Corporations and Nations: Power Imbalance in the Extractive Sector

This article examines the nature and significance of the power imbalance between developing countries and transnational corporations (TNCs) in the natural resource sector. It situates this power imbalance within the context of global economic realities, including the high profitability of extractive TNCs; rampant poverty in developing countries; dependence of many developing countries on the extractive sector for economic sustenance; and lack of regulatory expertise on the part of developing countries. The article suggests two potential avenues for addressing this power imbalance. First, it advocates for the recognition of TNCs as “subjects†of international law, thus paving way for the imposition of some international law duties on TNCs. Secondly, the article argues that civil society groups should be empowered to participate actively in the regulatory process and that an empowered civil society could potentially counterbalance the power of TNCs and other corporations.