martes, enero 16, 2007

Enough talk – it is time to start engaging seriously with the international law framework for corporate social responsibility and the possibilities

Special Reports: Legal issues – Ultimate governance: the international regulation of corporate responsibility
EC Newsdesk 11 Jan 07
Download as PDF
Print Comment Send
Ruggie: tough mandate
Enough talk – it is time to start engaging seriously with the international law framework for corporate social responsibility and the possibilities it offers, says Jennifer Zerk
Professor John Ruggie’s mandate, as the UN secretary-general’s special representative on business and human rights, has certainly given international lawyers plenty to think about. Are multinationals directly regulated by international law? What kinds of human rights standards are they subject to? What do these mean in practice? And whose responsibility is it anyway, to make sure these standards are met? These are important questions, and the fact that they are being asked at all says a lot about how our expectations of international law are changing.International law has always been one of the least-understood legal fields. Its shortcomings are all too plain to anyone who cares about climate change, nuclear weapons or Iraq. So, given all this negativity, it is fascinating that so much effort is now being invested in developing its potential as a source of regulation, not just for states, but for private enterprise too.Actually, it is not that difficult to see why this is happening. With most states displaying a distinct lack of interest in regulating the human rights performance of multinationals directly, it is only natural to try to fill in the gaps somehow. And despite its “state-centredness”, international law does offer rays of hope to activists.

Want to read more articles like this in print each month?Then click here and quote "ECT05" to order your free trial subscription to Ethical Corporation magazine.

For a start, its natural law roots and its built-in flexibility are an invitation to be creative. And its evolving nature means it can sometimes be as difficult to prove that a rule does not exist as it is to prove that it does.But those who see international law as a potential cure-all, a way of bypassing weak or reluctant states to create a system of direct regulation of companies by a higher order, are bound to be disappointed. New legal principles do not appear by magic. No claim that international law has changed or moved on will stand up unless there is solid evidence of support by states for the new rule. In other words, this is not a domain where anything goes. In practice, proving that a new rule has emerged is extremely difficult.Uncharted territorySo where does that leave efforts to make companies directly accountable under international law for human rights abuses? The first point to make is that companies are already subject to direct obligations under international law not to engage in the worst forms of human rights abuses: war crimes, slavery or genocide for instance. Yes, there may be little or no chance of enforcement, but a lack of enforcement mechanisms does not mean that the primary obligations do not exist. Beyond this, though, we are in largely uncharted territory. While there is nothing to prevent states from imposing further obligations on companies directly, there is no real evidence that they are doing so.Despite the considerable effort that went into the drafting of the UN Norms on Business and Human Rights, we still do not know quite how to translate established human rights principles to the corporate context. It is one thing to say that corporations should respect a right to health, for instance, but it is quite another to say what that would mean in practice. Providing a safe and healthy workplace? Surely. Providing a healthcare plan for employees and their families? Maybe. Supplying medicines and building hospitals? Who knows? Clearly, there is a balance to be struck here. Is there a danger, for instance, that in asking companies to take more responsibility for human rights, we may be letting states off the hook?We need to make progress on this, and soon. Let’s look at where we are now. Victims of corporate abuses are still frustrated at every turn. Companies are facing uncertain litigation risks and almost daily dilemmas about what is and is not an appropriate use of company resources. Home states that do offer remedies are now grappling with the implications of their unwanted role as international enforcers, as well as the risks that their multinationals may go elsewhere. And sooner or later, host states will have to face up to the consequences of a gradual usurpation of their traditional functions by companies under pressure. Clearly, the current lack of clarity about the responsibilities of companies with respect to human rights, and the patchiness with which they are enforced, are in nobody’s interests.Cross-purposesSo what is holding us back? One problem has to be the wildly divergent views among interest groups on how international law relates to corporate social responsibility, and what it can and cannot do. Out of this confusion have come several legislative proposals that have not stood up to even the slightest amount of legal scrutiny. But while these kinds of proposals may get their sponsors in the news, they have not brought us any closer to a solution. At this stage, more badly thought through proposals will only be counter-productive. Not only do they allow the debate to get bogged down in legal technicalities, they also lose credibility for the whole idea that the human rights performance of multinationals can be regulated at all.But it can. There is huge scope for improvement on the current state of affairs, given enough political will. And while the UN special representative’s mandate may not please everyone, it has at least provided a focus for discussion. What is desperately needed now is less wishful thinking and more rigorous analysis, informed by a clear vision of what we need from companies and states, and a clear demarcation of the role and responsibilities of each.Move or improve?Of course, international law can never be radical, and it surely has its limitations when it comes to regulating companies. But before we embark on a wholesale effort to reform it, let us take a look at what it offers already. In regulating companies there are two options. First is “direct regulation”, where international law applies directly. As already pointed out, this would require some creativity, and would probably need a full-blown treaty, complete with proper supervisory, complaint and enforcement mechanisms to make it work. The second (and more conventional) option would rely on states taking greater responsibility for overseeing the human rights performance of companies themselves – unilaterally, or by way of a co-ordinated project. Who should take the lead? Traditional international law principles place limits on the role of home states. Generally speaking, states cannot regulate the activities of “foreign nationals” in foreign countries. Foreign subsidiaries are treated as foreign nationals, even if owned and controlled from home. But these limitations are not as great as first appears. There is still much home states can do – short of actually regulating foreign subsidiaries directly – that would not put them in breach of international law. Offering more incentives to parent companies to improve the human rights performance of their foreign subsidiaries and business partners is one possibility. Tightening up criteria for export assistance is another, as is mandatory group reporting of human rights impacts.Treaty?The idea that companies have a vital role in the protection and maintenance of human rights is hardly controversial any more, even among companies. The law is ripe for reform – but what would an international regime on companies and human rights look like?It is probably not feasible to design a regime that deals with all possible human rights impacts of companies in one go. But there are a number of existing international regimes we could look to for inspiration. First of all, complaint procedures already exist under a number of existing human rights treaties. Conceivably these could be expanded to provide standing for individuals and NGOs (where this is not already the case), and to cover cases of corporate abuses expressly.Looking further afield, there are examples of effective compensation schemes to be found in international environmental law. These could be adapted to other areas of activity carrying serious pollution risks. If regulation by home states is preferred, the OECD Bribery Convention provides an example of a highly effective framework. Under this regime, states are given some flexibility in how they regulate companies, but are subject to strong peer review procedures to ensure their overall regulatory commitments are met. If the objective is to share the regulatory burdens between different groups of states, there are several examples in international environmental law of how this might be done. The Basel and Rotterdam Prior Informed Consent Conventions, for example, are both designed to help protect human health on an international scale by making sure that host states that import industrial hazards do so with knowledge of the risks. The World Health Organisation’s Convention on Tobacco Control provides a further example of a framework for international co-operation on a specific health problem.Of course, none of these examples suggests a single solution. But, taken together, they do provide an indication of the regulatory tactics most likely to work. The important thing is to be aware that precedents in international corporate social responsibility regulation do exist, and to learn from them.Jennifer Zerk is a former City lawyer, now a writer, researcher and business consultant specialising in the legal aspects of corporate social responsibility. Her book, “Multinationals and Corporate Social Responsibility: Limitations and Opportunities in International Law”, is published by Cambridge University

Press.jennifer.zerk@csrvision.co.ukwww.cambridge.org/law/zerk

Common misconceptions about international law and corporate social responsibility: the pessimistsInternational law is a primitive legal systemWrong. This comment is usually made because of the lack of a single legislature, and the lack of systematic enforcement mechanisms. Actually, international law is no less advanced than many other legal systems, and much of its machinery is highly sophisticated. Where it does differ from most other legal systems, however, is in its non-hierarchical structure and consensus-based approach. This is necessary because of the principle of sovereign equality, fundamental in international law, which says that no one state has the right to impose its will on another. The result is that states are both the lawmakers, and the main subjects of the law.International law does not really apply to companiesWrong. Like any other system of law, different parts of the law apply to different actors, depending on the context. Usually states will take on the responsibility for ensuring that an international law requirement (compliance with human rights law, for instance) is observed. However, some international law obligations have “direct effect”. Companies must comply with these obligations, regardless of what the applicable national law says. These include obligations not to participate in international law crimes of genocide, war crimes or slavery (including forced labour). It is always open to states to create further obligations for companies with “direct effect”.International law is too vague and abstract to be much use to corporate social responsibilityWrong. Like other areas of law, the overriding principles can be vague and abstract. And even the most experienced lawyers can struggle to say what they mean in practice. But it is always open to states to negotiate international agreements and other documents to explain how these principles will apply to practical situations, and how they propose to regulate them. There are already a number of treaties in effect that seek to regulate corporate responsibility-type issues: marine pollution, tobacco marketing, child labour and bribery just to name a few.International law cannot be enforced anywayWrong. Sure, there is a lack of enforcement mechanisms at international level at present, especially in relation to human rights. A number of regional human rights regimes provide for the possibility of individual complaints, but it is fair to say that enforcement is patchy. The need for better enforcement and compensation regimes could be addressed by further international agreements, given enough political will. Alternatively, states could be made responsible for enforcement of obligations, and their performance subject to regular monitoring (as is the case under the OECD Bribery Convention). In the meantime, some victims groups have been making claims against multinationals under national laws, notably the US Alien Tort Claims Act (see separate box).Common misconceptions about international law and corporate social responsibility: the cynicsInternational law is rigged in favour of the richer states…There is some truth in this. Only a tiny group of countries have been given the right under the UN charter to impose sanctions (military or economic) on another country, for example. But, by and large, international law is based on consent. Except for a few fundamental rules, no state is bound by an obligation unless it has consented to it.… that only obey it when it suits them Again, there is some truth in this. Unfortunately, legal subjects – whether companies, individuals or states – do not obey all their legal obligations all of the time. This is a problem every legal system must deal with. Enforcement machinery in international law is particularly lacking. But despite this, compliance with international law is actually greater than the headlines suggest. And states can and do develop more detailed supervisory mechanisms to deal with specific problems, from bribery to transboundary pollution, which can work well. Of course, flagrant breaches do occur and it is natural to become frustrated by this. But at least international law provides, in these cases, a principled legal framework to articulate why a state is wrong, and what the solution might be.International law is thus easily abused to subjugate weaker states and/or to preserve the status quoYes, up to a point. And the vagueness of some international rules can make them prone to manipulation for political purposes. On the other hand, international commissions and treaty bodies can provide forums for states that would not otherwise have a voice. And there have been cases where poorer states have grouped together to drive through legal reforms favourable to them. International law cannot resolve all imbalances in power we see today. But it does provide a set of tools and arguments to help frame the issues and work towards a solution.International law seeks to impose minimum standards on companies…This has been tried in the past, under the UN Draft Code of Conduct, for example. The UN human rights Norms project was another attempt to lay down some standards for multinationals on human rights. While these standards may help shape social expectations, they cannot become part of a company’s positive obligations under international law without the consent of states. On the other hand, it is always open to states to incorporate these standards as part of their national law.…which is an unreasonable encroachment on the independence of states…Host states are understandably worried about regulation from abroad, especially where this may undermine areas of “comparative advantage”. But international law contains rules designed to ensure that, in regulating multinationals, home states do not overstep the mark.… especially developing states, which have the right to determine their own regulatory policies, as they see fitWrong, insofar as standards relate to recognised human rights. All states have a legal obligation to protect human rights within their territories. And all other states have – in theory at least – a legal interest in making sure this happens. Host states have every right to complain about regulatory initiatives from other countries that interfere unreasonably with their domestic policies. But international law supports genuine attempts by home states to regulate the human rights performance of companies abroad, provided this is done sensitively and in accordance with the jurisdictional rules and, ideally, in consultation with other states.Common misconceptions about international law and corporate social responsibility: the optimistsInternational law helps fill in the regulatory gaps, when national governments let us downNot really. Of course, when a state is in breach of its obligations, this gives rise to legal consequences. But only states can bring those obligations into effect in the first place. This is done in two ways: by treaty, or by way of “custom”. If a state signs a treaty, then the legal position is straightforward enough. But proving a “customary” principle is extremely difficult. If states are, by and large, not doing something then the chances are that they are not required to. In these circumstances, international law cannot help.If we could just change international law, states would be obliged to reform their laws and regulate multinationals properlyTrue. NGOs, individuals and companies can all contribute the development of international law. But it is only states that have the final say. They may show their consent to a new rule by their behaviour (“custom”) or they may sign a treaty. In either case, they are only obliged to do what they have agreed to.Multinationals are already subject to a broad range of human rights obligations under international law, by virtue of being powerful international actors …It is true that companies are subject to human rights obligations, but this is largely at the national law level. In order to meet their human rights obligations states must make sure that their laws support human rights. This includes regulating companies in such a way that human rights are not infringed. If an abuse has occurred, states are obliged to provide some kind of remedy. In these circumstances, the company is answerable at a national level and the state is answerable at international level. It is certainly true that multinationals can and do have enormous human rights impacts. But these impacts are not regulated directly by international law as yet, except where international crimes are involved.… that can be enforced in national courtsNot exactly. The term “human rights litigation” is perhaps a little misleading. Although they may well be victims of human rights abuse, claimants usually have to show that they have a cause of action in tort (a national law remedy) to be successful. In most cases this is not too difficult though, as the rights protected by human rights law and tort law tend to overlap. A victim of physical abuse might, for instance, try to claim damages for battery (a “tort”). And massive environmental pollution could potentially be framed in terms of a “nuisance”. But no determination would be made on whether there was, in fact, a human rights violation as well. In the US, serious human rights abuses by companies are potentially actionable as a tort under the Alien Tort Claims Act. However, no case has yet been decided on the merits. Some have settled; most have been dismissed for a variety of reasons.

No hay comentarios.:

AddThis

Share |