Regulating Transnational Companies 46 Proposals Proposal Papers Series
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Regulating Transnational Companies 46 proposals Proposal Papers series Yann Queinnec William Bourdon Proposal Papers The Forum for a new World Governance encourages the drawing up and circulation of a series of Proposal Papers. The papers present the most relevant proposals for generating the breakthroughs and changes necessary for building a new, fairer and more sustainable world governance. The Proposal Papers are published in different languages and cover five broad categories of world governance: Environment and management of the planet The economy and globalization Politics, state structures and institutions Peace, security and armed conflicts Knowledge, science, education and the information and communication society. Forum for a new World Governance – FNWG - December 2010 www.world-governance.org English translation: Philippa Smith & Giles Smith Illustrations: Dominique Monteau Graphic design : Elsa Lescure Print: Causses et Cévenne Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/2.0/ This Proposal Paper is available under a Creative Commons Licence allowing users to use, reproduce and circulate it on condition that they mention the title, authors and Forum for a new World Governance. This Proposal Paper cannot be modified or sold. Yann Queinnec and William Bourdon would like to thank everyone at Sherpa, with special thanks to Louis Daniel Muka Tshibende, Claire Deshayes, Bertrand Besnard and Mathieu Le Soudéer for their valuable contribution to this Proposal Paper. Cover image: Alain Bublex, Plan Voisin de Paris - V2 Circulaire Secteur C23, 2004 (Courtesy Galerie GP & N Vallois, Paris) Regulating Transnational Companies 46 proposals Yann Queinnec William Bourdon December 2010 Regulating Transnational Companies C o n t e n t s FOREWORD . 9 Mireille Delmas-Marty INTRODUCTION . .10 1 GLOBALIZATION IN SEARCH OF TNC REGULATION – OVERVIEW . .14 2 A NEW APPROACH TO THE NOTION OF THE BUsiNEss . .19 New definition of the business . .20 Proposal 1 – Define articles of association that factor in the public interest . .20 Proposal 2 – Recognize the concept of the group of companies . .21 Proposal 3 – Adopt a common definition for the notion of parent company . .22 Internal organization of businesses . .24 Proposal 4 – Establish an overall standard of behaviour . .24 Proposal 5 – Executive responsibility . .25 Proposal 6 – Shareholder responsibility . .27 Proposal 7 – Employee responsibility . .29 3 NATIONAL EXTERNAL LEVEL – THE TNC IN ITS HOME COUNTRY . 32 Tools for preventing violations of basic rights and the environment Decision-support tools . 33 Proposal 8 – Projection tool – Demand that TNCs establish a 15-year social and environmental plan . .33 Proposal 9 – Information Tool – Require TNCs to issue annual social and environmental impact reports . .34 Proposal 10 – Measurement tool – Reform TNC accounting to include non-financial performance . .35 Proposal 11 – Comparison tool – Create indicators for non-financial performance . .37 Proposal 12 – Partnership tool – Systematize and provide a legal framework for partnerships between civil society organizations (CSOs) and TNCs . .38 TNC oversight tools . .39 Proposal 13 – Transparency – Guarantee third party access to TNC non-financial information . .39 Proposal 14 – Monitoring – Create a national centre monitoring non-financial performance . .41 Proposal 15 – Financing – Encourage public offerings for TNCs with good ESG performance . .42 Proposal 16 – Public procurement – Encourage responsible public procurement policies . .42 Proposal 17 – Responsible communications – Eradicate false advertising relating to sustainable development . .43 Regulating Transnational Companies Tools for redressing violations of basic rights and the environment . 44 Proposal 18 – Recognize the criminal liability of legal entities . .45 Proposal 19 – Make widespread use of administrative sanctions excluding TNCs with inadequate non-financial performance from public procurement contracts . .46 Proposal 20 – Harmonize the legal arsenal and resources available to national jurisdictions . .47 4 INTERNATIONAL EXTERNAL LEVEL—TNCS IN THEIR HOST COUNTRIES . .48 Adapting the legal framework to an international corporate scope . .49 Proposal 21 – Recognize the legal responsibility of a group’s parent company for actions undertaken by its overseas subsidiaries . .49 Proposal 22 – Engage the parent company’s responsibility towards supply chain actors . .50 Tools for preventing violations of basic rights and the environment . .51 Proposal 23 – Strengthen the preventive role of TNC staff regarding ESG impacts . .52 Proposal 24 – Set up an international network of stakeholders to provide high quality reporting on social and environmental impacts . .52 Tools for redressing violations of basic rights and the environment . .52 Proposal 25 – Extraterritorialize the law . .52 Proposal 26 – Define an initial extension to the offence of misappropriation . .54 Proposal 27 – Define a second extension to the offence of misappropriation . .55 Proposal 28 – Guarantee access to justice for NGOs combating environmental damage and corruption . .55 5 GLOBAL LEVEL – TNCS AND THE INTERNATIONAL COMMUNITY . .56 Adapting business law to address sustainable development concerns . 57 Proposal 29 – Recognize the TNC as subject to international law . .57 Proposal 30 – Incorporate respect of international agreements on protecting the environment and basic rights into international investment law . .57 Proposal 31 – Define competition law favouring sustainable partnerships between companies . .58 Proposal 32 – Promote the concept of the sustainable contract . .60 Proposal 33 – Encourage investors and financial actors to choose socially responsible investments . .63 Proposal 34 – Convince law practitioners to operate in favour of sustainable development . .64 The necessary creation of preventative tools . .64 Proposal 35 – Expertise – Create an international task force for states and authorities to ensure well-balanced international negotiations . .64 Proposal 36 – Monitoring – Create an international centre monitoring corporate social and environmental performance . .65 Proposal 37 – Whistleblowing – Adopt an international status for whistleblowers to protect them from pressure . .65 Regulating Transnational Companies Protecting and informing consumers . .66 Proposal 38 – Enforce a general duty for companies to protect consumers of their products and services . .66 Proposal 39 – Introduce an international obligation to label products and services with social and environmental performance.