2009-05 - human rights, chinese business

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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.


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.


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.


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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.


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.


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.


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 ...’


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.


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.


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


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.


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.


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.


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.


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.


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’.


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.


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


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.


[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.


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.


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.


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.


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.’


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.


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 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.


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.


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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.


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.


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.


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.


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.


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


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.


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


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


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.


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).


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).


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.


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.


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.


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


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


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


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.]


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’.


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.


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.


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.


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.


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.


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.


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.


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.


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


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.


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.


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.


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


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.


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.


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.


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


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/.


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.


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


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.’


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.


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].


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 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.


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.


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.


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.


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


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


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’.


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.


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


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a Chinese enterprise survey’, China Economic Review, Vol. 19, Issue 2, 2008, pp. 215-229..

Available online at www.sciencedirect.com.

! LI, W. & PUTTERMAN, L., Reforming China’s SOEs: an Overview, Comparative Economic Studies,

Palgrave MacMillan Journals, Volume 50, 2008, pp. 353-380.

! Manji, F., ’Assessing China’s role in Africa: a search for a new perspective’, Available at

Choike.org.

! Nair, Ch., ‘Why Asia must look beyond profits to ethics’, Financial Times, 4 September 2005.

! NAKAGANE, K., ‘SOE Reform and Privatization in China, A note on Several Theoretical and

Empirical Issues’, Discussion Paper CIRJE-F-95, University of Tokyo, November 2000.

! PEERENBOOM, R., ‘Let one hundred flowers bloom, One hundred schools contend: Debating Rule of

Law in China’, Michigan Journal of International Law, Volume 23, 2002:471. Available at:

http://papers.ssrn.com.

! PERRY, E.J., ‘Chinese Conceptions of ‘Rights’: From Mencius to Mao-and Now’, Perspectives on

Politics, Vol. 6, No. 1, March 2008, pp. 37-50.

! Qi, D., ‘State Immunity, China and Its Shifting Position’, Chinese Journal of International Law, 2008,

Vol. 7, No. 2, 307–337.

! 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.

! 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’, 2003.

! 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, Verlag

der Österreichischen Akademie der Wissenschaften, Wien, 2006.

! WANG, Jiangju, ’China and the Universal Human Rights Standards’, in Syracuse J. International

Law & Com., Vol. 29, 2001, pp. 135-158.

! WANG, Weimin, ‘An Agency or Instrumentality in the United States Foreign Sovereign Immunities

Act of 1976: an unauthorized Chinese view’, LL.M Thesis, Ottawa University, 1990.

! WU, VICTORIA, ‘Nurturing the Rule of Law in China’, The China Business Review, 2007-05, avaible

at: http://www.chinabusinessreview.com/public/0705/legal.html

! 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.

On MNEs, SOEs and State Obligations

! CATA BACKER, Larry, ’Multinational Corporations, Transnational Law: The United Nation's Norms on

the Responsibilities of Transnational Corporations as Harbinger of Corporate Responsibility in


International Law’, Columbia Human Rights Law Review, Vol,x, pp. 101-192. Available at:

http://papers.ssrn.com.

! 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.

! DAM, CEES VAN, ‘Aansprakelijkheid van ondernemingen voor betrokkenheid bij schending van

mensenrechten’, Inaugurele rede, Universiteit van Utrecht, 11 april 2008.

! DONOHO, J.’, Minimalist Interpretation of the Jurisdictional Immunities Convention’, Chicago Journal

of International law, 1 January 2009.

! FRANCIONI, F., ‘Alternative perspectives on International Responsibility for human rights violations

by Multinational Corporations’, in: Benedek, W. [ed], ‘Economic globalization and human rights’,

Cambridge University Press, Cambridge, 2007.

! JENSEN, MADST HOLST, ‘Promoting Human Rights and Business in China’, in: LEISINGER, BENJAMIN &

PROBST MARC, ‘Human Security & business’, Political Affairs Division IV [PDIV] of the Federal

Department of Foreign Affairs [DFA], Volume I, Rüffer & Rub, Zanardi Group, Italy, 2007.

! MARELLA, F., ‘Human rights, Arbitration, and Corporate Social Responsibility in the Law of

International Trade’, in: Benedek, W. [ed], ‘Economic globalization and human rights’, Cambridge

University Press, Cambridge, 2007.

! SKOGLY & GIBNEY, ‘Transnational Human rights Obligations’, Human Rights Quarterly, 24, 2002.

! THORSEN, S. AND MEISLING. A., ‘Perspectives On The Un Draft Norms’, Submitted for the IBA/AIJA

conference on Corporate Social Responsibility [CSR] in Amsterdam, 25 - 26 June 2004 by

Lawhouse.dk

! THORSEN, S. AND MEISLING. A.., ‘Contemporary Directions for Business on Human Rights, Issues for

exploration in relation to binding human rights obligations for business’, Lawhouse.dk, 2004.

! TIL, TABASUM V., ‘Multinational Corporations Balancing Powers’, Bachelor Thesis International,

Social and Economic Public Law [ISEP], Utrecht University, 2008.

! WEISBRODT, D. ‘Human Rights Responsibilities of Businesses as Non-State Actors’, in: ALSTON, Ph.,

Non-State Actors and Human Rights, Volume XIII, Oxford, Oxford UP, 2005.

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.


! 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



! 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.


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-


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).


! 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.


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.


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.


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.


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.



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.


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.


! 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


! ‘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/


! 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