International NGO Committee on Human Rights in Trade & Investment
INVESTMENT, TRADE AND FINANCE: THE HUMAN RIGHTS FRAMEWORK
Focussing on the Multilateral Agreement on Investment (MAI)
1. We, the undersigned, are an alliance of Organisations with specific concerns for the promotion, protection, defense and enforcement of human rights. We wish to add our voices to those of the many civil society groups across the world that have raised serious concerns about or have rejected outright the proposed Multilateral Agreement on Investment (MAI) currently being negotiated by the Organization for Economic Cooperation and Development (OECD).
2. While some of the elements of this draft agreement already exist in regional and bilateral agreements as well as in structural adjustment programs and other international financial institution conditionalities, we feel that the present text of the MAI represents a clear and qualitatively new threat to the international human rights regime. This agreement seeks to enshrine protections and advantages for corporate actors and major investors, which could threaten international and domestic laws and policies, designed to promote and protect the human rights of individuals and communities.
3. In accordance with the provisions of the International Bill of Rights, and other international human rights instruments, and as affirmed in the Vienna Declaration and Programme of Action, the protection and promotion of civil, cultural, economic, political and social rights is the first responsibility of States. The United Nations Charter includes the promotion of human rights and fundamental freedoms as a founding principle of the UN. These rights and freedoms are concretely defined in the various legal instruments and the interpretive jurisprudence developed by the respective UN treaty bodies that monitor compliance with these instruments. We refer in particular to the International Covenant on Economic, Social and Cultural Rights (ICESCR), the International Covenant on Civil and Political Rights (ICCPR), the Convention on the Rights of the Child (CRC), the Convention on the Elimination of all forms of Discrimination against Women (CEDAW) and the Convention on the Elimination of All Forms of Racial Discrimination (CERD).1 All these treaties have been widely ratified by states across the world and are legally binding thus obliging states to comply with the their provisions.
4. We would like to stress that by human rights, we mean both economic, social and cultural rights (such as the human rights to food, health, education, housing, and work) and civil and political rights (such as rights to free expression and fair trials). These human rights are recognized and protected by international law, domestic law and social programs. Economic, social and cultural rights, however, are in particular need of emphasis as a consequence of the relative lack of attention states have paid to their promotion and protection. Economic, social and cultural rights also face the greatest threat of further neglect in the face of economic globalization as the rapid pace of economic liberalization and integration has outstripped the capacity and commitment of states to address the implications of these developments for this category of rights. Concomitantly economic globalisation has been accompanied by the rapid establishment of powerful institutions such as the World Trade Organisation (WTO) and the North America Free Trade Agreement (NAFTA). The enforcement mechanisms of such institutions are very effective in stark contrast to the lack of attention given to the development of enforcement mechanisms to implement human rights, especially economic, social and cultural rights. For all these reasons, economic, social and cultural rights are our main areas of focus.
5. We believe that the promotion of human rights, in the broad sense of contributing to the welfare and dignity of all, rather than to the wealth of a few, is the only legitimate objective and justification for bilateral and multilateral trade, investment and financial regimes, and that to the extent that such regimes serve other objectives, they have no moral or other legitimacy. We believe that the MAI not only does not serve human rights objectives but that it proceeds from fundamentally different assumptions, and accordingly we reject it. We wish to contribute in solidarity with the environmental and other social movements to the mobilization of popular opposition to the provisions currently contained in the MAI text. We understand the broad human rights framework as being inclusive of and being informed by the principles and provisions of international environmental agreements. In pursuit of the objective of having a comprehensive human rights framework reflected in the ongoing debate on the MAI, we participated in the global NGO strategy meeting on the MAI that took place in Geneva on 17 May 1998.
6. Trade and investment regimes in general also need to be consistent with commitments made at the World Conferences, such as in the Copenhagen Declaration and Programme of Action that contains recommendations to states of the need to intervene in markets to prevent or counteract market failure, promote stability and long-term investment, ensure fair competition and ethical conduct, and harmonise economic and social development, including the development and implementation of appropriate programmes that would entitle and enable people living in poverty and the disadvantaged, especially women, to participate fully and productively in the economy and society. Some measures to protect economic, social and cultural rights include food subsidies, control of land speculation, agrarian reform and the implementation of health and environmental measures. These measures would also encompass community control of forests, local bans on the use of pesticides and hormone-induced foods, protection of local cultural industries, protection of civic services, clean air standards, limits on mineral, gas and oil extraction, and bans on toxic dumping.
7. We see our consideration of the MAI from a human rights perspective as an opportunity to develop this paradigm for wider consideration of the human rights imperatives for investment, trade and financial policy. We see the following four basic principles as inviolable in the context of the incontestable need for devising ways and means for the realization of human rights. From our perspective, they must form the organizing principles for all-bilateral and multilateral trade, investment and financial agreements, laws and policies.
SUMMARY OF BASIC HUMAN RIGHTS PRINCIPLES THREATENED BY THE MAI:
8. The primacy of human rights: The promotion and protection of human rights and equality among women and men must be accepted as the fundamental framework for and goal of all multilateral and bilateral investment, trade and financial agreements. Such agreements cannot exclude or ignore human rights principles and objectives without losing their most fundamental claim to legitimacy.
9. Non-retrogression: All states have a duty to respect, protect, ensure and fulfil international human rights obligations and cannot derogate from or limit them except as expressly provided for in the relevant human rights treaties. "Rollback" and "standstill" requirements, as formulated in the MAI, are incompatible with the requirement that economic, social and cultural rights be realized progressively, as explicitly stated in the International Covenant on Economic, Social and Cultural Rights. Governments must demonstrate that they are taking concrete steps towards realization of these rights. Moreover, there is a specific duty on state parties to not take retrogressive measures that would jeopardize economic, social and cultural rights.
10. The Right to an Effective Remedy in the Appropriate Forum: The right to an effective remedy for anyone whose rights have been violated cannot be contracted away by the state nor denied by the operations of intergovernmental institutions. Investment or trade bodies should not adjudicate concerns that fall firmly into the human rights domain as investment or trade disputes between corporations and state actors. Such disputes should be dealt with by appropriate domestic, regional, and international human rights fora and enforcement mechanisms.
11. Rights of participation and recourse of affected individuals and groups: Human rights cannot be effectively realized unless the right of participation of the affected populations in planning, implementation and seeking redress for violations is respected. The participation of women in all these processes is particularly important.
PROPOSED RECOMMENDATIONS FOR FUTURE ACTION
12. Given the widespread threat to human rights norms and principles from the emerging instruments of international trade, investment and finance, such as the MAI, it is crucial that the UN secretary-general and the Office of the High Commissioner for Human Rights conduct a study of the human rights implications of the MAI, as was recommended by the Committee on Economic, Social and Cultural Rights.2 The results of such a study could also be presented to the Commission on Human Rights, the Economic and Social Council (ECOSOC) and the General Assembly, as well as to the UN executive committees in which the High Commissioner for Human Rights participates.
13. Further, the OECD, WTO, IMF and other fora where negotiations on investment, trade and financial regimes may be undertaken should request the advice of bodies with appropriate expertise in human rights (such as the Office of the High Commissioner for Human Rights, the relevant UN human rights treaty bodies, the Committee of Experts of the Council of Europe, the International Labour Organisation (ILO), the International American Commission on Human Rights of the Organisation of American States (OAS) and the Commission on Human and Peoples' Rights of the Organisation of African Unity (OAU) and appropriate UN agencies such as UNCTAD, UNDP and UNICEF). Consideration should be given to the human rights implications of not only the MAI negotiating texts but also all other investment and trade agreements, instruments, conditionalities and case law.
14. Parallel to a human rights review of the MAI, we consider it of crucial importance for the Office of the High Commissioner for Human Rights and other relevant UN bodies such as the ILO, UNCTAD and UNDP to analyse and prepare studies of the human rights implications and effects of existing international trade, investment and financial instruments, such as the WTO agreements, NAFTA, MERCOSUR, relevant IMF articles, and agreements emanating from the EU, OECD, APEC and other similar fora.
ANALYSIS OF IMPACT ON HUMAN RIGHTS PRINCIPLES
The primacy of human rights
15. The process towards the realization of human rights and equality among women and men is the most sustainable framework for achieving peace, security and development. The proposed MAI, and all other investment and trade agreements, must function within that framework. Economic prosperity and the increased availability of goods and services, that may result from increased foreign direct investment and trade are valid objectives, only to the extent that they enhance the enjoyment by individuals and groups of their human rights.
16. Numerous civil society groups and governments (mostly from the developing countries) have raised concerns about the need for social and development issues to be taken into account during discussions for any multilateral trade and investment treaty. These voices have also spoken out about the need to retain and enhance the 'regulatory' role of the state. The ongoing East Asian crisis only reinforces this. We are convinced that the international human rights regime offers the framework for achieving, in a sustainable manner, development and social objectives. International human rights instruments also provide clear directives for state responsibility and for the state's essential regulatory role. We call for the application of the human rights regime in developing and implementing national and international regulatory frameworks that apply to the private sector.
17. Additionally, there is the complex issue of sovereignty. The Vienna Declaration and Programme of Action reaffirms that the protection and promotion of human rights and fundamental freedoms is the first responsibility of Governments. In view of this primary responsibility what is the impact of the progressive bargaining-away of state sovereignty under international trade and investment agreements upon the state's capacity to proactively fulfil its human rights obligations? What are the human rights implications of strengthening state sovereignty, given the past and necessary focus on human rights defense against state abuse? To what extent is economic globalisation used as a convenient excuse by states for failing to fulfill their human rights obligations? Obviously, these are questions in need of reflection and debate.
18. There are many potential threats to human rights already apparent in the current draft of the MAI. Numerous provisions of the ICESCR, CRC, CERD and CEDAW and other international human rights treaties require states parties to take positive measures to protect vulnerable groups. These requirements may include appropriate statutory and regulatory measures imposing restrictions on investors and may go against the proposed most favoured nation (MFN) and national treatment principles of the MAI. Any provision requiring a state to repeal or refrain from implementing such measures could cause the state to violate its international human rights obligations.
19. Measures which are important components of the implementation of ICESCR articles 2 (non-discrimination), 7 (work and equal opportunity) and 11 (adequate standard of living) of the ICESCR might be found to "discriminate" against a foreign investor under MAI. The proposed MAI could also prohibit "performance requirements" established with a human rights purpose, such as requiring a foreign investor to employ local workers, to provide training or to contribute in other ways to the local economy. A state that abrogates such requirements could be in breach of its human rights obligations. Furthermore, the adoption and implementation of the MAI could undermine the development of new mechanisms for corporate accountability for violations of human rights.
20. It is, therefore, in the interest of negotiating states that a review of the MAI should be undertaken from the viewpoint of the compatibility with international human rights instruments. States should be clear on their international responsibilities such that they avoid committing themselves to provisions of an investment or trade agreement that are in any way incompatible with their international human rights obligations. To not do so would be to abdicate their responsibility for the promotion and defense of human rights. This principle was reaffirmed by the Maastricht Guidelines on Violations of Economic, Social and Cultural Rights:
The obligations to protect includes the State's responsibility to ensure that private entities or individuals, including transnational corporations over which they exercise jurisdiction, do not deprive individuals of their economic, social and cultural rights. States are responsible for violations of economic, social and cultural rights that result from their failure to exercise due diligence in controlling the behavior of such non-State actors. 3
21. Under international human rights law, states have the obligation of non-retrogression, according to which states are not permitted to remove, weaken or withdraw from legislation and programs, which implement their human rights obligations. It is essential that investment and trade agreements contain no provisions impeding the capacity of state parties to respect, protect, ensure or fulfil human rights in accordance with their obligations under international and domestic human rights law. According to Article 2 of the ICESCR, states are under the obligation to take immediate steps to fulfill their obligations by guaranteeing economic, social and cultural rights without discrimination.
22. As espoused in the proposed MAI, the principles of roll back and standstill could require states to repeal legislation protecting human rights (under rollback) or foreclose such future legislative measures (standstill). If states succumb to pressure to do this in order to attract foreign investment these states would be in direct contravention of their obligation of both the immediate and progressive realization of the rights protected by such national legislation.
23. Therefore, measures taken by states to respect and protect human rights should be exempted from rollback and standstill requirements.4 This would protect states from being in violation of human rights standards of immediate and future applicability, such as the duty not to discriminate on the basis of race, sex, language, colour, national origin or other status.5
The Right to an Effective Remedy in the Appropriate Forum
24. The control over the protection and implementation of human rights cannot be left to a determination by an investment or trade tribunal or panel, which by definition is not competent to judge the meaning and scope of international and domestic human rights law. Human rights have evolved through specialized monitoring bodies established at the national and international levels. These institutions have acquired considerable experience in these matters. A vast body of specialized jurisprudence has developed in the last fifty years since the adoption of the Universal Declaration of Human Rights (UDHR), including special interpretative principles.
25. Moreover, under international human rights law, everyone is entitled to "an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law." (UDHR, Article 8). Allowing a trade or investment panel or other body to determine the legality of provisions claimed to have negative effects on the protection and enjoyment of human rights would be in clear violation of international law, as would provisions limiting access by individuals to effective remedies in competent national tribunals for acts violating his or her fundamental rights. Also as currently stated in the MAI, citizens are excluded from the dispute settlement system.
26. It is of fundamental importance that any dispute that may arise regarding the compatibility of the provisions of investment and trade agreements with a state party's obligations under a human rights treaty be referred to the competent body. Specifically, if a state invokes their human rights obligation in response to a challenge by an investor or other state party under an investment or trade agreement, the dispute should be examined under the ordinary procedures of domestic law and, where applicable, be referred to the appropriate UN human rights treaty body for an opinion. The defendant state and affected groups of civil society should have the option of having the dispute adjudicated under its domestic law or submitting it to the appropriate human rights treaty body for an ad hoc determination of the compatibility of the provision of that agreement with the state's obligation under human rights treaties.
Rights of participation and recourse of affected individuals and groups
27. It is an accepted principle of sustainable development that the affected population should participate in the planning and implementation of development policies, programs, and projects. It is also a basic principle of justice that persons affected by a procedure, which may result in the deprivation of their rights, be given a fair hearing. This principle must also be applied to investment and trade.
28. Therefore, communities and individuals affected by the proposed MAI and other investment and trade agreements must have access to the government agencies and international institutions entrusted with the negotiation, application and implementation of these agreements. This is underscored by the human rights tenet expressed in Article 21.3 of the Universal Declaration of Human Rights (UDHR): "The will of the people shall be the basis of the authority of government..."
29. The people affected or likely to be affected, and civil society groups concerned with human rights, environment and development must have meaningful access to these agencies, and the right to take part in the procedures mentioned above, as well as to resources necessary for their participation, especially considering the vast resources available to major investors. This would also include the right to submit documentation and advisory opinions. They should also have a right to information and notification of discussions in the OECD, WTO, IMF, IBRD and other relevant bodies of investment and trade matters affecting human rights, the environment and other community interests. Investment and trade disputes affecting vulnerable groups should never be adjudicated without those groups having full standing and resources to defend their interests.
30. We, the undersigned, recognize the threat of the proposed MAI to our human rights futures. We are gravely concerned about the human rights implications of not only this and other investment and trade agreements, but also the entire international system of investment and trade institutions and processes. We are committed to developing and documenting a comprehensive understanding of these implications and promoting human rights based framework for investment, trade and financial policy and practice.
31. We advocate alternative international investment and trade agreements and processes that would genuinely seek to ensure that international investment and trade regimes are fully consistent with international obligations arising from standards relating to human rights, environmental protection and sustainable development. Such alternative measures, promoting the establishment of an integrated international agenda, would serve to strengthen democratic control of capital flows and to stimulate investments and commerce that would benefit disadvantaged groups especially women, children and vulnerable communities such as marginal farmers, indigenous peoples, the urban poor, fisherfolk and rural agricultural laborers. Of particular importance would be measures that are sensitive to and strengthen the critical role played by women in all dimensions of economic, social and cultural human rights.
32. In order to promote such an integrated agenda, it becomes an inescapable task that all-relevant organisations carry out reviews, analysis and impact studies of international trade, investment and finance agreements, policies and practices. We have outlined initial recommendations along these lines. (See paras 12 to 14). At the same time we realise that it is essential that part of this task needs to be taken up by civil society groups.
33. We commit ourselves, therefore, to a work plan of action that includes rigorous research and mobilization (including education, documentation and monitoring), such that the full spectrum of local human rights impacts caused by the international investment, finance and trade system can be disaggregated, analysed and documented. This includes analyzing the human rights implications of investment and trade treaties, examining international, regional, national and local governance processes, documenting local impacts in our regions, and identifying private actors. In doing so, we seek to hold the international investment, finance and trade system accountable for the realization of human rights within the context of social justice and sustainable development for all.
The International NGO Committee on Human Rights in Trade and Investment **
International and Regional Human Rights Organisations
* Habitat International Coalition (HIC)
* People's Decade for Human Rights Education (PDHRE)
* The Lutheran World Federation (LWF)
* Latin American and Caribbean Committee for the Defense of Women's Rights (CLADEM)
* Food First Information and Action Network (FIAN)
* Youth for Unity of Voluntary Action (YUVA), India
* Center for Equality in Rights and Accommodation (CERA), Canada
* Mazingira Institute, Kenya
1. The texts of these instruments are available from the office of the UN High Commissioner of Human Rights in Geneva and New York. The texts can also be obtained from the website: <www.unhchr.ch>
2. See Statement by the Committee on Economic, Social and Cultural Rights: Globalisation and economic, social and cultural rights, May 1998
3. See para 18, The Maastricht Guidelines on Economic, Social and Cultural Rights, Netherlands Institute of Human Rights, SIM Special No. 20, Utrecht 1998. The Maastricht guidelines were unanimously adopted by a groups of over 30 human rights experts, from around the world, at a Workshop held in Maastricht from 22-26 January 1997.
4. See para 6 for some examples of measures that could be under threat by these provisions in the MAI.
5. See Article 2(2) of the ICESCR and Article 2(1) of the ICCPR. Similar provisions on non-discrimination are contained in all other international human rights instruments.
** The International NGO Committee on Human Rights in Trade and Investment can be reached at: HIC (Miloon Kothari). Tel/Fax: 41.22.7388167; e-mail: email@example.com
PDHRE (Shulamith Koenig or Tara Krause) Tel: 1.212.749.3156; Fax: 1.212.666.6325; e-mail: firstname.lastname@example.org
CLADEM (Susana Chiarotti) Tel: 51.1.4639237; Fax: 51.1.4635898; e-mail: email@example.com
9/3/98 - International NGO Committee on Human Rights in Trade and Investment