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Introduction

Public international law is mainly about the conduct and structure of analogous entities, sovereign states and intergovernmental organizations. International law is formed from the combination of two main branches: international agreements and the law of nations. Environmental deterioration, growth in international trade, access of international transportation and international awareness of human rights are the main factors that have led to increased use of international law. There is also private international law which mainly deals with the resolution of conflicts between laws. There are three main sources of international law (Muchlinski, 2007). The first one is international treaties. These are obligations that states accept voluntarily between themselves. The second source of international law is custom. This is derived from a practice in the states that are consistent. They believe that they have a legal obligation to engage in the consistent practice. The last source is the general principles of law. These are the main laws that have international recognition by legal systems.

Regulation of Multinational Companies

There is a significant difference in the regulation of multinational companies internationally, at home and at the host countries. In the home states, the countries have regulations that focus on the sovereignty of the multinationals. They set laws which favor the thriving of these companies in the country. However, this regulation is only limited to the home country. Host countries tend to limit the activities of the multinationals, in order to protect the other local companies from competition which may seem to be unfair. This is different for international regulation. The main function of international regulation is to ensure that some geographical areas are not left out in the activities of the multinationals. As the barriers of international trade are removed, these multinationals continue to gain more power and influence (Sornaraja, 2010). This leads to misuse of the power which causes the demise of emerging companies. Therefore, international regulation comes in and regulates the activities of these multinationals.

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