Adam McBeth, crushed by an Anvil: a case study on responsibility for human rights in the extractive sector.

AuthorNash, Lindsay C.
PositionReply to article in this issue, p. 127
  1. INTRODUCTION

    Crushed by an Anvil leaves the reader, like the Kilwa victims, feeling rather defeated. Author Adam McBeth uses the Anvil Mining example to show that existing dispute resolution mechanisms are inadequate to resolve conflicts related to increasing foreign investment by multinational enterprises. His description of each forum's refusal to provide redress offers insight into the political motivations underlying each decision, though the analysis fails to offer a solution to the forum-less victims. McBeth examines the ways that various adjudicatory bodies have declined to exercise jurisdiction, but he has not adequately addressed the question of which body should decide these claims.

    In looking at soft law corporate accountability mechanisms, McBeth finds the Multilateral Investment Guarantee Agency's (MIGA) performance standards (the Voluntary Principles) "toothless" and ineffective, lacking clear rules, reporting requirements, and enforcement mechanisms. (1) While this conclusion may be warranted, his finding of inadequacy cannot be the end of the inquiry. This response argues that appropriate recourse may be found by looking to the entities that make this unique, transnational interaction possible. Put simply, non-state actors like the World Bank Group (WBG) play a significant role in creating the international alliances and disputes that necessitate the development of international law. As facilitators and beneficiaries of these interactions, these entities have a duty to ensure that the parties involved have access to international law.

    Admittedly, existing soft law mechanisms are ineffective, largely due to the lack of effective enforcement mechanisms. However, I argue that converting voluntary behavioral standards into threshold terms of investment contracts would be an appropriate and effective way to hold multinational corporations liable for transnational activities. The WBG could allow the community to participate in enforcement by incorporating transparency and accountability into their own structure by insisting on informed, prior consent, clear guidelines of conduct, public access to records, and systems of redress that are accessible to the community. Contracts between MIGA and investors need to: (1) allow for the national government and the affected community to have input in creating social responsibility standards; and (2) make the standards threshold contractual conditions. To make these provisions effective, all parties involved, including the local community, investors, and MIGA, need reliable enforcement mechanisms. Restructuring the International Centre for Settlement of Investment Disputes (ICSID) procedure to make it accessible to the public would better protect community interest as well as investor interest and align the forum with World Bank goals of positive and sustainable development.

  2. THE WORLD BANK IS THE APPROPRIATE ADJUDICATORY BODY

    In the past decade, the WBG has expanded its role in arranging transactions within the extractive industry, describing their role in these investments as a transnational point person. A 2003 internal review describes the "heavy demands" placed on national governments by extractive industry investment. Governments must manage "multiple and wide-ranging impacts of oil, gas, and mining projects on the economy, the social fabric, and the environment." (2) Often governments lack the capacity, resources, experience, and skills to respond to the situation and effectively negotiate with potential investors, making the WBG "potentially vitally important to these countries in providing wise counsel, technical assistance, and financial support." (3) Drawing upon intergovernmental contacts, influence, and expertise to help national governments balance divergent interests, the World Bank provides logistical support and assurances that "extractive industries projects [will] contribute to poverty alleviation and sustainable development." (4) MIGA provides non-economic support through logistical support, technical advice, and the image of legitimacy underlying WBG initiatives. MIGA's extractive industry investments are aimed at stimulating economic development and reducing poverty by creating: (1) legal and fiscal frameworks to attract private mining investment, (2) social and environmental frameworks for responsible mining, and (3) reform and capacity building for government agencies and ministries. (5) In arranging investments, the World Bank is seen as a comprehensive international body, equipped and adept at establishing stable investments in risky and potentially crisis-prone situations. This comprehensive system, including safeguards, performance standards, and a framework for dispute resolution, gives both investors and the local community a degree of reassurance that the World Bank is capable of managing the situation. Therefore, when Anvil CEO Bill Turner admitted that he did not understand the Voluntary Principles and MIGA responded by approving the contract, it seems reasonable for Anvil to conclude, as McBeth does, that...

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