Vincent Chetail: THE LEGAL PERSONALITY OF MULTINATIONAL CORPORATIONS, STATE

RESPONSIBILITY AND DUE DILIGENCE: THE WAY FORWARD

[ original or plenary/derived or limited personality (cf. Parlett); variegated approach

[intermediate b/w positivistic or restrictive and extensive conception of personality]; ends with
noting the benefit of looking at them as participants and not subjects (over which there is
always doubt)]
There is no clear universal conception of intl. legal personality as it stands b/w what law is applicable
to whom. This is a very political q b/c it deals with sources and substance.

The question of personality is a question of the entire discipline itself: HENCE NO AGREEMENT b/c
“subjects doctrine forms the clearing house between sources and substance”

legal doctrine is not always coherent in proposing a uniform and general definition of
international personality

3 main conceptions of International Personality (based on analogy with the state)

1. The restrictive conception: An entity is a subject only if:

 it has the capacity to conclude international agreements
 the capacity to establish diplomatic relations
 the capacity to bring international claims
 Other authors add a fourth element based on the enjoyment of privileges and
immunities from national jurisdictions:

Although this generalisation can be transposed to IOs, it’s a restrictive conception which appears to
be in contradiction with the sociological evolution of contemporary international society, which is
more and more characterized by a plurality of actors. TOO SPECIFIC

2. The extensive conception

As opposed to state analogy- has a single doctrine: the capacity to be invested of rights and
obligations by international law
Note: the capacities to conclude international agreements and to bring international claims
are irrelevant
Criticism: blurring the traditional distinction between objects and subjects of ILAW

3. The intermediate position/conception

Promoted by the ICJ reparation case
Only if :
 “is capable of possessing international rights and duties
 it has capacity to maintain its rights by bringing international claims”.

Criticism: being circular b/c both criteria presuppose and depend on the existence of a legal person

PARLETT VAREIGATED APPROACH! the subjects of international law may substantially vary from
one to another- PUT THEM ON A SPECTRUM-their nature depends upon the needs of the
community.

ORIGINAL AND PLENARY PERSONAITY which belongs to states as the primary subjects of ILAW
and DERIVED AND LIMITED PERSONALITY which states confer on other entities:The distinction
between original and derived personality has been notably acknowledged by the ICJ in Legality of
the Use by a State of Nuclear Weapons in Armed Conflict (WHO Case), Advisory Opinion, ICJ Reports
1996, 66 +slide 19 of Intl’ legal personality day one

Multinational Corporations as a subject of ILAW

How and when has the issue of MNCs come up?: That debate first arose during the 1960s in the
context of nationalization and permanent sovereignty over resources of newly independent states.
Since the 1990s, the complex issue of the international subjectivity of corporations has resurfaced in
the context of their alleged responsibility in respect of human rights. Contribution to third world IL

The restrictive conception: MNCs are not considered subjects of ILAW based on this conceptions

> This is in contradiction to >

the sliding scale conception of ILAW personality as acknowledged by ICJ in the Reparation for
Injuries case (the court rejects any analogy with state in order to infer attributes of international
personality.

 Capacity to participate in ILAW making process might be a potential indicator but

falls into intermediate position- because it is based on a definition reliant on the
capacity to have rights and obligations and capacity to bring ILAW claims.

A GROWING NO. OF SCHOLARS BELIEVE THAT MNCS HAVE A LTD. PERSONALITY DERIVED FROM
UNDER IL./ LIMITED PERSONALITY DERIVED FROM ILAW

The capacity to have rights and obligations and the capacity to bring international claims have been
directly conferred on them by ILAW : a functional personality in the sense:

 Strict limits
 FOR specific ILAW purposes

Three distinct sources

1. Internationalized contracts
concluded between a host state and a corporation, and are mostly used in the field of oil
and mining concessions and development agreements. These contracts not only spell out
rights and obligations of the parties, but also frequently contain a clause stating that the
contract is governed by international law. Moreover, most of them provide for international
arbitration in case of a dispute.
[ going by the intermediate position posited by the ICJ – would make the signing corp an
entity possessing intl legal personality. Eg: 1977 in Texaco Calasiatic v. Libyan Arab Republic]

CRITICISM: cannot create intl. legal personality against all other states

2. Adoption of a Treaty
In practice, the capacity to have rights and to bring international claims has been already
conferred on corporations by several treaties related to investment. At the multilateral level,
the 1965 Convention establishing the International Centre for the Settlement of Investment
Disputes and the 1995 Energy Charter Treaty, as well as at the regional level the 1993 North
American Free Trade Agreement (NAFTA) and the 1994 Protocol of Colonia for the
Promotion and Reciprocal Protection of Investments in MERCOSUR are good examples.
Similar provisions may be found in other fields of international law. For instance, the United
 Nations Convention on the Law of the Sea (UNCLOS) provides for a binding arbitration
mechanism in case of disputes arising from the interpretation or application of a contract
between the parties concerned, including legal persons.
* treaties directly conferring legal capacities on corporations are not abundant.
3. Customary Law
the above-mentioned treaties on investment and the codes of conduct that have
proliferated over the past forty years are part of a broader customary law process
acknowledging the international personality of corporations. Not binding.
Eg: Organization for Economic Cooperation and Development (OECD) and the other drafted
by the International Labour Organization (ILO)
CRITICISM: doubtful if this custom has come into existence because no solid drafted
convention tbh: After longstanding and sensitive debates conducted between 1974 and
1992, states failed to adopt on the draft United Nations Code of Conduct on Transnational
Corporations43 because of major disagreements between industrialized and developing
countries on the crucial reference to international law and on the inclusion of standards of
treatment for MNCS

BUT: THERE IS SOFT LAW IN RELATION TO HOLDING MNCs RESPONSIBLE FOR THEIR ACTS

The recent adoption of the Guiding Principles on Business and Human Rights exemplifies the
potential of soft law in this area.

BEYOND ILAW PERSONALITY: ATTRIBUTION AND THE REGIME OF STATE RESPONSIBILITY

Why do we wish to grant personality to MNCs?

DIFF APPROACH: To hold them responsible for their acts – but the discussion on whether they have a
legal personality or not seems to get us nowhere on this path: therefore some have suggested to
look past the subject/object dichotomy and try to best focus on how best to control the MNC in the
intl space.

Higgins: subject/object has no credible reality or functional personality

Andrew Clapham: get rid of the subjectivity problem: “international rights and duties depend on the
capacity of the entity to enjoy those rights and bear those obligations; such rights and obligations do
not depend on the mysteries of subjectivity”.

HOW CAN CORPORATIONS BE BOUND BY ILAW W/O ALLEGED PERSONALITY/CAPACITY TO HAVE

DIRECT RIGHTS/OBLIGATIONS- NOT DONE IN THIS READING – 4TH MODULE REFER!!