Toward the Prevention of an Economic Holocaust

Toward the Prevention of an Economic Holocaust

By: Gerald F. Witherspoon, Sr. 20151230

Considered by some as forming a taut compact, and by others, as forming a modern rivalry, governments and multinational corporations (MNCs) have been complicit in the self-same crimes. From arms trafficking to conflict diamonds, both have proliferated the insecurities of the global citizenry. International regulatory regimes primarily affect international trade by offering a platform whereby rival standards can be discussed in a diplomatic fashion. Nevertheless, the same way peace diplomats fail to secure peace treaties, international regulatory regimes oft-times fail to bridge actor preferences or effectively influence regulatory coordination.

As pointed out by Emeka Duruigbo in Corporations and International Law, “Corporations have been associated with violating human rights, degrading the environment, escalating poverty, and increasing social vices in their foreign operations” (Sanford 2011, 173). Imagine domestic governments guilty of committing the same violations being called upon to hold MNCs operating overseas accountable for external violations. Strangely enough, MNCs have been called upon to influence government accountability. Moreover, many of these MNCs have been allowed to commit human rights and other types of violations because they have acted in concert with the corrupt governments where they operate.

It is important to note that MNCs voluntarily adopt certain codes of conduct for at least three reasons: To “avoid consumer backlash” and “adverse public opinion” or preempt “governmental regulation” (Sanford 2011, 175). However, in the 1970s the United Nations outright failed to deliver a compulsory set of rules aimed at preventing MNCs from interfering with host country politics and hindering their economic objectives. Other non-compulsory intergovernmental and multi-stakeholder initiatives have included the Code of Conduct for Transnational Corporations, the Guidelines for Multinational Enterprises, the UN Global Compact, Voluntary Principles on Security and Human Rights, the Extractive Industries Transparency Initiative (EITI), and the Kimberly Process Certification Scheme (KPCS). Although these initiatives have yielded higher levels of cooperation they have maintained a lackluster record of criminal accountability and prosecutorial enforceability (Sanford 2011).

Nevertheless, without international regulatory regimes, corrupt government and corporate forces already running amok, would increase their anarchic behavior to levels unimaginable and with total disregard for societal consequences. International regulatory regimes can discourage conflict-producing business interactions by increasing awareness of corporate complicity. They can distract from conquestorial pursuits that result in damage to the environment and human lives by fostering multi-stakeholder initiatives that encourage alternative methods for profit-maximization. They can prevent injustices by acting as economic consultants while echoing consumer concerns. Finally, they can act as a watchdog and incubator for behavioral norms which promote government stability. Unfortunately, their ability to stem the tide is currently inhibited by a lack of maturation.

Where political incentives do not discourage abusive practices, economic incentives oft-times do. Therefore, it is of high importance for international regulatory regimes to approach MNCs in a way that magnifies the economic incentives, then moves toward the enshrinement of economically-incentivized agreements that can be legally mandated through a government-constitutionalized framework. Indeed, power hungry leaders who care not for the welfare of citizens exist in both government and MNCs. The Nuremberg Trials illustrated an international consensus that government leaders should not enjoy impunity from international crimes against humanity. International regulatory regimes now face the challenge of discouraging, distracting, and preventing the leaders of MNCs from committing an economic holocaust.

References

Silverburg, Sanford R. 2011. International Law: Contemporary Issues and Future Developments. Boulder [Colo.]: Westview Press, 2011. eBook Collection (EBSCOhost), EBSCOhost (accessed December 29, 2015).

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