Saturday, June 28, 2008

U.S. Investment in Vietnam and Human Rights

The governments of the United States and the Socialist Republic of Vietnam will soon launch negotiations for a treaty to protect American investment and investors in Vietnam. The proposed treaty, called a BIT for Bilateral Investment Treaty, offers a natural opportunity to include human rights provisions, but so far there is no sign that the present U.S. administration plans to do so.

The 40 BITs that the United States already has with other countries do not have any human rights provisions. A new BIT with Vietnam could change that pattern, however, if Congressional advocates of international human rights get mobilized.

According to a report adopted unanimously by the UN Human Rights Council in June, the present BIT pattern creates an “imbalance” that weakens the host government’s obligations on human rights. The report, authored by Professor John Ruggie of Harvard, states:

“Investor protections [under BITs] have expanded with little regard to States’ duties to protect [human rights], skewing the balance between the two. Consequently, host States can find it difficult to strengthen domestic social and environmental standards, including those related to human rights, without fear of foreign investor challenge, which can take place under binding international arbitration.”

A joint U.S.-SRV statement on June 25 announced the decision to initiate the BIT negotiations. Separately, it also “noted the benefit of an open and candid dialogue on issues relating to human rights.” But it said nothing about the impact that U.S. investment in Vietnam – topping $12,000,000,000 in 2007 – has on the rights of Vietnamese workers and others.

The U.S. will use its standard “model agreement” as the starting point for negotiations with Vietnam. It defines “investment” so broadly that it includes patents, copyrights, trademarks, and other forms of intellectual property rights, and lays down strong enforcement mechanisms, including access to international arbitration for the investor.

Another “model BIT” has been developed by a Canada-based NGO, the International Institute for Sustainable Development (IISD). After extensive research, IIISD found that existing BITs are “one-sided instruments” that guarantee extensive protection of of the rights of foreign investors but without any corresponding investor responsibilies. The IISD model corrects that imbalance. (See “Linking Global Rights with Responsibilities": scroll down to the next-to-last item.)

Congressional concerns about this issue is reflected in the Trade Reform, Accountability, Development, and Employment Act, introduced on June 4. Among its provisions is that BIT protections of investor rights could no longer override a country’s efforts to protect the rights of its own workers.

It is probably too late to enact that bill into law, but it’s not too late to hold hearings on the proposed U.S. Bilateral Investment Treaty with Vietnam. Up till now, Congress has rubber-stamped BIT after BIT without drawing any public attention. It’s time to let the sunshine in.

Both Senators Obama and Clinton have pledged to review the labor provisions of trade agreements under a Democratic administration. They don't have to wait that long. They can insist that the Senate review the proposed BIT with Vietnam for its impact on the human rights of Vietnam's workers.

So one big question is: Will Congress rubberstamp the U.S.-Vietnam BIT without studying how it impacts the rights of Vietnam's working men and women? Another is: Will it rubberstamp that BIT without studying how facilitating more investments to Vietnam will facilitate the transfer of American jobs to the Socialist Republic of Vietnam?

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Tuesday, June 24, 2008

To Embed Human Rights in Multinationals

Australia’s Parliament has agreed to a policy fostering the integration of human rights into the operations of Australian multinational enterprises. The Parliamentary motion to that effect, adopted on June 23, had the support of the government and all political parties, major and minor.

The United States would benefit from a similar initiative. Australia’s decision grows out of factors that also resonate in the United States: an increased awareness 1) that some multinationals are engaged in behavior overseas thatis not tolerated at home, and 2) that present international rules don’t cope with the problem. (See “Where business and human rights intersect” by Andrew Hewett, executive director of Oxfam Austratlia.)

In Canberra the policy calls for “the development of measures to prevent the involvement or complicity of Australian companies in activities that may result in the abuse of human rights.” In Washington, legislation calling for the same thing probably could not be enacted this year, but a bill, and hearings on it, would serve as a helpful preparation for action by Congress and the new Administration next year.

Australia’s decision follows in time, and in spirit, a report on a “Framework for Business and Human Rights” adopted on June 18 by the UN Human Rights Council. That report, authored by Professor John Ruggie of Harvard, outlines a three-pronged plan to realize the State duty to protect human rights, the business responsibility to respect human rights, and the joint obligation to establish better access to remedies for human rights violations.

Under this plan, the most difficult challenge arises from what Ruggie calls “weak governance zones,” the areas where the government is unable or unwilling to exercise its authority and in which multinationals have expanded and prospered. The Ruggie report, recognizing the importance of filling this vacuum, puts all options on the table, including home State regulation of the multinational corporation’s foreign operations.

Traditionally, that option – “exercising extraterritorial jurisdiction” of business -- is a No-No. After extensive study by experts, Ruggie identified this consensus: international law does not require home States to regulate corporations abroad, but does not flatly prohibit it (i.e., permits it under certain circumstances), and there is an increasing tendency to encourage it.

As a stakeholder in the global economy, the government of Australia is beginning to take advantage of the latitude it has to exercise a duty it has at home and abroad. The United States, with a much larger stake, should do likewise.

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Sunday, June 22, 2008

Hooked on the Presidency

Looking over the field of men anxious to run for President at the beginning of 1976, James Reston wrote in his New York column: “Once hooked on the Presidency, it is an appetite more addictive than dope.” In “Who’s Hooked?” an op-ed piece that the Times did not print, I diagnosed the media as suffering from the very same addiction.

“Although it is true, as Reston says, that the appetite for the Presidency ‘consumes men as physical as George Wallace of Alabama and as intellectual and promising as Gene McCarthy of Minnesota,’” I wrote, “it also consumes news reporters and dominates their output.”

I marveled at the volumes written and spoken in speculation about election outcomes months before the ballots were printed. Laid end to end, those words “would reach far into outer space, and several times around Mars, where they would have about as much meaning as they have here,” I wrote.

I marveled, too, at the armies of reporters and photographers following Presidential aspirants everywhere. “Partial demobilization of this entourage need not put reporters on unemployment compensation rolls,” I wrote. “They could find productive employment writing about problems – gut problems – that concern people.”

Obviously, that 1976 critique of mine, which I found while cleaning out some old files, holds true for the media today. Why this obsession with the Presidency?

Well, it is, after all, the most powerful job in the United States and the world. Okay, but this is a democracy. The excessive focus on the President adds to that power, and it crowds out other voices.

Just listen to the claims that Presidential candidates make. “Just elect me, and I’ll solve ______[fill in the current problems].” Nonsense, of course. Thank God and the constitution, the President is not all-powerful. Yet through obsessive attention to the Presidency, the media pays little attention to the other power centers that share in national decision-making on matters small and large.

Take trade policy. It is one of the most important issues being debated by John McCain and Barrack Obama. Yet the media generally covers it only superficially, and sometimes sensationally.

Even the late Tim Russert, for all his knowledge of the political scene, was weak in bringing much enlightenment to a complex issue like trade. In fact, he was probably at his weakest in the March debate between Hillary Clinton and Barrack Obama.

He introduced a series of questions on NAFTA not by quoting what Clinton or Barrack had said, but what Al Gore had said back in 1993: “If you don’t like NAFTA and what’s done, we can get out of it in six months.” He then asked: “Will the U.S. President say we are out of NAFTA in six months.”

Russert reformulated the question twice for Clinton (once because he was not satisfied with Clinton’s qualified No) and then once for Obama, to which Obama replied: “I will make sure that we renegotiate, in the same way that Senator Clinton talked about, [using] the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced….”

(For details, check my March 6 posting “The ‘Opting Out” NAFTA Distraction,” based on the actual transcript.)

Although Russert got his point “buttoned” up to his satisfaction, the hurried exchange did more to confuse than to enlighten the public on NAFTA. That’s par for the course in the media when dealing with trade issues.

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Hooked on Free Trade Religion

Then there’s the print media’s addiction to the present system of “free trade.” The worst offender of all, in my view, is the New York Times. Liberalization of trade is a sacred component of its liberal faith, promulgated throughout the paper, not only on the editorial pages but in the business section and in the weekly Magazine. Dissenters seldom get any space, not even in the news pages.

Also, facts embarrassing to the policy line get buried or ignored. In a national poll conducted in mid-June, 56 percent of voters surveyed said that NAFTA needs to be renegotiated. Even 49 percent of Republicans agree, according to a June 18 release by an independent polling organization, Rasmussen Reports. The story appeared on Fox News, but not in the New York Times.

On June 8 the New York Times Magazine ran its latest defense of free trade, “This Global Show Must Go On” by Tyler Cowen, professor of economics at George Mason University. Among other things, Cowen criticizes a proposed “’timeout’ from globalization” when the actual proposal is for a timeout in trade negotiations (there already is a de facto timeout, and world trade is actually accelerating, as Cowen acknowledges).

Another economist, Dani Rodrik, has written an economic response to Cowen in an article, “Globalization anxiety as mass hysteria?” on his Weblog. Here’s his first sentence:

“Those who are puzzled by globalization anxiety and attribute it to collective irrationality (see Tyler Cowen’s piece in the NYT) overlook a fundamental aspect of markets – their ‘embeddedness’.”

Read the full text here. Enjoy.

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Wednesday, June 11, 2008

Who Cares About Bangladesh?

I’ve been neglecting my Blog because I am working on a long-delayed project: writing the last chapter of a book. But in my email I just got a press release about Bangladesh, which has a special place in my heart because long ago I researched the plight of women workers in the garment industry there. The email told me that in Bangladesh it’s still the same old story of human exploitation.

Every time I think that the campaign against sweatshops is succeeding, I learn about a story like this one. The government of Bangladesh, with the help of an American law firm, continues to crack down on the rights of workers. I’ve stopped keeping track of how many times the International Labor Organization seeks to shame Bangladesh for its repressive activities, without any success.

The workers in the country’s booming Export Processing Zones have recently taken the initiative to form a union through which they hoped to protect their rights. But the government has again intervened to crush the worker initiative.

This latest chapter in a story that goes back 20 years is told in the press release just issued by head of the International Textile Garment, and Leather Workers Federation, Neil Kearney.

In his testimony before the ILO Committee on the Application of Standards in Geneva on June 6, Kearney described the workers’ plight and said: “Garment workers in Bangladesh, mainly women, cannot be allowed to drop further into serfdom.”

Accordingly, the committee censured Bangladesh, as it has many times before. Once again, Bangladesh provides evidence that U.S. trade legislation needs to be strengthened to protect the rights of hundreds of thousands of women workers in Bangladesh, who are essentially part of our labor force.

Who cares?

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Thursday, June 05, 2008

Preparing Trade Policy Reforms

The United States will reform its trade policy no matter who occupies the Oval Office next year. That’s the prediction of Sherwood Brown (above, center), U.S. Senator from Ohio, long an advocate of fair trade.

Brown is leading a Congressional initiative to do the groundwork for that policy. On June 4 he introduced a bill to 1) review all existing trade agreements, 2) renegotiate those agreements based on that review, and 3) set the terms of new trade agreements.

The bill proposes policy requirements that broaden the protection of the public interest in trade and investment policy. For example, protecting the rights of foreign investors could no longer override a country’s efforts to protect the rights of its own workers.

Under current law and practice, President Bush has signed trade agreements on his own authority before sending them to Congress for approval under an expedited procedure that permits no amendment. Under Brown’s bill, the President could sign a trade agreement only after it gets the approval of both Houses of Congress.

The bill’s full title is the Trade Reform, Accountability, Development, and Employment Act of 2008, or TRADE Act for short. Although the bill is unlikely to be enacted this year, it should help develop an improved version for 2009.

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Wednesday, June 04, 2008

This UN Work Seems Back on Track

“We’ve had a train-wreck. Please get the train back on track.” That’s what a representative from a developing country told Professor John Ruggie of Harvard when he took over his job as Special Representative of the UN Secretary General for Business and Human Rights three years ago.

Now everything is back on track. At least it appeared to be on June 3 when Ruggie presented a report of his work to UN Human Rights Council in Geneva.

Back in 2005 two big stakeholders in globalization – the major international business organizations and leading human rights organizations – were sharply divided over what, if anything, the UN should do about ending human rights violations by multinational corporations. Now they seem to be on track together in supporting a proposal that Ruggie laid out in oral and written reports still under discussion by the Human Rights Council.

Ruggie has proposed an extension of his mandate in order to move “the discussion from the level of general principles to greater operational detail.”

I don’t yet have the Council decision, but in the meantime the full report and a massive amount of other material – much more than you’ll want to read – can be found on the Business and Human Rights website:

I have doggedly covered this human rights controversy from its very beginning. A certain amount of doggedliness was needed to pursue a story almost completely ignored by the media. “Global Norms Put Heat on Business,” published on January 6, 2004, was the first of my 12 reports on my Human Rights for Workers website. Then, before this brief articlet, I had four detailed ones on this weblog. (See the "categories" list at the right and check the "John Ruggie" label.)

Three of them turned out to be the first media analysis of the report that the Council is now discussing. You’ll find them listed last (under Robert Senser, Human Rights for Workers) in the chronologically arranged “responses, commentary & related articles” at

I have doggedly covered this human rights controversy from its very beginning. A certain amount of doggedliness was needed to pursue a continuing story almost completely ignored by the media. “Global Norms Put Heat on Business,” published on January 6, 2004, was the first of my 12 reports on my Human Rights for Workers website. Then, before this brief article, I had four detailed ones on this weblog.

Three of them turned out to be the first media analysis of the report that the Council is now discussing. You’ll find them listed last in the chronologically arranged “responses, commentary & related articles” at

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