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The Negotiations of the United Nations Code of Conduct on Transnational Corporations: Experience and Lessons Learned

Sauvant, Karl P.

Many of the issues that are today part of the discussions surrounding international investment agreements were first dealt with when governments sought to negotiate a United Nations Code of Conduct on Transnational Corporations (and various related instruments) almost 40 years ago. The Code was meant to establish a multilateral framework to define, in a balanced manner, the rights and responsibilities of transnational corporations and host country governments in their relations with each other. This article looks at the origins of these negotiations, the underlying interest situations of the participating country groups, the experience of related negotiations, the actual negotiations of the Code, the reasons for the failure of the negotiations, the current situation, and factors driving change. The article concludes with lessons learned from the Code and related negotiations. These lessons may be of interest to current efforts to improve the international investment law and policy regime. What rules should govern the behavior of transnational corporations (TNCs) in the countries in which they are established, and what rules should govern the treatment of these firms by the governments of host countries? This challenge has been on the international agenda since the end of World War II. However, it was only in the late 1970s that negotiators began to formulate a comprehensive multilateral instrument, the United Nations Code of Conduct on Transnational Corporations, to tackle this challenge. In parallel to these negotiations (and subsequent to them), negotiations were also undertaken on specific aspects of the activities of TNCs, the principal private actors in international economic relations and important forces in individual economies. Although the Code negotiations – serviced by the United Nations Centre on Transnational Corporations (UNCTC) – came to naught, they crystallized the basic interest situations of the principal stakeholders and key issues associated with them, and they laid bare a number of the obstacles that governments seeking a multilateral investment instrument need to overcome. Many of these are still with us today and await an international solution.

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Also Published In

Title
The Journal of World Investment and Trade

More About This Work

Academic Units
Law
Columbia Center on Sustainable Investment
Published Here
February 6, 2017
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