The Human Right to Development in a Globalized World

Daniel Aguirre

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9780754674719
• eBook ISBN: 9781351888073
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

Offering a comprehensive analysis of the human right to development and its realistic application in an era of economic globalization, Daniel Aguirre provides a multidisciplinary overview of economic globalization and examines its challenges to the realization of human development. He takes this further by engaging with these challenges and highlighting the human rights opportunities presented by economic globalization and the international investment system. The volume proposes a triadic system of responsibility for human rights in development, to include mapping the overlapping human rights responsibilities of corporations at the micro-level, of states at the macro-level and of the international community at the meso-level. The scope of the book is broad and the approach to the subject is new. It will generate interest across many disciplines including political science, international law and economics. Activists, academics and development practitioners in many fields should also read this book.

Chapter 1

Introduction: Economic Globalization and Human Rights

One of the most profound challenges that we face as a community of nations is to understand better the emerging socio-economic forces and forms of globalization, to shape them to serve our needs and to respond effectively to their deleterious consequences.¹

The effects of globalization are resonating around the world. Developments in technology, communications and transportation have facilitated a rapid increase in transnational political, economic and social exchanges. This has affected international relations and relations between states and multinational corporations.² Economic globalization is associated with economic interdependence, deregulation and a dominance of a liberalized marketplace. Globalization is touted as the basis of rapid development. But economic globalization has only strengthened international networks of trade and investment³ creating highly interdependent regions.⁴

Since the end of the Cold War, the international political economy has experienced fundamental changes.⁵ Cold War alliances once dominated the world economy as well as development policy. Thus markets were subjugated to political and economic security. Liberal values were not prioritized. Since then, competition between states has significantly increased. Developing states have been brought into, and now actively participate in, this competitive market-orientated international system.

Economic globalization now dominates international relations.⁶ Development strategy consists of liberal trading regimes with a reduced role for the state. International relations now involve states, the market, multinational corporations and international organizations.⁷ This globalization may make the task of fulfilling non-market goals at the national level more difficult. Specifically, the realization of the right to development, based on principles of economic self determination and global solidarity, may be impeded.⁸

International investment is a prominent component of economic globalization. Investment’s focus on profit-maximization and competitiveness can contradict the fulfillment of human rights entitlements.⁹ In a resolution on the question of the impact of globalization and its effect on human rights, the United Nations General Assembly recognizes that: ‘while globalization offers great opportunities, the fact that its benefits are very unevenly shared and its costs unevenly distributed represents an aspect of the process that affects the full enjoyment of all human rights, in particular in developing countries’.¹⁰

Economic globalization has increased the number and influence of multinational corporations, nearly all of which are based in G7 states.¹¹ Of the top 500, only 29 are from low income states.¹² Companies incorporated in the United States dominate the important industrial, financial and service industries.¹³ Of the world’s 100 largest economic entities, 51 are now corporations and 49 are countries.¹⁴ It is estimated that in 1970, there were 7,000 corporations. In 1993 there were 37,000 corporations, and by 2003, 64,000 with 870,000 foreign subsidiaries.¹⁵ The largest 500 corporations control 70 per cent of global trade and are the primary international investors. As a result of this expansion, corporate interests dominate economic globalization and influence the policy of individual states.¹⁶

The investment operations of corporations, the regulatory role of the state, and the right to development are the subject of this book. What began as research into the inadequacy of human rights law pertaining to economic globalization became a study on the unwillingness of states to fulfill their human rights obligations both domestically and internationally. After all, as Olivier de Schutter observes:

… what may appear in a static analysis as a disempowerment of the states confronted with a new form of sovereignty competing with theirs is, it should be remembered, the result of the emergence of a global marketplace which is initially the creation of the states. Less than ever should we exculpate states from their alleged inability to tame the new leviathans.¹⁷

Economic globalization can produce the capital needed to provide for human rights. Human rights law can help to contain the detrimental social effects of globalization. Human rights can balance market forces within a just international political framework.¹⁸ The ability and willingness of states to discharge their human rights obligations is crucial to this system. The United Nations General Assembly emphasizes that: ‘While globalization, by its impact on, inter alia, the role of the state, may affect human rights, the promotion and protection of all human rights is first and foremost the responsibility of the state.’¹⁹ It is put forward here that the Declaration on the Right to Development sets out a national and global framework of responsibility for states to do so.

Globalization entrenches trade liberalization and market expansion. The establishment of the World Trade Organization through the Uruguay Round of the General Agreement on Tariffs and Trade solidified this regime.²⁰ The Uruguay round created a legal framework for liberalization in trade-related aspects of intellectual property²¹ and trade in services.²² This increased the enforcement powers of the regime through the establishment of a sophisticated dispute settlement process.²³ Centralized international planning and decision making, for example via the United Nations, is no longer possible in the economic sphere.

The issue of trade and human rights has become a central concern.²⁴ Recent human rights discourse has been devoted to the study of multinational corporations and their direct effect on human rights.²⁵ Yet, the foundation of globalization – the state’s political, legal and economic facilitation of foreign investment by corporations. has not been subjected to analysis in human rights terms. The human rights must now be achieved in a global economy that prioritizes investment protection.

Market based economic theory presupposes perfect competition and the free functioning of international markets. However, investment is conducted under oligopolistic conditions in imperfect markets that afford the investor, often a developed world corporation, unique opportunities for the exploitation of global resources. Corporations are encouraged to utilize market imperfections and influence political relations with host-states.²⁶ The promotion of their interests pushes corporations to extend control over foreign economies and influence the regime governing competition.²⁷ Thus, the protection afforded corporations by investment treaties is central to the relationship between states. Even political alliances depend on the treatment of corporations.²⁸

The negative effects of corporations on human rights in development can be divided into two categories. First, the corporation may directly violate human rights by itself or in conjunction with another actor. This typically involves civil and political rights, such as the right to personal security. For example, a corporation may hire state security forces to protect its facilities that engage in torture as occurred in Myanmar in association with Unocal Corp.²⁹ Also, a corporation may directly violate rights by prohibiting collective bargaining or discriminating against minorities. The second category concerns indirect effects. This involves the corporation’s influence on host governments. Corporations can undermine the state’s ability to fulfill human rights law. They use their influence to encourage governments to adopt policies of liberalization, deregulation and privatization that ignore human rights consequences.

This second effect concerns mostly economic, social and cultural rights, which are vital in developing states. Corporations are the engines of economic growth upon which states depend for the provision of the right to development. Increasingly, corporations are more economically powerful and influential than the developing host-states from which they extract their profits. These states seem unable, without international cooperation, to fulfill the human rights obligations required to complete the right to development process. International cooperation to curb the negative influence of corporations is not forthcoming as the global economy depends on the expansion of investment.

The human rights regime has been criticized for its state-centric approach that seems out of place in a global economy with diverse powerful actors. State-centrism seems to insulate human rights discourse from vital challenges posed by non-state actors. The traditional approach reinforces the state as the central actor around which everything else revolves.³⁰ Is the state still the sovereign decision maker that human rights law was designed to regulate?

The questions surrounding international cooperation and the right to development cannot be examined without addressing the role of corporations and the regulation of their investment activities. Corporations are important actors within the process of economic globalization.³¹ It is assumed that these non-state actors have reduced ties to their home-states and have become powerful political entities in themselves. This leads to the assumption that they dictate international economic and political affairs. The role and significance of the corporation in domestic and international affairs is a much-debated topic within the field of international political economy.

The multinational corporation is incorporated in a particular state but owns and controls subsidiaries through foreign investment in other states. The purpose of foreign direct investment is to achieve partial or complete control over marketing, production, or other facilities in the services, manufacturing or commodities sectors of another state. Purchasing existing businesses or the construction of new ones, accompanied by mergers, takeovers and alliances with corporations of other states, is all included in foreign direct investment. It is therefore part of an overall corporate strategy to achieve a permanent position within host economies.³² When this occurs, the home-state’s economy benefits.

The corporation has transformed the global economy and some states have lost influence as corporations have become global in nature.³³ This is considered a movement towards a global economy where there will be no national products or economies.³⁴ Global development strategy reflects this; the corporation is now the most important source of capital and technology, having replaced foreign aid in this regard.³⁵

But the activities of the corporation still require the consent of states. Consider the following: first, the corporation remains physically headquartered in the home-state; second, empirical studies have shown that corporations still depend on their state of incorporation for sales;³⁶ third, corporations generally reflects the managerial culture of their home-states; and finally, the corporation is viewed in the host-state as an instrument of the home-state.³⁷ International political economy discourse still considers the corporation as ‘a creature of its home economy’.³⁸ Perhaps most importantly, they rely on their home-states to bilaterally facilitate investment protection for their activities.

The global expansion of corporations has been promoted by states. States have granted corporations rights through trade agreements, bilateral investment treaties and domestic liberalization.³⁹ The development of a neoliberal economy and the subsequent reduction of the state have led many observers to predict a shift to a...

Table of contents

• Cover
• Half Title
• Dedication
• Title Page
• Copyright Page
• Table of Contents
• Acknowledgements
• 1 Introduction: Economic Globalization and Human Rights
• Part 1: Development in a Global World
• Part 2: Triadic Responsibility in a Global World
• Bibliography
• Index