Accountability, International Business Operations and the Law

Providing Justice for Corporate Human Rights Violations in Global Value Chains

Liesbeth Enneking, Ivo Giesen, Anne-Jetske Schaap, Cedric Ryngaert, Francois Kristen, Lucas Roorda

• Publisher: Routledge
• Year: 2019
• ISBN:
  9781351127141
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

A consensus has emerged that corporations have societal and environmental responsibilities when operating transnationally. However, how exactly corporations can be held legally accountable for their transgressions, if at all, is less clear.

This volume inquires how regulatory tools stemming from international law, public law, and private law may or may not be used for transnational corporate accountability purposes. Attention is devoted to applicable standards of liability, institutional and jurisdictional issues, and practical challenges, with a focus on ways to improve the existing legal status quo. In addition, there is consideration of the extent to which non-legal regulatory instruments may complement or provide more viable alternatives to these legal mechanisms. The book combines legaldoctrinal approaches with comparative, interdisciplinary, and policy insights with the dual aim of furthering the legal scholarly debate on these issues and enabling higher quality decision-making by policymakers seeking to implement regulatory measures that enhance corporate accountability in this context. Through its study of contemporary developments in legislation and case law, it provides a timely and important contribution to the scholarly and sociopolitical debate in the fastevolving field of international corporate social responsibility and accountability.

Part 1
General perspectives

1
Introduction

Ivo Giesen, Liesbeth Enneking, François Kristen, Lucas Roorda, Cedric Ryngaert, and Anne-Jetske Schaap

1.1 Introduction

Sneakers, fuel, coffee, smartphones. Many of (the commodities for) our daily products are being produced abroad. Sometimes this takes place under conditions that would be considered unacceptable in the countries where the products involved are put on the market. This raises not only ethical and political questions, but also legal ones. Most of these currently revolve around the legal responsibilities of the companies involved with respect to the detrimental human rights or environmental impacts of business activities in their global value chains. What is the scope of the social responsibility of Western society-based internationally operating business enterprises that have their products manufactured in developing host countries, often at low cost, and put them on the market here? Are they under an obligation to prevent their own activities, or those of their local subsidiaries or suppliers, from having an adverse impact on the human rights of local employees, neighbors, or communities, or on the local environment? And if such adverse impacts do occur, under what circumstances can these internationally operating business enterprises be held liable for this before courts in their Western society home States?¹

The adverse effects of transnational corporations’ business activities, especially on human rights – including labor rights – and the environment in the host country of investment, have been well documented. A consensus has emerged that corporations have societal and environmental responsibilities when operating transnationally. A key development in this respect has been the appointment in 2005 of Prof John Ruggie as Special Representative to the UN Secretary-General on human rights and transnational corporations and other business enterprises.² This resulted in the publication of the “Protect, Respect and Remedy” Policy Framework on Business & Human Rights (hereinafter, Policy Framework) in 2008.³ This policy framework was further operationalized in the 2011 UNGPs.⁴ The UNGPs were unanimously endorsed by the UNHRC⁵ and have received support from a broad range of stakeholders, including States, international organizations, NGOs, unions, branch organizations, and individual business enterprises.⁶

Together, these two documents constitute an authoritative international soft law instrument, which propagates the message that both States and business enterprises have a role to play in the prevention and remedy of business-related human rights abuse. The Policy Framework rests on three pillars: 1) the State duty to protect against business-related human rights abuse; 2) the corporate responsibility to prevent, mitigate and/or redress the negative effects of operations pursued by or for them on third parties’ human rights; and 3) the need for an effective remedy for victims of business-related human rights abuse. The UNGPs contain standards of conduct for States and business enterprises with regard to what is expected of them in each of the three pillars when it comes to the prevention and remediation of business-related human rights abuse. Even though the documents in themselves are non-binding, their wide acceptance justifies the conclusion that a certain degree of international consensus exists on the standards of conduct laid down therein. Moreover, their subsequent uptake in other international and national legal instruments relating to international responsible business conduct (IRBC), some of which are of a more binding nature, has ensured that they are of great significance not only from a normative but also from a legal perspective.⁷

One of the key points of the UNGPs is that business enterprises have an independent responsibility to check whether their operations entail the risk of human rights abuse, to prevent or mitigate these risks as far as possible, and to remedy possible adverse impacts. This responsibility to respect applies regardless of the location of these operations and regardless of the local legal context. It may also include possible adverse human rights impacts that are directly linked to the business enterprise’s operations, products, or services through its business relationships. The UNGPs stipulate that business enterprises should have policy measures and procedures in place that are appropriate to their size and operational context in order to meet their responsibility to respect. These include, in any case: 1) a policy commitment as regards their responsibility to respect human rights; 2) a human rights due diligence procedure; 3) procedures to remedy any adverse human rights impacts the business operations caused or to which they contributed. The due diligence procedure is first of all meant to identify, prevent, and restrict, as well as – where necessary – to remedy the adverse effects of the business operations on third parties’ human rights. In addition, it should address the public accountability of business enterprises as regards the policies they pursue to restrict adverse human rights effects.⁸

Still, how exactly corporations can be held legally accountable for their transgressions, if at all, remains less clear.⁹ The present volume inquires how several distinct regulatory tools stemming from public international law, domestic public law, and/or domestic private law may or may not be used for transnational corporate accountability purposes. Attention is devoted to applicable standards of liability (tort law), institutional, and jurisdictional issues, as well as practical challenges, with a focus on ways to improve the existing legal status quo. In addition, there is consideration of the extent to which non-legal regulatory instruments may complement or provide (perhaps more viable) alternatives to these legal mechanisms. This volume emerges from some of the papers that were presented at an international conference on Accountability and International Business Operations, organized at Utrecht University (the Netherlands) on 18–20 May 2017.¹⁰

1.2 State of the art in the field

The state-of-the-art in the field that this conference and volume departs from can be categorized, in broad terms, as follows. Evidently, the field of business and human rights has seen an increase of academic publications in the last few years, especially after the adoption of the UNGPs put the question on the map of international law. But, at the same time, it is also still very much a field in the early stages of development, if compared to other fields of study. Early publications, such as those of Muchlinski,¹¹ Joseph,¹² and Zerk,¹³ focused on the challenge of regulating business actors generally through international law. These have been followed by more recent general volumes following the renewed interest in the topic,¹⁴ as well as a range of contemporary titles addressing more specific issues such as access to remedies for indigenous peoples,¹⁵ substantive obligations for businesses,¹⁶ prosecution of corporations for genocide,¹⁷ and the upcoming treaty on business and human rights.¹⁸ Most of these contributions, however, focus on issues that concern the adjustment of business behavior toward more human rights-friendly operations and/or focus on the international law dimension of the topic. The current volume, by contrast, aims to contribute to the discussion by focusing on accountability and liability questions that permeate different fields of law, as well as different national legal systems, as will be further explained.

From the more recent literature, only three volumes deal with accountability more conceptually.¹⁹ This book differs from these publications in various respects. Whereas Bernaz takes a more historical perspective and mainly addresses the issue from an international law and policy perspective, this volume tackles more contemporary legal barriers to accountability and liability, and covers both international and domestic trends in doing so. It differs from erni and Van Ho’s book in that it is more specifically geared toward ex post accountability questions, whereas erni and Van Ho include contributions that address wider issues such as ex ante responsibilities of businesses.²⁰ Furthermore, whereas Khoury and White take a more historical and political economy-oriented approach to the topic, the current volume draws heavily on more recent developments in a very rapidly moving field, including recent legislative initiatives relating to business and human rights issues at the domestic level.

1.3 Goals and ambitions of this volume

As was the case for the conference on Accountability and International Business Operations that was mentioned in section 1.1, this volume seeks to combine legal-doctrinal approaches with comparative, interdisciplinary, and policy insights. It does so in order to attain a dual goal:

• (1) To further the legal scholarly debate on these issues, and
• (2) To enable higher-quality decision-making by policymakers seeking to implement regulatory measures that enhance corporate accountability.

The common denominator of all chapters in this volume is to provide a timely and important contribution to the scholarly and sociopolitical debate in the field of international CSR and accountability. The papers, taken together, inquire what legal mechanisms could be relied on to create accountability for corporate abuses of public goods and values, and to do so, they bring together (legal) scholars from various backgrounds, in particular from the fields of private law, public law, and international law.

More specifically, this volume, through the different chapters therein, has several ambitions. It sets forth to:

• (1) Examine the possibilities to hold transnational corporations (or, more broadly, internationally operating business enterprises) to account under existing legal regimes, and to do so from a multi-disciplinary (international law, public law, private law) multi-level (international, domestic, corporate) and multi-State (comparative) perspective;
• (2) Uncover the ways in which mechanisms from different disciplines, levels and States may interact with and/or complement one another;
• (3) Adopt a holistic approach as regards corporate violations of standards relating to human rights or the environment that enables cross-learning from issues in these fields;
• (4) Provide an assessment of the legal significance and sociopolitical impact of the latest developments in legislation and case law relating to corporate accountability for violations of human rights and environmental standards;
• (5) Highlight how the workings of the law may potentially have major transformative effects on the conduct of transnational corporations; and finally,
• (6) Investigate the feasibility of legal reform in those areas where existing law does not offer adequate accountability mechanisms.

This last endeavor is undertaken with a focus on the identification of:

• (a) The application in new ways of existing accountability mechanisms by legal practitioners (e.g., courts and other law-applying agencies, attorneys, legal counsel, NGOs), and
• (b) The introduction of new accountability mechanisms by policymakers seeking to implement regulatory measures aimed at enhancing corporate accountability.

Whether all these ambitions are (or maybe, can) in fact realized will be analyzed in the concluding chapter of this volume (Chapter 14), as will be explained later in the text.

1.4 Set-up of this volume

In order to reach the goals set out in section 1.3, this volume is separated into five parts: a general part that offers overarching views on the topic (Part 1), followed by three discipline-specific parts (Parts 2, 3, and 4, respectively) that correspond to the three legal fields that are most relevant to legal accountability in the context of international CSR (i.e., international law, [domestic] public law, and [domestic] private law), and a concluding section (Part 5) with a discussion of the most viable ways forward when it comes to holding international busi...

Table of contents

• Cover
• Half Title
• Series Page
• Title
• Copyright
• Contents
• List of tables
• List of commonly used acronyms
• Biographies of authors and editors
• PART 1 General perspectives
• PART 2 Accountability through international law mechanisms
• PART 3 Accountability through domestic public law mechanisms
• PART 4 Accountability through domestic private law mechanisms
• PART 5 Conclusion
• Index