International Business Law – TYBBA IB - 2024

International Business Law - 3501

Introduction:

International law relates to the policies and procedures that govern relationships among nations
(Clarkson, Miller, & Cross, 2018).

These are crucial for businesses for multiple reasons:

First, there is not a single authoritative legislative source for global business affairs, nor a single world
court responsible for interpreting international law (Cheeseman, 2016, p. 903). There is also not a global
executive branch that enforces international law, which leaves global business affairs particularly
vulnerable.

Secondly, if a nation violates an international law and persuasive tactics fail, then the countries that
violated, or international organizations tasked with overseeing global trade, may act. Often these actions
use force to correct actions and may include economic sanctions, severance of diplomatic relations,
boycotts, or even war against the offending nation (Clarkson, Miller, & Cross, 2018, p. 439).

The purpose of international laws is to permit countries as much authority as possible over their own
international business affairs, while maximizing economic benefits of trade and working relationships
with other nations. Since many countries have historically allowed governance by international
agreements when conducting global business, there exists an evolving body of international laws that
facilitate global trade and commerce.

Thus we may say that; International laws are a set of rules, agreements and treaties that are binding
between countries.

Countries come together to make binding rules that they believe will benefit the citizens. It is an
independent system of law existing outside the legal framework of a particular state.

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Likewise; International Business Law consists of different legal areas in conducting business across
borders. The areas include business transactions, entity formation and funding, intellectual property
protection, export controls, regulatory compliance, taxation, dispute resolution and international trade
policy.

International Business Law is a body of legal rules like conventions, treaties, agreements, domestic
legislation and commercial customs, that govern these cross border transactions.

These laws also involve the rights and obligations of states and the relationship between countries and
international organizations.

Whenever there are any conflicts of laws between parties from different countries, these provisions of
laws are used to settle the matter.

International Business Law/ International Economic Law:

 International economic law is the foundation upon which the world economy is built. It is
the regulatory framework that governs how countries, organisations, and businesses operate
in the international economic arena.
 International economic law typically takes the form of treaties. These treaties are often
negotiated between countries and developed with support from lawyers specialising in
international economic law. They outline the rules that countries – and businesses within
those countries – need to follow when conducting business activities globally.

The objectives of international economic law

The past century has seen significant changes in the international economy, with nations and
businesses becoming more involved in moving goods and capital across borders, and
increasingly taking a global view in everything from investments to labour.
International economic law was conceived and developed in response to this increase in
international economic activity. It works to formalise and regulate the relationships and
interactions between countries through legal frameworks, and encourage international
cooperation.

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Other objectives and principles may include:

 Protecting national sovereignty, including economic, territorial, and political sovereignty, as
well as sovereignty over natural resources.
 Peaceful co-existence, which means non-aggression and non-intervention between nations.
 Reciprocity – the mutual and equal benefits for nations.
 The peaceful settlement of disputes.
 Equal rights, equitable treatment, and self-determination.
 The fulfilment of international obligations.
 Respect for human rights and the promotion of social justice.
 International cooperation for development.
 Preferential treatment for developing nations.
 Rules and permissions around expropriation, which occurs when a government takes
ownership or control of a foreign investor’s asset within its jurisdiction.
 Guidance for international arbitration, adjudication, and tribunals.
 National treatment, which means that imported goods should be treated the same as locally
produced goods.

Development of International Law:

The basic tenets of International Law can be traced back thousands of years ago; even at that time treaties
were formed for peaceful settlement and avoidance of disputes between different territories.

Ancient Times:

 Earlier legal systems which can be regarded as Early International Law Legal Systems were – Middle
Eastern Regions, China, India, and Greek.
 Greek acted as an important source in the evolution of International Law. There were numerous city
states in Greek who prescribed certain rules and regulations for interaction so as to minimize conflict
amongst them and acquire peace; to some extent it depicts glimpse of modern International Law. But
these rules were not applicable for interaction with non-Greek states.
 On the other hand, Roman Empire felt that there was no need of developing any International Law
because they did not abide by the rules while dealing with foreign territories.

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 But they did enact municipal laws, called jus gentium, for interaction of Roman citizens with foreigners
and was based on the principles of Natural Law and even today it can be found in modern International
Law.

Middle Ages:

 The Middle Ages were predominantly based on the authority of the Church; since the whole Europe was
one religion therefore the Church’s command and authority was binding on all irrespective of their tribe
and religion.
 In this Era the authority of Holy Roman Empire along with ecclesiastical law was of prime importance;
however, commercial law and maritime law developed and various mercantile courts were set up to
resolve dispute between tradesmen.
 Since the law was applicable in the whole of Europe, it formed International Trade Law; not only
mercantile law but also maritime law was soon applicable on the whole of European continent.
 These laws formed National Legal Systems and are considered to be one of the predecessors of
International Law since they dealt with international circumstances.

Theories of International Law:

1. The Realistic Theory:

The Realistic theory reflects the traditions views of international law that were propounded by
the likes of Bentham in the 18th century.

This theory suggests that only nation states are exclusively to be considered as subjects of public
international law. According to this theory, international law regulates the conduct of states
and hence states alone can be given the status of a subject. The nation states, irrespective of the
individuals that they consist of, are separate entities having rights, duties and obligations and
possess the capacity to maintain their right under international law, therefore nation states are the
ultimate subjects of international law.

According to the Article 1 of the Montevideo Convention on the Rights and Duties of States,
a state as a person of international law should possess the following qualifications:

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 permanent population;
 a defined territory
 a government; and
 capacity to enter into relations with other states
The state as a subject is endowed with rights and duties like; the right to equality, right to
coexistence and self-determination, right to independence, right to respect, dignity etc.

Similarly under the ILC (International Law Commission) draft declaration on Rights and Duties
of states,1949 lays down rights that states are entitled to like;

 The right to independence,

 Right to jurisdiction, (state jurisdiction)
 Duty of nonintervention,
 Right to equality,
 Duty to protect Human rights and fundamental freedoms,
 Duty to maintain peace and security, etc.
The theory rejects the notion individuals are proper subjects of international law. But few cases
have observed rules otherwise.

 Respublica v. DeLongchamps
American municipal court indicted the defendant (an individual) for assaulting the Consul
General of France to the new United States (Nation State).

It was held that the case must be determined on the principles of the laws of nations.

This case was instrumental in reiterating Blackstone’s view that, an individual could be guilty of
an infraction/infringment of international law.

 Paquete Habana case

The United States Navy had seized two Cuban fishing smacks in the opening days of the
Spanish-American War.

A lower federal court condemned the boats as prizes of war.

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The masters for themselves, their crews, and their owners, argued before the Supreme Court that
peaceful fishing craft were exempted from seizure under the rules of international law.

The Supreme Court held that “international law is part of our law, and must be ascertained and
administered by the courts of justice of appropriate jurisdiction, as often as questions of right
depending upon it are duly presented for their determination.”

This case once again highlighted the fact that individuals cannot be kept excluded from the
spectrum of international law.

 Nuremberg Trials
The most outstanding case that conclusively illustrates the limitations of the realistic theory is
the trials of Nazi war criminals after the Second World War.

The Charter of the International Military Tribunal at Nuremberg explicitly made individuals
subject to international rules relating to crimes against peace, war crimes, and crimes against
humanity.

At Nuremberg and in other war trials, thousands of war criminals were tried and convicted;
hundreds were executed. Nuremberg re-established plainly and forcefully that the rules of
international law should and do apply to individuals.

The Nuremberg Tribunal held that “crimes against international law are committed by men, not
by abstract entities, and only by punishing individuals who commit such crimes can the
provisions of international law be enforced.”

These cases clearly showcase the fact that to view nation-states as the only subject of
international law does not fulfill the purpose of the law, hence we may say that individual cannot
be isolated from being subject of International Law.

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Fictional Theory of International Law:

There are certain jurists who ascertain that in the ultimate analysis of international law it will be
evident that only individuals are the subjects of international law.

Professor Kelson is the chief proponent of this theory, he states that an individual alone is
entitled to be the subject of international law.

The duties and rights of the states are in reality the duties and rights of the men who
compose them. Many modern treaties do bestow rights and impose duties upon individuals.
From time to time certain treaties have been entered into which have conferred certain rights
upon individuals.

Although the statute of the ICJ (International Court of Justice) adheres to the traditional view
that only states can be parties to international proceedings, a number of other international
instruments have recognized the procedural capacity of the individual.

Various international treaties, judicial tribunals and courts have recognized individual
personality under international law.

For example:

 Treaty of 1907 between five Central American states established Central American Court
of Justice, which provided for individuals to bring cases directly before the court.
 African Charter 1981 and African Commission on Human & Peoples Rights
 The ICSID (International Centre for Settlement of Investment Disputes) 1965 has
enabled private foreign investor to have access to international machinery.
 The International Convention on the Suppression & punishment of Crime of Apartheid of
1974 declared apartheid an international crime and individual is directly responsible.
The chief criticism of the fictional theory is that it considers only individuals as the subject of
international law, it theorizes that though States are the main actors, they are composed of
individuals and hence only they are entitled to be called subjects of international law. The
fictional theory’s attempt to portray individuals as the subjects of international law proves futile

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because in reality even individuals derive their rights from a state, and the role of a state in
international law is of paramount importance. There is no doubt that states are still the main
subject of international law and most of the part of international law concerns with the conducts
and relationship of states with each other, therefore states cannot be isolated from being a subject
of international law.

Functional Theory of International Law:

Both the Realist and Fictional theories adopted the extreme course of opinions. But Functional
theory tends to meet both the extremist theories at a road of new approach.

According this theory neither states nor individuals are the only subjects; both are an inseparable
part of international law and therefore, both are considered to be subjects of international law.
States being primary and active subject of international law have recognized rights, duties and
obligations under international law and are capable to maintain the same by bringing
international claim. At the same time in modern international law individuals have also been
granted certain rights, duties and obligations under international law and can maintain the same
by bringing international claims. The increasingly inclusive approach of international law has
widened the ambit and scope of the field, with international organizations and non-state entities
also finding a place and acquiring the status of subjects.

There is very little to criticize in this theory as it rightly includes, not just states and individuals,
but also international organizations and non-state entities as subjects of international law. The
functional theory truly reflects the inclusive approach of modern international law. The widening
scope of modern international law has led to an increase in the subjects of international law,
there are many actors in international law, which have been granted rights, duties and
obligations, and also to secure their rights, they have been provided with capacity to bring
international claims, hence along with states and individuals certain other entities which have
been given international personality shall be treated as subjects of international law.

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Aim/ Objective/ Functions of Public International Law:

The existence of international law is the result of increased interstate engagement. It mainly aims to
maintain international peace and security among different states.

It also helps in:

1. promotion of friendly relations among the member states (members of the International community, for
example, United Nations),

2. providing for basic humanitarian rights,

3. to solve International problems through international cooperation,

4. to refrain the state from using threat or force over the territory of any other state to provide for the right to
self-determination to people, and

5. to use peaceful methods to settle international disputes are few of its functions.

Subjects of International Law:

Subject of International Law means entities who have a legal personality, with certain rights and duties
under the international legal system.

The state is considered to be the primary and original subject of international law.

All subjects of International Laws are as follows:

 Individuals – Common people of any state are also believed to be the subject of international law.
 International Organizations – It is an association of states, established by a treaty between two or more
states. International Organizations too have a legal personality and are considered to be the subject of
international law. For example, the United Nations, SAARC, OPEC, ASEAN, etc.
 Multinational Companies – They own and operate their corporate entities in at least one other country
aside from the place where it was incorporated, therefore it is established in more than one nation.

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All are considered to be subjects of international law and are enshrined with both rights and duties.

Basis of International Law:

The roots of International Law go deep into history and evidence of treaties, immunities of ambassadors,
usages of war, etc. can be found in ancient Egypt, India, the Greek and Roman empires. The present day
International Law owes its origin to the great jurist Grotious whose work De jure Belli ac Paces (1625) lent
legal basis to many areas of International Relations. His main idea is that there are certain eternal,
unchangeable and independent rules of law which have roots in human reason. This law of reason is called
by him Natural Law.

In The Grotian theory, there are three basis on International Law: Laws of reason, Customs and Treaties.
Emnating from his conception are two theories are seen as true basis of international law.

a. Naturalist Theory (Pufendrof) –

There exists a system of law which emanates from God or reason or morals. Law of nations is only a part
of law of nature. Hart explains that a minimum content of law flowing from the immutable nature of man
is that which is necessary for survival of mankind. International peace and security being necessary for
survival of human kind, all laws relating to it are thus parts of law of nature. The theory is criticised on the
ground that it is too vague.

b. Positivist Theory (Bynkershook) –

Only those principles may be deemed as law which have been adopted with the consent of the States.
Law is that which exists in fact. It is that law which is enacted or followed by States (i.e. emanate from
their own free will) and is hence binding upon States. Customs and treaties come into existence from
express or tacit consent of States. The theory is criticised as all rules of international law are not derived
from customs and treaties. Further, a treaty may be binding on third States as well, and, States in some
cases are bound by general international law even against their will.

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c. Eclectic Theory:
The views taken by the naturalists and positivists are extreme views. A theory giving equal importance to
both the views appears to be correct. As to the true basis of international law, contemporary sociological
theories tend to support Naturalism because they argue that international law is based on social
interdependence and aims at bringing about international social justice. Thus, natural law underlies even at
the positive law (customs and treaties) which is only an expression of this social interdependence.

Fundamental Principles of International Economic Law:

International economic law has widely been conceived in terms of a branch of international law; alongside
such other branches like international humanitarian law, international human rights law, international law
of the sea, etc. In which case, it stands on the pivot of international law, while keeping its particular
peculiarities. These peculiarities expose its content and concern to the economic development of states as
structured by the international community. Be that as it may, issues of economic concern affect the
individual in a given state where the person is governed by municipal law. Hence, every state has an
underlying obligation to enhance the economic development of its populace.
This ultimately affects the coexistence of different states and therefore becomes of international concern.
Indeed, when in 1948 the International Bill on Human Right was produced, it was viewed as a mere
international law instrument.
Later, it stood out as a measure of international and national commitment to the respect for the dignity of
man. Nations embraced the political aspect and over looked the social and economic angles.
Today, it has become evident that political rights will not flourish in the absence of social and economic
rights.
Obviously, the progress and growth in political rights in a state is measured by the growth of development
which is encapsulated in economic rights.
Therefore, there is no gainsaying the fact that economic activity is central to government affairs in the
promotion of economic welfare. This is why the exigencies of domestic economic and legal system are
germane to the development of international economic law. It is trite that the concern of international
economic law lies in the shaping of a state’s economic sovereignty. Hence, political sovereignty without
economic sovereignty translates into a mockery of independence. Indeed, the notion of equality of states
and the power to enter into treaty obligations with other states draws from the status of economic
sovereignty.

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Sovereignty in the international economic sphere relates mainly to a state’s permanent resources, its
economic system and to the rules of engagement in international economic relations.
In the search for economic sovereignty, developing states supported and pushed for the establishment of
the New International Economic Order (NIEO).
This “new” order emphasized the permanent sovereignty of states over natural resources. In pursuit of
NIEO, other emphases relating to environment and sustainable development also developed.
Following from these developments, a state that is desirous of economic development can tap into these
rights;
 Permanent sovereignty over its natural resources
 Sovereignty over the non-natural resources or economic activities within its territorial jurisdiction;
including its human resources
 Inalienable right to choose and conduct its own economic self-determination and governance
 Rights of non-interference in its economic affairs through the threat or use of force.

Under the auspices of international economic law, the NIEO for the development of the “third-world”
countries was adopted by the United Nations General Assembly.
Article 1, 2, 4 and 5 outlined the economic rights and duties of states in a more concrete manner.
Article 1, provides that: Every state has the sovereign and inalienable right to choose its economic system
as well as its political, social and cultural systems in accordance with the will of its people, without outside
interference, coercion or threat in any form whatsoever.
Article 2 provides as follows:
1) Every state has and shall fully exercise full permanent sovereignty, including possession, use and
disposal, over all its wealth, natural resources and economic activities.
2) Each state has the right:
a) To regulate and exercise authority over foreign investment within its national jurisdiction in accordance
with its laws and regulations and conformity with its national objectives and priorities. No state shall be
compelled to grant preferential treatment to foreign investment;
b) To regulate and supervise the activities of transnational corporations within its national jurisdiction and
take measure to ensure that such activities comply with its laws, rules and regulations and conform with its
economic and social policies. Transnational corporations shall not intervene in the internal affairs of a host

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state. Every state should, with full regard for its sovereign rights, co-operate with other states in the
exercise of the right set forth in this sub paragraph;
c) To nationalize, expropriate or transfer ownership of foreign property; in which case, appropriate
compensation should be paid by the state adopting such measures, taking into account its relevant laws and
regulations and all circumstances that the state considers pertinent. In any case, where the question of
compensation gives rise to a controversy, it shall be settled under the domestic law of the nationalizing
state and by its tribunals, unless it is freely and mutually agreed by all states concerned that other peaceful
means be sought on the basis of the sovereign equality of states and in accordance with the principle of free
choice of means".
Article 4 provides thus:
Every state has the right to engage in international trade and other forms of economic cooperation
irrespective of any differences in political, economic and social systems.
No state shall be subjected to discrimination of any kind based solely on such differences. In the pursuit of
international trade and other forms of economic cooperation, every state is free to choose the forms of
organization of its foreign economic relations and to enter into bilateral and multilateral arrangements
consistent with its international obligations and with the needs of international economic cooperation.
Article 5 provides as follows:
All states have the right to associate in organizations of primary commodity producers in order to develop
their national economies; to achieve stable financing for their development and, in pursuance of their aims,
to assist in the promotion of sustained growth of the world economy.
In particular accelerating the development of developing countries. Correspondingly, all states have the
duty to respect that right by refraining from applying economic and political measures that would limit it.

Although the Charter was not a "hard law" instrument having binding legal effect, many of the principles
embodied in it have been regarded as representing the basis for the development of International Economic
Law.
Indeed, the Charter reiterates some of the principles that were already widely accepted as representing
customary rules of international law, such as permanent sovereignty of states over their natural resources.
Under this resolution, the Charter of Economic Rights and Duties of States (CERDs) brought its central
theme to bear.

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Furthermore, Article 1 of the U.N. resolution 1986, provides that the right to development is an inalienable
human right which every human being and all people are entitled to participate in, contribute to, and enjoy
economic, social, cultural and political development. It also recognizes the right and duty of the states to
formulate appropriate national development policies that aim at the constant improvement of the well-being
of the entire population and of all individuals, on the basis of their active free and meaningful participation
in development.
The General Assembly, at its 2237th plenary meeting, on 21 September 1974, allocated to the Second
Committee agenda item 48, entitled "Charter of Economic Rights and Duties of States."

Preamble:
The General Assembly,

 Reaffirming the fundamental purposes of the United Nations,

 in particular the maintenance of international peace and security,
 the development of friendly relations among nations and the achievement of international co-
operation in solving international problems in the economic and social fields,
 Affirming the need for strengthening international co-operation for development,

Declaring that it is a fundamental purpose of the present Charter to:

 promote the establishment of the new international economic order,

 based on equality, sovereign equality, interdependence, common interest and co-operation among
all States, irrespective of their economic and social systems,

Desirous of contributing to the criterion of conditions for:

(a) The attainment of wider prosperity among all countries and of higher standards of living for all peoples,
(b) The promotion by the entire international community of the economic and social progress of all
countries, especially developing countries,
(c) The encouragement of co-operation, on the basis of mutual advantage and equitable benefits for all
peace-loving States which are willing to carry out the provisions of the present Charter, in the economic,
trade, scientific and technical fields, regardless of political, economic or social systems,

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(d) The overcoming of main obstacles in the way of economic development of the developing countries,
(e) The acceleration of the economic growth of developing countries with a view to bridging the economic
gap between developing and developed countries,
(f) The protection, preservation and enhancement of the environment,
Mindful of the need to establish and maintain a just and equitable economic and social order through:
(a) The achievement of more rational and equitable international economic relations and the
encouragement of structural changes in the world economy,
(b) The creation of conditions which permit the further expansion of trade and intensification of economic
co-operation among all nations,
(c) The strengthening of the economic independence of developing countries,
(d) The establishment and promotion of international economic relations, taking into account the agreed
differences in development of the developing countries and their specific needs,
Determined to promote collective economic security for development, in particular of the developing
countries, with strict respect for the sovereign equality of each State and through the co-operation of the
entire international community,
Considering that genuine co-operation among States, based on joint consideration of and concerted action
regarding international economic problems, is essential for fulfilling the international community's
common desire to achieve a just and rational development of all parts of the world.
Stressing the importance of ensuring appropriate conditions for the conduct of normal economic relations
among all States, irrespective of differences in social and economic systems, and for the full respect of the
rights of all peoples, as well as strengthening instruments of international economic cooperation as a means
for the consolidation of peace for the benefit of all.
Convinced of the need to develop a system of international economic relations on the basis of sovereign
equality, mutual and equitable benefit and the close interrelationship of the interests of all States,
Reiterating that the responsibility for the development of every country rests primarily upon itself but that
concomitant and effective international cooperation is an essential factor for the full achievement of its own
development goals.

Firmly convinced of the urgent need to evolve a substantially improved system of international economic
relations, Solemnly adopts the present Charter of Economic Rights and Duties of States.

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Fundamentals of International Economic Relations:

Economic as well as political and other relations among States shall be governed, inter alia, by the
following principles:

 Sovereignty, territorial integrity and political independence of States;

 Sovereign equality of all States;
 Non-aggression;
 Non-intervention;
 Mutual and equitable benefit;
 Peaceful coexistence;
 Equal rights and self-determination of peoples;
 Peaceful settlement of disputes;
 Remedying of injustices which have been brought about by force and which deprive a nation of
the natural means necessary for its normal development;
 Fulfillment in good faith of international obligations;
 Respect for human rights and international obligations;
 No attempt to seek hegemony and spheres of influence;
 Promotion of international social justice;
 International co-operation for development;
 Free access to and from the sea by land-locked countries within the framework of the above
principles.

In 1986, the UN General Assembly reiterated the right to development as a human right. It moved to
protect the freedom of people and nations to freely choose their method of development, control their
resources and regulation to facilitate that development, and note that development and advancement are
the responsibility of all persons. This framework may have led to the development of the Millennium
Development Goals in 2000.

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Trans National Corporations – rights, duties, responsibilities:

A. General obligations:
States have the primary responsibility to promote, secure the fulfilment of, respect, ensure respect of
and protect human rights recognized in international as well as national law, including ensuring that
transnational corporations and other business enterprises respect human rights. Within their respective
spheres of activity and influence, transnational corporations and other business enterprises have the
obligation to promote, secure the fulfilment of, respect, ensure respect of and protect human rights
recognized in international as well as national law, including the rights and interests of indigenous
peoples and other vulnerable groups.
B. Right to equal opportunity and non-discriminatory treatment:
Transnational corporations and other business enterprises shall ensure equality of opportunity and
treatment, as provided in the relevant international instruments and national legislation as well as
international human rights law, for the purpose of eliminating discrimination based on race, colour, sex,
language, religion, political opinion, national or social origin, social status, indigenous status, disability,
age - except for children, who may be given greater protection - or other status of the individual
unrelated to the inherent requirements to perform the job, or of complying with special measures
designed to overcome past discrimination against certain groups.
C. Right to security of persons:
Transnational corporations and other business enterprises shall not engage in nor benefit from war
crimes, crimes against humanity, genocide, torture, forced disappearance, forced or compulsory labour,
hostage-taking, extrajudicial, summary or arbitrary executions, other violations of humanitarian law
and other international crimes against the human person as defined by international law, in particular
human rights and humanitarian law.
Security arrangements for transnational corporations and other business enterprises shall observe
international human rights norms as well as the laws and professional standards of the country or
countries in which they operate.
D. Rights of workers: Transnational corporations and other business enterprises shall not use forced or
compulsory labour as forbidden by the relevant international instruments and national legislation as
well as international human rights and humanitarian law.

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Transnational corporations and other business enterprises shall respect the rights of children to be
protected from economic exploitation as forbidden by the relevant international instruments and
national legislation as well as international human rights and humanitarian law.
Transnational corporations and other business enterprises shall provide a safe and healthy working
environment as set forth in relevant international instruments and national legislation as well as
international human rights and humanitarian law.
Transnational corporations and other business enterprises shall provide workers with remuneration that
ensures an adequate standard of living for them and their families. Such remuneration shall take due
account of their needs for adequate living conditions with a view towards progressive improvement.
Transnational corporations and other business enterprises shall ensure freedom of association and
effective recognition of the right to collective bargaining by protecting the right to establish and,
subject only to the rules of the organization concerned, to join organizations of their own choosing
without distinction, previous authorization, or interference, for the protection of their employment
interests and for other collective bargaining purposes as provided in national legislation and the
relevant conventions of the International Labour Organization.
E. Respect for national sovereignty and human rights:
Transnational corporations and other business enterprises shall recognize and respect applicable norms
of international law, national laws and regulations, as well as administrative practices, the rule of law,
the public interest, development objectives, social, economic and cultural policies including
transparency, accountability and prohibition of corruption, and authority of the countries in which the
enterprises operate.
Transnational corporations and other business enterprises shall not offer, promise, give, accept,
condone, knowingly benefit from, or demand a bribe or other improper advantage, nor shall they be
solicited or expected to give a bribe or other improper advantage to any Government, public official,
candidate for elective post, any member of the armed forces or security forces, or any other individual
or organization. Transnational corporations and other business enterprises shall refrain from any
activity which supports, solicits, or encourages States or any other entities to abuse human rights. They
shall further seek to ensure that the goods and services they provide will not be used to abuse human
rights.
Transnational corporations and other business enterprises shall respect economic, social and cultural
rights as well as civil and political rights and contribute to their realization, in particular the rights to

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development, adequate food and drinking water, the highest attainable standard of physical and mental
health, adequate housing, privacy, education, freedom of thought, conscience, and religion and freedom
of opinion and expression, and shall refrain from actions which obstruct or impede the realization of
those rights.
F. Obligations with regard to consumer protection:
Transnational corporations and other business enterprises shall act in accordance with fair business,
marketing and advertising practices and shall take all necessary steps to ensure the safety and quality of
the goods and services they provide, including observance of the precautionary principle. Nor shall they
produce, distribute, market, or advertise harmful or potentially harmful products for use by consumers.
G. Obligations with regard to environmental protection:
Transnational corporations and other business enterprises shall carry out their activities in accordance
with national laws, regulations, administrative practices and policies relating to the preservation of the
environment of the countries in which they operate, as well as in accordance with relevant international
agreements, principles, objectives, responsibilities and standards with regard to the environment as well
as human rights, public health and safety, bioethics and the precautionary principle, and shall generally
conduct their activities in a manner contributing to the wider goal of sustainable development.
H. General provisions of implementation:
As an initial step towards implementing these Norms, each transnational corporation or other business
enterprise shall adopt, disseminate and implement internal rules of operation in compliance with the
Norms. Further, they shall periodically report on and take other measures fully to implement the Norms
and to provide at least for the prompt implementation of the protections set forth in the Norms. Each
transnational corporation or other business enterprise shall apply and incorporate these Norms in their
contracts or other arrangements and dealings with contractors, subcontractors, suppliers, licensees,
distributors, or natural or other legal persons that enter into any agreement with the transnational
corporation or business enterprise in order to ensure respect for and implementation of the Norms.
Transnational corporations and other business enterprises shall be subject to periodic monitoring and
verification by United Nations, other international and national mechanisms already in existence or yet
to be created, regarding application of the Norms. This monitoring shall be transparent and independent
and take into account input from stakeholders (including non-governmental organizations) and as a
result of complaints of violations of these Norms. Further, transnational corporations and other business

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enterprises shall conduct periodic evaluations concerning the impact of their own activities on human
rights under these Norms.
States should establish and reinforce the necessary legal and administrative framework for ensuring that
the Norms and other relevant national and international laws are implemented by transnational
corporations and other business enterprises.
Transnational corporations and other business enterprises shall provide prompt, effective and adequate
reparation to those persons, entities and communities that have been adversely affected by failures to
comply with these Norms through, inter alia, reparations, restitution, compensation and rehabilitation
for any damage done or property taken. In connection with determining damages, in regard to criminal
sanctions, and in all other respects, these Norms shall be applied by national courts and/or international
tribunals, pursuant to national and international law.
Nothing in these Norms shall be construed as diminishing, restricting, or adversely affecting the human
rights obligations of States under national and international law, nor shall they be construed as
diminishing, restricting, or adversely affecting more protective human rights norms, nor shall they be
construed as diminishing, restricting, or adversely affecting other obligations or responsibilities of
transnational corporations and other business enterprises in fields other than human rights.

International Institutions – Role, Functions

UNCTAD – United Nations Conference on Trade and Development

UN Trade and Development (UNCTAD) is an intergovernmental organization within the United
Nations Secretariat that promotes the interests of developing countries in world trade.
It was established in 1964 by the United Nations General Assembly (UNGA) as the United Nations
Conference on Trade and Development but rebranded to its current name on the occasion of its 60th
anniversary in 2024.
The primary objective of UNCTAD is to formulate policies relating to all aspects of development,
including trade, aid, transport, finance and technology. It was created in response to concerns among
developing countries that existing international institutions like GATT (since replaced by the World
Trade Organization), the International Monetary Fund (IMF), and the World Bank were not properly
organized to handle the particular problems of developing countries; UNCTAD would provide a forum
where developing nations could discuss and address problems relating to their economic development.

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One of UNCTAD's principal achievements was conceiving and implementing the Generalized System
of Preferences (GSP), which promotes the export of manufactured goods from developing countries. In
the 1970s and 1980s, UNCTAD was closely associated with the New International Economic
Order (NIEO), a set of proposals that sought to reduce economic dependency and inequality between
developing and developed countries.

UNCTAD conferences ordinarily take place every four years, with the first occurring in Geneva in
1964; fifteen subsequent meetings have taken place worldwide, with the most recent held
in Bridgetown, Barbados, from 3–8 October 2021 (albeit virtually, due to the COVID-19 pandemic).

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Sources:

1. https://openstax.org/books/business-law-i-essentials/pages/13-1-introduction-to-international-law
2. https://blog.ipleaders.in/international-law/
3. https://online.lincoln.ac.uk/what-is-international-economic-law/
4. Must Read as additional source -
https://www.researchgate.net/publication/369667967_International_Business_Law_and_Regulations
5. file:///C:/Users/a/Downloads/ajol-file-journals_479_articles_82381_submission_proof_82381-5653-
197837-1-10-20121018.pdf
6.
7.
8.

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