Sovereignty and Transnational Corporations

The position and role of transnational corporations (TNCs) vis-a-vis the concept of sovereignty is specific. TNCs operate as an organism (an economic and social reality of a net created by a mother society, subsidiaries, and their suppliers anchored in different jurisdictions). The article presents three areas where the interaction of a state’s sovereignty and TNCs is the most visible. First, it discusses the issue of self-limitation with respect to administrative jurisdiction in cases related to foreign direct investment and the risk to the host state in situations where such autolimitation is not clearly framed. Second, the author presents the issue of human rights abuses committed by TNCs, the procedural challenges for redress, and the way-out created by soft law instruments adopted at an international level. Third, the concept of corporate citizenship is presented, which might undermine national sovereignty.