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The Treaties - 16 - Treaty on Transnational Corporations: Democratic Regulation of their Conduct


1. Transnational corporations (TNCs) are responsible in large part for the global environmental crisis and for many social and economic problems resulting from "development". TNCs are the main actors in a development process which involves concentration of economic power and production and which leads to social and political inequity and loss of cultural diversity.

  1. TNCs in oil production, road transport, chlorofluorocarbon (CFC) production, electricity generation, metals production and agriculture account for roughly 50% of greenhouse gas emissions and virtually all ozone destroying chemicals.
  2. TNCs dominate the trade in natural resources and commodities, resulting in depletion or degradation of forests, soils, water and marine resources and biodiversity, through mining, drilling, logging and industrial agriculture.
  3. TNCs dominate the production of most of the world's toxic chemicals resulting in air, water and soil pollution, occupational hazards and unsafe products.
  4. TNCs are the main entities involved in the transfer of environmentally unsound production systems and hazardous materials to the South. Examples include unsafe pesticides and drugs banned in the country of origin, the relocation of polluting industries, lower safety standards such as those which led to the Bhopal disaster in India, the dumping of radioactive waste in the South Pacific and the export of wastes to Africa, Latin America and Asia. TNCs exploit weaker health safety and environmental standards as well as different levels of political freedom in these transfers.

2. Presently there is no force, governmental, intergovernmental, or nongovernmental which is capable of monitoring or regulating the activities of these large corporations. In fact, recent events show a trend to give more power to TNCs.

3. The United Nations Conference on Environment and Development (UNCED) has abdicated its responsibility to take measures to control TNC activities, instead promoting TNCs contribution to "sustainable development" and willingness to regulate themselves. The United Nations (UN) has given up trying to develop a Code for the TNCs and the Center on Transnational Corporations has been weakened. Proposals on trade related investment measures and intellectual property rights in the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) would strengthen the power of TNCs vis a vis governments, parliaments and the public.

General Principles

4. This treaty has as its aim democratic regulation of TNC conduct. TNCs have the duty to respect national sovereignty, respect the health and environmental rights of the public, and refrain from financial, pricing or technological activities that cause socio-economic difficulties to host countries.

5. International mechanisms should hold TNCs liable for the harmful effects caused by their operations in all countries of operation. Contractual clauses binding TNCs to agreement with host governments and communities should be enforceable in home and host countries.

6. TNCs should be held to the highest environmental, health, safety and labor standards in all countries of operations.

7. Workers and unions have the right to representation and participation in environmental and health audits. Workers have the right to training, control and to negotiate social, economic, health and environmental conditions in North and South.

8. Freedom of information for all citizens, environmental groups, labor unions and governmental agencies, including the names and quantities of chemicals on site, data on emissions, access to waste streams for independent sampling and analysis, access to environmental assessments and audits, should be guaranteed and take precedence over proprietary information and trade secrets.

9. Clean production methods and technologies should be used for all new TNC projects. Environmental assessments will determine whether a proposed project uses clean production. For existing operations, environmental audits will be the basis for planning a conversation to clean production.

10. TNCs shall not trade in wastes, banned or unregistered products, and shall not transfer obsolete or hazardous technologies.

11. Workers displaced by conversion to ecologically sound practices should be retrained and compensated by the TNCs.

12. The precautionary approach, which places the burden of proof of no harm on the potential polluter rather than on the environment or potential victims, should govern TNCs practices.


13. The following are suggested action components generated by the treaty negotiators. Their division into information and action sections is for organizational purposes only, and the list is intended to be a launching point for involvement in this issue, not an exhaustive list of possibilities.

14. Informational Components:

  1. Create regional TNC centers on each continent to coordinate information and actions
  2. Create a TNC information clearinghouse with connection to the regional centers
  3. Create an e-mail conference on TNCs, as follow up to the International NGO Forum, to be implemented immediately
  4. Produce a newsletter and a list of activities of NGOs regarding TNCs.

15. Action Components:

  1. Support the building up of a countervailing power within countries, involving NGOs, consumer associations, trade unions, citizen's groups, district associations and other grassroots groups
  2. Coordinate at a regional and international level of campaigns on specific TNC activities and products
  3. Produce a booklet containing twenty cases studies, to be launched in a year's time
  4. NGOs from the United States, the European Community and Japan commit themselves to support southern campaigns, for instance by sharing information and mobilizing in their countries
  5. Hold regional seminars between people specifically affected by the activities of TNCs such as consumers, workers or those living in the vicinity of plants
  6. Present a "Greenwash Award" for the most absurd environmental advertising by a TNC
  7. Produce a booklet listing the products made by the five biggest food TNCs
  8. Create a Registry of Toxic Technologies.


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