2009-05 - human rights, chinese business
DESCRIPTION
The central question that this masters thesis addresses is:To what extent will the commitment to and development of human rights under international human rights law impact China’s emerging transnational business, in particular the State Owned Enterprises?TRANSCRIPT
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iii
To my Mother
For teaching me:
Faith in Christ
Heart for the Needy
Understanding of Cultural Diversity
*
In memory of my Grandfather
A Businessman
in the Far East
iv
TABLE OF CONTENTS
Acknowledgement vi
Table of Acronyms & Abbreviations vii
Introduction 1
PART I THE PEOPLE'S REPUBLIC AND THE CONCEPT OF RIGHTS
CHAPTER 1 EAST MEETS WEST: CHINESE SOIL, COMMON GROUND
1.1 Confucianism: Captivating Chinese community 5
1.2 Communism: The Socialist utopia according to Mao 9
1.3 Capitalism: The Transformation according to Deng 11
1.4 Conclusion 13
CHAPTER 2 THE EAST DEFIES THE WEST
2.1 THE INTERNATIONAL HUMAN RIGHTS REGIME AND THE PEOPLE'S REPUBLIC- AN OVERVIEW 14
2.1.1 Pre-1989 14
2.1.2 Post-1989 16
2.2 PRC AND THE INTERNATIONAL BILL OF RIGHTS 17
2.2.1 THE UNC AND THE INTERNATIONAL BILL OF HUMAN RIGHTS 17
2.2.2 Other Core Human Rights Treaties 20
2.2.3 Additional international remedies 26
2.3 THE PRC AND THE HUMAN RIGHTS DISCOURSE 27
2.3.1 Civil-Political versus Economic, Social and Cultural rights 27
2.3.2 The Sovereignty of the People's Republic People's Republic 27
2.3.3 Universalism-cultural relativism 28
2.3.4 Zooming in, individual rights versus the collective 28
2.4 CONCLUSION 28
PART II CHINA’S STATE OWNED ENTERPRISES AND INTERNATIONAL HUMAN RIGHTS
LAW
CHAPTER 3 CHINA’S STATE OWNED ENTERPRISES AND THE HUMAN RIGHTS FRAMEWORK
3.1 FROM COMRADES TO CORPORATIONS: THE REFORM OF CHINA’S SOES 31
3.1.1 History of PRC’s economic expansion 32
3.1.2. The State governing the State Owned Enterprise 35
3.1.3 Zooming in on the nature of State Owned Enterprises 36
3.2 STATE OWNED ENTERPRISES: THE PEOPLE’S REPUBLIC AND THE DUTY TO PROTECT 38
3.2.1 The Attribution of conduct of an organ of the State 39
v
3.2.2 The Attribution of authorised conduct 40
3.2.3 The Attribution of conduct exceeding authority 41
3.2.4 The Attribution of conduct under State’s direction or control 42
3.2.5 Due diligence and the State’s responsibility to protect 43
3.2.6 CONCLUSION 45
3.3 State Responsibility under International Human Rights Law 45
3.3.1 The Tripartite Nature of Obligations 46
3.3.2 State ‘s Obligation to Protect 47
3.3.3 Due diligence in human rights regime 49
3.3.4 State’s Transnational Obligations 50
3.4 STATE RESPONSIBILITY: PEOPLE'S REPUBLIC’S PRINCIPLES AND PRACTICE 51
3.4.1 People's Republic and the ILC 51
3.4.2 People's Republic’s responsibility under Human Rights Law 56
3.5 CONCLUSION 57
CHAPTER 4 STATE OWNED ENTERPRISES AND THE DUTY TO RESPECT
4.1 A CORPORATE HUMAN RIGHTS FRAMEWORK? 59
4.1.1 Binding judicial corporate accountability instruments 61
4.1.2 non binding, Quasi-Judicial instruments 65
4.2 An SOE-specific human rights framework 68
4.2.1 THE EITI Principles 68
4.2.2 THE OECD GUIDELINES OF SOES 69
4.3 PRINCIPLES AND PRACTICE, COMPLIANCE OF CHINA 69
4.4 CHINA INC. IN AFRICA- A WIN-WIN SITUATION? 75
4.4.1 A general outline 75
4.4.2 China INC. in Conflict 76
4.5 CONCLUSION 77
CHAPTER 5 CONCLUSION AND RECOMMENDATIONS 79
TABLE OF CASES & LITERATURE 82
vi
Acknowledgement Summum Jus, summa injuria est
1
To describe at the end of a long journey of an academic study the impact of one’s influence or assistance, is
science in itself. Nevertheless, it is with great gratitude I would like to acknowledge the wonderful
cooperation with a diversity of people, each in themselves. This cooperation has resulted in this thesis,
Human Rights, Chinese Business, for the Master Netherlands Law, Theory of Law at the University of
Utrecht, which you find to be reading.
I am very thankful for inspiring professionals showing me the trodden path in the field of the protection of
social justice and the protection of human dignity. From a professional stance I would like to thank inspiring
at Aim for Human Rights, for an interesting internship lead by Marina d’Engelbronner, commenting on the
thesis, and Martha Meijer, director and the lender of her beautiful home, each zealous in their own expertise,
which has infused me and my colleague intern Alinda with a similar enthusiasm for the merge of business
and human rights. Hansje, Olga, Saskia thanks! At the Danish Institute of Human Rights, Mads Jensen. At
the University of Utrecht, the lending of ears and time to answer simple or less simple questions: Cedric
Reijngaardt, Tineke Lambooy, Ronald Janse, Tom Zwart, Harm Dotinga, and ofcourse the enthusiastic
response of the second reader, Professor Ton Hol. In China, Professor Tao Daniel C. Chow for his great
support, time and energetic spur for this subject.
At the SIM, human rights institute, for all those hours in a beautiful and silent yet inspiring atmosphere; a
special big thank you in this regard is extended to Hong Yanqing for his time during his fieldtrips helping me
out with matters concerning the PRC. And lastly, a very special thanks to my Supervisor Dr. Matthijs de
Blois of the University of Utrecht, Section Theory of Law, for his patience and flexibility, his corrections and
encouragements during the writing process: thank you!
I am deeply honoured to be found within a circle of friends, who have encouraged me during these months
of work each in their own way; Esther van W. [study-buddy!], Theo [saviour of crashed laptops], Anne, Lydia,
Esther M., Miranda, Irene, Dorine, and all to whom I am indebted and scandalously are leaving out, asking
me kindly on the progression, cooking dinner, drinking tea, keeping up good spirits: a big thank you all.
An absolute standing ovation for the primus inter pares, the one who has patiently served my interest in
lending me his ears, time, energy and the robbery of his office, without complaint sharing me with my
agenda. No one could find a truer friend for life, Willard R. Westra.
Finally, but not the least, a word of Praise to the One who has bestowed upon me the gift of curiosity and a
heart for the oppressed. Thanks be to our Heavenly Father, without whom any attempt of creating Justice is
incomplete.
Tabasum van Til
Utrecht University, Mei 2009
1 Latin phrase by Marcus Tullius Cicero on Justice in his De Officiis III.1 , meaning: ‘The rigor of the law is the height of oppression.’
vii
TABLE OF ACRONYMS & DEFINITIONS
ACHR AFRICAN CHARTER ON HUMAN AND PEOPLE’S RIGHTS
ATCA AMERICAN TORT CLAIMS ACT 1789 BLIHR BUSINESS LEADERS INITIATIVE ON HUMAN RIGHTS
BRIC FOUR-NATION GROUPING EXISTING OF BRAZIL, RUSSIA, INDIA AND CHINA. CAT CONVENTION AGAINST TORTURE AND OTHER CRUEL, INHUMAN OR DEGRADING
TREATMENT OR PUNISHMENT; COMMITTEE AGAINST TORTURE
CCP COMMUNIST PARTY OF CHINA
CEDAW CONVENTION ON THE ELIMINATION OF ALL FORMS OF DISCRIMINATION AGAINST WOMEN;COMMITTEE ON THE ELIMINATION OF DISCRIMINATION OF WOMEN
CERD COMMITTEE ON THE ELIMINATION OF RACIAL DISCRIMINATION
CNOOC CHINA NATIONAL OFFSHORE OIL CORPORATION
CNPC China National Petrol Company CSR CORPORATE SOCIAL RESPONSIBILITY
CRC CONVENTION ON THE RIGHT OF THE CHILD; COMMITTEE ON THE RIGHTS OF THE CHILD
DIHR DANISH INSTITUTE FOR HUMAN RIGHTS
ECHR EUROPEAN CONVENTION FOR THE PROTECTION OF HUMAN RIGHTS AND FUNDAMENTAL
FREEDOMS
FDI FOREIGN DIRECT INVESTMENT
FNC forum non conveniens FSIA Foreign Sovereign Immunity Act GRI GLOBAL REPORTING INITIATIVE
HRC HUMAN RIGHTS COMMITTEE
HRIC HUMAN RIGHTS IN CHINA [NGO] IACHR INTER-AMERICAN COURT ON HUMAN RIGHTS
ICCPR INTERNATIONAL COVENANT ON CIVIL AND POLITICAL RIGHTS
ICERD INTERNATIONAL CONVENTION ON THE ELIMINATION OF RACIAL DISCRIMINATION
ICESCR COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS
ICJ INTERNATIONAL COURT OF JUSTICE; INTERNATIONAL COMMISSION OF JURISTS
ICRMW INTERNATIONAL CONVENTION ON THE PROTECTION OF THE RIGHTS OF MIGRANT
WORKERS AND MEMBERS OF THEIR FAMILIES
ICRPD INTERNATIONAL CONVENTION ON THE RIGHTS OF PERSONS WITH DISABILITIES
ILC INTERNATIONAL LAW COMMISSION
ILO INTERNATIONAL LABOUR ORGANISATION
ILS INTERNATIONAL LABOUR STANDARDS
MNE MULTINATIONAL ENTERPRISE
MOFCOM MINISTRY OF COMMERCE OF THE PEOPLE’S REPUBLIC OF CHINA
NGO NON-GOVERNMENTAL ORGANISATION
OECD ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
OPSC OPTIONAL PROTOCOL TO THE CRC ON THE SALE OF CHILDREN, CHILD PROSTITUTION
AND CHILD PORNOGRAPHY
PRC PEOPLE'S REPUBLIC OF CHINA
SASAC STATE ASSET SUPERVISION AND ADMINISTRATION COMMISSION
SINOPEC CHINA PETROLEUM & CHEMICAL CORPORATION
SOE STATE OWNED ENTERPRISE
SRSG SPECIAL REPRESENTATIVE OF THE SECRETARY-GENERAL
TNC TRANSNATIONAL CORPORATION
UN UNITED NATIONS
UNC UNITED NATIONS CHARTER
UNCTAD UNITED NATIONS ON TRADE AND DEVELOPMENT
UNGC UNITED NATIONS GLOBAL COMPACT
UDHR UNIVERSAL DECLARATION OF HUMAN RIGHTS
VCLT VIENNA CONVENTION ON THE LAW OF THE TREATIES 1969WTO WORLD TRADE ORGANISATION
viii
DEFINITIONS
DANWEI WORK UNITFA LEGAL RULINGFAZHI RULE OF LAWFAJIA ZHUYI LEGALISMLUAN CHAOSLI MORAL CODE OF CONDUCTGUANXI NETWORKSGUANJI LITIGATIONGUO JIA STATE; ‘FAMILY STATE’ QUAN RIGHTSQUANLI POWER, RIGHTRENQUAN HUMAN RIGHTSRENZHI RULE OF MANRUJIA CONFUCIANISMTIANMING MANDATE OF HEAVEN RIGHTSXIANFA CONSTITUTIONZHI ORDER ZHONG LOYALTY ZHONGHUA FAXI CHINESE LEGAL TRADITION
HUMAN RIGHTS, CHINESE BUSINESS | 1
INTRODUCTION
The West is meeting the East again in the 21st Century. Globalisation through political, economical and legal
means is inevitable. The passed decade the People’s Republic of China [hereinafter China or PRC] has
arrived at a global economic leadership position. Not only does the PRC present itself as the Third World
representative, it might be America’s heir to the throne of Global hegemony within the coming decades.1
Chinese economy is growing that rapidly the world is holding its breath from time to time. How long can a
more than 10% growth per year since 1990 sustain?2 As the PRC expands and seeks development within
China, the need for extractives and other resources has followed its pace. The African continent has proven
to be a more than willing partner in negotiations and creating thus a new win-win situation: China has
promised aid, trade and Foreign Direct Investments [FDI], such as the building of infrastructure, universities,
and its economic and technologic know-how in exchange for Africa’s extractives such as copper, coal, oil,
diamond and other commodities.3 China’s cultural heritage, for instance the value of the collective, seems to
fit like an African glove. The PRC is offering African states the development it has been hoping for so long
without the Western strings attached, such as human rights compliance or environmental regulations. Its
practices and principles differ from the established practices in the Western hemisphere, however.
Many eyebrows were raised at the approach of the PRC on the African continent. Others welcomed the wind
of change. Since the 1989 Tiananmen debacle China’s commitment to universal human rights agreements
among which the UDHR has been meticulously followed and criticised. The domestic lack of enforcement
and compliance with human rights has not stopped since the emerge of Chinese entrepreneurship in Africa.
Moreover, together with the development of accountability of non state actors such as multinational
enterprises, China’s violations have been apparent the critics state.4
The ILO, the UN, the OECD are in the progress of framing several guidelines and binding regulations for
compliance of corporations to human rights.5 The UN Human Rights Council has awarded John G. Ruggie
the position of UN Special Representative of business and human rights. The strategic framework of
Ruggie’s mandate exists of the state duty to protect against human rights abuses by business, the corporate
responsibility to respect human rights and the need for better access by victims of effective remedies.6
1 Many authors have written on the Chinese potential of military, political and economic hegemony. See e.a. Alonso Trabanco, J.M.,
‘The Great Dragon Awakens: China Challenges American Hegemony’, Global Research, January 2009. Available at: www.globalresearch.ca/PrintArticle.php?articleId=11638 [lastly visited 30 May 2009].
2 The World Bank has published several reports on China’s economic development. Between 1990 and 2008 the growth rate has been unusually high. It has declined only recently in 2008. See the ‘Midterm Evaluation of China’s 11th Five Year Plan’, Executive Summary, World Bank Office Beijing, 2008, p. 1. Available at http://www.worldbank.org [visited lastly 30 May 2009]. Noted should be that the BRIC-countries [Brazil, Russia, India and China] account for 40% of the global Gross Domestic Product.
3 Guerrero, D-G and Manji, F. [Eds.], ‘China’s New Role in Africa and the South, A search for a new perspective’, Fahamu Books, Oxford, 2008, pp. 1-7. Available at: http://www.tni.org/detail_pub.phtml?know_id=218&menu=11a [lastly visited 30 may 2009].
4 Many NGOs, such as Human Rights Watch, Amnesty International, have intermittendly provided for extensive material on China’s human rights compliance for example in the light of Sudan’s weapons-for-oil-policy. See the Chapters 2 and 4 on these issues.
5 The ILO Tripartite Regulations, the OECD Guidelines for Enterprises, the UN Global Compact and the UN Draft Norms for Transnational Corporations are some initiatives which enhance the codes of conduct of corporations in line with international human rights norms. See Chapter 4 on the particular features of these and many more instruments.
6 UN HRC Doc. A/HRC/4/35, 19 February 2007. This mandate of the Special Representative of the Secretary-General as set out in resolution 2005/69 of the Commission on Human Rights, reads: “to identify and clarify standards of corporate responsibility and accountability … with regard to human rights”; “to elaborate on the role of States in effectively regulating and adjudicating” business activities; “to research and clarify the implications … of concepts such as ‘complicity’”; and identify some prevailing if not “best” practices by States and companies. All reports as provided for by SRSG Ruggie can be found on www.businessandhumanrights.org.
HUMAN RIGHTS, CHINESE BUSINESS | 2
How does China fit in the existing framework of businesses’ conduct of corporate social responsibility, next
to the guidelines as created through the international human rights standards or non binding codes of
conduct? Looking at different elements of these obligations and recommendations one distinguishes several
actors; the State of China, foreign companies in China, and Chinese transnational public and private
companies. Looking at the latter non-state actor, Chinese companies abroad can be divided into private
medium sized and smaller companies and large multinationals, which are mostly State Owned Enterprises
[SOEs]. 7 This public-private dichotomy of these particular enterprises produces many confusing
occurrences. Since the State and the Business sector yield to international obligations, we need to
understand to what extent both State and corporation can be addressed in the field of international human
rights violations concerning SOEs. Therefore the central question this thesis will address is:
To what extent will the commitment to and development of human rights under international human
rights law impact China’s emerging transnational business, in particular the State Owned
Enterprises?
Since the values in China differ greatly from the Western post-enlightenment legacy, it is of great importance
to understand the reflection of these values in social, political as well as legal and economic fields. The West
needs to acknowledge its non negotiable impact through its economic and political hegemony on the
dialogue with ‘newcomers’ on the stage. In our Western world the notion of human rights as a means to
preserve human dignity has reached an almost absolute height at its codification through instruments such
as the United Nations Charter and the International Bill of rights.8 In different parts of the world the embrace
of the human rights protection has been reflected into development of codification of these human rights in
various conventions and subsequent human rights courts. However, an Asian equivalent is yet to be
awaited, since other views are enhanced. One might wonder if it is justified to claim the universality of rights
as portrayed in the UDHR and ask for international compliance. There are many roads to Rome, there are
many roads to protect rights of human beings next to human rights protection other than the liberal
democratic practice, some argue. Is the West pretentious in its claim of universality of rights?
Part I will therefore describe the evolution of Chinese views on the concept of rights and China’s standpoint
towards the human rights regime and its moral stance in international legal practice in relation to the
Western liberal and universal stance on rights. Confucianism, Marxism and the Socialist interpretation of
Capitalism bear great influence on China as the West urges China’s compliance with the human rights
regime. In the first Chapter after a short introduction of the evolution of human rights as is constituted
through the international Bill of Rights, Chinese evolution of rights discourse will be described in order to
answer the differences between the acceptance of the universality of human rights in the West and its
counterparts. The second Chapter will examine to what extent China has accepted the human rights
standards and what its own view is of the presented contemporary human rights regime.
7 See in this respect Chapter 3 on the nature and origin of State Owned Enterprises in the People’s Republic. 8 Human rights as were codified in the United Nations Charter [1945]. The International Bill of Rights consists of the Universal
Declaration of Human Rights [1948], the 1966 International Covenant on Civil and Political Rights [ICCPR] and the [ICESRC], together with the accompanying 1977 Protocols.
HUMAN RIGHTS, CHINESE BUSINESS | 3
Part II will continue to describe the concrete obligations following from the international human rights law
with regard to home state China and her emerging business globally. Multinationals both State Owned
Enterprises [SOEs] as well as medium to small private corporations expand rapidly. The third chapter will
describe the state responsibility to protect from human rights violations by SOEs. The fourth chapter will
describe the possible avenues to create a ‘corporate human rights framework’ for enterprises in general and
SOEs in particular. The chapter finishes with a glimpse of difficult cases of Chinese enterprises in the
extractive sector on the African continent.
This thesis will end with a concluding Chapter on the central question, aiming at the increase of
understanding both parties, the East and the West, their stance in the field of human rights and the role
corporate obligations, especially extending to State Owned Enterprises.
HUMAN RIGHTS, CHINESE BUSINESS | 4
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HUMAN RIGHTS, CHINESE BUSINESS | 5
CHAPTER 1 THE EAST MEETS THE WEST
Chinese soil, common ground
‘Beauty is in the eye of the beholder’, is a saying. One’s perspective of a matter is of great importance to
one’s comprehension. This is the fact with the Asian events over the past decades. With the American
Declaration of Independence of 1776, the first ever codified inalienable rights to life, liberty, and the pursuit
of happiness as the Western legacy and backbone of today’s human rights regime, the West finds itself
based on the liberal democratic rule of law. Western liberal societies have in a common statement declared
the universality of human rights, such as the Universal Declaration of Human Rights. The international
community commemorates its 60th anniversary recently. This perception however is not a global reality.
Several battles have been fought between Universalists and relativists, who emphasise the relevance of the
contextual interpretation of rights. Peerenboom describes what elements frame this concept of rule of law in
today’s world: the legal system based on the rule of law incorporates free market capitalism with some level
of government intervention, multiparty democracy and a liberal, universal interpretation of human rights that
gives priority to civil and political rights over economic and social rights.9 The West uses these elements as
a yardstick to measure the development of other countries.10 This can be for the good, since history has
shown Western expertise can increase certain standards. The question remains however whether one shoe
will fit all. Discourse shows that in using the rule of law, is implied the liberal democratic rule of law. In the
following paragraphs historical and philosophical developments will clarify the meaning of legal development
and a possibility of non-liberal forms of rule of law as a non-democratic seedbed for the development of
human rights.
1.1 CONFUCIANISM: CAPTIVATING CHINESE COMMUNITY
Two competing legal schools have shaped the traditional Chinese legal discourse since the earliest
dynasties. Confucianism [Rujia] and Legalism [Fajia Zhuyi] were formed during the Eastern Zhou era from
771 till 256 B.C. This dynasty lived through the decline of the former slavery society and the upcoming
divided kingdoms. Confucianism left its mark through different dynasties up until the last Qing Dynasty which
came to an end in 1911.11 In writing the Lunyu, the Analects, Confucius [Kongzi, 551- 479 B.C.] left his
testament on which Chinese legal thought would build its foundations. Aiming at the transfiguring of one’s
moral, several codes of conduct were laid down [li]. Education of right and wrong would feed the conscience
and direct the conduct. In this shame based society no need would be for legal regulations, since the
people would govern themselves. The Legalistic school however emphasised the abiding of the law by
means of legal ruling [fa] sanctioned with severe punishment since social order needed protection.
Implemented during the feudal unification, the Qin dynasty [221-206 BC] which started the imperial era,
9 Peerenboom, R., ‘Let one hundred flowers bloom, One hundred schools contend: Debating Rule of Law in China’, Michigan Journal of International Law, Volume 23, 2002. Research Paper 02-14. Table 1: ‘A comparison of the four Ideal Rule of Law Types Plus Rule by Law’, p. 61.
10 In using the terminology East and West, the danger of generalisation and polarising is at hand. For the sake of discussion on contemporary human rights, this division will be used clarifying the difficulties in understanding parties’ position.
11 It is not the aim of this chapter to explain in full detail the merits of every dynasty in three millennia of Chinese history, however elucidating this may be. The Chinese Traditional law can be divided into the first phase from its beginning in 21st century BC until the 7th century BC. The second stage is where Confucius enters the stage: 7th century BC until the 20th century AD. In the first stage Chinese societies were built on slavery and nobility. This is reflected in the strictly dividing legislation, either governing the conduct of slaves [li], or rules of propriety of nobility [xing]. See for full detail, WANG, Ch. And Zhang X. [ed.], ‘Introduction to Chinese Law’, The China Law Series, Sweet & Maxwell Asia, Hong Kong, 1997, Introduction; Chow, Daniel CK., ‘The legal system of the People’s Republic of China, Introduction to Chinese Law’, Nutshell Series Thomson West Group, St. Paul, 2003, Chapter 2.
HUMAN RIGHTS, CHINESE BUSINESS | 6
people suffered severely from the Legalistic impact of criminal legislation.12 Confucianists encouraged the
abiding of li over fa, Legalists preferred the deterrent fa over li. The moral code would be acknowledged
being of greater importance than strict positive ruling.
Being codified in legal codes, Confucianism turned to the State ideology in the Han Dynasty [206 BC-220
A.D.] which lasted until the last dynasty of the empire. Focussing on the ideal person, Confucianism covered
codes of conduct for inner transformation of the individual, his family and society at large. Society needed to
be moulded in order to preserve order [zhi]. In order to form a harmonious order, a top down hierarchy
regulated interaction. Governmental ruling aimed at regulating this order to preserve harmony. This
monopoly was based on the ‘Mandate of Heaven’ [tianming] with all according powers [quan]. 13 The
autocratic ruler representing the divine/godly right to rule would risk his prerogative in case he acted
inhumanely towards his subjects.14 The loyalty [zhong] to the ruler topped the loyalty between parent and
child. Relationships were society’s backbone.15 Family community were the primal base. Order was a bare
necessity to prevent chaos [luan] within the harmonious society.16
It is within this unity and harmony of society’s collective interest the individual interests are embedded.
Moreover, one’s place in the system was determined to prolong this harmony: the common good was the
individual’s interest. The state [guo jia, ‘family state’] was to be supported by all individuals in achieving its
goal.17 In a culture thriving on harmony and loyalty, the performance of duties prevailed the enjoyment of
people’s rights [or benefits]. The social cohesion of the Chinese people was thicker than we have seen in
the Western evolution of society which resulted in a protection from the state and enhancing of one’s
position and therefore a range of entities. China’s evolution was quite the opposite; the state needed to be
protected from the egocentric and thus disturbing interest of the individual, this could only be accomplished
of course by means of li accompanied by fa.18
CONFUCIAN LEGAL CONCEPTS
The first significant philosopher of legal theory Confucius created the parameters of concepts of the state,
law and order, sovereignty, rights, individuals. Traditional Chinese law is deeply intertwined with Confucian
conceptual thinking; the most outstanding Han, Tong and Qing code bear witness.19 There are certain
elements which according to Daniel Chow and Wang Chenguang [et al.] can be considered inherent to the
Chinese Legal tradition [zhonghua faxi]20:
12 Confucianism was forbidden and only reengaged in the Han Dynasty. The explanation of the use of penalties in China is of importance
to understand its acceptance. Especially the criminal codes have seen many compilations in the Tang Code or the Great Qing Code in 1740. The emphasis on criminal legislation has had a long-lasting impact until the 21st century. The present relevance of the use of force lays in the many human rights complaints towards China cover the excessive use of torture.
13 KENT, Ann E., ‘Between Freedom and Subsistence: China and human rights’, Oxford University Press, Hong Kong, 1993, p. 32. Quan meant power, quanli right.
14 This rule resembles the contract between people and King John as was constituted in the 1215 Magna Charta. 15 Also known as ‘zhongshi yiwu,’, CLARKE, Donald C., Corporate Governance in China: An overview, China Economic Review,
Working Paper Series, 2003, p.13. 16 Kent [1993], p. 31. 17 Chow [2003], p. 43. 18 SITARAMAN, S., ‘Explaining China’s continues Resistance towards International Human Rights Norms: a Historical legal analysis’,
University of Illinois, ACDIS International Security Policy Brief Series, Champaign, 2008, p. 3. 19 The Han Code was formed during the Han dynasty in the century and created less punitive regulations than the former Legalistic
rulers. This transition formed the Tong Code, a.k.a. Tang Code [ 7th century] and the Qing Code [last dynasty.] 20 Chow [2003], p. 45-56; Wang [1997], p. 5, 26-28.
HUMAN RIGHTS, CHINESE BUSINESS | 7
The imperial feudal unity aimed at consolidating Confucian order and social harmony based on the
hierarchal differences. This process lasted for centuries and can be seen as a distinct feature of Chinese
governing.21 The Western notion of equality before the law as a remnant of the Enlightment was hence not
developed. The acknowledgement of the sheer inequality of all people within the social order was headed by
the ruler as the divine representation. This Confucian ‘legalised inequality’ would be used as a guiding
governing principle.22 It is this deep-rooted element of Chinese tradition which would recur in different stages
in Chinese history.
The acceptance of the position of the individual within the community and the surrender of his interests to
the common good is to be subscribed to the place in the order. Next to a direct consequence of the
totalitarian system with which the Chinese unity was ruled, the Mandate of Heaven given to the ruler as Son
of Heaven established the rule of man [renzhi].23 The social status and its inherent position determined one’s
impact on the autocratic legal system. Foreign powers could not get hold of the imperial status and could not
set foot in China.24
In the Western rich legacy of legal checks and balances, the doctrine of the Trias Politica has rooted deeply
in every aspect of the judicial, executive and legislative branch of governing.25 This separation of powers,
developed in the aftermath of historic events, protected individuals against excessive use of power from the
state represented by an absolute ruler. This doctrine has not found its counterpart in Chinese legal history.
Absolutism thrived well in the feudal system as portrayed. The rule of law [fazhi] was surpassed by the legal
rulings empowered by the emperor.26 His will became legislative, judiciary and executive power all in one
and needed thus abiding as such. Renzhi outweighed fazhi in this centralised system as the emperor stood
above the law or embodied law. As a consequence of the position of law, legal expertise, development and
schooling have not been the focus of Chinese governing professionals. Governing officials could perform
judicial tasks for example. In the Western positivist mind the prevalence of fixed regulations and subsequent
protection through checks and balances over moral and social customs hinders the full understanding of the
Chinese legal development. Chinese Legalists attempt to establish a legal structure per se might however
have been premature since Confucianism was fully implemented and passed on till the last century.
The creation of duties instead of rights for the individual benefited the community as a whole. The idea of
individualism and human rights [renquan] were not sacred or protected by decree or ruler.27 Personal
interests were on the contrary acknowledged. These were not seen as an obligation directed to the ruling
powers but as benefits or sheer consequence following the practice of performing duties. An individual could
not survive on its own and was an element of the chain of family relations. Harmonious relationship topped
rights therefore. State’s interests were intended to be protected through legislation. Personal interests only
hampered collective performing of duties.
21 Sitaramaran [2008], p. 5. 22 Ibidem. 23 Wang [1997], par. 1.20. 24 Wang [1997], par. 1.04. 25 Based on Charles Montesqieu’s thoughts on the separation of powers, the Trias Politica. 26 Sitaraman [2008], p. 6. 27 Angle, Stephen C., ‘Human Rights and Chinese Thought: a cross-cultural inquiry’, Cambridge University Press, 2002, para.1.1, p. 3.
HUMAN RIGHTS, CHINESE BUSINESS | 8
In a culture based on social customs, Confucian moral [li] found a larger base than law [fa]. To be precise,
no clear distinction was made between law and morality. Moral rules dominated the course of interaction.
When decisions would be based on either legal statutes or traditional doctrines, the latter would prevail. Law
was meant to regulate social conduct as well as inner transformation [Confucianism]. However, this
codification of social and moral customs, Confucianisation of Law, would last throughout the imperial reign
and would form a clear backbone of the totalitarian system.28
Law was seen not seen as an end in itself but as a tool to maintain order. Most regulations in the traditional
legislation were for criminal purposes.29 Since trespassing of criminal law resulted in gruesome penalties,
criminal law without the protection against abuse by means of notions of fair trial the legal system was not a
solace. Corruption increased and occurred on a large scale. Law was therefore not regarded as a means to
freedom or justice, but an asset to increased mischief. Civil law was hardly developed.30 Free market system
or protection of private goods was never established. Since the feudal system thrived on agriculture, the
existing hierarchal order remained solid.
ATTEMPTS TO LEGAL REFORMATION
The described cultural roots have clearly obstructed reformation of Chinese legal thought from the 19th
century until 1949. Only through stirring events China could make way for entire new, international, elements
combined with its own traditional legal merits.
The 1839-1842 Opium Wars with England forcefully opened China through encounters with foreign powers.
The decline of the imperial power meant the end of the empire itself. Next to corruption of politicians, the
numerous military defeats31 and the subsequent agreements such as the Treaty of Nanjing32 the principle of
extraterritoriality weakened the position of the Chinese legislation, since foreign nationals abiding by their
own home state regulations were protected from Chinese law. Providing no framework for commercial
activities or means of civil arbitration, the well equipped foreign companies made profit of Chinese legal
weakness.
The disastrous impact on the relation with the Chinese government, formed through a range of agreements
favouring foreign economic investors on Chinese territory, lasted from 1842 till 1949. This episode explains
Chinese hostile attitude towards bilateral or international intervention, be it political, trade or international
relations related.33
28 Sitaraman [2008], p. 6. 29 As the Tang Code described, supra n 13. 30 This development in contrast to the rich Western legal legacy based on Roman private and corporate law which has resulted in a vast
and thorough framework of legal regulations. Scholars differ on this matter: to some the Qing dynasty has had a clear civil regulation; others claim the legislation was mainly criminal of character.
31 The Opium Wars have not been the only foreign attempt to force China to alter its regulations in favour of foreign investments; another example is the Sino-Japanese War of 1894-95.
32 The Treaty of Nanjing was signed in 1842 as an unequal treaty after the first Opium War [1839-1842] in order to provide for a better trade condition for the West. Other examples are the Treaty of Tianjin 1858 and the Boxer Protocol 1901.
33 The Preamble to the People's Republic’s 1982 Constitution bears witness, claiming: ‘China turned into a semi -colonial country ...’
HUMAN RIGHTS, CHINESE BUSINESS | 9
The end of imperial ruling in 1912 by constitution of the Republic of China became a significant attempt to
reform governmental proceedings according to the Western standards.34 Accompanied by the American aid
to prevent China to fall into Communism, the Nationalists were equipped to rule China by all means
necessary. The long-lasting effect however of the extraterritorial abuse of China, resulted in lack of
cooperation of the government.35 A parliamentary system within the unitary republic failed since competing
powers striving for absolute ‘imperial’ control, tried to protect China from foreign influences. Although
Japanese legalists and other professionals attributed by means of an installed Law Commission to various
legal alterations, in particular the criminal law, the legal framework lacked significant structure.36 The
attempts of the Nationalist Government to implement copied Western laws next to the traditional legal
structure needed more than a sole political will; changing the institutions and its inherent policy could not
modify the underpinning traditional legal thought. The aim of the new Republic to reform legislation resulted
in new Criminal Codes and Constitutional reforms, next to the orthodox Confucian codifications.
Any type of transformation would need to come to terms with its legal legacy in order to adjust the inner legal
structure in such a way that both modern and traditional discourse would be done justice. Next to this, the
political turmoil due to lack of unity, power struggles between Republicans and the Nationalists who took
reign in 1928, the merge of the Chinese Communist Party [CCP] and the second World War erased any
trace of serious legal reformation.37 This era proved to be the best option to install basic features of liberal
democracy. Yet, to the West’s dismay, it did not last long.
1.2 COMMUNISM: THE SOCIALIST UTOPIA ACCORDING TO MAO
With the founding of the People’s Republic of China [PRC] in 1949 all legal progress was reduced to the
mere intention of transforming traditional legal standards.38 The socialist interpretation of legal reformation
by Mao Tse Dong was in many ways far from similar to the Republic’s. Economic, political, legal and social
structures were completely modified into the socialist ideology.
This Socialist Revolution replacing the New Democratic Revolution, aimed at the bringing down of the
traditional elite, and the sustaining of the workers in the rural sectors. This resulted in random mass-
executions against any party regarded as elite. Political policies by the 1921 founded CCP determined the
course of justice. The political and cultural adjustments Mao established through the Anti Rightist Campaign,
aimed for smothering the critiques of the opposition. The Cultural Revolution starting as the final stage of
reform in 1966 till Mao’s death in 1976 caused large deprivation of the people; no progression was to be
found in economic, cultural nor legal perspective. This revolution aimed by means of terror to adjust people
to Mao’s hard lined socialist idea of class struggle. The legal order still existing, demonstrated pro forma
34 The revolution of 1911 preluded the abdication of Emperor Qing. Dr. Sun Yat Sen subsequently headed the republican government.
This phase of Modern China lasted to some from 1912- 1978. 35 See on the principle of extraterritoriality, Sitaraman [2008], p. 9. 36 Chow [2003], 53-66. 37 In 1928 the Kwomintang [Nationalists] came into power and reformation initially changed the People's Republic’s course. 38 The Instruction on Abolition of the Nationalist Six Codes abolished all nationalist legislation enacted the establishment of a new
socialist structure.
HUMAN RIGHTS, CHINESE BUSINESS | 10
trials. The prior upcoming legal reform until 1956 was unfortunately freezed during the Anti-Rightist
Movement.39
Mao’s set of economic reforms, the Great Leap Forward [GLP], tried to catapult the PRC into the 20th
century. China was left with a stunning result: a landslide famine killing 30 million people. From 1958 on
China showed its potential since nationwide response to the economic reforms resulted in the devotion of
the entire population through hard work to unprecedented production records, a mentality that has lasted till
this day.
COMMUNIST LEGAL CONCEPTS
Although based on different ideologies the similarities between Confucian and socialist dealing with the
internal structure of Chinese society were striking, according to Sitaraman [2008].40 The feudal totalitarian
state in imperial China thrived on absolute and centralised power. The CCP headed by Mao disliked
bureaucracy, but gradually turned the governing of the people into the hands of one Party, by all means
necessary.
Law was a reflection and a tool of the socialist moral codes, which by means of educating the masses would
become the natural way of conduct. The restrictiveness of positivist, bureaucratic legalism was seen as
undesirable to achieve the socialist goals: the imperial favour of li instead of fa became apparent since again
law was regarded as less significant than morality. Even the indivisibility of law and morality equated the
Confucian legal thought; the criminal ends of law by means of severe punishment [fa] again on grounds of
social status, revived old legal practice. Yet, the social order was bottom up; the rural workers formed the
top of the pyramid. The necessity of a solid legal infrastructure in the new PRC was not acknowledged by
the CCP. No legal expertise was regarded an asset in the newly formed socialist state. Although new laws
were formed, law as such was regarded mere a vessel to carry the CCP’s policies and reinstall a centralised
top-down Party-led unification of China.41
The status of constitutions in the Western legal practice has been to show the parameters and the
foundation on which rule of law is being built. The PRC had formed constitutions, but these laws soon
proved to be meaningless. Although the 1954 Constitution [xianfa] at first served as a legal steppingstone for
the socialist reformation of China by the CCP, the provisions proved obsolete already in 1957. 42 Though
legal institutions were being formed to accompany socialist ideology, they soon were disregarded. Party
policy overruled any legal attempt to frame the new course of the nation. The 1975 Constitution exceeded
this dysfunction by far; the PRC had suffered tremendously form its corrupted leaders, the impact of the
Cultural Revolution and had backslidden to a state of anarchy.43 The CPC became the sole organ in power
and was rendered all authority. Anything that could hinder its path of destruction was cut back by means of
39 Wang [1997], p. 10-11. 40 Sitaraman [2008], p. 11-16. 41 See for more on the CCP, China’s White Paper ‘China’s Political Party System’, issued by the State Council at November 15, 2007.
Available at: http://www.china.org.cn/english/features/book/231979.htm 42 The National People’s Congress, the highest state organ, enacted the Constitutions of 1954, 1975, 1978 and 1982. 43 Even from within the Party the need for a drastic change in China’s course was felt.
HUMAN RIGHTS, CHINESE BUSINESS | 11
abolishing provisions. The legal mismanagement and disdain had reached no deeper level. Law was seen
as an unwanted tool of the elite which could not be of any use in the class struggle. The Party was the law.44
The totalitarian system based on the socialist ideology of Mao left no room for anything else than the rule of
man [renzhi]. Had China seen the Mandate of Heaven incarnated in the absolute ruling of the emperor, the
PRC soon was ruled by the people, by means of the CCP which embodied the State.45 Mass propaganda
would educate the people and social control would bind the people as one [li].46 Since the lack of regard for
the meaning of legal structure had undermined any serious attempt to transform the PRC, rule of law [fazhi]
was replaced by lawlessness. The Party’s Policy and the arbitrariness of Party’s officials would suffice to
bring justice. The legal framework which had just begun to emerge was crushed on the base of class
struggle: the institutions represented the former elite. The bureaucratic and elitarian equal justice which had
emerged from the existing legal framework needed replacement; the socialist notion of ‘equal distribution, for
all people are equal’ regarded the rural masses. Mao did not recognize rights for the people as such; the
collective interests of the socialist revolution overruled any private privilege. Performing duties in order to
sustain the People’s, and therefore their own, Republic was a matter of all. Rights as such did not exist,
since a legal system had not been established. The emphasis of the collective duties clearly was influenced
by the Confucian thought.47
It needs no explanation the PRC’s constitution left no room for any form of separation of powers. The Party
eventually became the incarnated law; all executives, legislators or judges were member of the CCP and
had needed no legal foundations to legitimise decisions. Law was no longer even a means to an end. It
simply ceased to exist. This brought the Confucian interpretation of law as an instrument to a stunningly
deep level which has never found its equal in Chinese history.
The accommodation of the Chinese people to these ideals is strikingly evident taking in account the impact
of traditional notions until the last dynasty, ending in 1911. One might to a certain extent say that the
socialist ideological strategy was old wine in new bags regarding the abovementioned similarities.
Considering the institutionalisation of human rights instruments and governing organisations these elements
should be taken into account. The CCP’s anti-legalistic policy, its absolute reign and the Chinese historical
legacy of foreign agreements could not easily be combined. In the next chapter the impact of the PRC’s
international policy on the admittance of certain organisations and treaties will be examined. The PRC’s
deficits came to a staggering halt by the end of the 70ties when China’s leaders took hold of their future and
changed course.
1.3 CAPITALISM: THE TRANSFORMATION ACCORDING TO DENG
The aftermath of Mao’s death in 1976, ending the Cultural Revolution, showed the disastrous result of the
PRC’s legal and economic detriment. With the instalment of Deng Xiaoping as the new leader, finally the
44 Xi, Chao, ‘Transforming Chinese Enterprises: ideology, efficiency and instrumentalism in the process of reform’, in: Gillespie, J. and
Nicholson, Pip, Asian Socialism & Legal Change, the Dynamics of the Vietnamese and Chinese reform, Canberra, Asia Pacific Press ANU Press, 2005, p. 97.
45 Ibidem, p. 92. 46 Chow [2003], p. 44. 47 Sitaraman [2008], p. 14
HUMAN RIGHTS, CHINESE BUSINESS | 12
PRC would enter a new era in economic and legal perspective. As Deng was supported by the Party elders,
the PRC could steer its course away from the class struggle and socialisation China. The devastating results
and the moral, ideological and economic deficits could have cost no greater toll. Economic and legal reform
was desperately needed to go hand in hand. The need to step out of China’s isolation in search for new
economic constructive means asked for a total remake of the legal structure. The 1978 Constitution
cautiously attempted to restore the damage caused by the legal deficit of the 1975 Constitution.48
The Democracy Wall Movement revived legal discourse in China until 1982.49 The 1979 Human Rights
League50 urged the government to install both civil political as well as social economic rights. Although the
intellectuals could openly attribute to the political prospects, it was premature to expect a political reform; the
reforms would not cease the political ideology. The 1982 Constitution installed the basic legal framework of
the People’s Republic.51 Deng started with a moderate plan [1978-84] and continued with a progressive plan
[1984-89]. Modernisations of agriculture, the military, industry, science and technology would be the
headlights of Deng’s reforms.52 Although the planned economy was replaced by a socialist form of economic
free markets, still the state controlled the economy.53
The enormous international credit prior to 1989 China had gained was soon ended. The events of the
crushing of the student’s demonstration at Tiananmen in 1989 turned the eye of the international community
towards the PRC.54 The supremacy of the CCP could clearly not condone any opposition based on political
critique. Critics urged China to repair its democratic deficits and adjust to international agreements. Only
social and economic liberties however, turned out to be a possibility for the People’s Republic. ‘Economic
rights to subsistence would always take precedent over other rights.’55
CONTEMPORARY LEGAL CONCEPTS
Wang describes several elements established in the Chinese legal discourse. Some can be traced back to
the Confucian legal concepts. Rule of law [fazhi] finally seemed to be re-established since its careful birth in
1912. With the 1982 Constitution a legal structure to which even the authority of the Party had to yield, was
laid out.56 Legal profession, schools, judicial branches and courts had been restored and law finally was
acknowledged as an essential element in the preserving of a nation.57 A set of principles would form the
policy; CPC leadership, the continuation of the socialist road, the people’s democratic dictatorship and the
48 More articles were drafted, creating some additional rights. Some courts were reinstalled. 49 See for more on this movement, NATHAN, ANDREW J., ‘Chinese Democracy’, London, Tauris, 1986; .L. Paltemaa, ‘The Democracy
Wall Movement and the Variations of Socialist Democracy’, Draft Paper presented at the 7th Biennial Nordic Conference on Chinese Studies, Helsinki 7-9 June 2005, University of Turku.
50 Kent [1993], p.142. 51 Many elements can be examined with regard to the 1982 Constitution [‘Zh!nghuá Rénmín Gònghéguó Xiànf"’]. The 1982
Constitution has been revised in 1988, 1993, 1999 and 2004. See for the Text of the Constitution of the People's Republic of China and its Amendments: http://english.people.com.cn/constitution/constitution.html [visited lastly at 30 May 2009].
52 Sitaraman [2008], p. 17-19. 53 Chow [2003], p. 27. Chapter 3 will examine in depth the consequences of this economical policy for international relations, especially
with regard to the promotion of human rights. 54 China has issued in several White Papers since 1991statements in favour of human rights discourse, for all issues covered see:
http://china.org.cn/e-white/index.htm. 55 As has been illustrated by the described great economic improvements at http://www.china.org.cn/e-white/3/3.2.htm. 56 See the Preamble of the 1982 Constitution, available at supra n 52. 57 Wang [1997], 1.12.
HUMAN RIGHTS, CHINESE BUSINESS | 13
Mao-Deng Xiaoping thought.58 In order to enhance and capacitate legal infrastructure, legal professionals
were imported and through the implementation of foreign laws, democratic influences next to ruling orthodox
classes increased.59 Being yet brought under the authority of law, the constitution provides at the same time
a legitimation for the power of the CCP. Rule of man was not erased. The CPC did not cease to be of great
importance to the nation’s governing. Although the absolute form socialist ideology had been terminated, the
power of the Party was needed to provide leadership, since luan was to be prevented at all costs. The PRC
turned into an authoritarianist society with next to the rule of law a clear favour of rule of man [renzhi].60
The transformation of the planned economy to the socialist free market economy implied changes in the field
of [inter-]national legal matters; China’s seat as represented by the RoC had been replaced in the United
Nations by the PRC in 1971. China’s membership to the United Nations Security Council was represented
by the PRC as well.61 Therefore, China could gain support for its rapid and thorough adjustments. Foreign
investments increased and China became accepted as an upcoming developing international partner. The
events of 1989 however isolated China since its resurrection in 1978 and made the PRC reluctant to comply
to international legal or political standards. Rights were not in the political agenda. The admittance to the
WTO in 2001 was an international recognition of the PRC had undergone at the least the basic adjustments
needed and was climbing back from the political isolation since 1989. In spite of various amendments to the
1982 Constitution, economic and social practice shows a need for a renewed Constitution.62
1.4 CONCLUSION
The Confucian heritage for Chinese Legal thought has left some distinct marks on today’s People's
Republic. The emphasis was placed on duties, loyalty, the collective and the prevention of chaos in a
totalitarian feudal hierarchy. Moral was found of greater importance than the instrumental law. The
Communist revival to totalitarianism left deep marks in Chinese society: the denial of the value of legal
structure was demonstrated by the people’s impoverishment. The rule of man notion overshadowed the rule
by law. The Chinese ‘Capitalist’ economic reforms impacted social and legal structure until this day;
although a totalitarian was reduced to authoritarian society, rule of man was not abolished. Rule by law
increased, although the rule of law is not yet a solid part of Chinese society, while strengthening a reformed
People's Republic.
After explaining the implication of Chinese legal discourse on a national level, China’s distrust of cooperation
with Western partners in the international legal arena needs to be understood. The PRC’s need to identify
with foreign economic and legal principles in order to constitute national progression will not go without a
fight. The following chapter will examine to what extent the international treaties and human rights
instruments the PRC has agreed upon and its changing stance in the international community.
58 Ibidem. 59 See for a flash-forward on contemporary means of nurturing the Rule of Law development in China 60 Supra n 55. 61 Kent, Ann E., ‘China, the United Nations and Human Rights: the limits of Compliance’, 1999, pp. 18-48; See also, KIM, SAMUEL S.,
‘China, the United Nations and world order’, New Jersey, Princeton UP, 1979. 62 Kent [1993], p. 172-173.
HUMAN RIGHTS, CHINESE BUSINESS | 14
CHAPTER 2 THE EAST DEFIES THE WEST
The impact of the historic, cultural and political legacy on the People's Republic’s stance towards Western
human rights initiatives must not be underestimated. The implications of the compliance with the human
rights regime are best seen before and after the 1989 shift in PRC policy on human rights, as paragraph 2.1
illustrates. The ‘establishment of accountability’ regarding agreements on human rights is an important asset
of the human rights regime in monitoring of the PRC.63 The adhered treaties are observed in the light of
China’s legal development on the bases of its fulfilment of the inherent norms. Monitoring mechanisms by
other states and ngo evaluations by non-state actors are an asset in monitoring human rights compliance of
the People's Republic by the subsequent treaty bodies. These independent bodies undertake the
international supervision of the implementation of the rights in the instruments by the state parties, as
paragraph 2.2 demonstrates. In addition, NGOs provide for essential support. The human rights discourse in
and outside the PRC is of importance to understand the difficult implementation of the adhered universal
human rights. Which party has the best perception of human rights, the West or the East? What is the result
of this discourse? In looking in depth into the scope of compliance by the PRC to the signed treaties in the
following paragraphs the meaning of the human rights regime will be edified. In paragraph 2.3 the critiques
and China’s argumentation in defence of its position on human rights are discussed. For there remains an
important question to be solved: To what extent does the international human rights regime apply to the
People's Republic?
2.1 THE INTERNATIONAL HUMAN RIGHTS REGIME AND THE PEOPLE'S REPUBLIC- AN OVERVIEW
The period describing China’s human rights regime adherence can be divided into a pre and post 1989
episode.
2.1.1 PRE-1989
The shift towards judicial reforms after Western modelling during the last decades of the empire was
prolonged by the subsequent Republican reign [1912-1949]. In favouring the international legislation, China
has never seen an administration more eager to study international law; several answers to the raised
questions by the Unequal Treaties were formulated by Zhogguo Guojifa lun: ‘The authority of the
international law would serve as the backbone of treaties. International equality of the nations would be
accomplished by the adherence to international law combined with national power. Any alteration of national
law should be in the hands of Chinese government. And finally, the legal advancement of China should be
provided for by Chinese scholars.’ 64 The Chinese application of international law until 1949 was
predominantly public law, consisting of positivist and man-made regulations between states.65 The hostile
anti-western attitude by the Nationalist Kuomintang government however provided the launch pad for a
63 As established by Alston, described in: Philip Alston, ‘Non-State Actors and Human Rights’, Volume XIII, 2005, Oxford. Alston tries
to gather all actions monitoring the effectuation of the agreed human rights standards in the phrase ‘establishing accountability’. Thus avoiding all pros and cons in favour of sanctions, bi-, multilateral monitoring, fact-finding, periodical reviews, and so on. This view is enhanced in this thesis.
64 As were provided for in the translated Japanese book of Zhogguo Guojifa lun in 1910s, in: Wang, Dong, The dissemination of international law and the study of the unequal treaties in China’, in: ‘As China meets the World, China’s Changing position in the international community, Wien, 2006.
65 Ibidem, p. 185.
HUMAN RIGHTS, CHINESE BUSINESS | 15
toning refuting position by the PRC vis-à-vis international regulations.66 The imperialist and colonialist
posture of the leading nations in the world needed to be brought to a standstill. The establishment of the
United Nations in 1945 as the watchdog of international human rights resulted in a demand of the PRC as
the actual representation of China.67 As became apparent, the Marxist Maoist ideology, supplied for several
angles. In the Five Principles of Peaceful Co-existence the socialist revolutionary restrain on international
law became evident68: ‘Mutual respect for each other’s territorial integrity and sovereignty, mutual non-
aggression, mutual non interference in states’ international affairs and equality and mutual benefit, formed
the backbone to the Maoist scorn towards the use of international law as a device in Western imperialist
hands.69 In the meantime, the Cold War stifled every attempt to come to an agreement on the scope of
human rights.70
The UN General Assembly decided on replacing the delegation of the ROC with the PRC delegation in
Resolution 2758. 71 The admission to the UN in 1971 finally put an end to an annual settlement of the
dispute on the Chinese representation.72 Its membership gave way to actual compliance to the basics of the
human rights regime by the PRC. Human rights became a formally integrated part of foreign statements. In
theory, since the generally accepted universality of human rights were still under heavy scrutiny and, based
on the principles of absolute sovereignty and non-interference, the PRC under Mao still would not consent to
international meddling in its state let alone foreign affairs.73 On a domestic level, in the 1975 Constitution
human rights were incorporated, as well as in the 1978 Constitution.74
The dawning of legal reforms came with the instalment of Deng Xiao Ping’s reform policies. The 1982
Constitution amended several rights and provided for the kick off of rule of law progression. In sum, until
1989 it is fair to state that the PRC’s compliance to the human rights regime was in effect absent. Formally,
the PRC administration adhered in all four Constitutions to the implementation of the human rights under
international law. Materially, based on political argumentation of principles of absolute sovereignty and non
interference, the PRC needed to come to terms with the meaning of human rights regime within its domestic
and foreign affairs.
66 Wang, [2006], p. 185-190. 67 The 1954 Constitution of the PRC integrated the bulk of the human rights as formulated by the UDHR, both civil political as well as
social economic rights. 68 The Five Principles of Peaceful Coexistence of 1955, see Wang [2006], pp. 68, 185-186. The change in governmental strict ruling
became apparent by comparison with the former republican vision on rights: rights had been under the protection of the state and its institutions, but now rights were replaced by unrestricted surrender of the people’s rights to the state.
69 DeLisle, J., ‘Into Africa: China's Quest for Resources and Influence,’ Foreign Policy Research Institute E-Notes, February 2007. Available at: http://www.unc.edu/depts/diplomat/item/2007/0103/deli/delisle_africa.. [Lastly visited 30 May 2009.]
70 See for the three periods of dispute until 1971, Chao, John K.T., The question of Chinese representation in the UN, in: ‘As China meets the World, China’s Changing position in the international community, Wien, 2006.
71 The founding and original state the Republic of China [ROC] had provided for a permanent seat in the Security Council of the UN [UN Charter art. 23]. By 1951, two representing governments, the ‘democratic’ PRC against the ‘feudal’ ROC, demanded exclusive representation in the UN. The debate showed the difficult balance between legal and procedural and on the other hand political standards of admission within the Security Council and the General Assembly. The Cultural Revolution imperilled the PRC’s approach of the international human rights regime, too.
72 See on China’s Admission, GA Resolution 2758 [‘Restoration of the Lawful Rights of the PRC in the United Nations of 25 October 1971’]. The actual acceptance of the PRC paved the way on the long run to adherence to the human rights regime.
73 Kent [1993], p. 100. 74 Although the 1954 Constitution has implemented human rights as well, the admission of the PRC to the UN is generally seen as the
‘beginning’ of the human rights compliance. In the 1975 Constitution mention is being made on rights, but limited by Party policies. In the 1978 Constitution some small remarks are made on citizen rights.
HUMAN RIGHTS, CHINESE BUSINESS | 16
2.1.2 POST-1989
The 1989 crackdown of student demonstrators at the Tiananmen Square sounded the horn for the
international community. This breakthrough in Chinese international and domestic affairs with regard to
human rights regime provided the pretext under which the international community would press on the PRC
to severe adjustments. Embargo’s, worldwide protests and sanctions increased the isolation of the PRC
rapidly. The PRC took action to steer an alternative course.75 The post-1989 increase of critic’s political
pressure provided for the release of White Papers as of 1991.76 The People's Republic engaged in the
human rights agreements as of 1997 by signing of ICESCR and ICCPR.77 After the ratification of ICESCR
the possibility of an admission in the WTO in 2001 encouraged a further going commitment PRC to the
human rights regime. The 2004 amendments of the 1982 Constitution on human rights and private property,
in light of the economic development proved beneficial. In 2009 the People's Republic drafted the National
Human Rights Action Plan in response to the as a means to fulfil the international human rights
obligations.78 These initiatives have gradually resulted in an advance of China’s poor human rights practice.
The People’s Republic of China has confirmed its commitment to the human rights regime in the standard
setting and promotion of human rights by agreeing on 22 international human rights instruments.79 The
United Nations’ Charter [UNC, 1945] and the International Bill of Human Rights have been outstanding tools
of compliance to the human rights regime. Six out of the nine core conventions have been ratified by the
People’s Republic and have entered into force: the Convention on the Elimination of all forms of Racial
Discrimination [CERD, 1965] International Covenant on Economic, Social and Cultural Rights [ICESCR,
1966], the Convention on the Elimination of all forms of Discrimination Against Women [CEDAW, 1979] 80,
the Convention Against Torture and other cruel, inhuman or degrading Treatment or Punishment [CAT,
1984] the Convention on the Rights of the Child [CRC, 1989] and the Convention on the Rights of Persons
with Disabilities [ICRPD, 2006].
The International Covenant on Civil and Political Rights [ICCPR, 1966] has been signed, but not yet ratified.
Its subsequent Optional Protocols have not been signed by the PRC. The remaining core major international
human rights instruments have not been ratified yet: the International Convention of the Protection of the
Rights of All Migrant Workers and Members of their Families [ICRMW, 1990], and its Optional Protocol [OP-
ICRD, 2006]. The International Convention for the Protection of all Persons from Enforced Disappearances
[ICPED] 2006 has not yet entered into force.81
75 Wang [2006], p. 142/3 76 See for China’s White Papers supra n 55. 77 However, this progress was stagnated due to the brutal crackdown of Falun Gong members in 1999. These are mere examples of
severe interventions of the Chinese government. 78 The National Human Rights Action Plan 2009-2010, issued by the State Council at 13 April 2009. Available at:
http://www.china.org.cn/archive/2009-04/13/content_17595407.htm [lastly visited 30 May 2009]. Sub V, ‘In the period 2009-2010, China will continue to fulfill its obligations to the international human rights conventions to which it has acceded, and initiate and actively participate in exchanges and cooperation in the field of international human rights.’
79 Kent [1999], pp.12-15. For a full overview of treaties under international law, see http://www2.ohchr.org/english/law/index.htm. 80 Aide memoir on the presentation of the PRC’s candidature tot the HRC of the UN in 2006, see
http://www.un.org/ga/60/elect/hrc/china.pdf. Lastly visited November 24, 2008. For a full list of documentation in the UN Charter-based bodies Database, see http://ap.ohchr.org/documents/dpage_e.aspx?c=39&su=49. For the Treaty-based equivalent, see http://tb.ohchr.org/default.aspx?country=cn, lastly visited December 2008.
81 See for the status of all ratifications by the People’s Republic, http://www.ohchr.org/EN/countries/AsiaRegion/Pages/CNIndex.aspx.
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2.2 CHINA’S RECEPTION OF THE INTERNATIONAL HUMAN RIGHTS REGIME
The subsequent subsections will elaborate on the abovementioned agreements in the field of international
human rights law, to which the People’s Republic on various occasions has pledged its commitment.
2.2.1 THE UNC AND THE INTERNATIONAL BILL OF HUMAN RIGHTS
THE UNITED NATIONS CHARTER [UNC]
The 1945 Charter of the United Nations is, in particular the preamble and the articles 1, 2, 55 and 56, in
promoting universal respect for, and observance of human rights and fundamental freedoms, first and
foremost directed to States.82
After the People’s Republic’s admission in 1971, the principles, rights and obligations following from the UN
would apply to the PRC, at the least in theory.83 All UN members as State parties to the United Nations
Charter were committed to the inherent bodies such as the 1946 created UN Commission on Human Rights
[UNCHR]. Working together with the Office of the High Commissioner of Human rights [UNHCR], the
Commission was the primal instrument in protection of human rights. After the PRC’s membership in 1971, it
took part in several activities conducted by the UNCHR.84
In 2006 the UNCHR was replaced by the Human Rights Council [HRC] which overtook the bulk of
mandates, including the Sub-commission on Human Rights.85 Under the HRC every UN member would be
submitted to a universal human rights review [Universal Periodic Review, UPR].86 The Special Rapporteur is
mandated to visit states.87 The PRC’s delegation responded in its Statement on the UPR with four remarks:
the HRC must ensure ‘universality, objectivity and non-selectivity in the consideration of human rights
issues, and the elimination of double standards and politicization; the significance of national and regional
particularities and various historical, cultural and religious backgrounds must be borne in mind; the
promotion and protection of human rights should be based on the principles of cooperation and genuine
dialogue and aimed at strengthening the capacity of Member States to comply with their human rights
obligations for the benefit of all human beings’; and finally, yet remarkable, ‘all human rights are universal,
indivisible, interrelated, interdependent and mutually reinforcing and that all human rights must be treated in
82 Art. 1 United Nations Charter: ‘The Purposes of the United Nations are: [...] 3. To achieve international cooperation in solving
international problems of an economic, social, cultural, or humanitarian character, and in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction [..].’ See, Tomuschat, Chr. [ed.], ‘Human Rights: between Idealism and Realism’, Oxford, Oxford University Press, 2003.HR, p. 113.
83 The Permanent Mission of the PRC to the UN Office at Geneva has provided for many statements on human rights issues, see http://www.china-un.ch/eng/rqrd/.
84 This cooperation has not always been without hinder as China has urged the UNCHR to ‘address human rights issues on the base of the principle of equality’. See, http://english.people.com.cn/200204/09/print20020409_93712.html
85 The Commission had been under heavy scrutiny and voted for to be replaced by the UNHRC on March 2006 by the UN General Assembly.http://www.nytimes.com/2006/02/26/opinion/26sun2.html?_r=2&n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fEditorials&oref=slogin.
86 See on the outcome United Nations HRC, ‘Universal Periodic Review. China.’ A/HRC/11/25 of 3 March 2009. For all available documents, see http://www.ohchr.org/EN/HRBodies/UPR/PAGES/CNSession4.aspx, visited 30 May 2009.
87 China was scheduled for 2008. See, for Resolutions submitted by China, the UN Documents A/HRC/2/L.23 on ‘Globalization and its impact on the full enjoyment of all human rights’ and A/HRC/2/L.24, on ‘Strengthening of the Office of the United Nations High Commissioner for Human Rights’.
HUMAN RIGHTS, CHINESE BUSINESS | 18
a fair and equal manner, on the same footing and with the same emphasis.‘ 88 In 2009 the HRC has
reviewed by means of the UPR the People’s Republic.89
THE INTERNATIONAL BILL OF HUMAN RIGHTS
The International Bill of Human Rights consists of the 1948 Universal Declaration of Human Rights [UDHR]
and the 1966 International Conventions on Civil and Political Rights [ICCPR] and on Economic, Social and
Cultural Rights [ICESCR] with the subsequent additional Protocols [1977] had been drafted in the light of the
notion of ‘human dignity’.90 Its purpose and objective had been to establish and promote the respect for
human rights by States and non-state actors.91 The Bill of Human Rights is a significant international agreed
upon and binding human rights instrument.92
THE UNIVERSAL DECLARATION OF HUMAN RIGHTS [1948]
Within the international legal order, the 1948 Universal Declaration of Human Rights (UDHR) occupies a
unique place. Although named Declaration, most of the UDHR has become an important part of customary
law. Its provisions are directed at states as well as non-state actors.93As a legal foundation, It has a
inimitable normative stance creating moral obligations. The PRC adopted the UDHR with its admittance in
1971 and has referred to it in various instruments.94
THE INTERNATIONAL COVENANT ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS [1966]
The 1966 adopted International Covenant on Economic, Social and Cultural Rights entered into force in
1976. It guarantees economic, social and cultural rights and addresses the states’ legal obligations under
the treaty. Article 2 stresses the need for domestic implementation of the rights as a focal point for the state
parties. The article imposes obligations of conduct and of result especially the undertaking ‘to guarantee’
and ‘to take steps’ to achieve full realisation of the rights as set forth in the covenant.95
88 The 2006 Statement on the UPR by the Deputy Representative of the Chinese Delegation, see http://www.china-
un.ch/eng/xwdt/t261293.htm. 89 The PRC was scheduled for the 4th Session in 2009. See, http://www.ohchr.org/EN/HRBodies/UPR/Documents/uprlist.pdf. See for
the Reports, United Nations HRC, ‘National Report submitted in accordance with par. 15 [a] of the annex to Human Rights Council Resolution 5/1.China.’ Working Group on the Universal Periodic Review February 2009. A/HRC/WG.6/4/CHN/1 of 10 November 2008. On the UPR on China: United Nations HRC, ‘Universal Periodic Review. China.’ A/HRC/11/25 of 3 March 2009. In the elaboration on People's Republic’s stance on different treaties the result of the UPR will be incorporated.
90 The Universal Declaration of Human Rights [UDHR], G.A. res. 217A (III), U.N. Doc A/810 at 71 (1948). With the Vienna Declaration [1993] it is underlined that all the rights from the International Bill of Human Rights, the only universally agreed human rights norms, are universal, interrelated, interdependent and indivisible. See on comments and recommendations on China’s human rights performance by international expert bodies http://www.universalhumanrightsindex.org.
91 JÄGERS, N., Corporate Human Rights Obligations, Intersentia, Antwerpen, 2002, p. 50-52; Weisbrodt, D., ‘ Human Rights Responsibilities of Businesses as Non-State Actors in: Alston, Ph., Non-State Actors and Human Rights, Volume XIII, 2005, Oxford, pp. 328-333; Genugten, W. van and Jägers, N., ‘Juridische gebondenheid van ondernemingen aan de rechten van de mens’, in: FLINTERMAN [ed.], Niet statelijke Actoren en de rechten van de mens; gevestigde waarden, nieuwe wegen’, Den Haag,, Boom Juridische Uitgevers, 2003, pp. 39-42.
92 Although the UDHR is a declaration, the international community regards its content as legally binding customary law. 93 There is some debate, on this matter. Some state it is generally agreed that they currently apply only to States (and sometimes
individuals) and do not include its preamble. Most of its provisions have also been incorporated in the Covenants and other United Nations human rights treaties. Do these instruments establish direct legal responsibilities for corporations? Several of them include non-binding, recognition that individuals have duties to ensure human rights. Chapter 3 will look in detail to this matter.
94 See in this respect also Chapter 4 on the significance of the UDHR and corporate adherence to human rights. 95 O’Flaherty, M., ‘Human Rights and the UN: Practice before the Treaty Bodies’, Den Haag, Nijhof, 2002, p. 47.
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The PRC signed the ICESCR in 1997 and ratified the treaty in 2001, when it formally entered into force.96
The treaty had already been signed under the RoC in 1969 and was ratified in 1972. However, the PRC’s
statement upon the signature and the ratification that Taiwan authorities have used in the name of China
was held ‘illegal, null and void.’97
The ESCR Committee finds its base in the 1985 ECOSOC resolution and not in the covenant itself.98 In
1996 an optional protocol was suggested providing for a complaints procedure for this monitoring body. It
had been adopted on the 60th Anniversary of the United Nations, 10 December 2008.99 An investigation
monitors and evaluates the situation. This procedure establishes possible grounds for systematic human
rights violations.100 A state reporting procedure can be submitted to the ECOSOC.101 General comments can
be made in order to clarify the meaning of the covenant.
The PRC has stated in its Initial Report of 2004 its compliance with the ICESCR.102 China proves by the list
of enacted Laws in conformity with its Constitution the safeguarding of the promotion and protection of the
rights as agreed upon through the ICESCR.103 Even more, the PRC’s Constitution ‘the articles 42 through 48
make thorough provision for citizens’ right to work, right to rest, right to education, rights to scientific
research and cultural activities, rights to material assistance from the State and society when aged, ill or
having lost the ability to work, right to the ownership of lawful property, right to inherit private property and
equality of rights between men and women’, which is an achievement for the developing PRC.104 Moreover,
in its National Human Rights Action Plan 2009-2010, China has covered guarantees of economic, social and
cultural rights by means of ‘proactive and effective’ measures.105
The PRC has encountered several critiques. In spite of its successes as acclaimed in its Initial Report, the
list of issues filed in response is not meagre.106 Although complimenting on some efforts107, the list of issues
96 On 27 October 1997, China signed the International Covenant on Economic, Social and Cultural Rights. On 28 February 2001, the
Standing Committee of the 9th National People’s Congress ratified China’s accession to the Covenant. On 27 March 2001, the Permanent Mission of the People’s Republic of China to the United Nations presented the instrument of accession to the Secretary-General of the United Nations. On 27 June 2001, the Covenant formally entered into force in China. PRC’s Initial Report, E/1990/5/Add.59, p. 5.
97 See for China’s Reservations, http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-3&chapter=4&lang=en. 98 The UN Economic and Social Council [ECOSOC] created the Committee via ECOSOC resolution 1985/17 UN DOC. E/1995/85. 99 UN GA Resolution A/RES/63/117, 10 December 2008. Avaible at: http://www2.ohchr.org/english/bodies/cescr/. The signing will be
opened as of 24 September 2009. 100 BAYEFSKI, Anne F., ‘How to complain to the UN human rights treaty system’, The Hague, Kluwer, 2003, p. 145. 101 O’Flaherty [2002], p. 58-59; Article 16 and 17 of ICESCR. 102 E/1990/5/Add.59, p. 6-9, paragraphs 9-16. See for more on the economic, social and cultural rights of citizens, White Paper ‘Progress
in China’s human rights Cause 2000’, subsection IV. Available at: http://www.china.org.cn/e-white/2000renquan/a-5.htm. 103 Ibidem. These laws are: the General Principles of Civil Law, the Inheritance Act, the Consumer Protection Act, the Mineral Resources
Act, the Land, Administration Act, the Water Act, the Water and Soil (Maintenance) Act, the Coal Act, the Environmental Protection Act, the Labour Act, the Trade Union Act, the Mine Safety Act, the Regulations on Minimum Livelihood Security for City Residents, the State Council, Regulations on the Establishment by Enterprises of Old-Age Pension Insurance, the Education Act, the Compulsory Education Act, the Higher Education Act, the Cultural Objects (Protection) Act, the Progress in Science and Technology Act, the Law on the National Language and its Writing, the Protection of Minors Act, the Women’s Rights and Interests Act, the Rights and Interests of the Elderly Act and the Protection of the Handicapped Act.
104 E/1990/5/Add.59, p. 7, paragraph 10. 105 ‘National Human Rights Action Plan of China, 2009-2010’, supra n 79, sub I; these guarantees cover a range of issues, the right to
work, to basic living conditions, social security, health, education, cultural and environmental rights, farmers’ rights and human rights in the reconstruction of the earthquake area’s.
106 E/1990/5/Add.59, List of issues to be taken up in connection with the consideration of the initial report of the PRC concerning the rights covered by articles 1-15 of the ICSCR.
107 E/C.12/1/Add.107, 13 May 2005, Part I China, sub b, p. 2
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are reflected in the concerns and recommendations in the Committee’s concluding observations.108 The
concerns vary from lack of constitutional guarantees of non-citizens, discrimination of migrant workers,
disabled persons and ethnic minorities, high [forced] abortion rate of girl foetuses ’, to the Re-education
through forced labour, sexual exploitation of women and children, poor working conditions [mine sector] and
restricted access on information on the internet.109
The PRC is strongly recommended to ensure legal training to promote the covenant before the domestic
courts, to consult the public in its state reports, to ensure the rights of the covenant without discrimination,
ensure protection against child labour, to ensure the rights for all workers, to ensure the formation of
independent trade unions, to adopt criminalising legislation regarding sexual exploitation, enforce laws
prohibiting forced evictions, to take into account the state party’s obligations under the covenant in all
aspects in relation to financial or regional trade agreements.110
THE INTERNATIONAL CONVENTION ON CIVIL AND POLITICAL RIGHTS [1966]
With the emphasis on civil and political rights, the International Covenant on Civil and Political Rights
[ICCPR] was not likely to be ratified by the PRC. Its aim is to guarantee a range of universal human rights.
The civil and political rights as set out in the treaty are derived from the inherent human dignity. The ICCPR
was signed on 5 Oct 1998. The optional Protocols of 1966 and 1989 were not signed by the PRC.111
However, the PRC’s declared the 1967 signature of the Taiwan authorities having used the name of China
illegal, null and void. Since the PRC is only a signatory and not a party to the ICCPR, it is not bound yet to
the HRC. Although the signing of the treaty is a signal for the PRC’s intention for further commitment by the
treaty’s provisions, China’s commitment would be given actual significance by means of future ratification or
accession. The importance of the universality of civil and political rights throughout the international
community is a main issue of debate. The PRC is urged on various occasions to adhere to the entire
backbone of the international human rights regime, especially on the abolition of the death penalty.112 In
paragraph 2.3 the elaboration on the discourse with the PRC will elucidate the delay of ratification of this
treaty. The People's Republic has not yet made statements to assume a possible ratification in due time, but
will ‘prepare the ground for approval’.113
2.2.2 OTHER CORE HUMAN RIGHTS TREATIES
CONVENTION ON THE ELIMINATION OF RACIAL DISCRIMINATION [1965]
After the atrocities of the holocaust conducted in the WWII, racial discrimination became a focal point of the
United Nations. The International Convention on the Elimination of All Forms of Racial Discrimination
108 E/C.12/1/Add.107, of 13 May 2005, Part I China, sub c and d, p. 2-10 109 See the concerns of the Committee in full, E/C.12/1/Add.107, of 13 May 2005, Part I on China, sub c, p. 2-5 110 See the recommendations of the Committee in full, E/C.12/1/Add.107, of 13 May 2005, Part I China, sub d, p. 5-10 111 See the status on http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-4&chapter=4&lang=en#EndDec. 112See, Article 6, right to life, and 9, the liberty and security of person, ICCPR. Although NGOs do not have formal standing under the
reporting procedure, different opportunities suffice to inform the Committee. O’Flaherty [2002], p. 33. Article 4 of the 1982 Constitution aims to protect the right to family life [article 16 UDHR].
113‘National Human Rights Action Plan’, supra n 79, sub II; the Action plan provides for several civil and political improvements, such as the freedom of religious, among which the forebode: ‘China has signed the "International Covenant on Civil and Political Rights (ICCPR)," and will continue legislative, judicial and administrative reforms to make domestic laws better linked with this Covenant, and prepare the ground for approval of the International Covenant on Civil and Political Rights’, sub V.
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[ICERD] was adopted by the GA, already in 1965. The PRC ratified the ICERD in 1981.114 The Amendment
to article 8 of the Convention of 1992 has been ratified by the PRC in 2002 as have the amendments to the
Convention of 2006 been ratified.115
The Committee on the Elimination of All Forms of Racial Discrimination is the monitor to the ICERD. The
legal basis for the Committee is article 8[1] ICERD. Its task comprehends the supervision of the
implementation of the Convention. Under article 9 it examines States Parties’ reports. These reports are
almost fully prepared by the states themselves.116 The duties of States seem to supersede the rights of
individuals.117 Corresponding duties of the Committee are the examination of individual complaints [art. 14],
the drafting of general recommendations on the interpretation of the convention [art. 9] and consideration of
the state-to-state complaints [art. 11].118 The PRC has not accepted the Committee’s complaints procedure.
Under international law other remedies are possible as well. The rights concerning discrimination as
portrayed under the ICESCR, the UDHR and CEDAW are applicable in many instances of racial
discrimination as well.119
THE CONVENTION ON THE ELIMINATION OF DISCRIMINATION AGAINST WOMEN [1979]
The preamble of the Convention on the Elimination of Discrimination Against Women [CEDAW] explains its
existence: the protection against extensive discrimination against women continues to exist, which violates
the principles of equality of rights and respect for human dignity. The rights in the convention are meant to
reaffirm the dignity and worth of women. These rights need to be provided within the national framework of
the state parties [art. 24].
The convention was signed and ratified by the People's Republic in 1980. In 2002 the PRC ratified the
Amendment to article 20, paragraph 1 of the Convention in 1995.120 The Optional Protocol to the Convention
of 1999 has not been signed by the PRC yet.121 The Committee monitoring the implementation to the
CEDAW finds its basis in the Covenant [art. 17 CEDAW]. The submission of state-reports [art. 18], the
communications and inquiry procedures under the Optional Protocol and the general recommendations
elucidating the Covenant, are the main tasks of the Committee.122
The PRC has not accepted the Committee’s competence to the complaints procedures under the Optional
Protocol. No case law can therefore be found on the People’s Republic concerning the CEDAW
114 See the status of the ICERD, http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-2&chapter=4&lang=en. 115 UN GA Report of the Committee on the Elimination of Racial Discrimination, Suppl. No. 18, A/61/18, 2006. 116 ALSTON, Ph. & CRAWFORD, J. [eds.], ‘The future of United Nations human rights treaty monitoring’, Cambridge, Cambridge UP,
2000, p. 348. 117 Alston [2000], p. 341. 118 See, http://www2.ohchr.org/english/bodies/cerd/. See also, Bayefski [2003], pp. 22-23; Alston [2000], p. 342. 119 ‘National Human Rights Action Plan of China, 2009-2010’, supra n 79, sub III, strives to guarantee the rights of women, children,
ethnic minorities and disabled persons. See also article 4 of the PRC 1982 Constitution, which reads: ‘All nationalities in the People's Republic are equal’, such as ethnic minorities, and article 48,’Women in the People's Republic enjoy equal rights.’
120The ‘National Human Rights Action Plan of China, 2009-2010’, supra n 79, sub III, strives to guarantee the rights of women: ‘The state will continue its efforts to realize the goals stated in the Program for the Development of Chinese Women [2001-2010], promoting gender equality as well as guaranteeing women's legitimate rights and interests.’
121 See, http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-8&chapter=4&lang=en#12, visited May 2009. 122 Accessible and constructive instruments to monitor a state’s compliance with regard to women’s rights, are for example the Health
Rights of Women Assessment Instrument (HeRWAI), available at: http://www.aimforhumanrights.org/themes/women-s-human-rights/health-rights-of-women/. See for the report on Impact Assessment of Women’s rights, the UNSR on health standards, Paul Hunt, ‘Impact Assessments, Poverty and Human Rights: A Case Study Using The Right to the Highest Attainable Standard of Health ‘, Part III, sub B3, available at: http://www.humanrightsimpact.org/fileadmin/hria_resources/unesco_hria_paper.pdf.
HUMAN RIGHTS, CHINESE BUSINESS | 22
provisions.123 The 2006 Concluding comments on the PRC show a range of concerns.124 With regard to the
definition of indirect and direct discrimination of women [art. 1 CEDAW] domestic law has not been
amended.125 Legal training as to ensure the scope and content of the Convention is a clear means to protect
women’s rights. PRC is recommended to monitor women’s enhancement of the impact of economic
development and to take corrective measures.126 The combat of trafficking of women needs a domestic
implementation of the international standards by means of comprehensive law. This needs to be done as
well in the field of domestic violence, labour laws, violence against women and girls especially concerning
ethnic minorities, the status of asylum seekers and refugees and selective abortion and infanticide.127 On top
of this, NGOs have expressed concerns on the position of women in the PRC.128
THE CONVENTION AGAINST TORTURE [1984]
The Convention Against Torture and other cruel, inhuman or degrading Treatment or Punishment [CAT]
stems from 1984. The convention aims to prevent acts of torture and to ensure the availability of remedies in
case of such deeds. States undertake several obligations regarding the prevention [art. 2], the investigation
[art. 12, 13], criminal prosecution [art. 4] and compensation [art. 14] of torture or cruel, inhuman or degrading
treatment or punishment.129 The PRC signed the CAT in 1986 and ratified it in 1988, after which it was
enforced. Amendments to articles 17 and 18 of the Convention against Torture [1992] were signed and
ratified in 2002.130 The Optional Protocol to the CAT [2002, updated in 2006], has however not been signed
nor ratified by PRC.131
The CAT’s two monitoring bodies, the Committee Against Torture [CAT] and the Special Rapporteur [SR],
supervise the implementation of the rights of the CAT. The legal basis for the monitoring Committee on CAT
is found in article 17, 1. It’s main tasks vary from examination of state-reports, consideration of individual
complaints [art. 22], investigation of systematic practice of torture [art. 20, 28] to making general comments
concerning the interpretation of the CAT and consideration of state to state complaints [art. 21].132 The
Special Rapporteur on Torture is appointed by the UNCHR and since 2006 by the replacing HRC. He is an
expert, a special rapporteur, to examine questions relevant to torture.133 The mandate comprises three main
activities varying from transmitting urgent individual appeals to States, as well as communications on past
alleged cases of torture and undertaking fact-finding country visits, to submitting annual reports on activities.
Unlike the complaints mechanisms of the human rights treaty monitoring bodies, the Special Rapporteur
does not require the exhaustion of domestic remedies to act. In any situation falling within the scope of the
123 Bayefski [2003], p. 139; see for updates on case law of state parties also: www.unhchr.ch/tbs/doc.nsf124 UN CEDAW‘Concluding comments of the CEDAW: China’, UN CEDAW/C/CHN/CO/6 of August 2006, p. 2-8, sub par. 8-34. 125 Ibidem sub par. 10. The Law on the Protection of Rights and Interests of Women as amended in 2005. 126 Ibidem, sub par. 12 and 16. 127 Ibidem. These recommendations correspond with the subsequent paragraphs: 20, 21, 30, 22 and 28, 34 and 32. 128 Human Rights in China [HRIC], ‘Implementation of the Convention on the Elimination of All Forms of Discrimination against
Women in the People’s Republic of China, A Parallel NGO Report by Human Rights in China’, Submitted to the Committee on the Elimination of Discrimination against Women in advance of its review of the combined fifth and sixth periodic reports of the People’s Republic of China on implementation of the Convention on the Elimination of All Forms of Discrimination against Women, June 2006. Available at: http://www.hrichina.org/public/index.
129Bayefski [2003], p. 15. 130 The CAT corresponds with the 1982 Constitution in articles 37 and 38, on the inviolability of the freedom of person of citizens. 131See, for the status, http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-9&chapter=4&lang=en#5. 132O’Flaherty [2002], pp. 129-131. 133GA Resolution 1985/33. The mandate was extended for three years by Human Rights Council Resolution 8/8 in June 2008. The
Special Rapporteur since 2004 is Manfred Nowak.
HUMAN RIGHTS, CHINESE BUSINESS | 23
mandate, the Special Rapporteur can decide to act upon. Another benefit is that the SR covers all countries,
irrespective of whether a State has ratified the Convention against Torture.134
The impact of the Convention on the People's Republic is grave. Not only the CAT and the SR increase
pressure, but also NGOs have made strong allegations to the PRC’s compliance to the CAT. 135 Since the
Optional Protocol CAT was not signed by, the Subcommittee on Prevention does not bind the PRC.
According to Human Rights in China, ‘the State secrets System of the PRC prevents independent
assessment of CAT implementation measures information control obstructs the Committee’s review process
and undermines legislative, administrative, judicial or other measures aimed at preventing acts of torture, in
classifying many situations as ‘state secret’.’136
In the Committee’s fourth periodic state report on China 137 its concerns and recommendations
complemented the NGO’s in answering to the initial report of the PRC.138 The SR reported his findings and
recommendations recently in 2008.139 In his report of 2005, the SR was convinced that torture remained
widespread in China. The PRC has undertaken efforts to improve the criminal justice system which have
contributed to the decline. Many factors contributed to the continuing practice of torture in China. They
include ‘incentives for interrogators to obtain confessions through torture, the excessive length of time that
criminal suspects are held in police custody without judicial control, the absence of a legal culture based on
the presumption of innocence, and restricted rights and access of defense counsel and independent, fair
and accessible courts and prosecutors.’ The SR Continues that ‘Basic conditions in the detention facilities
seem satisfactory; the criminal justice system and its strong focus on admission of culpability, confessions
and re-education is particularly disturbing in relation to the “Re-education through Labour” means.’ The
combination of the sanction of deprivation of liberty with measures of re-education through coercion
constitutes forms of inhuman or degrading treatment or punishment, which is incompatible with the values
as agreed upon in the treaty.140 There is no case law up until now on the PRC concerning the CAT
provisions since the PRC has not accepted the Committee’s competence on the complaints procedure. 141
134See for more on the Special Rapporteur, http://www2.ohchr.org/english/bodies/cat/. 135UN GA ‘Promotion and Protection of All human rights, Civil, Political, Economic, Social and Cultural Rights, Including the Right to
Development’, Report of the Special Rapporteur on torture and other cruel, inhuman or degrading treatment or punishment, Manfred Nowak Addendum Follow-up to the Recommendations made by the Special Rapporteur Visits to Azerbaijan, Cameroon, Chile, China, Colombia, Georgia, Jordan, Kenya, Mexico, Mongolia, Nepal, Pakistan, Russian Federation, Spain, Turkey, Uzbekistan and Venezuela, A/HRC/7/3/Add.2, 18 February 2008.
136 See The Human Rights in China [HRIC] Report Of October 2008, ‘Implementation Of The Convention Against Torture And Other Cruel, Inhuman Or Degrading Treatment Or Punishment In The People’s Republic Of China, A Parallel Ngo Report By Human Rights In China’, p. 1. Available at: http://www.hrichina.org/public/index, visited 30 May 2009.
137Advanced Unedited Version, Consideration Of Reports Submitted By States Parties Under Article 19 Of The Convention Concluding Observations Of The Committee Against Torture, China, Cat/C/Chn/Co/4 21 November 2008.
138The fourth initial report, CAT/C/CHN/427 June 2007. For the initial report of China, see CAT/C/7/Add.5; for its consideration, see CAT/C/SR.50; CAT/C/SR.51 and Official Records of the General Assembly, forty-fifth session, Supplement No. 45 (A/45/44), paras. 471-502. For the second periodic report, see CAT/C/20/Add.5; for its consideration, see CAT/C/SR.251, 252/Add.1 and 254 and Official Records of the General Assembly, fifty-first session, Supplement No. 51 (A/51/44), par. 138-150. For the third periodic report, see CAT/C/39/Add.2; for its consideration, see CAT/C/SR.414, 417 and 421 and Official Records of the General Assembly, fifty-fifth session, Supplement No. 55 (A/55/44), par. 106-145.
139The SR on Torture at The UN GA, ‘Promotion And Protection Of All Human Rights, Civil, Political, Economic, Social And Cultural Rights, Including The Right To Development’, Report Of The Special Rapporteur On Torture And Other Cruel, Inhuman Or Degrading Treatment Or Punishment, Manfred Nowaka/HRC/7/3, 15 January 2008
140ECOSOC, March 2006, ’Civil And Political Rights, Including The Question Of Torture And Detention’, Report Of The Special Rapporteur On Torture And Other Cruel, Inhuman Or degrading Treatment Or Punishment, M. Nowak, E/Cn.4/2006/6/Add.6, p.2.
141Bayefski [2002], p. 139. However, ‘National Human Rights Action Plan of China, 2009-2010’, supra n 79, sub II, mentions several measures on the rights of persons: rights of detainees, the right to a fair trial, to be informed and the right to be heard.
HUMAN RIGHTS, CHINESE BUSINESS | 24
THE CONVENTION ON THE RIGHTS OF THE CHILD [1989]
The need for a binding treaty to end the grave afflictions children suffer has been effectuated by the United
Nations in 1990. The Convention on the Rights of the Child [CRC] entered into force thus providing for a
universal application of protection against infant mortality, insufficient health care or education, exploitation,
prostitution child labour of victimisation of armed conflict.142 Article 2 obliges states to ensure measures
taken to enable the protection of the enjoyment and exercise of the rights under the Covenant. Article 3
stresses the need that the best interests of the child, every human being below the age of eighteen, shall be
the focal point of consideration. States need to guarantee without distinction the safeguarding of the civil
political as well as the economic, social and cultural rights.
The PRC has signed the convention in 1990 and ratified it in 1992. The Amendment to article 43 (2) of the
CRC of 1995 has been ratified in 2002. The Optional Protocols to the Convention on the Rights of the Child
of 2000 PRC have been signed in 2001 and ratified in 2008. 143 The PRC has acknowledged the
Committee’s competence. The CRC Committee is the monitor to the CRC and its Optional Protocols and is
based on the 2nd part of the CRC [art. 43]. The main activities of the Committee are the reporting procedure
[art. 44], the thematic examinations, and the regional missions by the Committee members. In the case of
emergencies, urgently requested reports are considered.144Since 20% of the world’s population of children,
350m, live in the PRC, it is of the utmost importance the Convention is implemented constructively and
thoroughly.145 The PRC has submitted two reports to the Committee in 1993 and in 2003 concerning the
Convention.
The PRC is recommended by the Committee to alteration on various fields with regard to article 44 of the
Convention. The Committee recommends the establishment of national human rights institutions with a clear
mandate to monitor children’s rights and implement the Convention at national, regional and local levels. The
PRC must ensure the right to life of all children in the PRC and take measures to prevent cases of forced
abortion and prevent infanticide. Furthermore, the Committee recommends the elimination of discrimination
in cases of HIV/AIDS, ethnic or religious minorities, disabled or migrant children. The insurance of the
freedom of religion needs to be enhanced through enacting of legislation explicitly guaranteeing for those
under 18. International adoption needs to be monitored and the State needs to strengthen existing
legislation to protect children from all forms of violence, abuse or neglect. Recommendations are in addition
made concerning establishing a definition of children with disabilities in conformity with the international
standards. Education needs to be accessible without charge or distinction of minority. Economic exploitation
of children needs to be prevented by implementing the ratified relevant ILO conventions. Street children
need to be provided with governmental aid; sexual exploitation of children needs to be prevented and
combated by developing comprehensive anti-trafficking policies. Although capital punishment for under the
age of 18 has been abolished, the juvenile justice system needs to be implemented with the international
142Bayefski,[2002], p. 29. 143Optional Protocols on the involvement of children in Armed Conflict and on the Sale of Children, Child Prostitution and Child
Pornography of 2000, http://treaties.un.org/Pages/Treaties.aspx?id=4&subid=A&lang=en. The PRC has also ratified the 1993 Hague Convention on the Protection of Children and Cooperation in Respect of Inter-country Adoption [No. 33] on September 2005.
144O’Flaherty [2002], pp. 162, 175. 145PRC Permanent Mission to Geneva, 2006, Introductory remarks by Ambassador Sha Zukang at the CRC Consideration of the Second
Periodic Report of the PRC on Implementation of the Convention of the Rights of the Child, CRC/C/Q/CHN/2, p. 3-11.
HUMAN RIGHTS, CHINESE BUSINESS | 25
standards as adhered [Beijing Principles]. Life sentences under the age of 18 must be abolished; the age of
criminal responsibility at the age of ten years must be raised. Juvenile cases must be heard in special
juvenile courts.146
With regard to the issues on article 12 of the Optional Protocol to the Convention, the Committee
recommends as follows. The PRC is recommended to amend the 1997 Penal Code in conformity with article
3 of the Optional Protocol.147 The PRC must expand its protection of child. Especially in the field of gender
issues the cooperation between CEDAW and the CRC is of importance. In addition, China has improved the
guarantees on child rights through its human rights Action Plan.148
THE CONVENTION ON THE RIGHTS OF PERSONS WITH DISABILITIES [2006]
The International Convention on the Rights of Persons with Disabilities [CRPD] of 2006 entered into force in
2008.149 It aims at protecting and promoting the rights for persons with various disabilities. Article 2 CRPD
obliges states to ensure protection of the rights as provided in the covenant. The Optional Protocol to the
Convention on the Rights of Persons with Disabilities [OP CRPD] of 2006 has entered into force in 2008 [Op
CRPD]. The PRC has signed the CRPD in 2007 and ratified it in 2008.150 The Optional Protocol has not
been ratified nor signed yet by the PRC. The monitoring Treaty Body, the Committee to the CRPD, which
recently has been elected [art. 34] is an independent body of experts which conduct the supervision of the
implementation of the Covenant by means of initial and periodic reporting [art. 35 CRPD].151 The PRC has
not accepted the Committee’s competence to consider the complaints procedures [art. 1 OP CRPD], since it
has not signed and ratified the Optional Protocol to the CRPD. Domestic legislation has improved with the
entrée into force of the Law of the People's Republic of China on the Protection of Persons with Disabilities
as of 1 Juli 2008.152 Nonetheless, it is possible to register violations of protection of persons with disabilities
under the CRC and the CEDAW as well.153
Two core Human rights Conventions which have not yet been signed or ratified by the People's Republic,
are the Convention on Enforced Disappearances and on Migrant Workers. The International Convention for
the Protection of all Persons from Enforced Disappearances [CPED] aims at the protection of two new rights
146UN CRC, Consideration of Reports submitted by State Parties under article 44 of the Convention, Sub par. 17, respectively 29, 32,
45a, 53c, 57a, 61b, 84, 86c, 88c, 89, 92, 94abc. CRC/C/CHN/CO/2, 24 November 2005. 147‘1. States Parties shall raise the minimum age for the voluntary recruitment of persons into their national armed forces from that set out
in article 38, paragraph 3, of the Convention on the Rights of the Child, taking account of the principles contained in that article and recognizing that under the Convention persons under the age of 18 years are entitled to special protection.’ See for the full text, http://www2.ohchr.org/english/law/crc-conflict.htm.
148 The Universal Periodic Review of February 2009 has recommended China to improve social rights, adopt legislation to combat child labour. In addition, health, education, housing and poverty alleviation have been covered by the National Human Rights Action Plan 2009-2010. National Human Rights Action Plan 2009-2010, supra n 79, sub III.3; furthermore, protection of juveniles’ rights and girls’ rights.
149UN CRPD Document Doc.A/61/611 entered into force 3 May 2008. See on ‘the Rights and Interests of the Disabled’, White Paper ‘Progress in China’s human rights Cause in 2003’, subsection VII. Available at: http://www.china.org.cn/e-white/20040330/7.htm.
150The signature on 30 March 2007 and the ratification were recently on 1 August 2008. See for the status of the Convention, http://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=IV-15&chapter=4&lang=en#1.
151The first election has taken place on 3 November 2008. China has nominated and been elected its candidate member of the Committee, Ms Jia Jang. The mandate expires in 2012. See, http://www2.ohchr.org/english/bodies/crpd/crpds1.htm.
152The law has been revised at the 2nd Meeting of the Standing Committee of the Eleventh National People's Congress of the People's Republic of China on April 24th, 2008. This Law shall enter into force as of July 1st, 2008.
153National Human Rights Action Plan 2009-2010, supra n 79, sub III.5: ‘The state has made great efforts to develop undertakings relating to the disabled and to beef up the building of the social security and service systems for them, providing guarantees for the legitimate rights and interests of the disabled.’
HUMAN RIGHTS, CHINESE BUSINESS | 26
of persons not to be involuntary seized and the right to know the truth. This convention has not yet entered
into force.154 The PRC has not signed or ratified the CPED.155 The International Convention of the Protection
of the Rights of All Migrant Workers and Members of their Families [ICMW] was adopted by the UN GA in
1990 and entered in to force in 2003. Its Optional Protocol [OP-ICMW] was adopted in 2006. The covenant
addresses a range of migrant workers, working lawfully or unregistered in a state without being a national
thereof. Rights as formulated under the ICCPR are guaranteed as well as particular rights regarding the
migrant worker. Economic, social and cultural rights are more limited.156 The PRC has neither signed nor
ratified either instrument.157
2.2.3 ADDITIONAL INTERNATIONAL REMEDIES
In the light of future initiatives of or future adherence to international remedies under international human
rights law, universal jurisdiction, the ICC and the regional human rights system must be named with respect
to all of the abovementioned rights to be protected.
Universal jurisdiction is the ability of the court of any state to judge or try persons for crimes committed
outside its own territory, irrespective of suspect’s or victim’s nationality or the state’s own national
interests.158 The PRC is strongly opposed to this intervention in state’s national affairs and insists on the
principle of state’s sovereignty.
The International Criminal Court entered into force on 1 July 2002. It is a permanent court which
complements national courts.159 The ICC establishes individual responsibility for acts of genocide, crimes
against humanity and crimes of war. The Court will exercise its jurisdiction when domestic authorities are
unable or unwilling to do so. The Preamble of the 1998 Rome Statute recalls “the duty of every State to
exercise its criminal jurisdiction over those responsible for international crimes”.160 In spite of the noble
initiative to construe a permanent court the PRC has not signed the Statute based on the non-aggression
154 See for information, http://www.enforceddisappearances.org/.The 1980 United Nations Cases Working group on Enforced and
involuntary Disappearances [UNWGEID] has transmitted mostly between 1988 and 1996. The Human Rights Committee (HRC) is the committee of most relevance in the scene of enforced disappearances of all treaty bodies. The UNWGEID has transmitted two urgent actions to the PRC’s government considering Tibetan monks and members of the Falun Gong.
155 The PRC has not yet acknowledged its obligation concerning this episode by means of investigation or remuneration, see http://www.tmc-hk.org/.
156Bayefski, [2002], p. 30-31. The National Human Rights Action Plan 2009-2010, supra n 79, sub III.5: ‘There are over 83 million people with various kinds of disabilities in China, accounting for 6.34 percent of the total population. The state has made great efforts to develop undertakings relating to the disabled and to beef up the building of the social security and service systems for them, providing guarantees for the legitimate rights and interests of the disabled.’
157In effect two monitors supervise the provisions of the ICMW, the CMW Committee and the SR. The PRC is not bound by the provisions or the Committees mandate. However, regarding the independency of the SR mandate, it is most likely the PRC will be submitted to the reporting procedure as mandated. The SR has sent the PRC urgent communications. The PRC has responded to the allegations NGOs have urged to report the PRC’s behaviour regarding migrant workers. UNCHR resolution 1999/44, available at: http://www.unhchr.ch/Huridocda/Huridoca.nsf/TestFrame/134ef623dad1ad1080256763005834fb?Opendocument and http://www2.ohchr.org/english/issues/migration/rapporteur/index.htm. See for the human rights standards as used in the SR mandate, www2.ohchr.org/english/issues/migration/rapporteur/standards.htm; Report of the Special Rapporteur on the Human Rights of Migrants, Jorge Bustamante, ‘Promotion and Protection of all human rights, civil, political, economic, social and cultural rights, including the right to development’, A/HRC/7/12 25 February 2008, I. Sub b, p. 4-5: ’From 1 January to 31 December 2007, the Special Rapporteur sent a total of 25 communications alleging violations of the rights of migrants …14 were in the form of urgent appeals, while the remaining communications were letters of allegation. Communications were sent to China. The PRC has provided information by responding. An example is found at document A/HRC/7/12/Add.1, sub C, p. 9.’
158Different types of jurisdiction apply to the universal jurisdiction: territorial jurisdiction, active personality jurisdiction or protective jurisdiction.
159See the Preamble to the Rome Statute of the International Criminal Court, document A/CONF.183/9 of 17 July 1998. 160Ibidem. It will not act if a case is being or has been investigated or prosecuted by a national judicial system, unless the national
proceedings are not genuine. See also Goldstein, International Relations, [2006] p. 276.
HUMAN RIGHTS, CHINESE BUSINESS | 27
principle, the principle of complementarity to domestic judicial and the non-intervention principle. As the ICC
is not regarded completely objective and impartial the People’s Republic fears the Court can be misused for
[inter-]national interests as a political vessel in the litigation processes.161 The PRC supports in principle the
establishment of an independent court to provide for remedy in case of grave human rights abuses.
The Asian continent has no regional system equivalent to the African Charter on Human Rights, the OAS
Charter on Human Rights or the European Convention on Human Rights, which provide for protection and
promotion of regional human rights violations.162 The PRC has not declared to be in favour of a regional
monitor on state’s practice yet.
2.3 THE PRC AND THE HUMAN RIGHTS DISCOURSE
The universal application of the UDHR has changed from a mere declaratory instrument to a binding
international document.163 The indivisibility of the range of rights as laid down in the international Bill of
Human Rights is internationally agreed upon; no hierarchy exists between civil and political as well as
economic and social rights.164 In observance of the signed or ratified international agreements, one might
wonder what China could hold against it. What critiques can be distilled? What have the responses on the
establishment of accountability by the human rights regime been by the People's Republic? There are
several claims with regard to the so called Asian view on human rights
2.3.1 CIVIL-POLITICAL VERSUS ECONOMIC, SOCIAL AND CULTURAL RIGHTS
In several statements the People's Republic has proclaimed its favour of the social-economic rights over the
classic rights, the civil-political rights.165 The demands of a developing country to provide for the basic needs
are comprised in the right to subsistence.166 The PRC’s distaste of luan [chaos] urges the state to proceed
rapidly with its economic course. As history shows, it might be a possible outcome that those benefiting the
economic wealth demand the right to property and subsequent civil-political rights. Although authoritarian
states misuse this argumentation to enhance their rigid position, the right to subsistence is only achieved by
strict state control of all interests. At the same time, those who depend on the government will not bite the
hand that feeds them. Does the limitation of freedom increase the access to food? Is the right to subsistence
hindered by the pursuit of personal freedom?
2.3.2 THE SOVEREIGNTY OF THE PEOPLE'S REPUBLIC PEOPLE'S REPUBLIC
The principle of state’s sovereignty is for a Realist country such as the PRC, intended to pursue the nation’s
goals, of the utmost importance. It is an offspring of the right to self determination that a state regards
161China and the International Criminal Court, 28 October 2003, http://www.fmprc.gov.cn/eng/wjb/zzjg/tyfls/tyfl/2626/2627/t15473.htm162 The African Commission of Human and People's Rights and the African Court of Human and People's Rights have a number of tasks
that concern the promotion and protection of human rights, as a result of the African Charter on Human and People's Rights. The Inter-American Commission on Human Rights and the Inter-American Court of Human Rights are the organs originated from the OAS Charter but also from the American Declaration of the Rights and Duties of Man and the American Convention on Human Rights. Their duties are the promotion, protection and implementation of human rights in the American continent. In Europe the European Court of Human Rights is the main institution that deals with human rights in Europe. The European Court was set up under the European Convention on Human Rights of 1950. The objective was to monitor compliance by State Parties.
163Donnelly, Jack, ’Universal Human rights in theory and practice’, 2nd edition, Ithaca, NY Cornell U.P., 2003, p. 129-130. 164Donnelly [2003], p. 27-33. 165 See White Paper ‘China’s Progress in Human Rights in 2004’, sub II and IV. Available at: http://china.org.cn/e-
white/20050418/II.htm. 166Ibidem, sub I.
HUMAN RIGHTS, CHINESE BUSINESS | 28
human rights its internal affairs. The principle of non-intervention prohibits thus the international community
to interfere in domestic events according to the PRC. The PRC has adhered to several core human rights
treaties. Does this add up to a double standard in the PRC’s stance on human rights? Will a human rights
framework with Chinese characteristics be a plausible outcome?167
2.3.3 UNIVERSALISM-CULTURAL RELATIVISM
Universalism holds that culture is ‘irrelevant to the universal validity of moral rights and rules.’ In contrast,
Cultural Relativism holds the culture as ‘the principle source of the validity of a right or rule’.168 Rights are
specific within the context of the given culture.169 However, the terminology of the rights might refer to its
origin and be very well suit for the cultural context of the People's Republic. Next to this, the definition might
be applied in cases of implementing rights; some rights are in any given context corresponding with cultural
framework of values. It is a matter of perspective too: one might regard a certain value as a cultural specific
right but find it in any culture all the same.170
2.3.4 ZOOMING IN: INDIVIDUAL RIGHTS VERSUS THE COLLECTIVE
Another claim reads that the community supersedes the interests of the individual. In the cultural rich legacy
of the PRC many traces of the core element of harmony is found. Social harmony is the cement to society.
Does this claim imply that the community as a whole is necessarily equalled by the state? The Western
perspective would add that the state is the holder of nation’s best interest. The PRC is built on the
foundation that the state is the family [guo jia] and thus the community. In a collective and duty oriented
society, it is very hard to limit this principle. However, to equal individual rights with the destruction of
community as such is a very limiting interpretation, in particular in an age of rapidly changing economic
standards and interaction of a large part of the PRC’s population.
2.4 CONCLUSION
The clear economic and therefore political influence China has been given the opportunity to improve on its
human rights adherence has been and should be taken with both hands. This change in attitude has been
beneficial to the People's Republic. In sum, it is clear that from 1949 until the 1989 Tiananmen incident, the
actual consequences of the formal adherence or compliance to human rights regime treaties were poor. The
post 1989 period started of with weak compliance and strenuous legal progression. Economic reforms under
Deng Xiao Ping combined with the post 1989 pressure concerning human rights implementation and the
subsequent lack of international prestige and economic development have increased the PRC’s compliance
to the international human rights.
167On an Asian Model see, Fareed Zacharia in conversation with Lee Kuan Yew, ’Culture is Destiny’, in: Meijer, M. [ed.], ’Dealing with
human rights’: Asian and Western Views on the Value of Human Rights’, Kumarian Press, 2001, pp. 75-94. 168See on this dichotomy, Donnelly [2003], pp. 89-100. On China’s values, p, 79-80. 169Li, ‘Asian Values and the universality of human rights’, in: Meijer, M. [ed.], ’Dealing with human rights’: Asian and Western Views
on the Value of Human Rights’, Kumarian Press, 2001, pp.38-39. See also, the Dutch Newspaper, NRC Next, 28 November 2008, Opinion, ‘Tussen Cultuurrelativisme en Culturalisme’.
170This discussion is too vast to discuss in full. It is important to bear in mind different economic and political parameters and arguments on this discourse, such as Western paternalism, the mark of colonialism or the protection of ones culture, supra n 169. See for example, Angle [2000], par. 1.2 on universalism in the PRC; Wang [2001], p. 136-139,148-156.
HUMAN RIGHTS, CHINESE BUSINESS | 29
The adherence to 6 out of 9 core human rights treaties and the increasing improvement of subsequent
domestic legislation are signs that the PRC although on opportunistic grounds is changing its course
towards an increased human rights adherence. Moreover, the socio-political culture needs to undergo a
fundamental change prior to the full reception of the agreed upon human rights principles, given the many
reports on human rights practise of the People's Republic. The conclusion must not be drawn however that
the outcome of the form of human rights adherence is fixed. It is within State’s discretion to implement the
agreed upon human rights provisions.
China’s experiences with Western politics illustrated by the Unequal Treaties’ synonym for national
humiliation have clearly shown a mental hindrance to compliance and cooperation in the field of international
legal instruments as produced by the international human rights regime. To overcome such deep feelings of
inequality and probable lack of understanding for the PRC’s different opinions and cultural heritage it is of
great importance that the PRC regards itself as an equal partner in the human rights discourse on social-
economic rights, sovereignty, universalism and collective rights.
As Nathan claims, China is more a taker than a shaper. Regarding its argumentation, the PRC needs to step
to another level in the international arena. Bearing Chinese state practice in mind the following paragraph
describes the State responsibilities for the protection of human rights in case of third parties and in particular
the dual-natured State Owned Enterprise.
HUMAN RIGHTS, CHINESE BUSINESS | 30
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CHAPTER 3 CHINA’S RESPONSIBILITY FOR STATE OWNED ENTERPRISES
‘[The] path of socialism with Chinese characteristics, led by the party, its policies and its theories, is correct.’ – Hu Jintao, 2008171
The present development of regulating corporate impact in the field of human rights originated in the realm
of domestic criminal, civil and tort law [corporate governance] and business directives on Corporate Social
Responsibility [CSR].172 Additionally, on the international human rights level harmful corporate conduct is
under increasing scrutiny. Next to the long-established unique status of States under international law, the
responsibility of corporate actors is more and more acknowledged and has led for more claims for binding
measures as to the business conduct. Assuming a division of public and private spheres, not all corporations
are easily classified into either sphere. This public-private dichotomy is illustrated best by the intricate nature
of the State Owned Enterprises. The presented chapter uncovers the responsible actors for the violations of
human rights under international law by Chinese transnational corporations, the State Owned Enterprises
[SOEs] in particular. In order to understand the nexus between SOEs and their home State owner the
People’s Republic the economic reforms concerning enterprises which are closely related to the reforms of
SOEs needs to be clarified. The subsequent paragraph will explicate the historical context of the Chinese
economic transformation of SOEs. As States bear primal direct and indirect responsibility under international
law for conduct of third parties such as enterprises, the second paragraph determines the extent and origin
of State obligations for third parties under international law. The State responsibilities for third parties are
examined under international human rights law in third paragraph. Lastly, in the fourth paragraph an analysis
is made of the applicability of State responsibilities in relation to the Chinese practice on the dual-natured
corporations. The chapter concludes with summary of the findings. It is within this framework Chapter 3
seeks to find answers to the question to what extent international human rights obligations can be applied to
the People’s Republic concerning its Chinese State Owned Enterprises.
3.1 FROM COMRADES TO CORPORATIONS: THE REFORM OF CHINA’S SOES
The shift from the planned economy to a socialist market economy after 1978 steered the course of the
People’s Republic as a nation. Central governing and ownership needed to be separated in modern
corporate governance [gongsi zhili] structure.173 Yet, the involvement of the Chinese government in its
economic reforms remained on the whole intact, in spite of many legal and economic changes during three
decades of reform. The subsequent paragraph reveals the intricate nature of the participation of the State in
corporate affairs in the light of the reform of the significant economic actors, the State Owned Enterprises
[SOEs].174
171 As was cited in: Bristow, Michael, ‘Chinese learn to live with reform’, BBC News, 18 December 2008. Available at:
http://news.bbc.co.uk/2/hi/asia-pacific/7780477.stm; See also, Bristow, M., ’Chinese President praises Reform’, BBC NEWS Beijing, 18 December 2008. Available at: http://news.bbc.co.uk/2/hi/asia-pacific/7789049.stm [visited 30 May 2009].
172Supra n 6. Special Representative to the Secretary General [SRSG] John Ruggie has been mandated in 2005 the task of the state duty to protect against human rights abuses by business, the corporate responsibility to respect human rights and the need for better access by victims of effective remedies, within the realm of the human rights framework of the United Nations. All reports and documentation available at: http://www.businessandhumanrights.org
173Clarke [2003], pp. 1, Introduction. 174Differentiating the enterprises would do justice to the complicated reform, but is not within the aim of the paper. Due to the illustrating
function of this paragraph it is not possible to explicate all important reform measures taken. I refer the eager reader to the mentioned authors for in depth studies of the [State Owned] Enterprise reforms.
HUMAN RIGHTS, CHINESE BUSINESS | 32
3.1.1 HISTORY OF PEOPLE’S REPUBLIC ECONOMIC EXPANSION
Economic reform of the People’s Republic can be divided into different phases: the command economy from
1949-1978, the Open Doors-reforms from 1979-1992 and the reforms after 1992.
THE VERTICAL ECONOMY [1949-1978]
The rise of the PRC’s economy set off nationwide during the totalitarian reign of the CCP in 1949. The PRC
set up a ‘centrally-planned economy’. In every sector the government decided on and controlled the
production, distribution, investment and capital allocation.175 One of its economic achievements featured the
nationalisation of the majority of enterprises formed under the RoC. Gaining public ownership over State-run
enterprises alongside rural reforms, the CCP increased its power countrywide. Providing for every need of
the Chinese worker, the iron rice bowl guaranteed life long employment. The legal instruments governing
SOEs proved to be without any sustaining value.176
Initiating the first Five-Year Plan in 1953 socialist ideology transformed the take over of total industry into
State Owned Enterprises. 177 State Owned Enterprises turned into essential working units [danwei],
executing production plans and supplying for social welfare in the command economy. Merely as a
subsidiary part within State’s bureaucracy, State-appointed managers178 realized the interest of the danwei
according to the directory responsibility system.179 The central government managed the SOEs directly by
fixing the prices of products and bearing responsibility for the enterprises’ financial performance or debts.180
A disastrous lack of economic understanding was revealed by the Great Leap Forward movement in 1958.
With millions of victims of famine many reformations had passed culminating in a bereaved economy during
the Cultural Revolution. In spite of mass mobilisation a centrally effectively planned economy was not
brought into being. The inefficient-decision making by the CCP culminated in a lack of accountability of
management. 181 The government holding both the ownership and governance of the enterprises was
presented the price of the socialist ideology.182 The ultimate fall-down of the economy called for other means
to be installed to prevent the country’s entire impoverishment: a reform policy.
THE OPEN DOOR STRATEGY [1979-1992]
With the leadership of Deng Xiaoping the long-awaited restructuring of the State [gaizhi] and its economy
took place by reforming enterprises from a command to a market-oriented economy. Finalizing the in 1964
175Chow [2007], p. 27-29. 176Mao’s contempt of the law did not prevent the creation of laws. Laws were regarded as purely instrumental. In the Measures of State-
Run Industrial Enterprises Work [Draft], Issued by the CPC Central Committee in 1961 regulated SOE governance. 177The 1st Five Year plan [1953-1957], available at: http://www.china.org.cn/english/MATERIAL/157602.htm [visited 30 May 2009]. 178The 1961 Measures, supra n 177, para. 5 art. 4. 179Ibidem, art. 6, Para 2. This system was adopted in 1956 at the CCP’s National Congress. It encompassed the CCP’s complete control
over SOE’s management and decisions by the CCP’s appointment of the director. 180Naugton, B., ‘The Chinese Economy: Transitions and Growth’, MIT Press Ltd., Cambridge, 2007, Chapter 13, p. 309. Access to bank
credit by non-performing loans was easily provided for by the central government, since the entire structure of the State aimed at the same socialist goal. LI, W. & PUTTERMAN, L., Reforming China’s SOEs: an Overview, Comparative Economic Studies, Palgrave MacMillan Journals, Volume 50, 2008, pp. 353-380, p. 354.
181XI, CHAO, ‘Transforming Chinese Enterprises: ideology, efficiency and instrumentalism in the process of reform’, in: Gillespie, J. and Nicholson, Pip, Asian Socialism & Legal Change, the Dynamics of the Vietnamese and Chinese reform, Canberra, Asia Pacific Press ANU Press, 2005, p. .
182The term Ownership implied Governance as a means of intern control. The majority of the enterprises first privately ownership now turned to public ownership in this period. Xi [2005], p. 92.
HUMAN RIGHTS, CHINESE BUSINESS | 33
Four Modernisations, presented by Zhou Enlai,183 Deng’s ‘Reform and Opening Up’ general policy resulted
in the Open Door policy for economic transformation.
From 1979 until 1983 rural reform was prioritized and hampered enterprise reform. The 1983 Interim
Regulations on State Owned Industrial Enterprises consolidated State’s Ownership and governance as
traditionally conducted.184Xi asserts the State Owned Enterprises were only little altered.185 The SOEs
became legal entities while the State remained its ownership of the enterprise’s assets. While emphasising
the importance of State’s ownership and governance, CCP’s policy entailed a delegation of the autonomy to
SOE’s management.186 In order to sustain this policy, the 1984 Law on Industrial Enterprises Owned by the
Whole People supported the division of government and corporate management.187 The Central government
managed the SOEs indirectly through the director responsibility system, but were limited in their control due
to the manager contract responsibility system, granting the manager more direct operating rights installed as
of 1987.188 Although decisions such as the determination of prices of SOEs’ products were still fixed by the
State, the SOEs bore responsibility for its own’ financial performance or debts.189 Nonetheless, the position
of the director of the enterprise remained an important vessel for State’s decision-making.
With the increase of productivity, the need for new technologies and resources grew. Luring foreign
investment and promoted export/ enter the international trade through overseas funds, countries other than
of socialist orientation provided for new technologies in the decades to come.190 Joint ventures with Chinese
State enterprises emerged successfully as from 1979 under the Law on Chinese Foreign Equity Joint
Ventures. The entry of foreign products ignited the profound transformation of the SOEs, which provided for
more than two-third of industrial output.191
New firms acquired up to date legislation and economic accommodation. This enactment illustrated the need
for accompanying economic reforms with legal and administrative regulations. Mao’s disdain of the exercise
of law was modified under Deng into a more instrumental and positivist use of law.192 The grip of State
control over SOEs remained firm, although the restriction of governmental direct management of SOEs was
an effective breakthrough of Chinese ideology. A new socialist market economy was soon to be known as
‘Socialism with Chinese Characteristics’.193
183 Zhou Enlai’s Four Modernizations: Industry, Agriculture, Defence, Science and Technology. Critics of the Democracy Wall
Movement, see Chapter 1, dared the Leadership by adding a Fifth Modernizations: Democracy. The Movement was jailed until 1997 and banished from the People’s Republic.
184See for example the articles 5, 23, 28 and 63 of the Interim Regulations on State-Owned Industrial EnterprisesState Council’s Interim Regulations, issued by by the State Council on 1 April 1983.
185Article 58 illustrates this division. See also, Xi, Chao, Transforming Chinese enterprises: ideology, efficiency and instrumentalism in the process of reform’, in: Gillespie, J. and Nicholson, Pip, Asian Socialism & Legal Change, the Dynamics of the Vietnamese and Chinese reform, Asia Pacific Press at the ANU Press, 2005, Canberra. p. 92, 100.
186Ibidem, p. 93 This policy was derived from CCP’s Decision on Economic Structure Reform, CCP Central Committee 1984. 187Law on Industrial Enterprises Owned by the Whole People, Adopted by the Seventh NPC on 13 April 1988 and came into force on 1
August 1988. This improvement was further enhanced by the Regulations on Transforming Operational Management Mechanisms of Industrial Enterprises Owned by the Whole People, Issued by the State Council and came into force on 23 July 1992.
188Li [2008], p. 358; accepted at the 13th National Party Congress. Through the 1983 Interim Regulations the old system was maintained, supra n 185.
189Naughton [2007], p. 309. Access to bank credit by non-performing loans was easily provided for by the central government since the entire structure of the State aimed at the same socialist goal, Li [2008], p. 354.
190For more information on Foreign Direct Investment in the PRC, see Chow [2007] Chapter 18. 191Naughton [2007], p. 299. The output of the enterprise was of greater importance to the government than its profit. Li [2008], p. 358. 192As we have seen in the preceding chapters, rule of law has not yet replaced the rule by law nor rule by man. 193The official acknowledgement of this Chinese Socialism came no sooner than 1992.
HUMAN RIGHTS, CHINESE BUSINESS | 34
ENTERING THE INTERNATIONAL MARKET [1992-2009]
The socialist market economy was officially embraced in 1992.194 The use of capitalist influences within the
parameters of socialism had been sustained by Deng and prolonged by his successor Jiang Zemin and
premier Zhu Rongji in 1996. The main objective was sustained by the renewed Company Law of 1994,
which was the legal vehicle for the improvement of governance in SOEs.195 In this reform era were the
development of reform of the SOEs through management reform and privatisation of the SOEs. The
management was restructured to enhance profitability and decision-making. The state’s influence was
reduced to an indirect ownership by share holding.
The profitable production of private enterprises could well be employed for State’s interests. In 1997 the
‘Grasping the large and letting go of the small’-policy concerning the SOEs led to unemployment in certain
area’s in the People's Republic in spite of the demands of the industry. ‘Letting go of the small’ either led to
privatisation or restructuring or even the close-down of the small and medium-sized SOEs.196 ‘Grasping the
large’ provided for the singling out of the main SOEs for state’s interests of raw resources such as coal, oil
or other industries of strategic importance. Due to these measures the State needed to supply for social
security and other accompanying reforms, the use of the danwei ended.197 Although not fully functioning, the
timing was right: the Asian financial crisis in 1997 created a rise in unemployment, ironically enough
originating from a lack of corporate governance. The needed core transformation of SOEs was a further
separation of corporation and government. This crisis and the WTO membership provided the right impetus
to embrace further reform.
With the WTO membership in 2001, the PRC took off with the expansion through international trade.
Acquiring thus global acceptance and fulfilling the requirements needed, such as adherence to human rights
has been most beneficial to the PRC as well as to the outside world.198 Upholding and promoting human
rights, the objectives of the accession on human rights had been transparency, predictability and compliance
to the ratified norms. Not only has the country become more affluent through trade and investment, the
market-based reforms have improved and spurred through WTO standards and the development of the rule
of law will be improved.199 The economic power the PRC has demonstrated has lead to a problematic Most
Favoured Nation [MFN] status within the WTO. However the requirements have to be met to create the right
climate for investors in providing for a credible and stable economy. Pragmatic as it may be, human rights
thus mattered.200
In 2002 an attempt to modify Deng’s Chinese socialism was uttered by Jiang Zemin in his ‘Three
Represents Thought’ [sange daibiao]. Jiang emphasised the economic development through privatisation of
194It was embraced in the October 1992 at the XIV Congress of the CCP. 195Company Law of the People's Republic of China, ‘Zhonghua Renmin Gongheguo Gongsi fa’, adopted Dec. 29, 1993, effective July 1,
1994. 196Li [2008], p. 360. 197Naughton [2007], p. 314. 198 See the following WTO Statement made in May 2000 as to the requirement of PRC’s adherence to human rights before accessing the
WTO, available at: http://www.wto.org/english/news_e/spmm_e/spmm31_e.htm. 199Lee Kuan Yew Singapore will disapprove, illustrating that as in Singapore, the political system can provide for a stable affluent society
while attentive to human dignity in a non Western mode, supra n 168. 200 Tay, Alice E.S. and Redd, Hamish, China: Trade, Law and Human Rights’, in: Cass, D. [eds],’China and the World Trading System,
Entering the New Millennium’, Cambridge, Cambridge UP, 2003, pp. 156-172.
HUMAN RIGHTS, CHINESE BUSINESS | 35
enterprises, cultural development and democratisation of the CCP. 201 An important instrument in the
development of economic reorganisation was the 2003 installed State Asset Supervision and Administration
Commission [SASAC], set up to govern regulation of the SOE.202 Another improvement had been the
Revised Company Law of 2005 which legalised important improvements in economic development. Insisting
on the separate legal personality of the SOE, State’s mingling decreased. 203 Traditional SOEs were
converted into joint-stock corporation [JSCs] or limited liability companies [LLCs] or the large limited liability
shareholding corporations [LLSC] more adaptable to the requirement of a market-economy. With the
enactment of the 11th Five Year Guideline [guihua] laying out the vision from 2006-2010, for the first time
Deng’s ‘Chinese Socialist State’ did not use the key instrument in the planned economy, the Five Years Plan
[jihua].204 The Guideline laid the foundation for building a “harmonious socialist society” [shehui zhuyi hexie
shehui] through the priority of economic development. The adagiums already known as ‘putting people first’
[yiren weiben), sustainable economic development, and the achievement of a ‘common prosperity’
[quanmian xiaokang) and a harmonious society, demonstrated the prioritization of economic development,
equal opportunities and growth.!"#$
In effect, the determining historical factors throughout the PRC’s economic evolution are indivisible from the
economic reform progress. According to Chow the hardworking human capital, Chinese nationalism, the
means of doing business through social networks [guanxi], are inherent to the PRC’s economic.206 Next to
legal change, social and economic reforms are intertwined and fully support each other. It is not possible to
enhance a legal reform without the concurring social embeddedness in society. Vice versa, it is not creating
legal certainty to progress economically without the legitimation in law and sustainability in society.207
Given the progression and bearing in mind the cultural importance to avert luan [chaos], it is evident that the
people of the PRC feel more reassured and inclined to a stable and providing economy and a State-
controlled nation.208 The existence of the SOE has been one of the pillars of the PRC until today as a result
of the fast forwarding of Chinese economic policy. The following paragraphs will comment on the context
and structure of the governing State organs and the quasi-State organ SOE.
3.1.2. THE STATE GOVERNING THE STATE OWNED ENTERPRISE
For a better understanding of the decision making concerning SOEs within the State of the People's
Republic, its governmental structure needs to be unravelled. Emphasising the unitary State the Constitution
of the People's Republic provides its central government through the powers vested by the CCP. The Party
201HUGHES, Christopher R., ‘Chinese Nationalism in the Global Era’, Politics in Asia Series, Routledge Taylor and Francis Group,
London and New York, 2006, p. 76. For details on Three Represents Thought, see http://www.idcpc.org.cn/english/policy/3represents.htm. 202Naughton [2007], para. 13.3.2.2. See the importance of the SASAC in the subsequent paragraph 3.1.2. Para. 3.3.1 will elaborate on the
State’s influence on SOEs during this transformation with regard to state’s responsibility under international law. 2033rd Revision of the 1993 Company Law, 2005, entered into force on 1st January 2006. 204Fan, C. Cindy, ‘China’s Eleventh Five-Year Plan (2006–2010): From ‘Getting Rich First’ to ‘Common Prosperity’, in: Eurasian
Geography and Economics, 2006, 47, No. 6, pp. 708–723. 205Ibidem, pp. 709, 716, 717. 206Chow, [2007], pp. 335. 207Due to the current large amount of reserves the PRC is seen as one of the key nations to provide assistance in the recent global
financial crisis. It is this swift power equation that ‘provides the evidence to the PRC that the Chinese model is working." http://news.bbc.co.uk/2/hi/asia-pacific/7671482.stm.
208The People’s Republic referred to the year 2008 as the year of luan, chaos. The gradual development to a free market and the WTO standard-setting might eventually lead to a change in the CCP’s hegemony and pave the way for a further dialogue on another level in human rights policy. See for example the 2009 National Human rights Action plan as described in Chapter 2.
HUMAN RIGHTS, CHINESE BUSINESS | 36
is headed by the current president Hu Jintao who succeeded Jiang Zemin in 2002. It appoints all the leading
positions in executive, legislative and judicial organs. The State Council, the ‘Cabinet’, is awarded the
executive power and is appointed by the National People’s Congress [NPC] embodying State’s legislative
power.209 Premier Zhu Rongji heading the government was succeeded by the current premier Wen Jiabao in
2002. The influential Five Year Plans or Guidelines have been drafted as economic strategies by the CCP
steering the economy according to Chinese Socialism.
With regard to international trade and SOEs, some additional adjustments were created. As of 1979 the
People's Republic developed a foreign trade policy. Within the State Council the Ministry of Foreign Trade
and Economic Cooperation [MOFTEC] had been awarded the direction of foreign trade. The Ministry was
renamed as the Ministry of Commerce [MOFCOM] after restructuring in 2003. With respect to the
reformation of SOEs, the State Council installed the SASAC in 2003.210 Although stimulating the issue of
export and import licences of various enterprises by the MOFCOM, the commodities of state’s interest, such
as energy and raw materials, had been placed under the control of the SASAC.211 Relieving the central
government of its ownership, SASAC’s main objective as investor and owner of state assets such as SOEs
is to execute governmental decisions. Although many issues are decentralised, state security issues can
evolve in SASAC’s all encompassing regulations for SOEs, the ownership of the main SOEs, or
shareholding and appointment of management212, accordingly demonstrating the impact of the state on the
enterprises.213 Important to note is that the credit loans for international transactions by the State owned
Central Bank of China et al. is a major asset to SOEs.
3.1.3 ZOOMING IN ON THE NATURE OF STATE OWNED ENTERPRISES
As the preceding paragraph has exemplified, State Owned Enterprises play a significant role in China’s
remarkable economic transformation. As the name suggests, the State holds the ownership of the
enterprise. However, a one-dimensional definition does not do justice to the intricate nature of the SOE.
Besides ownership, management, SOE’s regulation and attribution of conduct demand an effective definition
prior to analysing the obligations for State and the obligations for enterprise in the following paragraph.214
According to the 2005 OECD Guidelines a definition of a State Owned Enterprises is, ‘an enterprise where
the State has significant control, through full, majority, or significant minority ownership.’ 215 Although
distinguishing between shareholders’ ownership and management’s control of the SOE, it is apparent that
209Article 85 Constitution respectively 58 jo. Article 2 Constitution. 210See on the SASAC, http://www.sasac.gov.cn. 211Chow [2007], para. 17.4 212 In spite the official decentralisation of this function, the appointment procedure unfortunately sometimes is hampered by the
conflicting CCP’s appointing power. It has creatively ascribed this power to the CCP Committee within the SASAC in most of the cases. Urban Economy, p. 316-318. The independency of the SASAC needs to be further improved.
213With regard to large SOE oil companies, paragraph 3.4 will elaborate on the structure and human rights impact on enterprises in this branch. See also the ICG Report, ‘China’s thirst for Oil’, Asia Report No. 153, 9 June 2008.
214 Wee, C., Regulating the Human Rights Impact of State-owned Enterprises: tendencies of corporate Accountability and State Responsibility, International Commission of Jurists, Danish Section, October 2008, p. 9. Available at: http://www.icj.org.
215Organisation for Economic Co-operation and Development [OECD], OECD Guidelines on Corporate Governance of State-owned Enterprises [2005], p. 11. Available at: http://www.oecd.org/dataoecd/46/51/34803211.pdf
HUMAN RIGHTS, CHINESE BUSINESS | 37
the State still often is the major stakeholder of the enterprise.216 Varying from infrastructure to sectors of
energy and transport, SOEs still dominate the most prominent fields of economy.
Some Chinese scholars state that because China’s SOEs are belonging to the State in this capacity the
enterprises perform a governmental function of public services. It is therefore not structured for capitalist
reasons, but as a useful instrument for the ‘majority of the people’.217 An enterprise owned by the whole of
the people bearing legal personality, shall be ‘a socialist commodity production and operation unit making its
own managerial decisions, fully responsible for its profits and practicing independent accounting.’218 Yet,
according to Li SOEs are being transformed into ‘enterprises responding to price signals of a market
economy retaining the basic SOE organisational form and enjoying State bank loans and enlistment on an
active stock market’.219
Due to the many forms in which an SOE might transform, some prefer a workable definition of an SOE, as
‘companies in which the PRC government has a majority stake-holding. Companies are considered private if
the State does not own a controlling share.’ SOEs are considered to be State Owned or controlled
businesses performing operations similar to non-State business enterprises.’220For which of the above
stated definitions one may choose, the public-private dichotomy of the SOE needs to be acknowledged.
Both the nature and the purpose of the enterprise and its conduct need to be established in order to
ascertain the balance of state interest and corporate governance.221 The CCP still holds a reasonable firm
grip of the main SOEs in spite of the reduction of State’s ownership through shareholding and the
enhancement of managerial decision-making as a result of the privatisation of SOEs. Important to note is
that SOEs can be formally regarded as both public and privatised. This might seem a surprise given the
name. Even more so, the degree of internal State control does not in all instances equal the official legal
corporate qualification.222
Owing to the overlap in the traditionally separated fields of State and corporation, the SOE requires an
examination of the separate State’s obligations and corporate obligations under international law as an actor
in the domestic, international and commercial field. These obligations being intertwined can produce an
increase of expectations as both State and corporate responsibilities need to be fulfilled.223 The State’s
obligations under international law will therefore be addressed in the subsequent paragraph.224
216Li[2008] p. 354,Some SOEs have a minority of State owned assets. Other former SOEs still have the State as the majority stakeholder.
This creates a non-transparency on the market in what is private or public company. 217As Jiang Zemin has stated in his Three Represents theory. 218Wang [1997], p.360. 219Li [2008], p. 354. 220‘Mapping State obligations for corporate acts: An examination of the UN Human Rights Treaty System’, Report No. 1 International
Convention on the Elimination of All Forms of Racial Discrimination, Prepared for the SRSG on Human Rights and Transnational Corporations and Other Business Enterprises, December 18, 2006, p. 1
221The relevance of this balance is illustrated in para. 3.3. with regard to State’s Immunity for China’s agents. 222This will be elaborated on in the subsequent paragraphs. 223It is unfortunate that the Committees to the core human rights treaties do not clarify their understanding of a SOE. See for example,
Individual Report ICESCR no. 2 2007, Executive Summary, sub E, p. 7. 224The SOE’s corporate responsibilities will be addressed in Chapter 4. See for in depth discussion also Xinmin Zhou, ‘Core capability of
leaders: exploration and practice of China's state-owned enterprises’, Manhattan Beach, CA: East West Discovery Press, 2008.
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3.2 STATE OWNED ENTERPRISES: THE PEOPLE’S REPUBLIC AND THE DUTY TO PROTECT
Understanding the current reform of Chinese State Owned Enterprises within its historic and actual context,
the State’s connection to the corporation is considerable. The following paragraphs will examine to what
extent the People’s Republic bears responsibility for its State Owned Enterprises. First general obligations
and the State’s responsibility under international law will be examined in accordance with the secondary
rules for obligations as laid down in the ILC’s Articles on the Responsibility of States for Internationally
Wrongful Acts.225 The articles 4 to 8 will be examined supported by essential case law. Lastly the principle of
due diligence will amplify State’s responsibility for third parties.
STATE RESPONSIBILITY UNDER INTERNATIONAL LAW
State’s responsibility for its actors needs to be determined within the established framework of obligations
under international law. The following paragraph will deal with various issues. In the light of the existing
case-law will elucidate State’s duties concerning State Organs as well as private actors and the dual-natured
SOE’s. For the question remains, can the State itself be held responsible under international law for the
internationally wrongful acts of its SOEs?
Traditionally, the State is the principal subject under international public law. States are sovereign in their
interaction with other sovereign States. The Westphalian pillars demonstrate an external dimension of
sovereignty in the equality between States and an internal dimension of sovereignty in the domestic affairs
within States.226 These horizontal alignments between States define the realm of rights and obligations
attributed to States under international law.227 Contemporary international legal developments demonstrate
a supplementary vertical development in State’s responsibility: responsibility for non-State actors such as
individuals and private actors.228
The existing general framework on the issue of State responsibility with regard to internationally wrongful
conduct has been prepared by the International Law Commission [ILC] in the Articles on the Responsibility
of States for Internationally Wrongful Acts on request of the General Assembly of the United Nations.229 This
basic codification of duties by the States exists of mainly obligations on a horizontal level, from State to
State.230 The first part of the document on the internationally wrongful act of a State reveals general
principles on State responsibility in threefold. As the original subjects under international law, the State is the
principal bearer of rights and duties. After committing an unlawful act the State can be hold responsible for
225Primary rules of international law are obligations following from customary law and treaties; secondary rules stem from the law of
State responsibility, concerning conditions and legal consequences of the violated rule. 226In this thesis the emphasis is on the part of the People’s Republic of China as the home State of its actors, the SOEs. 227The Westphalian Peace of 1648 conducted for the first time the notion of international law which defined sovereignty. The current
relevance of this historic event is found in article 1 of the UNC on sovereign equality of all Members. 228For a historic evaluation of State’s responsibility, see e.g. MALEKIAN, F., ‘International Criminal Responsibility of States, A study on
the Evolution of State Responsibility with Particular Emphasis on the Concept of Crime and Criminal Responsibility’, Borgströms Tryckeri AB, Stockholm, 1985, Chapter 1 and 2. See further, Lillich, Richard B.,’ International Law of State Responsibility to Aliens, University Virginia, 1983; Spinedi, Marina [Ed], ‘United Nations Codifications of State Responsibility’, Oceana Publications, New York-London, 1987.
229The ILC was mandated to codify the principles of international law concerning State responsibility. In reaction to United Nations GA Resolution 799 [VIII] of 1953 the ILC’s Articles on the Responsibility of States for Internationally Wrongful Acts [hereinafter ILC Articles] were finally decided upon in 2001, UN Doc. A/CN.4/L.602/Rev.1.
230 The International Commission of Jurists has explored other issues of State responsibility under criminal and civil law. See, http://www.icj.org
HUMAN RIGHTS, CHINESE BUSINESS | 39
the breach of international law resulting in an obligation for the wrong-doing State.231 An internationally
wrongful conduct consists of either an action or an omission on the part of the State. In order to constitute an
international wrongful act, this conduct must firstly be imputed to the transgressing State. Moreover, the act
must lead to a breach of international legal regulations by the State.232 Finally, the internal domestic
legislation of the wrong-doing State is not relevant with regard to the nature of the wrongful act.233 A clear
breach of international law constitutes an obligation for the State as such in spite of the lawful character of
the act under domestic law.234
With regard to the attribution of conduct to the State, the ILC States that the general rule of attribution under
international law is either conduct of State organs of government or conduct as a result of the organs’
direction, instigation or control.235 The following elaborations on this rule demonstrate the framework as
developed by the ILC, concerning the attribution to the State of conduct of its organs [article 4], the
attribution to the State of conduct of entities empowered to exercise the governmental authority of a State
[article 5] and the attribution to the State of conduct of organs or entities exceeding the scope of their
authorised capacity [article 7]. Finally, the ILC leaves room for the attribution to the State of non-State
actors’ behaviour carried out ‘on the instructions of a State organ or under its direction or control’ [article
8].236
3.2.1 THE ATTRIBUTION OF CONDUCT OF AN ORGAN OF THE STATE
Article 4 of the ILC Articles constitutes the basic principle that acts by State organs are accredited to the
State.237 The article demonstrates the perspective that State is a comprehensive body in which all organs
are united. It follows that if any element of the State is attributed State responsibility, the State in effect is.
Any classification of entities as State organs as given by the internal legal provisions is regarded as the
State itself. As a result, no distinction can be made based on the place in hierarchy within the State,238 the
function of the organ being executive, legislative or judicial,239 or the exercise of the function being in central
or decentralised government.240 On the other hand, international law may accredit the State responsibility for
231Article 1 ILC Articles. 232Article 2 ILC Articles, reads: ‘There is an internationally wrongful act of a State when conduct consisting of an action or omission: (a)
Is attributable to the State under international law; and (b) Constitutes a breach of an international obligation of the State.’ In addition to article 2(b), see article 12 ILC Articles: the obligation needs to be in force when violated. This is the principle of tempus commissi delicti.
233Article 3 ILC Articles. 234‘Commentary to International Law Commission Articles on State Responsibility’, ILC Annual Report 2001, Chapter IV, p. 74. UN
Doc. A/56/10, 2001. Available at: http://untreaty.un.org/ilc/texts/instruments/englsih/draft%20articles9_6_2001.pdf235Ibidem, p. 80. 236Ibidem, p. 83. 237Article 4 ILC Articles, reads: ’1. The conduct of any State organ shall be considered an act of that State under international law,
whether the organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central government or of a territorial unit of the State. 2. An organ includes any person or entity which has that status in accordance with the internal law of the State.’
238Commentary to ILC Articles [2001], supra n 47, p. 86. 239Ibidem. Salvador Commercial Company Case, UNRIAA, vol. XV, p. 455. This rule has been confirmed by the International Court of
Justice, perceiving it as a rule of customary law, in ‘Difference Relating to Immunity from Legal Process of a Special Rapporteur of the Commission on Human Rights’, I.C.J. Reports 1999, p. 62.
240Commentary to ILC Articles [2001], supra n 47, p. 88
HUMAN RIGHTS, CHINESE BUSINESS | 40
conduct of any natural or legal person regarded as State organs, even if domestic legislation has not
provided for such a categorization.241
The ILC Articles leave room for conduct of State Owned Enterprises, when acting in the capacity of
commercial, non-State actors. According to article 4, if the SOE is a part of the State the conduct of the
SOE can be attributed to the State. According to the second part of the article in case the SOE is not
categorised as a State organ under internal law, responsibility under international can still be accredited to
the State when the organ acts in the capacity of the State.242 If the act or omission of the SOE does not
resemble the official capacity of the State, it can be difficult to ascribe responsibility to the State based on
this article. In order to classify the conduct of the SOE, the given circumstances should provide the exact
position of the actor under international law.243 The following articles provide in several other bases for
attribution of SOEs conduct for State responsibility.
3.2.2 THE ATTRIBUTION OF AUTHORISED CONDUCT
The ILC addresses in article 5 non-State entities which are rewarded the exercise of governmental authority
empowered by the internal law of the State.244 These entities are public, semi-public and even private
elements provided that they are endowed with a particular aspect of governmental authority. The private or
commercial acts or omissions by the conferred upon entity are not regarded as State’s conduct if this
conduct has not been authorised. What in fact falls within the scope of governmental authorisation has not
been defined by the ILC. Within the cultural given parameters content, purpose, extent and the manner of
award the public authority is of importance for the applicability of article 5.245
Given their particular nature, State Owned Enterprises can easily fall within the scope of article 5. When the
SOE is bestowed with the governmental capacity and acts as such, the authorised conduct can be
accredited to the State. Nonetheless, as was illustrated by the diverse definitions of SOEs the precise nexus
between the State and the SOE can be a determinant factor. An evaluation of the given circumstances is
necessary in the light of attribution concerning article 5. The mingling interests due to State’s ownership
along with its governance attribute to the SOEs non-transparent nature. In the light of its ownership the State
might perform as private actor on the market. By influencing the appointment of the Board members,
management and directives, the State exceeds the influence of regular corporate actors.246 Either the SOE
is commercially involved as a State organ, or the SOE is within the realm of public governmental capacity,
be it authorised, unauthorised or directed by the State as a third party.
241Ibidem, p. 91. To support the view of the ILC, the Maffezini-case exemplifies the objective of article 4, a case clarifying the ownership
and the subsequent responsibility. International Centre for Settlement of Investment Disputes Case of Maffezini v. Spain, Case no. ARB/97/7Decision of the Tribunal on Objections to Jurisdiction, 25 January 2000.
242As was made clear in the Case Concerning the Application of the Convention on the Prevention and Punishment of the Crime of Genocide [Bosnia and Herzegovina v Serbia and Montenegro] ICJ 2007. In the Maffezini-case, the functional test established the enterprise’s governmental performance, the structural test provided for the formal link to the State.
243Wee [2008]p. 23. 244Article 5 ILC Articles, reads: ’The conduct of a person or entity which is not an organ of the State under article 4 but which is
empowered by the law of that State to exercise elements of the governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in the particular instance.’
245Commentary to ILC Articles [2001], p. 94. 246This impact of the State on its actors will be deepened under article 8 ILC Articles.
HUMAN RIGHTS, CHINESE BUSINESS | 41
3.2.3 THE ATTRIBUTION OF CONDUCT EXCEEDING AUTHORITY
State organs can perform acts or omissions which exceed the scope of their authorised capacity. The entity
concerned might even act contrary to instructions. In either case the conduct can be attributed to the State,
even if this conduct is regulated under national law, states article 7.247 This article complements the
attribution of authorised conduct to States under article 5. An important issue is to establish the official
capacity of the entity concerned. If the compromised entity has clearly acted outside its authorised capacity,
the question is whether conduct can still be addressed to the State. A related observation is the thin line
between what official conduct is and what classifies as private. The ILC comments in resolution by
introducing the test of recurrence; if the conduct questioned generates a consistent pattern, a probable
foresee-ability by the State should evolve in appropriate measures taken to prevent such conduct.248
In any case it is important the act or omission under scrutiny has been established with evident
authorisation. The Caire-case brought before the French-Mexican Claims Commission has been the
steppingstone to article 7.249 Two officials had shot their detainee after attempting to obtain money by
threatening him. It was concluded that due to the two officials acting, although not within the parameters of
their capacity and not under instruction of superior officials, conduct still could be attributed to the State. The
Commission excluded responsibility ‘only in cases where the act had no connexion with the official function
and was, in fact, merely the act of a private individual.’250 In another case brought before the Iran-United
States Claims Tribunal the aforementioned can be stipulated. In the Petrolane, Inc v. Islamic Republic of
Iran-case there was an indication that the corporation had been given public powers. The conduct had been
carried out by corporate employees shrouded with governmental authority.251
In addition to article 5, State Owned enterprises granted with the authority to act as governmental actors
might exceed their given restrictions. The State will be held responsible for the apparently authorised SOE,
even though its act or omission exceeds the limitation. As the SOE is more likely than regular corporate
entities linked to governmental authorisation, the State ought to be more alert as to SOE’s conduct and in
developing the appropriate measures when an organ exceeds its authority. In assessing generally the
conduct of an SOE, the nexus between the State and the organ as described in article 5 and 7 is evident.
Given circumstances however, may reveal SOE’s engagement in conduct in the private sphere as a
commercial actor. Bearing in mind the Caire-case, the exclusion of purely private conduct comes to mind.
But even in this case, SOE’s non-transparent nature must be disclosed. Ownership in the end is not the only
string that attaches the SOE to the State. In the following description of article 8 the ILC establishes another
base of State responsibility: the State governing an entity by means of direction, control or instruction.
247Article 7 ILC Articles, reads: ‘The conduct of an organ of a State or of a person or entity empowered to exercise elements of the
governmental authority shall be considered an act of the State under international law if the organ, person or entity acts in that capacity, even if it exceeds its authority or contravenes instructions.’
248Commentary to ILC Articles [2001], supra n 47, p. 102. See for more on the State’s duty to take measures the following paragraph V. on due diligence and the State’s responsibility to prevent wrongful conduct.
249UNRIAA, Vol. V, p. 516. See also the Mallen-case of 1927, Mallen-case, UNRIAA, 1927, vol. IV (1925), p. 173-177;in this respect, in which the private act of an official was not and the wrongful act within his mandate was attributed to the State.
250Commentaries ILC Articles, par. 13, p. 91 and par. 5, p. 101. 251UNRIAA, Vol. XX, Petrolane, Inc v. Islamic Republic of Iran [1991], 27 Iran-U.S.C.T.R. 64. See also in this respect the Nahlik v.
Austria-case, Communication No. 608/1995 Franz Nahlik v. Austria, Communication No. 608/1995, U.N. Doc. CCPR/C/57/D/608/1995 (1996). See in this respect also the Velázquez Rodríguez-case, Velázquez Rodríguez v. Honduras, Judgement of 29 July 1988. Inter-Am.Ct.H.R. (Ser.C) No. 4 (1988).
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3.2.4 THE ATTRIBUTION OF CONDUCT UNDER STATE’S DIRECTION OR CONTROL
As article 5 and 7 have exemplified State organs falling within the scope of State’s responsibility in case of
governmental authorisation, notwithstanding exceeding its parameters. Under article 8 a distinct base is
found for State’s responsibility. 252 On the one hand an entity might engage in conduct after State’s
instructions. On the other hand, an entity falls within State’s responsibility after performing a wrongful act
under State’s direction or control. Although it is ‘sufficient to establish either one of them’253 the differences
will be made evident in the following cases. The division is not the only particularity. The ILC includes the
possibility that non-State actors partake in State’s activities. It is not essential that a State organ is involved
or that governmental authorisation is apparent through conduct, in contrast to article 5. Some entities have
acquired an independent legal personality through internal law; others only conduct on the base of State’s
legal personality.254 The central issue remaining is the practical implication of the conditions of instruction,
direction and control.
In the renowned Nicaragua-case255, the establishment of effective control was a prerequisite for the ICJ in
order to attribute State responsibility to the United States. The paramilitary opposition supported by the US
was held accountable for violations of international humanitarian law. The establishment through a ‘test of
control’ of the level of interdependency would be determinant of the responsibility.256 The Court denied the
claim that by providing the opposition with [i.] subsidies and arms [ii.] supervision through coordination, [iii.]
instructions by training, the condition for effective control was adequately met in order to impute full
responsibility on the US. Since the wrongful conduct could have been well performed outside the control of
the State further evidence needed to be submitted in order to attribute the responsibility to the United States.
This ‘test of control’ has yet been criticised in the Tadi!-case, adding that the degree of control may vary in
line with the circumstantial facts.257 The case-specific appreciation of the conduct concerned is necessary to
establish the attribution of the responsibility of the controlled conduct to the State.258
The ILC comments on the circumstantial facts of the conduct concerned specifically addressing State control
by means of the ownership of enterprises. In a number of cases the ILC addresses the State in the use of its
ownership or control for certain aims or the conduct of SOEs while exercising public powers.259 In the
Barcelona Traction-case it has been made evident that the under internal law separate legal personality of a
corporation cannot be used to obscure State practice. When the State creates a corporation initially, the
assumption of state ownership cannot instantly be made.260 In the SEDCO-case, property of the oil company
concerned had been confiscated. Yet no evidence to support the government’s involvement could be
submitted by means of the use of the corporation as a vehicle for State’s interests. No indication could be
252Article 8 ILC Articles, reads: ‘The conduct of a person or group of persons shall be considered an act of a State under international
law if the person or group of persons is in fact acting on the instructions of, or under the direction or control of, that State in carrying out the conduct.’
253Commentaries ILC Articles, p. 108, par. 7. 254Ibid. p. 104 255‘Military and Paramilitary Activities in and against Nicaragua’ (Nicaragua v. United States of America), I.C.J. Reports 1986, p. 14. 256Commentaries ILC Articles, p. 105 and 106. 257 Prosecutor v. Tadi!, (1999) I.L.M., vol. 38, p. 1518 258See in this respect the following cases on the level of control by the State, Starrett Housing Corp. v. Government of the Islamic
Republic of Iran (1983) 4 Iran-U.S.C.T.R.122, at p. 143; Yeager v. Islamic Republic of Iran, (1987) 17 Iran-U.S.C.T.R. 92, at p. 103. See also the Namibia-case concerning the factual control over territory.
259Commentaries ILC Articles, supra n 47, p. 107, par. 6. 260See in this respect the illustrating case of Schering Corporation v. Islamic Republic of Iran, Iran-U.S.C.T.R. (1984).
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given either as to the exercise of public powers by the corporation involved.261The State could only be
attributed responsibility for the conduct in question when evidence demonstrated either case.
In another case the State was attributed the discriminating conduct of a company in which the government
was the largest stakeholder, the Hertzberg v. Finland-case. The UN Human Rights Committee held that the
State was responsible for actions of the company in which the State has the dominant share of 90% and
which was placed under particular government control.262 The Foremost Tehran-case demonstrated the
majority shareholder of 52% had been in the hands of State-owned and State controlled corporations. These
had been a vessel for the government to implement its policy. Moreover, the majority of the Board were
appointed government officials.263 In sum, the foregoing cases illustrate the terms qualifying indicated
control: ‘effective control’, a ‘circumstantial degree of control’ and State’s integration within the specific
operation.
Article 8 expands the scope of the codification of the ILC. Next to the apparent State’s liaisons, private
entities such as enterprises, transnational corporations, even privatised State Owned Enterprises might
contribute to State’s responsibility in case of wrongful acts or omissions. The character of SOEs offers the
State the opportunity to impact the entities to a larger extent than in regular private entities. The ultimate
form of control by the State is ownership of the SOE. Even when this ownership formally has been modified
through the privatisation of the enterprise, a termination of State’s impact on SOEs is not guaranteed: the
State might still be the major, or the largest minor, shareholder. The State might govern the appointment the
director or central management, formulate general or SOE-specific regulations and monitor implementations
in SOEs. This dependency to the State contributes largely to the non-transparency of the inner structure of
SOEs, notwithstanding the question which entities concerned can be held accountable for established
wrongful conduct. In addition, the State’s due diligence to prevent internationally wrongful conduct is an
important doctrine supporting the framework of State responsibilities.
3.2.5 DUE DILIGENCE AND THE STATE’S RESPONSIBILITY TO PROTECT
Next to the general level of State responsibility based on a wrongful act or omission by the State, the State’s
liability can be established by its failure to prevent wrongful conduct by third parties, such as private
corporations.264 It is important to bear in mind that alongside attribution, the State can be held liable for
breaking other obligations under international law, for instance the duty of due care otherwise known as due
diligence.265 Initially a private act not under State control may not be attributable to the State. However, the
principle of due care requires the State to act on another level as well.
261SEDCO, Inc v. National Iranian Oil Co., Iran-U.S.C.T.R. (1987).Other cases to which the ILC refers to, are worthwhile mentioning:
International Technical Products Corp. v. Islamic Republic of Iran, Iran-U.S.C.T.R. (1985); Flexi-Van Leasing, Inc. v. Islamic Republic of Iran, Iran-U.S.C.T.R. (1986). See for more on the Iran-U.S.C.T.R. cases, Sornarajah, M., The International Law on Foreign Investment, Faculty of Law, National University of Singapore, 1994, University Press, Cambridge, pp. 384-397.
262Hertzberg v Finland, Leo Hertzberg et al. v. Finland, Communication No. 61/1979, U.N. Doc. CCPR/C/OP/1 at 124 (1985). 263Foremost Tehran Inc v. Islamic Republic of Iran, Iran-U.S.C.T.R. 228 [1986]. 264Article 2 of the ILC Articles refers to this duality of State’s own direct responsibility and its indirect responsibility for third parties.
There are circumstances which exclude the wrongfulness: consent, self-defence, countermeasures, force majeure, distress and necessity. See, articles 20 – 27 ILC Articles.
265CASSESE, A., ‘International law’, Ed., Press, Place, 2005. Chapter 13, International Wrongful Acts, p. 241-277; DIXON, M., Textbook on International Law, 6th edition, 2007, Oxford University Press, Chapter 9.
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The actual scrutinised conduct may not be awarded to the State, nevertheless the effects of the violation
and the inherent protection of the injured party concerned point towards the State. This idea is related to the
distinction between the obligation of result and the obligation of conduct.266 Not only does the result of the
violation matter, the process leading to the result may have inflicted the outcome of the conduct as well.
With respect to the State, the actual prevention by all available means should demonstrate the State’s
obligation of best efforts. It is very well possible that the actual result at the end does not establish a violation
of international law, but that from the absence of State’s obligation to diligently conduct, the violation can be
construed. At the heart of the framework on State responsibility is yet another distinction, the so-called
objective and subjective theory of responsibility. The objective theory aims at the strictly positivist
perspective that the apparent breach of an obligation constitutes liability, irrespective of fault. The subjective
‘fault’ theory regards the liability of a State only then established in case of culpable negligence, intent or
carelessness.267 Legal practice and customary rules demonstrate an inclination to the objective measure,
which provides a transparent system, put aside some apparent cases of State’s reasonable care.268 The ILC
Articles have not explicitly incorporated either of the distinctions, since under international law both exist in
customary law or judicial pronouncements. 269 The following cases exemplify diligent practice under
international law.270
In the Corfu Channel-case the ICJ Stated that States have the duty not to allow knowingly its territory to be
used for acts violating the rights of other States. In this case a British vessel exploded on the toll of lives and
material damage. The mines in the Albanian waters causing this catastrophe could have been placed with or
without the governmental authorisation. In both cases, the responsibility was imputed to Albania since the
obligation of diligent conduct to take all means necessary had carelessly not been fulfilled. It sufficed that ‘it
knew or must have known about the present mines and should have warned third States of their
presence.’271The Noyes Claim v Panama-case demonstrated that the injury of Noyes caused by private
persons could not be attributed to the State of Panama. The USA claimed that although it concerned
privately wrongful conduct, the State ought to have taken all means necessary by means of safeguard of the
police to prevent the wrongful conduct. The outcome however provided only for a general obligation to
provide protection against wrongful conduct and the case concerned did not establish negligence by the
State of Panama.272 Yet, the ruling in the US v Iran Hostages-case thwarted the misconduct of individuals to
be attributed to the State.273 The State of Iran was held responsible for the failure to protect with diligent
conduct the US Embassy during the attacks of private persons. The State had intentionally not taken the
measures needed in order to safeguard the rights of the US. In the AAPL v Sri Lanka-case Sri Lanka could
not be held responsible for the attacks of the Tamil Tigers on the destruction of the installations. However,
the Court held that, although this obligation could not construe an absolute standard, reasonable care
266The distinctions mentioned in this paragraph matter since the ILC has after many debates left them out of the final codification. 267Cassese [2005], p. 241-243. The consequence of this objective measure lies in the reparation for the moral or material damage caused
by the violation. Though interesting, I refer on this matter to Part II of the ILC Articles on the legal consequences of violating international law.
268Dixon, [2007], p. 244-246. 269See in this respect Cassese [2005], p. 251. 270More cases illustrating the obligation of diligent conduct by the State are e.g., 271Corfu Channel [United Kingdom v Albania] ICJ 1949, p. 4 at pp. 22-23. 272Noyes Claim [USA v Panama], UNRIAA, VOl. VI, 1933. 273US v Iran Hostages, ICJ 1980.
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needed to be taken by the State: Sri Lanka had failed to take all precautionary measures to prevent the
rebels to harm the installation, being property of the AAPL.274
These illustrative cases demonstrate the extent of State’s lack of diligent conduct for third parties under
international law. To begin with, States are not responsible for private conduct. However, the diligent
conduct obligation requires State to prevent possible violations, subjective or objective, by private entities
such as privatised SOEs. The asset of due diligence obligation to the general responsibilities of States under
international law has proven to be beneficial for the redress of harmful conduct.
3.2.6 CONCLUSION
In sum, according to the ILC Articles the general principles for State’s responsibility for State Owned
Enterprises under international law exists of several obligations. Regarding State organs, responsibility will
be attributed either exercising or exceeding governmental authority. Regarding non-State organs such as
SOEs, the State is to be held responsible for any wrongful act or omission under direct control of the State.
When in the remaining cases a private act of an SOE as a result has not created a clear violation or has
been established by purely private conduct, the State has to perform diligent conduct due to other
responsibilities under international law.275
On top of the foregoing, due to the double-natured SOEs, both the public as the private face of the
enterprise can be addressed under the framework on State responsibility. The State is accredited
responsibility when SOEs act wrongfully on behalf of the State based on the articles 4 to 8 of the ILC
Articles. The State can be imputed for failing to prevent SOEs’ wrongful conduct performed in a private
sphere according to the diligent conduct obligation.
Additional means to redress harmful conduct of SOEs can be found in international human rights regulations
and practice. Since human rights fall within the scope of responsibilities under international law, State
protection of human rights can be derived from the presented conclusions on State’s responsibility. In the
subsequent paragraph the specific State obligations under international human rights law for private and
public conduct of the SOE will be addressed.
3.3 STATE RESPONSIBILITY UNDER INTERNATIONAL HUMAN RIGHTS LAW
The preceding paragraph exemplified possible grounds for attribution to the State under international law of
private conduct of SOEs. The current paragraph demonstrates to what extent under international human
rights law States bear certain obligations for conduct of its actors. In particular with regard to private entities
such as the dual-natured SOE, the human rights regime is in process developing obligations for both States
and enterprises.276 In the following subsection general State obligations to respect, protect and fulfil are
explained. The Treaties ratified by the People's Republic’s elucidate these obligations. An analysis using
274Asian Agricultural Products Ltd [AAPL] v Democratic Socialist Republic of Sri Lanka [1991] 4, I.C.S.I.D. Reports 245. 275See also, Wee [2008], supra n 31, p. 32. 276See in this respect the subsequent paragraph 3.3 on the State Owned Enterprise and the Obligation for Corporations under international
human rights law. Note that the SOE when acting as an State Organ falls within the scope of the described State obligations.
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case-law under international human rights regime concerning the conduct of third parties, such as SOEs,
exemplifies the Tripartite-framework of obligations when applicable.
3.3.1 THE TRIPARTITE NATURE OF OBLIGATIONS
The nature of State’s obligations under the international human rights regime has been addressed on
several levels. The classic distinction of human rights in negative civil-political rights versus the positive
economic and social rights have been reflected in the wording of the two 1966 UN Covenants, the ICCPR
and the ICESCR.277 Correlating with the development of human rights are distinctions based on the nature
of obligations.278 The previously discussed dichotomy between obligation of conduct and result has been
implemented within the human rights discourse as well. The most applied analytical tool in observance of
human rights however has been the Tripartite Typology.279 The Tripartite-distinction, the duty to respect,
protect and fulfil, sheds light on the significance and scope of the obligations as portrayed in the Treaties.280
A better understanding of the scope of concrete implementation of different levels of State obligations can
be relevant for the respective policy and enforcement of human rights.281
THE OBLIGATION TO RESPECT, PROTECT & FULFIL
The Obligation to Respect requires States to refrain from interfering with or depriving of the enjoyment of
human rights, to the extent that this might hamper current satisfaction of human rights. This duty is regarded
as the classic duty of non-interference.282 The Obligation to Protect requires States to prevent violations of
human rights by third parties by regulation. The State must take positive preventive action to safeguard
against intrusive and harmful action by third parties. Legislation is regarded as an important means to
prevent, punish, investigate and redress harm by non-State actors.283To exemplify, the right to work as
provided in the ICESCR is protected when the State prevents third parties to interfere with the enjoyment of
this right.
The Obligation to Fulfil requires States to take appropriate legislative, administrative and judicial measures
to ensure full realisation of human rights.284This duty can be subdivided into the duty to promote, facilitate
and provide. In order to promote, the State needs to encompass long-term measures and alter public
277Stipulating initially the negative non-interference of the State as the negative pole of human rights and the subsequent positive
intervention of the State protecting human rights, the human rights regime today has found an integrating way in analysing any particular human right. Each right is equipped with a range of negative as well as positive aspects. Providing for a parallel political schism between the East and West, human rights discourse have provided for several blurring perspectives on the human rights regime, as Chapter 2 has demonstrated.
278Many distinctions have been developed since, all contributing to the realisation of human rights within each respective State. A division is between the immediate and progressive; as we have seen in the previous paragraph, the distinction between the obligation of conduct and the obligation of result are additionally applicable under the international human rights law.
279 See for a detailed survey, Shue, Henry, Basic rights, subsistence and affluence and US Foreign policy, Princeton University Press, 1980; He distinguished basic rights as security rights, subsistence rights and freedoms which are intertwined by interdependent duties This resulted in the subsequent duties to protect from and to avoid deprivation, and to aid the deprived.
280For more on the origin and context of the Typology see, Sépulveda [2003], 281The acceptance of the Tripartite finds its evidence in the reference by the Committee on the ESCR, e.g. through its Outline on General
Comments of 1999, E/C.12/1999/11. 282See also on the duty to protect, ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’ core
Human Rights Treaties.’, Report No. 6, Individual Report on the United Nations Convention on the Rights of the Child and its Optional Protocols, Prepared for the SRSG on Human Rights and Transnational Corporations and Other Business Enterprises, July 2007, pp. 24.
283Ibid. 284Maastricht Guidelines on Violations of Economic, Social and Cultural Rights, No. 6
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perception and understanding of rights.285 The second means to fulfil, is to facilitate. The State is required to
bring about those opportunities by which the particular rights can be enjoyed. The third way to fulfil is to
provide, which comes down to ensuring enjoyment of human rights through forms of aid and assistance in
goods and services. This element is said to merely compensate the absence of the duty to respect and
protect. States are duty-bound to the enjoyment of all recognised rights as provided for in the Treaties.
With regard to the issue on the conduct of the dual-natured SOEs, the importance of the Tripartite shows
from the responsible entity concerned: Either, when the SOE as a commercial private actor performs
wrongful conduct, the State is bound to address the enterprise to respect the enjoyment of human rights to
promote, facilitate and provide the enjoyment of human rights and above all, to protect from violations of the
alleged SOEs.286 When the SOE performs in its capacity as a State organ the State needs to fulfil an even
higher standard of all three requirements to meet the enjoyment of human rights. In the following review, in
particular the duty to protect requires State’s action to act upon wrongful conduct of third parties under
international human rights law.
3.3.2 STATE ‘S OBLIGATION TO PROTECT
It is commonly understood that the principle of human rights protection against violations rests on the
shoulders of the State as the primary duty bearer. If the nexus between a corporation and the State fails to
be established in conformity with the ILC Articles, a State still finds itself duty bound to protect from harm
under the human rights regime and can accordingly be accredited the responsibilities concerned. 287
Examining State’s obligations to protect from misconduct and violations by third parties, this paragraph
addresses those deriving from core human rights treaties.288
THE OBLIGATION TO PROTECT
The Treaties contain provisions requiring States to protect against violations of private actors such as
business enterprises and privatised State Owned Enterprises.289 In general, the Treaties hold the State
responsible for SOEs’ misconduct. SOEs are regarded private corporate actors when acting as such and
considered public when acting as State organs. Neither is specified whether this relates to State’s duty to
respect, in case of apparent public performance of the SOE as a State organ, nor has been clarified if
State’s duty to protect from misconduct from the privately performing SOE is applicable. However, the
Treaties explicate that States should take appropriate measures to enhance corporate conduct and monitor
285See for detailed information on this addition to the Tripartite, Van Hoof, G.J.H., Legal nature of economic, social and cultural rights:
a rebuttal of some traditional views’,1984. 286On the human rights requirements of the SOE as a private actor following from the Tripartite, I refer the reader to the subsequent
Chapter on corporate obligations. 287The principle of due diligence under international law obviously is incorporated in this matter; Consultation, ‘The Role of States in
Effectively regulating and adjudicating the activities of corporations with respect to human rights’, Summary report of SRSG held in Copenhagen 8-9 November 2007, Session I, p. 2 Available at: www.business-humanrights.or/Documents [visited lastly January 2009].
288Hereafter referred to as ‘Treaties’, including the relevant ratified Optional Protocols. In accordance with the outcome of Chapter 2 this subsection will not discuss the remaining core human rights treaties, the CDP, CMW but the by China adhered to Treaties, such as the ICESCR, the ICERD, the CEDAW, the CAT and the CRC.
289The treaties have been reflected regarding the issue of State’s obligations related to corporate activity under the human rights treaty regime in various UN materials, such as General Comments, Concluding Observations and Recommendations. This has resulted in the report prepared by the SRSG John Ruggie for the HRC, ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’ core Human Rights Treaties’, 12 February 2007. A/HRC/4/35/Add.1
HUMAN RIGHTS, CHINESE BUSINESS | 48
its improvement.290 Although the State is ultimately responsible and should realise regulate and adjudicate
corporate performance, best practices of enterprises through self-monitoring are recommended. 291 In
addition, enterprises should undertake promoting human rights.292It should be noted that the duty does not
imply the responsibility of the conduct in itself, but the State duty to protect by means of preventing or
redressing corporate misconduct.
Regarding treaty-specific observations, some additions can be made. State’s duty to protect is applicable to
all human rights. States are awarded discretion to decide on the exact implementation of national human
rights protection. The newer treaties incorporate a minimum of liability for corporations in order to ensure
human rights enjoyment.293 States are encouraged to provide for legal means to establish liability by means
of independent legal personality. States need to be aware of certain rights which heighten the possibility of
corporate abuse and therefore the increase of State’s protection. These are et al. the right to non-
discrimination294, labour rights, rights enjoyed by minorities, women and children and cultural rights of
indigenous people.295
The State has a higher responsibility when it comes to performance of the dual-natured SOE. When the
State as an owner or by its governance is closely related to the SOE, an increase of responsibilities can be
derived. In this regard due to its influence in internal policies or other means of control, a State can be held
responsible for the lack of protection of human rights. Though the treaties do not specify the exact nature of
an SOE, ranging from State owned facilities to State controlled, the State bears a general obligation to
protect against corporate abuse, as the Love-case illustrates.296
Another interesting consideration is next to State’s obligation to protect, its maintenance of the duties to
respect, fulfil or promote. States need to take into account the violation coming from multilateral agreements,
the performance of public functions, and facilitation of corporate abuse by legislation or lacking a ‘promotion
of human rights awareness for corporate entities. 297
State duty to protect based on international human rights law can be an additional asset when corporate
conduct based on the ILC Articles on State responsibility cannot be imputed to the State. Having this said,
due diligence, the transnational human rights obligations and extraterritorial jurisdiction complement the
main elements of the human rights obligations concerning third parties significantly as the subsequent
paragraphs demonstrate.
290Ruggie’s report on State Responsibility [2007], supra n 282, p. 6, par. 7. Measures taken range from monitoring, regulations,
adjudications through investigations, prosecutions or reparations to promotional measures. 291Through Corporate codes of conduct, voluntary initiatives, e.g. 292Paragraph 3.3 will address the obligations for enterprises following from the international human rights treaty system. 293These treaties concern the OP to the CRC, ICRMW. Concerning the non enforced treaties no report yet has been supplied. The
incorporation however will be provided for. The treaties do not prefer the establishment of liability of either natural or legal persons in this respect. Ruggie[2007], sub D par. 63.
294‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’ core Human Rights Treaties’, Individual Report on the International Covenant on Economic, Social and Cultural Rights, Report No. 2, Prepared for the SRSG on Human Rights and Transnational Corporations and Other Business Enterprises, May, 2007.
295Ruggie 2007, supra n 282, III.E.IV par. 73. Some additional rights are rights concerning living conditions, privacy rights. 296Love et al v. Australia, Communication 983/2001, UN Doc. CCPR/C77/983/2001, 28 April 2003. 297Ruggie State Report [2007], Introduction, Sub 1, par. 10
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3.3.3 DUE DILIGENCE IN THE HUMAN RIGHTS REGIME
Closely knit to the State responsibility to protect, is the due care obligation. States duty to protect is based
on the obligation of conduct. Although States are not simultaneously bearing responsibility for corporate
misconduct not governed by them, States do need to implement the principle of due diligence.298The
Treaties mention little on the due diligence-principle which has been of great value to State obligations under
international law. Shue describes the duty to take due care as an addition to the obligation to protect to
‘foresee and prevent serious harms to some degrees and in some cases’.299 These harms might result from
unintentional and unknowing violation of human rights.
Yet few treaties have referred explicitly to the principle. The CAT, CRC and the OPSC mention no reference
to this principle. In the light of article 2 of ICERD, no systematic reference has been made to due care.
However, a State must protect vulnerable groups effectively by means of investigations and monitoring of
racial violence or other actions of actions inciting hatred or discrimination regardless of public or private
actors.300 The Committee on the ICESCR remarked that State parties ought to take appropriate measures to
eliminate violence against men and women and act with due diligence to prevent, investigate, mediate,
punish and redress acts of violence against them by private actors.301 Nonetheless, States lack instruments
to establish due diligence deficiencies. The CEDAW seems to acknowledge the relevance of due care, but
only refers to it in regard to violence against women: ‘under international law and the Treaties States may be
responsible for private acts if they fail to act with due diligence to prevent violations or rights or to investigate
and punish acts of violence and for providing compensation.’302
Alongside the CEDAW the Human Rights Committee has underlined explicitly that the duty is one of conduct
and of means rather than of result: ‘violations of the duty to protect would not follow simply form abuse by a
private entity per se, but from the State’s failure to act with due diligence to prevent punish, investigate or
redress the harmful conduct.’303 Although it appears that the only clear due diligence concern relevant to
corporations are State duties to prevent torture, due care covers all human rights. Naturally, commercial
SOEs are included as private entities.
In addition, the relevance of due care concerning human rights violations has put forward the case of
Velázquez-Rodríguez. 304 The Inter-American Court of Human Rights ruled that States could be held
internationally responsible for private acts when failing to act with due diligence to prevent or respond to
violations. The case concerned the violations by State sponsored forces which had abducted Velazquez in
Honduras. Under international law the State is responsible for the acts or omissions of its agents. Moreover
the State is responsible due to the lack of due care to prevent or respond to the abuse. 305
298Consultatio n, ‘The Role of States’ [2007], supra n 288, p. 2 299Shue [1980], supra n 280, p. 43. 300General Comment 19, para. 4; General Comment 25, para. 6; General Comment 17 and 29, para. 1. 301General Comment 16, para. 8 and 27. 302General Comment 19, para. 9, ‘Violence against Women’. [Emphasis added.] 303HRC General Comment No. 31, ‘The Nature of the General Legal Obligation imposed on States Parties to the Covenant,’ UN.Doc
HRI/GEN/1/Rev.8 (2006)233, para.8. 304Velazquez-Rodriguez v. Honduras, Judgement of 29 July 1988, Inter-Am.Ct.H.R. (Ser.C) No. 4 (1988), para. 166-174. 305‘State Responsibilities to Regulate and Adjudicate Corporate Activities under the Inter-American Human Rights System’, Report on
the American Convention on Human Rights, Prepared by Cecilia Anicama, April 2008. [In order to inform the mandate of the SRSG on Business and Human Rights, John Ruggie.]
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3.3.4 STATE’S TRANSNATIONAL OBLIGATIONS
With the State’s obligation to protect from harmful conduct of SOEs, be it commercially or governmentally
performing, the question remains whether home States are responsible for transnational SOEs operating in
overseas territories beyond State’s jurisdiction in a host State. Although an extraterritorial dimension of
human rights has been adhered to in the Treaties, the relevance thereof remains uncertain. Unfortunately,
Overall can be said that States are encouraged to ‘influence the actions of businesses abroad’, within their
discretion. Few treaties have shed light on the matter of transnational obligations under international human
rights law.306 It is cumbersome that the conclusion must be drawn that the treaties do not provide for a clear
and detailed prescription how State obligations under international human rights law apply to corporate
activities outside State’s national territory but within State’s effective control.307 If a corporation performing
public functions, as is a SOE, is operating as a state agent outside its national territory it is well possible that
the corporation acts within the limits of States jurisdiction and State obligation would fully apply. 308 Yet, it is
recommended under the human rights treaties that offending home states are urged to comply with their
adhered to obligations.309Not one of the Treaties mentions a prohibition of the exercise of extraterritorial
jurisdiction. Nonetheless, States are bound by the limits as prescribed by international customary law, such
the principle of non-intervention. The due diligence principle seems to provide an escape route for the
lacunae created by the treaties, since States ultimately are responsible for their own human rights
misconduct, the SOE as a state agent, or by means of State’s obligation to protect against abuses from third
parties, such as privatised SOEs, as the Hopu and Bessert-case illustrates.310
On the whole, the most discussed State obligations to protect from transnational corporate abuses can be
directed to the industry-specific sector. Concerning the area’s in which transnational corporations’ violations
tend to occur, the mining, manufacturing and agricultural industry lead the list. The most recurring abuses in
this sector concern resource exploitation endangering health, labour and minority right enjoyment. Related
to this sector, in particular the extractive, logging and property development corporations hinder the
enjoyment of indigenous rights concerning health, living conditions and cultural rights. In particular the health
related rights are hampered by the pollution of water sources through extracting resources. These are
followed by the marketing and media companies hindering the enjoyment of the right to non-discrimination
and equality. In advertising racial or religious prejudices or the distribution of child pornography, the State is
bound to protect against these violations of private businesses.
In sum, there is no clear guidance as to the applicability of State obligations of their national corporations
abroad as to alleged human rights violations, lest for the due care obligation. States are recommended to
306ICESCR, ICERD, CEDAW, CAT, CRC 307‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’ core Human Rights Treaties.’,
Prepared for the mandate of the Special Representative of the United Nations Secretary-General [SRSG] on the issue of human rights and transnational corporations and other business enterprises. Harvard University, John F. Kennedy School of Government, 12 February 2007, p.3 introduction with regard to the ICESCR, ICERD, CEDAW, CAT, CRC,
308‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’ core Human Rights Treaties’, Individual Report on the International Covenant on Economic, Social and Cultural Rights, Report No. 2, Prepared for the SRSG on Human Rights and Transnational Corporations and Other Business Enterprises, May, 2007, p. 59.
309In the SRSG 2007 report, supra n 307, is ‘prescriptive extraterritorial jurisdiction’ referred to within the limits of a basic jurisdiction meaning, ‘the perpetrator is a national, adverse effects on the State, involvement of international crimes’. A ‘test of reasonableness’ must be met, including the non-intervention principle.
310Hopu and Bessert v. France, Communication 549/1993, UN Doc CCPR/C/60/D/549/1993/Rev.1. 29 December 1997,p.7, in which it was the State duty to monitor the SOE’s conduct, ‘regardless of the ground for its responsibility’.
HUMAN RIGHTS, CHINESE BUSINESS | 51
influence transnational corporate actions. State regulation of extraterritorial conduct should not exceed the
limits as provided for by international law.
3.4 THE PEOPLE'S REPUBLIC’S RESPONSIBILITY: PRINCIPLE AND PRACTICE
In the light of the preceding analysis, the outcome of State responsibility as provided for by the ILC
concerning the People's Republic’s ownership and governance of its enterprises needs to be examined.
Secondly, the findings of state responsibility regarding core human rights treaties need to be applied to the
People's Republic practice of human rights compliance.
3.4.1 THE PEOPLE'S REPUBLIC AND THE ILC
Given the historical and economic circumstances, the People's Republic state organs and state assets such
as SOEs may fall within the scope of international law regarding state responsibility as provided for by the
ILC. Firstly a general perspective of the People's Republic will demonstrate the evaluation of the principles
as laid down. Secondly, the People's Republic’s practice will edify the significance and scope of its stance.
THE GENERAL PERSPECTIVE
In its Statement on the Responsibility of States on internationally wrongful acts at the Sixth Committee of the
62nd Session of the UN General Assembly in 2007 the Chinese delegation acknowledged the codification of
the rules of customary law.311 Some additional remarks were placed. Although China was pleased with the
understanding of the ‘safeguarding of both state’s interests and the common interest of the international
community’, problems relating controversial issues need to be dealt with as well. In line with the reasoning of
Chinese international stance on non-interference, non-intervention and the absolute immunity from foreign
jurisdiction, the described problems relate to this position although the statement is revealing a nuanced
variation. Considering the conditions for the breach of an international wrongful act, the delegation
recognizes the definition given in article 1 ILC. It finds however the causality and the extent of the harmful
behaviour ambiguous. Considering the possibility of other States than the injured states to invoke
responsibility for harmful behaviour, the People's Republic prefers the eradication of the articles
concerned.312 In danger to be easily misused, this option can not be the prerogative of non-injured states,
safe those as appointed by a possible ‘collective authorisation mechanism’ in case of threat of international
peace and security. The fact that the distinction has been made between general and serious breaches of
international law has been welcomed as well, although corresponding consequences should be
developed.313 On the fact of dispute resolution, the legislative purpose of countermeasures should be to
urge states to compliance. In sum, the ILC Articles are perceived as an important asset to international law
by the People's Republic, which is in search of redefining its responsibility within the international
community.
311Statement by Mr. MA Xinmin, Chinese Delegate, at the Sixth Committee of the 62nd Session of the UN General Assembly, on Item
78 "Responsibility of States for Internationally Wrongful Acts”. 312Art. 48 and 54 ILC Articles. 313Art. 40 and 41 ILC Articles. The fact is that non recognition of a situation or the lack of assistance does not constitute an equal serious
breach or should suffer a similar consequence as actual violators. This view demonstrates as well the difference in the obligation based on the aforementioned positivist objective theory of par. 3.2.5.
HUMAN RIGHTS, CHINESE BUSINESS | 52
THE PEOPLE'S REPUBLIC: PRINCIPLE & PRACTICE
In general, the Chinese SOEs demonstrate a variety of state ownership and governance. Looking at the
described articles attributing responsibility to the state for conduct of SOEs, the following can be concluded.
With respect to the described responsibilities under article 4 to 8 of the ILC Articles, an analysis of the
People's Republic’s SOEs will be given in line with its economic historic diversified SOEs.
With regard to the attribution of conduct of the SOE as an organ of the People's Republic [article 4 ILC], the
connection between the PRC and the SOE in most cases is apparent. As we have seen in the summarising
economic history of the People's Republic, rooted in CCP’s ideology socialist vessels to control the entire
economy were created. The State held the ownership and the corporate governance.314 As such, public and
private transactions could not be distinguished, since both the purpose and nature of all assets was public
serve. This is a clear example of the SOE as a State organ, controlled and monitored in every way by the
CCP. This traditional perception of SOEs is far from extinct. Although the ‘Reforming and Opening up’ and
the derived ‘Three Represents’ policy have paved the way for ideological and economic modification, State’s
influence has not disappeared. It has adapted to its circumstances over time. The grip of the State of
corporate governance was formally separated from its ownership with the enactment of the 1993 Company
Law. 315 Supervising 150 large SOEs operating as national and transnational enterprises, owned and
governed by SASAC, the State has prolonged the capacity of the SOE as a state organ.316In addition, many
other SOEs have been privatised or reorganised into JSCs or LLCs for public as well as private purposes.
Although the People's Republic has taken its responsibility in creating a transparent and effective corporate
structure, the rippling effect of the revised Company Law of 2006 is taking its time.
According to article 4, wrongful conduct performed by State organs such as the SOEs within the discretion
of the SASAC can be accredited to the State Council, the central government of the People's Republic.
When the objective of an SOE falls within the scope of national interests, the internal legal provisions of the
State Council identify the SOE as a State organ. The scope of article 4 is not altered by either the
decentralisation of the central government to the SASAC or the limiting of CCP’s ownership and governance
of SOEs. The place in hierarchy or the exercise in function of the SOE as a State Organ is irrelevant for the
significance of article 4.317 Even when the SOEs under supervision of SASAC would conduct as non-state
actors, for example through commercial transactions, its conduct would still be accredited to the People's
Republic. This distinction is only hypothetical since even commercial transactions are purposed to benefit
the common good of China. They are performed in the capacity of the State and are supported other state
controlled entities, for example by profitable bank loans financed by the State Owned Bank of China.
With the privatisation of Chinese SOEs, the transparency of SOEs should have been improved. Given their
particular nature, China’s State Owned Enterprises in general can fall within the scope of the second part of
article 4, or article 5 and 7 when they are not regarded as a State Organ. 318 The authorisation of
314Article 6, 1982 Constitution. 315The public-private distinction has been amended to the 1982 Constitution in art. 7 emphasising the promulgation of the state owned
economy yet leaving room for private enterprises. 316Chapter 4 will elaborate on the Chinese expansion of these SOEs to Africa. 317The indirect influence will be explained sub article 8. 318See also second part of article 4 on non State SOEs performing governmental capacity.
HUMAN RIGHTS, CHINESE BUSINESS | 53
governmental functions might be seen as inherent to the public-private nature of SOE’s. It is however
difficult to distinguish the SOE’s ownership through shareholding by the government and the attribution or
exercise of governmental functions. Even not regarded as a State organ as under article 4, SOE’ a wrongful
act evolving from the [un-]authorised conduct can be accredited to SASAC and thus the People's Republic.
The private or commercial acts or omissions by the conferred upon entity are not regarded as State’s
conduct if this conduct has not been authorised by the SASAC or any other State organ. The problem
remains under what condition and in what form authorisation is given. The ILC has not provided for
conditions to define this. Within the parameters of the Chinese socialist culture content, purpose, extent and
the manner of awarding of the public authority is of importance for the applicability of article 5. According to
article 7, when the SOE is exceeding its official capacity, this conduct can be awarded to the People's
Republic. The difficulty is what is still within the realm of the authorised conduct.319 Based on the Caire-
Case, a mere act of private individual is not attributable to the SASAC. In addition to article 5, State Owned
enterprises granted with the authority to act as governmental actors might exceed their given restrictions.
The People's Republic is held responsible for the apparently authorised SOE, even though its act or
omission exceeds the limitation.
Under article 8 a distinct base is found for China’s state responsibility.320 Based on the renewed Company
Law of 2005, privatised SOEs are granted a separate and independent legal personality, next to the derived
legal personality of a State organ.321 The separation of state ownership and governance corresponds with
the central issues in article 8: the conditions of instruction, direction [governance] and control [ownership].
On the one hand a SOE engages in conduct after instructions by for example the SASAC or MOFCOM. On
the other hand, an entity falls within State’s responsibility after performing a wrongful act under the direction
of the CCP or control of the state through ownership by shareholding.
Although described as insufficient in the Nicaragua-case and Tadiç-case, the test of control next to the
circumstantial facts of ownership edifies China’s influence in this case. Regarding the effective control to
impute full responsibility to the state, this remains difficult to establish. However, it is remarkable, that
although the authority has been rendered over to the SASAC, the CCP’s influence in enterprises has not
ended with its separation from ownership. Membership of the CCP still creates a beneficial prerogative for
key legal and corporate positions. Since the CCP is represented in largely diversified commissions in every
segment of economy, the question remains to what extent even the privatised SOE or other entities act as a
non state actor. 322 Due to major shareholding the People's Republic might perform as a private actor on the
market. By influencing the appointment of the Board members, management, corporate regulation or
directing of corporate strategies, the State exceeds the influence of regular corporate actors.323
319An example is the expansion of the state owned oil consortium CNPC in Africa, initially operating without an authorized mandate. See
for more on Chinese transnational enterprises, Chapter 4 320Article 8 ILC Articles, reads: ‘The conduct of a person or group of persons shall be considered an act of a State under international
law if the person or group of persons is in fact acting on the instructions of, or under the direction or control of, that State in carrying out the conduct.’
321Article 3 Revised Company Law 2005, available at http://www.chinadaily.com.cn/bizchina/2006-04/17/content_569258_17.htm. 322Article 19 Revised Company Law 2005. 323This impact of the State on its actors will be deepened under article 8 ILC Articles.
HUMAN RIGHTS, CHINESE BUSINESS | 54
The contrasting argument is that one should regard the given context. Every case should be judged at its
own merits. The circumstantial facts of wrongful conduct lead to the question of addressing China’s control
by means of the ownership of enterprises. The Hertzberg v. Finland-case and the Foremost Tehran-case
demonstrate that governmental control through majority shareholding in enterprises may cause the
attribution of wrongful conduct to the People's Republic. The enterprises concerned had been a vessel for
the government to implement its policy. Due to the nature of the SOE the impact of China on its corporate
entities is still extensive although formally modified. Even when an independent manager decides upon
corporate central issues, he has to consult with the major shareholders. The State has continued to be the
predominant direct shareholder in enterprises in 21%, next to the 11% of the traditional SOEs in industrial
output. Looking however at the indirect forms of state ownership, state controlled enterprises and SOEs the
People's Republic has been the dominant shareholder in 84% of the enterprises.324
Some additional remarks can be made. In line with the Barcelona Traction-case, it is clear that the
codification of SOE’s separate legal personality does not legitimise indirect State practice through private
enterprises.325 In any case, if accusations of committing a wrongful conduct by China are uttered, the
SEDCO-case has demonstrated the importance of proven evidence of the government’s involvement.
China’s current practice of diversification of SOEs as state organs or privatised yet controlled enterprises
does not contribute to the transparency of the SOE’s ownership or governance. Next to this practice, public
and private transactions by SOEs can be financed and supported as well by state owned banks to varying
degrees. Moreover, SASAC paradoxically contributes to this line of control by exercising its attributed
authority which in turn is meant to enhance government’s shareholding position through the ownership of
key SOEs.326
Yet, China has affirmed in several cases the distinct separate nature of the SOE in order to prevent an
increase of litigation, be it domestic or international. In the case of Scott v. The People's Republic of China
the Chinese government emphasised that the enterprise concerned could be sued on its own merits since it
is independent legal personality provided for its own rights and duties.327 In the China Aviation Oil-case the
Chinese parent SOE China Aviation Oil Holding refrained itself from the litigation, claiming state immunity as
a State Organ.328 In the light of the abovementioned, the organ under SASAC ownership and supervision
was regarded as an independent SOE based on its non-governmental performance. Since the SASAC did
not intervene, this silent approval indicates the acknowledgement of the outcome of the case.329 In another
324Li [2008], p. 356, 357. Not all corporate shares are tradable under Chinese law. 325Article 3 Company Law 2005. 326Naughton [2007], p. 317. 327Scott v. The People's Republic of China, No CA3-79-0836-D [29 June 1979]. This tort damage claim-case filed under the Foreign
Sovereign Immunity Act [FSIA 1976] was brought before an American court based on the complaint of the plaintiff of harmful fireworks produced by a state controlled Chinese enterprise. The case was settled privately, although China had invoked State immunity in its defence as a sovereign State. See for China’s attitude towards State immunity, Ando, N. [ed.] ’Japan and International law, Past Present and Future’ International symposium to mark the centennial of the Japanese Association of International Law, International Law in Japanese Perspective, Martinus Nijhoff Publishers, 1999, pp. 153-173. See also in this survey, p. 61-62 on Jurisdictional Immunities of the PRC.
328Leong Yan Thiang, et al. v. China Aviation Oil (Singapore) Corporation, Ltd., et al. [S.D.N.Y. 2005]. This complaint based at the Security Exchange Act was among many others against this Corporation. As in the Scott-case, the SOEs were to be seen as entities separated from the original State entity and thus could be taken to court. See on the findings, http://www.cad.gov.sg/serv/pro/cas/Case+of+China+Aviation+Oil.htm and http://securities.stanford.edu/1033/CAOLFPK05_01/[lastly visited 31 May 2009].
329Qi, D., ‘State Immunity, China and Its Shifting Position’, Chinese Journal of International Law, 2008, Vol. 7, No. 2, 307–337, p. 325.
HUMAN RIGHTS, CHINESE BUSINESS | 55
case however, Paterson, Zochonis [UK] Ltd v. Compania United Arrow, a private Chinese enterprise
performed as a State organ and due to State immunity could not be contested.330
All in all, in case of a wrongful act it is most plausible that the People's Republic governmental structure with
regard to its SOEs correspond with conditions qualifying indicated control, such as effective control, a
circumstantial degree of control and State’s integration within the specific operation. The aforementioned
influence of the CCP is bound to impact to such an extent that the thin red line of the independency from the
state of an enterprise is under scrutiny, in spite of the cases demonstrating otherwise. The ILC should be
more specific on this point.
Next to the general level of State responsibility based on the wrongful act or omission by the State, the
People's Republic’s liability can be established by its failure to prevent wrongful conduct by third parties such
as private corporations.331 With regard to the obligation of due care, the prior mentioned statement has
shown People's Republic inclination to a positivist and result-oriented position. Only actual misconduct can
be addressed. The subjective fault perspective concerning intent or negligence is regarded as too vague.
However, the duty of diligence is applicable to People's Republic in spite of their preferences in case of the
effects of the violation, carelessness or the lack of inherent protection of the injured parties involved. The
People's Republic is obliged to act on knowledge of potential harm332, offer at least general protection
against misconduct333, refrain from intentionally not safeguarding against wrongful conduct334, or act with the
least reasonable care.335 The due care is for both public and private transactions of China’s SOEs.
In sum, according to the ILC Articles the general principles for People's Republic’s responsibility for State
Owned Enterprises under international law exists of several obligations. This is irrespective of the type of
enterprise. Either the SOE is commercially involved as a State organ, or the SOE is within the realm of
public governmental capacity, be it authorised, unauthorised, directed or controlled by the People's Republic
as a third party. In any case, an enterprise is obliged to comply with the [international] laws.336 As the SOE is
more likely than regular corporate entities linked to governmental authorisation, the State ought to be more
alert as to SOE’s conduct and in developing the appropriate measures.337
FAST FORWARDING: THE JURISDICTIONAL IMMUNITIES OF THE PEOPLE'S REPUBLIC
When an actual misconduct by an SOE has been established and is imputed on the People's Republic and
the alleged violator is hauled into court, it is very likely that the People's Republic will invoke its right to State
330Paterson, Zochonis [UK] Ltd v. Compania United Arrow, S.A, 493 F. Supp. 621 [S.D.N.Y. 1980]. Under the FSIA the Court had
granted the SOE sovereign immunity. In any case, a SOE is not entitled to invoke state immunity for its commercial activities. See also the case, China National Chemical Import & Export Corp. v. M/V Lago Hualaihue, 504 F.Supp. 621 [S.D.N.Y.]; the governmental commercial activity concerned was denied as a ground for State immunity under the FSIA.
331Article 2 of the ILC Articles refers to this duality. There are circumstances which exclude the wrongfulness: consent, self-defence, countermeasures, force majeure, distress and necessity. See, articles 20 – 27 ILC Articles.
332Corfu Channel Case, supra n 272 333Noyes, supra n 273 334US v Iran Hostages-case, supra n 274. 335AAPL-case, supra n 275. 336Art. 5, 2005 Company Law: ‘When undertaking business operations, a company shall comply with the laws and administrative
regulations, social morality and business morality. It shall act in good faith, accept the supervision of the government and the general public, and bear social responsibilities.’
337One must bear in mind the possibility that not only SASAC owns and governs key SOEs, the SOE in itself can create a private daughter enterprise. This ‘corporate veil’ should be lifted in any circumstance to reveal the nature and purpose of the enterprise in order to establish a possible attribution of state responsibility.
HUMAN RIGHTS, CHINESE BUSINESS | 56
immunity.338 Although the jurisdictional immunities of States and their property are generally accepted as a
principle of customary international law339, the need for a binding new instrument has been accommodated
by the UN in 2004.340 Although not yet entered into force, the UN Convention on Jurisdictional Immunities of
States and Their property demonstrates an illustrative future prospect of States’ responsibilities or
exonerations with respect to national actors, as for instance State Owned Enterprises.341 Signed by the
People's Republic in 2004, the importance of the Covenant lays in the departing from the absolute to the
restrictive immunity stance, which is an improvement to Chinese private enterprises. 342 Furthermore, the
application of detaching SOEs from their parent State entity and the exceptions to State immunity of SOEs
commercial transactions343, which was the case in the China Aviation Oil-case, empower China’s position
accordingly that SOEs possess an independent legal personality and should not enjoy immunities for its
activities. 344 Furthermore, ‘if a foreign state infringes upon sovereign immunities enjoyed by China’s
property, China will have the right to take corresponding countermeasures’. As Qi rightly remarks, SOEs
should be prevented to invoke State immunity in commercial transactions. However, it remains a state’s
prerogative to protect the authorised SOE with State immunity. In the light of the work of the ILC, this
prospect is of importance since it will establish in due time an additional base for the responsibility of the
People's Republic regarding its property [SOEs] and provides for an impetus for the accountability of
enterprises as the following chapter will address.
3.4.2 PEOPLE'S REPUBLIC’S RESPONSIBILITY UNDER HUMAN RIGHTS LAW
The present state of human rights compliance by the People's Republic in general has been illustrated by
the preceding Chapter. China’s obligation to protect form corporate human rights abuse deals with a vast
number of recurring concerns.345 Due to its stance on the principles of sovereignty, non-intervention and its
insistence on China’s right to subsistence and development, these allegations of abuses have not been
wholeheartedly received by the People's Republic.346 This non-responsive attitude is cumbersome and in the
338See para. 2.3. in which the PR position on absolute immunity illustratively has been defended on more than one occasion. This stance
resembles the 1812 Schooner Exchange-case in which the sovereign in all instances was immune for foreign jurisdiction. See also in this respect the Russell Jackson et al v. People's Republic-case in which China’s appeal on sovereign immunity is explained, JACKSON-CASE, Jackson v. People’s Republic of China, 505F Supp 869 [ND Ala. 1982].
339Shaw [2003], pp. 631-668. With respect to the possibility of litigation against State Owned Enterprises in foreign courts I refer the reader to the para. 4.3 on the ATCA. State’s immunity and its exemptions are discussed in this paragraph but needed to must be taken into account as we proceed on the corporate dimension of SOEs.
340See also ‘State Immunity and State Owned Enterprises, Report prepared for the SRSG on business and human rights, Clifford Chance, December 2008. Available at: www.businessandhumanrights.org [visited lastly April 2009]. See in comparison, The US Foreign Sovereign Immunities Act of 1976 [US FSIA] or the UK State Immunity Act of 1978 [UK SIA].
341UN 2004. As the site discloses, 28 of the needed 30 member states have signed and only some have ratified the treaty. [Visited at 1 April 2009].
342Although a treaty has not yet entered into force, based on article 18 Vienna Treaty signing a treaty demonstrates at least the refraining of China harming the Treaty.
343Article 10 juncto article 2 [1 sub b4] UN 2004 JIS. See also ‘Commentary to Draft Articles on Jurisdictional Immunity of States and their Property’, 1991, ILC Yearbook, Vol. II; see also, Article 12 UN 2004 JIS; See also ILC Commentary 1991, Vol. II.
344China seemed not to insist on absolute immunity in cases of commercial transactions; ANDO, N. [ED.], ’Japan and International law, Past Present and Future’ International symposium to mark the centennial of the Japanese Association of International Law, International Law in Japanese Perspective, Martinus Nijhoff Publishers, 1999, pp. 160-163.
345Several monitors examine China’s compliance with human rights, such as Freedom House Print ranking China on civil political rights on a scale of 10, China scores 8, meaning a low human rights compliance. On socio-economic rights, China scores 3, an intermediate human rights compliance score, source: http://www.freedomhouse.org/template.cfm?page=22&year=2008&country=7372.
346Donoho, J.’, Minimalist Interpretation of the Jurisdictional Immunities Convention’, Chicago Journal of International law, 1 January 2009. Regarding the United Nations JIS 2004, one of the disadvantages of the covenant is the lack of human rights clause. In the light of the preceding paragraphs and the protection of human rights it would have been an asset to the covenant, as has been edified by the Norwegian reservation to the Covenant.
HUMAN RIGHTS, CHINESE BUSINESS | 57
long run even for Chinese business not profitable. Yet it is of great importance that the People's Republic
State obligations following from the adhered to treaties will be reflected in its corporate regulations.
Mention should be made of specific high risk areas and business sectors in which Chinese [transnational]
corporate enterprises operate. Since their vast industry-specific sector is concerned within the extracting of
resources and construction, the most recurring rights infringements concern health and adequate living
standard conditions, labour rights, housing rights, equal remuneration and discrimination.347 In its 2009
Human Rights Action Plan, unfortunately no explicit mention has been made as to the reforms of business’
conduct with regard to human rights compliance.348 Yet, aiming at the achievement of a ‘harmonious
society’, China’s potential to enhance State’s duty to protect will increase with the promotion of equal justice,
poverty reduction, political restructuring and advancing the rule of law. The State’s duty to respect and
promote human rights and the fulfilment of legislation ensures human rights protection, are encompassed.
Still, adherence to human rights treaties has not been rooted in Chinese state practice in public performance
of State officials. In particular when a transnational SOE is performing public functions, chances are that the
lack of human rights enforcement and awareness results in continuing human rights violations. Although a
start has been made, many legal reforms need to follow in order to provide a solid foundation for State’s
protection of corporate human rights adherence.
3.5 CONCLUSION
The People's Republic is inclined to a stable, State-controlled nation.349 Based on the foundation of a
“harmonious socialist society”, ‘putting people first’-policy and a sustainable economic development, the
ongoing reformation of SOEs, under supervision of the SASAC has provided for an improvement of the lack
of transparency of Chinese state enterprises, concerning their ownership and corporate governance. This
survey on State obligations for third parties such as [state owned] enterprises has lead to several findings on
the part of international [human rights] law and on the part of the People's Republic’s compliance thereof.
The People's Republic bears State responsibility under international [human rights] law. As for the findings
of State obligations under international law as provided for by the ILC, the articles 4 to 8 have highlighted the
complex applicability of China’s State responsibilities on its State agents. When a SOE operates in the
capacity of or as a part of the State [article 4], is granted with the authority to act as a governmental actor
[article 5] or exceeds its given restrictions [article 7] or as a privatised SOE performs as a non-State organs
under direct control [article 8], the People's Republic State will be held responsible for any wrongful act or
omission of the apparently authorised SOE. The duty to prevent corporate abuse is complemented by the
due diligence obligation, which does not imply that the People's Republic is responsible for private conduct.
As for the findings of China’s compliance to international human rights law, the results are still meagre
although improvements have been made. The People's Republic direct duty to protect against human rights
347‘Mapping State obligations for corporate acts: An examination of the UN Human Rights Treaty System’, Report No. 1 International
Convention on the Elimination of All Forms of Racial Discrimination, Prepared for the SRSG on Human Rights and Transnational Corporations and Other Business Enterprises, December 18, 2006., p. 18; See also Danish Human Rights Institute, Human rights and Business Project, ‘China Country Risk Assessment, 2005, p.10. [Used with permission.]
348Supra n 79; See also Ruggie 2007 Report, supra n 288, sub V Future Objectives. 349The People’s Republic referred to the year 2008 as the year of luan, chaos. The gradual development to a free market and the WTO
standard-setting might eventually lead to a change in the CCP’s hegemony and pave the way for a further dialogue on another level in human rights policy.
HUMAN RIGHTS, CHINESE BUSINESS | 58
violations by third parties such as SOEs is based on the Tripartite of the duty to protect, respect and fulfil,
and the due diligence principle filling the lacunae in human rights law on extraterritorial obligations. As the
SOE is more likely than regular corporate entities linked to governmental authorisation, the State ought to be
more alert as to SOE’s conduct and in developing the appropriate measures. Due to SOE’s intricate nature
the People's Republic must be aware of the potential harm that can come from its lack of transparency in
ownership and governance. It must be assumed that due to the premise of CCP’s hegemony, SOEs and
other enterprises are largely State-controlled. This can be reflected in the attribution to the People's Republic
of potential human rights violations. It is therefore important that the human rights treaties provide for clear
and solid position on the regulation and adjudication of transnational SOEs.
Bearing this in mind, the following chapter edifies the direct corporate obligations for privatised SOEs, the
obligation to respect human rights.
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Chapter 4 STATE OWNED ENTERPRISES: CORPORATIONS AND THE DUTY TO RESPECT
‘Did you ever expect a corporation to have a conscience, when it has no soul to be damned and no body to be kicked?’ - Lord Chancellor of England.
Within the realm of international law the transnational enterprise, be it public or private, has not been
awarded an independent international legal personality. In the light of the prior chapter, the public-private
dichotomy of the SOE heightens the State’s responsibility to regulate SOEs conduct. As for the state, the
described indirect responsibilities under international law and human rights law for national enterprises have
been analysed. Hitherto, the current increase of corporate impact on economic, legal, societal grounds
leaves the question of direct responsibility still unanswered. As the human rights treaties and other
instruments refer to the business sector in general, including SOEs, as responsible for the respecting human
rights, the particular SOE needs to be addressed separately as well.350 This Chapter provides an analysis of
some of the extensive material on current binding and non-binding human rights instruments addressing
violations occurring during corporate transactions.351 The first paragraph describes an overview of corporate
instruments which are favourably adhered to. The second paragraph describes SOE-specific instruments on
corporations. The third paragraph demonstrates China’s practice on these principles. This chapter continues
with a case study of China’s expansion in Africa and concludes with a summary of the findings.
4.1 A CORPORATE HUMAN RIGHTS FRAMEWORK?
Transnational corporations are defined as ‘an economic entity operating in more than one country or a
cluster of economic entities operating in more than one country.’352 The legal personality of corporations
under national [civil] law is a common ground for the entity as a bearer of rights and duties. Yet, it is a
current phenomenon that due to the increasing position of corporations on a global scale, one begs to differ:
should direct responsibility not become regulated for transnational enterprises under international [human
rights] law? Their increasing impact has ignited the discourse on the position of transnational corporations
under international [human rights] law.353
Corporations are seen as mere objects or to some ‘participants’ of international law.354 Due to their derived
personality under national law, their legal capacity is restricted and not the equivalent of states under
international law355. In spite of increasing influential roles agreed upon in bilateral agreements [BIT] for
example, corporations have not yet acquired independent status under international law. 356 To hold
enterprises accountable for human rights violations is to some unacceptable and a misconstrued legal
venue.357 It is said, for reasons of profit maximisation, realist state interests or the lack of acknowledgement
350 Human rights treaties refer to the applicability of human rights provisions on corporate enterprises in general, including SOEs. 351I refer the reader to my Bachelor Thesis, ‘Multinational Corporations Balancing Powers’, Utrecht University, 2008, on the issues of
corporate legal personality, corporate obligations under international human rights law and the UN Draft Norms of 2003. 352UN Norms on Transnational enterprises, para. 20. 353Addo, M. ,’Human rights and Transnational Corporations’, in: Addo, M.K. [ed.],’Human rights standards and the responsibility of
Transnational Corporations’, Kluwer Law International, The Hague, 1999, pp. 4-5: ‘The decisions and activities of transnational corporations carry considerable weight in national and international policymaking’...’There has been a calling for a delimitation of the responsibilities of transnational corporations to reflect their increasing influence in society.’
354Higgins, R., in: Jägers [2002], p. 110. 355Barcelona Traction-case, ICJ reports 1970, pp. 3, 46-47 356 See also, SHAW, M.N., International Law, 4th Edition, 1997, Grotius Publications, Cambridge, pp. 224-225. Shaw deems the
multinational enterprises fit for candidature for international personality. 357Milton Friedman on corporate duty: ‘The social responsibility of the enterprise is to increase its profits’, in, ‘Capitalism and Freedom’
Chicago University Press [1962], pp. 130-133. Other opponents of CSR are e.g. David Henderson and Ann Bernstein. Some other arguments are the fact that a corporation is not the addressee of the human rights treaties and therefore can’t receive an equal
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of other perspectives on human rights, the human rights regime is not an effective and apt measure by
which corporate conduct ought to be examined. Put bluntly, corporations are not set up to weigh or pursue
moral performance.358 Although this utilistic truism is spot on in essence, the status quo of today’s track
record in human rights’ and environmental damage demonstrates the consequences of the trodden thin line
of an acceptable pursuance of corporate agenda. Hence, many stakeholders agree on the sheer fact of
corporations carrying some responsibilities, be it morally or legally based on core values.359 It is on this
ground that the Special Representative of the Secretary General on the issue of human rights and
transnational corporations and other business enterprises has provided for a corporate framework on human
rights in support of all actors, the tripartite ‘State’s protection against human rights violations, corporate
respect of human rights and effective access to remedy’.360
The lack of direct addressing corporations under international law does not imply the lack of regulations nor
does it nullify the necessity of a framework, to the contrary. A distinction needs to be made between
corporate social responsibility [CSR] and corporate accountability. CSR as a genus of corporate governance
of enterprises aims at the voluntary commitment of a corporation to upholding international agreements on
human rights performance.361 As we have seen, corporate accountability aims at regulating the corporate
behaviour by setting norms binding corporate practice.362 The force fuelling the development for corporate
accountability is the increasing commercial and public performance of large transnational corporations.363 As
law reflects societal norms of conduct and provides the legitimating use of powers, it is important to
understand not all issues jeopardising ensuring rights are redressed through national civil, company or tort
law.364 The current human rights regime, notwithstanding its shortcomings, can and needs to provide for the
complementary asset to these regulations to satisfy the need to examine expanding corporate power and as
a consequence of extension, its mishap.365 Although transnational and domestic corporations are not yet
directly and fully held accountable for all human rights, their responsibility has become evident. Corporate
indulgence of gain from human rights violations are no longer tolerated by the public.
protection or responsibility under the human rights regime; the state holds the monopoly for protection of society, therefore corporate CSR cannot be a substitute to cover up governments failures. According to Addo, supra n 3, the use of human rights in corporate regulations holds many advantages, such as the economic benefits of investment partners in upholding human rights respect, poverty alleviation or sustaining the environment. CLAPHAM, A. Human rights Obligations of non state actors, University Press, Oxford, 2005, pp. 196-197
358Ibidem. 359It is impossible to avoid demands for a transparent corporate conduct and structure by nongovernmental organizations, employees,
consumers or shareholders, regardless of what interpretation one holds of CSR. Clapham advocates the complete protection of human rights not only against states, but also against other entities such as corporations, supra n 7.
360Report of the 2005 appointed SRSG John Ruggie, ’Promotion and protection of all human rights, civil, political, economic, social, and cultural rights, including the right to development’, Advanced Edited Version of 7 April 2008, A/HRC/8/5. Due to the vast documentation only mention is made of several significant documents in this respect. See for more information, http://www.businessandhumanrights.org.
361This perception of philanthropy or generosity is slowly modifying. Next to this view, other concepts of CSR for example, corporate good governance or ethical duties can be accounted for. See also, ADDO, Michael K., ’Human rights and transnational Corporations- an Introduction’, in: Addo, Michael K., ’Human rights Standards and the Responsibility of Transnational Obligations’, Kluwer Law International, The Hague, 1999, p. 17-19; Schutter, O. de, ‘The Accountability of Multinationals for Human rights violations in European Law’, in: ALSTON, Ph., ‘Non-State Actors and Human Rights, Volume XIII, Oxford, Oxford UP, 2005, pp. 260-262.
362Regulation can be seen as contra productive which is not I line with the principles of regulation. CSR is an ineffective means unfit for a competition within a free market.
363Transnational corporations have not only improved trade perspectives, but have also served governmental functions in supplying with energy, telecom, infrastructure This shift has heightened public awareness and has resulted in the logic question for some level of accountability.
364Through extraterritorial transactions national regulations are bound to unduly construe parameters to measure corporate endeavours entirely. Additional [human rights] regulations are necessary, since CSR cannot only be seen as an enhancement of profitability.
365Corporate officials can be addressed as well as was the case with Guus Kouwenhoven and Frans van Anraat. However, with the diffused responsibilities in large corporations, attributing responsibilities to only corporate officials will not suffice.
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Bearing these parameters in mind, the following normative regulations and voluntary initiatives address the
improvement and regulation of corporate social conduct under international law. After all, corporate power
obliges.
4.1.1 BINDING JUDICIAL CORPORATE ACCOUNTABILITY INSTRUMENTS
Consistent with the human rights regime, corporations are bound to the positive obligation to respect human
rights and accordingly the negative obligation to refrain from hindering the respect of human rights.366 It is
important to bear in mind that the binding norms can have horizontal effect, yet States are ultimately
responsible for breaches by national private entities.367 No international obligations exist to provide for direct
protection under human rights law of private entities.368 The advantages of legal regulation comprise of
legally binding human rights codes erga omnes, the transparency and legal certainty of the conditions which
actors have to meet. Moreover, the regulations are mirroring an international consent on human rights
norms and on fundamental rights, jus cogens. However, the disadvantages lay in the fact that some legal
codes have not included business consultancy, and therefore lack a legitimate foundation. Furthermore, as
is common with law, its nature is responsive to societal demands rather than prompt acting in conformity
with public expectation. Law enforcement tends to sanction rather than inspire or educate the actors
concerned.369 In this developing field of international law, an imbalance needs to be prevented through
evaluation improved to create a foreseeable and effective framework to guide and support the business
sector in their human rights performance. The following binding instruments impact enterprises on their
human rights performance: the Universal Declaration [UDHR], the ILO Conventions and the particular
national instrument, the ATCA.370
THE 1948 UNIVERSAL DECLARATION OF HUMAN RIGHTS [UDHR]
The moral standing of the Universal Declaration of Human Rights [UDHR] is undisputed. Although created
as a declaration, its international legal binding status is acknowledged. According to the UDHR, the
obligations put forward address both states as private entities, such as SOEs, as a common standard of
achievement to the end that every individual and every organ of society shall strive to promote the respect
for these rights and freedoms.371 ‘Every organ of society’ clearly indicates the responsibilities of corporate
enterprises as well. All 30 articles can be applied to corporations; emphasizing a variety of rights, the
Declaration covers the assurance and respect of corporations of the right to life, liberty and security of
person, freedom from discrimination and slavery and fair working conditions. The value of this document lies
in the fact that the rights are applicable to corporations of all kind and by its universal value applicable all
over the world. This advantage creates legal certainty concerning the rights as covered in the Declaration.
However, since the date and time of creation, the emphasis on individual rights or civil political rights and
366JÄGERS, N., Corporate Human Rights Obligations, Intersentia, Antwerpen, 2002, calls this the duty not to cooperate. 367The Vienna Convention on the Law of Treaties provides for the interpretation of the aforementioned treaties and legal regulations and
the possibility of horizontal effect on Multinational corporations as derived personalities. 368Some scholars disagree and claim protection of human rights for corporations as well. 369Many more pro’s and contra’s can be given for the suitability of legally binding norms on human rights violations by corporate actors.
FRYNAS, J.G. and PEGG, S. [Ed], Transnational Corporations and Human Rights, Palgrave Macmillan, New York, 2003, p. 21. 370This paragraph is not aiming at dealing with all suitable instruments. For example, The United Nations Charter [UNC] promotes
respect for human rights firstly in its preamble, articles 1, 2, 22, 55, 56 directed to States initially, and in second instance through national regulations to multinationals.
371On Company Policies on Human Rights the UDHR affirms in The Preamble the importance of this Declaration and relevance for enterprises; see also, art 29 UDHR.
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universality thereof has not in all regions resorted in an enthusiastic reception. This document has provided
for the legitimacy of the following initiatives and standards.
THE CONVENTIONS OF THE INTERNATIONAL LABOUR ORGANISATION [ILO]
The conventions recognising fundamental human and labour rights promoting social justice as provided for
by the 1919 International Labour Organisation [ILO] are numerous.372 Eight fundamental conventions serve
as the cornerstones of the International Labours Standards [ILS].373 On differing issues labour rights and
corresponding obligations for multinational corporations have been set out in corresponding agreements on
the subsequent issues: Freedom from discrimination, freedom from slavery, Health and Safety, Freedom of
Association and the Right to Collective Bargaining. 374 In accordance with these stipulated rights,
corporations of any kind are obliged to ensure that business policy and best practices are aiming at the
protection of these rights. The disadvantage of the Conventions is their applicability only after ratification.375
THE 1789 ALIEN TORTS CLAIMS ACT [ATCA]
Liability for corporations under national law can be established on the base of violations of international
human rights under the 1789 Alien Tort Claims Act [ATCA].376 Foreigners are permitted to bring suit in US
Courts for the infringements of their rights by corporations. 377 Since 1980 this has been increasingly
interpreted as breaching of human rights. In addition, litigation does not depend on the nationality of the
legal entities concerned, or the place of the alleged violation. Unique in the world of human right this binding
instrument has provided for an additional extraterritorial base litigation. Important is the admissibility of a
range of cases and the subsequent US jurisdiction for the alleged breach of international law. 378
Some noteworthy cases illustrate the importance of the ATCA. For the first time, corporations could directly
be held liable for human rights violations. In the Unocal-case379 the Unocal Corporation and Union Oil
Company of California conducting business in Burma [Myanmar] was allegedly held liable for the acts of the
372Clapham, A., ‘Human rights Obligations of non-state actors’, 2005, University Press, Oxford, pp. 214; AI’s Human Rights Principles
for Companies: an introduction, available at: http://www.amnesty.org/en/report/info/ACT70/001/1998. See also, Amnesty International and Pax Christi, Multinational Enterprises and Human Rights, 1998, Utrecht; MUCHLINSKY, P.T., ’Multinational Enterprises and the Law, 2nd Edition, Oxford, Oxford U.P., 2007, Chapter 12 on Labour Relations, pp. 473-506.
373These fundamental conventions are the ILO Convention 100, on Equal Remuneration for Men and Women Workers for Work of Equal Value, ILO Convention 111, on Discrimination in respect of employment and occupation; The ILO Conventions 29 and 105, on the Abolition of Forced or Compulsory Labour; The ILO Convention 87 on the Freedom of Association and Protection of the Right to Organise, the ILO Convention 98 on the Right to Organise and Collective Bargaining as well as the ILO Convention 138 on Minimum Age. Finally ILO Convention 182 covers the Worst Forms of Child Labour of 1999.
374These correspond with the mentioned eight fundamental ILO Conventions and additional ILS: the ILO Convention 165, the ILO Convention 13, on the Minimum Age for Admission to Employment; The ILO Convention 155 on Occupational Safety and Health addresses general provisions, and other Conventions relate to protection in specific labour areas; The ILO Convention 87 on the Freedom of Association and Protection of the Right to Organise, the ILO Convention 98 on the Right to Organise and Collective Bargaining as well as the ILO Convention 135 on Workers Representatives.
375See on ILO Declarations the subsequent paragraph on quasi legal instruments. 376See for an exploration of the ATCA, Jägers [2002], Chapter VII; See for an excellent expose on the ATCA, Joseph, S.[2004, pp. 21- 377The ATCA declares, ‘The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in
violation of the law of nations or a treaty of the U.S.’ Unfortunately, the Act itself has no reference to human rights. Other countries providing a similar transnational human rights litigation are Australia [by statute], UK and Canada [by customary international law]. Some have uttered other regional equivalents, such as a European. Schutter, O. de, Multinationals in European Law, supra n
378GENUGTEN, VAN & JÄGERS, ‘Ondernemingen en de rechten van de mens’, in: FLINTERMAN [ed.], Niet statelijke Actoren en de rechten van de mens; gevestigde waarden, nieuwe wegen, Boom Juridische Uitgevers, 2003, pp. 42-47.
379Doe v. Unocal-case, 27 F Supp 2d 1174 [CD Cal 1998] Note the fact that several Unocal-cases have been filed. See also the renowned Filartiga v. Pena Irala-case, Filartiga-case, Filartiga v Pena-Irala 630 F. 2d 876 [2nd Cir 1980]. See in this respect, Dale, John G., ‘Transnational legal conflict between peasants and corporations in Burma: human rights and discursive ambivalence under the US Alien Tort Claims Act’, in: Goodale, M. [eds.], ‘The Practice of Human Rights: Tracking Law between the Global and the Local’, Cambridge: Cambridge University Press, 2007, pp. 285-319.
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military security forces as agents for Unocal in the course of an oil pipeline project concerning the use of
forced labour, torture, the involuntary relocation of people and the degree of complicity with the Burmese
military junta. Although the company knowingly aided and abetted the actual perpetrators of human rights
violations, it was not directly committing violations since knowledge in itself is insufficient for liability.380 Yet,
in knowingly supporting the conduct, such actions foreseeable lead to human rights violations of another
party. Thus different levels of complicity of corporations could be invoked as a ground of liability claim.381
The importance furthermore lay in the fact that forced labour seen as slavery is a violation of jus cogens.
An interesting case was provided by the so-called Beanal-case.382 The mining company Freeport operating
in Indonesia was accused of committing human rights violations such as cultural genocide and gross
environmental abuse. This case has produced a useful framework of four elements in establishing if the
alleged violations have taken place in the form of the State’s action;383 firstly, the nexus, establishing the
participation of the government in the alleged conduct; secondly, the symbiotic relationship, state and
corporation are integrally interdependent; thirdly, joint action: the corporation unquestioningly cooperates
with state organs and finally, public function, the corporation performs a governmental task.384 Unfortunately,
the evidence to prove the defendant was an Indonesian subsidiary did not suffice. A corporation will be held
liable if it directly supports State’s human rights violations.385 The mere fact that a corporation profits from
the State’s human rights abuse, is not in itself a ground for liability. In the Ge v. Peng-case, Adidas was not
regarded as an accomplice due to the fact that the PRC had produced soccer balls by forced prison labour
with eventually the Adidas logo.386
The greatest disadvantages of the ATCA are the time- and costs-consuming litigation. Moreover, the
inaccessibility of this remedy is most evident for human rights violations in developing countries.387 The
question remains if large enterprises in effect will alter their policy based on litigation which has not resulted
yet in a verdict. Civil Litigation for US Courts will not be admissible in all cases.388 The forum non conveniens
doctrine requires a court to dismiss an action in the US if an adequate alternative foreign forum is at hand
and if the decision to bring the suit before a US Court needs to be redefined on the base of public and
private considerations in another forum.389 The political question doctrine requires politically sensitive issues
to be dealt with outside the judicial scope of resolution. The act of state doctrine requires courts in cases in
which the corporation enjoying sovereign immunity as a state agent, to dismiss on the ground of sovereign
380See with respect to oil company, the Texaco-case, Jota v Texaco 157 F 3d 153 [2d Cir 1998]. See also the Khulumani-case, Case CV
25952 [EDNY 2002]. 381Muchlinsky[2007], pp. 527-529; 382BEANAL-case, Beanal v Freeport-McMoran, Inc 969F Supp 362 [ED la 1997]. 383Jägers [2002], pp. 183-196 on the ATCA and corporations. 384Compare the analysis on ILC Article 4-8 on State responsibility and the establishment of the nexus between State and the entity
concerned in Chapter 3. 385See also Joseph [2004], p. 50-53. 386GE V PENG-case, 201F supp 2D 14 [[DDC 2000]. This case was also dismissed on the ground of sovereign immunity. In another case,
Wiwa v. Royal Dutch Petroleum [Shell] Co No 96 Civ 8386 2002 US District Court Lexis 3293 S.D.N.Y22 February 2002, Shell was held responsible for the death of the Nigerian Ogoni activist Ken Saro Wiwa. Many cases followd in the Wiwa litigation. At this moment the Court has not yet decided on its ruling, 26 May 2009, SDNY2009.
387Joseph, S. [2004], p. 153. 388See in this respect, Steinhardt, R.G., The New Lex Mercatoria’, in: Alston, ‘Non-state Actors and human rights’, 2005, pp. 200-203;
ATCA will not be activated in cases such as ‘the rights to life, health sustainable development, freedom from discrimination, freedom of speech, prohibitions on terrorism, cultural genocide, environmental abuse, exile, expropriation of property, forced prison labour, transborder abduction, fraud, negligence, commercial torts and conversion’, Joseph [2004], pp. 26-28.
389
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immunity.390 An important consequence of the ATCA litigation, in which the actual liability of corporations is
established, is the subsequent question of the extent of complicity of corporations to human rights violations.
Several academic ‘complicity tests’ have provided for a guideline, next to the aforementioned Beanal-
case. 391 Within the corporate decision-making, the poignant questions can vary from legal restraints,
business considerations to political risks and humanitarian concerns. Jungk has described four constructive
factors to ascertain the level of complicity of transnational corporations, to systematically guide a corporation
in its human rights concerns in unstable regions. The degree of human rights violations can vary from
sporadic to systematic harm. The nature of violations distinguishes the actual active violation from a
government’s denial of ensuring human rights. The type of human rights violation depends on the various
cultural interpretations, although erga omnes provisions are addressed to all actors in spite of their
perspective. The fourth condition is a significant feature for the establishment of corporate nexus with
alleged human rights violations. The proximity condition is based on the level of connection to the alleged
violations and comes in three levels: no connection, the enterprise has not an actual effect on the political
agenda; an indirect connection, the political activities are fuelled by the enterprises transactions, or a direct
connection, which demonstrates human rights violations occur due to corporate productivity or engagement
in political transactions.392 To establish the proximity is the most determinant feature concerning enterprises
and it is the most difficult at the same time.
Another hurdle in the accountability of corporations is the ‘corporate veil’: the partition between parent and
subsidiary company through shares in order to establish a separate legal personality. In the case a
subsidiary is alleged of violations through acts or omissions, the parent corporation might be liable in
transnational human rights cases as well, as was established in the Amoco Cadiz and Connelly cases.393
The parent company can be directly held liable for acts or negligence when actual control is established to
ascertain its duty of care through e.g. a clear proximity to the subsidiary, the level of control of the alleged
misconduct or policy consideration.394Indirect liability is not an easier road to travel. The parent can be held
jointly liable, when there is sufficient evidence that both parent and subsidiary are liable for misconduct,
through e.g. communications, policy drafting or the use of common officers, or through multinational group
liability, regulating corporations based on their economic unity regardless of legal division; the group of
corporations have to provide evidence for their possible lack of liability.395In addition to the obstacles, the
ATCA has proven an apt instrument in many cases. Conceivably, plaintiffs need to seek other forms of
‘redress’ in alternative non-legal means such as corporate self-regulation, national promotional instruments
or the naming and shaming of NGOs. The following paragraph displays potential opportunities.
390Concerning the Jurisdictional Immunities of State property. Note the exceptions in which the immunity is not extended with regard to
human rights violations, such as commercial transactions or waivers. 391See in this respect articles 16, 58 of the ILC Articles on State Responsibility. 392Jungk in: Pegg [2003], pp. 11-13. 393See the cases, Amoco Cadiz, 1984. Case concerned oil pollution of the French Coast. Due to the major control of the parent company
over its subsidiaries owning the ship, it could be held liable for its negligence considering the ship; Connelly v RTZ corporation[1996], English parent company was accused of violations by an Namibian subsidiary mining company.
394And not per se the level of control over the subsidiary. See also for further implications of direct liability, Joseph [2004], pp. 134-138. 395Meeran, ‘Unveiling of Transnational Corporations’, in: Addo [1999], pp. 161- 170; Muchlinsky [2007], pp. 326-332.
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4.1.2 NON BINDING, QUASI-JUDICIAL INSTRUMENTS
This ‘soft’ law, based on non-enforceability, does not imply the human rights instruments to be useless. The
OECD-Guidelines for Multinational Enterprises, the ILO-Tripartite Declaration, and the United Nations Global
Compact and not in the least the UN Norms on the Responsibilities of Transnational Corporations have
established a promising voluntary adherence of participants. Some of these non-binding instruments have
been acknowledged as measures for human rights protection by enterprises in Codes of Conduct: Once
adhered to, these norms do provide for a level of accountability. This paragraph describes the content,
potential and disadvantages of the usage of these means.
THE 1976 OECD-GUIDELINES FOR MULTINATIONAL ENTERPRISES
Directing at both States and business the 1976 Guidelines for Multinational Enterprises and the Committee
on International Investment and Multinational Enterprises of the Organization for Economic Cooperation and
Development referred to as the OECD-Guidelines for Multinational Enterprises, have been revised in 2000.
As a non-binding instrument the Guidelines have a promising impact on human rights improvement through
corporate governance.396 The Guidelines aim at the promotion and protection of human rights among
multinational corporations as agreed upon. 397 In the General Policies of the OECD Guidelines the corporate
voluntary commitment is established to respect human rights. Enterprises should take into account
‘established policies in the countries in which they operate, and the views of other stakeholders. Enterprises
should respect the human rights of those affected by their activities consistent with the host government’s
international obligations and commitments.’398 In spite of the support of the G8, the OECD Guidelines have
not had much effect and have not been often referred to, in maintaining human rights for multinational
corporations. The Guidelines are regarded too general without specific adherence to human rights
instruments. Furthermore, their scope should broaden to current upcoming economies such as China399.
THE 1977 ILO-TRIPARTITE DECLARATION
The ILO has achieved several ILS, to which multinational corporation had to comply with. 400 The creation of
the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy was
completed with the 1998 ILO Declaration on Fundamental Principles and Rights at Work, providing for the
four main labour rights. 401 It refers to the provisions in the Declaration and the ILO Conventions, in
396The Guidelines can be described as public codes of conduct. See also Clapham 2005, p. 203-204. 397 Guidelines for Multinational Enterprises and the Committee on International Investment and Multinational Enterprises of the
Organization for Economic Cooperation and Development; “Every state has the right to prescribe the conditions under which multinational enterprises operate within its national jurisdiction subject to international law and to the international agreements to which it has subscribed...’’.
398 OECD Guidelines, General Policies II.2. Additionally, specific workers’ rights have been addressed varying from core labour standards, fighting corruption, consumer protection and environmental protection to compliance with local regulations, abstaining from anti-competitive practices and meeting hostcountry tax liabilities. ‘Refrain from seeking or accepting exemptions not contemplated in the statutory or regulatory framework related to environmental, health, safety, labour, taxation, financial incentives, or other issues.’ OECD Guidelines, General Policies II.5.
399The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD.
400See for specific ILO Conventions, supra n 18-21. See also on working conditions ILO Tripartite Declaration 33, 34 and 37. 401The Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, 83 ILO Official Bull., Series A, No.
3 (2000). It is seen as a type of public code of conduc, supra n 74 and n 75. The elimination of discrimination in respect of employment and occupation, as identified as the social minimum of rights, decided upon at the 1995 UN World Summit on Social Development.
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stimulating corporations to strive for improved labour rights.402 In spite of all efforts, the Tripartite Declaration
could not convince multinational corporations to act in accordance with it. The underlying norms of the
Conventions acquired the status of customary law and would be binding for multinational corporations as
well. Aiming at the preservation of sovereignty and national development the Tripartite states that
‘multinational enterprises should take account of countries’ policy objectives including development and
social priorities. They should pay due regard to using technologies which generate employment and
consider giving contracts to national companies using local materials and promoting local processing.’403 A
disadvantage of the Declaration is the segregation of core versus other rights important to developing
countries.404 Referring to States, enterprises and employee associations its coverage in human rights
promotion is wider than the OECD Guidelines.405
THE 1999 UNITED NATIONS GLOBAL COMPACT
The Global Compact is the voluntary corporate proposal of the UN Secretary-General mingling companies,
United Nations bodies and civil society organisations to support ten principles derived from the most
important international instruments such as the UDHR and the ILO conventions.406 The first two Global
Compact Principles concern human rights in general.407 The intent of the Global Compact partakers, among
which many multinational corporations, is the endorsement of international human rights. Originally the
multinational corporations would commit themselves to respect human rights in the workplace, protect
human rights outside the workplace, and promote human rights in the wider community.408 The proposition
of the Global Compact addressed four areas accepted by enterprises as standards of social responsibility,
human rights, labour standards, environmental protection and prevention of corruption. Even so, the
international consent on these complementing non-binding principles, can establish the intended voluntary
support of corporations.409 Although this initiative has contributed to the awareness and responsibilities of
enterprises, it is regarded by NGOs as ‘better than nothing at all’, in pressuring multinational corporations,
providing for corporate reputation’s make-up, and leaving out sufficient and unequivocal reference to human
rights. 410
402 The Tripartite Declaration, par. 11/8/7; ‘All the parties concerned by this Declaration [...] They should respect the Universal
Declaration of Human Rights and the corresponding International Covenants adopted by the General Assembly of the United Nations as well as the Constitution of the International Labour Organization and its principles according to which freedom of expression and association are essential to sustained progress.’
403ILO Tripartite Declaration of Principles on Enterprises and Social Policy 10, 19, 20: 404Muchlinsky [2007], p. 506. 405Clapham [2005], p. 211. 406See for the full text, http://www.unglobalcompact.org; A comparable set are the Global Sullivan Principles.407‘Human Rights: 1. Business should support and respect the protection of internationally proclaimed human rights within their sphere
of influence; and 2.Make sure they are not complicit in human right abuses.’ The remaining principles are: Labour 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; 4. The elimination of all forms of forced and compulsory labour; 5. the effective abolition of child labour; and 6. Eliminate discrimination in respect of employment and occupation. .Environment 7. Businesses should support a precautionary approach to environmental challenges; 8. Undertake initiatives to promote greater environmental responsibility; and 9. Encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption 10. Businesses should work against all forms of corruption, including extortion and bribery.’
408Clapham [2005], pp. 218-220. The Global Compact is a means based on universal values to attain a sustainable and inclusive global economy, by multilaterally defined universal values through international agreements.
409Forsythe [2007], p. 232. For detailed list of participants UNGC, see http://www.unglobalcompact.org/ParticipantsAndStakeholders/. 410Clapham [2005], p. 235.
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THE 2003 UN NORMS ON THE RESPONSIBILITIES OF TRANSNATIONAL CORPORATIONS
The in 2003 adopted Draft Norms on the Responsibilities of Transnational Corporations and Other Business
Enterprises with Regard to Human Rights are also known as UN Norms.411 The UN Norms provide for
corporate responsibilities of human rights, environmental and consumer protection. The UN Norms consist
of provisions on the right to equal opportunity and non-discrimination, the right to security of persons, the
rights of workers and respect for national sovereignty and human rights.412 The obligations will ‘within their
sphere of activity’ limit the obligations of multinational corporations.413 The negative obligation to respect
human rights acquires a corporate not to interfere. Corporate respect for human rights in practice comes
down to not [directly] interfering with the rights of the employees, the inhabitants of the area the corporations
operate in. Violations of human rights may occur on their own instigation, but can occur in participation with
other corporations with or without knowledge of the actual abuse of human rights. A form of corporate due
care can exist in corporations’ proper information prior to commercial transactions. Corporations have
incorporated this duty in their codes of conduct and corporate policies. Although this instrument has been
regarded as the most comprehensive it has failed yet to gain enough support as a mandatory and
enforceable instrument. Moreover, it seems mere logic to implement business proposals to an instrument
with this potential scope to the private sector.
SELF-REGULATION: CORPORATE CODES OF CONDUCT
Next to the prior mentioned instruments promoting human rights adherence ‘from above’, businesses
provide for adherence ‘from below’ through the self-regulation of business policy through codes of
conduct.414 These voluntary contributions to human rights promotion are construed as an expression of
goodwill towards social, ethical, moral or philanthropic requirements of businesses’ clients. Varying in legal
nature, content or means of adoption, the codes are a pliable means of commitment.415 Codes of conduct
come with strong features and flaws. Critics have disposed many disadvantages of the business codes in
promoting human rights: no effective mechanism monitors business practice, the codes are a subjective
means of window-dressing and the avoidance of regulating business practice together with the eventual
danger of suspension of binding legislation are amongst many others.416 It is unfortunate that business
practice confirms the premonition that social pressure by the public or other corporate scandals prove to be
the stamina for actual improvement of corporate conduct. The prospect is not dooming however. As
business codes are raising awareness declaring adherence, the foundation is laid for a development for
411Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, U.N.
Doc. E/CN.4/Sub.2/2003/12/Rev.2 (2003). In 2003 the Norms were presented for consideration by the Commission on Human Rights. 412UN Report of the United Nations High Commissioner on Human Rights on the responsibilities of transnational corporations and
related business enterprises with regard to human rights, E/CN.4/2005/9115 February 2005, p. 26. 413The first Paragraph states: ‘Within their respective sphere of activity and influence multinational corporations have the obligation to
promote, secure the fulfilment of, respect ensure respect of and protect human rights recognized in international law as well as national law [...].’ The private sector should directly be held accountable for violation of human rights regulations. See also, UN HRC Report of 15 May 2008, ‘Clarifying the Concepts of “Sphere of influence” and “Complicity” Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and other Business Enterprises John Ruggie’, A/HRC/8/16. Available at: http://www.unhcr.org/refworld/docid/484d1fe12.html [visited at 30 May 2009].
414A code of conduct in itself is ‘a written policy or statement of principles intended to serve as the basis for a commitment to a particular conduct’. Dubin cited in Pegg [2003], p. 53. See also the excellent, DINE, J., ‘Companies, International Trade and human rights’, Cambridge, Cambridge U.P., 2005.
415 Wawryk, Alex, ’Regulating Transnational Corporations through Corporate Codes of Conduct’, in: Pegg [2003], p. 53-73: Concerning the legal nature of a code, some provisions are decided to be voluntary, others can be mandatory. With regard to the form of code, Wawryk distinguishes between public, private/internal, national and non-industry codes of conduct. The means of adoption and monitoring vary; most of the codes lack effective monitors.
416Wawryk [2003], p. 47
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further enhancement of human rights norms. Due to la minimum of costs and low input, the codes as a quick
fix for human rights enhancement are preferred over extensive regulations. A good start is made through the
voluntary partaking of major actors. Once adhered to, a corporation declares the permissibility of testing its
performance. Demanding for more progress at a short notice is at present premature and contra productive
to the human rights adherence of the private sector. By cooperation and supporting the business sector by
assessing their human rights performance, it is more likely that a timely progress can be detected in
businesses’ self-regulation.417
4.2 AN SOE-SPECIFIC HUMAN RIGHTS FRAMEWORK
Not many corporate human rights instruments mention the practice of SOE explicitly. Given the particular
nature of the SOE it is important to pay due attention to this particular element in a corporate human rights
framework accompanied by the aforementioned applicable instruments. In the following the EITI Principles
and the OECD SOE Guidelines will be examined as a possible avenue for supporting and addressing
China’s SOEs on their corporate conduct on human rights.
4.2.1 THE EITI PRINCIPLES [2003]
The Extractive Industries Transparency Initiative [EITI], as a coalition of governments, ngos, companies, and
investors, aims to increase transparency of payments and revenues related to the extractive sector through
a voluntary reporting by the host country underpinned by independent third party auditing.418 Underlying this
endeavour is an attempt to lessen the opportunities for corruption which has in the past adversely affected
the local investment climate in developing countries. Determining government’s income and companies
costs is of significant importance regarding the accountability.
The 12 principles underpinning the EITI were agreed to in 2003. Participants firstly affirm the importance of
sustainable management of natural resource extraction which is beneficial for the host state’s inhabitants.
Committing to transparency in order to enhance public accountability improves the national investment
climate. Such transparency must be achieved through an effective disclosure system of payments and
revenues involving all the extractive companies operating in a given country. Finally, the principles affirm the
importance of effectively engaging stakeholders. The criteria for operationalising these principles agreed to
in 2005 require regular and comprehensive disclosure of payments by extractive companies, including state-
owned enterprises, to governments. These disclosures must be audited and reconciled by an independent
monitor using international standards. This process must involve the active participation, scrutiny of civil
society and international financial institutions. Companies and countries consult the EITI Source Book for
guidance in implementing the initiative. The deficiency of the Principles lays in the fact that home states of
extractive enterprises are mainly absent on the EITI list of participants. Given its short existence, the effects
of the EITI thus far need to be measured. Still, its future might be prosperous.
417There are many more examples of self-regulation, for example green banking and the Equator Principles:, see IFC Supports Major
Breakthrough in China’s Green Banking Industrial Bank Adopts Equator Principles’, http://www.ifc.org/ifcext/media.nsf/content/SelectedPressRelease?OpenDocument&UNID=64F68BBA2E777740852574F3004BC126
418 EITI Principles, available at: http://eitransparency.org/.
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4.2.2 THE OECD GUIDELINES OF SOES [2005]
Complementing the OECD Principles of Corporate Governance, the OECD Guidelines of Corporate
Governance of State Owned Enterprises are an important yet non-binding instrument in regulating listed
SOEs.419 The Guidelines are explicitly oriented on specific issues of corporate governance of State-Owned
Enterprises and consequently take the perspective of the state as an owner, focusing on policies that would
ensure good corporate governance. The document is divided into two parts. The Guidelines presented in the
first part of the document cover the following areas: I) Ensuring an Effective Legal and Regulatory
Framework for State-Owned Enterprises420; II) The State Acting as an Owner421; III) Equitable Treatment of
Shareholders422 ; IV) Relations with Stakeholders423 ; V) Transparency and Disclosure424 and, VI) The
Responsibilities of Boards of State-Owned Enterprises425. The second part of the Guidelines presents
annotations and commentary on the areas. Although this instrument is not aiming at the redress of human
rights violations, its adherence to the current human rights regime is not trifling in the light of prior
engagements such as the OECD Guidelines on Multinational enterprises. Implementation will enhance the
corporate structure and consequently the governance of important area’s such as the thin line between
corporate activity and human rights protection.426
In sum, it is safe to conclude that within the human rights framework as described support can be found for
means of the responsibility and even more, accountability of corporate entities. The following paragraph will
shed some light on China’s practice according to these principles.
4.3 CHINA’S PRINCIPLES AND PRACTICE
As the preceding chapter has demonstrated, the legal framework of China’s dual-natured enterprises is not
transparent. To describe Chinese private sector is difficult; some refer to it as ‘non-majority-state-owned’,
others rely on the definition of ‘an enterprise whose assets belong to individuals employing more than eight
workers’.427 The subsequent paragraph will seek to find foundations for improvement of the corporate
governance in respecting human rights in the light of the described [human rights] instruments.
Chinese enterprises at large are bound by the international agreements binding the People's Republic. As
we have seen, human rights treaties are addressing at Chinese enterprises as well. The treaty system
419OECD Guidelines on Corporate Governance of State-owned Enterprises [2005].
Available at: http://www.oecd.org/dataoecd/46/51/34803211.pdf420‘The legal and regulatory framework for state-owned enterprises should ensure a level-playing field in markets where tate-owned
enterprises and private sector companies compete in order to avoid market distortions. The framework should build on, and be fully compatible with, the OECD Principles of Corporate Governance.
421‘The state should act as an informed and active owner and establish a clear and consistent ownership policy, ensuring that the governance of state-owned enterprises is carried out in a transparent and accountable manner, with the necessary degree of professionalism and effectiveness’.
422‘The state and state-owned enterprises should recognise the rights of all shareholders and in accordance with the OECD Principles of Corporate Governance ensure their equitable treatment and equal access to corporate information.’
423‘The state ownership policy should fully recognise the state-owned enterprises’ responsibilities towards stakeholders and request that they report on their relations with stakeholders.’
424‘State-owned enterprises should observe high standards of transparency in accordance with the OECD Principles of Corporate Governance’.
425‘The boards of state-owned enterprises should have the necessary authority, competencies and objectivity to carry out their function of strategic guidance and monitoring of management. They should act with integrity and be held accountable for their actions.’
426The implementation of this particular instrument will be elaborated on in the following paragraph. 427As provided for by the ‘Interim Regulations on Private Enterprises’, 1 July 1988, as referred to in the WTO Report on China, p. 136-
137.
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leaves the exact implementation thereof to state’s discretion. Corporations have a certain margin of
appreciation to decide the business policies. According to articles 1 and 2 of the United Nations Charter of
Economic Rights and Duties of States, the People's Republic has ‘the right to choose its own economic
system and to regulate foreign investment and the activities of transnational corporations within its
jurisdiction.’ As a member of the Commission of Human Rights, China partook in the foundation of the
Universal Declaration. Advocated by the People's Republic the Declaration has been referred to in several
voluntary codes.428
The ILO has seen an increase of adherence to the ILS due to Chinese current economic reforms and the
entrance to the WTO in 2001. Hitherto, the People's Republic has ratified 23 conventions including three out
of eight fundamental ILO conventions, the ILO Conventions 100 [Equal Remuneration], 138 on Minimum
Age [Minimum Age] and 182 [Child Labour].429 In addition, China is a permanent member of the Governing
Body of the ILO due to its leading economic position. Together with the Chinese stakeholders the ILO has
drafted a custom-made program for enhancement of labour rights. Its spear points are a] the promotion and
realisation of the ILS, b] the assistance for the ratification and application, c] the promotion of awareness of
the ILS and d] strengthening the ‘Labour inspection capacity’.430 Together with three partners, the All China
Federation of Trade Unions [ACFTU], representing the workers, the China Enterprise Confederation [CEC],
representing the employers and the Ministry of Labour and Social Security [MOLLS], representing the
government, these improvements should be realised.431 Although many more labour challenges need to be
monitored, this recent development is an improvement in China’s high-risk labour rights issues varying from
a social security system, employment, social dialogue to migration and fighting HIV/AIDS. Regarding the
voluntary ILO Tripartite, the People's Republic combats the inherent issues within the same partnership, the
MOLLS, ACFTU and the CEC. Especially in the extractive sector, Chinese enterprises need to balance
national interests with responsibilities towards the communities concerned: ‘Multinational corporations [..]
can help develop countries both economically and socially. They can also abuse this power by operating in a
way that conflicts with the workers' and country's best interest.’432
In order to improve the lack of transparency in corporate structure and governance, China would benefit
from implementing the suggestions as put forward in the OECD Guidelines of Corporate Governance of
State Owned Enterprises would be an important asset to regulation of China’s SOEs. Unfortunately, China
has not met the requirements for membership of the OECD hitherto, although it has contributed in
preliminary work to OECD policy making.433 On the described area’s additional remarks can be made.
428See the elaboration on ILO Tripartite, UNGC, OECD Guidelines etc. 429China’s latest ratifications since 1990 are: 170 on Chemicals, 122 on Employment Policy, 150 on Labour Administration, and 167 on
Safety and Health. See in full, http://www-ilo-mirror.cornell.edu/public/english/region/asro/beijing/inchina.htm430Supra n 87, sub ILS development. 431Based on the 2001 Memorandum of Understanding [MOU]. Read full text on Employment, Social Protection, Social Dialogue and
Cooperation in various sectors, at http://www-ilo-mirror.cornell.edu/public/english/region/asro/beijing/mou.htm. Some improvements in national legislation were made recently: the on 1 January 2008 enforced new Labour Law. The 2005 Company Law has provided for the explicit enjoyment of labour rights by companies.
432Article 22; See also the Introduction to the ILO Tripartite. 433The SASAC has contributed to the drafting of the Guidelines in the 2004 consultation meeting. ‘It is quite relevant that it is indeed
China where the Guidelines are presented first. Reasons for this being, amongst others, the size and significance of state owned assets in the Chinese economy, and the very substantive reforms undertaken by the Chinese government in this area recently, the most important probably being the setting up of the State Assets Supervision and Administration Commission (SASAC), two years ago,’ as
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With regards to the first area, on ‘Effective Legal and Regulatory Framework for SOEs’, China’s reforms
over the last three decades have demonstrated a better division of state’s ownership and governance
prerogative and the increasing understanding of the need of a clear cut between state’s duties.434 It is
encouraging to find initially the separate legal personality of enterprises supported by case-law, thus
providing for a simplification of the SOE. However these reforms have an utilistic approach, since the public
service is profit maximization. The current developments demonstrate the need for a clear cut between the
State’s double featured performances, at the least for the sake of foreign investments. The sensibility for
corruption and the political interference with corporate procedures contribute to the slow progression in
reformation. The Guidelines encourage States to normalise the commercial relations between banks and
SOEs.435
Regarding the second area, ‘The State Acting as an Owner’, practice demonstrates that although separated
on paper, in practice by means of policies, indirect funding, appointment of determining board members,
supervisor and management, the State thus acts as an owner, be it as a major or minor shareholder. States
are therefore recommended to distance themselves from the effective management and create more
transparency. 436 The relation between stakeholders and the owners is still in need of ‘re-
conceptualisation’.437
With regard to the third and fourth area on Shareholders Treatment, all shareholders should be treated
equally. The People's Republic should consult with all shareholders and the partaking of board nominations
should be accessible to all. This board is to develop internal ethical codes.438 In this respect, the SASAC has
issued in 2008 “Instructing opinions about state-owned enterprises (SOEs) fulfilling social responsibility”,
based on the report called the “Research Report of CSR of SOEs”. In the Instructing Document the SASAC
suggested eight CSR factors concerning state-owned enterprises which must be taken into account in order
to fulfil their social responsibility. Overall, corporations should be responsible to stakeholders and the
environment while achieving business purposes. This is considered the most important action to enhance
socialism and a ‘harmonious society’.439 With regard to the promotion and protection of human rights, the 1st
instruction refers to compliance with law and moral standards440 and the 7th instruction on the protection of
was stated by Louis Bouchez in his Opening Remarks of the 2005 Policy Dialogue Corporate Governance in China, see http://www.oecd.org/dataoecd/21/61/34980538.pdf.
434This would imply for example a clear division between state’s ownership and other functions [sub 1a], a simplification of the legal personality of SOEs [sub 1b], a clear legal mandate for SOE undertakings [sub 1c], equal and efficient redress for stakeholders [sub 1d], flexible regulation to adjust SOEs’ structure. OECD SOE Guidelines p. 12.
435It is not meant to imply that no state control should be present, since in itself SOEs are important economic vessels. 436This would imply the government to issue an ownership policy, identification of exercise of ownership, provide for transparent board
nominations and SOE performance assessments; OECD SOE Guidelines, p. 13. 437Addo [1999], p. 14. 4382005 OECD SOE Guidelines, p. 14-15. 439State-owned Asset Supervision and Administration Commission [SASAC]: ‘CSR Guideline for SOE’, 4 January 2008. Available at:
http:// www.syntao.com. This report was published following an in-depth study conducted by SASAC on CSR issues of state-owned enterprises (SOEs) which began in 2006 and was initiated as a result of the ongoing and increasing debates on CSR in both the international and national arenas, such as policy and planning, and can be issued by any office or division of the government or Party at any level. However, the ‘No. 1Document’ (!"#$) is particularly symbolic as it is means the first Red Header Document issued to the public that year, meaning that the stated content will be the main focus of work for that department for the whole year. See, CSR Asia Weekly, Vol. 4, wk 2, 2008: CSR as “No. 1” issue for State-owned enterprises in China’, by Brian Ho. Available at: http://www.csrasia.com. See also GRI, http://www.globalreporting.org/NewsEventsPress/LatestNews/2008/NewsJan08Chinese.htm.
440‘1. Comply with laws and regulations, moral standards, business ethics, and industrial regulations and conduct their business honestly.’
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labour rights. 441 As may be expected, the developed CSR policy comes with the inevitable Chinese
characteristics.442 This feature however does not invalidate corporate long-term policy on CSR; it is in its
own interest.
On the fifth area of Transparency, China might consider to allow independent audits and documentation on
the progression of SOEs and their performances. In the case of large SOEs external audits based on
international standards should be equal to regular enterprises. Information in line with OECD principles
should be disclosed by SOEs, such as the objectives, the ownership of the enterprise, the nexus with parent
companies and financial assistance from the People's Republic.443 Due to the diversification of People's
Republic state’s control in financing and policy making and many issues as described previously, this area is
of utter importance foreign stakeholders such as investors. On the final issue of the Boards of SOEs, the
Guidelines urge enterprises to strive for accountability and integrity. Boards should be allocated a clear
mandate and bear full responsibility for corporate performance. Independent judgement separated from the
CEO and sustaining Committees should enhance the board’s performance, which in turn should annually be
monitored.444 We have seen in the preceding chapter that this is not an easy road to travel due to the age
old way of doing business through guanxi; the appointing of Party members in boards or other committees is
not likely to decrease altogether. This proposal will take time to root. An advantage of the Guidelines lies in
the value of OECD instruments with regards to human rights lays in the fact that due to China’s socio-
political structure and capacity building in the light of rule of law, a seedbed needs to be created for the
rationale behind the human rights protection, respect and ways of redress. The enhancement of SOE reform
through these Guidelines ultimately paves the way for a greater awareness and understanding of CSR and
in the end human rights preservation within the corporate internal structures.445 As the preceding chapters
have disclosed the strengths and flaws of Chinese economic development, these Guidelines turn out to be a
revolutionary aspiration of human rights enhancement.446
Following from the described ATCA-cases the admittance of civil claims in the U.S. Courts could provide for
the forum in which Chinese enterprises can be held accountable for human rights violations, directly or
indirectly.447 China is not likely to submit its business practice to foreign courts, such as the ATCA, based on
its stance on the sovereign immunity, the act of state doctrine, when a SOE operates as a State organ, and
the political jurisdiction doctrine, when Chinese political sensitive issues need to be dealt with in a non-
litigate manner.448 In case a Chinese SOE is acting in public service, China’s objection finds a legitimate
441 ‘Protect labour rights and enter into employment contracts that fully comply with legal requirements. Discrimination against gender,
ethnicity, religion and age should be eliminated. Employee representative mechanisms should be introduced or strengthened.’ 442See for an insightful delineation insightful delineation on the political dynamics of CSR, EU-CHINA Human Rights Network, Aguirre,
D., ‘Working Paper on Corporate Social Responsibility’, Dialogue Seminar on human rights in Beijing, 28-29 June 2004. 4432005 OECD SOE Guidelines, p. 16. 4442005 OECD SOE Guidelines, p. 17. 445According to Leonardo F. Peklar, the OECD Guidelines have become benchmarks in China on Corporate Governance of its business
sector. See, Leonardo Peklar, ‘OECD-China Policy Dialogue on Corporate Governance’, Socius June 2007, Available at: http://www.socius.si.
446See for examples on corporate governance regional meetings OECD Asia, ‘The 2003 White Paper on Corporate Governance’, http://www.oecd.org/document/24/0,3343,en_2649_34813_2048216_1_1_1_1,00.html; On Conclusions and key findings of the 2008 Asian Roundtable on Corporate Governance http://www.oecd.org/document/39/0,3343,en_2649_34813_40144295_1_1_1_1,00.html.
447The following case study will discuss the various complicity tests and levels as described sub 4.1.1 448A clear example of the means of influencing on a non-litigation level is given by Wu, Victora, ‘Nurturing the Rule of Law in China’,
The China Business Review, 2007-05. Available at: http://www.chinabusinessreview.com/public/0705/legal.html.
HUMAN RIGHTS, CHINESE BUSINESS | 73
ground. However, since the increase of independent legal personalities and the Chinese standpoint on the
financial and legal accountability of its enterprises, one should not be surprised to find an equivalent
increase in litigation against Chinese privatised SOEs as well. Since many corporations are at the least state
controlled, indirect by way of parent companies or stake holding, the significance of the independent legal
personality of corporations remains to be seen. With regard to establish the complicity of Chinese
enterprises, the lack of transparency creates additional concerns. Analysing the different conditions as
presented, the Chinese governmental participation in a public or private enterprise need to be established
on the base of the nexus, symbiosis, joint action and public function. In this respect, the nature, degree and
type of human rights violation might support the establishment of governmental misconduct. The most
significant element to establish corporate human rights violations is the proximity test. Since Chinese
governmental policy seep through private and privatised enterprises, the [in-]direct connection is complex to
ascertain. Again, knowingly aiding and abetting in human rights violation alone or plucking the mere fruits of
the human rights violation is not what constitutes for complicity of Chinese enterprises. If its enterprises are
brought before US Courts, the forum non conveniens doctrine might be invoked by the People's Republic to
bring suit before Chinese courts instead.
The EITI Principles have been welcomed by the People's Republic. The Principles are regarded as a helpful
instrument to develop the mining and extracting industry in a sustainable manner. The EITI’s reference to
the pursuance of national interests is in line with the Chinese position on its economic development
strategies. China has stipulated the fact that these national interests need to be in line with underlying
principles of fair, transparent and competitive regulations. Important yet implicit, the statements make
mention of the significance of good resource management with regard to the society and citizens
concerned.449 Concerning the vast problems in Chinese human rights performance in the extractive sector, it
is highly recommended that the EITI urges Chinese companies in the extractive sector to partake in this
initiative. In the withdrawal from the notorious ‘resource curse’ of corruption, conflict and poverty Chinese
business commences to be accountable and transparent on their corporate responsibilities.450
Since the 2003 UN Norms are a further enhancement of the prior created binding and voluntary initiatives,
China has not made other reservations to the adoption of the Norms than it already has made regarding
other agreements.451 The fact that the economic and social rights are only addressed to in article 12 will not
be in line with Chinese stance on the right to subsistence and economic development.
With regard to the United Nations Global Compact, the list of participants demonstrates an increase of
Chinese, State Owned, enterprises.452 Adhering to UDHR, the UNGC complements other human rights
instruments. Enclosing this element in their respective CSR policies and Codes of conduct can establish a
449Joint Statement by Energy Ministers of G8, The People’s Republic of China, India and The Republic of Korea Aomori, Japan on 8
June 2008. See also, Statements of Chinese Delegation on the EITI. Available at: http://www2.dfid.gov.uk/pubs/files/eitidraftreportchina.pdf
450EITI Report, 22 October 2007, p. 10. 451China, although welcoming labour rights, has for example made objections to several ILO Conventions such as number 98 on
Collective Bargaining, and is likely to reiterate if the UN Norms become a legally binding instrument. In addition, the UN Norms recognition of interrelatedness and indivisibility of the all human rights, is not likely to be perceived acceptable by the People’s Republic.
452See on the site of the UNGC, http://www.unglobalcompact.org/ParticipantsAndStakeholders/ [visited 30 May 2009].
HUMAN RIGHTS, CHINESE BUSINESS | 74
ground for human rights accountability in case of violations of human rights. After all, the enterprises
concerned have expressed voluntary adherence to the human rights regime. Noted should be, that with the
increase of adherence to different human rights instruments, the public expectation of the Chinese
government concerning regulation and implementation of human rights might reflect on business attitude of
human rights as well.
Given the reasoning of China’s stance on non-interference and sovereignty, it is not a surprise China’s
business regulation is more likely to be based on corporate responsibility initiatives than corporate
accountability. The adherence of many SOEs and privatised Chinese enterprises to voluntary initiatives such
as the United Nations Global Compact is therefore not an utter surprise, from a philanthropic point of view.
The acceptance of a light version of self-regulation is therefore widespread among Chinese enterprises, be it
public or private. Next to this some Chinese values are inherent to the ratio behind CSR. Moreover, to some
CSR related to is inherent to Chinese culture of public service.453 An interesting opportunity to enhance
human rights compliance might lie in China’s WTO membership. Since the WTO is capable of imposing
mandatory trade regulations on the Chinese government, such as the improvement of corporate codes of
conduct. This beneficial practice has paved the way for China’s efforts on human rights performances
aiming beyond the vested human rights regime more support for normative human rights regulations should
be drafted from within the international trade arena.454 At this moment these indirect and rather ‘neutral’
avenues might provide for renewed human rights commitment of developing nations states such as the
People's Republic with an alternative stance on scope of the human rights enforcement.
Despite the fact of this voluntary adherence, reports from different stakeholders in civil society such as the
Country Report Assessment [CRA] of the Danish Institute of Human rights [DIHR] demonstrate constructive
measures on Chinese human rights performance need to be taken. Business practise is heavily scrutinised
with respect to its ‘employment practise, supply chain management and community impact’ and are at high-
risk of human rights violations based on the UDHR. These violations concern foremost: the right to freedom
from discrimination, the right to life liberty and security of person, the right to freedom from forced labour and
servitude, the right to privacy, the right to freedom of movement, the right to family life, the right to own
property, the right to peaceful assembly and freedom of association, the right to an adequate standard of
living, the right to work and just and favourable conditions of work, the right to health and the right to
adequate housing.455
Unfortunately, the importance of the accountability of Chinese State Owned enterprises in particular is not
widely reflected. HRC’s Universal Periodic Review has not made mention of China’s development in
business practices on human rights implementation on a business level. Neither has China in its latest
453For example, some features such as a duty of good faith (chengxin) and diligence (qinmian) can fit well within the applicability of
CSR, Clarke [2003], p. 15; the Chinese philosopher Mencius which has linked the economic progress to the government and the notion of the ‘Virtuous Man’, who acts in accordance with what he knows is right. Jensen, in: Leisinger and Probst, ‘Human rights & Business’, Volume 01, p. 93; PERRY, E.J., ‘Chinese Conceptions of ‘Rights’: From Mencius to Mao-and Now’, Perspectives on Politics, Vol. 6, No. 1, March 2008, p.37-50.
454Pegg, pp. 41-48 on China and WTO 455Human rights and Business Project, CRA 2005, CRA update 2008 and the expected CRA 2009. DIHR. The DIHR has also developed
a workable human rights compliance assessment tool. Available at: http://www.humanrightsandbusiness.org. See, chapter 2 on China’s adherence to human rights treaties in general.
HUMAN RIGHTS, CHINESE BUSINESS | 75
Human Rights Action Plan mentioned the improvement of best practice by corporate enterprises. Since the
large correlation between state policy and state control in most of China’s enterprises, it is not unlikely to find
corresponding flaws in human rights performance. After all, in addition to all impressive efforts on the side of
legal and economic improvement and voluntary initiatives, it is still premature to conclude on China’s
capability to regulate its business enterprises as independent entities based on market economy principles.
The aforementioned analysis edifies the intricate nature not only of the SOE as a particular corporate
enterprise but the entire complexity of governance in China’s business framework. With regard to the
described human rights regime on the ‘protection, respect and remedies’ following form corporate
responsibility and accountability the complex identification of enterprise’s governance and ownership does
not simplify its applicability to the Chinese business practice. In spite of this encroachment, the Chinese
government has provided for some steps to regulate business practice. The following paragraph will
demonstrate the difficulty of holding Chinese enterprises accountable in accordance with United Nations
Global Compact with a case study.
4.4 CHINA, INC. IN AFRICA: A WIN-WIN SITUATION?
Within the Open Door framework the 1979 legislation by the State Council provided the steppingstone
towards Chinese entered the international market. Overseas funds had provided for Chinese aid and had
been the only permitted form of extraterritorial operations.456 The People’s Republic’s leading role in global
economic affairs has stirred the need for its transnational corporate cooperation with developing countries
on energy and raw resources.457
4.4.1 A GENERAL OUTLINE
On the African continent many sub-Saharan countries are inclined to a beneficial relation with China.
Without the environmental or human rights related ‘strings attached’ of US and EU aid-standards, African
governments are most willing to negotiate with the People’s Republic on its Foreign Direct Investments
[FDI], aid and trade proposals, and political support in international agreements. Additionally, as a potential
market for Chinese commodities, Africa’s willingness to provide the PRC with good trading conditions on
their resources is thought of mutual beneficial in the long run. Due to large trading debts and lacking
prospect of constructive change, the choice for African countries in favour of the China’s outstanding offer of
financial aid and know-how in various fields, constructing infrastructure, and the debt-relief, is easily made.
Prosperous as this development may be, deep concern in this development is not a sinecure: the costs for
this transnational corporate cooperation are paid by people and planet: environmental damages and human
rights violations throughout the African continent have increased rapidly. 458 Chinese transnational
corporations [TNCs] existing of both small and medium sized enterprises [SMEs] as well as large
456Corkin, L. and Burke, C., ‘China’s interest and activity in Africa’s Construction and Infrastructure Sectors ‘, Stellenbosch University,
Center for Chinese Studies, 2006. A research undertaking evaluating China’s Involvement in Africa’s construction and infrastructure sector prepared for DFID China, by the Centre for Chinese Studies of the Stellenbosch University.
457See on the report on 25 Chinese businesses, ‘HUMAN RIGHTS POLICIES OF CHINESE COMPANIES: RESULTS FROM A SURVEY’, Conducted under the mandate of the UN Secretary-General’s Special Representative for Business and Human Rights Professor John G. Ruggie, Harvard University, September 2007.
458 Recent litigation Shell versus Nigeria proves the impact of multinational corporations on the African environmental and community rights. The Three Gorges Dam in China has been a national piece de résistance. The harvest of Blood Diamonds have impacted the labour rights of the Chinese and local workers on the African continent.
HUMAN RIGHTS, CHINESE BUSINESS | 76
enterprises contribute to this development. 459 Being the major instrument in the Chinese economic
development, State Owned Enterprises [SOEs] are a different species among the corporations. In the
Chinese socialist market economy the State still influences the enterprise on different levels and segments
of the economy, both national and overseas.
With regard to the specific Chinese extracting enterprises, the securing of oil to keep China’s economy
running is of national interest. The four leading national oil consortiums exploiting and refining petroleum are
the SOEs China National Petroleum Corporation [CNPC]460 and China Petroleum and Chemical Corporation
[SINOPEC] 461 , China National Offshore Oil Corporation [CNOOC] 462 and CNPC’s daughter enterprise
PetroChina. 463 Granting those exclusive operating licences, Chinese government influences corporate
policies, decision-making on board members and subsidised funding as a significant shareholder through
SASAC. SOEs’ high technology and state support provide for the right means to operate exclusively in the
extractive sector.464 Keeping these strategies and developments in mind, the subsequent paragraph now
turns to the case study on PetroChina and the oil-conflict in Sudan. 465
4.4.2 CHINA INC. IN CONFLICT
In 1996 the CNPC set foot on Sudanese soil.466 The dependency of Sudan on China’s import of crude oil
increased to 40% of its export. Based on many allegations the UNGC has been addressed to investigate the
joint complaints of over 80 organisations with regard to human rights violations by oil companies which are
participating in the UNGC. According to the complainants, PetroChina‘s ‘egregious abuse is based on the
intimate, opaque, and symbiotic relationship between PetroChina and the China National Petroleum
Corporation [CNPC], their violation of UNGC principles and failure to respect human rights, lack of due
diligence in avoiding human rights violations, the widespread recognition of PetroChina as a major
contributor to the conflict in Darfur, and PetroChina’s continuing refusal to correct the abuses.’467 As a parent
SOE CNPC holds 90% in its daughter enterprise.468 Due to PetroChina’s enlisting on the stock market
foreign shareholders can not influence its decision-making. Neither is it clear to what extent CNPC operates
independently from PetroChina in Sudan. This lack of transparency needs to be edified by the Chinese
government as CNPC’s largest shareholder, and therefore owner, of PetroChina.
459These are among Chinese many other multinational enterprises. See the SASAC site for information on China’s main State Owned
Enterprises, http://www.sasac.gov.cn/n2963340/n2971121/n4956567/4956583.html. 460 See for details on the company, http://www.cnpc.com.cn/en/.461 See for details on the company, http://english.sinopec.com/about_sinopec/our_company/. 462 See for details on the company, http://www.cnooc.com.cn/yyww/default.shtml. 463 See for details on the company, http://www.petrochina.com.cn/ptr/. See also, WTO Report on China’s Energy Policy, ‘Trade Policy
Review’, Report by the Secretariat, People’s Republic of China, Revision, 26 June 2006, WT/TPR/S/161/Rev.1, pp. 178-182; International Crisis Group,‘China’s Thirst for Oil’, Asia Report No. 153, 9 June 2008.
464Zhou Yongkang one of nine leaders, is heading China’s Public Security Ministry after leading the China National Petroleum Corporation, largest oil and gas producer. http://news.bbc.co.uk/2/shared/spl/hi/in_depth/china_politics/leadership/html/10.stm. See for example the Dutch newspaper, ’De grootste in China en Africa’, [The greatest in China and Africa], De Volkskrant, 1 May 2009 on China Railway Construction Corporation [CRCC], one of the leading construction multinationals in Africa. Vicepresident Hu Zhenyi commented on the corporate policy: ‘We only build. We do not mingle with politics.’
465See for an excellent expose on China’s economic performance, ‘Trade Policy Review’, Report by the Secretariat, People’s Republic of China, Revision, 26 June 2006, WT/TPR/S/161/Rev.1
466See CNPC’s operations in Sudan, at http://www.cnpc.com.cn/en/cnpcworldwide/default.htm [lastly visited in May 2009]. 467Letter of 15 December, 2008. UN Global Compact, Complaint PetroChina 9 February 2009. Available at: See for detailed information
on this correspondence the UNGC, available at: http://www.unglobalcompact.org/NewsAndEvents/news_archives/2009_01_12b.html 468See for the relation of PetroChina to CNPC: http://www.petrochina.com.cn/Ptr/About_PetroChina/Company_Profile/default.htm.
HUMAN RIGHTS, CHINESE BUSINESS | 77
It seems that although a privately construed enterprise, Chinese governmental participation in this can be
based on several grounds of State action and complicity in human rights violations. The nexus between
Chinese government and the alleged human rights violations can unfortunately not be overlooked by the
overt and opportunistic support of the Government of Sudan. Moreover, its symbiosis can be established
through large shareholding, financial support, and a similar CEO. Lifting the ‘corporate veil’ between parent
CNPC and its daughter is due to lack in transparent information not entirely possible. The possibility of direct
liability is an option due to the ascertaining of the lack of due care through the control over policy on and
control of corporate conduct. A indirect joint liability of CNPC and PetroChina can be established on the
base of the use of common officers [CEO]. Even though the listed daughter is a legally independent
enterprise on paper, the possibility of joint action in the human rights violations by PetroChina with the
government remains, in spite of CNPC’s defence that only CNPC, not a UNGC member, is operating in
Sudan. Regarding the public function, CNPC initially operating without a mandate from the Chinese
government, has yet through full approval been re-established, since the described means of support served
national public interest in securing its energy revenues. In this respect, the continuous [nature], gross
[degree] human rights [[type]] violation might support the establishment of corporate misconduct. The
foreseeability of this continuing abuse is thus evident that knowingly aiding and abetting in misconduct must
result in constituting complicity of oil companies, noted not by means of the beneficial oil revenues in itself.
Concerning the proximity test, since Chinese governmental policies seep through the formally privatised
PetroChina, the [in-]direct connection is complex to ascertain.
Another concern is that if the aforementioned can be reconstructed to be valid and is leading to the
conclusion the Chinese state as the owner of CNPC and therefore PetroChina can be held accountable, the
question remains to what extent State responsibility for its state organs or its third parties can be
established. Based on the findings of Chapter 3 in the light of the work of the ILC, the articles 4-8 joint with
particular articles on complicity, provide for the responsibilities of the China as direct or indirect accountable.
In case this current complaint is acknowledged, the chances are that allegations against other oil companies
will follow.469 In the light of the prior described concerns on the transparency of SOEs performances,
ownership and corporate governance, this case, among many others, clearly establishes the need for a
structured insight provided for by the Chinese business sector lead by its government.470 This progress
might be strengthened by a future membership of the International Energy Agency [IEA]. Since the naming
and shaming has blemished China’s leading position, the current desire to be regarded as a responsible
player in the field will increase the pro human rights adherence, with Chinese characteristics, gradually.471
4.5 CONCLUSION
Corporate power obliges. This chapter has demonstrated the complementing asset of the human rights
instruments to the direct accountability and regulation of Chinese corporate performance, even without the
creation of a corporate independent international legal personality. Although corporations are not moral
469See for more the probability of indictment of other oil companies such as Royal Dutch Shell, http://www.businessandhumanrights.org
or http://www.ethicalcorp.com.. 470 In a letter addressed to the UNGC at 8 January 2008, the CNPC has confirmed its support of the UNGC principles and the
enhancement of its own social responsibility and a ‘win-win harmonious development of the region’. 471See in on the human rights protection by Chinese companies, Ruggie, J.G., ‘Human rights Policies of Chinese Companies: Results
from a Survey’, Conducted under the mandate of the United Nations SGSR for Business and human rights’, Harvard University, September 2007.
HUMAN RIGHTS, CHINESE BUSINESS | 78
vessels, the nexus between Chinese enterprises and State ownership and governance is still present. This
diffusion creates a tension between the utilistic stance of profit maximisation of Chinese business and non-
interference policy of Chinese government.
The core human rights treaties as well as the described initiatives have not subdivided business practice.
Their scope is extended to private enterprises as well as SOEs, parent and subsidiary enterprises, national
and transnational corporations. Unfortunately, this ‘corporate human rights framework’, in spite of all its
goodwill and progress, is lacking teeth: until this day no direct international mandatory instrument has been
drafted which can result in monitoring and regulating corporations’ conduct , in spite of the first legal attempt
of the 2003 United Nations Norms.
Chinese corporate adherence to human rights protection thrives well on the cooperation with the OECD and
the ILO on strengthening corporate governance. It seems that national civil or tort remedies, such as the
ATCA, provide the best alternative for plaintiffs for redress of corporate human rights violations. Flowing
from the ATCA jurisprudence alleged complicity in human rights violations of Chinese enterprises can be
established on the base of the nexus, symbiosis, joint action and the public service of the corporation to
State’s action. The nature, type and degree of human rights violations and corporate proximity create the
potential of accountability of human rights abuse. Having this said, the consequences on the Chinese
business sector needs to be taken into account. The lack of transparency of China’s SOEs concerning
ownership and governance creates diffusion in establishing the possibility of a state action of a Chinese
privatised enterprise. The national codification of a separate legal personality is an improvement. This
however is far from sufficient: national legislation should enhance the transparency of the nature of Chinese
privatised and state controlled enterprises. However, the lack of response with regard to alleged human
rights violations of parent SOEs for private enterprises demonstrated reveals China’s inadequacy ‘in the
field’. Since the human rights regime is not equipped to provide effective regulations for private or state
owned enterprises, redress of violations of China’s double natured enterprises lay barren, especially in the
extractive sector. Human rights bodies should provide a clear answer with regard to the position of dual
natured SOE and its privatised offspring under international human rights law.
China has provided for an increasing awareness of corporate social responsibility through the stimulation of
corporate Codes of Conduct, the enactment of the 2008 SASAC regulation and the membership of many
corporations to the UNGC. However, the disadvantages of voluntary initiatives are manifold. The Chinese
private sector and to a larger extent Chinese government should provide for a receptive socio-economic
seedbed, fully understanding China’s changing leading position with regards to business and human rights
performance, away from a philanthropic window-dressing in search of a leading new identity. An adherence
to international agreements should be reflected in a de facto implementation, not only the voluntary
initiatives. China can initiate its own instruments and even in a pragmatic way demonstrate leadership in the
realm of corporate responsibility, which in effect is the responsibility of the People’s Republic. China might
come to grasp the benefits from possible membership of human rights instruments such as the OECD and
demonstrate its capacity of a leading nation in the line with the current expectations. Moreover, the exposed
moral deficits of the Chinese private sector need to be sustained with values from within Chinese society.
Corporate power obliges to respect human rights. Chinese enterprises, private and public can therefore be
held responsible and to a lesser degree accountable for the maltreatment of human rights.
HUMAN RIGHTS, CHINESE BUSINESS | 79
CHAPTER V CONCLUSION AND RECOMMEND ATIONS
The year 2009 is the moment the People’s Republic commemorates a variety of events. 60 years after the
coming into being of the People’s Republic of China, it has been a country with great turmoil. Facing a
disrupted society, the PRC steered its course to a constructive three decades of economic and legal reform.
At the same time, the Western world has commemorated the 60th anniversary of the UDHR. Encouraging
China’s current human rights improvements, it has only been 20 years after the Tiananmen Square incident.
Looking into the future, the question remains what lies ahead. This survey has aimed to answer the central
question:
To what extent will the commitment to and development of human rights under
international human rights law impact China’s emerging transnational business, in
particular the State Owned Enterprises?
It can be seen as an important question in many perspectives. Starting with the commitment to the
international human rights regime some remarks can be made. As the Chinese philosophic heritage has
demonstrated, societal values have been based on notions such as the collective, loyalty, duties, the rule of
man, and rule by law. Only recently, China has seen a conceptual shift of values, accompanied with Chinese
characteristics; turning away from the socialist denial of the value of law and inherent condemnation of any
interpretation of human rights, to a careful adherence to by careful approval of six out of nine human rights
treaties. Notwithstanding its reservations on many core human rights issues, the odd conclusion can be
drawn that China’s initial pragmatic or even strategic standpoint on human rights can be united with the
compliance to human rights treaties. Although starting of with a deep anxiety of Western ‘imperialist’
reoccurrence through human rights obligations, it is through its renewed global economic position and its
emphasis on the right to subsistence China positions itself as an -in the long run- responsible partner in the
protection of human rights. Human rights practice, although promising, demonstrates however many
lacunae in the People’s Republic performance of State obligation to protect against violations of State
Owned Enterprises, in the capacity of either a State agents or of a corporate enterprises.
Concerning the progress of the commitment towards human rights adherence, some recommendations can
be made. Although the change in Chinese attitude might be regarded as strategic or opportunistic, the need
for a reformed society by means of constructive economic and legal transformation has fortunately been
acknowledged as an intertwined process. Nonetheless, the capacity to recreate a society’s rule of law is a
long and complex process. Transforming the rule by law into a form of rule of law accompanied with
supporting Chinese values is a prerequisite for the enhancement of human rights awareness, understanding
and eventually de facto human rights enforcement. It is therefore recommended that support is provided in
several means. The exchange of western legal advisors and academics will provide sustenance of better
equipped legal Chinese scholars and professionals and raise human rights awareness. Constructive
criticism of human rights compliance by the People’s Republic can productively accelerate China’s
adherence to human rights. Yet, this criticism ought not to be a means in itself; it should be accompanied
with a sound rights discourse and the understanding of Chinese cultural particularities, its preference for
socio-economic rights and sovereignty. At the same time, the People’s Republic need not interpret criticism
HUMAN RIGHTS, CHINESE BUSINESS | 80
as an antagonist attempt to polarise and disregard China’s human rights position. Not all criticism is meant
to interfere in State’s national interest; State’s discretion as to the extent of human rights implementation
remains to be an acknowledged principle. China should be encouraged to re-conceptualise its values and fill
the moral hiatus which have been It is possible that China and define its independent and responsible
position as a leading nation with regard to its human rights, for example by means of a leading position in
strengthening accountability and responsibility through regional human rights and trade related instruments .
Furthermore, as a furtherance of its current human rights compliance, human rights need to be implemented
on a deeper level in Chinese legislation. That said, legal reforms must be enhanced with a concurring social
embeddedness in Chinese society.
Regarding the Chinese society as a seedbed for legal reform, this leads us to the position of the CCP. Given
the CCP’s strong presence in all sectors of China’s society in conjunction with the strong preference for a
stable society, it is not likely that its far-reaching influence will before long be adjusted; the societal goals of
economic prosperity based on the rights of development and subsistence have not sufficiently been
consolidated in economic or legal sense. However this strong inclination of authoritarian leadership has
provided for many difficulties in the economic development of Chinese private sector. The need for a
separated State ownership and governance, in both public and private enterprises, has unfortunately also
lead to a lack of transparency in economic and human rights accountability. In this light some
recommendations are valuable. In order to protect, respect, fulfil and promote human rights against
violations of corporate enterprises such as the State Owned Enterprise, its separation of ownership and
governance are of utmost importance to the regulation and adjudication. Moreover, it has proven not to
advance economic development. Starting with the result of profit maximisation, the division between State’s
ownership as a controlling shareholder and State governance through mingling in corporate decision-
making, the ultimate corporate governance benefits corporate social responsibility and therefore improves
human rights standards.
This separation leads to an answerable corporate accountability and responsibility concerning human rights
application, as the case of PetroChina has inevitably demonstrated. Therefore, it is recommended that the
People’s Republic continues to create a transparent legal and economic structure of State Owned
Enterprises to enhance better corporate conduct and human rights compliance. It is furthermore
recommended that the human rights regime clearly defines its scope to State Owned Enterprises and
improves a binding ‘corporate human rights framework’ as a solid framework regulating and adjudicating
China’s State Owned Enterprises. The ultimate impact of the developing international –corporate- human
rights framework can be summarised in two facets; within the capacity building of China’s rule of law, the
legal empowerment will create for an effective and thorough framework to enhance economic developments.
The economic progress will provide for a stable and receptive society and the acceptance of further human
rights implementation. Since the economic and legal development is entwined in China’s continuing
progress of a responsible ‘harmonious society’, it is very likely that global economic cooperation through
binding and voluntary initiatives on human rights improvement will in the end provide for a receptive
seedbed to improve a legal framework and further understanding, adherence and implementation of human
rights by the People’s Republic of China. It seems that a utilistic and constructive business approach
HUMAN RIGHTS, CHINESE BUSINESS | 81
through corporate governance and corporate social responsibility provides a better stepping stone to
achieve a human rights improvement in addition to the ‘old-fashioned’ naming and shaming of China’s
human rights performance.
At this cross point in time, the human rights regime meets the People’s Republic. As the reforms have
demonstrated many improvements need to be made on the part of protection of Human rights, this is
China’s state and corporate business as well. The responsibility of the protection and assertion of human
rights must be in the end ‘Chinese business’.
HUMAN RIGHTS, CHINESE BUSINESS | 82
TABLE OF CASES
PERMANENT INTERNATIONAL COURT OF JUSTICE
! Corfu Channel Case, UK v Albania [United Kingdom v Albania] ICJ 1949, 4
! Reparation for Injuries suffered in the Service of the United Nations, ICJ Rep 1949, 174
! Barcelona traction-case, Case concerning the Barcelona Traction Light and Pawer company.
Limited [Belgium versus Spain], ICJ Rep 1970, 3
! US v Iran Hostages, ICJ 1980.
! Nicaragua-case, ‘Military and Paramilitary Activities in and against Nicaragua’ (Nicaragua v.
United States of America), I.C.J. Reports 1986, 14
! Bosnia Herzegovina Case, Case Concerning the Application of the Convention on the
Prevention and Punishment of the Crime of Genocide [Bosnia and Herzegovina v Serbia and
Montenegro] ICJ 2007, 91
IRAN -U.S.C.T.R.
! Starrett Housing Corp. v. Government of the Islamic Republic of Iran, 4 Iran-U.S.C.T.R.122
[1983]
! Schering Corporation v. Islamic Republic of Iran, Iran-U.S.C.T.R. [1984]
! International Technical Products Corp. v. Islamic Republic of Iran, Iran-U.S.C.T.R. [1985]
! Flexi-Van Leasing, Inc v. Islamic Republic of Iran, Iran USCTR [1986]
! SEDCO, Inc v. National Iranian Oil Co,. Iran-U.S.C.T.R. [1987]
! Yeager v. Islamic Republic of Iran, 17 , Iran-U.S.C.T.R. 92 [1987]
! Petrolane, Inc v. Islamic Republic of Iran, 27, Iran-U.S.C.T.R. 64 [1991]
! Foremost Tehran Inc v. Islamic Republic ofIran, Iran-U.S.C.T.R. 228 [1986]
UNITED NATIONS HUMAN RIGHTS COMMITTEE [ AVAILABLE: HTTP://WWW1.UMN.EDU/HUMANRTS/]
! Lopez Burgos v Uruguay-case, Sergio Euben Lopez Burgos v. Uruguay, Communication No.
R.12/52, U.N. Doc. Supp. No. 40 (A/36/40) at 176 [1981].
! Hertzberg v Finland, Leo Hertzberg et al. v. Finland, Communication No. 61/1979, U.N. Doc.
CCPR/C/OP/1 at 124 [1985].
! Nahlik v. Austria-case, Communication No. 608/1995 Franz Nahlik v. Austria, Communication
No. 608/1995, U.N. Doc. CCPR/C/57/D/608/1995 [1996].
! Hopu and Bessert-case, Francis Hopu and Tepoaitu Bessert v France, Communiation No.
549/1993 , U.N. Doc. CCPR/C/60/D/549/1993/Rev.1.[1997].
! Love et al v. Australia, Communication 983/2001, UN Doc. CCPR/C77/983/2001, 28 April
2003.
HUMAN RIGHTS, CHINESE BUSINESS | 83
UNITED NATIONS REPORTS OF INTERNATIONAL ARBITRAL AWARDS
! Salvador Commercial Company Case, UNRIAA, vol. XV, 1902.
! Mallen-case, UNRIAA, 1927, vol. IV (1925), p. 173-177.
! Caire-Case, UNRIAA, Vol. V, [1929], p. 516.-531.
! Noyes Claim [USA v Panama],UNRIAA, Vol. VI , 1933.
INTER-AMERICAN COURT OF HUMAN RIGHTS
! Velázquez Rodríguez-case, Velázquez Rodríguez v. Honduras, Judgement of 29 July 1988.
Inter-Am.Ct.H.R. (Ser.C) No. 4 (1988).
ALIEN TORT CLAIMS ACT [ATCA] [available at: http:// hartpub.co.uk/updates.html]
! Filartiga-case, Filartiga v Pena-Irala 630 F. 2d 876 [2nd Cir 1980]
! Jackson-case, Jackson v. People’s Republic of China, 505F Supp 869 [ND Ala. 1982]
! Texaco-case, Jota v Texaco 157 F 3d 153 [2d Cir 1998].
! Beanal-case, Beanal v Freeport-McMoran, Inc 969F Supp 362 [ED la 1997]
! Doe v. Unocal-case, Doe v. Unocal 27 F Supp 2d 1174 [CD Cal 1998]
! Ge v Peng-case, Ge v Peng 201F supp 2D 14 [[DDC 2000]
! Wiwa-case, Wiwa v. Royal Dutch Petroleum [Shell] Co No 96 Civ 8386 2002 US District Court
Lexis 3293 [S.D.N.Y22 February 2002]
! Khulumani-complaint, Khulumani et al v Barclays National Bank Case CV 25952 [EDNY 2002].
CHINESE CASES
! Scott v. The People's Republic of China, No CA3-79-0836-D [29 June 1979]. [FSIA]
! Paterson, Zochonis [UK] Ltd v. Compania United Arrow, S.A, 493 F. Supp. 621 [S.D.N.Y.
1980]
! China National Chemical Import & Export Corp. v. M/V Lago Hualaihue, 504 F.Supp. 621
[S.D.N.Y. 1980]
! Leong Yan Thiang, et al. v. China Aviation Oil (Singapore) Corporation, Ltd., et al. , [S.D.N.Y.
2005]
OTHER CASES AND OPINIONS
! Tadic-case, Case IT-94-1, Prosecutor v. Tadi!, (1999) I.L.M., vol. 38, p. 1518.
! Maffezini-case, International Centre for Settlement of Investment Disputes Case of Maffezini v.
Spain, Case no. ARB/97/7Decision of the Tribunal on Objections to Jurisdiction, 25 January
2000.
! AAPL-case, Asian Agricultural Products Ltd v. Democratic Socialist Republic of Sri Lanka,
(1991) 4 I.C.S.I.D. Reports 245
HUMAN RIGHTS, CHINESE BUSINESS | 84
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! CLAPHAM, A. Human rights Obligations of non state actors, University Press, Oxford, 2005.
! COTTIER, PAUWELYN, AND BÜRGI [eds.] ,’Human rights and International Trade’, International
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! DINE, J., ‘Companies, International Trade and human rights’, Cambridge, Cambridge U.P., 2005.
! EIDE, A., Bergesen, H.O., Goyer, P.R. [eds.], ‘Human Rights and the Oil Industry’, Intersentia,
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! FLINTERMAN [ed.], ‘Niet statelijke Actoren en de rechten van de mens; gevestigde waarden, nieuwe
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! FRYNAS, J.G. and PEGG, S. [Ed], Transnational Corporations and Human Rights, Palgrave
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! JÄGERS, N., Corporate Human Rights Obligations, Intersentia, Antwerpen, 2002.
! JOSEPH, S., Corporations and Transnational Human Rights Litigation, Human Rights Law in
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! LILLICH, Richard B., ’International Law of State Responsibility to Aliens, University Virginia, 1983.
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! VERWEIJ, M., ‘Using the OECD Guidelines for Multinational Enterprises, A critical Starter kit for
NGOs’, Amsterdam, Milieudefensie, 2002.
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exploration in relation to binding human rights obligations for business’, Lawhouse.dk, 2004.
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DOCUMENTS
DOMESTIC PEOPLE'S REPUBLIC LEGISLATION
! Measures of State-Run Industrial Enterprises Work [Draft], Issued by the CPC Central Committee
1961
! Constitution of the People’s Republic, adopted on 4 December 1982
! Interim Regulations on State-Owned Industrial EnterprisesState Council’s Interim Regulations,
issued by the State Council on 1 April 1983.
! Law on Industrial Enterprises Owned by the Whole People, Adopted by the Seventh NPC on 13
April 1988 and came into force on 1 August 1988.
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! Regulations on Transforming Operational Management Mechanisms of Industrial Enterprises
Owned by the Whole People, Issued by the State Council and came into force on 23 July 1992.
! Amendment to the Constitution of the People’s Republic, 1993
! The Company Law of 1993
! Amendment to the Constitution of the People’s Republic, 1999
! Amendment to the Constitution of the People’s Republic, 2004
! The Company Law 2005, 3rd revision to the 1993 Company Law [entry into force 2006]
White Papers [All available at: http://china.org.cn/e-white/index.htm, lastly visited 30 May 2009.]
! ‘Human rights in China’, issued by the State Council at November 1991.
! ‘Progress in China’s human rights cause in 1996’, issued by the State Council at March 1997.
! ‘Fifty years of Progress in China’s human Rights’, issued by the State Council at June 2000.
! ‘Progress in China’s Human Rights Cause in 2000’, issued by the State Council at April 2001.
! ‘Progress in China’s Human Rights Cause in 2003’, issued by the State Council at March 2004.
! ‘China’s Progress in Human Rights in 2004’, issued by the State Council at April 2005.
! ‘Building of Political Democracy in China’, issued by the State Council at October 2005.
! ‘China’s Peaceful Development Road’, issued by the State Council at December 2005.
! ‘China’s Political Party System’, issued by the State Council at November 15, 2007.
! ‘National Human Rights Action Plan of China, 2009-2010’, issued by the State Council at 13 April
2009. Available at: http://www.china.org.cn/archive/2009-04/13/content_17595407.htm [visited 30 May 2009].
INTERNATIONAL LAW
International Law Commission [All available at: http://www.un.org/law/ilc/]
! Commentary to Draft Articles on Jurisdictional Immunity of States and their Property’, 1991, ILC
Yearbook, Vol. II.
! International Law Commission’s Draft Articles on Jurisdictional Immunities of States and their
Property , adopted by the , Yearbook of the International Law Commission, 1991, vol. II, Part Two.
! International Law Commission’s Articles on ’State Responsibility. Titles and Text of the Draft
Articles on Responsibility of States for Internationally Wrongful Acts’, adopted by the Drafting
Committee on 2nd Reading at 26 July 2001. UN Doc. A/CN.4/L.602/Rev.1, in: Yearbook of the
International Law Commission, 2001, vol. II (Part Two).
! GA Resolution 56/83 of 12 December 2001, ’Responsibility of States for Internationally Wrongful
Acts’, A/RES/56/83.
! Correcting Annex to GA Resolution 56/83 of 12 December 2001, A/56/49(Vol. I)/Corr.4.
! GA Resolution 59/35 of 2 December 2004, ‘Responsibility of States for Internationally Wrongful
Acts’, A/RES/59/35.
! GA Resolution 59/38 of 2 December 2004, ‘United Nations Convention on Jurisdictional Immunities
of States and Their Property’, A/Res/59/38.
HUMAN RIGHTS, CHINESE BUSINESS | 91
INTERNATIONAL HUMAN RIGHTS LAW
United Nations Treaties General on Human Rights [All available at: http://treaties.un.org]
! United Nations Charter [UNC, 1945]
! International Convention on the Elimination of All Forms of Racial Discrimination [ICERD, 1965]
! International Covenant on Civil and Political Rights [ICCPR, 1966]
! International Covenant on Economic, Social and Cultural Rights [ICESCR, 1966]
! Convention Against Torture and other cruel, inhuman or degrading Treatment or Punishment [CAT,
1984]
! Convention on the Rights of the Child [CRC, 1989]
! Convention on the Rights of Persons with Disabilities [ICRPD, 2006].
! Convention on the Elimination of all forms of Discrimination Against Women [CEDAW, 1979]
Treaties Specific
International Labour Organisation [ILO], core conventions and declarations:
! ILO Convention 13 on the Minimum Age for Admission to Employment
! ILO Conventions 29, on the Abolition of Forced Labour [1930]
! ILO Convention 87 on the Freedom of Association and Protection of the Right to Organise [1948]
! ILO Convention 98 on the Right to Organise and Collective Bargaining [1949]
! ILO Convention 100, on Equal Remuneration for Men and Women [1951]
! ILO Convention 105, on the Abolition of Forced or Compulsory Labour [1957]
! ILO Convention 111, on Discrimination in respect of employment and occupation [1958]
! ILO Convention 135 on Workers Representatives
! ILO Convention 138 on the Elimination of Child Labour and Minimum Age [1973]
! ILO Convention 155 on Occupational Safety and Health
! ILO Convention 182 Worst Forms of Child Labour [1999]
! ILO Declaration on Fundamental Principles and Rights at Work [1998]
United Nations Additional Documents [http://www2.ohchr.org/english/bodies/treaty/comments.htm]
! United Nations CEDAW, ‘Concluding comments of the Committee on the Elimination of
Discrimination against Women: China’, CEDAW/C/CHN/CO/6, of 25 August 2006.
! ‘Consideration of Reports submitted by States Parties under article 19 of the Convention’, Fourth
periodic reports of States parties due in 2004, Addendum, China, CAT/C/CHN/4, of 27 June 2007.
! Advanced Unedited Version, ‘Consideration of Reports submitted by States Parties under article 19
of the Convention, Concluding Observations of the Committee against Torture, China’.
Cat/C/CHN/CO/4 of 21 November 2008.
! General Comments to Treaties [Available at: http://www2.ohchr.org/english/bodies/treaty/comments.htm]
No. 16;No. 17;No. 19, ‘Violence against Women’;No. 25;No. 31, The Nature of the General Legal
Obligation imposed on States Parties to the Covenant,’ UN.Doc HRI/GEN/1/Rev.8 (2006)
! UN ‘Draft Norms on the Responsibilities of Transnational Corporations and Other Business
Enterprises with Regard to Human Rights’, 2003 U.N. Econ. & Soc. Council [ECOSOC], Sub-
HUMAN RIGHTS, CHINESE BUSINESS | 92
Commission on Promotion & Prot. Of Human Rights, Norms on the Responsibilities of
Transnational Corporations and Other Business Enterprises with Regard to Human Rights, U.N.
Doc. E/CN.4/Sub.2/2003/L.8, Aug.7, 2003; Draft resolution prepared by A Martínez et al., available
at http://www.unhchr.ch/Huridocda/Huridoca.nsf/0/6b10e6a7e6f3b747c1256d8100211a60?Ope%&'()*+,-.$
Other Relevant Instruments
! Universal Declaration of Human Rights 1948 [UDHR]
! OECD Guidelines for Multinational Enterprises: Guidelines for Multinational Enterprises and the
Committee on International Investment and Multinational Enterprises of the Organization for
Economic Cooperation and Development, 1976.
! ILO Tripartite Declaration: the Tripartite Declaration of Principles Concerning Multinational
Enterprises and Social Policy of the International Labour Organisation, 1977
! OECD Guidelines on Corporate Governance of State-owned Enterprises [2005].
Available at: http://www.oecd.org/dataoecd/46/51/34803211.pdf
REPORTS
PEOPLE'S REPUBLIC
! PRC Permanent Mission to Geneva, ‘Introductory remarks by Ambassador Sha Zukang at the CRC
Consideration of the Second Periodic Report of the PRC on Implementation of the Convention of
the Rights of the Child’, CRC/C/Q/CHN/2, 2006.
INTERNATIONAL LAW
International Law Commission [ILC]
! ‘Commentary to International Law Commission Articles on State Responsibility’, ILC Annual Report
2001, Chapter IV, p. 74. UN Doc. A/56/10, 2001.
Available at: http://untreaty.un.org/ilc/texts/instruments/englsih/draft%20articles9_6_2001.pdf
INTERNATIONAL HUMAN RIGHTS LAW
International Commission of Jurists [ICJ]
! WEE, C., ‘Regulating the Human Rights Impact of State-owned Enterprises: tendencies of
corporate Accountability and State Responsibility’, International Commission of Jurists, Danish
Section, October 2008, pp. 38. Available at: http://www.icj.org
United Nations [All available at http://www.business-humanrights.org]
! ‘Commentary on the Norms on the Responsibilities of Transnational Corporations and Other
Business Enterprises with Regard to Human Rights’. U.N. Doc. E/CN.4/Sub.2/2003/38/Rev.2
[2003).
HUMAN RIGHTS, CHINESE BUSINESS | 93
! UN Report of the United Nations High Commissioner on Human Rights on the responsibilities of
transnational corporations and related business enterprises with regard to human rights,
E/CN.4/2005/91of 15 February 2005.
! UN CRC, Consideration of Reports submitted by State Parties under article 12 [1] of the Optional
Protocol to the Convention on the Rights of the Child on the Sale of Children, Child Prostitution and
Child Pornography, CRC/C/CHN/CO/1, 24 November 2005.
! UN CRC, Consideration of Reports submitted by State Parties under article 44 of the Convention,
Sub par. 17. CRC/C/CHN/CO/2, 24 November 2005.
! United Nations EcoSoc, ’Civil and Political rights, including the question of Torture and Detention’,
Report of the Special Rapporteur on Torture and other cruel, inhuman or degrading treatment or
punishment, Manfred Nowak. Mission to China, E/CN.4/2006/6/Add.6, 10 of March 2006.
! Asian Regional Consultation, Held by the SRSG on Human rights and Transnational Corporations
and Other Business Enterprises, Bangkok, June 26-27, 2006.
! ‘Mapping State obligations for corporate acts: An examination of the UN Human Rights Treaty
System’, Report No. 1 International Convention on the Elimination of All Forms of Racial
Discrimination, Prepared for the SRSG on Human Rights and Transnational Corporations and
Other Business Enterprises, December 18, 2006.
! ‘Mapping State obligations for corporate acts: An examination of the UN Human Rights Treaty
System’, Report No. VII, Individual Report on the International Convention on the Protection of the
Rights of All Migrant Workers and Members of Their Families, Prepared for the SRSG on Human
Rights and Transnational Corporations and Other Business Enterprises, January 2007.
! ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’
core Human Rights Treaties.’, Prepared for the mandate of the Special Representative of the
United Nations Secretary-General [SRSG] on the issue of human rights and transnational
corporations and other business enterprises. Harvard University, John F. Kennedy School of
Government, 12 February 2007.
! ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’
core Human Rights Treaties’, Individual Report on the International Covenant on Economic, Social
and Cultural Rights, Report No. 2, Prepared for the SRSG on Human Rights and Transnational
Corporations and Other Business Enterprises, May, 2007.
! ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’
core Human Rights Treaties.’, Report No. III, Individual Report on the International Covenant on
Civil and Political Rights, Prepared for the SRSG on Human Rights and Transnational Corporations
and Other Business Enterprises, June 2007.
! ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’
core Human Rights Treaties.’, Report No. 6, Individual Report on the United Nations Convention on
the Rights of the Child and its Optional Protocols, Prepared for the SRSG on Human Rights and
Transnational Corporations and Other Business Enterprises, July 2007.
! Ruggie, J.G., ‘Human rights Policies of Chinese Companies: Results from a Survey’, Conducted
under the mandate of the United Nations SGSR for Business and human rights’, Harvard
University, September 2007.
HUMAN RIGHTS, CHINESE BUSINESS | 94
! ‘State Responsibility to Regulate and Adjudicate Corporate Activities under the United Nations’
core Human Rights Treaties.’, Report No. 4, Individual Report on the United Nations Convention on
the Elimination of All Forms of Discrimination Against Women, Prepared for the SRSG on Human
Rights and Transnational Corporations and Other Business Enterprises, September 2007.
! ‘The Role of States in Effectively Regulating and Adjudicating the Activities of Corporations with
respect to Human Rights’, Summary report Business and Human Rights, Copenhagen, 8-9
November 2007.
! ‘Mapping State obligations for corporate acts: An examination of the UN Human Rights Treaty
System’, Report No. 5, Report on the Convention against Torture and Other Cruel, Inhuman or
Degrading Treatment or Punishment, Prepared for the SRSG on Human Rights and Transnational
Corporations and Other Business Enterprises, December 2007.
! UN GA ‘Promotion and Protection of All human rights, Civil, Political, Economic, Social and Cultural
Rights, Including the Right to Development’, Report of the Special Rapporteur on torture and other
cruel, inhuman or degrading treatment or punishment, Manfred Nowak Addendum,
A/HRC/7/3/Add.2, 18 February 2008.
! UN HRC Report, ‘Clarifying the Concepts of “Sphere of influence” and “Complicity” Report of the
Special Representative of the Secretary-General on the Issue of Human Rights and Transnational
Corporations and other Business Enterprises John Ruggie’, A/HRC/8/16 of 15 May 2008. Available
at: http://www.unhcr.org/refworld/docid/484d1fe12.html.
! United Nations HRC, ‘National Report submitted in accordance with par. 15 [a] of the annex to
Human Rights Council Resolution 5/1.China.’ Working Group on the Universal Periodic Review
February 2009. A/HRC/WG.6/4/CHN/1 of 10 November 2008.
! United Nations, Advanced Unedited Version, ‘Consideration Of Reports Submitted By States
Parties Under Article 19 Of The Convention Concluding Observations Of The Committee Against
Torture, China’, Cat/C/Chn/Co/4 21 November 2008.
! United Nations HRC, ‘Universal Periodic Review. China.’ A/HRC/11/25 of 3 March 2009.
! ‘State Responsibilities to Regulate and Adjudicate Corporate Activities under the Inter-American
Human Rights System’, Report on the American Convention on Human Rights, Prepared by Cecilia
Anicama, April 2008. [In order to inform the mandate of the SRSG on Business and Human Rights,
John Ruggie.]
OTHER HUMAN RIGHTS REPORTS GOVERNMENTAL AND NON-GOUVERNMENTAL ORGANISATIONS [NGOS]
NON-GOVERNMENTAL ORGANISATIONS
! Amnesty International [AI], ‘Human Rights Principles for companies’, January 1998. Available at:
http://www.amnesty.org/en/report/info/ACT70/001/1998
! Amnesty International and Pax Christi, Multinational Enterprises and Human Rights, 1998, Utrecht.
! Danish Human Rights Institute, Human rights and Business Project, ‘China Country Risk
Assessment, 2005. Used with permission.
! The Extractive Industries Transparency Initiative [EITI] & Artisanal and Small Scale Mining [ASM],
Preliminary Observations from the Republic of the Congo, N. Garrett, 2007.
HUMAN RIGHTS, CHINESE BUSINESS | 95
! Danish Human Rights Institute, Human rights and Business Project China Country Risk
Assessment Update, 2008.
! Human Rights in China [HRIC], ‘Implementation Of The Convention Against Torture And Other
Cruel, Inhuman Or Degrading Treatment Or Punishment In The People’s Republic Of China, A
Parallel Ngo Report By Human Rights In China,’ Report Of October 2008 Available at:
http://www.hrichina.org/public/index.
! Human Rights in China [HRIC], ‘Implementation of the Convention on the Elimination of All Forms
of Discrimination against Women in the People’s Republic of China, A Parallel NGO Report by
Human Rights in China’, Submitted to the Committee on the Elimination of Discrimination against
Women in advance of its review of the combined fifth and sixth periodic reports of the People’s
Republic of China on implementation of the Convention on the Elimination of All Forms of
Discrimination against Women, June 2006. Available at: http://www.hrichina.org/public/index.
! International Crisis Group [ICG] Report ‘China’s Thirst for Oil’, Asia Report No. 153, 9 June 2008.
! Corkin, L. and Burke, C., ‘China’s interest and activity in Africa’s Construction and Infrastructure
Sectors ‘, Stellenbosch University, Center for Chinese Studies, 2006.
EUROPEAN UNION
! Overview Bilateral trade relations between EU and China, available at:
http://ec.europa.eu/trade/issues/bilateral/countries/china/index_en.htm
! EU-CHINA Human Rights Network, Aguirre, D., Working Paper on Corporate Social
Responsibility, Dialogue Seminar on human rights in Beijing, 28-29 JUNE 2004.
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT [OECD]
! OECD, ‘White Paper on Corporate Governance in Asia’, First issued 10 June 2003, p. 1-113.
Available at: http://www.oecd.org/document/24/0,3343,en_2649_34813_2048216_1_1_1_1,00.html
U.S. DEPARTMENT OF STATE
! ‘2008 human rights report : China [includes Tibet, Hong Kong and Macau]’, 2008 Country Reports
on Human rights practices, Bureau of Democracy, Human Rights and Labour, 25 February 2009,
Available at: http://www.state.gov/g/drl/rls/hrrpt/2008/eap/119037.htm
! ‘Supporting Human Rights and Democracy: The US Records 2005-2006’, Department of State
Publication 11333 Bureau of Democracy, Human Rights and Labor Bureau of Public Affairs
Released April 2006. Available at: http://www.state.gov/documents/organization/64057.pdf
! Background Note on China, http://www.state.gov/r/pa/ei/bgn/18902.htm
UNITED NATIONS GLOBAL COMPACT
! UN Global Compact, 1999
! UN Global Compact, Complaint PetroChina 9 February 2009. Available at:
http://www.unglobalcompact.org/NewsAndEvents/news_archives/2009_01_12b.html
WORLD BANK
HUMAN RIGHTS, CHINESE BUSINESS | 96
! ‘Midterm Evaluation of China’s 11th
Five Year Plan’, Executive Summary, World Bank Office
Beijing, 2008. Available at http://www.worldbank.org.
WORLD TRADE ORGANIZATION
! ‘Trade Policy Review’, Report by the Secretariat, People’s Republic of China, Revision, 26 June
2006, WT/TPR/S/161/Rev.1
WEBSITES
On the Peoples’ Republic of China
! On MOFCOM http://english.mofcom.gov.cn/
! On SASAC http://www.sasac.gov.cn/n2963340/2964236.html
! On Ministry of Foreign Affairs http://www.fmprc.gov.cn/eng/default.htm
! Permanent Mission of the PRC to the UN http://www.china-un.ch/eng/rqrd/
! U.S. Department of State on China http://www.state.gov/r/pa/ei/bgn/18902.htm
! China CSR http://www.chinacsr.com/en/
! The Dutch Agency for International Business and Cooperation [EVD]
http://www.evd.nl/home/landen/publicatie
On China’s Enterprises
! China National Offshore Oil Corporation http://www.cnooc.com.cn/yyww/default.shtml
! China National Petroleum Corporation http://www.cnpc.com.cn/en/
! China Petroleum & Chemical Corporation http://english.sinopec.com/index.shtml
! PetroChina Company Ltd. http://www.petrochina.com.cn/ptr/
On human rights
! On Labour Standards http://www.ilo.org/ilolex/
! On Treaty Ratifications http://treaties.un.org
! On Treaty Body Database http://www.unhchr.ch/tbs/doc.nsf
! On OHCHR http://www.ohchr.org
! On UN Instruments http://www.un.org/Overview/rights.html
! China Rights Defenders http://crd-net.org/Article/ShowClass.asp?ClassID=9
! Human Rights in China http://www.hrichina.org
! Human Rights Watch www.hrw.org
! Human Rights Index http://www.universalhumanrightsindex.org/
Other recommended Sites on Corporate Social Responsibility
! Aim for Human Rights http://www.aimforhumanrights.org
! On Corporate Codes of Conduct http://www1.umn.edu/humanrts/business/codes.html
! On Business and Human rights http://www.business-humanrights.org;
http://www.humanrightsbusiness.org
! Danish Human Rights Institute http://www.humanrights.dk/
HUMAN RIGHTS, CHINESE BUSINESS | 97
! EITI http://eitransparency.org/
! Friends of the Earth-Milieudefensie http://www.milieudefensie.nl/english
! Global Reporting Initiative http://www.globalreporting.org
! On the OECD http://www.oecd.org
! Center for Research on Multinational Corporations [SOMO]
http://somo.nl/
! On UN Global Compact http://www.globalcompact.org
Other relevant websites
! US-China Business Council [USBC] http://www.uschina.org/index/browse.php?cat=17