UN rights body concerned over MAI implications

The UN Sub-Commission on Prevention of Discrimination and
Protection of Minorities has expressed concern over the
possible incompatibility of the Multilateral Agreement on
Investment with the full enjoyment of human rights by all.
Besides also acknowledging civil-society concerns over the
potential adverse implications for human rights of current
developments in international trade, investment and finance,
the Sub-Commission is establishing a working group on the
human-rights impact of TNC activities.

by Chakravarthi Raghavan

GENEVA: The campaign of the coalition of non-governmental
organizations against multilateral investment rules at the OECD
or other fora has received a boost at the hands of the UN Sub-
Commission on Prevention of Discrimination and Protection of
At its summer session here (in August), the Sub-Commission
adopted by consensus a resolution entitled "Human Rights as the
Primary Objective of Trade, Investment and Financial Policy",
emphasizing that the realization of human rights and
fundamental freedoms described in international human rights
instruments is the "first and most fundamental responsibility
and objective of States in all areas of governance and

Concern over MAI

In this context, the Sub-Commission expressed concern about
the human rights implications of the Multilateral Agreement on
Investment (MAI) (under negotiation at the OECD), and
"particularly about the extent to which the Agreement might
limit the capacity of States to take pro-active steps to ensure
enjoyment of economic, social and cultural rights by all
people, and create benefits for a small privileged minority at
the expense of an increasingly disenfranchised majority."
With these concerns in mind, the Sub-Commission urged member
States of the OECD to "review the draft text of the
Multilateral Agreement on Investment to ensure that all its
provisions are fully consistent with their human rights
obligations, and to keep these obligations in mind during any
future negotiations on the Agreement."
The negotiations at the OECD have been facing opposition
from the NGOs, as also differences among its members on various
aspects, and have been put off "for reflection". They are due
to be resumed in October. Side by side, talks on multilateral
investment rules are being pursued at the WTO, in its working
group on the relationship between trade and investment, at
UNCTAD, and at the International Monetary Fund via moves to
amend its charter to bring about capital account
A coalition of public-interest NGOs of the North and the
South have joined hands to campaign, in every fora where
multilateral rules on investment are being promoted, against
such rules that would expand the rights of foreign investors,
mostly transnational corporations, to the detriment of the
sovereign rights of countries and their right to autonomous
development to achieve economic, political, social and cultural
The resolutions and recommendations of the Sub-Commission go
before the UN Human Rights Commission.
In other recommendations, the Sub-Commission sought the
authorization of the Human Rights Commission to create a
"Social Forum", to meet during the annual sessions of the Sub-
Commission and exchange information on disparities in income
distribution and global poverty; analyze violations of
economic, social and cultural rights; and discuss and propose
legal standards and guidelines on these subjects.
The Sub-Commission also decided to establish, for a three-
year period, a sessional working group, composed of five of its
members, to examine the effects of the working methods and
activities of transnational corporations on enjoyment of
economic, social and cultural rights and the right to
development, as well as civil and political rights.
This body is also to analyze the compatibility of various
international human rights instruments with the various
investment agreements, regional as well as international,
including, in particular, the MAI.
During its meetings, the Sub-Commission heard an oral
statement by Mr. Miloon Kothari, of the Habitat International
Coalition, on behalf of the coalition of NGOs, "The
International NGO Committee on Human Rights in Trade and
While drawing particular attention to the OECD process, the
NGOs also drew attention to similar moves at the WTO and the UN
system, and asked the Sub-Commission to address these.

Rising inequality

In its resolution on the MAI, the Sub-Commission noted with
concern the conclusions of UNCTAD's Trade and Development
Report 1997 indicating that since the early 1980s, the world
economy has been characterized by rising inequality, both
between and within countries, that income gaps between North
and South continue to widen, and that the income share of the
richest 20% of the population has risen everywhere, while the
income shares of the poorest 20% and of the middle classes have
fallen. It also noted the conclusions of the UNDP Human
Development Report 1997 that a quarter of the world's people
remain in severe poverty, and that "unbridled globalization",
while helping to reduce poverty in some of the largest and
strongest developing countries, had produced a "widening gap
between winners and losers".
The Sub-Commission acknowledged the widespread concerns of
civil society about the negative impacts of current
international trade, investment and financial policies,
agreements and practices upon the human rights of peoples and
In the light of these, the Sub-Commission decided to prepare
a working paper "on ways and means by which the primacy of
human rights norms and standards could be better reflected in,
and could better inform, international and regional trade,
investment and financial policies, agreements and practices,
and how the UN Human Rights Bodies and mechanisms could play a
central role in this regard. The working paper is also to
include an analysis of the text of the MAI from a human rights
perspective, and to consider ways to ensure that future
negotiations on the MAI or analogous agreements or measures
take place within a human rights framework."
Representatives of the Habitat International and the
Lutheran World Federation, part of the International NGO
Committee which had promoted this initiative at the Sub-
Commission, welcomed its response to these critical issues.
They have expressed the hope that it would contribute to the
harmonization of international trade, investment and financial
regimes with existing international human rights obligations
and would ultimately lead to the establishment of an integrated
international agenda in which international trade, investment
and financial policies, agreements and practices would no
longer undermine international obligations and standards
relating to human rights, environmental protection and
sustainable development.
In a separate resolution, also adopted without a vote, a
resolution reaffirming UN General Assembly declarations and
Programme of Action on a New International Economic Order
(NIEO), the Charter of Rights and Duties of States, the Vienna
Declaration and Programme of Action on Human Rights.
The Sub-Commission also took into account the recommendation
of the Working Group on Rights to Development for new
international legislation and creation of effective
international institutions to regulate the activities of TNCs
and banks, and in particular for resumption of multilateral
negotiations on a code of conduct for TNCs.
The working group being established under this resolution,
among other things, is:
* also to examine, receive and gather information on effects
of the working methods and activities of TNCs on enjoyment of
economic, social and cultural rights and right to development,
as well as civil and political rights, and
* to make recommendations and proposals on methods of work
and activities of TNCs to ensure that these are in keeping with
the economic and social objectives of the countries in which
they operate, and to consider the scope of the obligations of
States to regulate the activities of TNCs, where their
activities have or are likely to have significant impact on
enjoyment of economic, social and cultural rights and the right
to development, as well as civil and political rights.
(Third World Economics No. 193, 16-30 September 1998)

Chakravarthi Raghavan is the Chief Editor of the South-North
Development Monitor (SUNS).