Companies have an enormous impact on the rights of individuals and communities. This impact can be positive, for example the creation of new jobs and an increase in state revenue that can be used to fund basic services. Yet all too often, human rights are abused as corporations exploit weak and poorly enforced domestic regulation and the lack of international accountability mechanisms to devastating effect in developing countries.
Allegations of human rights abuse are particularly high in the extractive industries. This is not surprising, given the impact that such operations have on land and water resources. Communities may be forcibly relocated to make way for extractive activities. Traditional livelihoods – and lives – can be destroyed or threatened as land is contaminated and water supplies are polluted or overused.
The arrival of well-resourced companies seeking to win over local communities can also lead to increased violence and social conflict, as some people are excluded from the benefits of economic development. This can be exacerbated by the lack of transparency in the way companies award community contracts and payments.
Affected communities are frequently denied access to information about the impact of company operations and excluded from participating in decisions that affect their lives.
When abuses do occur, the situation is further compounded when communities are denied access to justice, and governments cannot or will not hold companies to account. The consequence is continued abuse and insecurity, further entrenching the cycle of poverty.
In the name of economic efficiency, states have privatized many state services including those critical for people to enjoy their rights to education, health, and water. However, governments often fail to ensure that companies deliver these services without discrimination.
Economic globalization has expanded the reach of companies across national borders, but regulation has failed to keep up. A system of regulation must urgently be put in place that ensures redress for those affected and prevents the pursuit of profit at the expense of human rights.