Monthly Archives: September 2012

John Gerard Ruggie — Governing Transnational Corporations

John Ruggie photo[By John Gerard Ruggie. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

The international community is still in the early stages of adapting the human rights regime to provide more effective protection to individuals and communities against corporate-related human rights abuses—sweatshop conditions in factories supplying branded global firms; communities forcibly displaced for the benefit of oil and mining companies’ installations; food and beverage firms found with seven-year-old children toiling on their plantations; or collaboration with paramilitary forces accused of killing labor organizers.

Business is the major source of investment and job creation, and markets can be highly efficient means for allocating scarce resources. They constitute powerful forces capable of generating economic growth, reducing poverty, and increasing demand for the rule of law, thereby contributing to the realization of a broad spectrum of human rights. But markets work optimally only if they are embedded within rules, customs, and institutions. Indeed, history teaches us that markets pose the greatest risks—to society and business itself—when their scope and power far exceed the reach of the institutional underpinnings that allow them to function smoothly and ensure their political sustainability. This is such a time, and escalating charges of corporate-related human rights abuses are the canary in the coal mine signaling that all is not well.

Cocoa plantation photo

“The governance gaps created by globalization . . . provide the permissive conditions for wrongful acts by companies of all kinds.” This 14-year-old from Mali works on a cocoa plantation in Ivory Coast in 2001, providing cheap labor to multinational corporations selling chocolate globally.

The root cause of the business and human rights predicament today lies in the governance gaps— between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences—created by globalization. These governance gaps provide the permissive conditions for wrongful acts by companies of all kinds without adequate sanctioning or reparation.

Thus, the legal rights of transnational corporations have been expanded significantly over the past generation. This has encouraged investment and trade flows, but it has also created instances of imbalances between firms and states that may be detrimental to human rights. The more than 3,000 bilateral investment treaties currently in effect are a case in point. While providing legitimate protection to foreign investors, these treaties also permit those investors to take host states to binding international arbitration, including for alleged financial damages resulting from the implementation of legislation to improve domestic, social, and environmental standards—even when the legislation applies uniformly to all businesses, foreign and domestic. A European mining company operating in South Africa recently challenged that country’s black economic empowerment laws on these grounds.

At the same time, the legal framework regulating transnational corporations operates much as it did long before the recent wave of globalization. A parent company and its subsidiaries continue to be construed as distinct legal entities. Therefore, the parent company is generally not liable for wrongs committed by a subsidiary, even where it is the sole shareholder, unless the subsidiary is under such close operational control by the parent that it can be seen as its mere agent. Furthermore, despite the transformative changes in the global economic landscape generated by offshore sourcing, purchasing goods and services even from sole suppliers remains an unrelated party transaction in which the buyer is not legally liable for acts conducted by the supplier. Factors such as these make it exceedingly difficult to hold the extended enterprise accountable for human rights harm.

Each legally distinct corporate entity is subject to the laws of the countries in which it is based and operates. Yet states, particularly some developing countries, may lack the institutional capacity to enforce national laws and regulations against transnational firms doing business in their territory even when the will is there, or they may feel constrained from doing so by having to
compete internationally for investment. Home states of transnational firms may be reluctant to regulate against overseas harm by these firms because the permissible scope of national regulation with extraterritorial effect remains poorly understood, or out of concern that those firms might lose investment opportunities or relocate their headquarters. To attract investments and promote exports, governments may exempt national firms from certain legal and regulatory requirements or fail to adopt such standards in the first place.

And what is the result? A study I have conducted surveyed allegations of the worst cases of corporaterelated human rights harm. They occurred, predictably, where governance challenges were greatest: disproportionately in low-income countries; in countries that often had just emerged from or still were in conflict; and in countries where the rule of law was weak and levels of corruption high.

How to narrow and ultimately bridge these global and national governance gaps in relation to human rights is a fundamental governance challenge for the 21st century.

 

JOHN GERARD RUGGIE is the Berthold Beitz Professor in Human Rights and International Affairs at Harvard’s Kennedy School of Government; Affiliated Professor in International Legal Studies, Harvard Law School; and Special Representative of the United Nations Secretary-General for Business and Human Rights.

Shibley Telhami — Understanding Attitudes on Middle East Peace

Shibley Telhami photo[By Shibley Telhami. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

One of the striking observations in the Middle East throughout the turbulent first decade of the 21st century is that people in the region, both Arabs and Israelis, continued to support a solution to the Arab-Israeli conflict that envisions two states, Israel and Palestine, roughly separated by the border that preceded the 1967 Arab-Israeli war. Certainly, there remained important differences on details, but most embraced the principle of two states.

What is equally striking is that, behaviorally, there has been little indication of these attitudes: Israelis dumped the center-left from power and elected rightwing-led governments, and  Palestinians elected the militant Islamic Resistance Movement, Hamas, to lead their government. Across the Arab world, public opinion polls continued to show that militant leaders like Hassan Nassrallah of the Lebanese Hezbollah party were far more popular than conciliatory leaders like King Abdullah of Jordan.

In looking closely at public attitudes, one can get a better sense of what has been driving people’spositions. In six Arab countries in which I poll annually (Egypt, Saudi Arabia, Morocco, Jordan, Lebanon, and the United Arab Emirates),1 people’s openness toward a political solution has been matched by deep pessimism about the prospects for peace. Half of those polled in 2009 said peace will never come, and only 6 percent believed it will come within five years. While only about a quarter of the Arab public were in principle opposed to Israel, a majority of those who accepted a two-state solution did not believe the Israelis would ever accept it. This is a pattern that other polls found among Israelis and Palestinians as well, and one I found in a summer-2009 poll among Arab citizens of Israel.

The assessment of the prospects of failure to reach an agreement based on the two-state solution is another measure that sheds light on the public’s outlook. The vast majority of those polled believed that, if such a solution was not reached, the Middle East would face years of violence and instability. The net result of this deep pessimism was that many on each side assumed that the other will understand only the language of toughness and violence—and each felt a need to better position itself in case of failure.

These attitudes can be contrasted with the prevailing mood in the 1990s, when seemingly promising, if sometimes troubled, peace negotiations were seen by most as likely to lead to a peace settlement. Even those who were not especially happy with the kind of settlement that appeared likely had to prepare themselves to accommodate it. Preparing oneself for failure and preparing oneself for success entail dramatically different attitudes and strategies.

Prevailing public attitudes present extraordinary challenges to mediation diplomacy. At one level, the impact of public opinion is obvious: In places where free elections are held, such as Israel and the Palestinian territories, public attitudes affect the election outcomes and thus the governing coalitions. Following the collapse of the Clinton administration’s mediation efforts in July 2000, bloody confrontations ensued and Israelis elected a tough right-wing government headed by General Ariel Sharon. Among Palestinians, the failure of diplomacy to end Israeli occupation partly led to Hamas’s victory in the 2006 legislative elections, with subsequent conflict and territorial divide among the Palestinians.

Even beyond elections, public anger can be consequential. At the extreme end, it can be used by militant groups to spoil a possible deal they oppose. It can also sometimes lead to policy change. One such episode took place in the Fall of 2009 when the Palestinian Authority decided to ask the United Nations’ Human Rights Council to postpone a vote on the “Goldstone Report” prepared by a commission headed by South African Judge Richard Goldstone to assess human rights violations in the 2008–2009 Gaza war between Israel and Hamas. The report accused both Israel and Hamas of war crimes. Mindful of Israeli and American positions, and with an eye on reviving peace negotiations, the president of the Palestinian Authority, Mahmoud Abbas, asked the UNHRC to postpone considering the report. The public reaction was so vociferous that Abbas reversed his position quickly and asked for an emergency session of the UNHRC to vote on the report.

One of the challenges to governments in the region is that their ability to shape public attitudes is diminishing by the day. Polls indicate that most people in the region get their news from media outlets, especially satellite television, outside their own countries, so that their government’s narrative is an increasingly small part of the information they get. And Internet use is rapidly expanding, making public attitudes harder to control or even predict.

The net result of prevailing public attitudes is that incremental approaches to the Palestinian-Israeli conflict are unlikely to succeed. In theory, if a grand deal is put on the table that meets the basic needs of both sides, it could be embraced by majorities of Arabs and Israelis. The challenge is how to get to that point. Even in the 1990s when a sense of the inevitability of peace was common, incrementalism turned out to be problematic. Postponing key issues worked only to create opportunities for spoilers who helped undermine confidence instead. Leaders on both sides were less inclined to make short-term gestures as they feared giving up the leverage they needed to tackle the toughest issues down the road.

Public attitudes, even hardened ones, can of course change. But the sort of dramatic events that can lead to profound change are hard to anticipate. And given the moods of the Israeli and Palestinian publics and the complexity of their domestic politics, drama is unlikely to come from their leaders. That’s why the focus has been on international mediation, especially American—and aimed at the toughest issues from the outset, while striving for a comprehensive deal.

 

SHIBLEY TELHAMI is the Anwar Sadat Professor for Peace and Development at the University of Maryland, College Park, and nonresident senior fellow at the Saban Center at the Brookings Institution. He is the author of The Stakes: America and the Middle East (Westview Press, 2004).

Beth A. Simmons — Institutionalizing Human Rights

[By Beth A. Simmons. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

International human rights have become a central feature of the international legal system. Governments have formally agreed to a bewildering array of treaties, resolutions, and reporting procedures that make them ever more responsible to each other for the way they treat their own people. They have also participated in the creation of a slew of non-binding “standards” and “understandings” about the nature of their human rights agreements. Some even allow their citizens to complain to specific international “oversight bodies” if they feel there has been a violation of the rights guaranteed by treaty. Figure 1 shows the proliferation of these regimes since World War II. Occasionally, some governments even take the views of these bodies seriously.

There is something puzzling about this state of affairs. Why should governments agree among themselves to respect the rights of their own citizens? For much of the 20th century, citizens’ rights were simply considered a domestic problem, beyond the competence of the international community to inquire. This is certainly no longer the case. Formal international rights accountability is probably stronger now than it has ever been at any other moment in history.

The challenge for the future will be to bring actual practices more in line with the promises outlined in international treaties. Despite the fact that the Universal Declaration of Human Rights says that every person is “entitled to realization . . . of the economic, social and cultural rights indispensible for his dignity . . . ,” about 3 billion people worldwide live on less than $2.50 per day. Despite the fact that 165 countries have ratified the International Covenant on Civil and Political Rights, which provides a right “to vote and to be elected at genuine periodic elections . . . guaranteeing the will of the electors,” probably no more than half the world’s population can really exercise such a right. Even though 186 countries have ratified the Convention on the Elimination of Discrimination Against Women (CEDAW), guaranteeing  nondiscrimination in employment, on average the women of the world earn only 60–70 percent of what men earn for equivalent work.

None of this means that international law has failed. In fact, some research shows that many of the most important treaties, including those discussed above, have made important contributions to better rights practices in the countries that have ratified them. But it does mean that there is no automatic correspondence between principles and practice. How can governments be encouraged to take human rights—and their obligations—more seriously?

One possibility is to strengthen international enforcement of these norms. One could start by making the United Nations a more credible body in this regard. The main forum for handling rights abuses at the United Nations has been the Human Rights Commission, but it was rightly criticized as terribly political and staffed by representatives from countries that had terrible rights records. Some improvements have been made with the new Human Rights Council, but do states really have incentives to be their brother’s keepers?

Some think that countries with a real commitment to human rights should take enforcement into their own hands by imposing economic conditionality. To a certain extent, this is already happening. The U.S. Congress, for example, can withhold foreign assistance if rights practices are unsatisfactory. The European Union conditions membership on acceptance of high rights standards, and even tries to extend its influence to trading partners outside the region through its so-called “democracy clauses” attached to trade agreements. While these kinds of sanctions can be applied to the smaller states, it is hard to imagine  applying such a strategy to China. Furthermore, imposing economic sanctions can hurt the people you are trying to help, sometimes as much as the repressive government does itself.

Perhaps human rights cannot be enforced from the outside. Perhaps people around the world should simply be encouraged to use international norms to fight their own domestic rights battles, in ways they see as appropriate, and according to their own priorities. This approach has already led to important improvements in rights practices for countries that have had some experience with or are transitioning to accountable government, but it may offer little hope for those living in the most oppressive regimes in the world. The unfortunate truth of the matter is that in some countries, to demand your rights is to invite a crushing reaction from a ruthless regime.

Addressing human rights violations worldwide is a long-term project. It probably cannot be solved in isolation from the other major human endeavors of the last century: finding a way to curb poverty, ending widespread civil and international violence, and implementing stable and accountable systems of governance. But none of these projects will be complete without the recognition that individuals have inviolable rights that must be recognized, protected, and even promoted by their governments.

 

BETH SIMMONS is Clarence Dillon Professor of International Affairs and Director of the Weatherhead Center for International Affairs at Harvard University. Her new book is entitled Mobilizing for Human Rights: International Law in Domestic Politics (Cambridge University Press, 2009). Simmons was elected in April 2009 to the American Academy of Arts and Sciences.

Joseph S. Nye, Jr. — Diversifying American Power

Joseph Nye photo[By Joseph S. Nye, Jr. Part of the series “Global Challenges in 2030”  (Goldstein & Pevehouse), January 2010.]

The American National Intelligence Council projects that American dominance will be “much diminished,” by 2025. Many foreign leaders also suggest that American power has passed its mid-day. How would you know if these predictions are correct or not?

First, beware of misleading metaphors of organic decline. Nations are not like humans, with predictable life spans. For example, after Britain lost its American colonies at the end of the 18th century, Horace Walpole lamented Britain’s reduction to “as insignificant a country as Denmark or Sardinia.” He failed to foresee that the Industrial Revolution would give Britain a second century of even greater ascendency. Rome remained dominant for more than three centuries after the apogee of Roman power. Even then, Rome did not succumb to the rise of another state, but died a death of a thousand cuts inflicted by various barbarian tribes. Indeed for all the fashionable predictions of China, India, or Brazil surpassing the United States in the next decades, the greater threats to all states may come from modern barbarians and non-state actors. The classical transition of power among great states may be less of a problem than the rise of non-state actors. In an information-based world of cyberinsecurity, power diffusion may be a greater threat than power transition.

da Silva, Obama, Hu photo

“On many transnational issues, empowering others can help us to accomplish our own goals.” Here, in 2009, the leaders of Brazil, the United States, and China work together, with others, to coordinate actions for global economic recovery.

At an even more basic level, what resources will produce power in the next two decades? In the 16th century, control of colonies and gold bullion gave Spain
the edge; 17th-century Netherlands profited from trade and finance; 18th-century France gained from its larger population and armies; while 19th-century British power rested on its primacy in the Industrial Revolution and its navy. Conventional wisdom has always held
that the state with the largest military prevails, but in an information age it may be that the state (or nonstate) with the best story will win. Soft or attractive
power becomes as important as hard military or economic power. Secretary of State Hillary Clinton has said, “We must use what has been called ‘smart power,’ the full range of tools at our disposal.” Smart power means the combination of the hard power of command and the soft power of attraction.

In today’s world, power resources are distributed in a pattern that resembles a complex, three-dimensional chess game. On the top chessboard, military power is largely unipolar and the United States is likely to remain the only superpower for some time. But on the middle chessboard, economic power has already been multipolar for more than a decade, with the United States, Europe, Japan, and China as the major players, and others gaining in importance.

The bottom chessboard is the realm of transnational relations that cross borders outside of government control, and it includes non-state actors as diverse as bankers electronically transferring sums larger than most national budgets at one extreme, and terrorists transferring weapons or hackers threatening cyber-security at the other. It also includes new challenges like pandemics and climate change. On this bottom board, power is widely dispersed, and it makes no sense to speak of unipolarity, multipolarity, hegemony. The soft power to attract and organize cooperation will be essential for dealing with transnational issues.

The problem for American power in the 21st century is that there are more and more things outside the control of even the most powerful state. Although
the United States does well on military measures, there is increasingly more going on in the world that those measures fail to capture. For example,  international financial stability is vital to the prosperity of Americans, but the United States needs the cooperation of others to ensure it. Global climate change too will affect the quality of life, but the United States cannot manage the problem alone. And in a world where borders are becoming more porous than ever to everything from drugs to infectious diseases to terrorism, America must help build international coalitions and build institutions to address shared threats and challenges. In this sense, power becomes a positive sum game. It is not enough to think in terms of power over others. One must also think in terms of power to accomplish goals. On many transnational issues, empowering others can help us to accomplish our own goals. In this world, networks and connectedness become an important source of relevant power. The problem of American power is less one of decline, than realizing that even the largest country cannot achieve its aims without the help of others.

 

JOSEPH S. NYE, JR. is University Distinguished Service Professor at Harvard and former dean of Harvard’s Kennedy School of Government. He is the author of The Powers to Lead and Soft Power: The Means to Success in World Politics.

Global Challenges in 2030

Photo of child playing in India

How will trends in international relations affect today’s young people over the years? This worker’s child in India plays in salt piles, 2009. [Reuters]

Welcome back to InternationalRelations .com! This fall, instead of being driven by daily events, I’m going to look at bigger, longer-term themes and concepts in IR that apply to today’s events and relationships.

For the 2010 edition of our textbook International Relations, Jon Pevehouse and I asked eight prominent IR scholars to write short essays on “Global Challenges in 2030.” As of this fall, these essays no longer appear in the print edition of the textbook, but instead will appear here on InternationalRelations.com. Each week I will post another of these excellent analyses and invite comments.

CONTRIBUTORS

JOSEPH S. NYE, JR. — Diversifying American Power
BETH A. SIMMONS — Institutionalizing Human Rights
SHIBLEY TELHAMI — Understanding Attitudes on Middle East Peace
JOHN GERARD RUGGIE — Governing Transnational Corporations
CHARLI CARPENTER — Securing the Seas
ANDREW MORAVCSIK — Affirming Democracy in International Organizations
DANIEL W. DREZNER — Regulating Global Complexity
MICHAEL W. DOYLE — Democratizing World Politics

INTRODUCTION

Every generation of students and practitioners of international relations confronts new challenges. Some of these issues, such as the challenges of globalization or human rights, arise from long-standing trends of which we are aware, but still struggle to confront for one reason or another. Other issues take us by surprise, coming onto our collective “radar screen” with little or no warning. Prior to 2008, for example, piracy had not been a particularly salient issue to students or policymakers, yet now we are well aware of the dangers posed by nonstate actors on the high seas.

This set of essays is an attempt to place (or re-emphasize) issues on our collective “radar screen.” We asked eight prominent scholars of international relations to imagine the challenges facing your generation as you evolve from students of international relations to more active practitioners. Looking forward to your future, we asked these professors to envision global challenges
in 2030. These scholars are all considered key figures in their areas of study, but in addition, they all have also engaged with policy communities throughout
their careers. Thus, they are not simply presenting you with academic problems, but with real-world problems that, as our textbook indicates, are the practical concerns of the field of international relations.

The answers we received from these scholars are quite varied, ranging from the challenge of creating new democracies to respect for human rights to Middle East peace. All of the writers point out challenges facing the international system for the next (and often the current) generation, while noting that none have easy answers.

We begin with Professor Joseph Nye outlining the challenges to the future of American power. Professor Beth Simmons then discusses a key challenge
in the area of global governance: the promotion and protection of human rights through international law. Shifting to the Middle East, Professor Shibley Telhami highlights trends in public opinion in the Middle East that will shape the prospects for peace in that region for years to come. Returning to the issue of global governance and human rights, Professor John Ruggie discusses the potential tensions between transnational businesses and human rights in the context of international anarchy— the lack of a central system of international governance.

Professor Charli Carpenter then highlights the challenges of an issue currently garnering significant global attention—piracy on the high seas. Professor Andrew Moravcsik then delves into the debate over whether the growing number of international organizations presents a challenge to democratic rule in the very member states that form these institutions. Professor Daniel Drezner reflects on the global implications of the 2008 recession noting that new ideas may be needed to understand how to prevent such events in the future. Finally, Professor Michael Doyle turns to the issue of domestic governance, suggesting the challenges inherent in attempts to further the spread of democracy around the globe.

Following each essay are references to sections of the textbook that discuss the issue raised in the essay. As you work your way through the book, recall these authors’ contributions and think about how what you have learned can help shed light on the causes of these problems or, perhaps more importantly, on the solutions that can address them.

We hope that these guest essays will not only educate you about challenges that will confront your generation, but will also inspire you to use the knowledge you gain in your course to begin to tackle these nettlesome issues. Indeed, while the steps needed to address these problems may be many, we hope that you will take the first one through your studies of international relations.

JOSHUA S. GOLDSTEIN AND JON C. PEVEHOUSE