Should the United Nations be called on to legislate Transnational Corporations?

Essay by esawayaUniversity, Bachelor'sA+, April 2008

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Should the United Nationsbe called on to legislateTransnational Corporations?Should the UN be called on to legislate Transnational Corporations?Erik Sawaya1In the current context of globalisation, Transnational Corporations (TNCs - dened bythe United Nations as rms operating assets in two or more countries)1 are majorplayers in the world arena. Today, these multinational entities wield more power thanmany of the world's nations. Yet, by virtue of the scope of their operations, theyeffectively nd themselves in a unique position in terms of accountability. To a largeextent, TNCs are not required to comply with international legislation in terms of humanrights, labour standards and the environment.

The United Nations has a long history of implementing measures to regulate the actionsof TNCs. The majority of these have not been effective in legislating TNCsʼ actions. Inrecent years, the UN has shifted its approach to interacting with TNCs. Instead ofgenerating a regulatory framework from which to control TNCs' impact on society andthe environment, the UN has launched the Global Compact, a voluntary agreementcreated to engage TNCs in corporate responsibility.

Opinions about the Global Compact are polarised and discussions surrounding the GCand its implications have raised the question: can a non-binding agreement between theUnited Nations and Big Business be an effective tool for protecting human rights, labourstandards and the environment?Transnational Corporations and the Global EconomyIn what many refer to as the "New World Order," TNCs are central players. Their scopeof inuence extends beyond the world economy as they inuence national andinternational politics. Their operations also affect the environment and bio-diversity whilepermeating the lives of people everywhere, be it the afuent consumers of the world orpopulations living in developing nations.

Should the UN be called on to legislate Transnational Corporations?Erik Sawaya21 to the UN, there were 7,000 transnational corporations in 1970.2 By 1996, thatnumber had grown...