Introduction
This essay critically examines the evolution of the business and human rights (BHR) movement before the 2011 United Nations Guiding Principles on Business and Human Rights (UNGPs). It addresses two main areas. First, it traces historical developments from Friendship, Commerce, and Navigation (FCN) treaties to the early bilateral investment treaties (BITs), assessing how these instruments prioritised foreign investor protection while often overlooking social and environmental harms in host states such as Tanzania. Second, it evaluates pre-2011 accountability mechanisms, including the UN Draft Code of Conduct on Transnational Corporations, traditional corporate social responsibility (CSR) approaches, the 2003 UN Norms on the Responsibilities of Transnational Corporations with regard to Human Rights, and the jurisprudence of the African Commission on Human and Peoples’ Rights in the Ogoni case. The analysis draws on established legal scholarship to demonstrate that these earlier frameworks, though limited, laid important groundwork for later normative advances.
The Evolution from FCN Treaties to Early BITs and the Protection of Foreign Capital
International investment protection has deep roots in FCN treaties, which emerged prominently from the eighteenth century onwards. These agreements primarily regulated trade relations and provided basic guarantees for merchants and property owners operating abroad (Vandevelde, 2005). Their principal concern lay with securing favourable conditions for commerce between sovereign states, with limited attention to the conduct of private enterprises or any obligation to mitigate adverse effects on local populations.
By the mid-twentieth century, the limitations of FCN treaties in addressing large-scale foreign direct investment became apparent. The first modern BIT was concluded between Germany and Pakistan in 1959, marking a decisive shift towards dedicated investment protection instruments (Dolzer and Schreuer, 2012). Early BITs offered foreign investors substantive protections such as national treatment, most-favoured-nation clauses, and guarantees against expropriation without compensation. These treaties also typically included investor-state dispute settlement provisions, enabling corporations to bring claims directly against host states before international arbitral tribunals.
In developing countries, including Tanzania after independence, such treaties functioned predominantly as mechanisms to attract and safeguard foreign capital in extractive sectors. Tanzania entered into several BITs during the 1980s and 1990s, often with European states, at a time when structural adjustment programmes encouraged liberalisation of mining and other natural-resource industries. The resulting architecture prioritised investor rights, while environmental and social safeguards remained rudimentary or absent from the treaty texts themselves. Consequently, communities affected by mining operations frequently encountered difficulties in obtaining redress for pollution, displacement, or labour abuses (UNCTAD, 2000). Although BITs occasionally contained general references to public welfare, these references seldom translated into enforceable obligations for investors. The asymmetry between strong investor protections and weak host-state regulatory space illustrates how early investment law largely remained indifferent to ecological and human costs, reinforcing an architecture that privileged capital-exporting interests.
Pre-2011 Normative Frameworks: The UN Draft Code and Traditional CSR
Before consensus emerged around the UNGPs, attempts to regulate transnational corporations at the international level produced mixed results. Negotiations on a UN Draft Code of Conduct on Transnational Corporations began in the 1970s under the auspices of the United Nations Commission on Transnational Corporations. The draft sought to balance rights and responsibilities by addressing issues such as transfer pricing, technology transfer, and respect for host-state sovereignty (Sauvant, 2015). However, fundamental disagreements between capital-exporting and capital-importing states prevented adoption. The project was formally abandoned in the early 1990s, reflecting the prevailing preference for voluntary approaches.
Alongside these intergovernmental efforts, traditional CSR developed as a largely voluntary model. CSR initiatives encouraged corporations to engage in philanthropic activities or non-binding codes of conduct, often framed as profit-sharing or community-development programmes. While such measures occasionally delivered tangible local benefits, they proved insufficient to prevent serious rights violations because compliance depended entirely on corporate discretion. The voluntary character of CSR limited its capacity to impose genuine accountability, particularly where economic incentives favoured cost externalisation in extractive operations.
The 2003 UN Norms and Their Limitations
A more ambitious attempt appeared in 2003 with the UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights. Drafted by the Sub-Commission on the Promotion and Protection of Human Rights, the Norms sought to impose direct human rights obligations on corporations under international law, drawing on existing treaties and declaratory standards (Weissbrodt and Kruger, 2003). The document outlined responsibilities relating to labour rights, environmental protection, and non-discrimination.
The Norms encountered decisive opposition from states and business organisations, which argued that they improperly blurred the distinction between state and corporate duties. The Commission on Human Rights ultimately declined to adopt the text, requesting instead that the Secretary-General appoint a Special Representative to clarify the respective roles of states and corporations. This outcome highlighted the political constraints on mandatory frameworks at the time and underscored the systemic preference for softer normative instruments.
The Ogoni Case: Regional Jurisprudence before the UNGPs
Regional human-rights bodies provided another avenue for addressing corporate-related abuses. In The Social and Economic Rights Action Center and the Center for Economic and Social Rights v Nigeria (Communication No. 155/96, 2001), commonly known as the Ogoni case, the African Commission on Human and Peoples’ Rights examined allegations of environmental devastation and state complicity linked to oil extraction in the Niger Delta. The Commission found that Nigeria had violated several provisions of the African Charter on Human and Peoples’ Rights by failing to regulate corporate conduct effectively or to protect affected communities. The decision articulated state obligations to monitor and prevent environmental harm caused by private actors and emphasised the interdependence of economic, social, and cultural rights with civil and political rights.
Although the Ogoni decision constituted a significant jurisprudential development, its direct enforceability remained limited. The African Commission lacks binding judicial powers comparable to those of domestic courts, and implementation depended on political will within member states. Nevertheless, the case demonstrated that regional mechanisms could articulate corporate-related human-rights standards and expose gaps in national regulatory frameworks, thereby contributing to the broader pre-2011 normative landscape.
Conclusion
The historical trajectory of business and human rights prior to 2011 reveals a series of incomplete and contested efforts to reconcile investment protection with human-rights and environmental safeguards. FCN treaties and early BITs established robust protections for foreign capital that, in states such as Tanzania, often operated with minimal regard for local social and ecological consequences. Subsequent attempts at international regulation, from the UN Draft Code through the 2003 Norms and voluntary CSR initiatives, encountered structural obstacles that repeatedly favoured non-binding approaches. Regional decisions such as the Ogoni case offered valuable normative guidance yet suffered from weak enforcement. Collectively, these developments underscore both the persistence of regulatory asymmetry and the incremental learning that ultimately informed the more integrated framework adopted in 2011.
References
- Dolzer, R. and Schreuer, C. (2012) Principles of International Investment Law. 2nd edn. Oxford: Oxford University Press.
- Sauvant, K.P. (2015) ‘The negotiations of the United Nations Code of Conduct on Transnational Corporations: An unfinished history’, Journal of World Investment & Trade, 16(1), pp. 11–48.
- UNCTAD (2000) Bilateral Investment Treaties 1959–1999. New York and Geneva: United Nations.
- Vandevelde, K.J. (2005) ‘A brief history of international investment agreements’, UC Davis Journal of International Law & Policy, 12(1), pp. 157–194.
- Weissbrodt, D. and Kruger, M. (2003) ‘Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights’, American Journal of International Law, 97(4), pp. 901–922.
