'It isn't a state problem': the Minas Conga Mine controversy and the need for binding international obligations on corporate actors.

Author:Woods, Cindy S.
Position:I. Introduction through IV. The Current Corporate Accountability Landscape, p. 629-654
 
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  1. INTRODUCTION II. EVOLUTION OF THE MULTINATIONAL CORPORATION III. HISTORY OF THE U.N. CORPORATE ACCOUNTABILITY MOVEMENT IV. THE CURRENT CORPORATE ACCOUNTABILITY LANDSCAPE A. The U.N. Global Compact 1. The Ten Principles 2. The Communication on Progress (COP) Report 3. Criticism a. Disappointment b. Distrust c. Demand for Accountability B. The Guiding Principles 1. Protect 2. Respect 3. Remedy 4. Criticism a. No Corporate Obligation to Respect Human Rights b. Host State Governance Gaps c. Insufficient Home State Regulation i. Corporate Criminal Liability ii. Corporate Civil Liability iii. International Law Responsibility V. CASE STUDY: MINAS CONGA A. Neoliberalism and the Proliferation of Mining in Peru B. The Minas Conga Controversy C. The Anti-Mining Movement and State and Corporate Responses D. Exemplifying the Need for Binding International Human Rights Obligations for Corporations 1. The Global Compact and Minas Conga 2. The Guiding Principles and Minas Conga a. State Duty to Protect b. Corporate Responsibility to Respect c. Greater Access to Remedy i. Corporate Criminal Liability in the United States ii. Corporate Civil Liability for International Law Violations in the United States iii. Corporate Civil Liability for Domestic Law Violations in the United States (a). Statute of Limitations (b). Forum Non Conveniens (i). Delaware (ii). Colorado (c). Independent Corporate Personality 3. Lessons from the Minas Conga Controversy VI. CONCLUSION I. INTRODUCTION

    In June 2014, the United Nations Human Rights Council (UNHRC) adopted a proposal to negotiate a legally binding treaty to prevent human rights violations by transnational corporations. (1) For decades, sectors of the international community have entreated the U.N. to promulgate compulsory norms and codes of conduct aimed at regulating multinational corporations (MNCs) (2) and their actions in host countries. While the passage of this groundbreaking resolution is the first step in what will be an assuredly long process to answer these calls, some nations--the United States and the twenty-eight-member European Union included--have already avowed non-cooperation with any working group tasked with the undertaking. Through an analysis of the Minas Conga mining controversy, this Note aims to illustrate why the creation of a binding international treaty that obliges MNCs to uphold certain human rights standards is necessary to fully protect individuals against transnational corporate human rights abuses.

    Since the 1970s, sections of the international community have called on the U.N. to draft binding norms applicable to MNC conduct. (3) After decades of working group meetings, reports, and draft codes of conduct, no such binding mechanism exists. In its place, the U.N. has established the Global Compact, (4) a voluntary corporate governance scheme aimed at collaboration and monitoring, and the Guiding Principles, (5) a framework of business and human rights principles, which continues to propagate the dichotomy between state duties and corporate respect, not obligation.

    While the international community has largely viewed the Global Compact as a non-starter in resolving the issue of corporate involvement with and impunity in human rights abuses, many hoped that the Guiding Principles would provide the much-needed solution to this business and human rights problem. Not surprisingly, many state governments and corporate entities welcomed the Guiding Principles, which, in effect, had very little consequence on the institutionalized state of play. (6) While the Guiding Principles' impact on the field of business and human rights should not be downplayed, this framework cannot be the end, or the "end of the beginning" of the business and human rights discussion. (7) The historic lack of U.N. commitment to affect real change in the business and human rights relationship and contentment to rest on the laurels of the Guiding Principles will continue to foster widespread corporate impunity for human rights abuses, especially in situations where the state cannot or will not uphold its duty to protect.

    In 2010, the Peruvian government gave Newmont Mining Corporation (Newmont) the green light for its multi-billion dollar Minas Conga gold mine project. (8) The government approved the company's Environment Impact Assessment (EIA) despite grave mischaracterizations in the report and the admittedly severe possible and probable negative impacts of the project on the local communities' water supply. (9) Community protests, condemnation from the regional government, and international criticism led to an international review of the EIA and subsequent recommendations for further mitigating the negative effects of the project. Newmont, despite lacking the social license to operate in the region, (10) has begun work on the project, with the federal government's support. Local resistance continues to protest against the mine, calling on the government to protect Peruvian citizens' human rights. Peruvian president Ollanta Humala's response: "It is a mistake to think that Conga is a problem of the state." (11)

    This Note contends that a binding international treaty regarding the human rights obligations of multinational corporations is necessary to fully ensure corporate respect for human rights. Section II traces the evolution of the multinational corporation, from its nascent beginnings to its expanding political and economic power in the global arena. Section III surveys the history of U.N. attempts at creating both binding and nonbinding human rights norms in relation to corporations. Section IV provides a general overview of the existing business and human rights legal framework, discussing criticisms and highlighting the shortcomings of the current state of play. Section V then presents the Minas Conga mining controversy as an emblematic case, analyzing how current frameworks fail to protect victims of corporate human rights abuse and illustrating the need for a binding set of human rights duties for transnational corporations.

  2. EVOLUTION OF THE MULTINATIONAL CORPORATION

    Businesses have long conducted cross-border dealings. Transnational corporations, in their earliest form, have been traced back thousands of years by classical scholars. (12) European businesses involved in an array of sectors, such as mining, have conducted cross-border operations since the beginning of the thirteenth century. (13) However, the modern MNC, existing and operating within the overarching nation-state structure as we know it today, emerged in the seventeenth century, taking the shape of large transnational business ventures such as the British and Dutch East India companies. (14) By the mid-twentieth century, MNCs had begun to play increasingly larger roles in both the global marketplace and international political arena.

    With advancements in technology, manufacturing, transportation, and management methods, the modern MNC has experienced considerable growth in size, wealth, and political power over the decades. Recent statistics indicate that corporations represent forty of the world's hundred largest economic entities. (15) Some economists attempt to downplay the general increase in economic power of multinationals by arguing that their growth is slower than the overall growth of the world's GDP, while others continue to debate the suitability of comparing corporate sales with national GDPs in compiling these statistics; (16) however, even if the global GDP may as a whole be growing slightly faster than the fifty largest multinationals, by many different measures "the economic magnitude of the world's largest firms is increasing relative to the rest of the economy," fundamentally altering the traditional power balance in the international arena. (17) Additionally, these comparisons fail to capture the overwhelming power imbalances of the most economically powerful MNCs operating within the economies of some of the world's poorest countries.

    MNCs have begun to dominate the world market, profiting off the mass proliferation in recent years of bilateral and multilateral free trade agreements. (18) As developing countries continue to open their economies, vying for foreign direct investment in a race to the bottom, (19) they become dependent upon MNCs for market stability. (20) Once embedded in the national economy, MNCs wield considerable political power. (21) As these corporations have increased their influence and control in certain domestic markets, host states have turned a blind eye to the legal transgressions of multinationals, creating an environment of impunity. This pattern is clearly illustrated in the Minas Conga case study in Section V, where Peru's economic dependency upon the billions of dollars of investment from Newmont Mining Company has deterred the country from upholding its sovereign duty to protect its citizens against corporate abuse.

  3. HISTORY OF THE...

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