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Oral statement presented to United Nations Commission on Human Rights, Sub-Commission on the Prevention of Discrimination and Protection of Minorities, Fiftieth session, by Miloon Kothari, 12 August 1998 , for the International NGO Committee on Human Rights in Trade and Investment.

Agenda Item 4(a): The realization of economic, social and cultural rights: The international economic order and the promotion of human rights.

The headlong rush over the past decade to create a world where capital, goods and services are allowed unfettered freedom of movement has resulted in the creation of a comprehensive international legal regime for the benefit of trade, investment and finance. Such a regime, with extensive enforcement mechanisms including 'binding arbitration', is well into the process of completely undermining an older and more fundamental international legal regime - governed by international human rights instruments and mechanisms.

The ascendancy of the 'market' has also led to the casting aside of provisions and guidance offered, in the Declaration of Social Progress and Development, the Declaration and Programme of Action of a New International Economic Order, the Charter of Economic Rights and Duties of States as well as in the international human rights instruments.

Various efforts were made through the UN in the eighties seeking to provide social justice dimensions to the process of economic liberalisation and the growth of transnational corporations (TNC's) such as the UN Centre on Transnational Corporations (UNCTC), the UN Fund for Economic Development (SUNFED), the New International Information Order (NIIO), and the New International Economic Order (NIEO).

Those promoting, however, a world where wholesale liberalisation would become the order of the day systematically undermined these valuable efforts.

Subsequently numerous attempts have been made, under the leadership of the UN, to caution against the disproportionate growth of unguided liberalisation and to highlight the urgent need to define State obligations and to equip States to play the necessary regulatory role in protecting human rights, promoting development and protecting the environment. These convictions were reaffirmed at the World Conferences in Vienna and Copenhagen:

The Vienna Declaration and Programme of Action confirmed that the protection and promotion of human rights and fundamental freedoms is the first responsibility of governments, and that the human person is the central subject of development.

The Copenhagen Declaration and Programme of Action recommends to States that there is a need to intervene in markets to prevent or counteract market failure, promote stability and long-term investment, ensure fair competition and ethical conduct, and harmonise economic and social development.

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Despite these expressed convictions, recent developments in the international economic sphere continue to illustrate the complete disdain for human rights objectives and a fundamental discontinuity between the human rights regime and the international economic agenda.

Nothing typifies this destructive and conflictive trend more than the draft Multilateral Agreement on Investment (MAI) currently being negotiated at the Organisation for Economic Cooperation and Development (OECD), the international club of the world's richest countries. If adopted, the MAI would contribute a significant chapter in what has been called the "constitution of a single global economy," or "a bill of rights and freedoms for transnational corporations¼ a declaration of corporate rule." Up until last year when it was leaked, it was for the most part negotiated in secret and was driven by the aggressive advocacy of the International Chamber of Commerce, United States Council on International Business and other corporate-backed groups.

Over the past year, environmental, social justice, labour and development groups have rallied by popular consensus against the MAI, as it typifies the new trend of corporate globalisation that routinely brushes aside the existing obligations of nations under international law (particularly environmental, labour and human rights law).

The human rights community, including the UN human rights programme, has been slow to react. This is unfortunate, as it is abundantly clear that the principles upon which the MAI is based and the prescriptions it details run counter to the basic premise and the overarching principles of the international human rights regime. Essentially the MAI seeks to complete the economic liberalisation agenda, favouring the rights of transnational investors and corporations over the rights of workers, consumers, communities, and the environment

This freedom for investors could have tragic consequences as the MAI could counter and negate the positive measures that states have taken or may propose to take to end discrimination faced by vulnerable people and communities in relation to the human rights to food, health, housing, land and work. Necessary measures such as food subsidies, control of land speculation, agrarian reform, the implementation of health and environmental standards are all under threat of being viewed as 'illegal' under the MAI.

In addition, the MAI would also prohibit 'performance requirements' established with a human rights purpose, such as requiring a foreign investor to employ local workers, to provide training or to contribute in other ways to the local economy.

Since the principle resources of the developing countries are in the sectors of agriculture, mining, forestry and fisheries, the MAI could considerably exacerbate the pressure that these sectors, and the people and communities dependent on them for their livelihood, are experiencing. The most severely affected will be women and children, and vulnerable communities such as marginal farmers, indigenous peoples, fisherfolk, and rural agricultural labourers.

A recent response by the human rights community to the challenges posed by the MAI and global economic liberalisation, has been the formation earlier this year of an International NGO Committee on Human Rights in Trade and Investment currently consisting of eight human rights NGO's. The names

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of these organisations are listed below. A study by this International NGO Committee of the draft MAI has revealed the following four fundamental principles of human rights as being under threat:

The primacy of human rights: The promotion and protection of human rights must be accepted as the fundamental framework for and goal of all multilateral and bilateral investment, trade, and financial agreements.

Such agreements cannot exclude or ignore human rights principles and objectives without losing their most fundamental claim to legitimacy.

Non-retrogression: All states have a duty to respect, protect, ensure and fulfil international human rights obligations and cannot derogate from or limit them except as expressly provided for in the relevant human rights treaties. "Rollback" and "standstill" requirements, as formulated in the MAI, are incompatible with the requirement that economic, social and cultural rights be realised progressively, as explicitly stated in the International Covenant on Economic, Social and Cultural Rights. Governments must demonstrate that they are taking concrete steps towards realisation of these rights. Moreover, there is a specific duty on state parties to not take retrogressive measures that would jeopardise economic, social and cultural rights.

The Right to an Effective Remedy in the Appropriate Forum: The right to an effective remedy for anyone whose rights have been violated cannot be contracted away by the state nor denied by the operations of intergovernmental institutions. Investment or trade bodies should not adjudicate concerns that fall firmly into the human rights domain, as disputes between corporations and state actors, but these should be dealt with by appropriate domestic, regional, and international human rights fora and enforcement mechanisms.

Rights of participation and recourse of affected individuals and groups: Human rights cannot be effectively realised unless the right of participation of the affected populations in planning, implementation and seeking redress for violations is respected. The participation of women in all these processes is particularly important.

The same concerns and framework would apply to the other principle structures and instruments of the international economic liberalisation process including the WTO, OECD, IMF, NAFTA, APEC and the EU.

Only recently has the UN human rights system begun to take note of the potential impacts of the MAI. Following a day of general discussion on globalisation and economic, social and cultural rights, the UN Committee on Economic, Social and Cultural Rights during its 18th session (May,1998), adopted a statement declaring that the realms of trade, finance and investment are in no way exempt from human rights obligations and principles, and that the international organisations with specific responsibilities in these areas should play a positive and constructive role in relation to human rights, and called in particular for a careful study of the potential impact of the draft MAI upon respect for economic, social and cultural rights.

Essentially we believe that the international human rights regime is an overarching set of obligations and objectives applying to all areas of governance. The international trade, investment and financial regimes do not have any moral or other legitimacy unless they are informed by and contribute to the realisation of these overarching objectives.

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The Sub-Commission has done pioneering work with the studies on the right to food, economic, social and cultural rights, the right to housing, impunity and economic, social and cultural rights and income distribution and human rights.

The working document on relationship between the enjoyment of human rights and the working methods and activities of transnational corporations represents an important focus within the broader area of concern. The Social Forum proposed by the Special Rapportuer on income distribution and human rights would constitute a valuable focal point for various sectors where open dialogue in these areas. Could regularly take place.

All of this work, nevertheless is under threat whilst treaties such as the MAI and the processes of global economic liberalisation continue without reference to or respect for human rights obligations and objectives.

It is therefore critical that the Sub-Commission once again plays a leadership role in forcefully asserting the primacy of human rights.

It is the contention of the International NGO Committee on Human Rights in Trade and Investment that the Sub-Commission is ideally placed to play the leading role by identifying the ways and means in which the primacy of the international human rights system can be integrated in the forums that debate and articulate multilateral and regional trade, investment and finance instruments. Such a study could also focus on the human rights impact of the MAI and consider ways and means to ensure that future negotiations on the MAI and analogous agreements or measures take place within a human rights framework.

We believe that the Sub-Commission is the UN human rights body best placed and with the requisite expertise to take on this task. Such an important undertaking can also demonstrate the relevance of the Sub-Commission to people and communities' worldwide and its unique value within the UN system. Such a holistic study of the many human rights dimensions of international trade, investment and finance would form a complementary initiative to the Sub-Commission's existing work and a natural continuity to the earlier path-breaking work of the Sub-Commission.

In a world increasingly dominated by corporate demands for the free movement of capital, goods and services and the power of an international economic regime that does not pay attention to the human rights of vulnerable individuals and communities, the international human rights regime, painstakingly built over the past 50 years, is at risk of sliding towards irrelevance.

It once again falls on the Sub-Commission to articulate the ways and means through which the world can come to terms with the primacy of human rights and focus again on the urgent need for the recognition and fulfilment of economic, social and cultural rights.

The developing global economy urgently needs to be informed and guided by the principles and the imperatives inherent in the international human rights regime. Such a task is critical to the revival of the overall leadership exercised by the UN in the eighties and for the consolidation of peace and justice across the world.

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The International NGO Committee on Human Rights in Trade and Investment

International and Regional Human Rights Organisations:
Habitat International Coalition (HIC), People's Decade for Human Rights Education (PDHRE), The Lutheran World Federation, Latin American and Caribbean Committee for the Defense of Women's Rights (CLADEM), Food First Information and Action Network (FIAN).

National Organisations:
Youth for Unity of Voluntary Action (YUVA), India Center for Equality in Rights and Accommodation (CERA), Canada Mazingira Institute, Kenya

The International NGO Committee on Human Rights in Trade and Investment can be contacted in Geneva at: Tel/Fax: 41-22- 738-8167 (Miloon Kothari) and Tel: 41-22- 7916111 or 7916364 (Peter Prove); New York at : Tel: 212-749-3156, Fax: 212-666-6325 (Shulamith Koenig, Tara Krause); Lima Peru at: Tel: 51-1-463 9237, Fax: 51-1-463-5898 (Susana Chiarotti)

For more information, please contact PDHRE:
The People's Movement for Human Rights Education, 526 West 111th Street, New York, NY 10025
tel: 212.749-3156; fax: 212.666-6325; e-mail: pdhre@igc.org