Experience shows that polluting companies faced with strong environmental regulations will, when the economics dictate, move their base of operations to another country with lower (thus cheaper) standards. Can we do anything to stop this?
Indeed there are various examples historically such as Lubbe v Cape PLC. Similarly, more stringent waste regulations in Europe and other industrialised nations have also helped drive the current issues with trade in toxic wastes. Environmental concerns in natural resources industries (although location of host states is driven more by geology (rather than law) driven is also a glaring example of the poor environmental management practices of MNCs in countries with weak regulatory frameworks. It is pertinent to mention that it is not only inadequacies of the home states laws, but also institutional capacity deficits that gives rise to poor enforcement of extant laws. Over the years, various mechanisms have been suggested to avoid this "race to the bottom". These include international minimum standards, extraterritorial reach of home state laws, and transnational enforcement of host state laws. Unfortunately, so far, we still rely solely on soft law instruments at the international level. Transnational frameworks such as the US ATCA are now less promising following the US Supreme Court decision in the Kiobel. There is currently quite a lot of energy around the 2011 UN Framework in accordance with the Ruggie Recommendations. However, even within this framework, perhaps one of the most effective tool for effectively holding corporations accountable is still extraterritorial regulation of MNCs by home state
Absolutely. ATCA had a lot of promise, but the Kiobel case has pretty much put paid to it I think. The Ruggie recommendations again show promise, but more needs to be done to make sure that they don't suffer the same fate as the UN Commission on Transnational Corporations, which spent 20 years trying to get somewhere, and ultimately failed. And, as ever, if a home state starts to impose to strict a set of regulationms, the MNC will simply reincorporate itself somewhere else.
It is a difficult question to answer. However, there is a great article on The Conversation UK that answered a similar question. You can find the link attached to this answer.
Esentially, international law dictates "that the state has the responsibility to create and enforce national regulations to protect the human rights of its citizens against corporate abuses. That all sounds very good, but we have to remember that states are not always willing or able to create and enforce such regulations".
"As long as countries place the economic interests of their companies well before human rights" of their citizens, then efforts to regulate MNCs and make them comply with national laws, including environmental protection ones, such as those recently "proposed by Bolivia, Cuba, Ecuador, South Africa and Venezuela will continue to be overshadowed" by economic interests.
I hope that this answers your question. It is a sad reality, but a reality nonetheless.
I would like to suggest you the following book I have edited that include also chapters on this topic. These chapters also cite supplementary literature and case law which might be relevant for your research question:
Paolo Davide Farah, Elena Cima (editors), CHINA’S INFLUENCE ON NON-TRADE CONCERNS IN INTERNATIONAL ECONOMIC LAW, Global Law and Sustainable Development Book Series, Routledge Publishing (London/New-York), ISBN 978-1-4094-4848-8, September 2016, pp. 1 – 584.
In the complex world it is difficult to make them bend to obey the rules and regulations of municipal laws.
However, under international law law and private international law the multinational corporations are duty bound to follow all the laws of a country where ever they have a branch of theirs. They need to adhere or otherwise one can take them to court of law in their respective country. But they many times manage with the political leaders of the country and try to escape. This can be done only when the states parties and the political leaders are interested to help each other and to strengthen the roots of democracy.
Since they try to escape the route of law through some means, Like the Bhopal gas disaster and many other issues in India, the UN started working various perspectives. In this regard Secretary General Kofi Annan has given a gall to implement the CSR (Corporate Social Responsibility) on the corporations. Basing on this the UN started the protection mechanism. Under John Riggie the Protect Respect Remedy mechanism of 2011 of the Human Rights Council became the important task for the whole world. Today to fix responsibility in violations of the Corporate, the sustainability principle and the CSR and Human Rights became the Agenda.
There are a number of cases where in the courts of the various countries awarded million of $ compensation to the victims.
Ultimately it is the will of the states will work.
Dear Simon Sneddon social and environmental issues must be part of business operations and their interactions with their stakeholders on voluntary basis, not only fulfilling legal expectations, but also going beyond compliance, giving to markets the potential to deliver on the SDGs. Kind regards, Ernani