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Regulating Transnational Corporations in Domestic and International Regimes

Regulating Transnational Corporations in Domestic and International Regimes: An African Case Study

Copyright Date: 2009
Pages: 384
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  • Book Info
    Regulating Transnational Corporations in Domestic and International Regimes
    Book Description:

    This study explores the range of strategies for regulating the social and environmental practices of TNCs in Africa's extractive industries.

    eISBN: 978-1-4426-9779-9
    Subjects: Law, Political Science

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
  5. Abbreviations
    (pp. xiii-2)
  6. Introduction and Overview
    (pp. 3-12)

    Transnational corporations (TNCs)¹ are hardly recent arrivals in Africa. Much of the trade of Africa’s colonizers was carried out through corporations from the colonizing metropoles. TNCs such as the United Africa Company, the Royal Niger Company, the Compagnie Francaise de l’Afrique Occidentale, and Lever Brothers, to mention a few, were actively involved in colonial Africa.²

    The strategy of TNCs in Africa is largely the same today as it was in colonial times. Their profitability is based on control over sources of raw materials, the availability of cheap and exploitable labour in the host country and enormous investment incentives (such as...

  7. 1 The Social Irresponsibility of Transnational Corporations in Africa’s Extractive Industries
    (pp. 13-30)

    As noted in the introduction, the question of whether TNCs’ operations are economically useful and beneficial to Africa remains a matter for heated debate. However, two things appear certain. The first is that African leaders view TNCs as useful partners in the quest for Africa’s economic development.¹ This is especially so given Africa’s poverty and acute lack of technological know-how. Secondly, TNCs have a capacity to affect the social equilibrium of the host countries negatively as well as positively.² TNCs, Michael Todaro reminds us, ‘engage in a range of activities, many of which have little to do with the development...

  8. 2 Regulation of Corporations: Competing Models
    (pp. 31-49)

    In this chapter I propose a theoretical perspective for examining the regulation of the conduct of TNCs. More specifically, I propose that the regulation of corporations ought not to be a uniaxial undertaking, and that no one model or mechanism of regulation is sufficient in and of itself for effective regulation of corporate conduct. I argue that a plural regulatory platform is to be preferred to any one model or mechanism of regulation. A plural platform is particularly attractive because government regulation of corporate conduct cannot be effectively enforced in isolation from social realities, the divergent and complex nature of...

  9. 3 Environmental Regulation in Nigeria and Ghana: Two Case Studies of Regulatory Failure in the African Extractive Sector
    (pp. 50-79)

    This chapter compares the regulatory structures and experiences of two similarly situated African countries, Nigeria and Ghana. Their economies cover the spectrum of extractive industries. Nigeria is an oil-producing nation; Ghana has a large mining sector. They have a common British colonial heritage and have both been engaged in post-colonial struggles for democracy. Their judicial and parliamentary institutions and structures are similar. They both comprise a complex mix of ethnic nationalities, although Nigeria more so than Ghana. And both operate a federal system in which the central government has exclusive ownership of, and control over, natural resources.¹

    Although these characteristics...

  10. 4 Complementary Regulatory Strategies: Self-Regulation and the Role of Civil Society Organizations in Nigeria and Ghana
    (pp. 80-106)

    The previous chapter analysed public regulation of the environmental practices of TNCs in Nigeria and Ghana, underscoring the failure of public regulation in both countries. Because of this failure of conventional regulatory strategies it is necessary to explore some of the complementary strategies that are beginning to emerge in Nigeria and Ghana. The aim of this chapter is thus to consider non-state regulatory strategies, including market-based self-regulation and the influence of civil society in the regulatory processes. But it begins with a general analysis of the substantive contents of codes of conduct in extractive industries. This is intended to serve...

  11. 5 Multilateral African Regulatory Mechanisms
    (pp. 107-114)

    As discussed in chapter 3, attempts by individual African countries such as Nigeria and Ghana to regulate extractive TNCs have proved ineffective. What then has been the response of continental bodies such as the African Union to the social irresponsibility of TNCs? The present chapter considers this question. In particular, it examines the regulatory impact of theAfrican Charter on Human and Peoples’ Rights

    The African Union (and indeed its predecessor, the Organization of African Unity) has done little in terms of regulating TNCs, and Africa today lacks a coordinated or common regulatory framework. To be sure, treaties, conventions, declarations,...

  12. 6 The Regulation of Transnational Corporations under International Law
    (pp. 115-151)

    This chapter examines various substantive attempts by multilateral and international organizations to regulate, or at least influence, the conduct of TNCs. As argued below, these attempts are seriously flawed both in concept and practice. Little wonder they have failed to rein in TNCs. In fact, as will be suggested in this chapter, international law is unlikely to effectively regulate TNCs in the future because of the glaring power imbalance in the international system. The chapter begins with a brief examination of a preliminary threshold issue: the status of TNCs in international law. This is intended to provide a backdrop for...

  13. 7 International Financial Institutions as Regulatory Mechanisms: The World Bank Group and the African Extractive Sector
    (pp. 152-180)

    As mentioned in chapter 2, global financial institutions constitute essential market institutions that may become influential in corporate regulation.¹ In recognition of this fact, the international community has long affirmed that ‘[f]inancial institutions and development agencies, be they international or domestic, must coordinate their activities in order to promote sustainable development.’² To this end, civil society (particularly in the North) has consistently exerted pressure on global financial institutions and governments to include social clauses in trade and investment agreements. The idea is that global trade and social development are neither mutually exclusive nor contradictory and, thus, both must be linked...

  14. 8 Extraterritorial Regulation of Transnational Corporations in Their Home Countries
    (pp. 181-209)

    State laws in the developed countries (home of TNCs) do not specifically prohibit TNCs from engaging in social deviance or rights infractions overseas except, of course, to the limited extent of prohibitions of corrupt practices in foreign lands.¹ Although, as discussed below, aspects of state laws in some of these countries are being ingeniously utilized by lawyers and rights activists in an attempt to impute to TNCs liability for rights violations abroad, governments of the developed countries seem to have taken the position that corporate self-regulation is to be preferred to public extraterritorial regulation. This is manifested in theVoluntary...

  15. 9 Towards Effective Regulation of Transnational Corporations
    (pp. 210-226)

    The discussion in previous chapters indicates that the regulation of extractive TNCs has been ineffective in terms of results, insufficient in terms of the mechanisms adopted by regulatory agencies, and deficient in terms of the expertise and capacity of regulators. It thus underscores the need for a reappraisal of existing frameworks for the regulation of TNCs both within individual African countries and at the international level. As suggested in chapter 3, part of that reappraisal must involve the enhancement of the capacity and effectiveness of regulatory agencies in Nigeria, Ghana, and other African countries. Serious thought must also be given...

  16. Notes
    (pp. 227-348)
  17. Bibliography
    (pp. 349-398)
  18. Index
    (pp. 399-405)