., 2011). Since Ecuador was implementing environmental policies which prevented such situations and did not engage in the polluting actions, Texaco hid from the Government that they were disposing the waste in the river. For this reason, the Ecuadorian Courts found Chevron liable for $9.5 billion for damages (Lambooy et al., 2011). The question is what can be done to avoid similar situations in the future, when the State complies with its duties to respect human rights, but a TNC violates them and simply refuses to assume responsibility because they fear the financial consequences.
From my perspective, the concept of due diligence is a step in the right direction. If the UNGPs had been implemented, the company should have assessed the impact that their activity had on the human rights of the locals, take appropriate actions to prevent and mitigate them. The company would have also contributed to the remediation of the situation in case of human rights breach. The economic power the TNCs must be accompanied by increased responsibility towards human rights protection. If they are forced to adopt internal policies which respect human rights, introduce human rights due diligence in their due diligence process and adopt internal remedies for human rights breach, they might increase their carefulness towards the results of their actions.
If they refuse to assume responsibility, they can find procedural tricks to avoid enforcing a decision against them. The solution to this issue should revolve around adopting a more active stance towards enforcing the judgements. A possible solution would be the creation of an international mechanism of recognition of decisions and a set of clear procedural and substantial standards which have to be respected, to facilitate the enforcement of a judgement in a State where the TNC has assets. The third pillar of the UNGPs creates a useful general framework for the access to remedy of the victims, but unless reinforced by an effective transnational system of recognition of decisions, the de facto impunity of the TNCs will not end.