Concordia International School Shanghai Model United Nations ◆ Seventh Annual Session
Forum:
Environment Commission
Issue:
Establishing guidelines governing multinational corporate conduct in
the developing world, with an emphasis on preventing environmental
degradation
Student Officer: Da Hee Kang
Position:
Deputy President
Introduction
Multinational corporations (MNCs) and developing countries are in a complicated yet
unbreakable relationship. In fact, many economists still argue and debate about whether presence of
MNCs is beneficial to developing countries. Nonetheless, it seems that there is one unvarying opinion
regarding such businesses in developing world; their activities in developing countries lead to
environmental degradation. Starting from deforestation to oil spills, several corporations have
undoubtedly harmed this planet. Yet, it is also undeniable that existence of MNCs is crucial in global
economy. So the question is: environment or economy?
Definition of Key Terms
Multinational corporations (MNCs)
Companies with operations in more than one country, including Microsoft, Apple, Samsung, and
so on.
History
Growing importance of Multinational Corporations
As states have significantly declined in their roles as economic structure, private sectors and
multinational businesses have grown as the new giants in global market. They are especially crucial in
economies of developing countries, because they not only create more job opportunities for people, but
also provide daily life commodities in cheap prices to people through low cost production. In addition, in
order to appeal to the society and raise their reputations, many large corporations provide humanitarian
aid to those in need through consistent donation. Despite all these significance and positive impact they
have on modern society, many MNCs are being scrutinized and condemned for various reasons, but
especially for their careless attitude regarding environment.
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Concordia International School Shanghai Model United Nations ◆ Seventh Annual Session
Conflict between Niger Delta region and Shell Corporation
Damage in Niger Delta region caused by Shell – a multinational corporation dealing oils – is a
perfect example of how lethal and harmful the activities of multinationals can be. Due to years of
reckless oil exploration and ecological conflict by several oil multinationals, mainly Shell, Nigeria has
seen severe damages in its environment, including coastal erosion, land degradation, oil pollution,
depletion of water, and so on. Although admitted its fault and announced to clean the area, Shell has
taken negligent demeanor and means to purify the contamination in Niger Delta, only worsening the
situation.
Caption #1: Photo of oil spill from Shell Corporation taken in the Niger Delta region.
Key Issues
International environmental regulations on MNCs activities
As non-state firms that are not fully restricted under federal laws, multinational corporations are
not even bound to multilateral environmental agreements (MEAs) between states. According to studies,
MNCs are able to take advantage over their multinational and ephemeral nature, and avoid strict and
regulatory environmental restrictions from both home state and host state. Granted, local governments
have their full authority to put pressure upon such companies. However, since majority of these
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Concordia International School Shanghai Model United Nations ◆ Seventh Annual Session
businesses run in developing countries, governments do not prioritize environmental issues.
Consequently, vast majority of firms not only harm nature through extremely low environmental
standards, but also take very little responsibility in recovering damaged area.
Human rights of workers abused by MNCs
While environmental degradation is a serious issue getting significant attentions, it is not the only
negative impact that MNCs have brought upon developing countries. Blinded and driven by their
economic interest, many corporations use inhumane and violent means to get civilians and workers
under control. To take Nigerian conflict as an example, Shell has used its own private military to control,
and even kill, villagers who were against the oil extraction in Niger Delta area. In addition, Shell military
forces wrecked and destroyed a number of local villages for the sake of oil exploration and extraction.
During this process, many innocent civilians were injured and forced out of their home.
Major Parties Involved and Their Views
Nigeria
Although the government of Nigeria had gone through reformation from military to civilian in 1999,
it is still inept in dealing with unethical behaviors of large corporations. Even until very recently in 2013,
Shell was criticized by Amnesty International that it is contributing in oil spills that annually occur in
Nigeria. The government and its people are also aware that Nigeria has one of the worst human rights
record, yet they prioritize economic development rather than such issues.
Caption #2: The logo of Movement for the Emancipation of the Niger Delta (MEND).
International Oil Companies (IOCs)
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Concordia International School Shanghai Model United Nations ◆ Seventh Annual Session
IOCs, including Shell Corporation, are one of the leading factors of ecological degradation in
developing countries. They are currently being disparaged by several governmental and nongovernmental organizations, such as United Nations, Amnesty International, and so on. As a result of
international pressure, a portion of these firms are improving and strengthening their environmental
standards.
China
According to announcement made by Ma Jun, the director of the nongovernmental Institute of
Public & Environment Affairs, about 33 multinational corporations were punished for committing
environmentally harmful actions in the past three years. China, as one of the countries with the most
factories of various multinationals, has very strict policy regarding environment and is increasingly
becoming aware of the importance of preserving the ecosystem.
Timeline of Relevant Resolutions, Treaties and Events
Date
Description of event
December 2, 1984
November 30, 1990
May 15, 2002
Toxic gases released from the Union Carbide pesticide plant accident, which
killed more than 5000 residents.
International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC) adopted.
Report condemning and scrutinizing several multinational corporations in
developing countries released by United Nations Environment Program (UNEP)
Movement for the Emancipation of the Niger Delta (MEND) makes its first official
January 11, 2006
and international ‘debut’ as a militant group by attacking one oil field that
belongs to Shell Corp.
April 20, 2010
Oil spill in the Gulf of Mexico, caused by British Petroleum (BP).
Evaluation of Previous Attempts to Resolve the Issue
In order to protect environment in numerous developing countries and raise awareness about
unscrupulous and irresponsible attitude of MNCs, United Nations Environment Program (UNEP)
published an extensive and comprehensive report in 2002. The report critically analyzed the situation,
and claimed that this issue will not be resolved until all businesses fully participate and support. However,
this report does not have any practical means that can restrict large firms from destroying nature. In
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Concordia International School Shanghai Model United Nations ◆ Seventh Annual Session
addition, many governments of developing countries are still hesitant to litigate MNCs, since such
decision can hinder national economic development.
Possible Solutions
Creating a comprehensive and strict environmental regulation regarding industrial activities that
applies to all multinational corporations should be made. As aforementioned, administrations of
developing countries are aware of the growing problem, yet are afraid, and reluctant to limit large
companies. Thus, member nations of United Nations and/or More Economically Developed Countries
(MEDCs) should aid in establishing eco-friendly regulations that apply to every industrial activity.
Furthermore, home state or host state of the company should consider sending regular inspectors to the
workplaces and update with ongoing situations on a regular basis.
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Establishing guidelines governing multinational corporate