Human Rights Obligations of Corporations

Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world” [1]

Summary

Summary

Introduction

I. – Human rights obligations of corporations

I.A. – Human rights obligations of corporations: national legislations

I.B. – International legislations: the development of corporation duties

I.B.1. – Initial situation

I.B.2. – Subsequent developments

II. – Corporate human rights responsibility

II.A. – Overview

II.B. – In the national level: the problem in case of transnational violation

II.B.1. – The issue

II.B.2. – The Alien Tort Claims Act

II.C. In the international level: the problem of the States’ responsibility for corporations

II.C.1. – Case of genocide, outrage against humanity and war crime

II.C.2. – The State’s responsibility for corporations: the concept of “due diligence”

III. – From the ineffectiveness to a self-regulation

Main sources

Introduction

Through deduction, writing about relationships between companies and international protection of human rights may surprise. Indeed, on the one hand, rights granted to individuals draw its origins in treaties between States; which, then, according to the international law of treaties, set obligations imposed on them. In relation to multinationals for example, historically, the role of international law has primarily been to define the rights and obligations (especially to provide diplomatic protection) of states with respect to international investment [2] . The international law is thus a “determinedly state-centred system” [3] . On the other hand, despite recent papers on corporate governance, it is generally accepted that companies have to be managed exclusively in the interests of shareholders; which are not always related with the aim of ensuring human rights respect – given, in particular, the fact that “promoting and protecting human rights has financial consequences for companies” [4] .

However, economic and legal literatures highlight the current importance of the debate about the connections between corporations and human rights [5] . Indeed, number of trials in different parts of the globe during the last decade for violation of national and international law involve corporations – particularly multinationals [6] . The case between the oil company Shell and several activists in which the society was convicted of complicity in violation of human rights in Nigeria is a recent one [7] but also interesting as it points out the fact that the issue of liability of corporation (especially multinational) is controversial; particularly the question to which extend corporations have responsibility for the “protection, promotion and realization of human rights” [8] .

Thus, the following paper aim is to approach the general question of the responsibility of corporations on human rights. Namely, we will try to find out if the substantive law allow the implementation of the responsibility of a corporation (whether or not multinational) for breach of national or international law of human rights.

In order to analyze this question, we will divide our paper in three different parts. In the first section, we will check whether international or national law imposed directly human rights obligations on corporations (I). Afterward, we will focus on the liability of this non-state actor (II). Build from the finding that regulating effectively the responsibility of corporation on human rights, the last part attempt to highlight the possibility to integrate human rights protection under the “corporate social responsibility (III).

I. – Human rights obligations of corporations

If the question of whether corporation can jeopardize their human rights responsibility in the national level was once discussed, it now seems complete (I.A.). However, the situation is different at the international stage, having regards to the critical “state-centrism” that reigns (I.B.).

I.A. – Human rights obligations of corporations: national legislations

It is undeniable that companies must meet national standards for protecting human rights as any citizen and, in case of violation, they may be held liable (although controversy persists in case of violation from outside their home state’ “jurisdiction”).

Indeed, studies of comparative public law reveal that a lot of instrument in the national level contains provisions incorporating human rights recognized to every citizen. While in most legal systems, they are provided directly in constitutions (e.g. in Belgium [9] , Germany [10] , Italy [11] , Spain [12] , United States [13] ), in others, particularly in the United Kingdom [14] , several texts include human rights and fundamental freedoms. In all of these instruments, convey the idea that all human beings are born free and equal in dignity and rights; these ones have to be ensured without discrimination [15] .

However, only few texts specify the holders of the bonds in this framework [16] . But, many authors support the fact that “freedoms and rights may not be exercised and realised without corresponding responsibilities and obligations: human beings are not only born free and equal in dignity and rights but are also endowed with reason and conscience and should act towards one another in a spirit of brotherhood” [17] . Rights recognized by those instruments therefore correspond to obligations that are mandatory for everyone – including corporations.

If this logic now seems to be obvious (at least at national level), some authors, based on a historical approach to the protection of civil liberties, consider that human rights are created to protect people against States’ abuse [18] . This argument should be rejected because of many main reasons.

First of all, the reference to the state and its institutions as primary bearers of responsibility doesn’t mean that other actors have no obligations [19] . Afterwards, the plea is inconsistent with the idea that human rights are universal and benefit all human beings. If human rights should only be respected by the State, a discrimination between those whose rights have been violated by the state (who will, then, jeopardize his responsibility) and the others who have suffered a harm due to a breach perpetrated by non-state actors risk to emerge. Finally, some of legislations protecting human rights, especially those which protect labour law rights, would lose much of their effectiveness if it was assumed that corporations could not have obligations.

I.B. – International legislations: the development of corporation duties

I.B.1. – Initial situation

The last decades, corporations have been at the forefront of fundamental changes in domestic and international environments [20] . Indeed, “the privatization and deregulation of economies and liberalization of trade have diminished the state’s influence on daily economic lives of its people (…). In this context, the activities of corporations have often served as the catalyst for human rights violations by or involving corporations” [21] . However, most authors highlight the fact that international law is behind when it comes to impose obligations directly on non-state actors, including corporations [22] . Indeed, to date, very few of them have direct human rights obligations under international law [23] .

Regarding multinational corporations, this lack can be, in part, explained by two reasons (although we will see later that these have changed – especially the second one). The first one is political. Indeed, most of host states have the main goal to attract foreign investment (and thus corporations) by adjusting their domestic laws (including those which protect human rights). In this context, it is then tough to imagine obligations that will be imposed on multinationals. On the other hand, for these corporations, “the relationship with the citizenry became a matter of getting the best terms out of the employment contract. The citizenry’s human rights were the government’s responsibility, not theirs” [24] .

Nevertheless, the major reason of the absence of reaction from international law draws its origins in the much criticized “state-centrism” which seems to prevail in the international legal order [25] . Indeed, some authors insist on the fact that “private persons cannot, in general, be liable under international law because the state is a “screen” between them and international law” [26] . In the same line of thinking, some others point out that “only states are full subjects of international law because only they can enjoy the full range of legal rights and duties and make claims for violation of rights” [27] . Individuals and other legal entities recognised at domestic law, such as companies, are only “objects” on international law; thus, international law is not thought to be directly applicable to them [28] . However, few developments in international law seem to contradict these considerations as we will present it in the next point (B.2.).

I.B.2. – Subsequent developments

Many points come to nuance the idea that companies shouldn’t have international human rights duties.

First of all, the idea that companies, particularly multinationals, cannot have these types of obligations due on the fact they are not “subject of international law” has been strongly criticized in the judicial literature. Indeed, on the one hand, according to some authors, “the attribution of international legal personality is functional, and is influenced by the area of regulation (…), and the aims and needs of the international community overall” [29] . Thus, although few questions stayed unanswered (especially, regarding the definition of the concept of “multinational”), it is quite obvious that companies own rights under the international law and, correspondingly, are subject to some obligations [30] .

The reasoning used by these authors presents similarities with the argument which was highlight earlier when we spoke about human rights obligations that could have corporations at the national level. Indeed, the background is exactly the same and, in reality, roots its origins in the preamble to the Universal Declaration of Human Rights of the United Nations General Assembly in 1948 – which indicates that “every individual and every organ of society, keeping this Declaration constantly in mind, shall strive by teaching and education to promote respect for these rights and freedoms and by progressive measures, national and international, to secure their universal and effective recognition and observance”. Thus, this provision is relevant given it points out the fact that everyone has human rights obligations – states, international organization, individuals, corporations… However, this justification can be questioned. Indeed, given the fact that UDHR was created in the aftermath of World War II “by governments to hold each other to account” [31] , it is not certain that the drafters had corporations in mind [32] .

Besides this, legal literature seems to have found stronger arguments to justify human rights obligations for corporations. In this context, the notion of “power must be balanced by responsibilities” has been presented [33] . Indeed, it’s without any doubt that corporations affect quotidian lives of people around the world [34] – especially the enjoyment of their human rights [35] . But, as they benefit from important rights under the international law (e.g. the E.C.H.R.), it is quite normal that they should also be subject to some obligations [36] . Nevertheless, it could be dangerous to suggest that “all the obligations of governments can simply be transposed onto companies” [37] because states and companies perform different roles in society [38] .

Anyway, it seems that emerges the idea that corporations have human rights law obligations under the international law. Nevertheless, this can’t be surprising. In contrary, it is implicitly confirmed by numerous treaties. Indeed, States concluded various types of conventions under the international law, which probably didn’t seek to approach the question of responsibility of corporations, but, indirectly, leaded up to a similar situation [39] . The general reasoning behind these kinds of treaties is that “state responsibility, even under a strict liability regime, may not work to provide appropriate reparation for the harm done” [40] .

The development of international environment law and polluter responsibility is very interesting thereupon. Indeed, in general, in environment law, the polluter pays principle makes the party to which an act of pollution is attributed responsible for paying for the damage done to the natural environment [41] . This principle has been made operational by States through several agreements [42] – which, thus, impose “an international standard of liability on the corporation” [43] . Beyond this example, it is relevant to notice that, since the establishment of the European Union, treaties have imposed many obligations on companies especially in relation with competition law [44] .

All previous considerations demonstrate thus the emergence of a desire to impose certain obligations directly on companies. However, the implementation of their responsibility, especially when it comes to multinational companies, faces a lot of obstacles which will be presented in the following lines (II).

II. – Corporate human rights responsibility

II.A. – Overview

Any act of man that causes damage to another obliges the person by whose fault it happened to repair it [45] . This principle, found in most contemporary national legislation [46] , can be applied in cases of a violation, by corporations, of their human rights obligations [47] (II.B). However, the question of whether a corporation can incur responsibility beyond the national level is controversial and is, at the moment, compensated by the systematic implementation of the State’s responsibility (II.C.).

II.B. – In the national level: the problem in case of transnational violation

II.B.1. – The issue

The question of whether a corporation will jeopardize his responsibility in case of violation of national and international [48] human rights obligations, assuming that they exist, seems a priori pretty obvious if we take the national level. However, things are more complicated when the violation is committed outside of the home state of the corporation. This can occur for example when a company, duly incorporated in the territory of the United States, creates various branches on the territory of other States and commits a violation of national or international human rights obligations under the activities of one of them. This can also be the case when a company, validly created in Belgium and whose registered office (siege social)is located in Belgium (mainly its Board of Directors), develops activities in the territory of another country and violates, in that State, human rights. To approach the entire question in what follows is absolutely impossible; thus, we will focus only on one of its aspects: the situation of the victim.

In theory, the latter can sue the corporation whether before courts of the company home country; whether before courts of his home country (the host country of the corporation). It would however be unrealistic to believe that the victim has actually a choice. Indeed, when we look at few concrete cases, it’s easy to noticed that, given the political or/and economical situation of his home country, the victim is obliged to sue the corporation before the origin State of the latter.

Anyway, few States, especially in the United States [49] , has incorporate in their legal order few mechanisms which give jurisdiction in case of violation of a treaty (including international human rights treaties) by a foreigner (e.g. a multinational). We will analyze in the following lines the “largest body of domestic law on the subject” [50]

II.B.2. – The Alien Tort Claims Act

The Alien Tort Claims Act “confers upon the Federal District Courts original jurisdiction over any civil action by an alien for a tort only, committed in violation of the law of nations” [51] . Although its origin is still a bit misty, the provision is very often applied today to convict numbers of multinationals who have violated human rights outside of the United States territory. The primary purpose of this legislation was, on the one hand, to prevent foreigners from becoming victims of a miscarriage of justice and, on the other hand, to obviate any situation of tension or even international crisis [52] .

To apply this statute, two important conditions are required. Indeed, the defender must have violated law of Nations or a treaty which was ratified by United States (1) and have to be present within their jurisdiction (2). Regarding in particular multinationals, they don’t have to be incorporated in the United States. It is sufficient if they were welcomed (permanently or temporarily) in the United States or possess a secondary branch on its behalf in the United States or finally “doing business” on U.S. soil [53] .

This statute has been extended by federal courts by subsequent judgements in many cases. First of all, in Filartiga v. Pena-Irala, the court held that, on the one hand, the ATCA established federal jurisdiction over acts of official torture and, on the other hand, law of nations not only as including the offenses in existence when Congress enacted the ATCA, but also as including international torts currently recognized by the international community [54] . However, that case raised the question of whether the defendant must have committed a violation under the control of the state on which the violation was committed. In the judgment Doe I. V. Unocal Corp., the California Court of Appeal decided that a non-state actor, such as a corporation, could be held liable. However, its complicity in the State’s action must be proved [55] .

The ATCA seems to be an original instrument which is dedicated to an interesting development. However, it is totally irrelevant if the multinational doesn’t have a territorial link with the United States. In addition, given the Doe I… case, it will be impossible to sue a corporation for violation of international human rights law which was accomplished without a State’s intervention.

II.C. In the international level: the problem of the States’ responsibility for corporations

In case of a transnational violation of human rights, we noticed that it’s quite impossible to assign the corporation before the court of a specific State – although there are few mechanisms tending to regulate the issue.

II.C.1. – Case of genocide, outrage against humanity and war crime

If the violation constitutes genocide, outrage against humanity or war crime, a priori, the International Criminal Court should be competent to deal the case. However, there are two different obstacles. On the one hand, ICC has jurisdictions in only three alternatives conditions have to be respected [56] . Or, the accused is a national of a State party to the statute or accepting the jurisdiction of the ICC in this case; or, the crime was committed on the territory of a State party or accepting the jurisdiction of the ICC in this case; or, the Security Council appealed to the Prosecutor under Chapter VII of the United Nations Charter [57] . On the other hand, according to few authors, the Statute of the International Criminal Court permits the prosecution of individuals but not of legal persons such as companies [58] .

Although this situation is confirmed by the ICC’s case law, regarding the gradual evolution of thought regarding the criminal responsibility of corporations in comparative criminal law, nothing can be said with certainty that “departure from precedent” is inevitable on the issue. Furthermore, the fact that the ICC is not competent to deal the case doesn’t imply the company would never be criminally prosecuted in courts of a State [59] .

There remains the hypothesis of a multinational’s violation of human rights but which are not simultaneously a criminal offense. In this case, given the difficulty of being able to have effective action against the company, the victim will tend to engage the responsibility of a State.

II.C.2. – The State’s responsibility for corporations: the concept of “due diligence”

In principle, each State “is obliged to take steps to protect against human rights violations by private actors operating under or within its jurisdiction” [60] . In this context, in its judgment, the Inter-American Court of Human Rights declared that “an illegal act which violates human rights and which is initially not directly attributable to a State (from example, because it is the act of a private person) can lead to international responsibility of the State (…) because of the lack of due diligence to prevent the violation or to respond to it” [61] . This reasoning is also followed by the European Court on Human Rights [62] . It is therefore permitted, subject to conditions, to assign a State before an international court even if the violation has been committed by an individual (horizontal application of human rights).

However, this method is no more effective than those presented before. Besides the fact that the proceedings before the European Court of Human Rights takes a long time, it is illusory to think that all states have the capacity to regulate companies effectively for economical and political reasons – in particular regarding developing countries because of their dependence on foreign investment on the one hand, and, on the other hand, the lack of technical and financial resources to monitor and enforce standards effectively [63] .

III. – From the ineffectiveness to a self-regulation

Given the lack of substantive law to regulate effectively and completely the issue of corporate responsibility on human rights, various non-binding instruments have been adopted in order to “serve as a point of departure for enforcing human rights obligations of corporations” [64] . Among them, the Organization for Economic Cooperation and Development’s Guidelines for Multinational Enterprises are the only global corporate responsibility instrument that has been formally adopted by states [65] and the majority of corporations are covered with the OECD Guidelines. However, the Guidelines constitute a “legal document, which includes only a non-binding collection of principles and standards for responsible business conduct consistent with applicable laws” [66] . Nevertheless, the convention contains procedures which were created in order to ensure compliance with for guidelines [67] . This testifies adhering countries’ expectations for multinationals enterprise’s behavior.

More generally, legal and economic literature points out the fact that more and more companies, convinced that respecting human rights constitutes a long-term benefit, developed a policy to ensure within the company the respect of human rights. Proof is some corporations express their commitments to observe human rights and related standards [68] . In fact, this evolution is not surprising. Indeed, over the past few years, leading companies have strategies designed to help them become more “social responsible” [69] . The establishment of a policy to protect human rights is within this framework. This marks a willingness of corporations (especially multinationals) to self-regulate.

If the question of liability of multinationals stays bitterly debated, the willingness of companies to respect human rights seems to emerge, including the implementation by the corporation itself of mechanisms to protect human rights (self-regulation). However, this should not put in the s