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This article is written by Khyati Basant, pursuing BBA LLB from Symbiosis Law School, NOIDA. This article consists of a description of the role of TNC’s in International Laws.


In our globalized world, transnational companies (TNCs) are highly powerful. TNCs are undermining the authority and responsibilities that traditionally belong to states within a transnational context, and their often unchecked activity affects public interests. Arguably the most important situations are those where TNCs abuse citizens’ freedom to access the integrity of their civil rights. The actions of a TNC may impact either the human rights of persons engaged in the TNC ‘s business networks (e.g. employees working by a TNC supplier) or the human rights of persons not engaged in such networks (e.g. by environmentally damaging activities).

Globalization is also viewed as globalizing the economy. This perspective is, of course, too limited, but I would like to concentrate on this particular dimension of globalization for the purposes of this article, primarily on the role of transnational companies (TNCs) in Public International Law (PIL). TNCs are a driving force for globalization and are playing an increasingly significant role not just in economic terms but also for the cultures in which they work and for society as a whole. Even TNCs are interested in human rights violations. TNCs may also circumvent domestic laws. Therefore, transnational economic practices are easier to control than corporate strictly domestic economic activities. TNCs have both a legal identity and a legitimate personality. And this legal identity is generally focused on domestic law. No single national economy, not even China’s, is in itself essential for a massively broad multinational enterprise. This theoretical dependence on national law and the factual impotence of many nation-states makes it necessary to ask questions about the TNCs’ international legal position.

Over the last half-century, states and international organizations have worked to extend the codification of International Human Rights Law to protect citizens’ interests from abuses by regimes. Nevertheless, one of the most important developments in the human rights discourse at the beginning of the 21st century is the growing awareness of the connection between business and human rights. Several decades after the Universal Declaration of Human Rights was adopted, the Cold War was the central political framework for a world-view. The planet has, though, continued to look very different in the ten years since the Cold War officially ended.

Transnational corporations (hereinafter referred to as TNCs) also referred to as multinational companies (MNEs) or multinational corporations (MNCs) have to pose special questions about recent global developments, as they are involved in some of the most diverse sectors of national economies, such as extractive manufacturing, telecommunications, information technology, consumer electronics, clothing, etc.

The role of TNC’s 

One of the most important changes in public international law today is the obvious emergence of transnational corporations (TNC) regulation. Although public international law has been discussing international economic concerns for some time, in recent years, considering the expanding TNC operation and enhanced third world influence in international relations, greater emphasis has been centred on developing laws regulating TNC conduct. These trends are partially interpreted by the third world as an attempt to improve its foreign influence vis-à-vis the influence of both the TNCs and the Western developed world, with which the TNCs are usually allied, but are also motivated by additional influences. Firstly, since one country usually can not control TNC power and action independently, even the Western developed countries have an interest in this growth. TNCs themselves recognize the advantages of a uniform regulatory scheme that would avoid many of the difficulties arising from varying national needs. While these proposed regulations would restrict TNCs, the international precedent has traditionally precluded TNCs from intervening specifically in this phase of rule-making. The purpose of this article is to investigate what role TNCs and other non-governmental interest groups, if any, should be in the process. One can not ignore the reality of the impact these actors have on our globalized society. They need to be heard, because of their practical importance. Otherwise, we would have to deny a voice to the People’s Republic of China as well, say, and cut off more than a billion people from the international law-forming process.

Responsibilities of TNC with the International Laws 

TNCs pose a major challenge to Westphalian-style Public International Law that is still very much state-centered. Rather than understanding international law as a sudden and complete overthrow of the existing legal order in times of globalization, this development could be described more appropriately as a gradual change, albeit a rapid one. The most notable feature of this change is, of course, the development of International Human Rights Law. Under international law, international human rights law gives individuals a certain status, it does not elevate them to the status of full subjects who can decide on the creation of new rules. Simultaneously, today’s changing international legal system often involves responsibilities for non-state actors, most importantly, though not limited to, international criminal law.

Classical human rights theory accepts no connection other than that between people and state. In other words, the protection of fundamental human rights has traditionally been applied to its scope of responsibility since the very emergence of a State as a major actor in international society. Therefore, states carry out both the security and the abuse of human rights in a democratic society.

Non-binding standards of conduct such as those developed by the International Labor Organization (ILO) or the Organization for Economic Co-operation and Development (OECD) are primarily the focus of TNCs. Another key example is the “Norms on the Human Rights Responsibilities of transnational corporations and other businesses.” However, the so-called standards are only soft law and are faced with resistance by states, making it unlikely that they will soon become binding international law 

At present, this phase involves meetings and discussions that took place in the United Nations and the other international organizations and centered on the conduct of TNC development. While the care given to TNC members differs considerably among these organizations, with one exception nation-state members were the only official participants in the establishment of such criteria. In the International Labor Organization (ILO) the rule-business and labor representatives serve on national delegations and vote independently of the government methods of the delegation. Not only are TNCs currently isolated from the international negotiating process, but their participation is likely to be limited to domestic fora when the codes are implemented. Although a method for implementing these codes has not been firmly established, the current approach has been to pass resolutions in sponsoring organizations, which call on the individual nation-states to implement the codes through domestic law and other less coercive means.

This strategy stops short at first glance of directly enforcing international legal commitments on nation-states or on the TNC. However, if implemented on a worldwide scale, the combined effect of the resolutions, the uniform laws adopted by individual nation-states, and the international community’s practice could ultimately generate public international law without participating in its objectives.

This classification of TNCs is relatively consistent with conventional public international law doctrine. According to this principle, nation-states are the only subjects of international law. Many such bodies, especially persons and corporate organizations, communicate indirectly through their national governments with international law. Many scholars and philosophers disagree with these conventional assumptions; either they contend that the principles were never right, or that the new changes that transformed the international legal system have made them no longer valid.

Rights of transnational corporation In Public International Law 

Because TNC practices cross territorial boundaries by their very nature, they are difficult for national authorities to control. Not only do states face realistic regulatory problems, but they also face international legal restrictions on governing cross-border operations, which makes TNC operations a central threat to contemporary international law theory. In fact, the concept of nationality restricts the regulatory power of states by means of the jurisdiction of other states that are impaired if TNCs exist overseas by daughter companies registered in the foreign states in which they reside. These daughter companies are financially dependent on the mother that is registered in the state that aims to control them but is constitutionally autonomous, rendering it nearly difficult for the governing state to personally impact them. Hence, calls for international regulation of TNC activities have been issued. It will go further beyond the purposes of this report to get into the scope of how international law is used in efforts to govern TNCs, for example in the area of international environmental law and the protection of workers.

TNCs would have a larger function if other players accept them as needing to be involved in the deliberative process leading to the formation of new norms. As an argumentum e contrario from the assumptions drawn on the mutual non-recognition of organizations as states, I suggest that the substantive participation of TNCs in the legislative process by other objects of international law that constitute a degree of recognition which will lift TNCs to the same level as other NGOs. As described above, certain NGOs are also granted consultative status, e.g. by ECOSOC of the United Nations, and may serve as amicus curiae in international litigation.

There is evidence that TNCs have an international legal identity and have engaged for some time in the international legal system. Examples of such participation include the application of public international law to contracts with state entities and participation in dispute settlement for a set up by either treaty or intergovernmental organizations. Some principles of international public law have become so widely accepted that they have been seen to be binding on the international activities of the TNCs. Lastly, TNCs advise international organizations when their interests are at stake, and it is clear that they have a direct role to play in influencing national behaviour.



TNCs can not be the key builders of international law to replace States. Although the citizen is the central unit of the international community (and sub-global modes of organization of various entities are communities, tribes, countries, counties, governments, NGOs, religious groups, businesses, foreign organizations, etc.), the state is the primary player on the international scene. Nonetheless, it is no longer the only subject and even TNCs should have a part to play. There is little doubt that [Multinational Enterprises] has been, and continues to be, actively involved in generating legal standards applicable to their respective markets and industries. Regulation on a post-Westphalian level, though it would not in any way signal the arrival of a modern constitution. Rather, international law is moving into a comprehensiveness that reflects the power complexities of our time more effectively– without chopping off the seeds that nourish it.

This is increasingly clear as we remember the continuing importance of States for the international legal system: while non-state actors, NGOs and TNCs can play a role in international law today, both by claiming rights and by affecting the development of new laws, the responsibility for the implementation of international law still falls heavily on the shoulders of States parties to the international law.

TNC actions will, of course, create severe issues, but every rule of international law is as good as its compliance. Regulation is a critical international law issue, which will remain a significant problem for the future. While being involved in the creation of new rules of material law, which sends the signal that things are being done, is politically more attractive to be seen, the enforcement of international law needs further attention, especially on the part of the States. The participation of non-state actors does not absolve the States from this burden that they serve as the main objects of contemporary foreign legislation.

In the light of the undeniable movement toward greater international business regulation, the question arises as to whether the system used to develop these new rules is well designed. The prohibition of direct business intervention in the establishment of such laws raises other risks: (1) the regulations could be impracticable, (2) the reforms needlessly encourage tension between nation-states and TNCs (3) that the current respect by the international community for the international legal system will be reduced. Nevertheless, even representatives of organizations with direct interests in the rules under consideration could both minimize these risks and maximize the positive results in the rulemaking process.



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