Human Rights and Business : A Policy-Oriented Perspective [1 ed.] 9789004279872, 9789004279865

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Human Rights and Business

Studies in Intercultural Human Rights Editor-in-Chief Siegfried Wiessner St. Thomas University Board of Editors W. Michael Reisman (Yale University) Mahnoush H. Arsanjani (United Nations) Nora Demleitner (Hofstra University) Christof Heyns (University of Pretoria) Eckart Klein (University of Potsdam) Kalliopi Koufa (University of Thessaloniki) Makau Mutua (State University of New York at Buffalo) Martin Nettesheim (University of Tübingen; University of California at Berkeley) Thomas Oppermann (University 0f Tübingen) Roza Pati (St. Thomas University) Herbert Petzold (Former Registrar, European Court of Human Rights) Martin Scheinin (European University Institute, Florence)

VOLUME 6 This series offers pathbreaking studies in the dynamic field of intercultural human rights. Its primary aim is to publish volumes which offer interdisciplinary analysis of global societal problems, review past legal responses, and develop solutions which maximize access by all to the realization of universal human aspirations. Other original studies in the field of human rights are also considered for inclusion. The titles published in this series are listed at brill.com/sihr



Human Rights and Business A Policy-Oriented Perspective By

Denise Wallace

LEIDEN | BOSTON

Library of Congress Cataloging-in-Publication Data Wallace, Denise, author. Human rights and business : a policy-oriented perspective / By Denise Wallace.    pages cm. -- (Studies in intercultural human rights ; 6)  Includes bibliographical references and index. ISBN 978-90-04-27986-5 (hardback : alk. paper) 1. Human rights. 2. International business enterprises--Moral and ethical aspects. 3. Liability for human rights violations. 4. Social responsibility of business. I. Title. K3240.W3487 2014 341.4’8--dc23

2014036578

This publication has been typeset in the multilingual “Brill” typeface. With over 5,100 characters covering Latin, IPA, Greek, and Cyrillic, this typeface is especially suitable for use in the humanities. For more information, please see www.brill.com/brill-typeface. ISSN 1876-9861 ISBN 978-90-04-27986-5 (hardback) ISBN 978-90-04-27987-2 (e-book) Copyright 2015 by Koninklijke Brill NV, Leiden, The Netherlands. Koninklijke Brill nv incorporates the imprints Brill, Brill Nijhoff and Hotei Publishing. All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission from the publisher. Authorization to photocopy items for internal or personal use is granted by Koninklijke Brill NV provided that the appropriate fees are paid directly to The Copyright Clearance Center, 222 Rosewood Drive, Suite 910, Danvers, MA 01923, USA. Fees are subject to change. This book is printed on acid-free paper.

The highest calling of all of is to enhance human dignity in appropriate systems of public order. For those in the next generation who share this goal, Lasswell and I hope that our work may prove useful in providing principles of content and procedure and the tools for implementing them.*

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* Myres S. McDougal, as quoted by W. Michael Reisman in Theory About Law: Jurisprudence for a Free Society, 108 Yale J. Int’l L. 935, 937 (1999).

Contents Acknowledgments xi Abbreviations XIV 1 The New Haven School and the Human Rights and Business Debate 1 I Why the New Haven School? 4 A What is Law? 12 B Criticisms of the New Haven School 15 II The Challenges in Applying the New Haven School to the Human Rights and Business Debate 22 III What is International Law? 27 IV Conclusion 32 2 Delimitation of the Problem 34 I Tools of the Trade 34 A Clarification of Observational Standpoint 36 B The Observational Standpoints of Key Decision Makers (Problem Solvers) in the Human Rights and Business Debate 41 II Delimitation of the Problem under a Policy-Oriented Jurisprudence Analysis 44 III Geopolitical Drivers in the Human Rights and Business Debate 57 A Transnational Corporations: Searching for New Markets – A Geopolitical Strategy 57 B The Politics of Lebensraum and the Emergence of Transnational Corporations 68 IV A Historical Overview of Corporations 74 A Judicial Activism Eviscerates Constitutional Law: The Santa Clara Decision 84 V The Business of Business: Corporate Social Responsibility and Human Rights 90 A Corporate Social Responsibility (csr): Definitions 114 B Arguments for and against csr 132 3 Identifying the Participants in the Human Rights and Business Debate 158 I Who Are the Participants? 161 A Categorizing the Participants 162

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B

The Westphalian Nation-State: Has It Outlived Its Purpose? 166 C The Role of Corporations in the International Legal Order 185 II The Participants’ Competing and Conflicting Claims 190 A Claims of Individuals, Indigenous Peoples and Other Vulnerable Groups 192 B Claims of Transnational Corporations 193 C Claims of Nation-States 194 D Claims of Nongovernmental Organizations and Civil Society 194 E Claims of Decision Makers 194 F The Participants’ Perspectives on International Legal Personality 195 G Claim that tncs are not Subjects of International Law 199 III Perspectives of the Participants 199 A Perspectives of the Victims: Individuals/Indigenous Peoples and Other Vulnerable Groups 200 B Perspectives of the Perpetrators: tncs 201 C Perspectives of the Nation-State 201 D Perspectives of ngos and Civil Society Organizations 202 E Perspectives of John Ruggie, as the srsg 202 IV Common Assumptions of the Participants 205 V Participants’ Bases of Power 205 Individuals/Indigenous Peoples and Other Vulnerable Groups’ Bases of Power 208 tncs’ Bases of Power 208 Nation-States’ Bases of Power 208 V Strategies and Outcomes 209 4 Past Trends in Decision 215 I Trend Analysis – International 215 A The Anti-Slavery and Abolition Movement 220 B The Nuremberg Trials and the Liability of Corporations 232 II Trend Analysis: United Nations Attempts to Regulate Transnational Corporations 233 A Draft un Code of Conduct 233 B The Global Compact 234 C The un Norms 239

Contents

III Trend Analysis – Intergovernmental Organizations’ Guidance to tncs 277 A The oecd Guidelines 277 B ilo’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy 279 IV Trend Analysis: United States Domestic Law 280 A Alien Tort Claims Act 280 B Torture Victims Protection Act 281 C Foreign Corrupt Practices Act 282 D Comprehensive Anti-Apartheid Act of 1986 282 E Corporate Code of Conduct (United States) 283 V Trend Analysis – Other Nations Laws and Regulations 283 A France’s “New Economic Regulations” Law 283 B Swedish Mandatory Reporting Requirements 283 C Corporate Code of Conduct Bill 2000 (Australia) 284 D United Kingdom Corporate Responsibility Bill and Companies Act 2006 284 E South Africa Company Act 2008 285 VI Trend Analysis – Voluntary Codes of Conduct 285 A The Sullivan Principles 285 B The MacBride Principles 288 C The Slepak Principles 289 D The Miller Principles 289 E The Maquiladora Standards of Conduct 289 F United States Model Business Principles 290 G The Global Reporting Initiative 291 H Ethical Trading Initiative 291 I Fair Labor Association – Workplace Code of Conduct 292 J Accountability 1000 292 K The Extractive Industries Transparency Initiative 293 L Social Accountability 8000 293 M Voluntary Principles on Security and Human Rights 293 N Transparency International 294 O FTSE4Good 294 P International Code of Marketing Breast Milk Substitutes 294 5 Projecting Future Trends 298 I The Future of the Alien Tort Statute 299 II The Future of the Norms and the Guiding Principles 302

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6 Appraisal, Alternatives and Recommendations 305 I Appraisal 305 A Voluntary versus Mandatory Regulations 306 B The Anti-Corporation and Anti-Globalization Movements Fail to Address How to Resolve the Human Rights and Business Debate 308 II Alternatives 322 A International Tribunals 322 B World Court of Human Rights 326 C International Commercial Court 336 D A World Transnational Corporation Regulatory Authority 336 E The Charter Revocation Movement 337 F Code of Corporate Citizenship 341 G Corporate Accountability 345 III Recommendations 350 7 Conclusion 355 Bibliography 369 Subject Index 389

Acknowledgments It is said that people come into your lives for a reason, for a season or for a life time. There have been people who have helped me in the beginning, middle and end of this journey, and I am indebted to them all. Life is a continuous journey of change, which is sometimes imperceptible, sometimes abrupt and life altering. This academic journey has been life altering. My ongoing quest for knowledge as a lawyer and as a member of the world community has allowed me to meet new and different people, to learn new and different things, and to embrace a whole new way of problem solving. The New Haven School or policy-oriented jurisprudence has enabled me to restructure how and what I think about the “law.” Law is not a body of rules that are laid down on parchment and forever fixed. Instead, law is dynamic. It is forever changing, even if that change occurs slowly and seemingly imperceptibly or it crashes upon the shore with the ferocity of a tsunami that irreversibly changes the shoreline. My exposure to the New Haven School as a methodology to solve today’s global problems has changed how I view myself. The New Haven School has challenged me to acknowledge my predispositional orientations by looking into myself. I had to become cognizant that my approach to problem solving is based upon the societal and environmental factors that have shaped me. In pursuing my dissertation, I had to learn a completely new language, one that used terms such as “observational standpoint,” “conflicting claims,” “five intellectual tasks,” “perspectives of the participants,” and the “eight human values or wants.” I had to reduce those eight values into an acronym for easy recall until I could recite them with ease: PAWSEWRR – power, affection, wealth, skill, enlightenment, well-being, rectitude, and respect. I would like to thank two people who have made this book possible and without whom I would not have been able to complete my studies for my LL.M and J.S.D. in Intercultural Human Rights: Professor Siegfried Wiessner and Professor Roza Pati of St. Thomas University Law School, Miami Gardens, Florida. Without their prodding, pushing, and encouraging me to persevere, I would have not concluded this journey. Their simple words, “You can do this,” were said to me at the right times. Their stories of their own personal academic journeys let me know that in spite of the differences in our national heritages, ethnicities, and the challenges presented by our families and professional responsibilities, we had many more similarities that bound us in our quest for a world public order of human dignity than we had differences. Through Professors Wiessner and Pati, I met such wonderful people, who are also

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d­ edicated to making this world a better place and who believe in speaking up for the voiceless, championing the causes of the most vulnerable people in our community (the world community), and righting wrongs by striving to make the law as it should be, even if that means upsetting the status quo. Many thanks to Professor Eckart Klein, who unselfishly gave me his time, wisdom and guidance as my supervisor. His assistance in helping me to expand my knowledge and understanding of international human rights law and international law was invaluable. I would also like to thank Professor John Makdisi who chaired my rigorosum committee. Converting my dissertation into this book was its own separate journey. One that would not have been successful without the unselfish efforts of my dear friend and mentor, Professor Siegfried Wiessner. The countless hours that he spent reading and helping me edit my manuscript in between his work schedule and mine will never be forgotten. To tell him “Thank you” simply cannot convey the depths of my gratitude. Several people assisted me in my research for this book, whether it was by keeping their eyes open for articles and reports or simply gathering the books that I needed in the library. The staff at St. Thomas University Law School Library helped make this book possible by letting me stay on the second floor until the lights were ready to be turned off. My special thanks to my friend and LL.M. and J.S.D. classmate/colleague, Dr. Roy Balleste. We both did it! My thanks also to Haydee Gonzalez, the warm, consummate professional of the Intercultural Human Rights Department, who was always there for me. It is true that law is a jealous mistress and I would like to thank some special people who unselfishly shared me while I pursued my J.S.D. and during the completion of this book. If people are judged by the character of their friends, then I have some special friends. They understood what it meant for me to cut short my visits with them or to see me lug around my books to parties at their houses. Their desire to see to me complete this book speaks volumes about the meaning of friendship. I list them only in alphabetical order so as not to give rise to any speculations as to whose friendship was the most important, because all of them are collectively responsible for me completing this book: Patricia Anderson (Wooten), Maronda Brown, Veda Brown (unrelated to Maronda), James Evans, Jackie Hazel, and Mary Smith. I would not be who I am if it were not for some people who helped form my quest for knowledge. Sometimes people cross our paths and they never know that a word that they may have said, a kind gesture, or that their ability to push you to excel made all the difference. I had a great undergraduate experience at the University of Massachusetts – Amherst. To the friends that I met there and to the faculty at the African American Studies Department who

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c­ hallenged me to think outside of the box, and to question the question and the person asking the question, I thank you all. My special thanks to John Bracey, Johnnetta Cole and Chester Davis. I am because you are. To my unflappable support system – the Wallace family. To my brothers and sisters: Renee and Harvey, you can brag now. I did it! To Annette, Keith, Rhonda and Wendall, thanks for all you do and have done. To my nieces and nephews, who for the past five to six years only knew that I was studying something in the law that they didn’t quite know what it was, but knew that it had something to do with human rights (whatever that meant). To my mother, Dorothy M. Wallace, who deserves her own paragraph. Yes, Momma, this means that I can finally put away all of those boxes of papers in my dining room. Thanks for standing by me! To Daddy, who started it all by exposing me to people from other parts of the world. Finally, to my favorite oldest daughter, Nichelle, and my favorite youngest daughter, Shante’. Just think, now we can finally take a family vacation and I don’t need to bring a suitcase just for my research! To Kendall and Franchesca, I love you both equally. And to L.A.P., who has been there through it all and never once uttered a discouraging word. And to those who believe that a better world is possible, I leave you with these words: Now is the accepted time, not tomorrow, not some more convenient season. It is today that our best work can be done and not some future day or future year. It is today that we fit ourselves for the greater usefulness of tomorrow. Today is the seed time, now are the hours of work, and tomorrow comes the harvest and the playtime.* * W.E.B. Dubois, The Souls of Black Folks.

Abbreviations The following abbreviations are used throughout this dissertation: ats atca biac blihr bsr ca ced cr csr esocos eti eu fcpa fdi fla gri G77 hrc iblf icc icescr iccpr icj icj ictr icty igos ioe ilo ittc mdg mncs ngos nieo oecd

Alien Tort Statute Alien Tort Claims Act Business and Industry Advisory Council Business Leaders Initiative on Human Rights Business for Social Responsibility Corporate Accountability Committee for Economic Development Corporate Responsibility Corporate Social Responsibility Economic and Social Council Ethical Trading Initiatives European Union Foreign Corrupt Practices Ace Foreign Direct Investments Fair Labor Standards Global Reporting Initiative Group of 77 Human Rights Council International Business Leaders Forum International Criminal Court International Convention on Economic, Social and Cultural Rights International Convention on Civil and Political Rights International Court of Justice International Commission of Jurists International Criminal Tribunal for Rwanda International Criminal Tribunal for the former Yugoslavia International Governmental Organizations International Organization of Employers International Labour Organization International Indian Treaty Council Millennium Development Goals Multinational Corporations Nongovernmental Organizations New International Economic Order Organization for Economic Cooperation and Development

Abbreviations sme srsg tncs tnes tvpa udhr un unced unctad uk unhrc unrisd u.s. uscib voc wbcsd wchr

Small Medium-size Enterprises Special Representative to the Secretary General Transnational Corporations Transnational Enterprises Torture Victims Protection Act Universal Declaration of Human Rights United Nations United Nations Conference on Economic Development United Nations Conference on Trade and Development United Kingdom United Nations Human Rights Council United Nations Research Institute for Social Development United States United States Council for International Business Verenigde Oostindische Compagnie World Business Council for Sustainable Development World Court of Human Rights

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The New Haven School and the Human Rights and Business Debate The life of the law is struggle, a struggle of nations, state power, classes, interest groups, and individuals. All law is the result of strife; every important rule had to be wrested from those who opposed it, and it remains alive only as long as those who supported it stand ready to defend it. Law is not an abstract idea, but a living force.1 Today’s struggle to fashion a remedy for victims of corporate human rights abuses is not a novel endeavor. Attempts to do so are recorded in the annals of history against the backdrop of domestic and international commercial ventures that have traversed the oceans, mountain corridors, and desert sands as merchants searched for aromatic and preserving spices, rare gems, human labor, the finest silks, the rarest minerals and other commodities. With regard to the human rights and business debate, in the domestic context, some interest groups galvanized legislatures and the judiciary to support their economic interests by denouncing binding legislation or regulations. Whereas other groups launched persuasive arguments to garner public support in favor of domestic legislation to curtail, if not halt, the deleterious activities of commercial ventures that impinged upon human dignity. Attempts to form binding regulations, protocols or procedures in the international arena have not been as successful for various reasons. And yet, the struggle to fashion the “law” in such a manner as to provide meaningful remedies for victims of commercial human rights abuses continues. This is a struggle that resides within the clenched fists of the powerful ruling elites, the heavily financed business lobbyists and interest groups, and the fervent, yet humble pleas of the often overlooked, disposed and disenfranchised individuals, marginalized communities, and indigenous peoples. Historically, many commercial ventures that exploited the environment and trafficked human flesh were not necessarily immoral, illegal or a violation of human rights. The commoditization of human beings to be bartered, sold or 1 RUDOLF VON JHERING, Der KAMPF uM’S RECHT, 1 (Vienna, Manz 1872), as translated in Siegfried Wiessner & Andrew R. Willard, Policy-Oriented Jurisprudence and Human Rights Abuses in Internal Conflict: Toward a World Public Order of Human Dignity, 93 Am. J. Intl. L. 316, 319 (1999) [hereinafter Human Rights Abuses in Internal Conflict].

© koninklijke brill nv, leiden, 2015 | doi 10.1163/9789004279872_002

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traded dates back to the origins of humankind. Trading in human flesh, however, did not become a wholesale commercial enterprise until the seventeenth and eighteenth centuries with the advent of the transatlantic slave trade.2 Since then, commercial ventures that exploit human beings and violate natural and man-made laws have become intractable societal problems. The myriad of societal problems that result from the transborder operations of transnational corporations (tncs)3 pit business, governments, and people against each other. These are not abstract problems that are subjected to the theoretical postulates of academicians. Instead, these are real problems that are not amenable to simple solutions.4 In fact, none of the attempts by the United Nations, nongovernmental organizations (ngos), intergovernmental organizations, business groups, academicians, or civil society to address these problems have involved simple solutions. 2 John Hope Franklin, in his iconic and still highly acclaimed book From Slavery to Freedom: A History of African Americans, provides a detailed history of slavery in various ancient cultures and illustrates how the European Renaissance actually fostered in the modern institution of slavery and led to the transatlantic slave trade, which Franklin characterizes as “the big business of slave trading.” John Hope Franklin, From Slavery to Freedom: A History of African Americans 33 (7th ed., McGraw-Hill, Inc. 1994). Lerone Bennett, Jr. also provides a detailed account of the origins of the transatlantic slave trade, which began in Europe with the transportation of 70 slaves from West Africa to Portugal in 1444. See Lerone Bennett, Jr., Before The Mayflower: A History of Black America 34–35 (Chicago: Johnson Pub. Co. 2007). Franklin points out how the African continent was fodder for two slave trades – Arab and transatlantic slave trades. The Arab slave trade, which arguably may not have been as intense and voluminous as the transatlantic slave trade, was just as virulent. The African continent was bled of its human resources via all possible routes. Across the Sahara, through the Red Sea, from the Indian Ocean ports and across the Atlantic. At least ten centuries of slavery for the benefit of the Muslim countries (from the ninth to the nineteenth). …Four million enslaved people exported via the Red Sea, another four million through the Swahili ports of the Indian Ocean, perhaps as many as nine million along the trans-Saharan caravan route, and eleven to twenty million across the Atlantic Ocean.” Elikia M’bokolo, The impact of the slave trade on Africa, Le Monde diplomatique, Apr. 2, 1998, http://mondediplo.com/1998/04/02africa (last visited Oct. 22, 2013). 3 In this context, transborder operations refer to those operations performed by corporations outside their national domiciles. An ongoing argument is that the commercial operations of small to medium-size national corporations violate the human rights of local populations sometimes much more than transnational corporations do, because these local corporations generally operate under the radar of ngos and other watchdog groups. 4 See Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra note 1 (discussing human rights abuses in the context of internal conflicts).

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The problems spawned by the policies, procedures and operations of tncs are multivariate and range from the simple to the complex. Farming (trade and barter), the simplest and oldest form of commercial activity, had negative and positive impacts on human beings and human dignity. The age-old quest for fertile lands resulted in the theft or appropriation of lands through tribal wars, regional or religious conflicts. The privatization of water resulted in the damming and diversion of waterways, which created droughts and famines. Industrialization resulted in illnesses, diseases and the death of individuals who came into contact with industrial waste pollutants, sometimes hundreds of miles away from the source. Commercial ventures have causes and effects. Lack of knowledge about the adverse effects of commercial practices or the lack of a better alternative was generally a legitimate excuse for deleterious business practices. However, with scientific and technological advances, it is no longer acceptable to rely on ignorance as a defense. The fact that this planet does not have inexhaustible arable lands and mineral resources mandates that all people and businesses enact practices and policies that do not neglect, destroy, or callously disregard the planet and human life. The “why” business must do its part to stop violating human rights is simple. The “how” to achieve this goal is not. In the human rights and business context, this is a problem that has domestic and international implications. But there is no “single silver bullet” that will resolve the problem. Social problems that have both domestic and international implications are rarely resolved in simple terms. While it may be trite to state that today’s world is more complex than ever before, the nostalgic longings for the “good ole days”5 does not mean that the good ole days were without their own measure of complexity when viewed in their relevant historical, temporal framework. As Myres S. McDougal so aptly states, “It needs no emphasis that this is a time which has gone forever.”6 Technological advances in the sciences, medicine and communications have created a world in which certain simplicities of the “good ole days” are long gone. Thus, today’s complex world, while from objective standards has resulted in increased life expectancy, raised standards of 5 See generally Myres S. McDougal, The Law School of the Future: From Legal Realism to Policy Science in the World Community, 56 YALE L.J. 1345 (1947) [hereinafter McDougal, The Law School of the Future], available at http://digitalcommons.law.yale.edu/fss_papers/2484. McDougal, in discussing the law school of the future, admonishes us against placing emphasis on the purpose that law served in the past. He urges us to think prospectively and view law as it should be in today’s world. Simply put, clinging to a law designed to solve problems during the time in which the law was formed fails to take into account the profound changes that have or will occur in the world community. 6 Id. at 1348.

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living (for those who can access the basic necessities of life beyond daily sustenance and minimal shelter) contains great advancements for humankind as well as unparalleled challenges. Accordingly, today’s social problems are more complex, interdependent and interrelated. One particular problem or issue that has been the focus of intense debate over the past 40 plus years is the issue involving transnational corporations and the human rights abuses caused by the policies, practices, and procedures of the transborder operations of these corporations. Although the problem is a complex one, the difficulty in solving it rests only in the “minds of men.”7 Professor W. Michael Reisman acknowledges that the complex nature of today’s interdependent and interconnected world demands an appropriate methodology to resolve complex transnational and international problems. He offers the New Haven School, also called “Policy-Oriented Jurisprudence,” or “Law, Science and Policy,” methodology as a means to do so. Life is complex and anyone familiar with international political life knows that it is extraordinarily so. nhs [New Haven School] has developed an economical way of comprehending, advising and devising strategies that seek to change it. It is not the approach which is complicated. It is the material it must deal with: the international political and legal system on our planet. Any theory which fails to acknowledge and address that complexity misserves intellectual inquiry. nhs is not an easy system to apply. This is not the intellectual approach of fast food and those who seek short cuts, who are impatient and who are willing to live in an illusion that the world is simpler, should not look to this method. It requires of those who use it patience, responsibility, a willingness to acknowledge the complexity and difficulty of the problems presented and the courage to make explicit statements of goals.8

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Why the New Haven School?

In seeking to proffer a solution to today’s societal problem regarding human rights and tncs, the New Haven School recognizes that the problem is 7 Philip C. Jessup, Transnational Law 109 (New Haven: Yale University Press, 1956). 8 W. Michael Reisman, The Utility of McDougal’s Jurisprudence, 79 AM. SOC’Y INT’L L. PROC. 273, 280 (1985) [hereinafter, Reisman, Utility of McDougal], available at http://digitalcommons .law.yale.edu/fss_papers/737].

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multi-faceted and complex. Because of this complexity, scholars, diplomats, ngos, and affected individuals agree that there is no simple solution. Human dignity is critical to understanding why and how international law should be applied in the context of nonstate actors (tncs) that have been bestowed with certain enumerated rights under domestic and international law, but very few corresponding duties and obligations. The traditional concept of international law must be elasticized to umbrella the societal problems created by the transborder operations of tncs and their attendant effects on the human rights of individuals and indigenous peoples, and the lack of remedies available to individuals and indigenous peoples. The New Haven School methodology is not fixated in the past. Yet, law, as it is taught and practiced, relies upon past decisions to solve future problems. And since most jurists are unwilling to mete out justice, which may mean that they may have to “create law,” New Haven School lawyers have an uphill struggle in trying to fashion a remedy under international law to the human rights and business debate that advances a world public order of human dignity. Robert D. Sloane provides guidance as to how an international lawyer should approach international problems. “To be effective, she must first be able to identify all the participants, understand their roles, appreciate their modes of decision, and comprehend their relationships with one another.”9 Policyoriented jurisprudence provides the intellectual framework for doing so, instead of the “tools of syllogism and interpretation that have defined and limited [the legal profession].”10 In 1999, the Symposium on Method in International Law: Appraising the Methods of International Law highlighted the need to address the application of a conceptual framework (method) of international law to the concrete problems facing today’s international community.11 The symposium provided 9

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Robert D. Sloane, More Than What Courts Do: Jurisprudence, Decisions, and Dignity – In Brief Encounters and Global Affairs, 34 Yale J. Int’l L. 517, 523 (2009). This guidance was offered in response to the following hypothetical that was adapted from Michael Reisman’s 2007 Hague Academy lectures: “Secretary-General Ben Ki-moon asks you to advise the United Nations on how best to restore a degree of order sufficient for the supply of humanitarian aid to Somalia’s people to resume.” Siegfried Wiessner, The New Haven School of Jurisprudence: A Universal Toolkit for Understanding and Shaping the Law, 18 Asian Pacific L. Rev. 45, 48 (2010) [hereinafter Wiessner, New Haven School of Jurisprudence]. See Steven R. Ratner & Anne-Marie Slaughter, Symposium on Method in International Law: Appraising the Methods of International Law: A Prospectus for Readers, 93 AM. J. INT’L L. 291 (1999). In developing the symposium on the various methods utilized in international law, Ratner and Slaughter noted that some scholars focus on “abstract theories of

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an insight into the many theories of international law and explored how “they establish what the law is, where it might be going, what it should be, why it is the way it is, where the scholar and practitioner fit in, how to construct ­law-based options for the future, and whether it even matters to ask those questions.”12 The symposium highlighted seven methods: legal positivism,13 the New Haven School,14 international legal process,15 critical legal studies,16 international law and international relations,17 feminist jurisprudence,18 and

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international law that explain the nature of international law but are devoid of application to particular problems.” Id. at 293. The question that various international law scholars, international lawyers and practitioners were asked to address for the symposium was whether “individuals should be held criminally accountable for human rights abuses in internal conflicts, both in terms of substantive law and the mechanisms for accountability?” Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra note 1, at 318. Ratner & Slaughter, supra note 11, at 292. Positivism summarizes a range of theories that focus upon describing the law as it is [lex lata] backed up by effective sanctions, with reference to formal criteria, independently of moral or ethical observations. Id. at 293. The New Haven School “describes itself as a policy-oriented perspective, viewing international law as a process of decision making by which various actors in the world community clarify and implement their common interests in accordance with their expectations of appropriate processes and of effectiveness in controlling behavior. Perhaps the New Haven School’s greatest contribution has been its emphasis on both what actors say and what they do.” Id. at 294. International legal process considers international law “as the role of law in constraining decision-makers and affecting the course of international affairs.” Id. “International legal process emphasizes how international law works. It concentrates not so much on the exposition of rules and their content as on how international rules are actually used by the makers of foreign policy.” Mary Ellen O’Connell, New International Legal Process, 93 Am. J. Int’l L. 334 (1999). Policy-oriented jurisprudence has more in common with New Legal Process than with the original Legal Process school. The New Legal Process concerns itself with what the law “should” be versus what it is, without, however, providing any guidance on the content of the standards chosen to fashion and evaluate such future, preferred law. The New Haven School is eminently concerned with what the law should be, suggesting as its guiding light, a world order of human dignity. Critical legal studies emphasizes “the importance of culture to legal development and offer[s] a critical view of the progress of the law in its confrontations with state sovereignty.” Ratner & Slaughter, supra note 11, at 294. International law and international relations is “an interdisciplinary approach that seeks to incorporate into international law the insights of international relations theory regarding the behavior of international actors.” Id. Feminist jurisprudence “examine[s] how both legal norms and processes reflect the domination of men, and [seeks] to reexamine and reform these norms and processes to take account of women.” Id.

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law and economics.19 All seven methods are, in some way, infused into the New Haven School, which offers an interdisciplinary20 and comprehensive approach to arriving at a resolution to the human rights and business debate that advances a world public order of human dignity.21 The interdisciplinary nature of policy-oriented jurisprudence allows one to consider the entire p ­ laying field and the players, the conflicting claims and the context in which they arise.22 Policy-oriented jurisprudence is traced to a rejection of positivism by the legal realists in the 1920s and 30s. Some American scholars favored legal realism because “positivism failed to take into consideration the difference between law in theory and law in practice.”23 Myres S. McDougal, a professor at Yale law school, replaced legal realism with policy-oriented jurisprudence because he viewed it as more responsive to address today’s current problems,24 arguing that legal realism could not adequately respond to “the opportunities and obligations of our time.”25 More specifically, McDougal posited that policy-oriented jurisprudence applies the “best existing scientific knowledge to solving the policy problems of all our communities.”26 19

Law and economics “has both a descriptive component that seeks to explain existing rules as reflecting the most economically efficient outcome, and a normative component that evaluates proposed changes in the law and urges adoption of those that maximize wealth.” Id. Policy-oriented jurisprudence and law and economics both share “the common belief that a science of law should be capable of determining with a high degree of accuracy both what the law is and what it ought to be.” Julien Cantegriel, Legal Formalism Meets Policy-Oriented Jurisprudence: A More European Approach to Frame the War on Terror, 60 Me. L. Rev. 98, 114 (2008). 20 Id. (discussing the various disciplines that the New Haven School considers: sociology, history, philosophy, psychology, psychoanalysis and economics). A cross-disciplinary approach to international law was quite novel when Myres S. McDougal and Harold D. Lasswell first proposed it in 1943. Today, it is quite common in legal and political science scholarship. See Oona A. Hathaway, The Continuing Influence of the New Haven School, 32 Yale L.J. 565, 569 (2007). 21 See W. Michael Reisman, Siegfried Wiessner & Andrew R. Willard, The New Haven School: A Brief Introduction, 32 Yale J. Int’l L. 575, 576 (2007) [hereinafter, Reisman, Wiessner & Willard, A Brief Introduction]. 22 See Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra note 1, at 332. 23 Michael N. Schmitt, New Haven Revisited: Law, Policy and the Pursuit of World Order: A Review of Lung-chu Chen’s An Introduction to Contemporary International Law: A Policyoriented Perspective, 1 USAFA J. Leg. Stud. 185 (1990). 24 See generally W. Michael W. Reisman, Theory About Law: Jurisprudence for a Free Society, 108 Yale J. Int’l L. 935 (1999) [hereinafter, Reisman, Theory About Law.]. (discussing the reasons why McDougal parted with legal realism). 25 McDougal, The Law School of the Future, supra note 5, at 1345. 26 Id. at 1349.

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Because law schools were not training lawyers to provide solutions to the problems of that era, McDougal demanded that lawyers look at social problems and themselves in a radically different way; he offered policy-oriented jurisprudence as a tool to resolve complex social problems. Reisman elaborates on McDougal’s demand for lawyers to expand their cache of tools, arguing that complex problems cannot be solved by “rules and a simple system of logic.”27 McDougal, in collaboration with political scientist and communications theory specialist Harold D. Lasswell,28 proffered an alternative curriculum – policy-oriented jurisprudence29 – for lawyers. To them, lawyers are indispensable to decision and policy makers, because lawyers are in “the unassailably strategic position to influence, if not create, policy.”30 Thus, McDougal and Lasswell fused policy, law, and sociology together in a manner that would allow lawyers the widest latitude in fashioning remedies to problems that were not easily resolved by the current strictures of positivism. In their 1943 iconic article, Legal Education and Public Policy: Professional Training in the Public Interest, they assailed American law schools for teaching a static view of what is law, for not preparing lawyers to challenge the lawmaking process and to delve into the social context in which decisions are made, and for not producing lawyers trained as policy-makers.31 For them, lawyers are integral to making policy and law. 27 28

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W. Michael Reisman, Myres S. McDougal: Architect of a Jurisprudence for a Free Society, 66 Miss. L.J. 15, 26 (1996). A few of the seminal works of policy-oriented jurisprudence include, but are not limited to, the following: Harold D. Lasswell & Myres S. McDougal, Jurisprudence For A Free Society: Studies in Law, Science and Policy (Martinus Nijhoff 1992) [hereinafter Lasswell & McDougal, Jurisprudence for a Free Society]; Myres S. McDougal & Harold D. Lasswell, The Identification and Appraisal of Diverse Systems of Public Order, 53  Am. J. Int’l  L. 1 (1959); Myres S. McDougal, Harold D. Lasswell & W. Michael Reisman, The World Constitutive Process of Authoritative Decision, 19 J. Legal Educ. 253 (1967); W. Michael Reisman, A Theory About Law from the Policy Perspective, in Law and Policy 75 (D. Weisstub, ed., 1976); Myres S. McDougal & Florentino P. Feliciano, Law and Minimum World Public Order (Yale University Press 1961). See generally Harold D. Lasswell & Myres S. McDougal, Legal Education and Public Policy: Professional Training in the Public Interest, 52 Yale L.J. 207 (1943) [hereinafter Lasswell & McDougal, Legal Education & Policy] (discussing the state of legal education in law schools and the dearth of curriculum tied to the linkages between policy and law and the social sciences and law). Id. at 209. See generally Lasswell & McDougal, Legal Education & Policy, supra note 29; Wiessner, New Haven School of Jurisprudence, supra note 10. Almost eighty years later, Wiessner, Director and Founder of the Graduate Program in Intercultural Human Rights at

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It should need no emphasis that the lawyer is today, even when not himself a “maker” of policy, the one indispensable adviser of every responsible policy-maker of our society – whether we speak of the head of a government department or agency, of the executive of a corporation or labor union, of the secretary of a trade or other private association, or even of the humble independent enterpriser or professional man.32 This intrusion of the lawyer’s role into the making of policy is one of the main critiques of policy-oriented jurisprudence. But to McDougal and Lasswell fusing law and policy together was necessary to deconstruct the positivists’ view that law is simply a “body of rules” laid down by the sovereign as postulated by Austin and Kelsen,33 or as advanced by H.L.A. Hart as some “rational ‘rule of recognition’.”34 With Lasswell’s input, policy-oriented jurisprudence adopted the analytical methods of the social sciences to the prescriptive purposes of the law.35 Lasswell, in collaborating with McDougal, left an indelible mark on legal education and the role that lawyers must play in the lawmaking process. As an

32 33

34 35

St. Thomas University School of Law, Miami Gardens, Florida, contends that law schools are still not preparing lawyers to practice law to comport with the needs of today’s global world. “Conceptions of law prevalent in legal education focus on what judges are supposedly doing, not what they actually do. They have the paradigmatic legal professional, i.e., the judge, apply what is called ‘the law’, conceived as command of the sovereign, to the facts – the classical syllogism.” Wiessner, New Haven School of Jurisprudence, supra note 10, at 46. Wiessner, however, acknowledges that today “the global trend in legal education” is to “better prepare students for the practice of law.” Id. at 45. And to this end, he advocates the New Haven School as providing the appropriate legal theory to do so. Lasswell & McDougal, Legal Education & Policy, supra note 29, at 208–209. See Richard A. Falk, Book Review: Casting the Spell: The New Haven School of International Law, 104 Yale L.J. 1991, 1992 (1995). Hans Kelsen placed the state and not the human being at the center of international law. Id. McDougal’s approach to law stressed the importance of studying “how people use words,” “how the human mind works,” and the “variables that affect the official behavior,” and knowing “who is using these principles of international laws, these recognized doctrines, in what context, to get what results, with respect to whom.” Myres S. McDougal, Remarks by McDougal, Proc. Am. Soc’y of Int’l  L. 47 (1947). Harold D. Lasswell, one of the founders of communications theory and propaganda analysis, incorporated how communications affect and influence behavior and how legislation or law is influenced by such communications into policy-oriented jurisprudence. See generally W. Michael Reisman, International Lawmaking: A Process of Communication, 75 Am Soc’y Int’l  L. Proc. 101, 105 (1981) [hereinafter Reisman, International Lawmaking].

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expert on the dynamics of power and the “father of the policy sciences,”36 Lasswell found in McDougal “an associate…who could overcome the difficulties in delimiting the ‘authority’ component of the power process.”37 In rejecting positivism, McDougal and Lasswell provided lawyers with a set of tools that could be utilized to answer any given domestic or international policy problem in a manner that “promotes the common interest in achieving a world order founded on fundamental principles of human dignity.”38 Human dignity is the linchpin of policy-oriented jurisprudence. Policy-oriented jurisprudence demystifies the past and challenges traditional modes of thinking about what constitutes law and how it is made. What is more important, policy-oriented jurisprudence places human beings at the core of law’s primary and optimal purpose: to serve human beings,39 not only in their local communities but in the world community. The interrelatedness of individuals who constitute the world community was key for McDougal and Lasswell. At the aperture of making policy-oriented jurisprudence theory, they realized decades ago that the world’s circumference was disintegrating, making all who live on this planet interdependent and interconnected. We all know today that there is ‘a clear planetary indivisibility’ of all peoples everywhere, not only as to the minimum value of physical safety, but 36

Policy sciences “are concerned with knowledge of and in the decision process of the public and civic order. Knowledge of the decision process implies systematic, empirical studies of how policies are put into effect.” Harold D. Lasswell, A Pre-View of Policy Science 1 (American Elsevier Pub. 1971). The approach of policy science is anticipatory. See Alexander G. Flor, Development Communication and the Policy Sciences, http://up-ou.academia.edu/ AlexanderFlor/Papers/580895/Development_Communication_and_the_Policy_Sciences (last visited Dec. 3, 2011). That is one should not leave the problem of crossing a river until the river is reached. Instead, the territory should be surveyed in advance to identify the terrain and decide whether it is necessary to cross the river, and if so, how and where to cross it. Id. So it should have been with multinational corporations and their extended reach. Domestic and international law failed to anticipate the impact that transnational business activities would have on human rights; and the law has not kept pace. 37 W. Michael Reisman, In Memoriam: Harold D. Lasswell, 4 Yale Stud. World Pub. Ord. 154 (1978) [hereinafter Reisman, In Memoriam, Lasswell], available at http://digital commons.law.yale.edu/fss_papers/719. “Lasswell was interested in developing a theory which not only could increase understanding of how power was used institutionally to secure the shaping and sharing of all other values, but also could increase the skill of those wishing to use power to create a world public order of human dignity.” Id. at 155. 38 Falk, supra note 33. 39 See Reisman, Wiessner & Willard, A Brief Introduction, supra note 21, at 580. The New Haven School “starts from the premise that law should serve human beings.” Id.

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as to all values – the sharing of power, the production and sharing of wealth, well-being, enlightenment, health and respect. [Wo]Men no longer ask for whom the bell tolls. They know it tolls for one and all. They are coming more and more to identify themselves with interests, demands, and expectations, with all the communities – from the local to the global – to which they belong.40 Applying a policy-oriented jurisprudence analysis to resolve human rights ­violations created by tncs provides an intellectual framework that is comprehensive, interdisciplinary and policy-oriented.41 Policy-oriented jurisprudence enables decision makers to make informed decisions that are in the best interests of the community. The community in this instance, on a macro-level, is the global community – the world, not in the sense of individual, disconnected states, but instead a system of states and its people that are interconnected and intertwined as a result of globalization.42 Nothing highlights this interconnectedness and interdependency more than the 2008 financial crisis in the United States,43 and the European Union’s financial fissures, e.g., Greece, Spain, Portugal and Italy.44 Similarly, the 2010 British Petroleum explosion ripping through the Gulf of Mexico’s ecosystem reveals in glaring details that business 40 McDougal, The Law School of the Future, supra note 5, at 1348–1349. 41 Reisman, Wiessner, Willard, A Brief Introduction, supra note 21, at 577. The New Haven School analyzes the problem of the human rights and business debate systematically. It considers and analyzes those who engage in the [social process] (the participants), the subjective dimensions that animate them (their perspectives); the situations in which they interact; the resources upon which they draw (bases of power); the ways they manipulate those resources (strategies); and the aggregate outcomes of the process of interaction; which are concluded in terms of a comprehensive set of values. W. Michael Reisman, The View from the New Haven School of International Law, 86 Am. Soc’y Int’l L. Proc. 118, 121–122 (1992) [hereinafter, Reisman, View from New Haven School]. 42 See generally Myres S. McDougal, Harold D. Lasswell & W. Michael Reisman, Theories About International Law: Prologue to a Configurative Jurisprudence, 8 Va. J. Int’l  L. 188 (1967) (discussing the interdependence of peoples in the world) [hereinafter McDougal, Lasswell & Reisman, Theories about International Law]. “[T]he deprivation of human rights visited upon one individual is increasingly felt to be a personal deprivation and a potential threat to all freedom.” Id. at 191. 43 See infra Chapter 3, Global Financial Crises are Hindered by the Westphalian System. 44 See George Friedman, Global Economic Downturn: A Crisis of Political Economy, Aug. 9, 2011, http://www.stratfor.com/weekly/20110808-global-economic-dowturn-crisis-politial-economy #axzz3F46Hckin (last visited Dec. 1, 2013); Mauro F. Gullien, The Global Economic and Financial

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practices can have deleterious effects on thousands of people hundreds of miles away from the disaster’s epicenter.45 A What is Law? The New Haven School begins with an analysis of “what is law?” and “how is law made? This distinction will determine how one approaches inquiry to a problem and the resultant solution(s). For policy-oriented jurisprudence adherents, the function and purpose of law is to “serve human beings.”46 It should serve “our needs and our aspirations – particularly our aspirations.”47 In constructing law to serve human beings, the New Haven School has crafted “tools to bring about changes in public and civic order that will make them more closely approximate the goals of human dignity which [the New Haven School] postulates.”48 In answering the question of what is law, the New Haven School and positivists answer differently based upon different conceptual theories. Positivists define law as a “‘body of rules and principles of action’, which are binding upon the subjects of a legal system and whose applicability can be assumed without an extended analysis of the social and political environment in which they operate.”49 This “body of rules” consists of “past decisions” that are known or referred to as court, legislative or executive decisions, which have been given the nomenclature of “the law” or “laws.” For positivists, law is a “social fact,”50 which is viewed from the perspective of the receiver of commands, the “political inferior.” Law, thus, becomes a body of [static] commands for which Crisis: A Timeline, http://lauder.wharton.upenn.edu/pages/pdf/class_info/Chronology _Economic_Financial_Crisis.pdf. 45 On April 20, 2010, the Deepwater Horizon, an oil platform in the Gulf of Mexico, off the coast of the u.s., exploded killing eleven people and injuring seventeen others. The explosion created the largest and most widespread ecological and environmental disaster in the u.s. spilling millions of gallons of oil and gas into the Gulf of Mexico that washed ashore in four states: Louisiana, Mississippi, Alabama and Florida. 46 See Reisman, Wiessner & Willard, A Brief Introduction, supra note 21, at 580. 47 Wiessner, New Haven School of Jurisprudence, supra note 10, at 51. 48 Reisman, Wiessner & Willard, A Brief Introduction, supra note 21. 49 Oran R. Young, International and Social Science: The Contributions of Myres S. McDougal, 66 Am. J. Int’l L. 60, 61 (1972) (quoting J.L. Bierly, The Law of Nations 1 (6th ed., New York 1963)). 50 See Tai-Heng Cheng, Positivism, New Haven Jurisprudence, and the Fragmentation of International Law, International & Comparative Law Colloquium Papers, Paper 8, page 6 (discussing the differences and the similarities between positivism and policy-oriented jurisprudence) [hereinafter Cheng, Positivism], available at http://digitalcommons.law .umaryland.edu/iclc_papers/8 (last visited Apr. 10, 2010).

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o­ bedience is required by the receiver depending upon the content and the meaning of the command.51 The seminal distinction between law as positivists view it and law as viewed by policy-oriented scholars is that positivists focus on “existing rules” emanating solely from entities deemed to have the sovereign authority to make (prescribe) rules.52 Positivism does not consider how law is made, applied and changed. Under positivism, law “remains fixated in the past,”53 where lawyers try to reap meaning from the words (find the law) irrespective of the context in which the “law” was written in order to resolve a problem that arises from a totally different context.54 Policy-oriented jurisprudence, unlike positivism, identifies the conditioning factors that went into creating the law (a past decision)55 and considers the personality, political inclinations, gender and cultural background of the decision makers, as well as the mood of the times, and other societal factors that influenced laws. Perhaps the greatest difference between positivism and policy-oriented jurisprudence is that positivists do not ask themselves what the law should be.56 The New Haven School defines law as a process of decision that is both authoritative and controlling. Communication is at the heart of this decision process and it is through such communication that the New Haven School seeks to resolve conflicting claims in society. Seven functions are essential components of the communication (decision) process. 1. 2.

Intelligence: the obtaining, processing and dissemination of information. Promotion: the advocacy of general policy.

51 Reisman, View from New Haven School, supra note 41, at 119. A major advantage that the New Haven School has over positivism for international lawyers is that policy-oriented jurisprudence encourages lawyers to adopt the perspective of the political superior, as opposed to the political inferior that Reisman talks about. Sloane posits that this perspective is better suited to resolving international law problems. “The instability, decentralization and diversity of the international system, while often lamentable, generates ample opportunities for lawyers to shape and creatively influence international law. The [New Haven] School seeks to identify those opportunities to empower lawyers to influence the way social choices are continuously made about the production and distribution of resources including consideration about the ways that decisions should be made about those things.” Sloane, supra note 9, at 523. 52 See Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra note 1, at 320. 53 Id. 54 Id. 55 Id. 56 Id.

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3.

Prescription: the crystallization of general policy in continuing authoritative community expectations. Invocation: the provisional characterizations of concrete circumstances in reference to prescription. Application: the final characterization of concrete circumstances in reference to prescriptions. Termination: the ending of a prescription and the disposition of legitimate expectations created when the prescription was in effect. Appraisal: the evaluation of the manner and measure in which public policies have been put into effect and or responsibility therefor.57

4. 5. 6. 7.

These functions are carried out sometimes subconsciously, but they form the foundation of all decisions, from the simplest to the mundane to the most complex. In policy-oriented jurisprudence, only those decisions, i.e., communications with policy are prescriptive, contents, that are taken community wide perspectives of authority and backed up by control intent, are characterized as law. Policy-oriented jurisprudence proponents view law as “an authoritative and controlling response to conflicting claims in society.”58 Communication is at the heart of this “authoritative and controlling response.”59 Law is found in the communication process, which is at the core of the New Haven School’s definition of law. Law becomes those decisions that are made by persons in a community that the community expects to make such decisions. These persons are known as decision makers and are identified as such based upon the community’s internal structures of authority. The selections of the decision makers are all done through a process of communication and as the internal structure expands, contracts or changes, so can the decision makers. Simply put, lawmaking or the prescribing of policy as authoritative for a  community is a process of communication. All groups are, perforce, communication networks. An indispensable part of the political 57 58 59

McDougal, Lasswell & Reisman, Theories About International Law, supra note 42, at 192. Id. Lasswell, often called the intellectual father of the modern communication theory, focused on, inter alia, how communication is used as a propaganda tool and how “law” is made through the communication process. International lawmaking begins as a series of communication modalities between individuals in society before it is codified in a w ­ ritten “body of rules.” Lasswell knew that policy making and lawmaking are not mutually exclusive. Reisman also would agree that lawmaking involves a great deal of policy. Lasswell’s model of communication is a foundational pillar of policy-oriented jurisprudence.

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­ rocesses of groups is communication. An ineluctable effect of all comp munications is political. Like any other communication process, prescription involves the mediation of subjectivities from a communicator to an audience, resulting in a set of appropriate expectations that are supposed to influence behavior and, contingently, to alert community enforcement responses when deviations are deemed to threaten public order.60 Consequently, policy-oriented jurisprudence is about ‘understanding and shaping’ the law. Understanding what is called ‘the law’ means going outside of our inherited lenses of observation narrowed to commands of the sovereign in the modern nation-state; it means removing those blinders and setting out to grasp the reality of what is called ‘the law’ in the ‘manifold of events’ that constitute the social process on this planet.61 B Criticisms of the New Haven School Criticisms of the New Haven School are as varied as the academic disciplines of its critics. Some critics claim that the New Haven School’s approach is an intrusion of politics into the realm of “law.”62 All law, however, is political. 60 Reisman, International Lawmaking, supra note 35, at 105; see also John Norton Moore, Prolegomenon the Jurisprudence of Myres McDougal and Harold Lasswell, 54 Va. L. Rev. 662, 667 (1968). “Another important tenet of [policy-oriented jurisprudence] is that law is a process. That is, law is not merely rules, it is not merely judges or courts, or, as Holmes suggested, what courts do in fact.” Id. 61 Siegfried Wiessner, Law as a Means to a Public Order of Human Dignity: The Jurisprudence of Michael Reisman, 34 Yale J. Int’l  L. 525, 526 (2009) [hereinafter Essay in Honor of Reisman]. 62 Another criticism is that policy-oriented jurisprudence fuses law and policy in a manner that threatens to turn international law into a convenient instrument of national policy – as is the case in totalitarian countries, or as it is characterized by the more radical exponents of Realpolitik; one that approves of nationalistic policies, provided that the policy-maker is on the ‘right’ side i.e., an exponent of the values of ‘human dignity’, and the state or group of states against who such policy is exercised is not. Eisuke Suzuki, The New Haven School of International Law: An Invitation to a PolicyOriented Jurisprudence, 1 Yale Stud. World Pub. Ord 1, 7 (1974) (quoting, Friedman, Book Review, 64 Colum. L. Rev. 604, 608 (1964). For a discussion of the various criticisms of the New Haven School see Cheng, Positivism, supra note 50.

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If one is to adhere to the legal positivists’ theory of law, then law is law only because it is backed by force/power of the political elites – the government or a controlling authority. But as Lasswell and McDougal write, “None who deal with law, however defined, can escape policy when policy is defined as the making of important decisions which effect the distribution of values.” (emphasis in original).63 The criticism that the New Haven School conflates law with politics and policy fails to consider how law is actually made. From the common-law AngloAmerican legal tradition, which is based on precedent, stare decisis,64 policy has always had an impact on lawmaking. New Haven School scholars do not deny that “law is policy.”65 McDougal and Lasswell made no pretense that, as policy,

63

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65

Lasswell & McDougal, Legal Education & Policy, supra note 29, at 207. Rosalyn Higgins believes that “there is no avoiding the human element [in law-making]; that all legal norms inevitably have policy repercussions and can therefore never be perfectly neutral and that insofar as ‘impartiality’ on the decisionmaker is taken to mean indifference as to the respective merits of alternative, competing values, it is both chimerical and undesirable.” Rosalyn Higgins, Policy and Impartiality The Uneasy Relationship in International Law, 23 Int’l Org. 931 (1969). Stare decisis is an Anglo-American common law concept, which is generally inapplicable in civil law jurisdictions that comprise the majority of the world’s legal systems. Civil law is based upon a code, a collection of codified written laws, i.e. positive law. Civil law countries acknowledge and apply the concept of jurisprudence constante, which requires judges to interpret law in a predictable manner. The British concept of a corporation, a legal entity separate and distinct from its owners, gave rise to the modern American corporate-styled entity that predominates the organizational structure of the vast amount of tncs. However, when it comes to whether corporations have international legal personality or whether corporations are entitled to some of the same rights as individuals, certain civil law countries have followed American constitutional law that recognizes the legal status of corporations not as the result of positive constitutional law, but rather as the result of precedent that was established by Santa Clara and its progeny. See, infra Chapter 2, Judicial Activism Eviscerates Constitutional Law: The Santa Clara Decision. See generally Reisman, Wiessner & Willard, A Brief Introduction, supra note 21, at 577. As a racial minority and a female, I have experienced first-hand the policies cloaked as law that kept black Americans, women, and other linguistic and minority groups relegated to second and third class citizenship status. These laws, paraphrasing Dr. Martin Luther King, degraded human dignity and were unjust. “Any law that uplifts human personality is just. Any law that degrades human personality is unjust.” Martin Luther King, Jr., Letter from Birmingham City Jail (1963), reprinted in A Testament of Hope: The Essential Writings and Speeches of Martin Luther King Jr. 289, 293, (James Melvin Washington, ed. Harper One 1986).

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law involved “authoritative decision-making.”66 But to suggest that policy-oriented jurisprudence is nothing more than policy is short sighted. The New Haven School involves scrutinizing and assessing current processes, institutions and practices to resolve problems. Michael Schmitt, in his review of Lung-chu Chen’s An Introduction to Contemporary International Law: A Policy-Oriented Perspective, noted that McDougal and Lasswell unapologetically created “a radically new understanding of the dynamics of law in society. The critical component of their work was an assertion that law, contextually understood, was essentially policy and, as such, could be shaped to achieve particular values.”67 In a tripartite system of law – the legislature, the executive and the judiciary – the legislature is the “law making” body. Simply put, legislators are politicians charged with making policy, which becomes institutionalized through law. Politicians, policy and law are all in the same realm. The fact that McDougal and Lasswell have provided an alternative tool to utilize in making policy, which ultimately may become law, reflects only one aspect and reality of the lawmaking process. Critics also claim that policy-oriented jurisprudence is too labor intensive and its terminology too oppressive.68 In other words, “[McDougal and Lasswell’s] writing is filled with insight but why don’t they write in English?”69 66

67 68 69

McDougal and Lasswell highlighted the conception of law as policy in 1943 in their article titled Legal Education and Public Policy: Professional Training in the Public Interest. See supra note 29. Schmitt, supra note 23, at 186 (1990). See Suzuki, supra note 62, at 8. Policy-oriented jurisprudence’s weakness lies in its verbiage and the avoidance of familiar terms. Id. at 10, n. 22. John Moore Norton, Prolegomenon to the Jurisprudence of Myres McDougal and Harold Lasswell, 54 Va. L. Rev. 662, 674 (1968). To this criticism John Moore Norton responds: This criticism stems from a genuine difficulty in understanding the specialized terminology of their policy-oriented jurisprudence. Perhaps also it stems from a natural suspicion, nurtured by a jargon filled world, of that which is not understood. But the terminological suspicion of policy-oriented jurisprudence is not well-founded. The terminology which causes the greatest difficulty of the uninitiated is a necessary part of the approach and is itself responsible for many of the insights. Though policy-oriented jurisprudence is characterized by diversity of techniques, central to the approach is a focus on the intellectual tasks necessary for problem solving and a method of systematically exploring social context in aid of decision. Id. at 675–674 (discussing the various criticisms of policy-oriented jurisprudence); see also Osofsky, infra note 82, at 424 (noting that the New Haven School has also been accused of abandoning constraints provided by formal legal rules, favoring elites, paying insufficient attention to the complexities of the “third world” and problems of inequality, and writing in an inaccessible fashion).

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To this critique, Eisuke Suzuki quips that the New Haven School is “maddening only to those who do not want to understand it in the first place.”70 To paraphrase Reisman, the New Haven School is not intellectual fast food. It requires patience, responsibility and the willingness to acknowledge that today’s problems are complex, difficult, and the courage to solve them.71 Wiessner stresses that many policy-oriented jurisprudence scholars do not use the express terminology; moreover, it is not the terminology that controls. To illustrate this, he notes that Reisman in much of his writing does not use verbatim policyoriented jurisprudence terminology. “Reisman does not feel compelled to always use some of its specific terminology, and does what he does best: capture the audience with his unmatched mastery of the English language and any subject matter he chooses to address.”72 The New Haven School’s terminology is not controlling. One is free to use any terminology one chooses, as long as the New Haven School’s values and goals are not forsaken. As its main ­proponents today so eloquently put it. It does not matter whether a cat is black or white but whether it catches mice. Our loyalty is to the values of human dignity and our goal is a world order producing and distributing those values. The New Haven School was established to refine and apply tools to achieve that goal. If there is a better cat around, we would be the first to use it. As far as we have been able to tell, there is not.73 Indeed policy-oriented jurisprudence’s language is not easy reading and requires one to masticate it until it becomes ingested into one’s being. The importance that policy-oriented jurisprudence places on dissecting one’s observational standpoint is, in itself, an introspective journey that is not easily achieved. Reisman explains that “much of the confusion and even passionate anger the New Haven School generates arises from failure to understand the perspective it adopts.”74 In deconstructing the “law” in order to create new law, the tools the New Haven School uses are of little use to positivists, who view law from the stance of the political inferior and demand strict compliance

70 Suzuki, supra note 62, at 8. 71 See Reisman, Utility of McDougal, supra note 8. 72 Wiessner, Essay in Honor of Reisman, supra note 61, at 529. 73 Reisman, Wiessner & Willard, A Brief Introduction, supra note 21, at 582. 74 Reisman, View from New Haven, supra note 41, at 124.

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with “rules.” To these individuals, the New Haven School would seem “threatening, destructive, and even evil.”75 Another criticism is that the utilization of the eight value categories proposed by Lasswell will yield whatever result the user wants them to yield. As Stanley Hoffman writes, “the magical Lasswellian categories [will give] to whoever uses them whatever result he wants to reach.”76 Such criticism reflects a narrow understanding of policy-oriented jurisprudence. Anyone can alter the practical application of a theory until it produces the desired results. Such is the case in all areas of human interaction. There has been no quantifiable proof that policy-oriented jurisprudence proponents tend to distort this methodology any more than the proponents of other methodologies. Richard Falk,77 a once ardent supporter of the New Haven School, called McDougal’s theory “dangerous knowledge,”78 because it “threatens the prevailing paradigm, and hence draws fire from certain kinds of professionals who continue to believe in [the traditional nation-state system].”79 Allowing the status quo to continue irrespectively of how it was engendered and the horrific abuses that have occurred in order to maintain the status quo defy reason and certainly fail to promote social justice and human dignity. This refrain, “dangerous” as applied to policy-oriented jurisprudence, continued during the sixties in the United States and abroad at Cambridge University. “[I]n Cambridge in the 1960s, two things were forbidden: one was not permitted to entertain (sic!) women in one’s rooms overnight and was not allowed to make reference to the copious writings of Myres S. McDougal and his associates…McDougal was as dangerous by day as by night.”80 Falk hurls an additional criticism. He  insists that policy-oriented jurisprudence’s “fatal flaw” is its failure to 75 76 77

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Id. Stanley Hoffman, International Law and the Control of Force, in The Relevance of International Law 34, 46 (K. Deustch & Hoffman, eds. 1968: Anchor edn. 1971). Falk, who later became a critic of policy-oriented jurisprudence, is credited with inventing the term “New Haven School” after he left Yale and joined the Princeton faculty. See Hathaway, supra note 20. See Suzuki, supra note 62, at 11. Id. (quoting Falk, The Sherrill Lectures delivered at the Yale Law School, 1974); see also Rosalyn Higgins, supra note 63 (reviewing Richard A. Falk, Legal Order in A Violent World). See Wiessner, New Haven School of Jurisprudence, supra note 10, at 46 (quoting Colin Warbrick, Introduction, in Phillip Allott, Theory and International Law: An  Introduction, p. xi (British Institute of International and Comparative Law: London 1991).

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include the perspectives of excluded constituencies – feminists, gay and l­ esbian, indigenous peoples, non-Westerners, blacks and other minorities.81 This criticism is hardly unique to policy-oriented jurisprudence and is a flaw of other jurisprudences as well. And yet policy-oriented jurisprudence provides, perhaps, the only tools that enable the scholar or the decision maker to a­ ctually assess and appraise the interests of these marginalized constituencies before recommending a final decision, rather than finding out afterwards the unintended consequences that a decision may have had on these marginalized groups. The New Haven School has been criticized as advocating or serving the interests of u.s. foreign policy.82 If it once did, this no longer holds true. Although some proponents of the New Haven School may have allowed politics and ­policy to influence their decisions, this does not mean that the New Haven School “incorporates partisan politics as a criteria for policy choices and legal 81

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See Falk, supra note 33, at 1999. Falk’s assertions that policy-oriented jurisprudence does not incorporate the vantage point of minorities is hard to square with the fact that policyoriented jurisprudence has attracted “generations of foreign students.” See Sloane, supra note 9, at 518. Moreover, Falk, himself, acknowledged that policy-oriented jurisprudence is widely accepted in Third World countries despite McDougal’s penchant for applying it as a justification for American foreign policy. See Falk, supra note 33, at 1997. This in and of itself demonstrates that policy-oriented jurisprudence’s intellectual framework finds credence and support in those arenas where tncs have committed some of the most egregious human rights abuses. See also Sloane, supra note 9. Because the New Haven School seeks to empower individuals to participate in the decision making process and to promote the optimal shaping and sharing of values, Sloane views policy-oriented jurisprudence as being particularly attractive to the “disenfranchised,” which in most societies, including America, have been and are women, and racial, ethnic and linguistic minorities. “The New Haven School, properly conceived, is not confined by any one cultural background, particularly a Eurocentric one. This feature of inclusiveness has always been attractive to scholars from outside the us, especially the ‘Third World’.” Wiessner, New Haven School of Jurisprudence, supra note 10, at 53. See Falk, supra note 33, at 1999; see also Hari M. Osofsky, A Law and Geography Perspective on the New Haven School, 32 Yale J. Int’l L. 421, 424 (2007) (The New Haven School “has been accused of serving as apologists for u.s. foreign policy.”); see also Reisman, Theory About Law, supra note 24, at 939 (1999) (noting that critics have accused policy-oriented jurisprudence of promoting American values). Democracy is one of the key values of American foreign policy and it is also a key tenet of the Universal Declaration of Human Rights and the United Nations Charter. While McDougal may have sided with u.s. interests, policy-oriented jurisprudence’s goal is a world public order of human dignity. If democracy is one of the vehicles through which to achieve that goal, then policy-oriented jurisprudence supports universal values. As McDougal and Lasswell write,

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validity.”83 And although McDougal and Lasswell may have viewed the eight values through an American lens, this does not mean that their successors and other adherents of policy-oriented jurisprudence continue to do so.84 For instance, Reisman has openly and repeatedly criticized u.s. foreign policy.85 Tai-Heng Cheng attributes the criticism that policy-oriented jurisprudence conflates law, policy and politics in such a manner that it denigrates positivism86 to McDougal’s iconoclastic personality rather than to the perception that policy-oriented jurisprudence is opposed to the positivist concept of law.87 In fact, Cheng views the disagreements between positivists and the New Haven School more as a matter of commitments to concepts that are “ontological, political, normative and/or semantic.”88 He argues that if the semantics could be adjusted, this would eliminate the confusion when it comes to the concept of what is law.89 He demonstrates ways in which positivism and policy-oriented jurisprudence do not conflict90 but overlap91 and are not disharmonious. The supreme value of democracy is the dignity and worth of the individual; hence a democratic society is a commonwealth of mutual deference – a commonwealth where there is full opportunity to mature talent into socially creative skill, free from discrimination on grounds of religion, culture or class. It is a society in which specific values as power, respect and knowledge are widely shared and are not concentrated in the hands of a single group, class or institution – the state – among the many institutions of society. Lasswell & McDougal, Legal Education & Policy, supra note 29, at 212. 83 Cheng, Positivism, supra note 50, at 18. 84 See generally Tai-Heng Cheng, Making International Law Without Agreeing What It Is, 10 Wash. U. Global Stud. L. Rev. 1 (2011) [hereinafter, Cheng, Making International Law]. “Any appraisal of the New Haven conception of law should not be transfixed on its applications to problems that occurred decades ago.” Id. at 19. 85 See generally W. Michael Reisman, Why Regime Change Is (Almost Always) A Bad Idea, 98 Am. J. Int’l  L. 516 (2004) (criticizing the u.s. invasion of Iraq in 2003); W. Michael Reisman & Andrea Armstrong, The Past and Future of the Claim of Pre-emptive SelfDefense, 100 Am. J. Int’l L. 525 (2006) (renouncing the Bush doctrine as a potential threat to world order). 86 See Cheng, Positivism, supra note 50; see also New Directions in International Economic Law in Memoriam Thomas Walde, (Martinus Nijhoff 2011). 87 See Cheng, Positivism, supra note 51, at 8. According to Reisman, scholars and international lawyers considered McDougal an “enfant terrible and destroyer of the law.” Reisman, Theory About Law, supra note 24, at 939. 88 Cheng, Positivism, supra note, at 6. 89 Id. 90 Id. 91 See generally Harold D. Lasswell & Myres S. McDougal, Jurisprudence in PolicyOriented Perspective, 19 U. Fla. L. Rev. 486 (1966) [hereinafter Lasswell & McDougal,

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Policy-oriented jurisprudence, for all of its criticisms, provides indispensable tools for addressing current social problems.92 It encourages the decision maker to consider various factors and values in reaching a resolution to a problem. Reisman reminds observers and decision makers of their responsibilities. He urges the decision maker to first realize that she is an “instrument of observation and choice.”93 He reminds her that “the responsible decision maker or appraiser should develop methods of scrutinizing the self-system and determining the extent to which emotional tendencies, sub-group parochialism or institutional biases are distorting or skewing observation and choice.”94 II

The Challenges in Applying the New Haven School to the Human Rights and Business Debate

For the international lawyer who recognizes the utility and the immeasurable benefits of employing a policy-oriented jurisprudence analysis to resolving problems, the biggest challenge is the skepticism that still abounds with regard to the New Haven School methodology. Falk, in assailing McDougal, casts wide aspersions on international lawyers who use policy-oriented jurisprudence. He views these lawyers as untrustworthy and “potentially dangerous presences

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Policy-Oriented Perspective]. Positivists offer a “theory of law” whereas policy-oriented jurisprudence offers a “theory about law.” Lasswell and McDougal acknowledge that the two formulations often overlap. Although Reisman dismisses the criticisms as not being worthy of a response, he, nonetheless, offers the following: Criticisms of a jurisprudential method based on guilt by association or on political differences are not entitled even to the dignity of a response. Some scholars have tried to mock what they [McDougal and Lasswell] have presented as the daunting complexity of this approach. In fact, much of its intellectual power lies in its comparative simplicity and the extraordinary condensation which its authors achieved. None of the particular tools requires one to remember more than eight terms or to count on more than eight fingers. Perhaps those who have criticized the theory for complexity may find even this beyond their own resources, but they have missed the point by a large margin. Reisman, Utility of McDougal, supra note 8, at 279–280. See W. Michael Reisman & Aaron M. Schreiber, Jurisprudence: Understanding and Shaping Law 13 (New Haven Press 1987). Id.; but see Falk, supra note 33, at 2002. Falk contends that scrutinizing one’s observational standpoint to limit the intrusion of bias is unrealistic and “old-fashioned.” For him, in a post-modern world, “there is no way to transcend the particularities of perspectives and hence, what is called bias.” Id.

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within organizational structure.”95 Such a pronouncement, even if it is dated, undoubtedly reinforces the preference for only international lawyers who are committed to protecting the status quo at all costs, even if that means ignoring their own moral compasses. Such rationale discounts the realities of today’s multicultural, diverse and pluralistic society and instead seeks to protect the interests of the political elite. Commonly referred to as the Arab Spring, the recent reactions to the status quo in Tunisia, Egypt, Libya, Yemen, Bahrain, Syria and other Middle Eastern and North African countries are testaments that the status quo that deprives and denies people of human dignity should not prevail.96 Falk also implies that international lawyers who would seek to use policyoriented jurisprudence to influence decision makers to impose human rights obligations on tncs should be disqualified from public service. He posits that the New Haven School “has a radicalizing impact that largely disqualifies its adherents from serving the state in a mere professional capacity. The policy voice remains audible in a manner that challenges the division of labor and technicist ethos which large scale organizations, particularly governments and corporations, depend and insist upon.”97 Harold Koh, conversely, disagrees. He chastises international lawyers that are “yes men” and encourages them to dedicate themselves to being the architects of international law and public servants. [I]nternational lawyers must be moral actors. Our job is not simply to do as we are told. We must fuse our training and skill with moral courage,  and guide the evolution of legal process with the application of

95 Suzuki, supra note 62, at 8, n. 18 (quoting Richard Falk, The Place of Policy in International Law, 2 Supp. Ga. J. Int’l & Comp. L. 29, 32 (1972)). 96 The term Arab Spring has been credited to several sources. The Atlantic Monthly Magazine traces it back to 1975, when it was used in the Journal of Islamic Studies. Jen Doll, ‘Arab Spring’ Goes Back to 1975?, The Atlantic Monthly, http://www.theatlantic.com/ magazine/archive/2013/10/wordplay/309453/ (last visited Dec. 12, 2013). Another source credits the media with using the term in 2005, when the Bush administration invaded Iraq. This invasion was to be the first bloom of democracy in the region. Arab Spring, Sourcewatch, http://www.sourcewatch.org/index.php?title=Arab_Spring#Quotes_on _.22Arab_Spring.2C.22_post-Iraq_War (last visited Dec. 12, 2013). During the spring of 2011, the term became synonymous with the populist uprisings in Northern Africa and the Middle East against depots and monarchs who had been entrenched in power, mainly with the u.s.’ economic and military backing. 97 Suzuki, supra note 63.

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f­undamental values. By having courage to argue with our clients, to invoke illegality, to bring lawsuits, to negotiate treaties, international lawyers guide difficult policy choices into lawful channels, and thereby stand up for the rule of law.98 International lawyers in the 21st century face a radically changed geopolitical, technological, social and economic environment.99 They, therefore, like doctors, should refine and upgrade their knowledge and the tools that they use. [W]e as ‘doctors of the social order’ stand to benefit greatly from a fundamental review of how successfully we perform our tasks, scrutinizing rigorously the quality and usefulness, of our intellectual and technological tools. …Let us also upgrade our methodology so that we handle the task set before us with the highest level of competence and integrity.100 International lawyers are called upon “to diagnose precisely the problem – the social ill – before [we] prescribe a treatment”101 and then apply the appropriate cure, if one is known and readily available. In those instances where a cure eludes us, we are called upon to research and ferret out the cause of the malady or malaise and to administer a barrage of tests and assistance until a cure is obtained. And if the problem metastasizes or mutates, we do not give up hope. Instead we try to ascertain the different variables that are affecting the problem as we continually search for ways to alleviate the discomfort until it can be abated completely. In his article International Law in the 21st Century, Wiessner presents several hypothetical problems or tasks that involve human rights that international lawyers may be called upon to solve. He reminds the lawyer that how she deals with a particular task is determined by her theory about law as well as the  understanding of her particular role.102 Reisman also presents several 98

Harold Hongju Koh, Is There a “New” New Haven School of International Law? 32 Yale Int’l L 559, 572 (2007) [hereinafter Koh, New New Haven School]. 99 See generally Siegfried Wiessner, International Law in the 21st Century: Decisionmaking in Institutionalized and Non-Institutionalized Settings, 26 Thesaurus Acroasium 137, International Justice (Thessaloniki: Sakkoulas Pub. 1997) [hereinafter Wiessner, Law in the 21st Century]. 100 Id. 101 Wiessner, New Haven School of Jurisprudence, supra note 10, at 48 (noting that the problems that lawyers face are global and local and often intertwined). 102 The problem presented in this dissertation topic, how to formulate a solution under international law that provides individuals and indigenous peoples with a remedy for human

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hypothetical contemporary problems that international lawyers may be called upon to resolve. He stresses that the way these problems are characterized, the intellectual tools used to research them and the information that is utilized in answering the problems are determined by one’s conception of law. “Your ­conception [of law] will influence the role you assume, the method you use, the ethics you adopt and the outcome.”103 The traditional role of international lawyers, to apply sources of law to the human rights and business debate, limits the scope of their method of problem solving. International law, unlike domestic law, does not have a tripartite division of formal governmental institutions – executive, legislative and judicial branches. And there is not a central sovereign governmental structure that makes law. International law is divided into two types: treaty law and customary international law. The sources of international law are generally those set forth in Article 38 of the International Court of Justice. Some scholars consider Article 38’s pronouncement as to the sources of international law incomplete because it is premised on a myth. International lawyers who are ensconced in the “myth” that Article 38104 provides the exclusive statement of the sources of international law should note that the New Haven School provides an alternative paradigm, one that offers a methodology to deconstruct the traditional concept of “what is international law.”105 Reisman, in International Lawmaking: rights abuses committed by tncs’ policies, practices and transborder activities, is addressed in the application of my theory about law and the methodology that I am using – policy-oriented jurisprudence. 103 Reisman, View from New Haven School, supra note 41, at 119. 104 Article 38 reads in pertinent part: 1. The Court, whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply: a. international conventions, whether general or particular, establishing rules expressly recognized by the contesting states; b. international custom, as evidence of a general practice as accepted law; c. the general principles of law recognized by civilized nations; d. subject to the provisions of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law. 2. This provision shall not prejudice the power of the Court to decide a case ex aequo et bono, if the parties agree thereto. United Nations, Statute of the International Court of Justice, art. 38. 105 See generally Reisman, International Lawmaking, supra note 35, (icj Article 38 represents a myth of what are the sources of international law); see also Jordan Paust, The Reality of Private Rights, Duties, and Participation in the International Legal Process, 25 Mich. J. Int’l  L. 1229 (2004) [hereinafter Paust, Private Rights and Duties]. But see Cantegriel,

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A Process of Communication, explains that the myth that Article 38 provides the sole sources of international law developed because international lawyers fashioned Article 38 as the equivalent of “Aristotle’s tripartite division.”106 He cautions international lawyers not to focus on Article 38’s sources of law as exclusive. Instead, he urges them to recognize that law, no matter how it is defined, reflects how behaviors are affected by that which is called “law.” Jordan Paust, likewise, cautions against relying solely on Article 38. There are no single sources or evidence of international law; no single set of participants; and no single arenas or institutional arrangements for the creation, invocation, application, change or termination of such law. Like all human law, it is full of human choice and rich in individual and group participation and interaffectation.107 Reisman views international lawmaking as a process of communication, which involves three message flows: policy content, authority signal, and control intention.108 These message flows together provide a contrast to Article 38’s enumerated sources of international law, “which are not wrong, but [merely] incomplete.”109 Similarly, John Norton Moore cautions one not to rely upon the “incomplete generalities of Article 38 of the icj in an understanding of the sources of international law.”110 Instead Moore recommends the New Haven School to the scholar because it “offers a map of the world constitutive process detailing the range of participants in the making of international law and their supra note 19, at 117 (The New Haven School must accept the reality that lawyers and to a certain degree judges must function with this “myth of rules.”). 106 Reisman, International Lawmaking, supra note 35, at 101. Lasswell advocated replacing the Aristotelian tripartite division – executive, legislative and judicial – to resolve the more intractable problems, into seven functions that have become the basis of the policyoriented jurisprudence approach: (1) the gathering of intelligence; (2) the promoting or lobbying of preferences; (3) the prescribing of authoritative policy or lawmaking; (4) the making of provisional characterizations of deviations from prescriptions or invoking; (5) applying prescriptions: (6) terminating prescriptions; and (7) appraising the aggregate performance of a community’s decision processes in terms of community goals. Id. at 101. 107 Paust, Private Rights and Duties, supra note 105, at 1229. 108 See Reisman, International Lawmaking, supra note 35. 109 Cantegriel, supra note 19, at 119; see also Myres S. McDougal & W. Michael Reisman, The Prescribing Function in World Constitutive Process: How International Law is Made, 6 Yale Stud. World Pub. Ord. 249, 267 (1979) (Article 38 fails to include the lawmaking [prescription] functions of international governmental organizations such as the United Nations.) [hereinafter McDougal & Reisman, World Constitutive Process]. 110 Moore, supra note 60, at 668.

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characteristics.”111 Reisman and other appliers of policy-oriented jurisprudence focus on the expectations that influence aggregate behavior, which is shaped by the various communication processes. It is ultimately within this spectrum of communication that one finds “what is the law.” And since communications are fluid and in constant flux, past decisions and static sources of law are insufficient to help resolve contemporary problems. III

What is International Law?

For scholars, experts, and practitioners of international law (international lawyers),112 the concept of what is law or international law can and often does turn on what is one’s perception of law, or what one considers to be the origin or source of law. In addressing the issue of tncs and human rights, three distinct areas of the law are intertwined: (1) international human rights law: (2) international law, which includes international relations; and (3) commercial and/ or corporate law (this can be further broken down into trade law, business law, economics, etc.). Resolving the human rights and business debate is not an esoteric exercise involving ethereal theories about how law is derived, but is instead one about how to bring tncs into the ambit of international law and international human rights law. Consequently, one has to be cognizant of the intersection of law with social sciences in order to create a new paradigm. In doing so, one must delve into the “social phenomenon” that led to the creation of international law. McDougal and Lasswell insist that “law’s ultimate goal should be to promote human dignity.”113 They developed an approach that recognized and accepted that “policy” is embedded in the law. As an American-trained lawyer, I recognize that authority and control will often converge in the courts, especially appellate courts, which generally offer a reliable prophecy of “what the court will do in fact.”114 In approaching the problem, I understand how the legal system operates, and agree with Reisman that “international lawyers, even more than their domestic counterparts, have a deeply practical need to 111 Id. 112 The adjective “international” before the word lawyer can simply mean a lawyer whose practice involves litigation, commercial or business transactions, or a cause of action that has aspects that involve other nation-states (governments) or nationals or business entities of other nation-states. 113 Sloane, supra note 9, at 520. 114 Id.

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understand how the legal system in which they operate actually functions. Only then can they responsibly and accurately determine whether and how they might influence it.”115 The accepted beginnings of international law as we know it are credited to Hugo Grotius,116 who is regarded as the founder of international law. Grotius set forth his systemized body of rules in his work De Juri Belli Ac Pacis, Libri Tres [The Law of War and Peace in Three Books] in 1625. Grotius’ concept predates the generally accepted recognition that the modern nation-state began with the Peace of Westphalia by about twenty years. However, the historical origins of international law are not exclusively European.117 Historically, cultures have often related to one another in peaceful, predictable and mutually beneficial ways. Herodotus provides us with examples in his description of “silent trading” between the Carthaginians and an unnamed North African tribe in sixth century bc.118 Mesopotamia, India, and classical Greece had three areas of international law: diplomatic relations, treaty making, and the conduct of war.119 These systems were geographically and culturally restricted. There was no concept of an international community of states.120 Oppenheim defines international law as “a body of the rules of human conduct within a community which by common consent of this community shall be enforced by an external power.”121 The community in this context was not 115 Id. at 519. 116 Grotius, interestingly, owned major shares in the Verenigde Oostindische Compagnie (voc), a precursor to the modern day tnc. See infra Chapter 2, sect. III, B, discussing the voc and its role in the slave trade and other violations of human dignity. The development of international law was further assisted by Spanish writers Francisco de Vitoria and Francisco Suarez. See generally McDougal, Lasswell & Reisman, Theories About International Law, supra note 42. 117 See generally Stephen C. Neff, A Short History of International Law (Malcolm D. Evans ed. Oxford: Oxford University Press 2010). 118 Id. at 4. The Carthaginians would leave goods on the shore and the African tribe would inspect them and then leave gold. The Carthaginians would return to shore and if the gold was not enough, they would leave the gold and return back to their boat. The tribe would then leave more gold. This interaction continued until both parties were satisfied. See also McDougal, Lasswell & Reisman, World Constitutive Process, supra note 110 (discussing the silent trading arrangements for commodities between tribes). 119 Id. 120 See generally M. Shaw, International Law (6th ed., Cambridge: Cambridge University Press 2008) (discussing the community of states as a source of international law). 121 Lassa Oppenheim, International Law § 67, 120 (8th ed., Hersch Laterpacht ed., London: Longmans, Green & Co. 1955).

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inclusive. International law as it was originally defined was based upon the political realities of that era. War, as a means of exerting geopolitical dominance over people, resources and territories, legitimized the need only for civilized nations or Christian nations to engage in formalized relations. “At that time, international law was law that pertained to the affairs of states, and only certain states at that: the reference was only to ‘civilized states’ or ‘Christian nations’, terms that excluded the vast majority of countries that compose the contemporary international community.”122 Restatement (Third) Foreign Relations Law of United States provides that international law “consists of rules and principles of general application dealing with the conduct of states and of international organizations and with their relations inter se, as well as with some of their relations with persons, whether natural or juridical.”123 Similarly, H.B. Jacovini, in International Law: A Text, defines “[i]nternational law or the law of nations [as] that body of rules or laws which is binding on states and other international persons.”124 The definition of international law remained unchanged until the early part of the 20th century125 and was based upon the historical realities of the times in which the “rules” to regulate the affairs of states and the people within those states were not as fluid or as complex as they are today. The definition of international law has now expanded to reflect the growing complexity that globalization has on how nation-states interact with each other and the emergence of nonstate actors on the international plane. Defining international law as a “body of rules” that govern individuals and states beyond the confines of nation-state borders fails to acknowledge a role for international law beyond that specifically envisioned at the moment of its promulgation.126 If we are to rely upon rules that were laid down in Article 38, which are based upon rules as postulated by the doctrine of nation-state sovereignty envisioned in the Peace of Westphalia, then international law would have been doomed. Rules do not evolve; “they are either superseded, repealed or allowed to lapse into disuse.”127 122 See Emeka Duruigbo, Corporate Accountability and Liability for International Human Rights Abuses: Recent Changes and Recurring Challenges, 6 NW U.J. Int’l Hum. Rts. 222, 233 (2008). 123 Restatement of the Law (Third), § 101, International Law Defined, Foreign Relations Law of the United States (1987). 124 H.B. Jacovini, International Law: A Text 1 (1963). 125 For various definitions of international law that focus solely on the relations between nation-states, see Duruigbo, supra note 122, at 231–232. 126 See Schmitt, supra note 23, at 188. 127 Id.

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But what are rules? To Judge Hardy Dillard, a former judge of the International Court of Justice, rules are “illusory.”128 They do not “exist,” not like a tree or stone is said to exist.129 True, they may be articulated and put on paper and in that form they exist, but, whatever their form, they are expressed in words which are merely signs mediating human subjectivities. They represent and arouse expectations which are capable of being explored scientifically. The ‘law’ is thus not a ‘something’ impelling obedience; it is a constantly evolving process of decision-making and the way it evolves will depend on the knowledge and insights of the decision-makers.130 Judge Dillard urges us to liberate ourselves from the “cramping assumption that [law] ‘exists’ as a kind of ‘entity’ imposing restrictions on the decisionmaker.”131 Rosalyn Higgins, the first woman appointed as a judge to the International Court of Justice, agrees with her colleague. She views international law as “a continuing process of authoritative decision.”132 It is “the entire decision-making process, and not just the reference to the trend of past decisions which are termed ‘rules’.”133 She disagrees with those who insist that international law are “rules” and that all international lawyers have to do is to identify them [the rules] and apply them. Reliance on a “body of rules,” or lack thereof, as the sole prescriptive measure for resolving a social problem fails to take into account that law is not created in a “human vacuum.” Human beings effectuate changes in law; the human element is essential to the lawmaking process. Wiessner and Willard explain. “[Law] is a human artifact, established, maintained and changed by the decisions of the politically relevant actors.”134 Under a policy-oriented jurisprudence perspective, international law cannot remain constrained by policy that was set when the world was a much “simpler” place. A world in which international law was fashioned by Christianity at a time when wars 128 129 130 131 132

See Hardy Dillard, The Policy-Oriented Approach to Law, 40 Va. Q. Rev. 626, 629 (1964). Id. Id. Id. See Rosalyn Higgins, Problems and Process: International Law and How We Use it 2 (Oxford: Oxford University Press 1994) [hereinafter Higgins, Problems and Process]. Higgins is a former professor of international law at the London School of Economics. She is also an advocate of policy-oriented jurisprudence. 133 Id. 134 Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra note 1, at 319.

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about whose God reigned supreme resulted in the malicious and wanton deaths of millions and the genocide and enslavement of ethnic, racial and linguistic minorities. A world in which “human dignity” was not an inalienable birth right, but instead was meted out according to the conscience and predilections of the ruling elite. In today’s global context, international law constantly reacts to the changing international environment. Olivier de Schutter, although recognizing the conceptual difficulties in imposing human rights obligations on tncs under international law, nonetheless, implores us not to be “held hostage to an understanding of international law – outdated in fact, and unworkable in practice – that sees international law (as under the approach classical in the 19th century) as the law of inter-State relations, thus creating an artificial obstacle to the recognition of ‘non-State’ entities as subjects of international law.”135 International law, as Paust reminds us, is not only a complex and dynamic legal process but is based upon human interaction.136 For decades, there have been diverse viewpoints on what international law is, how it works, whom it binds, how it controls actions, and whether it is even law. This fragmentation has resulted in governments reaching different decisions about what is lawful, national courts and international tribunals prescribing conflicting legal principles and inconsistent outcomes with potentially destructive consequences for world order, and corporations being left uncertain about their legal protections in their international activities and indigenous peoples demand for remedies for violations of their human rights.137 This fragmentation has justifiably caused angst because human society functions best with predictability and certainty. However, such predictability and certainty can have adverse consequences for the advancement of human dignity. The adage, better the Devil you know than the Devil you don’t know, unfortunately holds resonance, especially when considering how societal changes sometimes cause radical upheavals when the status quo is challenged. Rules, as the term is used in international law, under a policy-oriented jurisprudence analysis may play a consequential part in determining the outcome of an international problem, but they may not be dispositive of the outcome. Because identifying a rule as a law based upon past decisions could obscure

135 Olivier de Schutter, Transnational Corporations and Human Rights: An Introduction, New York Law School, Hauseer Global Law Working Paper (2005), available at http://www .nyulawglobal.orgworkingpapers/GLWP_0105.htm. (last visited Apr. 5, 2009). 136 Paust, Private Rights and Duties, supra note 105. 137 See generally Cheng, Making International Law, supra note 84, at 3.

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the intellectual tasks, the New Haven School resists characterizing rules, standing alone, as law. Law should not be “equated with a ‘body of rules’ that enforce themselves. Rules always require for their implementation the ‘conveyor belt of human action’.”138 Judge Higgins conceptualizes international law as “the whole process of competent persons making authoritative decisions in response to claims which various parties are pressing upon them, in respect of various views and interests.”139 For her, “it is the task of the judge to decide the distribution as between them of the value at stake, but taking into account not only the interests of the parties, but the interests of the world community as a whole.”140 IV Conclusion Conceptual theories about what is law or definitions of law have been the subject of scholarly texts and treatises for decades. McDougal and Lasswell remind us that “[t]hough definitions are part of life, by themselves they tell us nothing about life. Properly managed definitions are tools of discovery, since they guide attention to the social process itself where human beings are perpetually engaged in the never-ending interactions in which values are shaped and shared.”141 McDougal and Lasswell posit that these theories about law emerged concurrently with man’s progression from hunter-gatherer to living in roving bands or settled tribes to living in cities.142 In all probability legal theories emerged concurrently with the discovery, articulation and enunciation of the prescriptions in urban civilizations. It appears that the invention was an epochal date which marked the beginning of the modern phase of man and his culture. With the city came scribes and writing; and as tribal control broke down the modern territorial community took shape, with its written codes, administrative hierarchies, tax arrangements and organized armies.143 Within this structure, the written codes reflected a process of communication between those articulating the code, those writing the codes, those receiving 138 Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra note 1, at 319. 139 Higgins, Problems and Process, supra note 132, at 9. 140 Id. 141 Lasswell & McDougal, Policy-Oriented Perspective, supra note 91, at 499. 142 Id. at 488. 143 Id.

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the codes either before or after they were written, and those responding to what had been written. From this positivist perspective, a written code would be a “body of rules” and, thus, law. There are varying theories or perspectives as to what is law. One’s perspective of what is law influences the way a person thinks. A person trained in one perspective may be locked into that perspective refusing to accept that another perspective exists. The issue of tncs and whether they have attendant human rights obligations span multiple disciplines, weaving in and out of “theories of law” and “theories about law.” There is a need to understand how all of these theories of law and about law intersect to formulate a solution to a problem. McDougal, Lasswell and Reisman were cognizant that today’s complex social problems do not occur in a vacuum and that the international scholar or lawyer does not exist independently of the community. “We are not living in a ‘human vacuum’ isolated from other communities, nor does law exists on paper independent of human involvements.”144 Therefore the international lawyer in approaching her task must first understand and accept that she cannot be a wholly objective analyst of the community process she examines because she is both a product of and participant in that process.145 Once the observer (policymaker/decision maker) accepts that her objectivity will be limited by her perspectives and attitudes (environmental variables),146 she can then proceed to an inquiry of the issues that need to be clarified. The foci of inquiry will be tempered by the observer’s “theories of law” or “theories about law.” The New Haven School is premised on a “theory about law” as opposed to a “theory of law.” This distinction will determine how one approaches inquiry to a problem and the resultant solution(s). 144 See generally Suzuki, supra note 62, at 19. 145 Id. at 12. There is no such thing as objectivity when it comes to policymaking or lawmaking. Jurors, judges, legislators, prosecutors and law enforcement are not objective. They cannot be because they are both a product of and a participant in the process they are promoting, defending or protecting. 146 See generally Suzuki, supra note 62, at 13. Environmental variables are the different group associations that observers may become a part of through the course of time, which can shape the observers’ perspectives and attitudes.

chapter 2

Delimitation of the Problem I

Tools of the Trade

The New Haven School methodology is not fixated in the past. Yet, law as it is taught and practiced relies upon past decisions to solve future problems. And since most jurists have been unwilling to mete out justice, which may mean that they would have to “create law,” New Haven School lawyers have an uphill struggle in trying to fashion a remedy to the human rights and business debate that advances a world public order of human dignity. Sloane provides guidance as to how an international lawyer should approach international problems. “To be effective, she must first be able to identify all the participants, understand their roles, appreciate their modes of decision, and comprehend their relationships with one another.”1 Policy-oriented jurisprudence provides the intellectual framework for doing so instead of the “tools of syllogism and interpretation that have defined and limited [the legal profession].”2 The New Haven School is concerned with the focal lenses through which a problem is approached. The focal lenses are the way the observer looks at things and arranges them into conceptual categories.3 In tackling any problem, whether it is designing or building a house for the most discerning client, negotiating a complex corporate merger and acquisition, drafting legislation to strip away the reproductive rights of women under the guise that a woman’s choice is not between her conscience and her God, but is instead a societal problem subject to governmental regulation by conservatives who believe in a smaller and more limited government into our 1 Sloane, supra Chapter 1, note 9, at 523. This guidance was offered in response to the following hypothetical that was adapted from Michael Reisman’s 2007 Hague Academy lectures: “Secretary-General Ben Ki-moon asks you to advise the United Nations on how best to restore a degree of order sufficient for the supply of humanitarian aid to Somalia’s people to resume.” 2 Wiessner, New Haven School of Jurisprudence, supra Chapter 1, note 10, at 48. 3 Reisman, View from New Haven School, supra Chapter 1, note 41, at 120–121. Focal lenses address the question of how observers look at pertinent data. Unlike positivists that look at a limited number of text, characterized as legal, and those social events, ‘facts’, to which the rules direct attention. Because New Haven School’s goal is understanding and influencing decision in ways that will precipitate desired social outcomes, the what of inquiry is necessarily broader than the what of conventional analysis. Id.

© koninklijke brill nv, leiden, 2015 | doi 10.1163/9789004279872_003

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­ ersonal lives, or rationalizing that torture and the dismantling of basic human p rights are justified under the penumbra of a declared “war on terror,” the tradesman will need the requisite tools. The New Haven School approach to resolving problems, be they domestic or international, is to employ five intellectual [tools] tasks that allow a rational, interdisciplinary analysis. These five tasks are: (1) [to identify] the parameters of the social ill or problem the law has to address [delimitation of the problem and goal clarification]; (2) to review the conflicting claims; (3) to analyse the past legal responses in light of the factors that produced them; (4) to predict future such decisions; and (5) to assess the past legal responses, invent alternatives and recommend solutions better in line with a good order, a preferred order [termed] as a ‘public order of human dignity’.4 The five intellectual tasks have also been delineated as follows: (1) Goal Clarification; (2) Trend Analysis; (3) Factor Analysis; (4) Predictions; and (5) Invention of Alternatives.5 Lawyers and decision makers employ these five tasks either implicitly or explicitly when they make decisions.6 In advocating the New Haven School, Wiessner notes that “[t]he New Haven School of Jurisprudence, in essence, looks at possible outcomes of the decision making process on a particular issue and recommends choosing the decision that would maximise access by all to the things humans want out of life”7 or value. Lasswell categorized these human wants into eight values or essential human strivings: power, wealth, respect, well-being, rectitude, affection, skill, and enlightenment.8 The New Haven School recognizes that “[a]ny legal solution to a societal problem should ideally provide everybody with maximum access to the processes of shaping and sharing of all of these things humans value”9 and want out of life, and not things that others determine are needed. 4 Id. 5 See Reisman, View from New Haven School, supra Chapter 1, note 41, at 123–124. 6 Moore, supra Chapter 1, note 60, at 672. “We perform them, for example, when we decide whether to buy a house or rent.” 7 Wiessner, New Haven School of Jurisprudence, supra Chapter 1, note 10, at 51. 8 See Lasswell & McDougal, supra Chapter 1, note 28, at 36. This is not a closed list. More importantly, these eight values are not within the exclusive domain or province of the cultural superior, wealthy or politically elite. They transcend culture, national boundaries and political doctrines. 9 Wiessner, New Haven School of Jurisprudence, supra Chapter 1, note 10, at 52.

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A Clarification of Observational Standpoint Policy-oriented jurisprudence mandates that prior to framing or identifying what social problem needs to be resolved, the problem solver must first clarify her observational standpoint. The aphorism that “the law is blind” is used to explain the depiction of Lady Justice, the Roman goddess of justice, who carries a sword in one hand, scales in the other and wears a blindfold. The symbolic meaning is that justice is meted out objectively, without fear or favor, regardless of racial, religious or linguistic identity, socioeconomic status or political power. In reality, nothing can be or has been further from the truth or practice. Law, if it is that “body of rules” that is written down on paper, may, as a practical matter, be objective. Law, however, as it has been or may be interpreted and applied, is anything but objective, because the decision maker – whether she is a judge, juror, member of the legislator policymaker, prosecutor, or law enforcement official – is not and cannot be objective. The New Haven School challenges the person addressing a problem, known in New Haven School’s parlance as “the observer,” whether she is a scholar, international lawyer, or decision maker, to recognize that in law, objectivity is a “myth.” And therefore, the observer must first know herself.10 This is done by examining “one’s standpoint and commitments, and in particular, to scrutinize the psychological and emotional factors that operate on the self.”11 This is because the observer, like the decision maker, is both a product of the social process that created her environment as well as a participant in the very process.12 Before the problem can be delimited, the observer must conduct a selfintrospection to ascertain the societal and environmental factors that may affect how she defines the problem, researches it, analyzes it and ultimately resolves it. Humans are social beings. We form who we are through various processes of socialization. Socialization begins at the micro level with the family unit, our nuclear group, and later expands to larger groups, units and communities. Continued socialization results in shaping the observer’s predisposition over time through various predispositional variables, such as (1) the identifications the observer establishes in her relationship to other individuals and groups; (2) her demands for preferred interests, including those 10

“To thine own self be true.” This is Polonius’ last piece of advice to his son Laertes in Hamlet. William Shakespeare, Hamlet, act 1, sc. 3 (Barbara A. Mowat & Paul Werstine eds., The New Folger Shakespeare Library 1992). 11 Reisman, Utility of McDougal, supra Chapter 1, note 8, at 277. 12 Suzuki, supra Chapter 1, note 62, at 12; see also Falk, supra Chapter 1, note 33. Falk contends that one cannot avoid letting biases permeate the decision making process. It is unrealistic to think otherwise.

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involved in the problem under inquiry; and (3) her expectations about her own losses and gains.13 These variables shape the observer’s perspectives, attitudes, and standards of behavior through her socialization process, which occurs in the context of various groups. Throughout her life, the observer will come in contact with and be a part of numerous groups, i.e., the nuclear family, national origin groups, racial, linguistic, cultural and religious majorities/minorities within a city, state, country or geographical region. As the observer moves in and out of these groups, her perspectives, attitudes and behaviors are shaped by these group associations based upon her level of education, domestic and international travel, and living experiences and experiences resulting from her economic status. All of these variables have helped shape the observer and may determine how her group associations affect the manner in which she resolves a particular problem. With regard to fashioning a solution to the human rights and business debate, “[t]he observational standpoint is important because it affects all other relevant features: the focus of inquiry, the performance of intellectual tasks, and the postulation of goals.”14 Consequently, the myriad of problem solvers, those self-appointed and seemingly cloaked with authority, those appointed by the un Secretary General, the various business groups, nation-state legislative bodies and ngos have observational standpoints based upon their group associations, which have shaped their approach to the problem. 1 The Author’s Observational Standpoint As a member of a historically oppressed and racial minority/majority15 and descendant of a former colonized, racial/cultural/anthropological 13 Suzuki, supra Chapter 1, note 62, at 13–15. 14 McDougal, Lasswell & Reisman, Theories about International Law, supra Chapter 1, note 42, at 199. 15 My paternal great-great grandfather was conceived from the union between a black American female slave and a white American slave owner of Irish descent. During that time period, Irish Americans were not considered to be a part of the politically powerful white Anglo Saxon, Protestant majority. My great-great grandfather’s “whiteness” (he was known to pass as an Irishman and lived as a “free” man of color), however, gave him access to certain things that were not allowed to nonwhite minorities. America’s cataloguing of who is “white” is not based upon bloodlines traced to Europeans. Instead, America has always catalogued who is “colored,” Negro, or black based upon his/her bloodline being traced to African descendants. See infra, Chapter 2 notes 202–205, Plessy v. Ferguson and accompanying text; F. James Davis, Who is Black? One Nation’s Definition (Pennsylvania University Press 2001); see also pbs, Frontline (discussing the “one drop rule,” meaning that one drop of African blood makes a person “black”), http://www.pbs

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group,16 my observational standpoint incorporates components of critical legal studies, which focuses on the “contradictions, hypocrisies and failings of international legal discourses.”17 In the 1970s, I attended a predominantly white university, the University of Massachusetts, which was flanked by liberal and progressive colleges: Amherst College, Mount Holyoke College, Smith College and Hampshire College.18 I participated in civil rights, anti-apartheid, anti-Vietnam and feminist rallies and supported the Equal Rights Amendment and alternative lifestyles.19 I am cognizant of how “both legal norms and processes reflect the domination of men,”20 white men, in particularly. I, therefore, recognize that legal reform must include a woman’s perspective, which is what

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.org/wgbh/pages/frontline/shows/jefferson/mixed/onedrop.html (last visited Aug. 1, 2011). Therefore, my formative experiences in America have always been outside the access to political and economic power. My maternal great grandmother was born a slave in the American South. Through her, I can trace my ancestry to the African continent. The insidious and artificial grouping of people according to physical phenotypes began in 1648 when Francois Bernier, a French physician, classified individuals who displayed certain physical phenotypes according to “race.” See infra note 120, discussing the concept of race. In the Americas, terms such as mulatto, quadroon, octoroon, colored, Negro, Black or Afro-American were not based upon a person’s physical color or display of the predominant physical characteristics of the white race. Instead, it was based upon the unscientific calculus of having “one drop” of Negro blood. To be considered black in the United States not even half of one’s ancestry must be African black… The nation’s answer to the question “Who is black?” has long been that a black is any person with any known African black ancestry. This definition reflects the long experience with slavery and later with Jim Crow segregation. In the South it became known as the “one-drop rule,” meaning that a single drop of “black blood” makes a person a black. It is also known as the “one black ancestor rule,” some courts have called it the “traceable amount rule,” and anthropologists call it the “hypodescent rule,” meaning that racially mixed persons are assigned the status of the subordinate group. This definition emerged from the American South to become the nation’s definition, generally accepted by whites and blacks. pbs, Frontline, supra note 15 (quoting J. Davis, Who is Black?). See generally Ratner & Slaughter, supra Chapter 1, note 11, at 294. In 1977, Hampshire College was the first college in the United States to divest from apartheid South Africa, see infra note 250. During the 70s, “alternative lifestyles” was the politically correct terminology used to be refer to gay, lesbian, bisexual and transgender individuals. See generally Heather Ruth Wishik, To Question Everything: The Inquiries of Feminist Jurisprudence, 1 Berkeley Women’S L. J. 64 (1985); see also Feminist Jurisprudence, Overview, http://law.jrank.org/pages/6836/Feminist-Jurisprudence-Overview.html (last visited Aug. 1, 2011).

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feminist jurisprudence seeks to do. “Feminist jurisprudence is an examination of the relationship between law and society from the point of view of all women.”21 Feminist jurisprudence must also embrace the perspectives of marginalized racial and linguistic minority groupings of women.22 As a black American female, a member of a legally oppressed racial minority group, I have witnessed first-hand how positive law (those past decisions of courts and legislatures) was used to continue legally sanctioned American apartheid.23 It has taken decades of concerted efforts by individuals committed to holding America to the tenets set forth in the Declaration of Independence, “We hold these truths to be self-evident, that all men [and women] are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness,”24 to change the law to what it should be: a maximization of the eight values that all humans want out of life. Consequently, my observational standpoint is the sum total of cultural, educational, racial, national, and gender life experiences. As a student of international human rights law, I understand that the traditional sources of international law are treaties and customary international law, but that this is not exhaustive. As a u.s. trained civil litigator, I understand that the American legal concept of stare decisis is not transferable to the international law context. Thus, because the international legal system is decentralized and “international law” has not been traditionally made by international tribunals or domestic courts,25 I realize that I “would be professionally derelict” to advise clients on what the potential outcome of a problem will be based upon past decisions. But under a policy-­oriented jurisprudence analysis, I seek to resolve international problems in order to promote a 21 Wishik, supra Chapter 1, note 19. 22 Feminist jurisprudence has been criticized for focusing almost exclusively on white women liberation issues and failing to recognize that black women and women of color approach feminism from an entirely different vantage point, one in which the dynamics of race and white privilege are inextricably and intimately intertwined. See generally Angela Davis, Women, Race & Class (Vintage Books 1983); Bell Hooks, Black Women, Shaping Feminist Theory, in From Margin to Center (Boston: South End Press 1984). 23 See supra, note 246 and accompanying text discussing the Civil Rights Cases. 24 u.s. Declaration of Independence. Feminist jurisprudence recognizes that the Declaration reflected the power dynamics of the time. White men, property owners, construed the laws in their favor to keep them in power. This power dynamic is still at play today and demonstrated by white men in the Republican Party making policies regarding reproductive rights that limit a women’s freedom of choice. 25 See Sloane, supra Chapter 1, note 9, at 518.

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world public order of human dignity. Finally, my observational standpoint is that of a world citizen. As an observer analyzing the problem, I recognize that there is no such thing as an objective analysis. Referred to as the “myth of objectivity,”26 policyoriented jurisprudence acknowledges that an observer cannot be objective. Thus, a person’s observational standpoint is subject to flux depending upon the group identification she assumes when analyzing a problem. Observational standpoints and one’s perception of the law will vary based upon a variety of factors. Wiessner and Willard conclude that the observer’s perception is formed by her various group affiliations. One’s perception of “the law” can differ substantially depending on whether one is a member of the system observed, whether one is an outsider, or whether one lives at its margin. It may also vary depending on one’s culture, class, education, gender, age, life experiences, and other factors. One’s view of “the law” may also change depending on the role one performs – e.g., a scholar, an employee of a nation-state or international organization, an advocate, a judge, an official of a nongovernmental organization, an accused or a victim. More often than not, one acts differently in different roles. Every role and corollary perspective, however, is authentic and has its place and function in the process of authoritative and ­controlling decision. Also, decision making in institutionalized and noninstitutionalized settings is markedly different. Of course, perspectives vary and scholars and decision makers committed to human dignity must be sensitive to variations in perception that attend each perspective and role and must select practices that are appropriate to the task at hand.27 Accordingly, scholars, advisers and decision makers must try to make themselves conscious of their particular standpoint vis-à-vis the problem confronting them. Thus, while there can be multiple standpoints, each of which affects and shapes what is viewed and how it is viewed, the observer must be sensitive to and aware of the perspective from which she views a problem. In clarifying our individual standpoint, we stand a chance of becoming aware of otherwise hidden parochialisms, biases or neurotic tendencies that would possibly skew a rational look at the problem,28 which can be driven by “culture, class, gender, 26 27 28

See generally Suzuki, supra Chapter 1, note 62, at 12. Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 322. Id.

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age, or, in particular, by the profound influence of crises, experience or trauma on the observer.”29 For comparison’s sake, I provide a brief observation of the observational standpoints of key actors in the human rights and business debate. These insights are not only illuminating per se, they also help to provide indispensable background as predispositional conditioning factors of the past trends in decision these observers helped shape. The Observational Standpoints of Key Decision Makers (Problem Solvers) in the Human Rights and Business Debate The backgrounds of some of the key decision makers in the human rights and business debate, past and current, their academic, professional and educational backgrounds as well as the social milieus in which they have operated must be scrutinized based upon the positions they have taken and take with regard to the  debate. Some of the key decision makers have been and are:30 John Ruggie,31 David Weissbrodt,32 Kofi Annan,33 Mary Robinson,34 Irene Khan,35

B

29 30

31

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Reisman, Wiessner & Willard, A Brief Introduction, supra Chapter 1, note 21, at 579. The list of key decision makers is not exhaustive and is merely illustrative. The participants listed are key actors who have weighed in on the business and human rights debate. Their perspectives, identifications and predispositional factors affect their decisions and claims. See infra Chapter 3, The Participants’ Competing and Conflicting Claims. John Ruggie has played an instrumental role in formulating two of the most important programs and reports related to business and human rights debate. In 1999, he helped draft the Global Compact. In 2005, United Nations Secretary Genearal Kofi Annan, appointed Ruggie as the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, Ruggie concluded in his report in October 2010. David Weissbrodt has played an instrumental role in the business and human rights debate. He chaired the Sub-Commission on the Promotion and Protection of Human Rights (2001– 2002) and was a member of the Sub-Commission’s Working Group on the Working Methods and Activities of Transnational Corporations, which produced the Norms. Kofi Annan, former un Secretary-General, is sometimes credited for keeping the un involved in the business and human rights debate. In 1999, he proposed the Global Compact, a partnership between the un and business. He also urged other un agencies to reassess their relationships with business. Mary Robinson, former President of Ireland and former un High Commissioner for Human Rights, has been a vocal supporter of having business assume human rights responsibilities and insisting that human rights is the business of business. Irene Khan, former Secretary-General for Amnesty International, has worked tirelessly in representing the interests of individuals through Amnesty International in the business

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the  Center for Constitutional Rights,36 Martin Scheinin,37 Manfred Nowak,38 Steve Ratner,39 Kenneth Roth,40 Sir Godfrey Chandler,41 Amnesty

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and human rights debate. She supports binding regulations because she feels that voluntary initiatives are subject to the whim of corporate executives. The Center for Constitutional Rights (ccr) is dedicated to advancing and protecting the rights guaranteed by the United States Constitution and the Universal Declaration of Human Rights. Founded in 1966 by attorneys who represented civil rights movements in the South, ccr is a non-profit legal and educational organization committed to the creative use of law as a positive force for social change. ccr pioneered the prosecution in u.s. courts of human rights abuses committed abroad – and some of the worst perpetrators have been corporations. From the murder of activists, to the degradation of the environment in countries ranging from Nigeria and Vietnam to the Occupied Territories in Palestine and South Africa, corporations must be held accountable when torture and killings are committed to further profits. ccr also fights to hold domestic companies accountable for injustices committed against those who can least afford them, from the families of prison inmates to sub-minimum wage workers. Center for Constitutional Rights, http://ccrjustice.org. Martin Scheinin, United Nations Special Rapporteur on human rights and counterterrorism, a human rights lawyer and professor, has been a longtime proponent of a World Court of Human Rights with the jurisdiction to hear individual complaints against multinational corporations for human rights abuses and to render binding decisions and order reparations and redress for the victims. He presented his proposal for a Statute for the World Court of Human Rights as part of the Swiss Initiative to Commemorate the 60th Anniversary of the udhr, Protecting Dignity: An Agenda for Human Rights. See infra Chapter 6. Manfred Nowak, United Nations Special Rapporteur on Torture, a human rights lawyer and professor, has been a long-time proponent of a World Court of Human Rights with the jurisdiction to hear individual complaints against multinational corporations for human rights abuses and to render binding decisions and order reparations and redress for the victims. He presented his proposal for a Statute for the World Court of Human Rights as part of the Swiss Initiative to Commemorate the 60th Anniversary of the udhr, Protecting Dignity: An Agenda for Human Rights. See infra Chapter 6. Steve Ratner, a law professor, has studied extensively the various ways to hold multinational corporations accountable for human rights abuses. See Ratner, Theory of Legal Responsibility, infra Chapter 4, note 44. Kenneth Roth is the executive director of Human Rights Watch, one of the world’s leading international human rights organizations, which operates in more than 80 countries. Roth has conducted numerous human rights investigations and missions around the world. He has written extensively on a wide range of human rights abuses, devoting special attention to issues of international justice, counterterrorism, the foreign policies of the major powers, and the work of the United Nations. Sir Geoffrey Chandler, a former executive for Shell, headed Amnesty International’s Business Group. He was one of the first business executives to champion binding regulations for corporations. He advocated a type of Hippocratic Oath for business leaders to

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International,42 Human Rights Watch,43 and the International Chamber of Commerce.44 Some of these observers/decision makers are international relations scholars with no legal background or training. They may approach the problem from a non-interdisciplinary view, applying a strict literal construction to what international law is and who are its subjects. Others are traditional international lawyers by training, who are trapped in their understanding of the law as commands of the sovereign states, incapable of seeing businesses as addresses of international human rights norms. Others are lobbyists or business organizations who oppose binding norms and advocate for limited voluntary, selfregulatory measures as a means to forestall or obviate the need for any

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ensure that their business strategies incorporated human rights and into the bottom line. See infra Chapter 7, note 34. Amnesty International (ai) is a global movement of more than 3 million supporters, members and activists in over 150 countries and territories who campaign to end grave abuses of human rights. Amnesty’s vision is for every person to enjoy all the rights enshrined in the Universal Declaration of Human Rights and other international human rights standards. ai has been one of the leading voices in demanding a global binding instrument to regulate multinational corporations. Amnesty believes that human rights abuses anywhere are the concern of people everywhere. Amnesty International, http://www .amnesty.org/en/who-we-are. Human Rights Watch (hrw) has been a vocal proponent for binding regulations against multinational corporations. It is one of the world’s leading independent organizations dedicated to defending and protecting human rights. By focusing international attention where human rights are violated, hrw gives voice to the oppressed and hold oppressors accountable for their crimes. hrw’s rigorous, objective investigations and strategic, targeted advocacy build intense pressure for action and raise the cost of human rights abuse. For more than 30 years, hrw has worked tenaciously to lay the legal and moral groundwork for deep-rooted change and has fought to bring greater justice and security to people around the world. Human Rights Watch, http://www.hrw.org/about. The International Chamber of Commerce has actively lobbied against binding regulations for multinational corporations. See infra Chapter 2, note 377 and accompanying text. The Chamber of Commerce is a unique global business organization. The Chamber of Commerce is – and has been throughout its long existence – a steadfast rallying point for those who believe, like its founders, that strengthening commercial ties among nations is not only good for business but good for global living standards and good for peace. To that end, Chamber of Commerce provides a forum for businesses and other organizations to examine and better comprehend the nature and significance of the major shifts taking place in the world economy. The Chamber of Commerce also offers an influential and respected channel for supplying business leadership to help governments manage those shifts in a collaborative manner for the benefit of the world economy as a whole. International Chamber of Commerce, http://www.iccwbo.org/about-icc/organization/.

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measures that may hinder a company’s ability to maximize profits. Others are human rights lawyers and activists who embrace holding tncs accountable for the full panoply of applicable human rights obligations, responsibilities and duties that can conceivably fall within an area of law. All of these individuals and entities seek to influence decision makers in the lawmaking process. Moreover, all of these individuals and entities can, at some point in time, act on behalf of or in conjunction with other stakeholders involved in the human rights and business debate. Many of these decision makers are also participants/ claimants whose perspectives and group identifications infuse the claims they make. When they make decisions, they are guided by these and other, more hidden, predispositional factors they would benefit from exploring. II

Delimitation of the Problem under a Policy-Oriented Jurisprudence Analysis

Some scholars posit that there is an ongoing debate regarding human rights and business45 without clearly articulating what is the proposition of the debate, its origins, the participants in the debate, when, where and why the debate was held, and what was the outcome. This debate ostensibly centers on whether international law is elastic enough to encompass nonstate actors and hold them accountable for human rights violations to individuals whose rights have been violated. Lawyers, political scientists, international relations experts and a host of corporate and business law academicians have participated in and are participating in this debate. However, since alleged violations must ultimately be brought before a court of law or another type of tribunal that must weigh legal principles and evidence, it is the lawyer who, under a policyoriented jurisprudence analysis, is thrust into the role of advocating for the victims, advising the alleged perpetrators, arguing policy and legal principles before judges, administrative, domestic and international courts and tribunals 45

The literature on the issue of business and human rights is replete with references to the “debate,” which inherently presupposes a winner, loser or a draw, which ultimately results in stagnation. In facilitating discussion, the term “debate” is used to refer to the issues surrounding how to provide a remedy for individuals whose human rights have been violated by tncs. See generally Klaus M. Leisinger, On Corporate Responsibility for Human Rights, in Humanism in Business (Cambridge University Press 2009) http://www .novartisfoundation.org/mandant/apps/publication/detail.asp?MenuID=270&ID=612& Menu=3&Item=46.1&pub=200 (last visited Jan. 15, 2009). “The debate on ‘business and human rights’ has become a central theme on the international corporate responsibility agenda.”). Id. at 3.

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and other regulatory bodies. Lawyers seeking to challenge or preserve the status quo of international law are ultimately making choices and/or creating choice-making institutions.46 Thus, while all who participate in the debate have an observational standpoint, it is the lawyer who is “the ultimate instrument of observation, evaluation and choices as well as the ultimate target of decision.”47 Delimitation of a problem begins with a clear focus of inquiry as to what problem needs to be resolved by clarifying those issues that need clarification for a more viable solution. This requires a meticulous analysis of geopolitical events, the moods and times that existed when the law was made, the observational standpoints of the decision makers who made the law, how society has evolved since the law was made, how the law has been interpreted, applied and implemented in light of today’s social needs and mores. The observer must be cognizant of the community in which the problem arises and the human interactions that exist in the community and how the “law” is linked to the community. Delimitation includes gathering and digesting all relevant information on the issue under inquiry.48 All accessible knowledge of the topic has to be collected and used, from all of the various disciplines that could shed light on the topic. Although transborder/transnational commercial activities of some form have existed since recorded history, the extraterritorial effects of these commercial adventures, as inhumane and egregious as they may have been, 46 47

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See Reisman, In Memoriam Lasswell, supra Chapter 1, note 37, at 156. Michael Reisman, in his Essay in Memoriam of Harold D. Lasswell, discusses why Lasswell considers the lawyer’s role instrumental in the decision making process known as “law.” According to Lasswell, the lawyer who does not perform the requisite self-inventory approaches her job in a manner that ultimately does a disservice to human dignity. Lawyers, however, have been cast in competing and conflicting roles. Roles in which lawyers find themselves having to advocate for causes based upon the client’s wishes, which can and oftentimes does collide with a lawyer’s moral compass. Thus, it is no wonder that people have given an inaccurate interpretation to Shakespeare’s quote from Henry V1. “The first thing we do, let’s kill all the lawyers.” Many people take this to mean that lawyers are corrupt and unethical. The scene from Henry VI (Part II) concerns the planning of an evil revolution – a takeover of power by Cades and his companion, Dick the Butcher, for their own greedy purposes. But the depiction of lawyers is taken out of context. In this scene, Dick the Butcher and Cades are planning a revolution, and the lawyers are viewed as the only group of people who stand in the way. Thus, in order to be successful, Dick the Butcher wants to kill all the lawyers. This famous quote is not a criticism of lawyers, but actually is the greatest possible compliment. Lawyers can be the vanguards of social justice. See David Giacalone, Shakespeare and Lawyers: the Bars Propaganda (Mar. 1, 2004), http:// blogs.law.harvard.edu/ethicalesq/shakespeare-and-lawyers (last visited Nov. 15, 2010). See Suzuki, supra Chapter 1, note 62, at 31.

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occurred during a period of time when human value, worth and dignity were predicated upon views that men, women and children were chattel to be dominated by male oligarchies. Sovereign rulers (the church, monarchs and warlords) commissioned and sanctioned these commercial ventures, which resulted in empires being established in far flung reaches of the world. Foreign flags towered over foreign soils, designating that the resources of the lands, whether minerals, precious metals, agriculture or humans, were property of the sovereign to be exploited in the name of the sovereign and protected by the sovereign. Military and naval power were used to maintain these commercial ventures. The abject disregard for human dignity and the environment did not sound a collective chord around the world until God-fearing women and men opposed the slave trade and spoke out against God-fearing men and women who operated, supported, participated in, and profited enormously from the trade of dark chattel. Human rights, as the term is known today, did not exist as an area of law that nation-states, individuals, and corporations were subjected to for their commercial exploits and activities that violated human rights. Yet, the problems associated with transborder/transnational commercial activities from the beginning of recorded history until the adoption of Universal Declaration of Human Rights (udhr) in 1948 have not changed. The world community’s reactions, however, to such activities have waxed and waned over the years. The United Nations in the 60s and 70s, against the backdrop of international exposure of transnational corporations’ policies, practices and procedures that resulted in gross human rights abuses in developing countries and the interference in political affairs, began to grapple with the topic of transnational corporations and human rights. With the wave of decolonization washing ashore on the African and Asian continents and other parts of the “Third World,” many of these nations began to loudly and vocally confront transnational corporations because of their policies, practices and procedures.49 The problem surrounding the lack of international regulations to hold tncs accountable for human rights abuses is multifaceted and involves intertwined areas of law that must be considered before reaching a solution. As any lawyer knows, how the problem or question is framed often determines the result. This is especially true when law as a body of rules is applied and past decisions are the guideposts by which the lawyer determines how the decision maker will decide. While the issue at hand is not a novel issue of law, it is, nonetheless,

49

See text discussing the New International Economic Order, supra Chapter 3, note 120 and accompanying text.

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a recurring issue. One in which the problem has become exacerbated over time. But framing the problem in terms of what the current or existing law allows does little to further social justice or to advance a world order of human dignity. The problem then, as it is now, is who is responsible for corporate business activities that adversely exploit individuals, a community’s natural resources or its peoples? Domestically, this question is responded to with the simple refrain: the government is responsible for protecting its people against harmful corporate activities. Governments do this by enacting legislation and regulations that companies are required to comply with. What happens, however, when there is no law? Or there is a law, but no compliance? Generally, laws carry consequences for noncompliance – monetary fines, suspension from participating in various business ventures, and even imprisonment of ceos, and compensation or reparations to the victims in a tncs home state. When such commercial activities occur in foreign lands by a foreign-based tnc, the answer to the question becomes more complex for two reasons: one, domestic corporate law governs the formation of a corporation; and two, the current and prevailing corporate model is an Anglo-American based model established by u.s. laws. Framing the problem in a manner that elevates a corporation to the same legal status as a human being is flawed. It places the rights of the commercial/ business entity, which exists only as an operation of law, above or on par with the rights of individuals who exist as a matter of nature or biology. Corporations, although composed of human beings, are unable to biologically procreate. Utilizing Darwin’s philosophy, the survival of the fittest, corporate productivity is based upon humans collectively using their ingenuity to increase corporate performance. In essence, corporations cannot exist without human beings. Unless we know how a problem has come about, it is difficult to discuss ways to address it. Policy-oriented jurisprudence starts with the delimitation of the problem as characterized by a discrepancy between predicted and desired future decisions regarding conflicting claims on any issue in society. It suggests that the problem or issue needs to be defined precisely and comprehensively in its relevant context, using all available resources or knowledge. Generally, the problem in the human rights and business debate has been postulated as follows: How can transnational/multinational corporations be held accountable for human rights abuses under international law? Or some variation thereof. In applying the five intellectual tasks to this question as delimited, there is no solution. McDougal and Lasswell placed the individual at the center of their methodology since human dignity only applies to

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the  individual.50 It is from this perspective that the problem is delimited as follows: Should individuals and indigenous peoples and other vulnerable groups be entitled to remedies under international law for human rights abuses committed by transnational corporations? Delimiting the problem in this manner provides for a much more deliberative process. It places the individual at the core of any area of law that can assist the decision maker in fashioning a viable and efficacious solution. In delimiting the problem, one must engage in a thorough gathering and digestion of all of the relevant information on the issue,51 drawing from the various disciplines that could assist the observer in shedding light on the problem and ultimately proposing a viable solution. The various disciplines and areas of law that were researched included the following: corporate law, sociology, political science, business as an academic discipline, economics, economic law, international law, international human rights law, humanitarian law, contracts, u.s. constitutional law, world history, u.s. history, European history, u.s. civil rights law, and environmental law. The delimited problem’s focus of inquiry deals with all of the above, but primarily international law, transnational law, transnational corporations and international human rights law. Transnational corporations are often considered to have negative effects on globalization as it relates to the world community. When human rights are infringed upon by transnational business entities, whether it is from using government security forces in a natural gas extraction facility to quell protest and the security forces rape, murder and torture the protesters52 to the debasement of human dignity as a

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Some scholars argue that the state-centric focus of international law, which is based upon the notion of sovereignty, is actually inaccurate. The state is a fiction that was designed to benefit the individual and exists only with the consent of collective individuals. “Empirically speaking, states do not exist. The phenomenal world only knows individuals dressed up in the cloak of abstract entities such as ‘states’, ‘governments’, or ‘other social organizations’, different individuals have different roles; some are vested with authority in a given community to make and/or enforce decisions.” Siegfried Wiessner, Non-State Actors and Their Impact on International Human Rights Law, American Association of Law Schools Workshop in Human Rights, Alexandria, Virginia (Oct. 26–28, 2000), available at http://aalsfar.com/profdev/humanrights/weissner (last visited Aug. 2, 2011). To qualify this statement, a complete review of “all” sources of relevant information is a physical impossibility. See John Doe VIII v. Exxon Mobil Corp., 658 F.Supp.2d 131 (d.d.c. 2009).

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result of child labor,53 or the manipulation of mothers to rely upon infant baby formula instead of breast milk,54 human rights abuses in one part of the world affect the entire world community. The New Haven School is concerned with the world community.55 It is the individual in this world community who McDougal, Lasswell, Reisman and other policy-oriented jurisprudence scholars and international lawyers recognize as the direct beneficiaries of the international human rights regime. This world community has been shaped by tncs and their interactions with people. McDougal and Lasswell’s policy-oriented jurisprudence is premised upon a “world community” that consists of individual communities that are interrelated and interdependent.56 Therefore, the issue of tncs and human rights 53

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See “Bitter plight of the vanilla trade children,” The Sunday Times (Mar. 14, 2010) (detailing the plight of children forced to work on vanilla plantations in Madagascar) http://www.timesonline.co.uk/tol/news/world/africa/article7060962.ece (last visited Sept. 9, 2011). See also Boimah Flomo, et al v. Firestone Natural Rubber Co., llc, 643 F.3d 1013 (7th Cir. 2011). Twenty-three Liberian children brought suit in the u.s. against the Firestone Rubber Company under the Alien Tort Statute (“ats”), claiming, inter alia, that Firestone used child labor on its Liberian rubber plantation in violation of customary international law. See International Code of Marketing of Breast Milk Substitutes, infra Chapter 4, notes 358–363 and accompanying text accompanying text discussing the aggressive marketing practices by makers of infant formula and the campaign to boycott Nestle. The term world community in this context reflects the reality that the “world,” even though segregated into national, regional and local enclaves of people based upon nationalities, religions, ethnic, racial and linguistic commonalities, is composed of people living on this planet in ever increasing interdependent and interrelated linkages. In any level of community, municipal through regional to global, people seek to broaden their identifications, expectations, and demands about values in both organized and unorganized ways transcending national territorial boundaries since they have become increasingly aware that the conditions under which these values can be secured are rapidly transcending the artificial man-made lines inherited from the arbitrary confines of feudalism. Interdependence on a global scale demonstrates the presence of the world community. Suzuki, supra Chapter 1, note 62, at 21. See McDougal, The Law School of the Future, supra Chapter 1, note 5, at 1352. That there is today a world community, in a fundamental sense that all people, whatever their location or function, are interdependent in achieving all the major values of our time – safety; the democratic sharing of power, respect and knowledge; the production and sharing of wealth; the promotion of congenial personal relationships; and the maintenance of standards of rectitude. We recognize, however, that this world community is imperfect in that people are not yet fully conscious of these interdependencies and have not yet reshaped their institutions to conform to the imperative

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abuses is a global problem that affects the world community. Policy-oriented jurisprudence has always viewed the world as an integrated whole. Technological advances have made the world irreversibly smaller, interconnected and interdependent. In 1966, Reisman and McDougal criticized the Rhodesian government’s human rights abuses. They stressed that what happens in Rhodesia affects someone thousands of miles away in another part of the world. In the contemporary intensely interdependent world, peoples interact not merely through the modalities of collaborative or combat operations but also through shared subjectivities – not merely through the physical movement of goods and services or exercises with armaments, but also through communications in which they simply take each other into account. The people in one territorial community may realistically regard themselves as being affected by activities in another territorial community, though no goods or people cross any boundaries. Much more important than the physical movements are the communications which people make to each other.57 New technology galvanizes young adults around the globe to unite in solidarity with other young adults thousands of miles away when cell phones captured a jobless graduate, Mohamed Bouazizi, arrested for selling vegetables without a permit and later setting himself on fire. Mr. Bouaziz’s act was an extreme rejection of the Tunisian government’s handling of the country’s internal economic crisis. WikiLeaks later publishes an article on the United States’ criticism of the Tunisian regime. These events coalesced and ignited protests among young Tunisians. The flames caught sail on African winds and fanned a wildfire across North Africa and the Middle East, ushering in new governments and new hopes. Technology allowed students to organize a mass rebellion and force the resignation of an Egyptian despot, simply by “tweeting” when, where and at what time to show up in Tahrir Square. Egyptians responded by arriving in the thousands, as the world community watched and witnessed the flowering of democracy. Just as a people’s fight against despotic regimes that violated human rights garnered world-wide attention and support, corporate violations of human

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requirements of these interdependencies, and so to release their full potentialities in the production of values. Id. Myres S. McDougal & W. Michael Reisman, Rhodesia and the United Nations: The Lawfulness of International Concern, 62 Am. J. Int’l L. 1, 12 (1968), available at http://­ digitalcommons.law.yale.edu/fss_papers/674 (last visited Dec. 12, 2006).

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rights when individuals do not have access to remedies also capture the world’s attention. Corporate human rights abuses affect everyone in today’s global world. Under policy-oriented jurisprudence everyone in the modern world is a member of one “world community.”58 “[W]e speak of ‘the world community’ because the existence of the high frequency of interaction and the intensity of interdependence on a global scale causes the aggregate of people inhabiting this ‘shrunken globe’ to realize their common stake.”59 As members of the world community, the problem of whether individuals are entitled to a remedy under international human rights law to hold multinational corporations accountable for human rights abuses cannot be relegated to parochial interests under the rubric that abuses in hosts states do not concern or impact individuals in home states or other communities far removed from the individuals whose rights have been abused and the abuser (multinational corporations). Thus, in delimitating the problem of tncs and human rights, even the disengaged observer should respond to the problem with the view of improving the world community.60 Because problems do not arise in a vacuum independent of human interaction within the community and law does not exist on paper independent of human involvement, “[t]he focus of inquiry must accordingly be directed to a social process in which people influence one another consciously or otherwise.”61 One must understand how “law,” that amorphous “body of rules,” as relied upon by positivists to control the outcome of judicial decisions and/or a community’s response to a problem, is at the core of the human rights and business debate. The “law” pertaining to the purpose and effect of sovereignty, 58

Under policy-oriented jurisprudence, viewing the world as a “community” that is made up of interrelated and interdependent units because these units exist on one planet is essential to understanding why all members of the world community are entitled to remedies for corporate-related human rights abuses. The “world community” is an underlying component of policy-oriented jurisprudence that is found in all of McDougal’s writings. See generally McDougal, Lasswell & Reisman, Theories about International Law, supra Chapter 1, note 42, at 189–195. 59 Suzuki supra Chapter 1, note 62, at 20. The common stake that we share is not to have an individual’s basic human rights violated by tncs that are given enumerated legal [human] rights without any attendant or corollary legal obligations. Traditional first generation human rights are not the only focus, but also justice and economic fairness. The Occupy movements in the u.s. and union and trade organizations protests in Greece and Italy as a result of the global economic crisis demonstrate that when one country sneezes other countries across the globe catch a cold, sometimes the flu. 60 See generally Suzuki, supra Chapter 1, note 62, at 34 (even the disengaged observer is a part of the world community). 61 Id. at 20.

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corporate law, public and private international law, international human rights law and the legal protections extended to tncs (domestic constitutional law) are all a part of how the inquiry process must be approached and how the problem must be delimited. Thus, in delimiting the problem, the focus should be on what the law should be in order to ensure the maximization of human dignity. Although the problem may have at one time had limited appeal to the world community, because tnc’s activities can cause ecological damage to the environment, which is often irreversible and affects the cardinal human right – the right to life – human rights abuses committed by tncs can affect the entire world community. Posing the following questions will further clarify the inquiry and sets forth the issues considered essential to such clarification, which in doing so will aid in developing specific strategic recommendations to resolve the human rights and business debate.62 The first question is the seminal one and the others flow from it: What is meant by human rights abuses?63 Do they cover only affronts to human dignity that effect the physical integrity of persons?64 Do they include attacks on a person’s moral integrity, such as the exclusion of persons from major benefits of society on account of their race, ethnicity, sex or national origin?65 Are violations of so-called civil and political rights part of the picture?66 What about claims characterized as ‘social’, ‘economic’ or cultural rights?67 Do the abuses have to be widespread of systematic?68 Broadly defined, human rights are “those human desires and wants that the politically relevant members of a community decide to authoritatively protect and promote.”69 Human desires and wants are what people value. McDougal and Lasswell have identified eight categories of values: 62

63 64 65 66 67 68 69

See generally Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 318. Wiessner and Willard posed similar questions in answering the question whether “individuals should be held criminally accountable for human rights abuses in internal conflicts.” Id. Id. Id. Id. Id. Id. Id. McDougal, Lasswell and Chen note that perhaps the greatest challenge in securing the protection of human rights is that scholars and decision makers “have not met their responsibilities for clarifying and promoting the demands, identifications and expectations among the people of the world which are an essential precondition of a public order of human dignity.” Myres S. McDougal, Harold D. Lasswell & Lung-chu Chen, Human

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1. Respect – Freedom of choice, equality and recognition; 2. Power – Making and influencing community decisions; 3. Enlightenment – Gathering, processing and disseminating; 4. Well-being – Safety, health, and comfort; 5. Wealth – Production, distribution, and consumption of goods and services, control of resources; 6. Skill – Acquisition and exercises of capabilities in vocations, profession, and the arts; 7. Affection – Intimacy, friendship, loyalty, positive sentiments; and 8. Rectitude – Participation in forming and applying norms of responsible conduct.70 This listing is neither hierarchical nor exhaustive. Numerous examples abound illustrating how one or more of these values have been affected.71 Human

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Rights in World Public Order: Human Rights in Comprehensive Context, 72 nw. U. L. Rev. 280, 281 (1975), available at http://digitalcommons.law.yale.edu/fss_papers/2465. McDougal, Lasswell and Chen also assert that the various theories of law – natural, historical, positivist, Marxist and social science approaches – have created “intellectual confusion” as to what exactly are human rights. They offer the policy-oriented jurisprudence perspective of human rights to alleviate this confusion and to fill the void in scholarship that is needed to achieve a world public order of human dignity. Myres S. McDougal, Harold D. Lasswell & Lung-chu Chen, Human Rights in World Public Order: The Basic Policies of an International Law of Human Dignity 85 (New Haven: Yale University Press 1980) [hereinafter McDougal, Chen & Laswell, World Public Order]. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 888 (2d Cir. 2000) (finding that plaintiff’s allegations that Shell participated in deportation, forced exile and torture of the Ogoni People in Nigeria, as part of a widespread attack, satisfied a claim for crimes against humanity under the ats); Presbyterian Church of Sudan v. Talisman Energy, Inc., 244 F.Supp.2d 289 (s.d.n.y. 2003) (Sudanese residents brought a class action against Talisman Energy and Sudan alleging that the defendants collaborated to commit gross human rights violations, including extrajudicial killings, forcible displacement, war crimes, confiscation and destruction of property, kidnaping, rape and enslavement); aff’d 582 F.3d 244 (2d Cir. n.y. 2009), cert. denied, 131 S. Ct. 79 (2010); Bowoto v. Chevron, 557 F.Supp.2d 1080 (n.d. Cal. 2008) (Several members of a Nigerian village accused Chevron of being involved in the shooting deaths of two activists at an offshore oil platform in the Niger Delta of Nigeria in 1998. A jury found in favor of the defendants.); John Doe VIII v. Exxon Mobil Corp., 658 F.Supp.2d 131 (d.d.c. 2009). In John Doe VIII v. Exxon Mobil Corp., the plaintiffs, Indonesian villagers alleged that Indonesian security forces hired and supervised by Exxon committed murder, torture, sexual assault, battery, and false imprisonment, appealed the dismissal of their case; Boimah Flomo, et al v. Firestone Natural

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rights abuses occur when one or more of the eight values have been violated by tncs’ activities, policies or practices.72 Of course, what is a human rights abuse is contextual and may vary from one community to the next; however, this does not mean that human rights are culture specific, as the cultural relativists would argue.73 Wiessner and Willard define a human rights abuse as any event or series of events in which individuals are deprived of any of the eight values (or any combination or mix of the values) if the deprivation results from the infringement or violation of an authoritatively protected practice associated with the shaping and sharing of the value (s) in question; these authoritatively protected practices may or may not be codified in a printed document. Also, determining whether or not a value deprivation occurs is not always a straightforward matter.74 These eight values are subsumed into the initial inquiry and clarification of the goals that the problem solver should consider. They permit the study of a particular problem in a systematic way.75 In the New Haven School’s casebook on international law, Wiessner discusses human rights from a policy-oriented perspective and defines it as follows:

Rubber Co., llc, 744 F.Supp.2d (s.d. Ind. 2010); aff’d 643 F.3d 1013 (7th Cir. 2011). Twenty-three Liberian children brought suit in the United States against the Firestone Rubber Company under the Alien Tort Statute (“ats”), claiming, inter alia, that Firestone used child labor on its Liberian rubber plantation in violation of customary international law. Applying international law the Court ruled that the plaintiffs’ claims were not adequately pled to support a violation of customary international law. 72 See generally Myres S. McDougal, Harold D. Lasswell & Lung-chu Chen, The Protection of Respect and Human Rights: Freedom of Choice and World Public Order, 24 am. Univ. L. Rev. 919, 950 n. 123 (1975) [hereinafter McDougal, Lasswell & Chen, Protection of Respect] (discussing the values impacted by the slave trade). 73 Diana Ayton-Shenker, The Challenge of Human Rights and Cultural Diversity, United Nations Background Note, http://www.un.org/rights/dpi1627e.htm (last visited Aug. 1, 2011). Cultural relativism generally deals with the belief that an individual’s conception about human rights should be based upon the individual’s view of his/her culture. In the abstract, this sounds perfectly acceptable in light of imperialistic and colonial exploitations of people of color. Where cultural relativism falls short is that the right to a life with human dignity is not based upon the predispositions of cultural norms and mores that deny an individual such a basic right. 74 Wiessner & Willard, Human Rights Abuses Internal in Conflict, supra Chapter 1, note 2, at 321. 75 Schmitt, supra Chapter 1, note 23, at 190.

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The concept of ‘human rights’, properly delimited, refers broadly to the authoritative and controlling responses of international decisionmaking processes to claims by individuals to secure and maximize certain values. These claims may vary, and they into conflict with each other, depending on the identity of the claimants and their respective value preferences. It is suggested (1) that the proper focus of human rights discussion is on the individual human being; (2) that the individual human being is formed and transformed, by choice, destiny and, sometimes, the will of others, in a complex process of social interaction; (3) that the policy driving the human rights movement and its legal manifestations is the protection and full development of the individual being in his or her entire social context; and (4) that this policy can be broken down, at least initially into the goals of protecting the physical integrity, the moral integrity, and the civic integrity of each human being.76 The International Court of Justice reaffirmed the long-standing principle that human rights are an inherent and innate part of what makes one human. Human rights have always existed with the human being. They existed independently of, and before, the State… There must be no legal vacuum in the protection of human rights. Who can believe, as a reasonable man, that the existence of human rights depends upon the internal or international legislative measures, etc., of the State and that accordingly they can be abolished or modified by the will of the State?77 The second question is whether international law provides a rubric for postulating a solution to the problem. Despite the New Haven School’s abhorrence for viewing or equating law as body of rules,78 these rules must be reviewed, considered and dissected in order to apply policy-oriented jurisprudence. Some scholars, particularly Hans Morgenthau,79 consider international law as not really law 76

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W. Michael Reisman, Mahnoush H. Arsanjani, Siegfried Wiessner, & Gayl S. Westerman, International Law in Contemporary Perspective 520 (2d ed., Foundation Press 2004) [hereinafter Contemporary Perspective]. South West Africa (Second Phase) (Eth. v. S. Afr.; Liber. v. S. Afr.) 1966 i.c.j. 6, 250, 297–298 (July 18). McDougal considers law not as a “body of rules” but as a process of making authoritative decisions about how values – power, wealth, enlightenment, skill, well-being, affection, respect and rectitude – are to be protected and distributed in the community. See generally Richard Falk, Rosalyn C. Higgins, W, Michael Reisman, & Burns H. Weston, Notes and Comments: Myres Smith McDougal (1906–1998), 92 Am. J. Int’l L 729, 730 (1998). See Hathaway, supra Chapter 1, note 20.

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because no sanctions can be applied to its ­violator.80 The body of rules that make up international law, past authoritative and controlling decisions that have been reduced to a written form (treaties) or form part of a custom (customary international law), obfuscates the issue and shields transnational corporations from legal accountability for their abusive policies, practices and procedures. International law, that “body of law” espoused and postulated by Grotius in 1625 and set forth by Oppenheim and various other scholars, provides only a starting point of inquiry. The traditional concept of international law, the law that governs international relations between civilized and Christian nationstates, does not allow for the imposition of any obligations on tncs. Applying the historical purpose of international human rights law, which is to curb and halt the abuse that nation-states perpetrated on their citizens, as exemplified by the Nazi regime’s quest for lebensraum as a geopolitical policy, tncs do not fall within the ambit of international law as it was originally formulated, later defined and accepted by the world community. If one is to subscribe to a theory about international law, then that cadre of rules that were established in 1625 and later codified in the International Court of Justice Article 38 should not result in such an entrenched position as to preclude events and entities that were not in existence when the law was promulgated to remain in an obligatory abyss. The absurdity of such a position fails to recognize that the world and all of its inhabitants,81 from the microscopic to the largest life forms, do not exist in a cryogenic stasis. Whether one ascribes 80

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See generally Hans J. Morgenthau, Positivism, Functionalism, and International Law, 34 Am. J. Int’l L. 260, 276 (1940). Morgenthau’s concept that enforcement mechanisms or sanctions are needed in order for international law to be considered “real law” is not shared by all. According to Lung-chu Cheng, effective sanctions are relevant, however, the lack of sanctions is not a determinative factor. See Schmitt, supra Chapter 1, note 23, at 188. The view that human rights also extend to the eco-system was realized with the unleashing of the atomic bomb and the devastation that resulted. Additionally, a healthy environment is tied directly to human rights and is interdependent and inter-determinate. [I]mplict at least, in the concern for the integrity of the eco-system is clearly the notion that there are no human rights if there is no environment in which human beings can survive and possibly even improve the human prospect. But this insight suggests an even higher level of moral consciousness in the sense that the eco-system (with all its plant life and animals, wild and domesticated) are all part of a complex cycle, in which human beings are both custodians and also utterly dependent as individuals and as society. This means we now see in nature not something irresponsibly exploited and destroyed but central to our identity as a sentient species. Winston P. Nagan Individuality, Humanism, & Human Rights, Eruditio, e-journal, World Academy of Art and Science, Electronic Seminar (June 30, 2012), http://eruditio.world academy.org/article/individuality-humanism-human-rights (last visited Dec. 12, 2013).

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to the big bang theory, Darwinian evolution, the biblical Genesis or the creation mythologies of ancient civilizations, life on this planet is ongoing. The seismological naturally occurring events – hurricanes, tornadoes, earthquakes, floods, droughts, tsunamis, or heat waves – whether hastened by global warming or not, have changed this planet’s physical and atmospheric landscapes since the beginning of time, as recorded in stone images, print, or recanted through the oral histories of indigenous peoples and tribes. A priori, a law that was formulated to resolve a particular problem at a particular point in time serves the same utilitarian purpose for human beings as any of our remaining vestigial organs do. These vestiges are distant, but vague and palpable, reminders of from whence we came; they serve no purpose for the journey that lies before us. So it is with international law serving as a stop gap to holding tncs accountable for human rights abuses. Planetary geographical changes are naturally occurring processes that sometimes move imperceptibly until molecules collide creating immediate and irreversible changes. So too it must be and currently is happening with international law. The planetary confluence of people and sociological and geographical occurrences have been thrust together in a beaker of life called the “world community,” and they are calling for a change in international law, from what it was originally formulated to be, to take into account tncs. And if not that, then an urgent and resounding cry is being emitted for something to fill the void. It is this “something” that is currently being fashioned and shaped by either a reformulation or reconceptualization of law, if not a complete deconstruction of various areas of law that precipitated and created the void that allows tncs to abuse human rights with impunity and without accountability. III

Geopolitical Drivers in the Human Rights and Business Debate The politics of a State lies in its geography. napoleon bonaparte82

Transnational Corporations: Searching for New Markets – A Geopolitical Strategy International concerns about the expanding global reach of tncs83 began shortly after World War II as u.s. enterprises rapidly spread throughout the

A

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Gerard Chaliand & Jean-Pierre Rageau, Atlas Strategigue, Geopolitque Des Rapports De Forces Dans Le Monde (Editions Complexe, Paris 1994). Transnational corporations (tncs), multinational corporations (mncs), multinational enterprises (mnes), and transnational enterprises (tnes) are used interchangeably,

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world.84 Europeans and the Japanese, whose economies as well as physical landscapes were decimated as a result of the war, cast skeptical and suspicious eyes at the u.s. policy of a world dominated corporate hegemony,85 viewing it as a threat to their economic viability.86 The movement by American corporate giants to dominate markets beyond America’s territorial borders raised additional concerns among former colonial subjects emerging from the shackles of their colonial masters in the global south. These newly emerging nations questioned the influence these multinational corporations had over governments and how the transborder operations of these corporations impacted the social and cultural fabrics of people. Many of these nations considered the economic and political character of multinational enterprises87 as a continuous arm of colonialism under the aegis of private corporations. even though they have slightly different meanings. Some authors prefer the term transnational because it more aptly reflects a corporate organizational structure that has entities dispersed throughout several nation-states that operate in relation to each other, whereas the term multinational implies that the company or enterprise has national status in various different countries. See generally F. Rigaux, Transnational Corporations, in Mohammed Bedjaoui, International Law: Achievements and Prospects (Dordrecht: Martinus Nijhoff 1991). These terms are used to denote the transborder nature of the commercial activities of business entities. The word corporation, company and business will also be used interchangeably to refer to mncs, tncs, mnes and tnes. 84 Peter T. Muchlinski, Multinational Enterprises And the Law 3–5 (Oxford: Blackwell 1995). 85 See generally Nikola von Kreltor, nato and the Architects of American Lebensraum, 4 (May 10, 2008), derkeiler.com, http://newsgroups.derkeiler.com/Archive/Soc/soc.culture .china/2008-05/msg00555.html (last visited July 21, 2010). 86 Muchlinski, supra note 84, at 4. 87 Muchlinski prefers using the term multinational “enterprise” instead of corporation because it avoids “restricting the object of study to incorporated business entities and to corporate groups based on parent-subsidiary relations alone.” Id. at 5. David Lilienthal is credited with defining the term “multinational corporation” in 1960. According to Lilienthal, mncs are “corporations…which have their homes in one country but which operate and live under the laws and customs of other countries as well.” Id. at 12. The Institut de Droit International provided the first legal definition of mnes as ­follows: “Enterprises which consist of a decision-making centre located in one country and operating centres with or without the legal personality in one or more countries should, in law, be considered as multinational enterprises.” Silva Danailov, The Accountability of Non-State Actors for Human Rights Violations: the Special Case of Transnational Corporations 11 (Annuaire de l’Institut de Droit International, 1998) [hereinafter Danailov, Non-State Actors], available at

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The emergence of multinational corporations88 after World War II, which was dominated primarily by corporations headquartered or domiciled in the http://www.lawanddevelopment.org/articles/transnationalcorps.html (last visited Jan. 22, 2008). According to a un study, the concept of a transnational corporation refers to enterprises irrespective of their country of origin and their ownership, including private, public or mixed, comprising entities in two or more countries, regardless of the legal form and fields of activity of these entities, which operate under a system of decisionmaking, permitting coherent policies and a common strategy through one or more decision-making centres, in which the entities are so linked, by ownership or otherwise, that one or more of them may be able to exercise a significant influence over the activities of others and, in particular, to share knowledge, resources and responsibilities with the others. Report of un Centre on Transnational Corporations: E/1988/39/Add.1, par.1 a. The United Nations Conference on Trade and Development (unctad) defines “transnational corporations” as follows: [I]ncorporated or unincorporated enterprises comprising parent enterprises and their foreign affiliates. A parent enterprise is defined as an enterprise that controls assets of other entities in countries other than its home country, usually by owning a certain equity stake. An equity capital stake of 10 per cent or more of the ordinary shares or voting power, or its equivalent for an unincorporated enterprise, is normally considered as a threshold for the control of assets… A foreign affiliate is an incorporated or unincorporated enterprise in which an investor, who is a resident in another country, owns a stake that permits a lasting interest in the management of that enterprise (an equity stake of 10 per cent for an incorporated enterprise or its equivalent for an unincorporated enterprise). unctad, World Investment Report 2000, 267, http://www.unctad.org/en/docs/wir2000 _en.pdf (last visited Jan. 11, 2009). The Organisation for Economic Corporation and Development (oecd) Guidelines for Multinational Enterprises define mnes as …companies or other entities established in more than one country and so linked that they may co-ordinate operations in various ways. While one or more of these entities may be able to exercise a significant influence over the activities of others, their degree of autonomy within the enterprise may vary widely from one multinational enterprise to another. Ownership may be private, state or mixed. oecd Guidelines (2001) 40 ilm 237, Part 1 (Concepts and Principles), para. 3. The International Labour Organisation (ilo) Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy provide that “[m]ultinational Enterprises include enterprises, whether they are of public, mixed or private ownership, which own or control production, distribution, services or other facilities outside the country in which they are based.” Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, ilo, 16.11.1977, reproduced in International Legal Materials, 422 (1978: 424) cited in Danailov, Non-State Actors, supra note 87, at 11.

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u.s.,89 is geopolitical in nature. “[G]eography has long been considered as an important aspect of international business.”90 Commercial explorations and exploitations by governments have served as an impetus for conquest of other nations and people solely because geography relegated specific natural resources to certain territorial boundaries.91 Consequently, the history of transborder commercial ventures has always been driven by geopolitics long before Rudolf Kjellen coined the term at the beginning of the 20th century.92 Although there is no universally accepted definition,93 geopolitics is ­generally defined as follows: Rebecca Bratspies defines tnes as “a profit oriented business entity that has the capacity to locate production across national borders, trade across frontiers, exploit foreign ­markets, and affect the international allocation of resources.” Rebecca M. Bratspies, “Organs of Society”: A Plea for Human Rights Accountability for Transnational Enterprises and Other Business Entities, 13 Mich. J. Int’l L. 9, 1, n. 3 [hereinafter, Bratspies, Organs of Society]. 88 See also Bratspies, Organs of Society, supra note 87, for the various definitions of multinational corporations. 89 Muchlinski, supra note 84. Muchlinski traces the current “mne problem,” how to regulate them, to the rapid spread of u.s. enterprises throughout the world after World War II. 90 Sharif N. As-Suber, P.W. Liesch & Peter J. Dowling, Geopolitics and its Impacts on International Business Decisions: A Framework for Geopolitical Paradigm of International Business, 2, in T. Brewer, In Search for Relevance for International Business Research: Impact on Management and Public Policy, Academy of International Business 2000 Annual Meeting, Phoenix, Arizona (Nov. 17–20, 2000), available at http://espace.library.uq.edu .au/view/UQ:147743 (last visited Feb. 2, 2010). 91 See Marieke Peters & Jasper Balduk, Geopolitics, From European supremacy to Western hegemony, 4), http://wendang.baidu.com/view/abaec0659b6648d7c1c7467a .html?from=related (last visited Dec. 12, 2013). Although transborder commercial trade ventures are integral to the history of mankind, the global domination of trade began with Europe’s emerging monarchs during the second half of the 15th century. Commercial competition and mercantilism were viewed as the correct economic policy to further the monarch’s territorial expansion and sovereign authority. 92 Rudolf Kjellen (1864–1922), a Swedish political scientist, is credited with using the term “geopolitics” in 1900. See Ronald Johnston, The Dictionary of Human Geography (Wiley-Blackwell 2000). 93 See As-Suber, supra note 90, at 3. On whether definitions really matter, Lasswell and McDougal in discussing policy-oriented jurisprudence noted the following: “Though definitions are part of life, by themselves they tell us nothing about life. Properly managed definitions are tools of discovery, since they guide attention to the social process itself where human beings are perpetually engaged in the never-ending interactions by which values are shaped and shared.” Lasswell & McDougal, Policy-Oriented Perspective, supra Chapter 1, note 91, at 499.

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1. The study of the relationship among politics and geography, demography, and economics, esp. with respect to the foreign policy of a nation. 2. a. A governmental policy of geopolitics, b. A Nazi doctrine holding that the geographic, economic, and political needs of Germany justified its invasion and seizure of other lands. 3. A combination of geographic and political factors relating to or influencing a nation or region.94 Generally, “geopolitics is concerned with how geographical factors, including territory, population, strategic location, and natural resource endowments, as modified by economics and technology, affect the relations between states and the struggle for world domination.”95 It is the economic underpinnings of geopolitics as a strategy in the “search for wealth in the form of gold (or ivory or slaves) and the evolution of European mercantile competition”96 that makes geopolitics a Western ideology, one that is “associated with Western policies and the Western, Westphalian system.”97 To effectuate the “search for wealth” the newly evolved Westphalian states used trade as a tool to carve out geographic boundaries in order to control the natural resources within those boundaries.98 Geopolitics, as championed by Kjellen, is “essentially concerned with the external relations, strategy and politics of the state, and…seeks to employ such knowledge to political ends.” Geopolitics as a political strategy utilized by governments has taken various forms and perspectives since it emerged in 1900. Those perspectives that had the conquest of other lands and people to serve 94 95

Geopolitics, The American Heritage College Dictionary (4th ed. 2007). John B. Foster, The New Geopolitics of Empire, 57 Monthly Rev. 8 (2006), http://monthlyreview.org/0106jbf.htm (last visited Jan. 2, 2010). 96 Peters, supra note 91, at 4. The European practice of, indeed the practice of governments, empires, nation-states, tribes and indigenous peoples as a collective governing territorial unit, obtaining natural resources and goods, whether through a trade and barter system or as an economic exchange, predates European expansion in search of wealth and the actual use of the term “geopolitics.” 97 John Agnew, Geopolitics, Revisioning World Politics 72 (London: Routledge 2003). 98 See As-Suber, supra note 90, at 6. English, Dutch, French, and Danish companies initially operated in the geographic region formerly known as the East Indies – the southeastern region of Asia, encompassing the Indian subcontinent, the Indo-Chinese peninsula, and the Malay Archipelago. Trade, the basis of international relations between these companies and the East Indies, set the stage for geopolitical and economic control of these regions.

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national economic interests have had and still have human rights implications.99 Geopolitics has been fused with scientific principles of evolution and social science to buttress racial superiority ideologies as a means of impinging human dignity.100 Although credited with coining the term geopolitics, Kjellen built upon the works of Friedrich Ratzel,101 whose work provided the basis of the German variant of geopolitics, Geopolitik.102 In the late 19th century, Ratzel incorporated Darwin’s103 theory of “natural selection,” also known as Social Darwinism, into a geopolitical framework that justified one country’s political dominance over another based upon the fallacious premise that humankind exists of sub-cultures and/or races that are preordained to be subordinated and subjugated to superior races.104 Social Darwinism, “the survival of the 99

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Although the term “geopolitics” predates the codification of modern international human rights law, it was the implementation of geopolitics as a governmental strategy of Hitler’s Nazi regime that gave birth to the Universal Declaration of Human Rights. Government policies based on racial or ethnic identities have been used legally to relegate classes of people to dehumanizing and degrading living conditions, i.e., France’s Code Noir (Black Codes), the u.s. “separate but equal” policies and Jim Crow laws, Australia’s anti-aborigine policy, Europe’s practice of ethnic cleansing, and South Africa apartheid. Friedrich Ratzel (1844–1904), a German geographer, published Politische Geographie (political geography) in 1897. Ratzel focused on the relationship of people to the geographic borders within which they lived. He theorized that groups of people who successfully adapted to one location could adapt to other locations. The gist of Ratzel’s theory was that people, since they were organic beings, needed space in order to maximize their fullest potential. After World War II until the early 1970s, many academicians and international foreign relations scholars disfavored Geopolitik as a viable political strategy because it formed the basis for Nazi Germany’s ideology. In 1859, Charles Darwin, published On the Origin of the Species, wherein he postulated that biological populations evolve overtime through a process known as “natural selection,” through which “the survival of the best adapted.” Charles Darwin, On the Origin of the Species (1st ed., London: John Murray 1859), available at http://www .gutenberg.org/files/1228/1228-h/1228-h.htm. European expansion to and conquest of African, Asian, North and South American civilizations predates geopolitics as a government strategy. Conquest by war is and was at the core of the geopolitical doctrine. The search for new lands in order for civilizations to grow and survive is the history of mankind. It was, however, the underlying premise of Nazi Germany’s genetic racial superiority ideology that made geopolitics such an odious policy and practice. The religious and racial superiority of people who worshiped Christian Gods have been repeatedly used as a basis for a nation’s conquest and domination of other people. Sanctioned by the Catholic Church, the Doctrine of Discovery was a similar odious policy

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­fittest,” however, was never postulated by Darwin.105 Nonetheless, Social Darwinism has provided, and, in many instances, still provides political elites with justification for the suppression of human rights and the denial of human dignity. Social Darwinism “led to glorification of free enterprise, laissez-faire economics and war, to an unscientific eugenics and racism, and eventually to Hitler and Nazi ideology.”106 Comparing the nation-state to organic life forms, which like plants and people need space and resources to grow, Ratzel reasoned: States are organic and growing, with borders representing only a temporary stop in their movement. States can only thrive if they expand into other territories to express their vitality. The competition for that resulted in the genocide of many indigenous societies. See Doctrine of Discovery, infra note 165. For example, Spain reasoned that it had the divine and natural right to lands in the New World because “Indians had unlawfully attempted to exclude Spanish traders from their kingdoms, contrary to natural law.” Neff, supra Chapter 1, note 117, at 8. Governments have used natural law theories and the divine right to rationalize the conquests of peoples and the theft of their lands. European migration to the Americas and the u.s. ideologies of Manifest Destiny and the Monroe Doctrine were geopolitical in nature, based upon racial and religious superiority principles grounded in natural law. 105 Darwin’s natural selection theory, often called Social Darwinism, is erroneously based upon “the survival of the fittest,” a term that Herbert Spencer (1820–1903) used years before Darwin authored On the Origin of the Species. Spencer used the term “survival of the fittest” to explain past, present and future social conditions. See Herbert Spencer,  American Experience, pbs Online, http://www.pbs.org/wgbh/amex/carnegie/­ peopleevents/pande03.html (last visited Dec. 12, 2013); Herbert Spencer, Stanford Encyclopedia of Philosophy (Dec. 15, 2002, revised Sept. 17, 2012), http://plato.stanford.edu/ entries/spencer/ (last visited Dec. 15, 2013). “The leap…from Darwinism to Social Darwinism is one that Charles Darwin himself never made; Darwin was a biologist, not an imperialist.” Lebensraum Revisited, The Cucking Stool, Feb. 10, 2009, http://thecucking stool.blogspot.com/2009/02/lebensraum-revisited.html (last visited Jan. 15, 2010). Social Darwinism represents a “Eurocentric style of thinking that has shaped the very foundations of our society by shaping and molding perceptions of individuals at all class levels.” jr Parrot, Lions, and Tigers and Banks Oh My! Social Darwinism and the Notion of ‘Too Big to Fail’, Parrot’s Perspective (May 3, 2010), http://jrparrott.wordpress.com/2010/05/03/ lions-and-tigers-and-banks-oh-my-social-darwin (last visited July 21, 2010); see also Social Darwinism, Definition, BusinessDictionary.com (Social Darwinism has nothing to do with Darwin’s theory of natural selection.), http://www.businessdictionary.com/definition/ Social-Darwinism.html (last visited July 21, 2010). 106 Julian Huxley & H.B.D. Kittlewell, Charles Darwin And His World 81 (New York: Viking Press 1965).

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Lebensraum107[space], either in Europe or overseas, leads to natural selection in which the species that are best accustomed to their surroundings will survive. The expanse of a state’s borders is a reflection of the health of the nation.108 Through the works of Halford Mackinder,109 the concept of geopolitics gained prominence. For Mackinder, geopolitics was simply about control; the ability of the nation-state to exercise rule and dominion over territories and people outside of its naturally, geographically defined boundaries.110 He organized the world into three political regions: the main or central region being the “Heartland”; comprising Eastern Europe/Western Russia; the “World Island,” comprising Eurasia and Africa, the Peripheral Island, comprising the British Isles, Japan, Indonesia and Australia; and the New World, comprising the Americas.111 Based upon this geographic division, he argued that whoever ­controlled [ruled] the Heartland “ruled” the world.112 107 Lebensraum, German for “habitat” or “living space,” served as a rationale for Nazi Germany’s territorial aggression. Ratzel coined the term in 1901; it was used as a slogan in Germany referring to the unification of the country and the acquisition of colonies, based on the French and English models. See Woodruff D. Smith, Friedrich Ratzel and the Origins of Lebensraum, 13 German Stud. Rev. 1, 55–68 (1980), available at http://www.jstor.org/ stable/1429483 (last visited Oct. 15, 2010). 108 See Peters, supra note 91, at 4. 109 Halford Mackinder (1861–1947), a British geographer, in 1904 developed his theory of geopolitics based upon a more global perspective. He considered the earth as a whole, the land and the seas, and noted that the era of sea power was ending and control over land would determine the economic strength of a nation. Mackinder advocated for British colonial expansion into Africa and Asia as a means to avoid a clash of the social classes in Europe. See Foster, supra note 95. Ironically the avoidance of a clash between the social classes in Europe resulted in a reordering and repositioning of social classes and the cultural structures in Africa and Asia. European expansion into Africa, Asia and South America has been cited as one of the reasons why certain nations have remained “underdeveloped.” Human rights activists note that the victimization argument, the grouping of historically identified indigenous peoples into artificial boundaries, which is one cause of ethnic strife resulting in human rights violations, is an inexcusable crutch. 110 See Peters, supra note 91, at 4. 111 Id. at 5. The need to control designated geographic boundaries reflected the Europecentric world view that dominated political and religious thought from the 15th century to the present day. International law is based upon the Westphalian concept of territorial sovereignty, which serves as a barrier to extending human rights obligations to tncs. 112 Control of the “Heartland” as a geographic space is no longer at the core of geopolitics as a business strategy for tncs. Instead it is the domination of markets in Asia, Africa and South America. It is this economic control of world markets that has contributed to the

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Who rules East Europe commands the Heartland; Who rules the Heartland commands the World-Island; Who rules the World-Island commands the World.113 The extraterritorial application of geopolitics violated nation-state sovereignty and human rights long before the Nazis used lebensraum as a genocidal tool.114 Historians may not refer to the conquest of other countries through the annihilation of indigenous populations as genocide because such events predate the modern human rights regime. But the terminology used to refer to such events and their results cannot obfuscate the facts, which Arundhati Roy articulates. Most of the genocidal killing from the 15th century onwards has been an integral part of Europe’s search for what the Germans famously called Lebensraum-living space. [In fact]… Europe had already begun her quest for lebensraum 400 years earlier, when Columbus landed in America. The search for lebensraum also took Europeans to Africa: unleashing holocaust after holocaust. The Germans exterminated almost the entire population of the Hereros in Southwest Africa; while in the Congo, the Belgians’ ‘experiment in commercial expansion’ cost 10 million lives. By the last quarter of the 19th century, the British had exterminated the aboriginal people of Tasmania and of most of Australia.115 Karl Haushofer116 expanded upon Ratzel, Kjellen, and Mackinder’s theories of lebensraum. He defined Geopolitik as “the duty to safeguard the right to the soil, to the land in the wildest sense, not only the land within the frontiers of the

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ongoing demand to regulate tncs because they have sought to topple democratically elected officials in Chile, have located to countries with lax environmental regulations, and have failed to adhere to human rights norms regarding working conditions and labor rights. Indeed, “[a]ll the major struggles going on in the world today can be traced to this hunger of multinational corporations for maximum Lebensraum.” Paul A. Baran & Paul M. Sweezy, Notes on the Theory of Imperialism, Monthly Rev. (June 24, 2006), http:// mrzine.monthlyreview.org/2010/bs240610.html (last visited July 21, 2010). Francis P. Sempa, Geopolitics: From the Cold War to the 21st Century 71 (New Brunswick, n.j.: Transaction Publishers 2009). See Arundhati Roy, Listening to Grasshoppers – Genocide, Denial and Celebration, Countercurrents.org (Jan. 26, 2008), http://www.countercurrents.org/roy260108.htm (last visited Mar. 19, 2010). Id. German geographer Karl Haushofer’s (1869–1946) geopolitical theories formed the foundation for Geopolitik, the Nazi foreign policy, which expanded upon the concept of

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Reich, but the right to the more extensive Volk and cultural lands.”117 He justified Lebensraum, the physical space in which “organic” nations needed in order to grow, even at the costs of other nations.118 It was the need for new land and raw materials that led to geopolitics being equated with Nazi Germany’s policy of eliminating and forcibly removing inferior races of people119 that raised the uniformed cry “never again” from the world community, and led to the reexamination, albeit a small one, of the Westphalian principle of nonintervention. The annihilation and subjugation of distinct races of people120 in the quest to foster political domination of Europe resulted in the forced retirement

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Lebensraum. See Edmund A. Walsh, S.J., Total Power: A footnote To History (Garden City, New York: Doubleday & Company, Inc. 1949); Andreas Dorpalen, The World of General Haushofer (New York: Farrar & Rinehart, Inc. 1984). Walsh, supra note 116. See generally Foster, supra note 95. Adolf Hitler in his book Mein Kampf made lebensraum, the need for the German people to obtain land and raw materials, the official policy of the Nazis, which justified the killing, deportation and enslavement of the Polish, Russian and other Slavic populations. Hitler stated, “Without consideration of traditions and prejudices, Germany must find the courage to gather our people and their strength for an advance along the road that will lead this people from its present restricted living space to new land and soil, and hence also free it from the danger of vanishing from the earth or of serving others as a slave nation.” Adolf Hitler, Mein Kampf, 646 (Houghton Mifflin, 1971). The term “races of people” is a misnomer. There is only one race of people – the human race. The concept of classifying humans into four distinctive racial groups based upon physical and phenotypical characteristics is credited to the French physician, Francois Bernier, who in 1648 published Nouvelle division de la terre par les différentes espèces ou races qui l’habitent (New division of Earth by the different species or races which inhabit it). This categorization has served as a justification for genocide, enslavement, rape as a tool of war, and the conquests of lands and natural resources based upon an ill-conceived premise that a specific group of people is preordained by their God, or by nature, to be politically, racially, intellectually and culturally superior and the most highly favored. Although the superiority or the most favored status predates the concept of lebensraum and has religious roots, the pernicious effects of this philosophy and belief system still reverberates, sometimes quite loudly, despite all scientific and anthropological proof that mankind descended from one common ancestor who bathe in the waters of an African river. Race, as a dominant form of identity in societies where it functions to stratify the social system, is a cultural invention that took root in the sixteenth century in the English language, but was rarely used to refer to populations in the slave trade. It was a mere classificatory term like kind, type or even breed, or stock, and it had no clear meaning until the eighteenth century. During this time, the English began to have wider experiences with varied populations and gradually developed attitudes and beliefs that had not appeared before in Western history and

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of geopolitics as a means of foreign policy.121 Interestingly, Henry Kissinger,122 former u.s. Secretary of State, resurrected geopolitics as an “explicit, even ­official doctrine of u.s. foreign policy in the 1970s.”123 The resurgence of geopolitics as a political and economic policy or strategy as a means to control and denominate a physical space plays an important role in international business strategies.124 Ratzel’s Social-Darwinism approach to dominating space is what critics of the expansion of American corporations feared in the 1960s and 1970s. Large American-based corporations stretched out beyond their continental borders, “which represented only a temporary stop in their movement,”125 and cannibalized local companies in other countries, not so much for lebensraum (space) but for access to markets. New York Times columnist Thomas Friedman demonstrates how tncs are integrally linked to American geopolitics. In a 1999 New York Times article, he writes, “The hidden hand of the market will never work without a hidden fist. McDonald’s cannot flourish without McDonnell Douglas, the designer of the which reflected a new kind of understanding and interpretation of human differences. Understanding the foundations of race ideology is critical to our analysis. Audrey Smedley, “Race” and the Construction of Human Identity, 100 am. Anthropologist 3, 695 (1998), available at http://www.jstor.org/stable/682047. McDougal, Lasswell & Chen discuss that slavery initially was not based upon race, but with European expansion into the New World, racism became a justification for slavery. Originally the fate of slavery was not confined to any particular race or ethnic group, but during the era of the European colonial expansion, the fact of the slave trade and the servile exploitation of “fellow men” from Africa appeared difficult to reconcile with the professed Christian ideal that all men are born equal before God. Hence, racism asserted itself as a new justification: the black people were condemned to slavery because of their inherent inferiority. The age-worn elitist doctrine was thus wedded to the concept of “race,” the damaging impacts of which are still being felt today. McDougal, Lasswell & Chen, Protection of Respect, supra note 72 at n. 123). 121 See generally Agnew, supra note 97. 122 Kissinger served as National Security Advisor and later concurrently as Secretary of State in the administrations of Presidents Richard Nixon and Gerald Ford. Kissinger defines geopolitics as “an approach that pays attention to the requirements of equilibrium.” Colin S. Gray & G.R. Sloan, Geopolitics, Geography, and Strategy (Portland: Frank Cass Publishers, 1999). 123 See Foster, supra note 95. The political events that forced Kissinger to resurrect “geopolitics” were America’s defeat in Vietnam, the Cold War, the weakening position of the u.s. dollar as the hegemonic currency, the energy crisis associated with the Arab oil boycott in response to the 1973 Yom Kippur War, the rise of the opec oil cartel, and the 1974–1975 slowdown of the u.s. economy. 124 Id. 125 Peters, supra note 91, at 4.

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F-15. And the hidden fist that keeps the world safe for Silicon Valley’s technologies is called the u.s. Army, Air Force, Navy and Marine Corps.”126 Social movements to curtail tncs’ vociferous appetite for new markets resulted in thousands demonstrating against the World Trade Organization (wto) in Seattle in 1999 and around the world. Anti-corporation activists viewed the expansion of tncs in today’s globalized world as a direct out-growth of the changes in corporate law that allowed corporations to own stock in other corporations. It has been the government’s hidden fist, whether the United States, Europe or host countries, that has provided tactical support to tncs that have human rights activists alleging complicity in several high profile cases.127 The resultant effect has been Social Darwinism applied in the business context. Companies cannibalize each other through merger and acquisition, seeking competitive business advantages, sometimes by legislative fiat and international regulation, i.e., the wto, bilateral and multilateral trade agreements. These companies rationalize that in a free-market economy only the fittest, or in lieu of the 2008 financial crisis, only those companies “too big to fail”128 without government intervention,129 will survive.130 Or, as John D. Rockefeller131 is reported to have stated, “The growth of a large business is a matter of the survival of the fittest…[i]t is merely the working out of a law of nature and the law of God.”132 The Politics of Lebensraum and the Emergence of Transnational Corporations. America’s commercial expansion beyond its territorial borders is known as  “American Lebensraum.”133 President Woodrow Wilson postulated that

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126 Thomas Friedman, A Manifesto for the Fast World, New York Times Magazine. Mar. 28, 1999, http://www.nytimes.com/1999/03/28/magazine/a-manifesto-for-the-fast-world .html (last visited Nov. 16, 2010). 127 See supra note 71 and cases cited therein. 128 See generally Parrot, supra note 105. 129 Id. 130 See generally Robert Blake, Warren Avis & Jane Mounton, Corporate Darwinism (Houston: Gulf Pub. 1996) (noting that the evolution of business is natural. A business will either swallow the competition or be swallowed up by the competition). 131 John D. Rockefeller is known just as much for his philanthropy, providing a million dollar gift to the University of Chicago Divinity School, as for his ruthless business dealings. 132 Richard Hofstadter, Social Darwinism in American Thought 45 (Boston: Beacon Press 1992); William Ghent, Our Benevolent Feudalism 29 (New York: MacMillian 1902). 133 See generally Nikola von Kreltor, supra note 85. In 1845, John O’Sullivan formulated the concept of American Lebensraum, which was based on three ideologies: the Manifest Destiny Doctrine, the Monroe Doctrine and the Open Door Doctrine. Id.

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America could dominate the world if u.s. companies dominated the world marketplace.134 He set forth his support for American lebensraum in a lecture at Columbia University in 1907. According to President Wilson, the expansion of transnational trade was vital to the nation’s economic health. Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed must be battered down. Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused. The seed of war in the modern world is industrial and commercial rivalry.135 It was not until after wwii, however, that the Wilsonian policy of American lebensraum took hold, and by the 1970s American multinationals institutionalized this policy, effectively expanding their search for new markets and access to resources and minerals to developing countries.136 Concerns about tncs’ responsibilities with regard to human rights can be traced to the early 1970s and it is from this lens that today’s human rights and business debate was launched. Thus, America’s utilization of geopolitics as an economic and political strategy was necessary to meet the geopolitical imperatives of u.s. multinational corporations.137 Indeed, political events in the 1980s forced the United States to develop a “geopolitics of minerals.”138 This was directly linked to a postcolonial push to control the resources within the former colonies’ borders. Accordingly, “mncs established themselves as powerful international entities 134 President Wilson championed for America to control “the economic fortunes of the world” through “Open Door expansionism.” Corporations would be the vehicles through which to achieve such expansion. 135 von Kreltor, supra note 85. 136 See generally Gerald F. Davis, Marina von Neumann Whitman & Mayer N. Zaid, The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility, 11 Ross School of Business Paper No. 1031 (Apr. 2006) (noting that scholars in the 1950s and 1960s “described continuous growth as the paramount objective of the corporation.”), at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=899112 (last visited Nov. 19, 2010). 137 See Foster, supra note 95. “In the 1980s, beset by demands among the post-colonial regimes for a ‘new international economic order’ and a related antagonism toward the multinational resource corporations,” the United States was increasingly, ‘vulnerable’ to loss of strategic materials and “world oil and raw material routes.” 138 Id.

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capable of influencing government policies in their favour.”139 At the same time, the human rights and human dignity of individuals in home states, and sometimes host states, were severely neglected, if not, in most instances, blatantly disregarded. The current concerns regarding whether multinational corporations can be subjected to human rights regulation, or, probably more aptly put, to what extent are tncs being held accountable for human rights abuses, is nothing more than a critique of the interplay of law, economics, politics and the control of geographic boundaries, and now cyberspace. Nation-states once controlled extraterritorial geographic boundaries by war and might. This is now being done through the aegis of multinational corporations, trade regulations and bilateral trade treaties. Any undertaking to alter the landscape of international law and international human rights law to regulate multinational corporations must consider the interplay of geopolitics, international relations, foreign policy and the nature of the Westphalian system. Geopolitical issues, per se, are seldom a part of the human rights and business debate. Geopolitics, however, has historically been at the heart of international trade and commerce. Geopolitics as it relates to the human rights and business debate has always centered on international trade and commerce as a governmental strategy to dominate world markets. The English East India Company (eic) and the United Dutch East Indies or Verenigde Oostindische Compagnie (voc) illustrate the interplay of international trade and commerce as a government strategy. The eic and voc, considered the forerunners of the modern transnational corporation,140 are referred to as “embryonic multinationals.”141 The eic and voc had trade monopolies over entire geographical regions.142 The eic, which received its charter from the British government in 1600, is considered the first commercial enterprise

139 As-Suber, supra note 90, at 8. 140 See generally Carlos Ortiz, Embryonic Multinational Corporations and Private Military Companies in the Expansion of the Early-Modern Overseas Charter System, Presentation, Annual Meeting of the International Studies Association, Town & Country Resort and Convention Center, San Diego, California, usa (Mar. 22, 2006) http://www.allacademic .com/meta/p_mla_apa_research_citation/0/9/7/8/4/p97844_index.html (last visited Nov. 15, 2010). 141 Id. at 15. 142 War and genocide were the modus operands of the eic and voc for maintaining their trade monopolies. Carlos Ortiz noted that “the more resistance the indigenous populations offered to the companies’ advances, the more coercion the companies had to exert on them.” Id. at 8.

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“with a decentralized ‘global’ organization.”143 The eic’s “corporate model consisted of an organized structure, which, through the combination of good information, policy and execution of affairs, was indeed very similar to today’s multinationals.”144 The voc received its charter in 1602 from the Dutch government. Both charters allowed these commercial ventures to operate as de facto governments. They waged war, maintained private armies and navies, built fortresses, concluded treaties with foreign powers,145 and coined their own money.146 Both companies were considered to be a “state within a state.”147 The Dutch and British governments abdicated their sovereign powers to these companies. “[T]he distinction between the company as a private body of enterprise and as a public authority enjoying more or less sovereign power was actually somewhat lost.”148 “The voc maintained the right to ignore or override the sovereignty of nation states, including their own.”149 More than four hundred years later, geopolitics is intertwined with and is at the heart of the human rights and business debate. Since these early corporations, the boundaries between the power and scope of corporations and nation-state sovereignty have been challenged, if not outright disregarded, by nation-states when it came to allowing transborder commercial activities to benefit the individual nation-state. To allow tncs to violate human dignity cannot be countenanced. Sovereignty cannot be used to shield tncs from accountability for human rights abuses. 1 Legal Human Rights without Legal Human Obligations To bestow the rights of citizenship upon fictitious persons created by judicial fiat without imposing attendant obligations and responsibilities creates a double standard.150 However, extending human rights obligations to 143 Id. at 14 144 Id. 145 Id. at 9; see also Robert D. Ingraham, The Modern Anglo-Dutch Empire: Its Origins, Evolution, and Anti-Human Outlook 42 (Aug. 2008), wlym.com/ ~oakland/brutish/TheModernAngloDutchEmpire.pdf ) (last visited Feb. 2, 2011). 146 Ingraham, supra note 145, at 64. Similarities between the eic and voc are strikingly similar to today’s tncs. Many tncs operating in the extractive industries hire private armies and manage mineral concessions. See Bratspies, Organs of Society, supra note 87, at 5. 147 Ortiz, supra note 140, at 14. 148 Id. 149 Ingraham, supra note 145, at 42. 150 American courts have ruled that corporations are “fictitious persons” with the right to buy and sell property, to sue in court for injuries and to express “corporate speech.” But

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corporations appears to be an insurmountable task due to the legal structure of corporations and the theory of legal personality. Modern day corporate structure is subject to the statutes and regulations of the incorporating state. These statutes provide for the issuance of stock to shareholders, who are considered the owners of the corporations. The ceo and executive managers are hired to control the operations of the corporation in the shareholders’ interests. This relationship, considered fiduciary in nature, is based on the premise that the shareholders’ interest is the primary interest that the managers are legally obligated to pursue. And that interest is profit maximization. Up until the mid-70s, academic literature in business schools and other disciplines provided support for the shareholder primacy theory, i.e., that nonshareholder stakeholders do not have any rights concerning corporate operations. During the 1990s, Congress enacted various pieces of legislation where nonstakeholder concerns trumped shareholder concerns in limited areas of federal law.151 Whereas Congress has superimposed specific restrictions on corporate operations in a few limited areas of federal law, the Supreme Court continues to bestow “human rights” under the rubric of “legal ­personhood” on corporations in other areas of federal constitutional law.152 they have not been required, for the most part, to abide by normal human responsibilities. See John Cavanagh & Jerry Mander, Fixing the Rotten Corporate Barrel, Nation Magazine, Dec. 23, 2002, http://www.thirdworldtraveler.com/Controlling_Corpora tions/TakingAway_CorpCharters.html (last visited Feb. 22, 2007). 151 See Tara J. Radin, 700 Families to Feed: The Challenge of Corporate Citizenship, Williams Davidson Working Paper Number 534, Jan. 2003, The William Davidson Institute, Univ. of Michigan Business School, http://deepblue.lib.umich.edu/bitstream/han dle/2027.42/39919/wp534.pdf?sequence=3 [hereinafter Radin, 700 Families to Feed]. For examples of such legislation, see e.g., Foreign Corrupt Practices Act, 15 u.s.c. section  78a-78ff (2001); Family and Medical Leave Act of 1993, 29 u.s.c. sect.  2601–2645 (1993); Americans with Disability Act, 42 u.s.c. sect. 12101–117 (1990). 152 The following cases are illustrative of the various constitutional rights that have been extended to corporations: Trustees of Dartmouth College v. Woodward, 17 u.s. (4 Wheat) 518 (1810) (impairment of contracts applies to corporations, Art. 1, § 10, clause 1); Louisville C & C. R.R. v. Letson 43 u.s. (2 How.) 497, 557–558 (1844) (extending diversity of citizenship to corporations for purposes of federal court diversity of citizenship jurisdiction. Even though a corporation is an “artificial” person, it is considered a citizen of the state where it is incorporated or presumed to have citizenship, Art. III, § 2, clause 1); Santa Clara County v. Southern Pacific Railroad, 118 u.s. 394 (1886) (the 14th Amendment applies to corporations for purposes of equal protection of the laws); Minneapolis & St. Louis Ry. v Beckwith, 129 u.s. 26 (1889) ) (corporations have due process under the 5th and 14th Amendments); Hale v. Henkel, 201 u.s. 43 (1906) (corporations are protected from unreasonable search and seizure, Fourth Amendment right to privacy); Grosjean v. American

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By doing so, the Supreme Court has elevated corporations to the status of a deity, one whose powers and rights exist in perpetuity. Recognizing a corporation as a legal person with attendant legal rights and responsibilities has resulted in the corporation demanding legal recognition and protection. “Rights and responsibilities attributed to corporations tend to correspond to the constitutional protections afforded to human persons. Corporations are not however guaranteed protection as human persons, but they are afforded protection similar to human persons.”153 Although corporations have attained many rights similar to those granted to human beings, they have not been required, for the most part, to abide by human rights responsibilities and obligations. Extending “personhood” to a fictitious entity with perpetual existence has created justifiable angst among human rights activists who campaign for extending human rights obligations to corporations. Questions abound not about whether the letter of the law has been stretched to reach a result that was never contemplated by the drafters of the Constitution,154 but instead about whether the spirit of the law has been stretched to the point

Press Co., 297 u.s. 233, 234 (1939) (corporations have due process under the 5th and 14th Amendments); Oklahoma Press Publishing Co. v. Walling, 327 u.s. 185, 208 (1946) (corporations are protected from unreasonable search and seizure, Fourth Amendment right to privacy); First Nat’l Bank of Boston v. Bellotti, 435 u.s. 765 (1968) (corporate speech is protected, but the corporation as the speaker is not entitled to the First Amendment right to free speech); In Citizens United v. Federal Elections Commission, 558 u.s. 310 (2010), the 5–4 majority overruled two important precedents about the First Amendment rights of corporations and held that the government may not ban political spending in candidate elections. 153 See Radin, 700 Families to Feed, supra note 151, at 35. 154 Based upon the Framers of the Constitution’s skepticism about the evil potential of corporations, it stands to reason that the constitutional fundamentalists on the current Supreme Court are devoid of reasoning when it comes to fictitious persons versus natural persons. The Framers clearly distinguished between human beings and human institutions. Human beings were bestowed with certain inalienable rights, which are acknowledged in the Bill of Rights and the Declaration of Independence. Human institutions, however, had only privileges that were defined by “We, The People” – the sole holders of the rights. In 1886, in Santa Clara v. Southern Pacific Railroad, 118 u.s. 394 (1886), the u.s. Supreme Court plucked corporations out of the “privileges” category and dropped them into the “rights” category along with individual human beings. See Thomas Hartman, Unequal Protection: The Rise of Corporate Dominance and The Theft of Human Rights (St. Martin Press 2005).

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of absurdity.155 The argument for extending human rights to corporations without extending corollary human obligations is not simply a question of what is right, but must be couched in terms of what is right, just and equitable. Is it moral, just or equitable for a fictitious entity to have certain enumerated rights that were, in the course of the advancement of human dignity and human rights, intended only for humans and then not to impose upon the fictitious entity the moral or legal obligations that other humans have toward each other under the social contract theory?156 Answering this question often results in circular reasoning. What is right, just or equitable are moral concepts; and moral concepts can only be applied to and interpreted by “just beings” with a higher reasoning ability. Legally created entities by virtue of their creation cannot be susceptible to moral concepts of right or wrong, or what is just.157 Such reasoning does not deal with the practical realities of today’s globalized world. IV

A Historical Overview of Corporations

Corporate personhood158 is now law, even though corporations obtained this status through subterfuge. A scrivener’s error in the now infamous Santa Clara 155 No matter how the Supreme Court Justices in favor of Citizens United try to justify their illogical departure from precedent and disregard of stare decisis, their decision does not square with a strict constructionist interpretation of the Constitution. The Constitution neither mentions nor alludes to corporations, nor have any subsequent amendments. 156 Nation-states have social contracts with all of its citizens. Because corporations require state approval to exist, the question is whether in exchange for legal existence corporations owe a broader duty to society than merely respecting applicable laws or regulations. In other words, are corporations bound to a “social contract” that includes expectations regarding corporate behavior that are not mandatory but nevertheless implicit with the granting of the corporate license? 157 Knighting a corporation with legal personhood does not extend moral personhood as well. See generally Peter A. French, The Corporation as a Moral Person, 16 Am. Phil. Q. 207 (1979); see also Manuel G. Velasquez, Why Corporations Are Not Morally Responsible for Anything They Do, 2 Bus. & Prof. Ethics J. 1 (1983). 158 Corporate personhood, although a legal fiction, appears to be firmly entrenched in American law, unless or until jurists decide to revisit precedent to apply a strict constructionist interpretation to the Constitution. Or at the very least, American jurists may limit the legal rights of corporations. Personhood in American law is limited by age and by mental capacity. Minors under the age of 18 in most civil contexts are not accountable for their behavior. Likewise, criminal law allows for certain persons not to be punished if they are mentally ill or have diminished capacity at the time a crime was committed. See generally Radin, 700 Families to Feed, supra note 151.

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v. Southern Pacific Railroad159 brought into existence what the framers of the Constitution feared: the reign of corporations. These newly anointed persons claimed and gained constitutional protections for their “property,” which was first construed to be something tangible, expanded to include the intangible, and now includes the imaginary.160 Although some scholars trace the origin of tncs to more than 2000 years ago,161 it is generally agreed that the genesis of today’s tncs dates back to 16th century England and Holland.162 [M]ultinationals…have been traced back two thousand years by classical scholars. This is accurate in the sense that certain trading groups were transnational. It is anachronistic that the nation-States did not exist at the time, thus giving a different meaning to multinational. If we add the word “corporation,” we again must realize that it is a legal term given precise meaning only recently. In any case, modern multinational corporations can be discerned emerging in the seventeenth century and flourishing for example, in the shape of the Dutch and British East India companies.163 Other scholars, however, give the birth of tncs a much later starting point – the second half of the 19th century – citing the advances in technology, 159 The Santa Clara case was a taxation case challenging the method that Santa Clara County, California used to tax the State of California land and the right of-way of the Southern Pacific Railroad. Opponents of corporate personhood believe that railroad companies intentionally created a misrepresentation of the Santa Clara decision for the benefit of the railroads based upon correspondence discovered between the Supreme Court Justice Morrison R. Waite and the court reporter, J.C. Bancroft Davis. See infra note 196 and accompanying text. 160 See Jane Anne Morris, How to Research the Legal History of Corporations in Your State (1998), polcad, Program on Law, Corporations and Democracy, www.polcad.org (last ­visited Nov. 12, 2013). 161 Karl Moore & David A. Lewis, Birth of the Multinational: 2000 Years of Ancient Business History – From Ashur to Augustus 27 (Copenhagen Business School Press 1999); see also David Korten, When Corporations Ruled The World (San Francisco: Berrett-Koehler Publishers, Inc. 2001). Although the profit motive was always at the core of transborder commercial activities, it is the complex structural nature of tncs and the “speed with which they communicate and share information” that distinguishes them from their predecessors. Bratspies, Organs of Society, supra note 87, at 2, n. 4. 162 See generally Duruigbo, supra Chapter 1, note 122. 163 Bruce Mazlish, “The New Global History,” 8, available at http://toynbeeprize.org/wp -content/uploads/2014/03/mazlich-the-new-global-history1.pdf (last visited June 29, 2013).

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­ anufacturing and management processes employed as the key components m of what makes a firm a multinational enterprise.164 Although mankind’s interstate or transborder commercial or mercantile forages have existed since the dawn of history, the regulation of such activities was never considered to be within the purview of international law because such commercial activities were either sanctioned by and conducted at the behest of the sovereign or undertaken by private individuals and thus outside of the sovereign’s reach. In essence, when international law (as a “body of rules”) was established, transborder commercial activities were part and parcel of a sovereign’s right to exploit, raid and dehumanize other people and wreak environmental hazard on other countries under the “doctrine of discovery.”165 tncs could not have been 164 Muchlinski, supra note 84, at 20. 165 The origins of the doctrine of discovery can be traced to Pope Nicholas V’s issuance of the papal bull Romanus Pontifex in 1455. The papal bull gave Portugal’s King Alonso V permission to invade, search out, capture, vanquish, and subdue all Saracens and pagans whatsoever, and other enemies of Christ wheresoever placed, and the kingdoms, the dukedoms, principalities, dominions, possessions, and all movable and immovable goods whatsoever held and possessed by them and to reduce their persons to perpetual slavery. The Bull Romanus Pontifex (Nicholas V), January 8, 1455, as translated in European Treaties bearing on the History of the United States and its Dependencies to 1648 (Frances Gardiner Davenport ed., Washington, d.c.: Carnegie Institution of Washington 1917). Pope Alexander VI extended to Spain the right to conquer newly-found lands in 1493, with the papal bull Inter caetera, after Christopher Columbus had already begun doing so. See generally Steve Newcomb, Five Hundred Years of Injustice: The Legacy of Fifteenth Century Religious Prejudice, at http://ili.nativeweb.org/sdrm_art.html (last visited Oct. 16, 2010); Preliminary Study Shows ‘Doctrine of Discovery’ Legal Construct Historical Root for Ongoing Violations of Indigenous Peoples Rights, Permanent Forum Told, Permanent Forum on Indigenous Issues, Ninth Session, 11th Meeting (am) Economic and Social Council HR/5019, www.un.org/News/Press/docs/2010/hr5019.doc.htm (last visited Oct. 16, 2010). The Vatican’s doctrine of discovery was based upon the premise that all nonChristian lands belonged to no one because no Christians were living there and no Christian monarch or lord had yet claimed dominion. The doctrine of discovery and its interpretive framework has been used for five centuries to violate the rights of indigenous peoples to their native lands. The impact of the doctrine reverberates through current u.s. government policy and human behavior. See generally Valerie Taliman, Christian ‘Doctrine’ Fueled Dehumanization: unpfll Report, Apr. 27, 2010, The Huffington Post, http://www.huffingonpost.cm/valerie-taliman/ christian-doctrine-fueled_b_558571.html (last visited Nov. 11, 2010). In Johnson v. M’Intosh, 21 u.s. (8 Wheat.) 543 (1823), the Court identified the royal charters of Great Britain pertaining to North America as the source of the argument that “discovery gave title” to the government by whose authority the “discovery” was made. The doctrine has been cited in land claim cases decided against Indian nations, see Tee Hit Ton Indians v.

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s­ ubjects of international law because they did not exist when international law was formulated. Simply because something did not exist when a law was formulated fails to justify adherence to such a position hundreds of years later. Regardless of what geopolitical events engendered the precursor of the modern mncs, the notion that a corporation represents the property of the individual investors survived. The salient difference was that the charter was for a limited duration and tied to a specific public purpose or mission. In return for corporate privilege, the sovereign (crown) received a share of the profits. Thus, the corporation became instrumental in trade, commerce and the exploration and conquests of other nations.166 United States, 348 u.s. 272 (1955), and City of Sherrill v. Oneida Indian Nation of New York, 544 u.s. 197 (2005). In July 2009, at a meeting of the General Convention, the Episcopal Church by Resolution D035 repudiated the doctrine of discovery. By way of resolution the Church: • renounced the doctrine; • urged dioceses to reflect in their history and seek a greater understanding of indigenous peoples “within the geo-political boundaries claimed by the United States and other nation states located within the Episcopal Church’s boundaries,” and to support their efforts to have “their inherent sovereignty and fundamental human rights” respected; • called for the elimination of the doctrine’s “presence in its contemporary policies, program, and structures”; • directed the church to advocate for the federal government’s endorsement of the United Nations Declaration on the Rights of Indigenous Peoples, which Australia, Canada, New Zealand and the u.s. opposed when the u.n. General Assembly adopted it in 2007; and • directed “the appropriate representatives of the House of Bishops and House of Deputies” to ask Queen Elizabeth II in her role as the head of the Church of England to do the same. See General Convention renounces Doctrine of Discovery, Episcopal News Service, Aug. 27, 2009, http://library.episcopalchurch.org/article/general-convention-renounces-doctrine-discovery (last visited Dec. 23, 2009); see also Resolution, D035, Repudiate the Doctrine of Discovery, www.doctrineofdiscovery.org/episcopalrepud.htm. 166 The Massachusetts Bay Colony was charted in 1628 by King Charles II to colonize the New World (America). The East India Company, the Royal African Company, the Virginia Company, and the Carolina Company were chartered as governing entities. Backed by the might of the English Empire, these corporations “waged war, vacuumed up resources, enslaved people, destroyed local cultures, eroded rules by which millions of people lived, labored, and died.” See supra notes 140–149. See also Philip C. Jessup, The Subjects of a Modern Law of Nations, 45 Mich. L. Rev. 384, 389 (1947) (discussing that the Dutch East India and British East India Companies had international legal personality. “They had the power to make war and peace and to conclude treaties on which their states relied as the basis of rights.”).

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After being subjugated to corporate abuse and tyranny, the Framers of the Declaration of Independence and the Constitution sought liberation from England and also corporations.167 Because of the role British corporations played, the Framers were reticent to grant corporations power.168 The u.s. Constitution is silent on corporations. This deliberate omission suggests that the Framers did not intend for corporations to have a consequential role in the affairs of a new nation.169 Nonetheless, the Constitution and its amendments have been interpreted to extend due process and equal protection guarantees to corporations. As former Supreme Court Justice Felix Frankfurter stated, the history of constitutional law is “the history of the impact of the modern corporation upon the American scene.”170 The first corporations in America were religious, educational, and literary corporations incorporated under general incorporation statutes as many 167 See William Kalle Lasn, Culture Jam: The Uncooling of America (William Morrow & Co. 1999), available at http://www.thirdworldtraveler.com/Corporations/ Hx_Corporations_US.html. 168 Id. (The United States of America is the offspring of a revolution against not only the abusive powers of the British monarchs and the British Parliament, but also against British corporations.). 169 Justice Stevens, in his dissent in Citizens United, provides a detailed and succinct history about the Framers of the Constitution and their view on the role of corporations in American society. In relying upon the “original understandings” of the Constitution when it was drafted, Justice Stevens acknowledged that the Framers clearly supported corporations serving a social purpose in tandem with the government. “Corporations were created, supervised, and conceptualized as quasi-public entities, ‘designed to serve a social function for the state’. It was presumed that [they] were legally privileged organizations that had to be closely scrutinized by the legislature because their purposes had to be made consistent with public welfare.” Id. at 427 (internal citations omitted). For a discussion on the effect of the Constitution not explicitly mentioning corporations see A.F. Conard, Corporations in Perspective (Foundation Press 1976). According to Conard, the Constitution’s silence on corporations is a natural consequence of federalism. “[T]he effect of [the Constitution] saying nothing,” Conard asserted, “was to permit the states to continue granting corporate status under the doctrine of reserved powers.” Id. at 6. Gregory A. Mark counters Conrad’s account and claims that political events behind the scenes were actually more in play than the doctrine of reserved powers. Mark attributes the system that we have now is not the natural result of federalism, but, in actuality, nothing more than an “accident” resulting from a web of contradictory and complementary “phenomena.” G.A. Mark, The Court and the Corporation: Jurisprudence, Localism, and Federalism (The University of Chicago Press 1997). 170 Felix Frankfuter, The Commerce Clause Under Marshall, Taney, and Waite 63 (Quadrangle Paperbacks/Quadrangle Books 1964).

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­business corporations are today.171 There were also small unincorporated business associations, which some have argued are the “true progenitors” of today’s business corporations.172 The early American corporations were authorized by grant of a special legislative charter.173 Corporate sponsors would petition the legislature and the legislature, if amenable, would issue a charter that specified the corporation’s powers and purposes and “authoritatively fixed the scope and content of corporate organization, including the internal structure of the corporation.”174 Corporations were not allowed to exist perpetually. Limits were placed on how big and how powerful they could become. The charters could and were often revoked if the chartered purpose was not fulfilled or there was an abuse or a misuse of the charters. The few hundred or so corporations operating in the u.s. during the 18th century were chartered to perform specific public functions, such as digging canals, building bridges, constructing turnpikes, or providing financial services.175 They were not allowed to participate in the political process176 and could not buy stock in other corporations.177 Geopolitical events of the 1800s, the trade embargo with France and Britain from 1807 to 1809, and the War of 1812 provided the impetus to form corporations for something other than public purposes. To replace the manufactured goods that had previously come from England, newly formed American companies collected the capital needed to build factories. From the drafting of the Constitution until that time, only corporations chartered to fulfill a public purpose were recognized under the law. Existing law had to be interpreted accordingly. The Supreme Court, under the leadership of John Marshall, invoking the Constitution’s “obligation of contracts,” which states that “no State will pass any law impairing the  obligation of contracts,”178 established the precedent for a pro-business 171 See generally Joseph S. Davis, Essays in the Earlier History of American Corporations 24 (Harvard University Press 1917); Richard Seavoy, Origins of the American Business Corporation, 1784–1855, 5 (Greenwood Press 1982). 172 Lawrence Friedman, A History of American Law 200 (2d ed., New York: Touchstone 1985) [hereinafter Friedman, american law]. 173 Id. (citing E. Merrick Dodd, American Business Corporations Until 1860, 197 (Harvard University Press 1954); see also Friedman, American Law, supra note 72, at 188–189. 174 James Hurst, the Legitimacy of the Business Corporation in the Law of the United States 1780–1970, 15–16 (1970) (New Jersey: The Law Book Ltd. 2004). 175 See Mandel G. Blackboard & K. Austin Kerr, Business Enterprise in American History 120–121 (New York: Houghton Mifflin 1994). 176 Id. 177 Id. 178 u.s. Const. Art. 1, § 10.

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interpretation of the Constitution. The Marshall Court facilitated the corporate assault on the Constitution’s deliberate omission of corporate rights. Notwithstanding the “hungry ghosts”179 that the Supreme Court unleashed, the judiciary and the executive branch continued to battle against the corporate abuse of power. In an 1819 decision, Trustees of Dartmouth College v. Woodward,180 the Supreme Court held that [a] corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence. These are such as are supposed to do effect for the object for which it was created.181 In 1837, Chief Justice Taney reiterated the Framer’s objection to transferring power to corporations.182 A state ought never to be presumed to surrender this power, because, like the taxing power, the whole community have an interest in preserving it undiminished. And when a corporation alleges, that a state has surrendered for seventy years, its power of improvement and public accommodation, in a great and important line of travel, along which a vast number of its citizens must daily pass; the community have a right to insist, in the language of this Court above quoted, “that its abandonment ought not to be presumed, in a case, in which the deliberate purpose of the state to abandon it does not appear.” The continued existence of a government would be of no great value, if by implications and presumptions, it was disarmed of the powers necessary to accomplish the ends of its creation; and the functions it was designed to perform, transferred to the hands of privileged corporations.183 179 Derrick Jensen calls corporations “hungry ghosts.” “Limited-liability corporations are institutionalized dissatisfaction. They are immortal, created solely to amass large amounts of wealth. They are the economic manifestation of the Buddhist notion of hungry ghosts – spirits that roam the earth, always eating, never sated.” Derrick Jensen, http:// www.theecologist.org/investigations/politics_and_economics/268504/corporate _power_wielded_through_limited_liability_status.html (last visited July 5, 2008). 180 17 u.s. 518 (1819). 181 Id. at 613. 182 See Charles River Bridge v. The Proprietors of the Warren River Bridge, 36 u.s. 420 (1837). 183 Id. at 19.

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Several American presidents also were leery of the unfettered power of corporations. In 1832, President Andrew Jackson vetoed a motion to extend the charter of Second Bank of the United States because of the corrupt manner in which it operated.184 In Pennsylvania, several banks that failed to operate in the public’s interest also had their charters revoked.185 Justice Campbell, in his dissent in Dodge v. Woolsey, reminded us that society never intended for corporations to have unfettered powers. Individuals are not the creatures of the State, but constitute it. They come into society with rights, which cannot be invaded without injustice. But corporations derive their existence from the society, are the offspring of transitory conditions of the State; and, with faculties for good in such conditions, combine durable dispositions for evil. They display a love of power, a preference for corporate interests to moral or political principles or public duties, and an antagonism to individual freedom, which have marked them as objects of jealousy in every epoch of their history. Therefore, the power has been exercised, in all civilized States, to limit their privileges, or to suppress their existence, under the exigencies either of public policy or political necessity.186 Although Justice Campbell recognized that corporations are groupings of ­people,187 he was, nonetheless, convinced that the original construction and intent of the Constitution did not bestow any rights to corporations simply because they consisted of a voluntary and collective grouping of people. That the people of the States should have released their powers over the artificial bodies which originate under the legislation of their representatives, or over the improvident charges or concessions imposed by them upon its revenues, or over the acts of their own functionaries, is not to be assumed. Such a surrender was not essential to any policy of the Union, nor required by any confederate obligation. Such an abandonment could 184 See Lasn, supra note 167. 185 Id. 186 59 u.s. 331, 375 (1885). 187 See id. Governor Mitt Romney, Republican presidential candidate, cavalierly reminded the public that “[c]orporations are people, my friend…of course they are. Everything corporations earn ultimately goes to the people. Where do you think it goes? Whose pockets? Whose pockets? People’s pockets. Human beings my friend.” Sam Stein & Elyse Siegel, Politics, The Huffington Post, http://www.huffingtonpost.com/2011/08/11/mitt-rom ney-heckled-iowa_n_924426.html (last updated Oct. 11, 2011).

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have served no other interest than that of the corporations, or individuals who might profit by the legislative acts themselves. Combinations of classes in society, united by the bond of a corporate spirit, for the accumulation of power, influence, or wealth, by the control of intercourse or trade, or the spiritual or moral concerns of society, unquestionably desire limitations upon the sovereignty of the people, and the existence of an authority upon which they can repose in security and confidence. But the framers of the constitution were imbued with no desire to call into existence such combinations, nor dread of the sovereignty of the people.188 The domestic geopolitics of the American Civil War was the seminal shift in elevating and solidifying the political, social and economic power of corporations. Corporations took advantage of the national turmoil.189 With a war raging that was couched in maintaining the unity of the nation as a single entity, the increasing power of corporations was almost lost in the rhetoric of “liberty, freedom and justice for all.” Thus, while the battle to preserve the Union was being fought on bloodstained battlefields, in bombed seaports and fire-ravaged Southern cities, preserving the Union was not the only security threat. President Lincoln also considered corporations to be a national security threat. Lincoln foreshadowed the unbalanced and unchecked power that corporations would have over the government in effectuating legislation and policy that would benefit only corporations. In 1864, he warned: As a result of the war, corporations have been enthroned… An era of ­corruption in high places will follow, and the money power of the country 188 59 u.s. at 378. 189 Because of the trading monopolies enjoyed by the slave trading companies and the huge profits that slave labor produced, the Civil War was as much about the preservation of transnational slave corporations as it was about states’ rights. The proslavery faction consisted of merchants, investors and owners of slave trading companies who fiercely resisted having their livelihoods disrupted and profits diminished. Thus, corporations took advantage of the turmoil surrounding the Civil War and the corruption that existed in the state legislators to advance corporate interests and at the same time made huge profits from procurement contracts. See Jonathan Shepard Fast & Luzviminda Bartolome Farancisco, Conspiracy for Empire, Big Business, Corruption and the Politics of Imperialism in America, 1976–1907, 92–97 (Quezon City: Foundation for Nationalist Studies 1985) (discussing how corporate businessmen, Mark Hanna, Henry Havemeyer and Senator Nelson Aldrich systematically bribed Congress during this period. Most of the Supreme Court judges that were appointed were former corporate lawyers).

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will endeavor to prolong its reign by working on the prejudices of the ­people until wealth is aggregated in a few hands and the Republic is destroyed.190 Lincoln’s warning did not go unheeded. A little more than a decade after the Civil War, President Rutherford B. Hayes made the following observations: The real difficulty is with the vast wealth and power in the hands of the few and the unscrupulous who represent or control capital. Hundreds of laws of Congress and the state legislatures are in the interest of these men and against the interests of workingmen. These need to be exposed and repealed. All laws on corporations, on taxation, on trusts, wills, descent, and the like, need examination and extensive change. This is a government of the people, by the people, that has been fulfilled, and for the people no longer. It is a government of corporations, by corporations, and for corporations. How is this?191 Corporate power and influence are tied to enormous wealth that corporations are able to generate. This wealth in turn has allowed corporations to influence legislators in order to create laws favorable to corporate interests. “[T]he halls of legislation were transformed into a mart where the price of votes was haggled over, and laws, made to order, were bought and sold.”192 Indeed, justices in several Supreme Court cases have reiterated President Lincoln’s concerns about corporations. Corporations are artificial entities created by law for the purpose of ­furthering certain economic goals. In order to facilitate the achievement

190 Archer h. Shaw, The Lincoln Encyclopedia, u.s. President Abraham Lincoln, Nov. 21, 1864 (letter to Col. William F. Elkins) (New York: MacMillian 1950). Some authors have questioned the veracity of this quote. See Rick Crawford, What Lincoln Foresaw: Corporations Being “Enthroned” After the Civil War and Re-Writing the Laws Defining Their Existence (discussing and tracking the origins of the quote) (last visited July 10, 2011), at http://www.ratical.org/corporations/Lincoln.html. However, judicial activism, most recently in the guise of a strict constructionist’s interpretation of the Constitution in Citizens United, turned Lincoln’s warning into a prophecy. 191 See Charles Richard Williams, William Henry Smith, The Life of Rutherford Birchard Hayes: The Nineteenth President of the United States, vol. 2, 388 (Boston: Houghton Mifflin 1914) (President Hayes’ Diary, Mar. 11, 1888). 192 Matthew Josephson, The Robber Barons: Great American Capitalists, 1861–1901, 168 (New York: Harcourt, Brace and Company 1934).

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of such ends, special rules relating to such matters as limited liability, perpetual life, and the accumulation, distribution, and taxation of assets are normally applied to them. States have provided corporations with such attributes in order to increase their economic viability, and thus strengthen the economy generally. It has long been recognized, however, that the special status of corporations has placed them in a position to control vast amounts of economic power which may, if not regulated, dominate not only the economy, but also the very heart of our democracy, the electoral process.193 Elevating corporations to “persons” and ascribing to them human qualities was, in former Chief Justice Rehnquist’s opinion, elevating form over substance. “To ascribe such artificial entities [corporations] an ‘intellect’ or ‘mind’ for freedom of conscience purposes is to confuse metaphor with reality.”194 Judicial Activism Eviscerates Constitutional Law: The Santa Clara Decision In 1886, the Supreme Court ruled in Santa Clara County vs. Southern Pacific Railroad,195 a dispute pertaining to rail bed routes, that a private corporation is a “natural person” under the Constitution. The Constitution does not mention or allude to corporations. The Santa Clara case should be important not for erroneously applying the 14th Amendment to corporations, but rather for its blatant misappropriation of judicial power and unabashed judicial activism. Recently discovered documents support the theory that corporate influence corrupted the Santa Clara Court. It is believed that court reporter J.C. Bancroft Davis and Supreme Court Justice Maurice R. White intentionally misrepresented the holding in Santa Clara for the benefit of the railroads.196 Set forth in

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193 First Nat’l Bank of Boston v. Bellotti, 435 u.s. 765, 768 (1978) (Justices Byron White, William Brennan and Thurgood Marshall dissenting). 194 Pacific Gas & Electric Co. v. Public Utilities Commission, 475 u.s. 1 (1986) (Chief Justice William Rehnquist dissenting). 195 118 u.s. 394 (1886). 196 See Marking some milestones in the corporate theft of human rights, Historical documents, http://athenwood.com/uphistory.shtml (last visited Apr. 29, 2010). Railroads have always held a unique place in American history. In the late 1800s, railroads were the most powerful corporations in America. Special charters were used to create the first railroad corporations in the late 1820s. See generally Charles W. Wooten & Christie L. Roszkowski, Legal Aspects of Corporate Governance in Early American Railroads, 28 Bus. & Econ. Hist. 2 (1999).

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a head note, and not the body of the decision, J.C. Davis, the former president of Newburg & New York Railroad, wrote: The Court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.197 The Supreme Court has ruled twice since Santa Clara, in u.s. v. Detroit Timber & Lumber Co.,198 and Burbank v. Ernst,199 that headnotes have no legal standing. In Detroit Timber, the Court, in the body of the decision and not in a headnote, ruled: In the first place, the headnote is not the work of the court, nor does it state its decision, though a different rule, it is true, is prescribed by statute in some states. It is simply the work of the reporter, gives his understanding of the decision, and is prepared for the convenience of the profession in the examination of the reports.200 In Burbank v. Ernst, the Court stated: But the headnote is given no special force by statute or rule of court, as in some states. It inaccurately represents the reasoning of the judgment. In 129 La., it is said to have been made by the court. However that may be, we look to the opinion for the original and authentic statement of the grounds of decision.201 In 1896, ten years after Santa Clara, the Supreme Court ruled in another landmark case involving railroads, Plessy v. Ferguson.202 In 1890, the State of 197 118 u.s. at 397. Headnotes, as any first year law student learns, do not constitute principles of law. They are a summary of key legal points that are useful for a quick scan of the judgment, but they are the editor’s remarks and not those of the court. 198 200 u.s. 321 (1906). 199 232 u.s. 162 (1914). 200 200 u.s. at 337. 201 232 u.s. at 163. 202 163 u.s. 537 (1896). Under Plessy, schools, hospitals, public and private accommodations and transportation designed to cater to racial and ethnic minorities were legal as long as they were “equal.”

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Louisiana passed Act 111 that required separate but equal accommodations for black and whites on railroads. A coalition of black Americans, including Louisiana’s former governor p.b.s. Pinchback, a black man, and whites in New Orleans formed the Citizens’ Committee to Test the Separate Car Act, dedicated to repealing the law. Homer Plessy, who because of his skin color and features could not be discerned as being “colored,” purchased a ticket and boarded the whites’ only section of the train. By asserting and claiming his human dignity, Plessy’s challenge to the “law” resulted in his arrest. The lower court found the law constitutional. Plessy then appealed to the u.s. Supreme Court, arguing that the law violated his rights under the Thirteenth and Fourteenth Amendments. The Plessy decision established and legalized the “separate but equal” doctrine of racial segregation. The Supreme Court stripped African Americans of their “inalienable rights,” effectively holding that segregated facilities did not traverse human dignity and that these facilities were neither a moral nor a religious abomination under natural or positive law. Plessy exemplifies America’s penchant for upholding its dogmatic and irrational notions that power, prestige and privilege are reserved only for those deemed to members of the “white” race.203 As the Court noted: [Plessy, an American citizen] of mixed descent, in the proportion of seven-eighth African blood; that the mixture of colored blood was not discernible in him and that he was entitled to every recognition, right, privilege, and immunity secured to the citizens of United States of the white race, by its constitution and laws…204 203 See supra notes 16, 120 and accompanying text (discussing on how “racial designations” are social and political constructs). 204 163 u.s. at 638. The Court’s rationale for its ruling is a prime example of how law cannot always serve as a beacon for justice, simply because it is laid down by the sovereign and interpreted by the judiciary. Such laws must be constantly challenged to ensure a world public order of human dignity. John Harlan, the lone dissenter in Plessy, and ironically a former slave owner, had this to say about the majority’s ruling. The white race deems itself to be the dominant race in this country. And so it is, in prestige, in achievements, in education, in wealth and in power. So, I doubt not, it will continue to be for all time, if it remains true to its great heritage and holds fast to the principles of constitutional liberty. But in view of the Constitution, in the eye of the law, there is in this country no superior, dominant, ruling class of citizens. There is no  caste here. Our Constitution is color-blind, and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law.

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J.C. Davis, the court reporter in Santa Clara, was also the court reporter in Plessy. Ironically, both cases dealt with human rights and corporations. Thus, with a few strokes of a pen, J.C. Davis bestowed human rights upon an inanimate object, the corporation, which was integrally tied to, promoted and financially benefitted from the slave trade, the vestiges of which the 14th Amendment was designed to eradicate.205 The Supreme Court interpreted the 14th The humblest is the peer of the most powerful. The law regards man as man, and takes no account of his surroundings or of his color when his civil rights as guaranteed by the supreme law of the land are involved. It is, therefore, to be regretted that this high tribunal, the final expositor of the fundamental law of the land, has reached the conclusion that it is competent for a State to regulate the enjoyment by citizens of their civil rights solely upon the basis of race. (emphasis added) 163 u.s. at 559. The Santa Clara and Plessy decisions underscore the untrammeled power that railroad corporations once had. The history of railroad companies in America is the history of corporate influence and corruption of the judiciary and the legislatures. 205 Plessy’s holding remained the law of the land for more than fifty years until it was overturned by Brown v. Board of Education of Topeka, 347 u.s. 483 (1954), which ruled that “separate educational facilities are inherently unequal” and ruled that de jure racial segregation violated the Equal Protection Clause of the Fourteenth Amendment. We conclude that in the field of public education the doctrine of “separate but equal” has no place. Separate educational facilities are inherently unequal. Therefore, we hold that the plaintiffs and others similarly situated for whom the actions have been brought are, by reason of the segregation complained of, deprived of the equal protection of the laws guaranteed by the Fourteenth Amendment. This disposition makes unnecessary any discussion whether such segregation also violates the Due Process Clause of the Fourteenth Amendment. 347 u.s. at 495. Brown consolidated four public schools desegregation cases in Kansas, South Carolina, Virginia and Delaware. Brown v. Bd. of Education of Topeka, 98 F. Supp. 799 (1951); Briggs v. Elliott, 98 F. Supp. 529 (1951); Davis v. County School Board, 103 F. Supp. 337 (1952), and Gebhart v. Belton, 87 A.2d 862 (1952). The named plaintiff in Brown, Oliver L. Brown, ironically worked as a welder for a railroad company. His daughter Linda, a third grader, had to walk six blocks to a bus to her school, which was more than a mile away. A white school was almost seven blocks from her house. The Brown plaintiffs asserted that this “separate but equal” system actually resulted in unequal treatment by perpetuating inferior accommodations, services, and treatment for black Americans. In reaching its unanimous decision to overturn more than fifty years of precedent, the Brown court relied in part on international law principles enshrined in the udhr, a 1948 resolution of the un Social and Economic Council, and a 1950 unesco declaration titled The Race Question, which was prepared under the guidance of and assistance from several renowned international scholars and experts. Considering how the irrational and illogical adherence to racial superiority fueled the Nazi’s regime of terror, unesco in 1945 waged

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Amendment, which was enacted to protect the rights of freed slaves,206 to vest inanimate, fictional entities with “human rights” that newly freed slaves did not fully enjoy until the passage of the Civil Rights Act of 1964.207 war on racism. In doing so, unesco adopted a “programme of dissemination of scientific facts designed to bring about the disappearance of that which is commonly called race prejudice.” The Race Question, unesco and its programme, vol. 3, p. 1, 1950, at unesdoc. unesco.org/images/0012/001282/128291eo.pdf (last visited Apr. 27, 2009). The declaration dispelled the myth that there are separate and distinct racial classifications that justify the separation of racial groups on the basis of biological factors and began to correct the fallacious assumption of racial superiority by defining what race is and how phenotypical variations occur. Attempts at scientifically justifying racism as well as morally condemning racism, the unesco report along with the works of the anthropologist Gunnar Myrdal and educational psychologists Kenneth B. Clark and Mamie Phipps Clark’s “doll test,” which studied how segregation impacted black school children, formed the backdrop for the Court’s decision. See also Gunnar Myrdal, An American Dilemma: The Negro Problem and Modern Democracy (New York: Harper Brothers, 1944). The Court recognized that Plessy was decided based upon “the extent of psychological knowledge at the time…” 347 u.s. at 494. Accordingly, the Court looked at the social, cultural, and political policies that formed the backdrop for the Court’s rationale in Plessy and rejected continuing such rationale in light of the current realities, mores and values that existed in 1954. The Brown’s court’s analysis that past decisions, which are based upon the temporal context under which they were derived, cannot continue to provide justification for keeping laws intact provides guidance and support for construing international law in a fashion that takes cognizance of today’s realities. Consquently, we must ensure that human dignity is afforded to all whose rights are violated, irrespective of who the actor is. Interestingly, in Brown the focus of the argument before the Court centered on the circumstances surrounding the adoption of the Fourteenth Amendment in 1868. Accordingly, the Court opined that The most avid proponents of the post-War Amendments undoubtedly intended them to remove all legal distinctions among ‘all persons born or naturalized in the United States’. Their opponents, just as certainly, were antagonistic to both the letter and the spirit of the Amendments and wished them to have the most limited effect. What others in Congress and the state legislators had in mind cannot be determined with any degree of certainty. 347 u.s. at 489. 206 See Barry Yeoman, When is a Corporation Like a Freed Slave, Mother Jones (Nov/Dec. 2006), http://motherjones.com/politics/2006/10/when-corporation-freed-slave? (last visited May 5, 2007). 207 Beginning with the 1960s, the u.s. Supreme Court, the Warren and Burger courts, addressed the effects of past and present racial discriminatory practices in public schools. The Court, in using a policy analysis approach, recognized that local school districts had “the affirmative duty to take whatever steps might be necessary to convert to a unitary

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The Santa Clara decision ostensibly set the precedent for the Supreme Court to extend to corporations many of the same rights enjoyed by private citizens.208 Fifty years after the decision, Supreme Court Justice Hugo Black stated in his dissent, “I do not believe the word ‘person’ in the Fourteenth Amendment includes corporations,”209 and urged the Court to “overrule decisions which interpret the Fourteenth Amendment to include corporations.”210 Justice Black rightly reasoned that positive law when it is wrongly interpreted and applied is not law. “A constitutional interpretation that is wrong should not stand.”211 He noted that “[n]either the history nor the language of the Fourteenth Amendment justifies the belief that corporations are included within its protection.”212 Justice Black also noted that “less than one half of 1% of the Supreme Court rulings that invoked the 14th Amendment were invoked in its protection of the Negro race, and more than 50% asked that its benefits be extended to corporations.”213 Likewise, sixty years after the decision, Supreme Court Justice William O. Douglas stated that Santa Clara was wrongly decided and that “[t]here was no history, logic or reason given to support the view [that corporations are legally persons as was determined in Santa Clara].”214 Post-Santa Clara America became a very different place. In the post-World War II era corporations continued to gain power and influence. In 2011, of the world’s top fifty (50) economic entities, eight were multinationals. Royal Dutch

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system in which racial discrimination would be eliminated root and branch.” See e.g., Green v. County Board, 391 u.s. 430, 437–438 (1968); see also Swain v. Board of Education, 402 u.s. 1 (1971); Keyes v. Denver School District, 413 u.s. 189 (1973). See generally Milton Horwitz, The Transformation of American Law, 1870– 1960: The Crisis of Legal Orthodoxy (Oxford University Press 1992). Horwitz discusses how the Santa Clara case, although wrongly decided, set forth a basis for courts to eventually give “legal personhood” to corporations. The “‘natural entity’ or ‘real entity’ theory of corporation that the Santa Clara case is supposed to have adopted was nowhere to be found in American legal thought when the case was decided… [T]hose who argued for the corporations as well as Supreme Court Justice Stephen Field, who decided in favor of the corporation in two elaborate circuit court opinions below, clearly had no conception of a natural entity theory of the corporation…and when the natural entity theory emerged about a decade later, it was only then gradually absorbed into the Santa Clara precedent to establish dramatically new constitutional protections for corporations.” Id. at 67. Connecticut General Life Ins. Co. v. Johnson, 303 u.s. 77, 85 (1938). Id. Id. Id. Id. Wheeling Steel Corp. v. Glander, 337 u.s. 562, 577 (1949).

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Shell, Exxon Mobile and Wal-Mart Stores are in the top 30 global economic entities (26, 27 and 28 respectively). These three mncs are larger than 110 countries, which is roughly about 55 percent of the total number of countries. The total revenues of Royal Dutch Shell is 2.04 times greater than the gdp of Portugal and 6.75 times greater than the gdp of Oman.215 Corporations are integral components of every facet of society. They enjoy the full rights and benefits of citizens without being burdened with many of the responsibilities and liabilities of citizenship. Having obtained the same right to free speech as natural persons, corporations have achieved through judicial decision what the Bill of Rights sought to prevent, the domination of public thought and discourse.216 V

The Business of Business: Corporate Social Responsibility and Human Rights [T]here is only one social responsibility of business – to use its resources to engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or more.217

215 Steven White, The Top 175 Global Economic Entities, 2011 (based upon Gross Domestic Product as measured by the World Bank and Total Revenue Source, Fortune Magazine, All Things Marketing, http://dstevenwhite.com/2012/08/11/the-top-175-global-economic -entities-2011/ (last visited Nov. 12, 2013). 216 Lasn, supra note 167. 217 Milton Friedman, Capitalism and Freedom 133 (Chicago: University of Chicago Press 1962); Milton Friedman, The Social Responsibility of Business is to Increase Profits, n.y. Times Magazine, Sept. 13, 1970, at 32 [hereinafter, Friedman, Social Responsibility of Business]. The Michigan Supreme Court, in Dodge v. Ford Motor, Co., 204 Mich. 459, 170 nw 668 (Mich. 1919), solidified the precedent for Friedman’s position that corporations are organized to make profits for their shareholders. A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed to that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the nondistribution of profits among the stockholders in order to devote them to other purposes. 170 nw at 684. The Court ruled that Henry Ford owed a duty to the company’s shareholders to operate the business in a manner that would maximize profits for its shareholders rather than to divert funds to use for the benefit of employees or the community at large.

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Milton Friedman’s218 seminal pronouncement that business’ only social responsibility is to make profits has been assailed by his critics, proponents of binding regulations on tncs, and applauded by other like-minded scholars.219 According to Friedman, business can pursue any avenue it wants to as long as it adheres to the “rules of the game.” But exactly what are the rules of the game?220 Who made them? When were they made? How were they made? Are the rules written or verbal? Where are the rules found? Can the rules be changed? If so, how are they changed? Who is allowed to change them? Who

The concept known as “shareholder value” principle has not been explicitly overruled but does not represent current law in the United States. 218 Milton Friedman (1912–2006) was an American economist and Nobel Laureate in Economics in 1976. As President Regan’s economic advisor he championed a free market economic system with little intervention from the government. See also infra note 96, discussing the Chicago School of Economics for which Friedman is associated with. See also David Weissbrodt, Eighteenth Annual Corporate Law Symposium: Corporate Social Responsibility in the International Context: Business and Human Rights, 74 U. Cin. L. Rev. 55, 71 n. 65 (2006) (referencing Ronald Coase’s alternative paradigm to Friedman’s position. Coase argues that business is best understood by observing their actual conduct rather than creating artificial models of how they ought to act. Coase, however, is a proponent of the Chicago School.). 219 See Athanasios Chymis, Using Friedman to Understand the Relationship between Market Competition and Corporate Social Performance, 8 (unpublished Ph.D. dissertation University of Missouri – Columbia, May 2007), available at https://mospace.umsystem .edu/xmlui/bitstream/handle/10355/4841/research.pdf?sequence=3 (last visited May 5, 2009). Other scholars, in addition to Milton Friedman, who have also opposed business utilizing corporate social responsibility initiatives include Friedrich Hayek, Theodore Levitt and David Henderson. Levitt believed that corporate social responsibility measures would thrust business into the role of government, thereby dominating society. He analogized that business would become the 20th century equivalent of the medieval church – the all-embracing institution in society. See Theodore Levitt, The Dangers of Social Responsibility, 36 Harv. Bus. Rev. 41 (1958). 220 The “rules of the game” in a free marketplace, according to Sean McAleer, who critically discusses Friedman’s stockholder theory of corporate moral responsibility, are not made without government intervention. Indeed, McAleer argues that although Friedman opposed government placing regulations on businesses, he aptly recognized, when he wrote Capitalism and Freedom, that “government is essential both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided upon.” Sean McAleer, Friedman’s Stockholder Theory of Corporate Moral Responsibility, 7 Teaching Business Ethics 4, 439 (Netherlands: Kluwer Academic Publishers 2003), www.springerlink.com/index/h12p7105585833j3.pdf (last visited Jan. 15, 2010).

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or what determines when the rules need to be changed? Whose interests do these rules serve? Do the rules reflect good policy? Are the rules a closed set, permanently fixed by some past event? Are the rules susceptible to being changed by some present event to be implemented in the future to prevent a repeat of past events that led to a decline in profits? Are the rules positive or normative law?221 When it comes to the human rights and business debate, the “rules of the game” are not necessarily fluid, even though, as some scholars note, corporate activity can touch the entire spectrum of human rights. [W]hat other rules of the game should there be beyond anti-trust and anti-corruption laws? Should there not also be anti-discrimination, and anti-pollution laws that protect people from infringements of privacy, bodily integrity, free association, movement or speech, or from degradations of their standards of living, health and education? In short, should the rules of the game provide certain basic standards of human existence, certain human rights that would, could and are sometimes compromised by corporations in their pursuit of profits?222 Should those who adhere to the rules consider the rules’ impact on human dignity?223 Perhaps, what is more important, should human rights abuses committed in the pursuit of profits be tolerated as long as the “rules of the game” are followed?224 The “rules of the game” for business at one time allowed for and openly sanctioned slavery, child labor, and sexual, racial, religious and gender

221 According to McAleer, the “rules of the game” and the rules of society (i.e. the laws) may be different. Id. 222 David Kinley, Human Rights and Corporations, Introduction, xii (Ashgate 2009). 223 From a policy-oriented jurisprudence analysis, the rules of the game would be “an accumulation of past decisions,” and thus are positive law. Policy-oriented scholars in addressing “the rules of the game” are obliged to discern whether the rules deviate from good policies for the community at large, and if so, they should try to persuade corporate ceos and policy makers to set aside their parochial interests in favor of shared world values. 224 It is argued that the financial crisis of 2008 changed the “rules of the game,” and strengthened corporate social responsibility initiatives.

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­discrimination, and harassment. Such practices, which were not illegal,225 were morally wrong and violated the human dignity of individuals and indigenous peoples. Women and men of good conscience, aided by civil society organizations and religious organizations, engaged in civil activism and disobedience until moral views changed the law, thereby effectively making such degradations and affronts to human dignity illegal. Thus, notwithstanding the proponents who tout Friedman’s mantra, even Friedman could not justify genocide or the use of slave labor in the pursuit of profits. Many in the business community have challenged Friedman’s philosophy. In 1939, before the current push to have corporations conduct their business activities in a socially responsible manner, Dave Packard, co-founder of Hewlett Packard, reasoned that corporations had a duty to society at large: I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper and find the real reasons for our being. As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately – they make a contribution to society, a phrase which sounds trite but is fundamental.226 Jeff Swartz, then ceo of Timberland Corporation, speaking at the Ethical Corporation227 2004 European Conference, called Friedman’s profit maximization theory “outdated, inadequate and incomplete.”228 He reasoned that a chief executive’s role is to maximize profits for shareholders and to design a 225 Illegal under the positive law of the sovereign nation-state. 226 Dr. P. Katsoulakos & Prof. Y. Katsoulakos, A multi-dimensional view of corporate responsibility, 6, The 4cr strategic approach to corporate responsibility, 4cr Working papers, 4cr Part A, 4cr A1.5 (July 12, 2006), www.csrquest.net/uploadfiles/4CR%20A1.4.pdf (last visited Nov. 19, 2010). 227 Ethical Corporation, founded in 2001, is a media business, whose aim is to encourage debate and discussion of responsible business through publishing, conferences, and independent research and advisory work. See http://www.ethicalcorp.com/s/about-ethical -corporation.asp. 228 Timberland ceo says Friedman is ‘outdated, inadequate and incomplete’, Ethical Corp. Archive, http://www.ethicalcorp.com/content_print.asp?ContentID=2042 (last visited Nov. 5, 2007).

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strategy that achieves liberty and justice for all.229 In his view, “doing good and doing well are inextricably linked – they have absolutely nothing to do with the next.”230 Similarly, former Quaker Oats President Kenneth Mason found Friedman’s pursuit of profits to be “a dreary and demeaning view of the role of business and business leaders in our society.”231 He noted that “[m]aking a profit is no more the purpose of a corporation than getting enough to eat is the purpose of life. Getting enough to eat is a requirement of life; life’s purpose, one would hope, is somewhat broader and more challenging, likewise with business and profit.”232 Mason sees business as having a moral responsibility in addition to serving an economic function. It is the economic function and the organizational structure233 of a business that is at odds with the movement to hold tncs accountable for human rights abuses. Other business executives also disagree with Friedman’s profit maximization doctrine. A worldwide survey conducted in 2005 of 4,328 business executives found that only 6 per cent of those surveyed agreed that the “business of business is business.” Eighty-four per cent agreed that a company had to balance profit maximization against a company’s contribution to “the broader public good.”234 Scholars also disagree with Friedman’s position. Einer Elhauge refuted Friedman’s contention by pointing out the following: 229 Id. 230 Id. 231 Joel Makower, Milton Friedman and the Social Responsibility of Business, GreenBiz.com, http://www.greenbiz.com/news/2006/11/24/milton-friedman-and-social-responsibility -business (last visited Apr. 22, 2009). 232 Id. 233 See Peter Begley, Socially Responsible Investing, Calvert Mutual Funds & Corporate Governance, May 31, 2006, Credo Advisors, http://www.credoadvisors.com (last visited Jan. 17, 2008). [A] corporation’s governance structure is inherently in conflict with the pursuit of social concerns. A corporation’s fiduciaries have duties of loyalty and care to the corporation and its shareholders, which typically leads to the prioritization of profits over any other concern. Placing corporate integrity and social concerns first, or even in addition to profit maximization, may cause the fiduciaries to be in breach of one or both duties. Introducing additional fiduciary duties, such as duties of citizenship and humanity, which stipulate a greater social concern by the corporation, may alleviate this conflict. Id. at 3. 234 Doreen McBarnet, Corporate social responsibility beyond law, through law, for law: the new corporate accountability, in The New Corporate Accountability: Corporate Social Responsibility and the Law 11 (citations omitted) (Doreen McBarnet, Aurora Voiculescu & Tom Campbell eds., Cambridge University Press 2007) [hereinafter New Corporate Accountability].

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None of the fifty states has a statute that imposes a duty to profit m ­ aximize or that makes profit-maximization the sole purpose of the corporation. Every state has a statute authorizing unprofitable corporate donations… Likewise, the… American Law Institute explicitly states that common law fiduciary duties do not prohibit managers from sacrificing profits to further the public interest…235 Similarly, Robert L. Heilbroner identifies three flaws in Friedman’s position: One, pure profit maximization does not exist.236 Businesses routinely lower the cost of products, which reduces profits, to drive competitors out of business. Two, even if the government makes the “rules of the game,” businesses seldom willingly accept these rules if they have no part in creating them.237 Three, shareholders rarely have input into how a company operates.238 Heilbroner questions whether Friedman can “realistically claim that the rights of shareholders should predominate when the stockholder is no longer a significant source of venture capital but ‘merely’ a passive holder of certificates of varying degrees of risk and potential return with little knowledge of the real performance of the corporation?”239 In 1971, a year after Friedman published The Social Responsibility of Business, the us Committee for Economic Development (ced) published a business code of conduct titled Social Responsibilities of Business Corporations, which outlined a three-tiered model of corporate social responsibility (csr).240 Archie B. Carroll heralds the ced’s model as “a landmark contribution to the concept of csr” because it recognized the changing relationship between business and society.241 As Carroll put it: 235 Einer R. Elhauge, Sacrificing Corporate Profits in the Public Interest, 80 n.y.u.l. Rev. 733, 738 (2005). 236 See generally Robert L. Heilbroner, Business Civilization in Decline (New York: Calder & Boyars 1976). 237 Id. 238 Id. 239 Id. 240 See Gail Thomas & Margaret Nowak, Corporate Social Responsibility: A definition, Working Paper Series 62, 5 Curtin University of Technology, Graduate School of Business (Dec. 2006) (discussing the origins of csr and the various definitions of csr), http://www .business.curtin.edu.au/download.cfm?DownloadFile=5DFD6601-A14D-E163-CF 7C4986F1562F60 (last visited July 7, 2010). 241 See Archie B. Carroll, Corporate Social Responsibility: Evolution of Definitional Construct, 38 Bus. & Soc’y 3, 274 (1999) (tracing the various academic definitions of csr from the 1950s to the 1990s) [hereinafter Carroll, Evolution of Definitional Construct].

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Business is being asked to assume broader responsibilities to society than ever before and to serve a wider range of human values. Business enterprises, in effect, are being asked to contribute more to the quality of American life than just supplying quantities of goods and services. Inasmuch as business exists to serve society, its future will depend on the quality of management’s response to the changing expectations of the public.242 The world has become increasingly smaller since Friedman pronounced more than fifty years ago that in a “free enterprise, private property system,”243 a corporate executive’s sole responsibility needs to be only to his employers – the shareholders. During the 60s and 70s, Friedman’s America, indeed Friedman’s “free enterprise, private property system,” was engaged in Vietnam,244 was deciding how to rectify the horrific legacy of slavery and Jim Crow245 laws by 242 Id. 243 Friedman discussed the social responsibility of business in his book Capitalism and Freedom, which was published in 1962. It is the New York Times article, The Social Responsibility of Business, written in 1970, where he reiterated his position that is most often cited as the source. 244 The u.s. entered the Vietnam War in the beginning of 1950 and escalated its involvement in 1961–1962. College students began protesting against the war in 1964, which lasted until the war ended. u.s. combat units were deployed in 1965 and the u.s. remained embroiled in Vietnam until 1975. 245 History is sometimes filled with half-truths. The origins of the term “Jim Crow” falls into this category. Most historians credit Thomas Darmouth Rice, known as the “father of American minstrelsy,” with creating the character Jim Crow. Minstrel shows were musical performances from the 1830s to the early 1900s. In 1832, performing for an all-white audience, Rice dressed in tattered clothes and painted his face black with shoe polish, greasepaint or burnt cork, exaggerating his lips and eyes in white or red paint to resemble Negro features, and spoke in exaggerated Negro dialect, portraying the Negro as an ignorant, stupid, docile, dumb-witted buffoon. No one seems to know if Jim Crow was patterned after an actual person. Some historians say that Jim Crow was an unknown soldier. Others say that he was a slave from Cincinnati, Ohio. Some say that the name Crow is from Mr. Crow, the slave owner; and others say the name Crow is a simile for black as a crow. Others say that Jim Crow was patterned after a black folklore, a black trickster, who was well known among the slaves. Bennett, supra Chapter 1, note 2, at 221; see also Jim Crow Museum of Racist Memorabilia, Ferris State University, http://www.ferris.edu/htmls .news/jimcrow/origins.htm. What is not a half-truth is that Rice immortalized his character in song and dance with the following jingle in Negro dialect: Come listen all you galls and boys I’se jist from Tuckyhoe,

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extending civil and political rights to women and minorities,246 was faced with eradicating the systems of paternalism and the “good ole boy” network by I’m goin to sing a little song, My name is Jim Crow. Fist on de heel tap. Den on the toe. Ebry time I weel about I jump Jim Crow. Weel about and turn about En do jus so, And every time I weel about, I jump Jim Crow. Blackface! Minstrel Shows, http://black-face.com/minstrel-shows.htm (last visited Dec. 12, 2013). While the term Jim Crow was meant for comic relief, it pernicious effects as a governmental policy provided no such relief for African Americans. The term became synonymous with a set of laws, policies and practices that were predicated on nothing more that the color of one’s skin. These laws, which were enacted in primarily Southern states, governed where blacks could live, eat, work; whether they could vote; who they could marry; their educational opportunities and whether they could sit next to whites on airplanes, buses, or trains. Jim Crow’s laws were America’s version of apartheid. Signs were placed over water fountains, bathroom facilities and restaurant counters designating “Colored Only” or “Whites Only.” Violations resulted in imprisonment, humiliation and death by lynching. For an example of Jim Crow laws, see infra note 246, Randall Kennedy, Martin Luther King’s Constitution: A Legacy of the Montgomery Bus Boycott. 246 Slavery in the u.s. was legal from approximately 1607 until 1865. The practice of relegating people from sub-Saharan Africa as slaves in the Western Hemisphere was justified by a fallacious, albeit scientifically unproven by proponents of slavery, reasoning that blacks were a genetically, culturally, and socially inferior class (race) of people. See supra note 267, discussion on the origins of the term “race.” Therefore it was morally justified to enslave blacks. Although the enslavement of humans can be traced to the beginning of recorded history, it was not based upon skin color per se, as much as it was a product of war and conquests of other people and land. Generally, skin color and physical traits did not matter as much as nationality, regional or religious alliances did. The Founders of America grappled with the hypocrisy embedded in a country that was founded on religious freedom and tolerance as it fought to liberate itself from the tyrannical oppression of the British crown and yet benefitted from the economic and cultural institution of slavery. This newly formed country, the land of the free and home of the brave, denied inalienable rights to blacks, whether free or slave, and designated blacks as “three-fifths” of a person. Representation and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by addressing to the whole Number of free Persons, including those bound to Service for a Term of Years and excluding Indians not taxed three fifths of all other Persons. u.s. Const. Art. 1, § 2, para. 3.

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establishing affirmative action programs in education and employment for women247 and minorities. Thomas and Nowak discussed the impact that the geopolitical events of the 1970s would have on corporate America. The scourge of slavery eventually led to a civil war. During the Reconstruction period, the vestiges of slavery, the inferior civil and political status of black Americans and legal segregation, remained. From 1865 to 1877, federal law provided civil rights protection for freed slaves through the 13th, 14th and 15th Amendments, known as the Civil War Amendments, which were adopted in 1868. Congress passed the Civil Rights Act of 1875 to enforce the Civil War Amendments, making it illegal to segregate schools, places of public accommodations, modes of transportation and juries. In 1883, however, the Supreme Court, in Civil Rights Cases, 109 u.s. 3 (1883), declared the Act unconstitutional, holding that it was not authorized by the 13th and 14th Amendments. The Court ruled that the 14th Amendment only applied to discrimination by state governments, not to discrimination by private persons as owners of railroads, theaters or inns. Thus, the federal government was virtually powerless to control discrimination against blacks by private persons. As a result of invalidating the Act, southern states enacted Jim Crow laws designed to keep black Americans under the shackles of de facto slavery and second class citizenship. These laws regulated where black Americans could live, eat, sleep, enjoy recreational activities, attend school, or obtain adequate health care. The laws regulated who black Americans could marry, if and when they could vote in elections, what types of federal and state jobs they could hold, if they could own property, and what types of recreational games they could play and with whom. For example, a 1957 Montgomery, Alabama ordinance made “[i]t unlawful for white and colored persons to play together…in any game of cards, dice, dominoes, checkers, billiard, softball, basketball, football, golf, track, and at swimming pools or in any athletic conference.” Randall Kennedy, Martin Luther King’s Constitution: A Legal History of the Montgomery Bus Boycott, 98 Yale L. J. 999, 1057 (1989) http://academic.udayton.edu/race/02rights/civilrights03d.htm (last visited Feb. 27, 2011). In 1896, the u.s. Supreme Court formally made American apartheid the law and eviscerated the Equal Protection Clause for black Americans when it ruled that states and local municipalities could legally provide racially segregated schools, public accommodations and other facilities. As explained above, the Court’s decision in Plessy v. Ferguson established the “separate but equal” doctrine. America was governed by this doctrine for 68 years until the Court ruled in 1954, in Brown v. Bd. of Education, that “separate” public schools for black and white children are “inherently unequal.” The Civil Rights Act of 1957, 42 usca § 1975, the first federal legislation passed since Reconstruction, established the Commission on Civil Rights and the Civil Rights Division within the Department of Justice. The Civil Rights Act of 1964, 42 usca § 2000e-1 et seq., and the Voting Rights Act of 1965, 42 usc § 1973c, legally ended the practices and policies of Jim Crow laws and de jure segregation, although the effects and legacy of the laws are still prevalent in 2014. The Civil Rights Act of 1964 prohibited discrimination based on race, color, national origin, or religion in most privately-owned business that served

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The relationship between business and society was being questioned at a time when the United States was embroiled in the social and political protests of the civil rights and the peace movements, when issues such as ‘human values’ and morality were being publicly debated. This would also have impacted on corporate America.248 On a global scale, in the 1960s and 70s, multinational corporations were just beginning to make significant expansions beyond American and European borders. The full realization of the Universal Declaration of Human Rights (udhr) did not encompass the people of East Berlin.249 China, Brazil, and India were not economic or political power brokers. And the Union of South Africa’s apartheid

the public and the Act established the Equal Employment Opportunity Commission (eeoc) to eliminate illegal workplace discrimination. The Equal Employment Act of 1972, 42 usc § 2000d & 2000e, gave the eeoc litigation authority. The Voting Rights Act of 1965 prohibited state residency requirements, poll taxes (requiring a tax to be paid before voting), grandfather clauses, and candidate filing fees that were traditionally used to discriminate against poor and minority voters. The 1968 Fair Housing Act, 42 usc § 3601 et seq., prohibited discrimination in housing. 247 In 1920, the 19th Amendment guaranteed women the right to vote. The second wave of the Women’s Rights Movement, often called “feminism” or the “Feminist Movement” or the “Women’s Liberation Movement,” began in the 1960s and lasted through the late 1970s. Women challenged the status quo, where white males were in positions of power from politics (elected officials) to skilled labor professions in industry and the corporate and academic worlds. The 1963 Equal Pay Act, 29 usc 8 § 206(d), required that men and women receive similar pay for performing similar work. The Supreme Court in 1971, in Reed v. Reed, 404 u.s. 71, overturned a state law arbitrarily discriminating against women. In 1972, Congress passed the Equal Rights Amendment (era), which stated “[e]quality of equal rights shall not be denied or abridged by the United States or any state on account of sex.” There was a seven year time limit to ratify the amendment, which Congress extended for an additional three years. Thirty-eight states were needed to ratify the era by June 20, 1982. Ratification fell short by three states. 248 Thomas & Nowak, supra note 240, at 6; see also Archie B. Carroll & Kareem M. Shabana, The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice, 12 Int’L J. Mgmt. Rev. 85 (Mar. 2010) (discussing the impact that the social movements of the 1960s and 1970s had on corporations in America) [hereinafter Carroll & Shabana], available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1537406. 249 The Berlin Wall and minefields on the Western border of the East German state, the German Democratic Republic prevented emigration of East Germans to West Germany and other parts of Western Europe. The wall was erected in 1961 and existed until 1989 when political changes within East Germany resulted in millions of East Berliners literally crawling over the wall into West Berlin. The end result was the reunification of Germany in 1990.

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system, which was supported and maintained by domestic and u.s. multinational corporate policies and practices, was being targeted by American civil society and student-led divestment movements at major universities in the United States, whose coffers were the results of the apartheid business practices.250 Indeed, in the decade leading up to 1970, the American consciousness and the world’s consciousness were less socially and politically responsive to the needs of others. Human dignity, as embodied in the udhr, was in its nascent stage. Nonetheless, Friedman’s edict that business’ sole responsibility is to make profits has led to the defeat of most, if not all, regulatory attempts to impose human rights obligations on tncs. As Friedman admonished: What does it mean to say that ‘business’ has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but ‘business’ as a whole cannot be said to have responsibilities, even in this vague sense.251 If one adheres to Friedman’s logic, because a business is an artificial person it  cannot have human rights obligations,252 then it stands to reason that a 250 Student-led protests forced many colleges to divest from South Africa during the 1970s and 1980s. In 1977, Hampshire College, in Amherst, Massachusetts, was one the first colleges in the u.s. to divest from companies doing business in South Africa. These companies included Exxon, Clarke and International Harvester, which students considered reprehensible because of the corporations’ involvement in South Africa. See Hampshire College (last visited Nov. 7, 2010) http://www.hampshire.edu/library/3406.htm; see also The Sullivan Principles, infra Chapter 4, notes 324–326. 251 Friedman, Social Responsibility of Business, supra note 217; see Stephen Dunne, Corporate Social Responsibility and the Value of Corporate Moral Personhood (Feb. 29, 2008) https:// lra.le.ac.uk/bitstream/2381/3905/1/Value_of_Moral_Personhood.pdf (last visited Nov. 15, 2011). Dunne counters Friedman by stressing that corporations should not only be required to obey the law but they should also be obliged to be good, in the moral sense, in addition to being right in the juridical sense. The law makes a certain abstraction from material conditions in order to conjure the corporation into existence. Friedman’s work, as has been shown, suggests as much to us. And if this is possible, then it must also be possible for corporate chastisement to be effectuated along a similar line of abstraction from material conditions… [The corporation] must therefore be commendable and condemnable in the much the same ways as a real person is. Id at 14. 252 Dennis Masaka likewise assails Friedman’s position. He asks and answers as follows: [Is a] business…technically a moral person or a bundle of moral persons that have to act in such a way that is morally praiseworthy? Since the external image of a business organisation is defined by the person(s) that own and run it, it is utopian to try to bracket out

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b­ usiness, because it is an artificial person, cannot have rights either – at least not the same rights as a natural person. Yet, in Santa Clara253 the Supreme Court, in a headnote, held that corporations were recognized as persons for purposes of the 14th Amendment.254 The Santa Clara decision has been criticized for many reasons. Of particular note is how the Court interpreted and applied the 14th Amendment to extend human rights to inanimate and fictitious commercial entities. The 14th Amendment, as originally drafted, legally bestowed certain enumerated human rights to previously enslaved and disenfranchised black Americans. After the Santa Clara decision, the Court, with more deliberate speed than it employed in enforcing the Brown decision, anointed corporations, with some of the same rights as individuals, e.g.,

business practices from the realm of moral evaluation on the basis of the technicality that corporate organisations are not natural persons. Corporate organisations’ economic fortunes or misfortunes are, partly, reflective of the moral standing of the persons that constitute them. It is not, therefore, an overstatement to say that a corporate organisation is technically a moral person whose actions are equally subject to moral evaluation just like those of natural persons. An attempt to exempt corporate organisations from moral evaluation on the technicality that they are not natural persons is fallacious in that it disregards the undisputed fact that a corporate organisation is just but a bundle of natural persons that put together their resources and skills into a pool and employed them with the prime motive of making more money. Therefore, Friedman’s attempt to abstract business from the realm of moral evaluation can be blamed on a failure to properly situate business in the broad scope of morality. Indeed, business has and ought to show social concern through actions that aim at positively contributing towards betterment of the communities that it provides with goods and services and this makes his attempt to alienate business from the realm of moral evaluation is utopian. Dennis Masaka, Why Enforcing Corporate Social Responsibility (csr) is Morally Questionable, ejbo Electronic, 13 J. Bus. Ethics & Org. Stud. 1, 17 (2008), available at http://ejbo.jyu.fi/archives/vol13_no1.html. Jill Fisch, on the other hand, argues that corporations cannot have moral obligations because they “lack an internal moral compass. Because corporations are artificial entities, it is difficult to identify a source of their moral obligations… [T]here is no reason to believe that corporations share the social, moral, or ethical obligations or natural persons.” Jill E. Fisch, The “Bad Man” goes to Washington: The Effect of Political Influence on Corporate Duty, 75 Fordham L. Rev. 1593, 1599 (2006). 253 118 u.s. 384. The slippery slope toward granting human rights to corporations began in 1809 when the Supreme Court ruled that the “term” citizen should be construed to describe real persons who come before the court, even under the corporate name. See Bank of the United States v. Deveaux, 9 u.s. (5 Cranch) 61, 86, 91 (1809). 254 See supra note 197 and accompanying text.

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­freedom of the press under the First Amendment,255 freedom from unreasonable searches and seizures under the 14th Amendment,256 and protection of the Due Process Clause.257 Indeed the same free enterprise, private property system that Friedman recognizes as the driver behind a free society has created many of the social inequities that businesses are called upon to be socially responsive to. According to Friedman, positive law258 precludes the corporate executive from pursing anything less than profit maximization. Corporate law, the law of agency and contracts, and state statutory law established the “rules of the game.” Under the laws of agency, “the corporate executive…is the agent of the individuals who own the corporation…and his primary responsibility is to them.”259 Because this agency relationship is contractual, a corporate executive is contractually obligated to conduct business in accordance with the desires of his employers, which generally is “to make as much money as possible for them while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.”260 To this end, any business decision could also result in reduced profits. Friedman recognizes that law and custom sometimes may require the corporate executive to perform his job in a socially responsible manner that may result in a reduction of profits.261 Friedman’s objections to a business being socially responsible stem from the corporate executive unilaterally inferring what activities he can do that are not tied into the business operational model.262 For example, if a business manufactures widgets then all activities should center on manufacturing a better widget at a price that maximizes profit. The building of a fitness facility to promote employee wellness is not tied to manufacturing a better widget and thus 255 See Minneapolis & St. L. Ry. v. Beckworth, 129 u.s. 26 (1889) (protection of due process). 256 See Hale v. Henkel, 201 u.s. 43 (1906) (subpoena for production of corporate records so broad that it constituted an unreasonable search and seizure in violation of the 14th Amendment). 257 See Grosjean v. American Press Co., 297 u.s. 233 (1936) (state surtax on newspapers with large circulation invalidated as restraint on freedom of press). 258 In the context of international law, positivists view international law as no more or no less than the rules to which states have agreed through treaties, customs and perhaps other forms of consent. See generally Ratner & Slaughter, supra Chapter 1, note 11. 259 Friedman, Social Responsibility of Business, supra note 217. 260 Id. 261 See Chymis, supra note 219, at 11 (noting that Friedman tacitly accepted that “law and ethical custom” might require a business to engage in csr initiatives). 262 Id. at 13. Friedman’s reaction to csr initiatives is mostly a response to how csr is defined. What csr proponents call social responsibility, Friedman calls good management.

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reduces shareholders’ profit, even if the tangible results of increased employee health and wellness can affect the bottom line by decreasing health-related illnesses that ultimately affect an employee’s productivity, which can negatively affect the company’s bottom line. Elhauge posits that Friedman’s reliance on the proposition that unless the laws of agency are changed corporate managers are prohibited from engaging in anything other than profit maximization is misplaced.263 Furthermore, Elhauge disagrees with any legal attempts to constrain corporate managers from utilizing csr as a business strategy because ultimately any deviation from a “sole” profit-maximization course inures to the benefits of shareholders. To obviate the fear aroused in the 1800s by those who were against states allowing corporations to have unfettered power and feared the proliferation of the “soulless” corporation,264 Elhauge favors allowing corporate managers to “exercise profit sacrificing discretion…to respond to social and moral sanctions [that] will improve corporate behavior in the right direction, assuming our society’s social and moral norms correctly identify which direction is right.”265 Friedman’s position that corporations because of their internal structure owe a duty only to their shareholders conflicts with the position of others who rail against the Supreme Court extending “human” rights to corporations without imposing attendant legal responsibilities. As Robert C. Hinkley266 so aptly stated. 263 See Elhauge, supra note 235 264 Justice Stevens, in his dissent, reminds us that Thomas Jefferson feared the power of corporations. “The word ‘soulless’ constantly recurs in debates over corporations… Corporations, it was feared, could concentrate the worst urges of whole groups of men. Thomas Jefferson famously fretted that corporations would subvert the Republic.” Citizens United, 130 S. Ct. 876, 950 (citations omitted). The corporation has been called ‘soulless’ because it has “no soul to be damned, no body to be kicked.” Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (New York: Free Press 2004). Bakan contends that the corporation is “a pathological institution, a dangerous possessor of the great power it wields over people and societies.” Id. at 2. The quote, “no soul to be damned, no body to be kicked,” is attributed to Edward, First Baron Thurlow (1731–1806), as quoted in John C. Coffee, “No Soul to Damn: No Body to Kick”: An Unscandalized Inquiry into the Problem of Corporate Punishment, 79 Mich. L. Rev. 386 (1981). One version reports that the Lord Chancellor then added in a stage whisper, “[a]nd, by God, it ought to have both.” H.L. Mencken, A New Dictionary of Quotations on Historical Principles From Ancient And Modern Sources 2, 23 (1st ed., Alfred Knopf 1942). 265 Elhauge, supra note 235, at 739–40. 266 Robert Hinkley was a corporate securities attorney for 23 years and a partner at a major international law firm, Skadden, Arps, Slate, Meagher & Flom. In June 2000, Hinkley, fed

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Corporations…exist only because laws have been passed to provide for their creation and given them licence to operate. When these laws were enacted…most corporations were too small and their impact on society was insignificant… Today corporations are the most powerful citizens and it is no longer tenable that they be entitled to all the benefits of citizenship and none of the responsibilities.267 It is this dilemma, the rights of citizenship for corporations without attendant legal responsibilities and legal accountability, that sustains the revitalized movement to hold tncs accountable under international law for human rights abuses, or more precisely, how to provide remedies to individuals under international law whose human rights have been abused by tncs. In the human rights context, csr is a catchall phrase that seeks to umbrella all possible and foreseeable corporate acts that offend, violate, abuse, or abridge individual or group human rights. Because the umbrella covers such a wide terrain of human rights, csr as it is applied to business has been parsed into several categories. Some of these categories are the subject of existing regulations, based upon the content matter or industry affected (environment, mining and extractive industries, pollution, and international trade). csr was initially the province of business academicians theorizing different management strategies. Today, csr has moved from the halls of academia and has become, at least in nomenclature, a corporate practice or policy. csr has also become the mantra for some ngos, human rights groups and civil society activists who seek to hold tncs accountable for corporate behavior that violates human rights. This move can be attributed to three factors: (1) globalization; (2) the increasing acceptance by business that corporate responsibility is good for business; and (3) the role ngos have played in spotlighting abusive companies. As viewed from academicians in the business field, csr is a social construct, the definition of which is contextual. Because of the diverse range and p ­ urposes of tncs, csr, as implemented, is purely left up to the individual business or up with “the game,” left the firm and embarked on a new career of “build[ing] a consensus to change the law so it encourages good corporate citizenship, rather than inhibiting it.” According to Hinkley, “many of the social ills created by corporations stem directly from corporate law.” Robert Hinkley, How Corporate Law Inhibits Social Responsibility, A Corporate Attorney Proposes a ‘Code for Corporate Citizenship, State Law, Business Ethics: Corporate Social Responsibility Report ( Jan/Feb 2002), available at http://www.commondreams.org/views02/0119–04.htm (last visited July 23, 2010). 267 Kim Kercher, Corporate Social Responsibility: Impact of Globalization and International Business, Corp. Governance Ejournal 2 (Bond University, 2007) at http://epublica tions.bond.edu.au/cgej/4/ (last visited May 12, 2007); see also Hinkley, id.

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industry area. In the final analysis, companies will integrate csr as long as it, like any other management strategy, contributes to, but does not detract from, the bottom line. It is because of this rationale that opponents of csr, ngos and many civil society activists insist on legally binding regulations. They contend that companies will value csr as long as it enhances a company’s tangible and intangible assets. Business advocates who oppose csr in principle do so relying upon fixed rules of corporate law, which are based upon the law of agency, the privacy of contracts, the primacy of shareholder status and a staunch resistance to extending human rights obligations to transnational corporations. Consequently, csr as a management tool or business practice must first and foremost be beneficial to the corporation. It is only when csr is beneficial to the company and does not detract from a corporation’s sole purpose – to make profit-for its shareholders – that csr is a laudable goal. Opponents of csr initiatives posit that in the area of human rights, csr should not be relegated as a business decision to be employed at a ceo’s whim. Human rights activists argue that because the world is more global and multinational corporations have greater financial worth than many nation-states, human rights laws should be interpreted to apply to multinationals. Both camps have conflicting claims that can be ­considered under a policy-oriented jurisprudence analysis.268 If there is no definitive consensus as to what csr means, then imposing human rights obligations on tncs becomes a much more arduous task. Although the absence of a definition is not fatal to extending human rights obligations to corporations, words in their abstract are meaningless until they are used in a specific context. Combining the phrases “corporate social responsibility” and “human rights” together in the same breath give rise to confusion about what both phrases mean together, let alone separately. Combining the three words corporate, social, and responsibility to be applied to some mode of corporate behavior has inherent contradictions. In order to adequately attempt to determine whether or how csr can or should be utilized as a starting point to address how to impose binding obligations on corporations, one must begin by exploring the etymological meaning of “corporate social responsibility” and “company” and how these words are used today. The word “company,” derived from two Latin words cum and panis, means “breaking bread together.”269 It has a social or communal connotation. The word “corporate,” derived from the Latin word corpus, means body or c­ orporare, 268 See infra Chapter 3, The Participants’ Competing and Conflicting Claims. 269 A Guide to Corporate Social Responsibility (csr), http://www.ecrc.org.eg/uploads/­ documents/articles_a%20guide%20to%20corporate%20social%20responsibility.pdf

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to make into a body.270 Webster’s Third International Dictionary, in relevant part, defines “corporate” as: 1 a: formed into or forming a body by legal enactment: united in association and endowed by law with the rights and liabilities of an individual b: of or relating to a corporation or to corporations in general 3 a:  of or relating to a unified body made up of individuals or particulars.271 Referring to its Latin origin, corpus, a corporation is defined as “a body of persons granted a charter legally recognizing them as a separate entity having its own rights, privileges, and liabilities distinct from those of its members.”272 The word “social,” derived from the French word socialis or the Latin word socius, is defined in part as: 3. a: forming or having a tendency to form cooperative and interdependent relationships with one’s fellows: 4. b: of or relating to human society…of or relating to the interaction of the individual and the group: b: of, relating to, or concerned with the welfare of human beings as members of society; c: Roman, civil, & Scotts law: of, or relating to an association, partnership, or corporation.273 The word “responsibility,” derived from the word “responsible,” which is from the Latin word responsus, is defined in part as: 1: the quality or state of being responsible: as a: moral, legal, or mental accountability.274 Combining all three words, the phrase corporate social responsibility, has caused knee-jerk reactions in the business world because it is viewed by many as a substitute for government social (welfare) programs. Much of the

270 271 272 273 274

(last visited May 12, 2007); J.J. Asongu, The History of Corporate Social Responsibility, 2 J. Bus. & Pub. Pol’y 2, 2 (2007). Webster’s Third International Dictionary of the English Language Unabridged (Springfield, ma.: Merriam-Webster Inc. 1981). Id. The American Heritage College Dictionary (Boston: Houghton Mifflin, Co. 1991). Roman law forms the basis for many of today’s commercial laws. Id.

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confusion and ambiguity surrounding the meaning of csr can be attributed to the word “social,” which in the csr context can be interpreted in at least three different ways.275 The first interpretation relates to the question of to whom corporate responsibilities are owed to. Are they owed to society in general?276 The second interpretation deals with the contrast between “social and legal.”277 And the third interpretation has to do with the content of the obligations that relate to promoting the interests of groups (stakeholders) other than shareholders, senior managers, and board members of the corporation.278 Friedman and others take issue with initiatives that fall within the third category. They contend that csr thrusts business into the role of government and that business is ill-equipped to handle the government’s role. While there was at one time a distinct separation between the functions of government and “big” business, there no longer is. Big business has legally taken over many government social programs. Interestingly, in the past two decades there has been a strong movement, generally attributable to the Republican Party, which is viewed as an ally and supporter of big business, to privatize traditional governmental functions under the touted premise that business can run government programs more efficiently and productively, thereby reducing costs and waste. Conse­ quently, everything from public utilities, public education, public transportation, public health care to public jails and prisons have been privatized in some manner. These former government programs are now owned and operated by corporations. So if social responsibility has always been the exclusive domain of governments with regard to providing for the social welfare of its citizens, then indeed this responsibility has now been transferred to business. Thus, within this context, csr “covers the responsibilities that companies or corporations have to the societies within which they are based and operate.”279 Etymologically, corporate social responsibility entails a social expectation of duties, accountability, and the ability to distinguish right from wrong. And herein lies the problem. Corporations are not individuals who are capable of distinguishing right from wrong. They have no “soul to be damned and no body to be kicked”280 for all eternity because of their misguided choices. Corporations are man-made creations. A person can and should be held accountable or 275 Thomas Campbell, The normative grounding of corporate social responsibility: a human rights approach, in New Corporate Accountability, supra note 234, at 534. 276 Id. 277 Id. 278 Id. 279 J.J. Asongu, supra note 269, at 28. 280 Bakan, supra note 264.

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­punishable for his or her actions, especially a person whose religious or theological predisposition engenders a belief in heaven or hell. Unfortunately, a corporation has no soul to rest in either place at the end of its earthly existence.281 So why should corporations be responsible and if they should, then to whom? Some would argue that it is good business to engage in socially responsible initiatives. Most business executives, on the other hand, would argue that social welfare is the government’s business.282 Simple logic favors supporting this corporate reasoning. However, corporations exist by operation of law and not nature, and the law that created corporations can impose and, indeed, has imposed limitations and obligations on corporate behavior and operations. With regard to the human rights and business debate, several questions about csr predominate. Is csr a term that lends itself to a definition or do the practices of business entities283 define the term? Is the term defined based upon the political, social, academic and ethical (moral) backgrounds of the decision makers, individuals or organizations providing the definition or making the decisions?284 Or is the term defined by the academic, social or business contexts in which it emerges as a policy to be applied to internal or external corporate operations?285 Does the manner in which csr is implemented, 281 Historically, corporate charters were only for a specific purpose for a limited duration. Corporate law has evolved to where corporations have perpetual existence, unless terminated by market forces, i.e. bankruptcy, merger or acquisition. 282 See Carroll & Shabana, supra note 248 (discussing the arguments for and against csr). 283 Business entities can encompass everything from sole proprietorships to tncs, mncs, mnes, smes, and tnes. The movement to impose binding human rights regulations on business entities acknowledges that all business practices, regardless of the size or scope of the business entity, can result in human rights abuses. The focal point of the movement is on large scale corporate activity conducted by tncs, mncs or mnes simply due to the sheer economic influence these entities have on influencing legislation and policy that favors their narrow interests. 284 Under policy-oriented jurisprudence, a conditioning factor in defining csr depends upon the observational standpoint of the decision-maker. 285 See John L. Campbell, Presentation, Why Would Corporations Behave in Socially Responsible Ways? An Institutional Theory of Corporate Social Responsibility, 7–8 (Aug. 8. 2005), Conference on Political Economy, McGill University) [hereinafter J. Campbell, Theory of Corporate Social Responsibility], available at http://www.allacademic.com/meta/p_mla _apa_research_citation/0/1/8/7/2/p18728_index.html (last visited Dec. 12, 2013). csr, which is a relatively new term, means different things to different people at different times. Although a uniformed definition has yet to be commonly accepted, any definition must establish “a minimum behavioral standard with respect to the corporation’s relationship to a stakeholder below which corporate behavior becomes socially irresponsible.” Id. For Campbell, socially responsible corporations must accomplish at least two things.

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­ anaged, and monitored depend upon what human rights are, or have the m potential of, being adversely impacted? If csr initiatives are formalized and made a part of a company’s internal policies will these initiatives be practical and comprehensive enough to address all possible human rights violations? The term “corporate social responsibility” is relatively new as it is applied to the human rights and business debate and the attendant legal and policy issues surrounding the debate. The concept, however, of a corporation or a commercial business entity operating in a socially responsible manner can be traced to classical Greek society and beyond.286 In ancient Greece, businesses were expected to “serve the community in an honest and skillful manner.”287 Environmental laws to protect logging forests from commercial logging operations existed 5,000 years ago.288 Around 1760 bc in Mesopotamia, under the Code of Hammurabi, builders, innkeepers or farmers could be put to death if their negligence caused deaths or injury to others.289 One of the first documented responses by tncs to citizens’ concerns was in 1790 when English consumers boycotted the East India Company290 because it used slave labor to produce sugar.291 After protesters distributed leaflets claiming “we the people can overthrow slavery,”292 the East India Company changed its practices and purchased slave-free sugar from Bengal.293 There has been a discernible shift away from the doctrine that a business’ sole function is to make profits for its shareholders (shareholder primacy

286 287 288 289

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First, [corporations] must not knowingly do anything that could harm their stakeholders, notably their investors, employees, suppliers, or the local community in which they operate. Second, if corporations do cause harm to their stakeholders, then they must voluntarily rectify it whenever it is discovered and brought to their attention. Id. at 9. See N.N. Eberstadt, What History Tells Us About Corporate Social Responsibility, 7 Bus. & Soc’y Rev. 77, 78 (1973). Id. Id. Although the Code of Hammurabi accorded considerable rights to slaves, it was a class and caste oriented code, which would violate many human rights instruments if it were applied today. See McDougal, Lasswell & Chen, Protection of Respect, supra note 72, at 953. See supra notes 140–149 and accompanying text (discussing the East India Company as a precursor to the modern multinational corporation). See Eberstadt, supra note 286; see also Ramon Mullerat, Corporate Social Responsibility (A Human Face to the Global Economy) 3 Oil, Gas & Energy Law 4 (2004) [hereinafter Mullerat, Human Face], available at www.ogel.org/article.asp?key=1674 (last visited May 31, 2011). See Mullerat, id. Id.

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­theory).294 Businesses as social institutions are viewed as having obligations to other members of society (the stakeholder theory) and these obligations should be considered in corporate decision making.295 The source of these obligations is often viewed in moral terms, whether a corporation has a legal obligation to stakeholders, internal or external, and adds to the complexity of the human rights and business debate. The sheer size, power and capacity of multinationals to affect politics, legislation and the lives of people and globalization have given a new urgency to this debate, which had been percolating in business and academic circles since the late 1920s.296 In 1929, Wallace B. Donham, Dean of Harvard Business School, while speaking at Northwestern University stated: Business started long centuries before the dawn of history, but business as we now know it is new – new in its broadening scope, new in its social significance. Business has not learned how to handle these changes, nor does it recognize the magnitude of its responsibilities to future civilizations.297 One of the earliest and most famous debates about whether a corporation has a social obligation/responsibility to nonshareholders occurred in the 1930s between Adolf A. Berle and E. Merrick Dodd, two Harvard professors.298 294 See William T. Allen, Our Schizophrenic Conception of the Business Corporation, 14 Cardozo L. Rev. 261 (1992) (discusses corporations as private property and as social institutions). 295 See Kercher, supra note 267, at 3. In his 1984 book, Strategic Management: A Stakeholder Approach, Edward Freeman defined stakeholders as “any group or individual who is affected by or can affect the achievement of an organisation’s objectives.” Edward Freeman, Strategic Management: A Stakeholder Approach, Pitman Series in Business and Public Policy (Harper Collins College Div. 1984). According to Freeman, the use of the term stakeholder grew out of the pioneering ideas at Stanford Research Institute (now sri International) in the 1960s and were further developed through the work of Igor Ansoff and others. Under this approach, the concerns of all stakeholders were taken into consideration in developing business objectives. 296 See generally Thomas & Nowak, supra note 240 (discussing the origins of csr from the 1920s and the various definitions of csr). 297 Jennifer A. Zerk, Multinationals and Corporate Social Responsibility: Limitations and Opportunities In International Law 15 (Cambridge: Cambridge Press 2006) (internal citations omitted). 298 But see William Bratton & Michael Wachter, Shareholder Primacy’s Corporatist Origins: Adolf Berle and The Modern Corporation, 34 J. Corp. L. 99 (2008) (asserting that scholars wrongly concluded that the Berle-Dodd debate was about corporate social responsibility

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The debate, which began when Berle wrote Corporate Powers as Powers in Trust,299 focused on the nature, purpose and legal structure of the corporation under corporate law, centering on the powers and duties of corporate managers.300 This debate involved communitarian versus contractarian301 or the shareholder primacy versus the stakeholder theories.302 Responding to Berle’s article, Dodd wrote For Whom Are Corporate Managers Trustees?, wherein he argued that corporate managers are trustees not only for the shareholders but also for nonshareholders, i.e., employees, consumers and the general public.303 Berle, in response, countered, arguing that corporate managers support only shareholders’ interests.304 Berle and Dodd viewed a corporation as being “purely a private matter,” one involving the property rights of business owners, either individually or in the

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versus shareholder primacy by relying on readings of old material outside of its original contexts). Adolf A. Berle, Corporate Powers as Powers in Trust, 44 Harv. L. Rev. 1049 (1931); A.A. Sommer, Jr., Whom Should the Corporation Serve? The Berle-Dodd Debate Revisited Sixty Years Later, 16 Del. J. Corp. L. 33 (1991). See generally Thomas W. Dunfee, Corporate Governance in a Market with Morality, 62 Law & Contemp. Probs. 3 (1999). See generally David Milton, Communitarians, Contractarians and the Crisis of Corporate Liability, 50 Wash. & Lee L. Rev. 1373 (1993). Communitarian generally refers to the need to balance individual rights and interests with those of the community as a whole. Contractarian refers to the belief that ethical obligations are derived from mutual agreements or contacts between people that spell out each other’s duties. The shareholder primacy theory of corporate governance places the interests of the shareholder above all other interests. The stakeholder theory is a management theory that considers other members of a firm, i.e. employees, and the interests of others in which the company operates or transacts business. Stakeholder theory presupposes that all stakeholder interests should be taken into account for the effective management of a corporation. Stakeholder theory is a “theory of organizational management and ethics.” The term “stakeholder” appeared in the early 1960s. It was a deliberate play on the word “stockholder.” Stakeholder signifies that there are other parties having a “stake” in the decision making process. These parties in policyoriented jurisprudence parlance are called “participants.” Generally, stakeholders are defined as follows: “A stakeholder in an organization is (by definition) any group or individual who can affect or is affected by the achievement of the organization’s objectives.” Kenneth E. Goodpaster, Business Ethics and Stakeholder Analysis, 1 Bus. Ethics Q. 1 (Jan. 1991), available at http://www.jstor.org/pss/3857592 (last visited Nov. 22, 2009). See E. Merrick Dodd, For Whom Are Corporate Managers Trustees? 45 Harv. L. Rev. 1145 (1932). See Adolf A. Berle, For Whom Corporate Managers Are Trustees: A Note, 45 Harv. L. Rev. 1365 (1932).

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aggregate form as an incorporated entity.305 They both agreed that historically a business existed solely to make profit for its owners and acknowledged that corporate law had evolved to reflect public opinion that “business is a public profession rather than a purely private matter.”306 Based upon this precept of “business as a public profession,” Dodd concluded that corporate managers should acknowledge that a business has social obligations to nonshareholders and respond accordingly. “[W]e are undergoing a substantial change in our public opinion with regard to the obligations of business to the community, it is natural to expect that this change of opinion will have some effect upon the attitude of those who manage business.”307 Conversely, Berle, strongly argued that corporate managers had no duty to anyone other than the shareholders.308 He contended that under a private property analysis, which is what a stockholder’s interest is, a corporate manager has no authority to divert private property for ancillary uses that are not designed to maximize profits. Simply asserting that a corporation has a duty to expend the private property of shareholders to meet social obligations that benefit the community does not make it so. Berle reasoned as follows: Nothing is accomplished, either as a matter of law or of economics, merely by saying that the claim of this group [nonshareholders] ought not to be ‘emphasized’. Either you have a system based on individual ownership or you do not. If not – and there are at the moment plenty of reasons why capitalism does not seem ideal – it becomes necessary to present a system (none has been presented) of law or government, or both, by which responsibility for control of national wealth and income is so apportioned and enforced that the community as a whole, or at least the great bulk of it, is properly taken care of.309 Berle’s position would find resonance in Friedman’s mantra, “the business of business is business.” Berle, nonetheless, eventually accepted Dodd’s position that a business has social obligations to nonshareholders.310 Dodd’s position in 305 306 307 308 309 310

See Dodd, supra note 303. Id. at 1153. Id. See Berle, supra note 304. Id. at 1368. See Joseph L. Weiner, The Berle-Dodd Dialogue on the Concept of the Corporation, 64 Colum. L. Rev. 1458, 1464 (1964). “Twenty years ago, the writer [Berle] had a controversy with the late E. Merrick Dodd, of Harvard Law School, the writer holding that corporate

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this debate evolved into csr initiatives311 and the continued push for binding regulations on multinationals. The geopolitical events that precipitated the Berle-Dodd debate and continued to make it relevant were the Great Depression and World Wars I and II.312 Thus, while the Berle-Dodd debate was localized to American business, the social concerns that businesses faced during the Great Depression, i.e., workers’ rights, legislation to protect the health and safety of employees, and fair wages,313 are principles found in human rights instruments.314 Berle’s contention that private property rights of powers were powers in trust for the entire community. The argument has been settled (at least for the time being) squarely in favor of Dodd’s contention.” Id. 311 See Dodd, supra note 303, at 1153. Dodd urged corporate managers “to voluntarily and without waiting for legal compulsion” to fulfill business’ social obligations to nonshareholders. See also Colin Marks & Nancy B. Rapoport, The Corporate Lawyer’s Role in a Contemporary Democracy, 77 Fordham L. Rev. 1269 (2009). 312 See Lionel Kimble, Jr., I Too Serve America: African American Women War Workers in Chicago, 1940–1945, 93 J. Ill. st. Historical Soc’y 415 (2000) (discussing how African Americans serving in World War II set the tone for the Civil Rights Movement of the 1950s and 1960s as well as the movement for gender equality. Corporations adopted policies as a result of legal fiat to address their obligations to nonshareholders (external stakeholders), available at http://www.jstor.org/stable/40193454 (last visited Nov. 30, 2009). 313 See Dodd, supra note 303, at 1151. 314 International Covenant on Economic, Social and Cultural Rights, Adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16 Dec. 1966, Entry into force 3 January 1976, in accordance with article 27; International Covenant on Civil and Political Rights, Adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16 Dec. 1966, Entry into force 23 Mar. 1976, in accordance with Article 49; Optional Protocol to the International Covenant on Civil and Political Rights, Adopted and opened for signature, ratification and accession by General Assembly resolution 2200A (XXI) of 16 Dec. 1966, Entry into force 23 Mar. 1976, in accordance with Article 9; International Convention on the Elimination of All Forms of Racial Discrimination, Adopted and opened for signature and ratification by General Assembly resolution 2106 (XX) of 21 Dec. 1965, Entry into force 4 January 1969, in accordance with Article 19; International Convention on the Elimination of All Forms of Discrimination Against Women, Adopted and opened for signature by United Nations General Assembly resolution 34/180 on 18 Dec. 1979, Entry into force 3 September 1981; Convention on the Rights of the Child, Adopted and opened for signature, ratification and accession by General Assembly resolution 44/25 of 20 November 1989, Entry into force 2 September 1990, in accordance with article 49; United Nations Declaration on the Rights of Indigenous Peoples, un General Assembly Resolution A/RES/61/295, 2 October 2007, 61st Sess.; The Convention on the Rights of Persons with Disabilities and its Optional Protocol was adopted on 13 December 2006 at the sixty-first session of the General Assembly by resolution A/RES/61/106 and was opened for signature on Mar. 30, 2007, Entry into force 3 May 2008.

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s­ hareholders foreclosed regulatory measures that infringed upon these private property rights have been continually challenged and has resulted in various legislation to ensure that corporations did not profit from the abuse of humans.315 A Corporate Social Responsibility (csr): Definitions csr as a business concept had its genesis in the early 1940s316 when Theodore Kreps championed the need for businesses to be socially responsible in his book Measurement of the Social Performance of Business.317 Although Kreps is credited with calling for businesses to be socially responsible, the phrase “corporate social responsibility” did not become a part of the business school lexicon as a possible governance strategy until 1953 when Howard R. Bowen wrote Social Responsibility of the Businessman.318 Bowen, described as the “Father of Corporate Social Responsibility,”319 defined csr as “the obligation of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of objectives and values of our society.”320 Bowen’s appeal to the businessman revitalized the timeless debate as  to what should be a corporation’s role in society.321 Although not linked

315 See Weiner, supra note 310, at 1466–1467 (discussing how the theory of private property rights of shareholders was modified by the Civil Rights Act of 1964). 316 In the 1940s, America was climbing out of the Great Depression, which was attributed to corporate greed as exemplified by America’s gilded age. 317 Theodore Kreps, Measurement of the Social Performance of Business (1940), reprinted in 343 Annals of the American Academy of Political and Social Science (Sept. 1962)), 20–31, http://www.jstor.org/discover/10.2307/1033606?uid=3739600&uid=21 29&uid=2&uid=70&uid=4&uid=3739256&sid=21102947487763. Kreps was known as “the conscience of the [Standford’s] business school.” The idea that business should have a social responsibility can actually be traced to the 1930s to the Berle-Dodd debate and to Chester Bernard writings. See Chester Bernard, The Functions of the Executive (Cambridge: Harvard University Press 1938). 318 Howard R. Bowen, Social Responsibility of The Businessman (New York: Harper & Row 1953). In the 1960s, Keith Davis expanded upon Bowen’s appeal to the businessman and tied csr to decisions and actions that were beyond a company’s “direct economic interest.” See generally Keith Davis, Can Business Afford to Ignore Its Social Responsibility? 2 Cal. Mgmt. Rev. 3, 20–76 (1960). 319 See Carroll, Evolution of Definitional Construct, supra note 241. 320 Bowen, supra note 318, at 6; Chymis, supra note 219, at 6; Carroll, Evolution of Definitional Construct, supra note 241, at 270. 321 See Marks & Rapoport, supra note 311 (discussing the Berle and Dodd debate over the role of managers).

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s­pecifically to human rights, Bowen intimated that a corporation owed its employees more than just a paycheck. In the 1950s, csr was more commonly known as social responsibility. In the 1960s, internal geopolitical events in the United States, coupled with social justice movements,322 and external international geopolitical events gave birth to a surge in csr initiatives. From the 1950s until the mid-70s, this newly enunciated responsibility of business resonated with academicians and business executives and began to coalesce as a business management or corporate governance theory.323 In the 1960s, academicians began to look beyond the organizational structure of the corporation, reasoning that the responsibilities of business extended beyond economic and legal obligations. Keith Davis’ socalled “Iron Law of Responsibility” formed the basis for this thinking. Davis explains. [I]f business wishes to retain its present social role and social power, it must respond to society’s needs and give society what it wants. This has been stated as the Iron Law of Responsibility, which is that ‘in the long run, those who do not use power in a manner which society considers responsible will tend to lose it’.324 In response to Friedman’s edict, a plethora of definitions were espoused by individuals, academicians, politicians, nongovernmental organizations (ngos), civil society advocates and anyone who stood to benefit from or be hindered by linking human rights and business in a fashion that would somehow result in binding regulations. Many of these definitions325 are based 322 The federal government had to intervene in the domestic affairs of several southern states that disenfranchised black Americans of basic civil and human rights. See supra notes 246–247 discussing the various civil rights movements. 323 See generally Richard Parsons, The Social Responsibility of Business is to Challenge its Assumptions, The 4th Annual Critical Management Studies Conference, uq Business School & Center for Social Responsibility in Mining, The University of Queensland, Australia, June 1, 2005 (discussing the social responsibility of business as a governance issue), www.mngt.waikato.ac.nz/ejrot/…/movementsmoments/Parsons.pdf; see also Joshua D. Margolis & James P. Walsh, Misery Loves Companies: Rethinking Social Initiatives by Business, 48 Admin. Sci. Q. 2 (2003), available at http://www.jstor.org/ stable/3556659. 324 Keith Davis, The Case for and Against Business Assumption of Social Responsibilities, 16 Acad. Mgmt. J. 312, 314 (1973). 325 See Carroll, Evolution of Definitional Construct, supra note 241 (discussion of various definitions of csr).

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on  concepts such as corporate sustainability,326 corporate social investment,327  ethical investment,328 corporate governance,329 corporate social

326 Corporate sustainability is the corporate response to sustainable development represented by strategies and practices that address the key issues for the world’s sustainable development. Sustainable development is about creating the conditions for a better quality of life for everyone, now and in the future, based on eco-efficiency and innovative solutions for engaging everyone, particularly the developing countries, in the global economy. See csr Quest, http://www.csrquest.net/default.aspx?articleID =13113&heading=. The Brundtland Commission in its report Our Common Future defines sustainable development as development “that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Report of the World Commission on Environment and Development: Our Common Future (United Nations, 1987), Transmitted to the General Assembly as an Annex to document A/42/427 – Development and International Co-operation: Environment, available at http://conspect .nl/pdf/Our_Common-Future-Bruntland_Report_1987.pdf (last visited Nov. 12, 2013). Corporate sustainability involves four concepts: (1) sustainable development; (2) corporate social responsibility; (3) stakeholder theory; and (4) corporate accountability theory. See Mel Wilson, Corporate Sustainability: What is it and where does it come from? Ivey Bus. j. online (Mar/April 2003), http://iveybusinessjournal.com/topics/social -responsibility/corporate-sustainability-what-is-it-and-where-does-it-come-from# .UoUNDeXnZ6o (last visited Nov. 20, 2010). 327 Corporate social investment (csi) “encompasses projects that are external to the business or outward looking; projects undertaken for the purpose of uplifting communities in general and those which have a strong developmental approach. It also includes projects with a focus on social, developmental or community aspects where the investment is not primarily driven as a marketing initiative.” Altron Group Corporate Social Investment Policy and implementation guidelines, Incorporating Socio-Economic Development as per the bbbee [Broad Based Black Economic Empowerment] Codes of Good Practice, www.altron.co.za/pdf/csi_policy.pdf (last visited Nov. 20, 2010). 328 Ethical investment, also known as socially responsible investment, has been defined as “the exercise of ethical and social criteria in the selection and management of investment portfolios, generally consisting of company shares (stocks).” Christopher. J. Cowton & Russell Sparkes, The Maturing of Socially Responsible Investment: A Review of the Developing Links with Corporate Social Responsibility, 52 J. Bus. Ethics 45, 47 (2004). 329 The oecd Principles of Corporate Governance define corporate governance as “a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.” oecd Principles of Corporate Governance, 11 (2004), http://www.oecd.org/daf/ca/corporategovernanceprinciples/31557724.pdf (last visited Apr. 22, 2012).

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­performance,330 corporate citizenship,331 and social license to operate.332 All of these are only tangentially related to international human rights law as a 330 Corporate social performance (csp) is defined as “a business organization’s configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm’s societal relationships.” Diane J. Wood, Corporate Social Performance Revisited, 16 Acad. Mgmt. Rev. 4, 693 (1991), available at http://www.jstor.org/stable/258977. 331 See Carroll, Evolution of Definitional Construct, supra note 241. The term corporate citizenship emerged as a concept in the early 90s and was generally used more by practitioners than by scholars. It was first viewed more as philanthropy than as a business concept. Today, corporate citizenship is generally understood to vest corporations with some of the same rights as individuals. Corporate citizenship suggests that corporations, as a part of the local or global community, should obey some of the same dictates as individuals, such as being a good neighbor. In the context of the business and human rights debate, corporate citizenship is defined as “addressing the eroding effects of globalization on the role of nation states as guardians of individual rights through their loss of control over economic, social and political domains of civil society.” Corporate Social Responsibility: The 3C-SR Model, 3 Int’l J. Soc. Econ. 5/6, 391 (2006), available at http://www.brevolu tionconsulting.com/assets/3CSRmodel.pdf (last visited Nov. 1, 2013). See also A. Matten & D. Crane, Corporate Citizenship: Toward an Extended Theoretical Conceptualization, 30 Acad. Mgmt. Rev. 1 (2005), http://www.jstor.org/stable/201599101. The Boston College Center for Corporate Citizenship defines corporate citizenship as [T]he way a company integrates basic social values and everyday business practices, operations and policies. A corporate citizenship company therefore understands that its own success is intertwined with societal health and well-being. Therefore it takes into account its impact on all stakeholders, including employees, customers, communities, suppliers, and the natural environment. Boston College Center for Corporate Citizenship is a 350 corporate membership-based research organization that is committed to helping business leverage its social, economic and human assets to ensure both its success and a more just and sustainable world. The center works with global corporations to help them define, plan and operationalize their corporate citizenship. See Boston Center for Corporate Citizenship, Corporate Citizenship, http://www.bcccc.net/corporate-citizenship.html (last visited Apr. 3, 2009). The World Economic Forum defines corporate citizenship as [T]he contribution a company makes to society and the environment through its core business activities, its social investment and philanthropy programmes, and its engagement in public policy. The manner in which a company manages its economic, social and environmental relationships, as well as those with different stakeholders, in particular shareholders, employees, customers, business partners, governments and communities determines its impact. Global Corporate Citizenship: The Leadership Challenge for ceos and Board 1, World Economic Forum, available at http://www.weforum.org/pdf/GCCI/GCCI_CEO_question naire.pdf (last visited Nov. 2, 2013). The World Economic Forum, incorporated in 1971, is

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discipline and the international human rights norms. The common thread throughout all of these terms is that business should voluntarily regulate itself. Ever since Bowen appealed for the businessman to be socially responsible, business academicians have proffered various definitions of csr. Yet, a singular definition as to what csr is remains elusive. According to Thomas and Nowak, csr as originally envisioned by Bowen to establish a benchmark for what makes a company socially responsible has been distorted to the extent that it is “morally vacuous, conceptually meaningless, and utterly unrecognizable.”333 The lack of interdisciplinary linkages between business as an academic discipline and international human rights law presents a challenge to arriving at a definition of csr that incorporates what the term means as it relates to the international human rights regime. Archie B. Carroll developed a framework of csr, known as the “pyramid of csr.” This model involves four aspects: economic, legal, ethical and discretionary (philanthropic) responsibilities. He explains his framework as providing the “categories for the various responsibilities that society expects businesses to assume.”334 These responsibilities form the backdrop for defining csr, which for Carroll reflect society’s expectations of corporations. Carroll’s approach to csr encompasses broadening corporate stakeholders to include not only the organization’s stockholders but also those groups or persons who a nonprofit and impartial, independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas. It operates under the supervision of the Swiss Federal Government. World Economic Forum, http://www.weforum.org (last visited Apr. 20, 2009). 332 Social license to operate is described as “based not on compliance with legal requirements (although the breach of these requirements may jeopardise the social license, but rather upon the degree to which a corporation and its activities are accepted by local communities, the wider society, and various constituent groups.” Thomas & Nowak, supra note 240, at 13. 333 Id. 334 Archie B. Carroll, A Three-Dimensional Conceptual Model of Corporate Performance, 4 Acad. Mgmt. Rev. 479, 499 (1979), available at http://www-rohan.sdsu.edu/faculty/ dunnweb/rprnts.pyramidofcsr.pdf. “The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.” Id. at 500. Carroll’s view of csr stresses that in order for csr to be accepted as legitimate, it has to address the entire spectrum of obligations that business has to society, including the most fundamental – economic. See also Archie B. Carroll, The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, Bus. Horizons (July–Aug. 1991) [hereinafter Pyramid of csr], www.cbe.wwu.edu/dunn/rprnts.pyramidofcsr.pdf (last visited Oct. 22, 2007).

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have a stake, a claim, or an interest in the operations and decisions of the corporation. As Carroll explains: There is a natural fit between the idea of corporate social responsibility and an organization’s stakeholders. The word “social” in csr has always been vague and lacking in specific definition as to whom the corporation is responsible. The concept of stakeholder personalizes social or societal responsibilities by delineating the specific groups or persons business should consider in its csr orientation.335 1

Corporate Social Responsibility Defined in Relation to Human Rights csr, in the context of human rights, had its initial emergence in the 1980s when the un grappled with the International Code of Conduct on Transnational Corporations, which encompassed labor standards, consumers’ rights, women’s rights, the environment, corruption and restrictive business practices.336 During this period, academicians compared business to a dragon. It was wild, unpredictable, and yet necessary to society. According to Peter Drucker, who is considered the father of modern business management, the goal of any socially responsible business “is to tame the dragon – that is to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.”337 Although the term csr had become part of the business school lexicon from the 1950s through the 1990s, it did not, however, link up with the human rights agenda until 1992 at the United Nations Conference on Environment and Development (unced), commonly known as the Earth Summit in Rio de Janeiro (the Summit).338 After 1992, csr consisted of two phases: the traditional csr, which focused on philanthropic and social welfare issues, and “new

335 Carroll, Pyramid of csr, supra note 334. 336 un Draft International Code of Conduct on Transnational Corporations. un Doc. E/C, 10/1984/S/5/ (1984), 231.L.M.626 (1984). 337 Peter Drucker, The New Meaning of Corporate Social Responsibility, 26 Cal. Mgmt. Rev. 2, 62 (1984); see also Ralph Nader, Mark Green & Joel Seligman, Taming The Giant Corporation: How The Largest Corporations Control Our Lives (New York: W.W. Norton & Co. 1977) (comparing corporations to large beasts that need to be tamed by regulation.). 338 See Parsons, supra note 323, at 3 (Until the 1990s, the corporate world opposed and avoided discussions centering on social and environmental issues.).

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csr,” which is closely tied to the green and environmental movement.339 The Summit was designed to facilitate ways governments could mine and process natural resources in a sustainable manner and at the same time encourage economic development while limiting or reducing pollution of the planet.340 The Summit produced the Rio Declaration on Environment and Development (the Rio Declaration), which puts “human beings at the center of concerns for sustainable development.”341 The Rio Declaration consists of 27 principles, many of which are regarded as “third generation rights.”342 At the Summit, the World Business Council for Sustainable Development (wbcsd)343 lobbied for voluntary self-regulations. The Summit fell short of its goal to produce binding 339 See generally, Douglas Branson, Corporate Governance Reform and the ‘New’ Corporate Social Responsibility, 61 U. Pitts. L. Rev. 605 (2001); see also Douglas Branson, Corporate Social Responsibility Redux, 76 Tul. L. Rev. 1207 (2002). 340 The Summit served as a benchmark for all subsequent un conferences that focused on themes pertaining to human rights and population, social development, women and sustainable development, which Member States were previously not receptive to. 341 Principle 1, Rio Declaration, Rio Declaration on Environment and Development, http:// www.un.org/documents/ga/conf151/aconf15126-1annex1.htm. 342 There are three categories of human rights. First generation human rights protect the individual from abuse by the state. These rights focus on civil and political rights and include, among other rights, freedom of speech, the right to a fair trial, freedom of religion, and voting rights. These rights are set forth in Articles 3 through 21 of the udhr and also in the International Covenant on Civil and Political Rights. Second-generation human rights ensure equality of conditions and treatment for all citizens. These rights focus on social, economic, and cultural rights and include the right to be employed, rights to housing and health care, as well as to social security and unemployment benefits. They are set forth in Articles 22 through 27 of the udhr and the International Covenant on Economic, Social, and Cultural Rights. Third-generation human rights are expressed in the 1972 Stockholm Declaration of the United Nations Conference on the Human Environment and the 1992 Rio Declaration on Environment and Development. These rights include group and collective rights, the right to self-determination, to economic and social development, to a healthy environment, to natural resources, to communicate and communication rights, to participation in cultural heritage, and to intergenerational equity and sustainability. 343 The wbcsd is a ceo-led, global association of some 200 international companies dealing exclusively with business and sustainable development based upon three pillars of economic growth, ecological balance and social progress. It provides a platform for companies to explore sustainable development, share knowledge, experiences and best practices, and to advocate business positions on these issues in a variety of forums, working with governments, non-governmental and intergovernmental organizations. See www.wbcsd.org.

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regulations on multinationals, whereas the wbcsd achieved its objectives – voluntary regulations. The push for multinationals to self-regulate their activities evolved into csr initiatives. In the years immediately following the Summit, business academicians began to link csr tenuously with human rights, defining it as the “obligations of business organizations toward society.”344 Since then, there has been a growing proliferation of various definitions for the term corporate social responsibility345 that seem to morph based upon who is doing the defining, the type of business industry, and the scope of the commercial activity or business practices and policies that the csr initiative is tied to.346 Scholars agree that “[t]he phrase corporate social responsibility has been used in so many different contexts that it has lost all meaning. Devoid of internal structure and content, it has come to mean all things to all people.”347 In exploring the linkages between csr as a business strategy and social justice, Jessica Ludescher considers csr “a misleading and distracting doctrine that blinds us to the political issues confronting us in an era of corporate economic globalization.”348 Accordingly, csr can be viewed as a relative concept, one that is not culturally unique to the West.349 344 Carroll, Evolution of Definitional Construct, supra note 241. 345 For an illustrative and detailed discussion of the various definitions of csr, see A. Dahlsrud, How Corporate Social Responsibility Is Defined: An Analysis of 37 Definitions, 15 Corp. Soc. Responsib. Environ. Mgmt. 1–13 (2008), available at http://www.csr-nor way.no/papers/2007_dahlsrud_CSR.pdf (last visited Mar. 3, 2007); see also Valerie Swaen, Presentation, Corporate Social Responsibility: Do Managers and Consumers Have the Same Conception of “Doing Good?” (June 22–23, 2002, 10th International Conference of the Greening Industry Network, Goteborg, Sweden) (a table with various definitions by academicians for csr, corporate citizenship, corporate social performance, and corporate social responsiveness), gin.confex.com/gin/archives/2002/papers/010140Swaen.pdf (last visited Oct. 19, 2010). 346 The difficulty to precisely define a concept that is subject to change over time and depends on cultural characteristics is obvious. See Prakesh S. Sethi, Dimensions of Corporate Social Responsibility, 17 Cal. Mgmt. Rev. 3, 58 (1975). 347 Id. 348 Jessica Ludescher, Corporate Social Responsibility: From Corporate Strategy to Global Justice, Harv. Int’l Rev. (Apr. 27, 2009) (internal citations omitted), available at http:// hir.harvard.edu/print/corporate-social-responsibility. 349 See Thomas & Nowak, supra note 241; see also A.K. Sharm & Balvir Talwar, Corporate social responsibility: modern vis-à-vis Vedic approach, Measuring Business Excellence, vol. 9, no. 1 (Emerald Publishing Ltd., 2005) (utilizing profits for the sake of the welfare of the society is in alignment with Vedic (Indian) philosophy), http://www.emeraldinsight.com/ journals.htm?issn=1368-3047&volume=9&issue=1&arti… (last visited Oct. 21, 2009); I.

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csr as a legal theory has many different definitions depending upon the social organization that advances a particular definition.350 It is the lack of an unanimous definition that has helped concretize the opposition to binding regulations for tncs. The applicability of csr as a methodology to impose human rights obligations on tncs must first begin with a review of what csr means to the various claimants/participants, who include, but are not limited to, internal and external stakeholders,351 governments, regulatory agencies, and intergovernmental agencies and organizations and how csr is defined by them. Maignan & O. Ferrell, Nature of Corporate Responsibilities: Perspectives from American, French, and German Consumers, 56 J. Of Bus. res. 1 (2003), available at http://www .sciencedirect.com/science/article/B6V7S-47N7F37-5/2/6db86cfbe302c564a9d0ff9977 979c70 (last visited Nov. 2, 2011); R. Welford, Corporate Social Responsibility in Europe, North America and Asia, J. Corp. Citizenship, Issue 17 (2005), available at http:// unpan1.un.org/intradoc/groups/public/documents/apcity/unpan036967.pdf (last visited Nov. 11, 2011); A. Habisch & M. Wegner, Germany, Overcoming the Heritage of Corporatism, in Corporate Social Responsibility (A. Habisch & J. Jonker, ed., Berlin, Germany: Springer Verlag 2005); Asyraf Wajdi Dusuki, Does Corporate Social Responsibility Pay off? An Empirical Examination of Stakeholder Perspectives (Islamic banking institutions are guided by an Islamic world view, which is based on the principle of social justice and well-being. Islamic banking institutions have a greater regard for ethics and social responsibility, which are based on Divine Revelation), http://mubs.mdx. ac.uk/conferences/bpcsr05/03_measuring_csr/CSR%29Paper%20_Asraf%20Dusuki _.pdf (last visited Nov. 2, 2006). 350 Social organization in this context means any juridical entity, whether organized formally under state law, ngos, civil society, academic or political think tanks that can affect public policy through lobbying or policy making. 351 Internal stakeholders are the shareholders. External stakeholders may be prioritized in order of their primacy based upon their proximity to the either the corporate structure or the activities emanating from the corporate structure. The [s]takeholder theory is closely related to the issue of corporate social responsibility to the extent that stakeholder theorists define appropriate and inappropriate corporate behavior in terms of how corporations act vis-à-vis their stakeholders. Most of the stakeholder literature focuses on four issues. It describes what the corporation is and who its stakeholders are. It argues that stakeholders have legitimate interests in corporate activity. It recognizes attitudes, structures, and practices that constitute stakeholder management. It identifies the relationship between stakeholder management and the achievement of various corporate performance goals, such as profitability, stability, and growth. J. Campbell, Theory of Corporate Social Responsibility, supra note 285, at 7. Under a policy-oriented jurisprudence approach, internal and external stakeholders may be participants or claimants with conflicting claims.

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The impetus to link csr to the human rights and business debate derives its force from whether voluntary corporate promises and self-imposed principles regarding corporate behavior provide better guarantees than binding regulations. There is a mistaken assumption that csr initiatives are human rights policies and that csr addresses the various human rights concerns. While csr and human rights may overlap in certain areas, csr and human rights policies are not the same thing. As Zerk reminds us, “[t]hey are distinct concepts, with different origins and purposes, and cover different, though overlapping, subject matter.”352 This is mainly because csr, as a business management or corporate governance strategy, is premised on a voluntary acceptance by corporate executives generally based upon best practices in a particular business field in conjunction with various business operational models. Conversely whether a business practice and/or operational model create situations where human rights are abused is a legal issue that flows from the business practice. Some business activities may be entirely legal but the resultant effects are human rights abuses. Thus, a business can be responsible for violating human rights and not accountable under the law. This dilemma is at the heart of a shifting international law paradigm. a Various Participants/Stakeholders’ Definitions of csr This section explores the various definitions external stakeholders have proposed for csr. Nongovernmental organizations and human rights activists have been primarily responsible for defining csr as it relates to or fails to relate to human rights. Business and academicians define csr as it relates to their perspectives of shareholder and stakeholder theories. 1

Nongovernmental Organizations’ Definitions of csr

Nongovernmental organizations have been vocal critics of csr initiatives implemented by transnational corporations in efforts to avoid binding governmental regulations. Some of the most vocal voices against csr initiatives are well-respected ngos with international scope and reach that have been and continue to be at the forefront of the movement to hold tncs accountable for human rights abuses. Such accountability may or may not include csr initiatives as ngos insist that victims are entitled to remedies for human rights abuses. It is highly questionable whether voluntary regulations can have enforceable remedies absent a contractual nexus or some kind of mandatory enforcement procedure. 352 Zerk, supra note 297, at 43.

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In its seminal article Behind the Mask: The Real Face of Corporate Social Responsibility, Christian Aid, a nongovernmental Christian organization that insists that the world can and must be swiftly changed to one where everyone can live a full life, free from poverty,353 defines csr as: [A]n entirely voluntary corporate-led initiative to promote self-regulation as a substitute for regulation at either the national or international level. csr is a catch-all term increasingly used by business, which encompasses the voluntary codes, principles and initiatives companies adopt in their general desire to confine corporate responsibility to selfregulation.354 .



Oxfam International

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Intergovernmental Organizations’ Definitions of csr

Oxfam International355 defines csr “as a firm’s commitment to conduct all aspects of its business in a manner that advances rather than hinder human development.”356 Perhaps the greatest rift to bridge in defining csr is between intergovernmental organizations (igos) and ngos. igos are an important aspect of public international law. 353 See Christian Aid website www.christianaid.org.uk. 354 Christian Aid, Behind the Mask, The Real Face of Corporate Social Responsibility (Jan. 21, 2004), www.st-andrews.ac.uk/~csearweb/aptopractice/Behind-the-mask.pdf (last visited Mar. 2, 2011); see also http://www.christian-aid.org/uk/news/media/pressrel/040121p.htm. Behind the Mask presents three case studies of corporations operating in African countries to support its premise that csr or cr (corporate responsibility) is used or promoted by companies as a front for avoiding regulatory measures. Christian Aid concludes its report by calling for binding legislation, mandatory reporting and the uk equivalent to the us Alien Tort Claims Act. But see Mallen Baker, Behind the Mask: How Christian Aid Got it Wrong on Corporate Responsibility, Ethical Corporation, Feb. 23, 2004, http:// www.mallenbaker.net/CSR/page.php.?Story_ID+1238 (last visited Jan. 1, 2011). 355 Oxfam International is an international group of independent non-governmental organizations dedicated to fighting poverty and related injustice around the world. See website http://www.oxfam.org/en/about/what/mission. 356 Oxfam International, The European Commission’s Green Paper: Promoting a European Framework for Corporate Social Responsibility, 6 (Jan. 2002), http://www.intermonoxfam .org/cms/HTML/espanol/463/OI_submission.pdf. In responding to the Commission’s Green Paper, Oxfam expressed its dissatisfaction with the eu’s failure to provide “effective means of holding companies accountable for their social and environmental impacts.” Id. at 2.

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The World Bank

The World Bank Corporate Social Responsibility Practice357 defines csr as: [t]he commitment of business to contribute to sustainable economic development – working with employees, their families, the local community and society at large to improve the quality of life, in ways that are both good for business and good for development.358

The United Nations

Although the un has not formally defined csr, it has, nonetheless, provided contextual definitions as to what csr should entail vis-à-vis the business activities of tncs that may infringe upon human rights. A 2004 Addendum to the United Nations Conference of Trade and Development (unctad) secretariat report reads as follows: The definition of corporate social responsibility has undergone substantial modifications over time, and it is still evolving along with society and society’s expectations. There is no globally accepted definition of csr, nor is there a consensus of a definitive list of the issues it encompasses. It is generally agreed that csr is neither corporate philanthropy nor strict compliance with law. The common denominator to most definitions is that csr is a concept whereby enterprises integrate social and environmental concerns into their business policies and operations, with a view to improving their impact on society.359 357 The World Bank is made up of two unique development institutions owned by 187 member countries: the International Bank for Reconstruction and Development (ibrd) and the International Development Association (ida). Each institution plays a different but collaborative role in advancing the vision of inclusive and sustainable globalization. The ibrd aims to reduce poverty in middle-income and creditworthy poorer countries, while ida focuses on the world’s poorest countries. The World Bank provides low-interest loans, interest-free credits and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, financial and private sector development, agriculture and environmental and natural resource management. See World Bank, http://web.worldbank.org/WBSITE/EXTERNAL/EXTABO UTUS/0,pagePK:50004410~piPK. 358 Halina Ward, Public Sector Roles in Strengthening Corporate Social Responsibility: Taking Stock, 3 (Jan. 2004) (prepared for the Corporate Social Responsibility Practice Group of the World Bank), www.iied.org/pubs/pdfs/16014IIED.pdf (last visited July 19, 2009). 359 United Nations Conference on Trade and Development [unctad] (2004), Disclosure on the Impact of Corporations on Society, Current Trends and Issues, 22–24 (New York: unctad 2004), www.unctad.org/en/docs/iteteb20037_en.pdf. 5.

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In 2008, unctad expanded its view of csr. Corporate social responsibility concerns how business enterprises relate to, and impact upon a society’s needs and goals. All societal groups are expected to perform certain roles and functions that can change over time with the society’s own evolution. Expectations related to business enterprises, and particularly tncs, are undergoing unusually rapid change due to the expanded role these enterprises play in a globalized society. Discussions relating to tncs’ social responsibility standards and performance therefore comprise an important component of efforts to develop a stable, prosperous and just global society.360

The Global Compact

The Global Compact does not define csr per se. Instead the Compact indirectly references csr through its definition of sustainability and corporate citizenship, which is “the voluntary commitment on behalf of ceos to implement universal principles and to take actions in support of broader societal goals.”361 The Compact provides a rationale about why csr should be considered as a means to “help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere” in the “ten universally accepted principles in the area of human rights, labour, environment and anti-corruption.”362 The Global Compact website sets forth the following: The Global Compact is a leadership platform, endorsed by Chief Executive Officers, and offering a unique strategic platform for participants to advance their commitments to sustainability and corporate citizenship. Structured as a public-private initiative, the Global Compact is a policy framework for the development, implementation, and disclosure of sustainability principles and practices and offering participants a wide  spectrum of specialized workstreams, management tools and resources, and topical programs and projects all designed to help advance 360 unctad, The Social Responsibility of Transnational Corporations, 1 (New York: United Nations 1999), http://www.unctad.org/en/docs/poiteiitm21.en.pdf (last visited June 12, 2008). 361 George Kell, Interview, Economic Downturn Increases Demand for Value (Mar. 4, 2009), http://www.corporateandresponsible.com/2009/03/georg-kell-of-un-global-compact. html (last visited Oct. 21, 2010). 362 Id.

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sustainable business models and markets in order to contribute to the initiative’s overarching mission of helping to build a more sustainable and inclusive global economy.363

The Organization for Economic Cooperation and Development (oecd)

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Governmental Entities’ Definitions of csr The European Union

According to oecd, csr can be summed up as follows: “The common aim of governments adhering to the [oecd] Guidelines is to encourage the positive contributions that multinational enterprises can make to economics, environmental and social progress and to minimize the difficulties to which their various operations may give rise.”364

The European Union took an active interest in csr in the 1990s but, at that time, failed to deliver any concrete recommendations. ngos and civil society had hoped that the European Commission would advocate for binding regulations. In March 2000, the eu’s Council of Ministers urged business to adopt a more sustainable approach to csr. In 2001, the eu’s Commission published Green Paper, Promoting a European Framework for Corporate Social Responsibility,365 which focused on how the eu “could promote [csr] at both the European and international level.”366 In this report, the Commission defined csr as a “concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with various stakeholders on a voluntary basis.”367 By incorporating the idea of “stakeholders” in its definition, the eu shifts from the agency theory of corporations or the shareholder primacy theory to one that recognizes that a company’s business decisions and practices impact other actors: employees, communities, consumers, suppliers, partners and even advocacy groups. The eu, nonetheless, advances only the precepts of voluntary 363 Overview of the un Global Compact, The Global Compact, http://www.unglobalcompact .org/AboutTheGC/index.html (last visited Jan. 10, 2011). 364 oecd Guidelines for Multinational Enterprises, Preface, para. 10, oecd, http://www .oecd.org/document/18/0,3343,en_2649_34889_2397532_1_1_1_1,00.html. 365 Comm’n of the European Union Cmtys., Green Paper Promoting a European Framework for Corporate Social Responsibility, com (2001) 366 final (July 18, 2001) http://www.csr-in -commerce.eu/data/files/resources/717/com_2001_0366_en.pdf (last visited May 25, 2009). 366 Id. 367 Id.

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measures. The eu’s inclusion of “stakeholders” links csr to human rights, while, at the same time, it maintains a voluntary focus to be employed by business. The Commission released two follow up reports: one in 2002 titled Corporate Social Responsibility: A business contribution to sustainable development368 and the other one in 2006 titled Implementing the Partnership for Growth and Jobs: Making Europe a Pole of Excellence on Corporate Social Responsibility.369 None of these reports advocated for binding regulations.

The United Kingdom

The United Kingdom’s government website on csr defines it as follows: [T]he business contribution to our sustainable development goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates – maximising benefits and minimising the downsides. Specifically we see csr as the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society.370 4

Business Advocacy and other Organizations’ Definitions of csr

In 1971, the u.s. Committee for Economic Development (ced) defined csr as “being related to products, jobs, and economic growth; related to societal expectations; and related to activities aimed at improving the social environment of the firm.”371 368 European Commission, Corporate Social Responsibility: A business contribution to sustainable development, com (2002) 347 final (July 2, 2002) http://community-wealth.org/sites/ clone.community-wealth.org/files/downloads/report-european-commission.pdf (last visited Sept. 1, 2014). 369 Implementing the Partnership for Growth and Jobs: Making Europe a Pole of Excellence on Corporate Social Responsibility, com (2006) 136 final (Mar. 22, 2006) http://www.csr-in -commerce.eu/data/files/resources/719/com_2006_0136_en.pdf (last visited Sept. 1, 2014). 370 Zerk, supra note 297, at 30. Zerk provides her own definition of csr. For her, csr is “the notion that each business enterprise, as a member of society, has a responsibility to operate ethically and in accordance with its legal obligations and to strive to minimise any adverse effects of its operations and activities on the environment, society and human health.” Id. at 32. 371 Thomas & Nowak, supra note 241, at 5.

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The World Business Council for Sustainable Development



The International Business Leaders Forum



International Chamber of Commerce

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The World Business Council for Sustainable Development372 defines csr as “[t]he continuing commitment of business to behave ethically and contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life.”373 According the wbcsd, in its report Corporate Social Responsibility, The w ­ bcsd’s Journey, the above-referenced definition is not an “official” definition, but is presented to provide insight on wbcsd’s exploration of the topic of Corporate Social Responsibility.374 To the International Business Leaders Forum (iblf),375 csr “means open and transparent business practices that are based on ethical values and respect for employees, communities and the environment. It is designed to deliver sustainable value to society at large, as well as to shareholders.”376 The International Chamber of Commerce377 considers corporate responsibility and not corporate social responsibility, as “the voluntary commitment by  business to manage its activities in a responsible way. More broadly, 372 See wbcsd Stakeholder Dialogue on csr; see supra note 343 (background information on wbscd). 373 Corporate Social Responsibility, The wbcsd’s Journey, http://www.wbcsd.org/DocRoot/ I0NYLirijYoHBDflunP5/csr2002.pdf (last visited Mar. 22, 2010). 374 Id. 375 Founded in 1990, iblf is the premier independent, not-for-profit global organization working with business leaders to deliver innovative solutions to sustainable development challenges worldwide. The iblf is widely respected by ngos, companies, governments and global organizations for its neutrality, professionalism, leadership and reach. iblf is unaligned to any political, partisan or national interests. It advocates and promotes business leadership in corporate responsibility and development across multiple sectors, markets and issues and does not represent or endorse individual companies, sectors or markets. See ibilf, http://www.iblf.org/en/who-we-are/aboutus.aspx. 376 Id. 377 International Chamber of Commerce, founded in 1919, is an international business organization, a representative body that speaks on behalf of enterprises from all sectors in every part of the world. It promotes an open international trade and investment system and market economy. It actively lobbied against the Norms and other binding regulatory measures. See International Chamber of Commerce, http://www.iccwbo.org.

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cr includes  the efforts by business to contribute to the society in which it operates.”378

Business for Social Responsibility

Business for Social Responsibility379 (bsr) views csr as “a comprehensive set of policies, practices and programs that are integrated into business ­operations, supply chains, and decision making processes throughout the company – wherever the company does business – and includes responsibility for current and past actions as well as future impacts.”380 bsr also considers csr as a means in which businesses address the legal, ethical, commercial and other expectations that society has of business and that these expectations should be balanced against the claims of all key stakeholders.381 More specifically, bsr defines csr as …operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. csr is seen by leadership companies as more than a collection of discrete practices or occasional gestures, or initiatives motivated by marketing, public relations or other business benefits. Rather, it is viewed as a comprehensive set of policies, practices and programs that are integrated throughout business operations, and decision-making processes that are supported and rewarded by top management.382 For bsr, stakeholders include, but are not limited to, shareholders, analysts, regulators, activists, labor unions, employees, community organizations, and news media.383 378 The role of the United Nations in promoting corporate responsibility, International Chamber of Commerce, Policy Statement (June 21, 2009), http://www.ciwbo.org/uploadedFiles/ ICC/policy/business_in_society/Statements/14186%20rev2%20final.pdf (last visited Feb. 1, 2011). 379 Business for Social Responsibility’s mission is to work with business to create a just and sustainable world. A leader in corporate responsibility since 1992, bsr works with its global network of more than 250 member companies to develop sustainable business strategies and solutions through consulting, research, and cross-sector collaboration in environment, human rights, economic development, and governance and accountability. See Business for Social Responsibility (bsr), http://www.bsr.org. 380 Id. 381 Overview of Corporate Social Responsibility, bsr Issue Briefs, Business for Social Responsibility, http://www.bsr.org (last visited Aug. 11, 2006). 382 See bsr, http://www.bsr.org/resourcecenter. 383 Under a policy-oriented jurisprudence approach these stakeholders may be participants, claimants with conflicting claims and decision makers.

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Corporate Social Responsibility Initiative

The Corporate Social Responsibility Initiative at Harvard Kennedy School384 provides a strategic definition of csr. Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm.385 b Commonality of All Definitions Even though all subsequent definitions of csr are permutations of Bowen’s definition,386 there is no consensus as to what csr means. As stated by Ramon Mullerat: Although the debate about csr has continued to grow, we remain a long way from consensus on what it means and its value. Some suggest that it is just about glossy reports and public relations. Some see it as a source of business opportunity and improved competitiveness. Some see it as no more than sound business practice. Others see it as a distraction or threat. Is it a framework for across-the-board regulation of all the relationships between business and the rest of society, nationally and globally? Is it just about the activities of North American and European multinational corporations in developing countries? Is it relevant and useful to companies at all stages no matter where they are based and operate?387 Generally when discussing csr, the following questions must be considered: What is a corporation’s role in society? If it is to maximize profit, then how can a 384 Corporate Social Responsibility Initiative at Harvard Kennedy School, http://www.hks .harvard.edu/m-rcbg/CSRI/init_approach.html (last visited May 26, 2011). 385 Id. 386 See Bowen, supra note 318, at 6. “[T]he obligation of businessmen is to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of objectives and values of our society.” Id. 387 Ramon Mullerat, Quo vadis Corporate Social Responsibility? (New trends of csr), 4 [hereinafter Mullerat, New Trends], www.fbe.org/IMG/pdf/Ramon_Mullerat-4.pdf (last visited May 31, 2011).

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voluntary commitment be enforced and monitored if in doing so it detracts from the corporate bottom line? Such questions do little to press the debate forward in the human rights arena. Nonetheless, csr is generally understood to encompass a continuing commitment by business to behave ethically, contribute to the overall economic development as well as improve the quality of life of the workforce, their families, the local community and society at large.388 In its broadest categories, csr typically includes issues related to business ethics,389 community philanthropy and outreach programs, environmental issues, governance, human rights, and nondiscriminatory marketplace and workplace policies and practices. B Arguments for and against csr Arguments for csr are as broad and as varied the arguments against csr. Some of the arguments for csr include (1) csr is good for business; (2) csr is a moral obligation; (3) the changing paradigm of globalization requires that multinational corporations have a greater obligation to engage in business practices that respect human dignity because of the economic largess of these corporations; and (4) business does not operate in an isolated vacuum independent of societal mores and values. At the core of many of these arguments are moral values.390 Some scholars agree that because businesses exist within 388 See Socially Responsible Investment and Corporate Sustainability, 3 Sustain Mag. 2, 32 (Spring 2002). 389 Business ethics is not the same as corporate social responsibility. Business ethics has to do with ethical behavior vis-à-vis the ceo’s interaction with the employees and investors financially. Business ethics is concerned with moral values. Enron is an example of failed ethics in business. See Diane Huie Balay, Close-up: Failed Ethics: Enron debacle offers lessons, at http://archives.umc.org/interior.asp?mid=1396 (last visited Nov. 15, 2005). 390 See Errol P. Mendes, The Moral Argument Against the Business Case for Corporate Social Responsibility: A Call for a New Moral and Spiritual Approach, University of Ottawa (2007), http://www.ucalgary.ca/christchair/files/christchair/Mendes-detailed-paper.pdf (last visited Oct. 10, 2010). Mendes discusses that all of the major religions, Judeo-Christianity theology, Judaism, Islam, Buddhism and Hindu, recognize that the “highest form of human good is compassion and the protection of human rights and dignity in a substantial sense.” Id. at 7–8. Although, he used to favor the business case for human rights, he now considers it as one based on a utilitarian cost benefit analysis. A company will seek to incorporate human rights norms into its policies as long as the costs for doing so does not reduce the profit margin. Mendes cites the examples of the Tylenol deaths that resulted in 1982 from pills contaminated with cyanide and the Ford Pinto debacle (cars exploding because of a defective fuel system) in the late 1960s and early 70s. In both instances, the companies were faced with a business decision regarding the recall of the products. Tylenol choose to recall and destroy over 31 million bottles of medication,

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society and not independent of and apart from society, businesses should ­conduct their activities in morally responsible manners. Notwithstanding that morality is subjective and is presumed to be founded upon certain religious precepts, imbuing an inanimate being with moral capabilities is just as much of a fictitious leap of logic as it was elevating a corporation to the status of a person. It has been more than twenty years since csr became entrenched as a business strategy and thousands companies worldwide now have some type of csr initiative. Initially, many of these initiatives were corporate public relations campaigns391 designed to lull the public and external stakeholders into believing that “corporations are really doing more than they are capable of doing given the intensity of the competition.”392 For Robert Reich, former Secretary of Labor under President Clinton, a csr initiative is “as meaningless as cotton candy. The more you bite into it the faster it dissolves.”393 Reich favors mandatory regulations over csr. Other critics of csr feel that business has “hijacked” the csr movement to make businesses socially responsible by insisting on ­self-regulatory measures.394 Or as Dennis Masaka writes, “csr has now been corrupted and manipulated to further enhance the economic advantage of those  in business to the detriment of the rights of consumers and the

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which did severely impact its profits. Ford, on the other hand, refused to retool the cars, which would have cost $11.00 per car based upon a cost/benefit analysis. Ford failed to do so, which resulted in deaths and massive lawsuits. He argues that too many businesses fall in line with Ford, refusing to take dangerous products off the market because of an adverse cost/benefit analysis. Id. See Irene Khan, Taking Stock: Corporate social responsibility and human rights, Speech at the World Economic Forum, Davos (Sept. 24, 2003) (discussing the status of csr from its initial beginnings as a public relations campaign to incorporating human rights standards) [hereinafter Khan, Taking Stock], http://www.amnesty.org/en/library/info/ IOR50/003/2003 (last visited Oct. 8, 2010). Khan is the former International Secretary General of Amnesty International. She joined Amnesty International in 2001 as its Secretary General. She was the first woman, the first Asian, the first Bangladeshi and the first Muslim to hold the position of Amnesty International Secretary General. She left Amnesty International in 2010. Robert Reich, Supercapitalism: The Transformation of Business, Democracy and Everyday Life 171 (Knopf: New York 2007). Id. See Dame Anita Roddick, infra Chapter 3, notes 504–505; see also Amiram Gill, Corporate Governance as Social Responsibility: A Research Agenda, 26 Berkley J. Int’L L. 452, 462 (2008) (discussing how some scholars feel that the social change motives of csr have been replaced by the marketing interests of business, thus making csr a “cynical public relations tool.”).

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­environment.”395 Reich, however, views a corporation’s profit maximization focus as nothing more than what the corporation is designed to do. He argues that it is in a corporation’s “self-interest” to maximize profits. Specifically, he opines, “I don’t think it is impure to do things out of self-interest. They [corporations] are doing things out of their shareholders’ interest. That doesn’t make them impure. That doesn’t make them blameworthy. That’s what corporations are supposed to do.”396 In spite of the corporate world’s initial resistance to csr, csr initiatives have been widely accepted and embedded into corporate practices. Business advocacy groups encourage the integration of human rights standards into csr policies.397 Engaging in csr initiatives does not insulate companies from violating human rights. csr initiatives are not the same thing as a human rights policy.398 The disconnect exits because there is no uniformly agreed upon definition of csr, whereas human rights are definitively defined or at least universally understood.399 “In other words, ‘human rights’ is associated 395 Masaka, supra note 252, at 16. Masaka argues that a business does not engage in csr because it is the moral thing to do, but rather because csr is in a business’ self-interest, if csr increases profits. 396 Dennis Schall, Robert Takes on ‘Supercapitalism’ and You, cr Magazine Online, http:// www.thecro.com/note/591 (last visited Nov. 11, 2010). 397 csr Europe considers csr to be “about integrating the issues of workplace, human rights, the community and the marketplace into core business practices.” Corporate Social Responsibility – The European Business Campaign, http://www.csreurope.org/ CSRCampaign/what.html (last visited Dec. 12, 2009). csr Europe was founded in 1995 by senior European business leaders in response to an appeal by the European Commission President Jacques Delors. It is the leading European business network for corporate social responsibility with around 70 multinational corporations and 27 national partner organizations as members. See csr, www.csreurope.org. 398 See Business and Human Rights Resource Center for a listing of companies with human rights policies that expressly refer to the udhr, http://www.business-humanrights.org/ Documents/Policies. 399 The United Nations Office of the High Commissioner for Human Rights defines human rights as “rights inherent to all human beings, whatever our nationality, place of residence, sex, national or ethnic origin, colour, religion, language, or any other status. We are all equally entitled to our human rights without discrimination. These rights are all interrelated, interdependent and indivisible.” What are Human Rights? un Office of the High Commissioner, http://www.ohchr.org/en/issues/Pages/WhatareHumanRights.aspx (last visited Mar. 3, 2010). In 2001, Global Exchange, a San Francisco based ngo, called for a redefinition of the term human rights to include social justice and human dignity. Now, a decade after the end of the Cold War, new space exists for a fundamental redefinition of the term “human rights.” Luckily, we don’t have to go any farther than one of

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with abuse, and ‘csr’ is well, whatever the user wants it to mean.”400 The lack of a uniform definition of csr and how it intersects with human rights provides the impetus for corporations to advance voluntary self-regulations (codes of conduct) instead of binding international or domestic regulations. Corporate ­resistance to binding regulations has little to do with the willingness to adopt voluntary measures. The reality is just the opposite. tncs have adopted ­voluntary measures – self-regulation – as a means to obviate or thwart binding norms. 1 Arguments for csr a Moral and Religious Arguments for csr There are two competing moral arguments regarding human rights and business and whether csr demonstrates tncs’ respect for human rights. One favors csr and the other opposes it. Those who argue in favor of csr adhere to the view that tncs have a moral obligation to respect human rights and that csr is in line with many religious teachings, particularly Catholic social thought. At the core of Catholic social thought is a timeless belief that corporations have a social responsibility to their communities. Catholic social teachings emphasize that businesses should not view their sole purpose as making as  much profit as possible for their shareholders to the detriment of others the un’s founding documents to find a new interpretation. Adopted by the United Nations General Assembly in 1948, the Universal Declaration of Human Rights is considered the foundation of modern international human rights defense and promotion. The declaration is built on the common sense idea that human rights are based on the inherent dignity of every person. This dignity, and the rights to freedom and equality that derive from it, are undeniable. …. Until we bring genuine democracy to economic decision-making, we will be unable to end violations against basic economic and social rights. Unless we establish popular governance of the global economy, there is no chance of creating the sort of social justice that guarantees individuals’ basic dignity. And dignity, it must be remembered, is a human right. Jason Mark, A New Definition of Human Rights: At the Millennium, a Broader Definition of Human Rights Justice, Democracy, and Dignity, Global Exchange (Jan. 2001), http://www .globalexchange.org/about/newhumanrights.html (last visited Dec. 5, 2010). 400 Christine Bader, Business & Human Rights: Corporate Recognition and Responsibility, csr in Context, 7, China Rights Forum, No. 1 (2008), http://www.hrichina.org/public/ PDFs/CRF.1.2008/CRF-2008-1_Corporate.pdf (last visited Oct. 8, 2010). Christine Bader was an advisor to John Ruggie, un Special Representative of the Secretary-General for Business and Human Rights.

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(nonshareholders).401 Stephen Long, in his article Corporations and the Common Good, explores the purpose of a corporation from a theological standpoint.402 He asks Christian lawyers, business persons, consumers, laity, clergy and theologians to question whether profit maximization is sufficient as a legal foundation for the corporation, or whether something like the supernatural virtues of faith, hope and charity also must be used to assess the corporation.403 Long acknowledges that profit maximization is not anathema to Christian principles as long it “does not conflict with the aforementioned virtues.”404 He contends that these virtues should be at the heart of a corporation’s policies, and if they are not, then the converse, greed, controls.405 Greed, avarice or covetousness, whether exemplified through individual or corporate material wealth, is viewed as one the seven deadly Christian sins.406 Other religions, Hindu, Buddhism, Judaism, Islam and Sikh, also view greed with disfavor.407 tncs, in pursuit of their purpose – to make a profit – have been assailed because their earnings or intrinsic worth/value exceed that of most nations.408 That worth/value is tied to many intangibles such as brand images.409 The profit making function of tncs has in many instances been wrongly tied to the greed of the shareholders, who indirectly pressure corporate executives to engage in profit maximization at the expense of workers and external stakeholders where these corporations are located. There is an underlying assumption that the scandals involving corporations such as Enron, WorldCom, HealthSouth, Xerox, Tyco, Arthur Andersen, Global Crossing, Adelphia, ImClone and aol were all fueled by greed.410 But just as a corporation cannot 401 See Alison McMorra Sulentic, Now I Lay Me Down To Sleep: Work-Related Sleep Deficits and the Theology of Leisure, 20 Notre Dame J. L. Ethics & Pub. Pol’y 749, 752 (2006). 402 See D. Stephen Long, Corporations for the Common Good, 4 Ave Maria L. Rev. 77 (2006). 403 Id. at 79. 404 Id. at 87. 405 Id. 406 The seven deadly sins are wrath, greed (avarice), sloth, pride, lust, envy and gluttony. St. Thomas Aquinas considered avarice a general sin when a person desires anything more than he ought to and a special sin when a person has an excessive love of money. See Long, supra note 402 at 100–101. 407 See Kamran Mofid, Business Ethics, Corporate Social Responsibility And Globalisation For The Common Good 9 (London: Shepard Walwyn 2003). 408 See supra note 215 (discussing that some corporations’ net worth is more than that of some nations). 409 See Charles Handy, What’s Business For?, 80 Harv. Bus. Rev. 49 (2002), available at http:// papers.ssrn.com/abstract=932676. “[T]he value of a company largely resides in its intellectual property, in its brands and patents and in the skills and experience of its workforce.” 410 See Long, supra note 402, at 88.

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be moral,411 it cannot be greedy. In attempts to counter this perception, many companies have embraced csr initiatives because it is not only the right thing to do but the moral thing to do. As Long surmises: The greed-motivated neo-liberal world is spinning out of control. Perhaps it is time for us to redefine our values. From a religious perspective the two main problems with market capitalism are greed and delusion. In modern economic theory, and the kind of market it promotes, the moral concept of greed has inevitably been lost; ‘today it seems left to religion to preserve what is problematic about a human trait that is unsavoury at best and unambiguously evil at its worst’. Religious traditions have tended to accept greed as part of the human condition, but they have seen a great need to control it.412 The Catholic Church has continuously recognized that a sole profit maximization philosophy can lead to “abominable [greed] abuses” and has advocated legal measures to control such abuses.413 Pope Pius XI, in 1931, during the Great Depression, spoke out against the lack of adequate legal constraints of corporate power and corporate abuses.414 The regulations legally enacted for corporations, with their divided responsibility and limited liability, have given occasion to abominable abuses. The greatly weakened accountability makes little impression, as is evident, upon the conscience. The worst injustices and frauds take place beneath the obscurity of the common name of a corporative firm… A stern insistence on the moral law, enacted with vigor by civil authorities, could have dispelled or perhaps abetted these enormous evils. This however, was too often lamentably wanting.415 411 Long distinguishes the modern corporation from the “medieval societas that encompassed contractual commercial arrangements, which functioned within the context of virtues. The modern corporation is never discussed within the context of virtues; it is discussed solely in terms of law.” Id. at 88. It does not have the same moral obligations persons have, especially as those obligations are defined by the Catholic Church. Id. 412 Id. at 9. 413 See generally William Quigley, Catholic Social Thought and the Amorality of Large Corporations: Time to Abolish Corporate Personhood, 5 Loy. J. Pub. Int’l L. 109 (2004), available at http://www.stthomas.edu/cathstudies/cst/conferences/bilbao/papers/quig ley.pdf. 414 Id. 415 Id. at 18, n. 42 (citing Quadragesimo Anno, After Forty Years (1931) para 132–133).

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In 1961, Pope Paul XXIII favored regulating “public and private economic institutions” to promote the common good.416 The Second Vatican Council, in 1965, stressed that business enterprises’ duties should be more than the mere accumulation of profit417 and should be in conformity with the duties that individuals have in society. Similarly, in the 1981 encyclical Laborem Exercens, John Paul II also chastised multinational corporations for engaging in profit maximization by directly and indirectly exploiting workers in other countries.418 The document criticized the chief economic priority of maximizing profit and called on local, state, and world level institutions to exercise their influence to change these relationships.419 In 1997, the National Conference of Catholic Bishops championed a uniformed code of conduct for foreign corporations designed to rein in corporate abuse. Although the ability of corporations to plan, operate, and communicate across national borders without concern for domestic considerations makes it harder for governments to direct their activities toward the common good, the effort should be made; the Christian ethic is incompatible with the primary or exclusive focus on maximization of profit. We strongly urge u.s. and international support of efforts to develop a code of conduct for foreign corporations that recognizes that quasi-public character and encourages both development and equitable distribution of their benefits. Transnational corporations should be required to adopt such a code, and to conform their behavior to its provisions.420 Pope Francis,421 in keeping with Catholic social thought, has urged political leaders to seek ethical solutions to poverty and the “greed” that caused the financial crisis of 2008, which has disproportionately affected the poor and has contributed to the rise in poverty.

416 417 418 419 420 421

Id. Id. at 121. Id. Id. Id. Pope Francis, Jorge Mario Bergoglio, is the first Pope from the Americas. He was born in Argentina and considers himself a friend to the “poor.” “My people are poor and I am one of them,” he has said more than once, explaining his decision to live in an apartment and cook his own supper. He was elected Supreme Pontiff on March 13, 2013. See Biography of Holy Father Pope Francis, http://www.vatican.va/holy_father/francesco/biography/docu ments/papa-francesco-biografia-bergoglio_en.html (last visited August 27, 2013).

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One cause of this situation, in my opinion, is in the relationship with money, and our acceptance of its power over ourselves and our society. Consequently, the financial crisis which we are experiencing makes us forget that its ultimate origin is to be found in a profound human crisis. In the denial of the primacy of human beings.422 He counsels political leaders and businessmen to stop rejecting ethics and instead to infuse ethics into the financial dealings. For Pope Francis, [A] rejection of ethics [is] a rejection of God. Ethics, like solidarity, is a nuisance! It is regarded as counterproductive; as something too human, because it relativizes money and power; as a threat, because it rejects manipulation and subjection of people; because ethics lead to God, who is situated outside the categories of the market.423 Of course, when it comes to human rights, it can be argued that religious reasons for corporations to behave in a morally responsible manner are subjective, based upon societal and cultural mores and values,424 which are inapplicable to fictitious persons. Currently there is no commonly acceptable standard within the global community on how a corporation is to behave morally.425 422 Pope: Financial reform along ethical lines, Vatican Radio, May 5, 2013, http://www.news.va/ en/news/pope-financial-reform-alongethical-lines (last visited Aug. 24, 2013) 423 Id. 424 For those Americans who argue that the United States is a “Christian nation,” to allow corporations to escape a Christian moral obligation obfuscates just what is meant by the terminology “Christian nation.” America’s Tea Party’s movement vocally asserts that America is a “Christian nation” as part of its mantra “taking our country back.” It is neither anecdotal or revisionist history to point out that the Tea Party’s “Christian nation” engaged in genocide against the country’s indigenous peoples, enslaved others, and openly discriminated against non-Anglo Saxon Europeans and Catholics. See Most Tea Partiers call America a Christian nation, study finds, cnn, Oct. 5, 2010, http://religion.blogs.cnn .com/2010/10/05/most-tea-partiers-call-america-a-christian-nation-study-finds/ (last visited Mar. 2, 2011); Tea Party Believes America is a Christian Nation, DefendChristians.org (responding to an editorial written by Michael Gerson, Washington Post), http:// defendchristians.org/commentary/tea-party-believes-america-is-a-christian-nation/ (last visited Mar. 2, 2011). 425 See Christos Papoutsy, Is Moral Capitalism Possible? Corporate Social Responsibility, http://www.helleniccomserve.com/moralcapitalism.html (last visited Oct. 10, 2010). In Latin America, csr is viewed as a way to reduce poverty and address other pressing social issues across the region. See csr in Latin America: The Moral Case, The Business Case, Etica

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The pursuit of profit to the exclusion of a business’ social responsiveness to the communities in which it operates is not only a concern of the Catholic Church, but it has also been cited by others as a disservice to the human community. In response to the question of who and what is a business for? in the Harvard Business Review, Charles Handy answered as follows: The purpose of a business…is not to make a profit, full stop. It is to make a profit so that business can do something more or better. That ‘something’ becomes a real justification for the business. Owners know this. Investors needn’t care. They are anxious only for their share of that profit. To many this will sound like quibbling with words. Not so. It is a moral issue. To mistake the means for the end is to be turned in on oneself, which Saint Augustine called one of the greatest sins. Deep down, the suspicions of capitalism are rooted in a feeling that its instruments, the corporations, are immoral in that sense – they have no purpose other than themselves. This may be to many of them a great injustice, but if so they are let down by their own rhetoric and behaviour. It is a salutary process to ask of any organization. ‘If it did not exist, would we invent it?’ ‘Only if it could do something more useful, better or different than anyone else’ would have to be the answer, with profits as a means to doing just that would be the means to that larger end.426 Claus Frederiksen has approached the issue of morality, csr and business from a different perspective. He conducted a study of three Danish companies all engaged in csr initiatives to determine the moral theories upon which their csr policies were based and the reasons why the companies favored one policy over another. According to Frederiksen, the study of moral theories of csr is a new category of investigation that focuses on the normative aspect of  csr rather than the empirical investigations concerning the relation between csr and financial performance.427 Frederiksen sought to answer two questions: “Which moral theories form the basis of csr policies? Are they Empresarial (interview of Lourdes Casanova, author of Global Latinas: Latin America’s Emerging Multinationals), http://www.wharton.universia.net/index.cfm?fa=printArticle &ID (last visited Oct. 10, 2010). 426 Handy, supra note 409. 427 See Claus S. Frederiksen, The Relation Between Policies Concerning Corporate Social Responsibility and Philosophical Moral Theories – An Empirical Investigation, csr & Business in Society, cbs Working Papers, Working Paper No. 08–2009, 1–2, cbs Center for Corporate Social Responsibility: Porcelaenshaven, Denmark (2009), available at openarchive.cbs.dk/bitstream/handle/…/Working_paper_03_2009.pdf? (last visited Mar. 8, 2010).

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based on self-interest, utilitarian thinking, some kind of common-sense morality, or are they based on libertarian thinking regarding negative duties to do no harm?”428 The moral theories that formed the basis of csr policies could reflect whether managers when faced with an ethical dilemma made decisions based upon a specific moral theory instead of moral theories of justice or rights.429 The study confirmed that csr policies of companies engaged in csr, regarding positive duties, are based on common sense morality principles regarding special obligations.430 Empirical investigation of the moral theories utilized in csr can provide a basis for holding corporate officers and directors responsible for human rights violations. Enron, Adelphia, WorldCom, HealthSouth and other corporate scandals provide precedent for holding corporate directors and officers, as well as corporations, liable for financial crimes and harms to shareholders and internal stakeholders (employees).431 The business judgment rule does not insulate management decisions that were ostensibly based upon corporate malfeasance to increase profits by altering corporate books. Gianni Zappala considers the Corporate Responsibility (cr) movement, which emerged from the csr movement, as having the potential to transform the corporation into the type of organization that will help provide solutions for 21st century problems – human and environmental sustainability.432 He premises his thesis on the belief that an “emerging world view of increased spirituality is being embedded into the corporate ethos.”433 According to Zappala, humankind is at a transformational point where a new world view must emerge that is not based upon the teachings of the past. He quotes Albert Einstein to support his view. “The world cannot get out of its current state of crisis with the same thinking that got it there in the first place.”434 428 429 430 431

Id. Id. at 2 Id. at 26. See generally Christopher A. Wray & Robert K. Hur, Corporate Criminal Prosecution in a Post-Enron World: The Thompson Memo in Theory and Practice, 43 Am. Crim. L. Rev. 1095 (2006) (discussing the criminal prosecution of corporate officials and corporate entities for fraud and corruption and noting that corporate criminal liability, although not specifically utilized for human rights abuse, has been the law in the United States since 1909 as set forth in New York Cent. & Hudson R.R. Co. v. United States, 212 u.s. 481, 495 (1909). 432 See Gianni Zappala, Beyond Corporate Responsibility: The ‘Spiritual Turn’ and the rise of Conscious Business, The Centre for Social Impact (csi), Background Paper No. 6 (Feb. 2010), http://www.csi.edu.au/dr-giannizappala/#publications (last visited Feb. 2, 2010). 433 Id. 434 Id.

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In 1991, Sir Geoffrey Chandler helped form Amnesty International’s (ai) uk business group, which included Amnesty members with business or industrial experience.435 The purpose of the group was to encourage companies to use their influence in support of human rights, which would benefit the world. ai presented the “business case” for applying human rights responsibilities to business, which Sir Geoffrey Chandler viewed as fundamentally a moral argument. He noted that increasing business’ awareness of their obligations for human rights and getting them to do something about it was an uphill struggle, which he likened to Sisyphus in Greek mythology.436 According to Chandler, “those who advocate imposing human rights obligations on corporations have pushed the boulder part way up the hill, and while it will not roll back down, nor will it, it is now stuck. Its progress is hindered by three dead weights,”437 which he identifies as follows: First, by the corporate belief that money to shareholders is the purpose of corporate activity, measuring success by financial criteria only. Second, by the belief of the human rights non-governmental organisations (ngos) that their experience in dealing with states is adequate to dealing with the very different world of companies. Third, by the laissez faire response of national governments to an international challenge.438 For Chandler, removing these obstacles is the challenge being confronted today. In seeking to increase corporate awareness about businesses’ human rights obligations, ai made a fundamental decision to use its resources to remove the causes of abuse by influencing company policies and practices so that support for human rights would apply across a company’s total operations. This methodology by itself did not create the impetus for corporations to move from their entrenched positions. Chandler noted that a corporation’s 435 See Sir Geoffrey Chandler, Presentation Business and Human Rights: Reflections on Progress Made and Challenges Ahead, Sir Geoffrey Chandler Speaker Series, Business and Human Rights Resource Centre (Dec. 4, 2007), http://www.business-humanrights.org/Documents/ Chandler4Dec2007 (last visited Nov. 19, 2010). Sir Geoffrey Chandler (1922–2011) was the Founder and Chair of Amnesty International uk Business Group, former Director General, uk National Economic Development Office and former Director, Shell International. 436 In Greek and Roman mythology, Sisyphus was a king who promoted navigation and commerce. He kept his competitive advantage by killing travelers and guests, which violated the Greek laws of hospitality. The eternal punishment for his avarice and cruelty was to push a boulder up a hill, only to have it invariably fall down again. 437 Chandler, supra note 435. 438 Id.

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r­ esistance to having their policies scrutinized were relaxed only after Shell and bp suffered reputational damage in 1995 as a result of their activities in Nigeria and Colombia, respectively.439 The legal formation of the corporate structure is often assailed as the culprit that prohibits the corporation from behaving morally. “The legal dna of corporations prevents them from acting like humans and having the chance to act in moral ways.”440 Quigley argues that the size, power and legal structures of the modern corporation make them so powerful that they cannot be made to act in accordance with Catholic social thought; therefore, they should be abolished.441 Mendes sets forth the moral argument against the business case for csr and calls for a “new moral and spiritual approach.” He notes that according to Immanuel Kant, [t]here can never be a moral business case for corporate social responsibility that allows corporate leaders and their corporations to unjustly exploit employees, customers and local communities exclusively as a means to corporate profit…or as a means to save expending resources to remedy a defective product or not risking corporate profits and reputation by recalling a potentially dangerous product.442 Mendes premises his argument on the fact that corporate leaders cannot obviate their moral duties, shielding themselves behind the corporate form. “The ultimate task of corporate leaders is, according to Kantian and global religious and spiritual consensus, to utilize their power to promote and protect human dignity and show compassion to those who are involved or affected by their operations.”443 Thus, the fact that a corporation is technically not a natural person does not mean it should be stripped of moral values. Under the aggregate theory of a corporation, a corporation consists of individuals (shareholders) that have joined together to conduct business in the corporate form. It is this aggregate compilation of individuals who are imbued with morals or values that should be attributed to the corporate form. Several scholars 439 According to Irene Khan, corporations began to react to human rights as a result of crises. “[H]uman rights really popped onto companies’ radar screens as a result of crises. The execution of the Ogoni 9 in Nigeria and the conduct of private security firms in Colombia convinced oil giants Shell and bp to take human rights concerns on board.” Khan, Taking Stock, supra note 391. 440 See Quigley, supra note 413. 441 Id. 442 Mendes, supra note 390, at 6. 443 Id. at 11.

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acknowledge that corporations are just as morally culpable for their actions [business activities that harm other individuals] as each shareholder or ceo would be in his/her individual capacity. b The Business Argument for csr According to David Henderson, the former Head of the Economics and Statistics Department of the oecd, there are two business arguments in favor of corporate social responsibility, which are based upon “misguided virtues.”444 The first argument, which provides a basis for the human rights case in support of certain csr initiatives as championed by former un High Commissioner for Human Rights Mary Robinson and others, is that corporate social responsibility or corporate accountability is “the right thing [and] also makes good business sense.”445 More precisely, it is in a business’ “self-interest” to embrace some type of csr initiative because there are real economic benefits to the company’s bottom line.446 Henderson considers this argument to be misguided because corporations have adopted this position from a “defensive and business focused” posture.447 He explains. It is defensive, in the sense that the changes that go with it [csr policies] are viewed, not so much as desirable for their own sake, but rather as necessary or prudent adaptations to a new and more demanding situation. It is business focused, in that in each case the rationale for changes is derived entirely or largely, from a concern with the interests of the enterprise itself; it is not explicitly linked to some wider goal. Corporations are seen as needing to adapt because it makes good business sense for them to do so, and not because it would make the world a better place.448 In this instance, Henderson sees the business case for csr as a company’s response or adaptation to external or outside forces that have nothing to do with a company’s desire to be socially responsive. 444 David Henderson Misguided Virtue: False Notions of Corporate Social Responsibility (London: The Institute of Economic Affairs 2001). 445 Mary Robinson, Human Rights and Corporate Accountability, Speech at The Fund for Peace, Human Rights and Business Roundtable, Washington, d.c. (Feb. 19, 2003), http:// www.fundforpeace.org/media/speeches/robinson.pdf (last visited Dec. 15, 2009); see also Campbell, New Accountability, supra note 234. 446 Keith Davis frames the “self-interest” argument as one actually tied to profit maximization. If csr initiatives will result in a better community and better society, then in the long run this may actually help a company’s profits. See K. Davis, supra note 424. 447 Henderson, supra note 444, at 32. 448 Id.

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The second business case argument for csr that Henderson refers to centers around business and its role in today’s society. This argument closely parallels the human rights argument for change within the corporate structure to ensure that corporate policies are not violating human rights. This position recognizes that there is “a new and enlarged responsibility for businesses today in contributing to both the wellbeing of society in general and the integrity of the natural environment.”449 Henderson further explains his reasoning. Corporations are seen as having a leading role, in society and on the world stage, as agents for progress. This role (it is argued) needs to be recognised, made explicit, and given expression in the objectives that firms set for themselves and in their policies and operations; businesses  should embrace, and give effect to, the notion of corporate citizenship.450 David Vogel offers a similar view of csr.451 [The] most important driver of corporate interest in csr is the argument that good corporate citizenship is also good for business. csr initiatives that portray the corporation as a “good citizen” because it has undertaken voluntary initiatives to ostensibly refrain from doing what is morally reprehensible in the name of maximizing profits or, in some limited instances, provide monetary compensation for the deleterious effects of profit maximization are challenged as “greenwashing.”452 Both arguments for the business case for csr consider voluntary measures or guidelines as the main focus. Neither argument provides persuasive support for why binding regulations to deter human rights abuses are not needed. Indeed the business case for csr, the voluntary nature of the csr initiatives, also provides support for the business case against csr as it relates to the human rights and business debate. On the other hand, Jan Wouters and Leen 449 Id. 450 Id. at 33. 451 See David Vogel, Market For Virtue: The Potential And Limits of Corporate Social Responsibility (Brookings Institution Press 2005). 452 Id. at 11. Greenwashing is defined as “disinformation disseminated by an organization so as to present an environmentally responsible public image.” See Jacob Vos, Actions Speak Louder Than Words: Greenwashing Corporate America, 23 Notre Dame J. L. Ethics & Pub. Pol’y 673, 674 (2009).

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Chanet contend that no matter how persuasive the business case for corporate human rights responsibility is, it is an insufficient means for attaining our goal of ensuring responsible corporate activity. Accordingly, corporate human rights responsibilities cannot be left to the marketplace. Effective state action is necessary to ensure that grave human rights violations by business are not tolerated, whether they happen in the corporation’s home or host state. Such violations must be redressed and victims must receive reparations. There is a need for civil and criminal procedures to address serious violations of human rights.453 Carroll and Shabana approach the business case for csr by focusing on the type of tangible benefits, if any, that business organizations receive by engaging in csr initiatives. By providing a summary of the various arguments for and against csr, they conclude that the business case for csr is determined by documenting the relationship between csr and the firm’s financial performance.454 Most businesses have accepted that csr is more than a passing phase and that it actually has value. These businesses have moved beyond Friedman’s mantra and accept that “companies also have duties to the stakeholders, sustainable development and human rights.”455 Ramon Mullerat has noted ten trends that have emerged in csr since the 1990s. Businesses have embraced one or more of these trends.456 These trends reflect the reality that respecting human rights contributes to the success of business.457 Promoting the business case of human rights, however, cannot be left to business. There must be collaboration among all affected participants: individuals, ngos, nation-states and corporations. c The Government’s Argument for csr Binding regulations to hold tncs accountable for human rights abuses may be the long range goal for many human rights activists, human rights lawyers and civil society. Because of the inordinate lobbying efforts by business corporations, the domestic chamber of commerce units, the International Chamber of 453 Jan Wouters & Leen Chanet, Corporate Human Rights Responsibility: A European Perspective, 6 nw. U. J. Int’l Hum. Rts. 262, para. 23 (2008) (calling Friedman’s the business of business, reasoning archaic), available at http://www.law.northwestern ­ .edu/journals/jihr/v6/n2/3. 454 See Carroll & Shabana, supra note 248. 455 Mullerat, Human Face, supra note 291. 456 Mullerat, New Trends, supra note 387. 457 Id.

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Commerce and others,458 governments, in many instances, have committed themselves to promoting csr as a means of addressing human rights concerns. In 2000, the British government (Labour party) assigned a minister the formal responsibility for the oversight of corporate social responsibility, whose role was twofold: to make the business case for csr and coordinate government activity to promote csr.459 The European Union, likewise, at the eu Lisbon Summit in March 2000 supported a proposal for “a major campaign aimed at persuading companies to take… csr issues more seriously,”460 placing csr at the top of the eu’s political agenda.461 Membership governments in the oecd have also recognized the emergence of csr initiatives as valuable business strategies. In 2000, the oecd Ministerial Council met and approved a revised version of the oecd Guidelines for Multinational Enterprises that are “‘recommendations on responsible business conduct addressed by governments to [mnes]’; and as such, ‘[t]hey represent standards of behaviour supplemental to applicable law’, and are designed to ‘prove a useful reference point and tool for promoting corporate social responsibility.”462 d The Human Rights Argument for csr Why should businesses care about human rights? Mary Robinson answers the question this way. “[T]he Declaration helps me with the answer; because business needs human rights and human rights needs business.”463 According to Robinson, real progress in human rights will require innovative common mutually beneficial partnerships at all levels between governments, corporations, nongovernmental organizations, international organizations and wider civil society.464 Robinson also notes that regulation is needed to ensure that tncs comply with minimum norms related to human rights. “Regulation is crucial to minimize abuses and to enforce compliance with minimum norms but it alone will not establish the ‘business case’ for making the necessary

458 Governments sometimes fail to secure citizens’ rights due to corporate lobbying and contributions to political parties. See Ludescher, supra note 348. 459 See Henderson, supra note 444, at 34. 460 Id. at 35. 461 Mullerat, Human Face, supra note 438, at 23. 462 Id. at 36. 463 Mary Robinson, Building Relationships That Make a Difference, Speech, Business for Social Responsibility Conference on Profitable Partnerships, San Francisco (Nov. 3, 1999), http:// www.unglobalcompact.org/newsandevents/speeches_and_statements/san_francisco _conf erence_on_profitable_partnerships.html (last visited June 25, 2009). 464 Id.

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changes. To do so we must provide incentives, so that doing the right thing also makes good business sense.”465 Peter Sane, former Secretary-General of Amnesty International, sets forth the following five reasons/arguments for the business case for human rights: 1. 2.

The moral argument. The legitimacy argument. Human rights have been codified in treaties ratified by governments. People around the world are struggling to hold their governments accountable for the implementation of international law. 3. The self-interest argument. [I]t is in the interest of business to see human rights protected. The rule of law protects investments by guaranteeing political stability. A company tarnished by controversies around hr [human rights] violation can see its reputation destroyed and its profitability threatened 4. The responsibility argument. tncs have an enormous influence and power in the countries where they do their business. And with power comes responsibility to contribute to the promotion and protections of hr [human rights]. 5. The Universal Declaration argument. The Universal Declaration of hr [Human Rights] calls upon all organs of society to protect and promote hr [human rights].466 e Nongovernmental Organizations’ Argument for csr Historically, the modus operandi of ngos467 when it came to tncs was generally one of confrontation, whether through boycotts or “shame and blame” tactics. Some ngos, however, have supported csr initiatives by tncs and have changed their strategy to one of collaboration.468 The amount of ngos collaborating with tncs results from ngos being considered active and, in most instances, crucial actors/participants in the human rights and business debate. This collaboration has resulted in some ngos and tncs creating a new set of 465 Mary Robinson, Beyond Good Intentions: Corporate Citizenship for a New Century, Speech, rsa World Leaders Lecture, London (May 7, 2002), www.angelfire.com/journal2/comuni carse/beyondgood.pdf (last visited Dec. 12, 2009). 466 Mullerat, Human Face, supra note 291, at 16. 467 See Dr. Isabella D. Bunn, Global Advocacy for Corporate Accountability: Transatlantic Perspectives from the ngo Community, 19 am. U. Int’L L. Rev. 1265 (2004) (listing various European-based ngos that are involved in corporate social responsibility and accountability issues). 468 Id.

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regulatory institutions that seek to engage in “co-regulation” initiatives.469 These co-regulation initiatives involve companies and civil society organizations, and/or governmental and international agencies coming together to promote standard setting, monitoring, reporting, auditing, certification, stakeholder dialogues and “best practice learning.”470 Co-regulation seeks to address the weaknesses that characterizes codes of conduct and self-regulation related to csr. Through co-regulation some tncs have begun to accept that labor, environmental and human rights law also apply to tncs.471 2 Arguments against csr Interestingly, the arguments against csr include a cacophony of voices from an assortment of unlikely cohorts – ngos, business organizations, academicians, human rights activists, and corporations. These arguments gained renewed traction, as well as reignited proponents of csr to push harder for such initiatives, with the publishing of Aneel Karnani’s Wall Street Journal article, The Case Against Corporate Social Responsibility.472 Karnani argued that csr, as appealing as it is, is “an illusion, and a potentially dangerous one,” because no matter how well intentioned a company’s motives are, any expenditure of corporate profits to promote csr “will end up increasing social welfare.”473 Notwithstanding Karnani’s edict that csr is bad for business and Friedman’s postulate that the business of business is not corporate social responsibility,474 other scholars and prominent international lawyers agree that the business community has reached an almost a clear consensus that csr is a part of business going forward. Henderson states that “as against this 469 See generally Peter Utting, Corporate Responsibility and the Movement of Business, 15 Dev. in Prac. 3/4, 382 (June 2005), available at http://www.unrisd.org/80256B3C005BCCF9/ (httpAuxPages)/67924234EC32460FC125705A002F5FC3/$file/MovBus.pdf (last visited Feb. 2, 2009). 470 Id. 471 Id. 472 See Aneel Karnani, The Case Against Corporate Social Responsibility, Wall st. J. (Aug. 23, 2010), http://online.wsj.com/article/SB10001424052748703338004575230112664504890. html (last visited Oct. 11, 2010). Karnani is a Professor of Strategy at the University of Michigan’s Stephen M. Ross School of Business; see also Reich, supra note 392 (calling csr as “meaningless as cotton candy.”). 473 Id. 474 “[F]ew trends could so thoroughly undermine the very foundation of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their shareholders as possible. This is a fundamental corporate doctrine.” Friedman, supra note 217.

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general trend toward acceptance, advocacy and diffusion of csr, dissenting or even skeptical voices appear to be very much in the minority.”475 Mullerat also opines, “[t]oday, while there are still remnants of Friedman’s thinking around, most business leaders consider that, in addition to making profits for the shareholders, companies also have duties to the shareholders, sustainable development and human rights.”476 a The Shareholder Primacy Theory The main argument against employing csr in any fashion is predicated upon Friedman’s stockholder/shareholder primacy theory.477 Corporations are structured so that the financial interests of the shareholder generally take ­primacy over all other interests.478 Business advocates and scholars have championed the shareholder primacy model as the only model of corporate governance that could deliver sustained economic performance.479 This theory is being challenged in light of recent corporate scandals and the 2008 financial crisis.480 csr is viewed as infringing upon established principles of corporate law, the law of agency and shareholder primacy principles, and places non-shareholder stakeholders on par with the owners of the company (shareholders). Under the shareholder primacy principle, any voluntary redirection from the pursuit of profits by corporate management violates agency and contractual employment principles and is therefore impermissible. Moreover, proponents of the shareholder primacy theory posit that corporations benefit the public good through their shareholders, the trickle-down effect. Since the sole purpose of a corporation is to pursue profits, which are distributed to its shareholders thereby creating wealth, which increases social welfare. Simply put, “[s]ociety benefits when corporations increase shareholder’s profits: an increase in corporate profits results in an increase of corporate taxes paid, increases in tax

475 Henderson, supra note 444, at 38–39. 476 Mullerat, Human Face, supra note 291, at 2. 477 See D. Gordon Smith, The Shareholder Primacy Norm, 23 J. Corp. L. 277, 298 (1998). 478 See generally Kent Greenfield, New Principles for Corporate Law, 1 Hastings Bus. L. J. 89 (2005). Greenfield contends that corporate law should be rewritten to include new principles that focus on the protection of the public good. See also Handy, supra note 556, at 5 (discussing that company law in America and the uk are both out-of-date and that it no longer fits the reality of business in the knowledge economy.). 479 See Margaret M. Blair, Directors Duties in a Post-Enron World: Why Language Matters, 38 Wake Forest L. Rev. 885, 888 (2003). 480 Id. at 889.

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revenues results in more secure employees, and more secure employees creates a more stable community.”481 If it were only that simple. It is well documented that tncs do not pay their fair share in taxes. Companies have intentionally relocated outside of their home country in search of cheaper labor and lax environmental and labor laws. Moreover, extractive industries’ practices of relocation, sometimes forcibly, of indigenous peoples and environmental degradation to native lands have done anything but create a more stable community. And yet, this principal line of reasoning remains the main deterrent in the push for binding regulations based upon the underlying premise that any diversion of corporate funds to measures that cannot be attributed to making profits is not only unjustified but also illegal.482 The argument that csr will reduce profits is actually a red herring and a  non-starter. Almost any business decision can reduce profits. Moreover, changes in the marketplace, such as war, misguided economic policies and internal political strife, can reduce profits. Corporate reactions to domestic or global financial crises enacted to sustain a company’s profit margin can reduce and, in light of the Great Depression and the 2008 financial crisis, have reduced profits. csr initiatives because they are viewed as driven by the demands of external stakeholders have been unfairly criticized for being unprofitable. The Levi Strauss Company is often held up as a model of what happens when a company adopts a csr value driven policy. In 1998, Levi Strauss adopted a csr management policy. Between 1998 and 2000, Levi’s sales fell almost 25 percent.483 Arguably in the short term, Levi’s csr initiatives affected its bottom line. In the long term, this may not have been the case. Moreover, Levi’s declining sales could have been the result of a confluence of other external and even internal factors. Another argument against csr is actually an argument for binding regulations. Considering the fact that csr, as the very term is generally understood, involves only voluntary measures, which can be replaced or discontinued at a corporate ceo’s whim, csr initiatives are not legally binding and are unenforceable. Mullerat notes that “the great advantage of voluntary rules is that you can break them whenever they turn out to be inconvenient.”484 Several 481 Elisa Scalise, The Code for Corporate Citizenship: States Should Amend Statutes Governing Corporations and Enable Corporations to be Good Citizens, 29 Seattle U. L. Rev. 275, 281 (2005) (citing Benedict Sheehy, The Importance of Corporate Models: Economic and Jurisprudential Values and the Future of Corporate Law, 2 DePaul Bus. & Com. L. J. 463, 481 (2004)). 482 Does this mean that binding regulations that do not involve the use of corporate funds in order to comply with the law would be justified as well as legal? 483 See Henderson, supra note 444, at 60. 484 Mullerat, Human Face, supra note 291, at 9.

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notable scholars agree that csr is a means to avoid government regulations. James Rowe argues that csr initiatives are simply a business strategy for quelling discontent with corporate power. He opines that “the primary cost of supporting voluntary codes is the forestallment of precisely what global civil society hopes to gain through them the binding regulations of transnational corporations.”485 To support this premise, Rowe conducted a historical analysis of two recent periods of crisis for the business world: 1960–1976 (when developing countries called for a New International Economic Order) and 1998– 2005 (anti-globalization protests and corporate scandals, i.e., Enron and World Com, increased the call for regulation).486 He concluded that it is doubtful whether codes of conduct will yield to mandatory binding regulations. Some scholars suggest that csr is a continuation of colonialism. For corporations in developing countries, who are following the Anglo-American corporate tradition as generators of wealth at any costs, csr is viewed as “essentially a colonialist effort – another effort by developed states to regulate the rest of the world.”487 It is ludicrous to suggest that csr as a tool to regulate tncs, albeit voluntarily, is the equivalent of another effort by the developed world to regulate the rest of the world. Since most of the tncs, whose corporate activities have transnational implications have Western countries as their home states, regulations to control these tncs should emanate from the developed world. It is, however, this seemingly uniform character of regulations in the international context that gives rise to fears of neocolonialism or as Deepak Lal has termed it “ecoimperialism,”488 which results from imposition in developing countries of environmental norms that were not designed for the local situation in mind.489 The crux of this argument lies in an outmoded and self-serving rationale: the developed world became so because corporate activities were allowed to flourish without much regulation, thereby creating wealth. Accordingly, this is the only operational format for other countries to increase wealth. Such reasoning is not only illogical and borders on delusion, it also seeks to over-simplify today’s reality, disregards the laws of physics, chemistry, biology and botany and ignores the non-replenishing nature of many aspects of the planet (the world community). If the only wealth creation model disregards sustainable development and environmental degradation, then, 485 Rowe, infra Chapter 3, note 98. 486 See generally id. 487 Zerk, supra note 297, at 43. 488 See generally Deepak Lal, The New Cultural Imperialism: The Green and Economic Development, The Inaugural Julian Simon Memorial Lecture, Liberty Institute (Dec. 9, 2000), http://www.econ.ucla.edu/workingpapers/wp814.pdf (last visited May 15, 2010). 489 Id. 637.

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ultimately, the very resources that are the basis of wealth creation will be depleted and, with them, the means to create wealth. csr is considered by many to usurp the government’s role in social welfare. Opponents of imposing human rights obligations on business argue that it is not the duty of business to address social ills. The government, not corporate executives, are equipped to address social issues by passing laws and regulations. While it may not be the primary role of business to alleviate poverty and other social ills, business benefits if poverty is alleviated. Of course, a business that exploits poverty in order to relocate to countries where labor laws and worker rights are violated under the aegis of profit maximization, human rights activists would assail even if the business has a csr policy. Unfortunately, many companies spend considerable time and money lobbying legislatures on areas of interest that may impact a company’s operations. Such lobbying may involve blocking legislation that serves a social end in order for the company to continue to operate without regulations that may increase costs or effect profits.490 b The Human Rights Argument against csr Many ngos view csr initiatives simply as public relations tools and dilatory corporate tactics designed to permanently forestall any meaningful movement to enact binding regulations against tncs for abusing human rights. Irene Khan, on behalf of ai, steadfastly advocated against csr initiatives being used as a panacea for or an alternative to mandatory binding regulations. If csr is not to be a pr [public relations] exercise, then companies cannot look at human rights just as a luxury for the good times to be supported when the economy is good – or an optional extra for good boys and girls. Human rights are there for all people for all times. Companies, as responsible members of society, must uphold the principle under the rule of law, as do governments. That is the expectation not just of ngos, but of a great many people.491 Recognizing that civil society “cannot entrust human rights to the market place,”492 ai considers csr as one step in a two-pronged approach to addressing 490 See The Frank-Dodd Wall Street Reform and Consumer Protection Act, p.l. 111–203, h.r. 4173, and infra Chapter 3, note 111 (discussing the lobbying efforts that resulted in water downed legislation). 491 Irene Khan, Human Rights for All Project, Speech, Novartis Conference, Basle (Nov. 27, 2003), http://www.independentsday.org/project_1210/essays/donnacha_delong.php (last visited Jan. 6, 2008); see also Khan, Taking Stock, supra note 391. 492 Khan, Taking Stock, supra note 391.

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human rights abuses by tncs. The first step is to pursue voluntary approaches – codes, commitments and public pressure; the second step is to continually campaign for legal accountability mechanisms.493 Khan explains. Obviously the best way to hold companies legally responsible is under national law, but in the era of global economic integration depending simply on national laws is not enough. Quality of laws vary from country to country. In any case, multinationals operate across borders. We need an international legal framework that reflects ethical standards of global relevance. And we don’t need to invent these ethical standards – they exist in universal human rights… [I]nternational law would not supplant national laws but would buttress national efforts, would act as a benchmark and as a stop-gap where failures at the national level left companies off the hook.494 Corporate Watch, an anti-corporation ngo based in the United Kingdom, noted in its Corporate Watch Report 2006 that csr is an effective strategy for: bolstering a company’s public image; avoiding regulation; gaining legitimacy and access to markets and decision makers; and shifting the ground towards privatisation of public functions. csr enables business to propose ineffective, voluntary, market-based solutions to social and environmental crises under the guise of being responsible. This deflects blame for problems caused by corporate operations away from the company, and protects companies’ interest while hampering efforts to tackle the root causes of social and environmental injustice.495 Mullerat has also noted that many scholars and human rights activists believe that csr initiatives are designed to avoid regulation and that such initiatives “permit the government and the public to believe that compulsory rules are unnecessary as the same objectives are being met by other means.”496 According to Mullerat, there is cynicism that csr is simply a “pr [public relations] smokescreen for companies to hide behind.”497 493 Id. at 3. 494 Id.; see also David Petrasek, Business and Human Rights: Towards legal accountability, Speech, World Economic Forum, Davos (Jan. 23, 2003), www.amnesty.org/en/library/info/ IOR50/001/2003 (last visited Oct. 22, 2006). 495 What’s Wrong with Corporate Social Responsibility? 2, Corporate Watch Report 2006, Corporatewatch.org, www.corporatewatch.org?lid=2670 (last visited Jan. 1, 2007). 496 Mullerat, Human Face, supra note 291, at 9. 497 Id. (internal citations omitted).

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Although efforts persist to hold tncs accountable via binding regulations, adhering to and promoting respect for human rights by developing or acceding to voluntary csr policies and practices do not mean that a corporation is respecting human rights. ngos and human rights activists claim that many csr measures are public relations campaigns that simply highlight compliance with industry best practices. Industry best practices, however, may still result in human rights abuses where enforcement is lax or regulations nonexistent. For example, the Anglo-American mining project in Zambia was heavily criticized for failing to install a state-of-the-art furnace to reduce hazardous emissions down to safe levels because of the cost of the furnace.498 The argument was that “[c]orporate socially responsible behavior is heavily circumscribed by batneec principles – ‘best available technology not entailing excessive cost’. In other words the company’s financial health takes precedence over the physical health of the workforce and local residents.”499 The International Federation for Human Rights (fidh) and ai have criticized the European Commission’s stance on csr because it failed to make progress toward a regulatory framework to compliment the voluntariness of csr initiatives. In a joint statement they stated, “fidh and ai regret that the eu focus is on ‘raising awareness’ and ‘exchanging experience’ on csr instead of translating the discourse on csr into effective regulation”500 Oxfam International expressed a similar dissatisfaction with the eu’s focus on csr as opposed to binding measures, noting that codes of conduct rarely “address abuses of economic and social rights. Nor do they consider the role that mne’s play in markets, nor the impact of their activities upon the economic and social development in the host nations. As, such, self-regulation as a sole mechanism for ensuring csr is inadequate.”501 Khan of ai also stressed that a company’s word that it will do the right thing is not enough. [C]ompanies tell us we should trust them, that their voluntary principles will do the trick. But in reality it took further unrest around oil pipelines and oil installations in Nigeria, Colombia and Indonesia to bring oil 498 See Richard Meeran, Corporations, Human Rights and Transnational Litigation (Jan. 29, 2003), Monash University, Castan Centre for Human Rights Law, http://www.law.monash .edu.au/castancentre/events/2003/meeranpaper.html (last visited June 28, 2010). 499 Id. 500 See New eu Communication on Corporate Social Responsibility: a Missed Opportunity, fidh, International Federation for Human Rights (Mar. 24, 2006), http://www.fidh.org/ New-EU-Communication-on-Corporate-Social (last visited Nov. 2, 2010). 501 Oxfam, supra note 356, at 7.

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c­ ompanies in the us, uk and now Norway and the Netherlands to endorse a voluntary principles for the use of security forces in the extraction industry. It was the fear of a consumer boycott and concerned effort by the ngos that led governments and industry to put in place the Kimberley process of international certification of diamonds so that conflict diamonds could be eradicated.502 Many tncs currently demonstrate their respect for human rights through voluntary, nonbinding measures, initiatives or policies. These csr measures, ostensibly, appear to be human rights policies designed to adhere to specific human rights instruments. Many companies acknowledge that their internal csr policies or adherence to voluntary guidelines set forth by intergovernmental organizations (igos), supranational organizations, trade related industry groups, the Global Compact, the Sullivan Principles, Kimberley Principles, oecd Guidelines or the International Labour Organisation (ilo) are not human rights policies.503 Some opponents of csr initiatives consider them a step in the right direction, but argue that they do not go far enough. Others view the csr movement as a means to obfuscate the need for binding regulations and to forestall them indefinitely. Many opponents are business executives and business entrepreneurs. Dame Anita Roddick, founder of The Body Shop,504 one of the architects of the responsible business movement and a campaigner for human rights and trade justice, recognized that businesses as “organs of society” are members of a global, interdependent and an interrelated world. She stressed 502 Irene Khan, Speech at the World Economic Forum, Davos (Jan. 23, 2003), http://www.amne sty.org/en/library/asset/IOR50/002/2003/en/2bab52f0-d726-11dd-b0cc-1f0860013475/ ior500022003en.html (last visited Dec. 1, 2011). 503 There are currently 271 companies listed on Business and Human Rights Resource Centre’s website that have adopted a formal company policy statement explicitly referring to the udhr. Business and Human Rights, http://www.business-humanrights.org/Documents/ Policies (last visited Jan. 4, 2011). 504 Dame Anita Roddick (1942–2007) founded the Body Shop, a cosmetics company that produces beauty products based upon the principal of ethical consumerism. The Body Shop was one of the first companies to prohibit the use of ingredients tested on animals and one of the first to promote fair trade with Third World countries, human rights and environmental issues. The Body Shop’s website opens with a quote from Dame Anita Roddick. “The business of business should not just be about money, it should be about responsibility. It should be about public good, not private greed.” The Body Shop, http://www.thebodyshop.com/_en/_ww/services/aboutus_company.aspx (last visited Feb. 23, 2011).

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that businesses should operate in a manner that was cognizant of their human rights obligations. According, to Dame Roddick, the csr movement has little to do with a business operating in a socially responsible manner. She surmised that adding the word “corporate” to the term social responsibility has allowed business to “hijack” the movement for more socially responsible business and has allowed it to control the debate because it now controls the language of the debate.505 Dame Roddick opined: Corporate social responsibility, I don’t think it’s working. I think it’s, it’s been taken over by the big management houses, marketing houses, been taken over by the big groups like kpmg, like Arthur Anderson. It’s a huge money-building operation now. I think maybe it’s the word “corporate.”506 In law, the insertion of a word, even a comma, can and often does change the meaning and intent of a phrase that can result in a different legal analysis. The csr movement should be a subset of the drive to hold tncs accountable for their actions. Instead, the movement has been used to deflect from the real issues: (1) how to create new legal paradigms that hold a non-state fictional entity, whose activities are global in scope and legally bestowed with enumerated human rights, accountable for actions that would result in legal accountability for natural persons; and (2) what mechanisms should be used to do so. csr policies and practices, no matter how well intentioned, are no substitutes for ensuring that tncs are held legally accountable for violating human rights abuses and that individuals have remedies for such violations. Accordingly, as Dame Roddick lamented, the movement to regulate business activities that violate human rights will not produce any real socially responsible businesses until businesses are “measured by a financial bottom line that does include human rights, social justice and workers justice…”507 505 See Anita Roddick: Corporate Social Responsibility? GlobalIssues.org (June 8, 2007), http:// www.globalissues.org/video/733/anita-roddickcorporate-social-responsibility (last visited Oct. 13, 2008). The power to control the contours of language allows one to effectively change the dynamics of a debate. Lasswell postulated that the manipulation of information is a critical dimension of power. See generally Falk, supra Chapter 1, note 33, at 1995. tncs have rephrased and reshaped the business and human rights debate by touting self-regulation and voluntary initiatives as if they were manna from heaven. The economic largess of tncs translates into power because it has allowed them to control what gets communicated to decision makers and manipulate that information to their advantage. 506 Id. 507 Id.

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Identifying the Participants in the Human Rights and Business Debate The second intellectual task is to identify the participants. In order to propagate viable solutions to the problem under review, the observer, after clarifying her observational standpoint, must identify the participants involved in or affected by the problem. With regard to the human rights and business debate, the participants are the “world community.” Such a broad identification, however, does little to advance a resolution to the problem. Accordingly, “who,” in the “world community,” is most directly impacted by the problem needs to be further delineated. Broadly speaking, participants are actors, either individually or through group associations, that act to optimize values (preferred events) through institutions affecting resources.1 “[A] participant in the constitutive process… is an individual or an entity which has at least minimum access to the process of authority in the sense that it can make claims or be subject to claims.”2 On a macro level, the participants are those individuals and group associations that comprise the world community.3 On a micro level, the participants will be members of a particular group that are bound by a territorial boundary that is being affected by deleterious activities, policies and practices of tncs. Individuals, indigenous peoples and tncs may be those sharing a high frequency of perspectives but not necessarily having the same territorial boundary. When framed under the traditional state-centric, positivist concept, the main or sole participant in the human rights and business debate is the nationstate, since states are the traditional subjects of international law. States or governments, however, are legal fictions, represented by state officials (individuals). However, the traditional concept that states are the sole subjects of international law has been eroding continuously to where it is now widely 1 Eisuke Suzuki, The New Haven School of Jurisprudence and Non-State Actors in International Law in Policy Perspective, 46 (Feb. 20, 2013), available at http://kgur.kwansei.ac.jp/dspace/ bitstream/10236/10570/1/42-4.pdf. 2 McDougal & Reisman, World Constitutive Process, supra Chapter 1, note 109, at 262. 3 The New Haven School uses the term “community” to denote the types of “community or communities that can with a defined geographical area or an aggregate of participants that transcend boundaries.” Id.

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accepted that states are the primary subjects of international law, but not the sole subjects. McDougal and Lasswell offer an alternate way of classifying international actors. Instead of viewing them as “subjects,” they consider them to be participants. McDougal and Leighton consider the nation-state as the “predominant” participant, but are not the “sole” participant. They and other scholars contend that states were never the “sole” subjects under international law and that this principle is actually a misrepresentation of international law. McDougal and Leighton assail the concept that states are the sole subjects of international law as a “nineteenth century canard,” which needs to change to embrace the international importance of tncs.4 “[T]he theoretical relation of ‘states’ to the exclusion of individuals is in fact of relatively recent origin, a product of nineteenth century positivism.”5 Since 1945, there has been a shift in the doctrine that only states are subjects of international law and a move toward a broader participation to include nonstate actors. By positioning the individual at the center of international law, adherents of policy-oriented jurisprudence stand firm in their affirmation that the purpose of international law, indeed, any law, but more specifically international human rights law, is to protect the individual6 and to seek a world public order of human dignity.7 Therefore, individuals or associations of individuals are the main participants under policy-oriented jurisprudence. The current debate is framed in such a manner that places the nation-state and tncs as the primary participants. All, if not most, of the literature on the debate is captioned by placing a term that denotes a corporate entity first followed by 4 Myres S. McDougal & Gertude Leighton, The Rights of Man in the World Community: Constitutional Illusions Versus Rational Action, 14 Law & Contemp. Probs. 490 (1949) [hereinafter McDougal & Leighton, The Rights of Man], available at http://digitalcommons .law.yale.edu/fss_papers/2482 (last visited Aug. 5, 2011). 5 Id. at 509; see also Duruigbo, supra Chapter 1, note 122, at 234. 6 Corporations also consists of individuals, who have human rights, i.e., shareholders, employees. Human rights law as originally envisioned and formulated only covered natural persons. The primordial human right, the right to life, cannot be conferred on an entity. Human dignity, by its very term, applies only to natural persons. Corporations are not born. They come into existence through the corporate charter, and give birth to their progeny through mergers and acquisitions. Death, however, does not naturally follow corporate birth. Perpetual life is a corporate option that evades natural persons. 7 McDougal and Reisman note that international law’s main emphasis has traditionally been on inter-state relations. This has led to international law being resistant to recognizing how other participants are involved in or influence the lawmaking process. See generally McDougal & Reisman, World Constitutive Process, supra Chapter 1, note 109, at 261, n. 7.

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the term human rights – either expressed or implied. The United Nations, in its various attempts to regulate tncs, used terms that reflected that the primary emphasis was on business rights as opposed to providing remedies for individuals8: United Nations Draft International Code of Conduct on Transnational Corporations (1984), Code of Conduct for Transnational Corporations (1990), the Norms on the Responsibilities of Transnational (the Norms) Corporations and Other Business Enterprises with regard to Human Rights (2003). With the appointment of Special Representative of the SecretaryGeneral on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises (2005), however, the term “human rights” is placed in the primary position. At every juncture, under un led attempts to resolve the “business and human rights debate,” the rights of tncs and other business entities have taken primacy and, to paraphrase the concerns of Dame Anita Roddick, “high jacked” the debate to secure their interests. Although this observation may seem trite, one of the first rules of communication theory is to control the language and content of what is being communicated.9 The order, placement and syntax in which words are used can control what is being communicated and the outcome of an issue. The trial and appellate lawyer’s tasks are to frame the issue, control the presentation and ultimately the argument in a manner that persuades the jury or judge in favor of the lawyer’s position. The actual facts can be either obscured or highlighted by how the issue is framed. At the appellate level, all that the court will consider sometimes is the written presentation. 8 Principle 1 of the Rio Declaration does place primary emphasis on human beings. “Human beings are at the centre of concerns for sustainable development. They are entitled to a healthy and productive life in harmony with nature.” Rio Declaration on Environment and Development, E/CN.17/1997/8, available at www.un.org/esa/documents/ecosoc/cn17/1997/ ecn171997-8.htm. 9 Lasswell recognized that communication is at the heart of all human interactions, and has been since the beginnings of time. As humankind progressed, so did the means and modalities of communications, from smoke signals to drum beats to hieroglyphics to painted images left inside primitive caves to etchings in stone tables and prayers on papyrus parchment to the printed texts burned during the Enlightenment to Morse code, radio, television and now social media. How humankind has sought to convey and express feelings, wants and desires have all found expression via communication channels. Miscommunications because of wrongly interpreted words, gestures and deeds have resulted in atrocities and singular acts of violence. Similarly, deliberate interpretations of words to dehumanize and delegitimize the human rights of individuals and peoples under the understanding that the edicts of the legislature as interpreted by the judiciary are law still reverberates.

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Who Are the Participants?

Under policy-oriented jurisprudence, the participants are those given the power to make decisions: judges, legislators, other actors with “decision competence” or individuals who play a formal role in influencing decisions. International law, however, does not refer to actors as participants. A new terminology may actually allow a loosening of barriers that prohibit providing remedies to victims abused by tncs. In discussing human rights abuses in internal conflicts, Wiessner and Willard provide the following analysis for identifying the relevant participants: “The [New Haven School] approach asks, who is involved or who is a participant in the context under scrutiny?”10 In the human rights and business debate, there is a wide swath of participants.11 Some of them are at the center of the debate and others radiate out from this center based on their interactions with the core participants and play roles in setting policy and making decisions simply due to their collective, even individual, political and economic clout, which is sometimes backed by military force. The participants involved are the victims (individuals, indigenous peoples and groups of individuals), tncs and other business entities as perpetrators, nationstates, the United Nations and its agencies, nongovernmental organizations, intergovernmental organizations, international law scholars, international relations scholars, international lawyers (advocates for victims and advocates for tncs), human rights activists, anti-corporation activists, antiglobalization activists, civil society groups and the media.12 This listing is neither exhaustive nor hierarchical, with the exception of identifying individuals as the primary participants, tncs next, and then the nation-state – the three participants involved in the problem under inquiry. For Wiessner and Willard, participants are “all who respond in varying ways to instances of human rights abuses or 10 11

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Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 323. David Weissbrodt, one of the primary observers and decision makers in drafting the Norms consulted with various participants. John Ruggie, the srsg, in carrying out his mandate, also consulted with various participants. The perspectives of some of these participants are discussed infra Chapter 3. Steven Ratner identifies six major actors who participate in the international legal process: states, individuals, peoples, international organizations, nongovernmental organizations and business entities. He also includes organized religions, sports entities, and transnational organized crime or terrorist groups as possible participants. He identifies these participants on the basis that they are moral actors who can make moral claims and society can prescribe ethical behavior for them. See Steven Ratner, Is International Law Impartial? 11 Legal Theory 39 (2005) [hereinafter, Ratner, International Law], available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=643821 (last visited Sept. 19, 2010).

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alleged abuses…”13 private armies (security forces),14 pressure groups,15 lobbyists,16 political parties,17 private associations18 and the media.19 All of these participants may act on behalf of themselves or other participants.20 Decision makers, those who participate in the process of authoritative and controlling decision, may also be participants. Decision makers are those with formal competence to make decisions, such as judges, arbitrators, legislators, and intergovernmental organizations. Observers may also be participants. In identifying participants, the observer must cast a wide net – to make a comprehensive inventory of all participants involved in the social process. By doing so, any actor who has the actual or potential influence on the decision is considered a participant. This allows the observer to maximize her effectiveness while empowering marginalized actors to play a greater role in the decision making process.21 The participants’ self-identification and group identification may allow them to move in and out of subcategories based upon their individual perspectives or perspectives as a member of a particular group. Accordingly, participants are identified within the social context in which the problem is situated. A Categorizing the Participants The universe of participants is voluminous and can be categorized based upon the participants’ concept of theories about international law, international human rights law, sovereignty and extraterritoriality principles, and whether any of the foregoing preclude the victims from obtaining a remedy under international law. The concept of nonintervention forms the bedrock of sovereignty, 13 14 15

16 17 18

19 20 21

Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 323. Id. Many corporations act directly through international pressure groups or negotiate directly with nation-state representatives. See McDougal, Lasswell & Reisman, World Constitutive Process, supra Chapter 1, note 109, at 268. See Wiessner, Law in the 21st Century, supra Chapter 1, note 99, at 143. Many corporations act indirectly through political parties. See McDougal, Lasswell & Reisman, World Constitutive Process, supra Chapter 1, note 109, at 268. McDougal, Lasswell & Reisman define private associations as “a nongovernmental organization formed for the purpose of pursuing scope values other than power.” These entities can be international in membership, goals and arenas of activity. Id. at 265–266. See Monica Hakimi, The Media as Participants in the International Legal Process, 16 Duke J. Comp. & Int’l L. 1 (2006). See Reisman, Wiessner & Willard, A Brief Introduction, supra Chapter 1, note 21. See Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 32.

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which international law is premised upon. Accordingly, the resistance to binding codes of conduct rests upon the principle that sovereignty precludes the extraterritorial application of domestic laws to tncs operating in host states. Globalization, however, has impacted the traditional notion of sovereignty and the international human rights regime has eviscerated the notion of nonintervention. Yet, when it comes to the human rights and business debate, sovereignty remains the primary battle cry to rally participants against binding regulations. The participants are analyzed with regard to their perspectives on what modalities are preferable to resolving the human rights and business debate and grouped into three categories: (1) those who support only voluntary codes of conduct (soft law); (2) those who favor only binding, mandatory regulations (hard law); and (3) those who favor voluntary codes of conduct with the view that mandatory regulations may emerge from these voluntary codes. In essence, the participants can be grouped as those who favor no law, hard law (binding regulations), or soft law (internationally accepted voluntary codes) that may eventually form the predicate for hard law. In many instances, depending upon the issues at stake, the same participants may represent differing interests depending upon the issues. Initially, the participants that favored and opposed voluntary codes of conduct did not represent a range of individuals or group associations of individuals. When the call for voluntary codes of conduct emerged, the participants were decision makers connected to business corporations,22 corporate executives, and a sprinkling of ngos. These participants focused on whether corporate social responsibility or corporate responsibility initiatives were the proper tools to address tncs’ obligations, to the extent that they had any, for human rights abuses. With increased publicity about and scrutiny over human rights abuses committed by tncs, the amount of participants increased and became more diverse as the language of the debate switched from voluntary to binding regulations to voluntary codes of conduct. The diversity of participants included those from different racial, national and ethnic minority backgrounds. Some representatives from newly independent nation-states, corporate executives, business associations, religious organizations and institutions, ngos, civil society groups, international human rights lawyers, academicians, legal experts and anti-corporate and anti-globalization advocates insisted on binding regulations. There were just as many participants that had given their support to defeating or limiting any binding 22

See generally Rev. Leon Sullivan and The Sullivan Principles, infra Chapter 4, notes 324– 326 and accompanying text.

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regulations. These participants included private associations of business groups, lobbyists, international corporate lawyers, international relation scholars, corporate executives, United Nations appointed consultants, representatives of nation states. a

Individuals/Indigenous Peoples and Other Vulnerable Groups: The Victims Individuals and indigenous peoples or other vulnerable groups are sometimes unable to represent their interests on the international plane. Not all treaty bodies and regional systems allow individual or group complaints.23 The United Nations very rarely, if at all, allow individuals representing their sole concerns to speak before the General Assembly. In the legal arena, pro se litigants are at an extreme disadvantage when faced with pursing claims against tncs for human rights abuses. The costs of litigation and the arsenal of lawyers that tncs have to represent their interests can be staggering. Individuals and vulnerable groups generally speak through spokespersons. These spokespersons, as participants, may be international human rights lawyers, human rights activists, ngos, scholarly organizations, trade unions, civil society groups and/ or governments. 23

There are ten core human rights treaty bodies that deal with a broad range of human rights. Not all of the treaties allow individual complaints. International Covenant on Civil and Political Rights (iccpr), Dec. 16, 1966, S. Treaty Doc. No. 95-20, 6 I.L.M. 368 (1967), 999 U.N.T.S. 171; International Covenant on Economic, Social and Cultural Rights (icescr), Dec. 16, 1966, S. Treaty Doc. No. 95-19, 6 I.L.M. 360 (1967), 993 U.N.T.S. 3; Convention on the Elimination of All Forms of Discrimination Against Women, Dec. 18, 1979, 1249 U.N.T.S. 13; Convention Against Torture, and Other Cruel, Inhumane and Degrading Treatment or Punishment (cat), G.A. res. 39/46, Annex, 39 un gaor Supp. (No. 51) at 197, un Doc. A/39/51 (1984), entered into force June 26, 1987; Convention on the Rights of Persons with Disabilities (crpd), G.A. Res. 61/106, Annex I, un gaor, 61st Sess., Supp. No. 49, at 65, un Doc. A/61/49 (2006), entered into force May 3, 2008, under Optional Protocol to the crpd, G.A. Res. 61/106, Annex II, un gaor, 61st Sess., Supp. No. 49, at 80, un Doc. A/61/49 (2006), entered into force May 3, 2008; International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families (cwm), G.A. res. 45/158, annex, 45 un gaor Supp. (No. 49A) at 262, un Doc. A/45/49 (1990), entered into force July 1, 2003. through acceptance of Article 77; International Convention on All Forms of Racial Discrimination (cerd), 660 U.N.T.S. 195, entered into force Jan. 4, 1969, through the acceptance of Article 14 of cerd; Convention on the Rights of the Child (crc), Nov. 20, 1989, 1577 U.N.T.S. 3. the Human Rights Committee (hrc); Optional Protocol to the Convention Against Torture, and Other Cruel, Inhumane and Degrading Treatment or Punishment, Dec. 18, 2002, entered into force June 22, 2006; Optional Protocol to the Convention on the Rights of Persons with Disabilities, Dec. 12, 2006, entered into force May 3, 2008.

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b Transnational Corporations: The Perpetrators Suffice it to say that all fictitious entities must speak and operate through natural persons. Disregarding theoretical rhetoric about whether or not a corporate entity can be held accountable for human rights abuses, corporate spokespersons, as participants, may be tribal leaders or designated indigenous leaders, international lawyers, legal experts, lobbyists and even representatives of nation-states (diplomats). Some favor binding codes. Most overwhelmingly favor voluntary codes of conduct. c Nation-States Nation-states, like tncs, are, empirically speaking, fictitious entities that speak through natural persons. These spokespersons may be diplomats, government officials, and representatives on domestic and international bodies. (A discussion on how the nation-state became a participant is explored in greater detail in Chapter 3, The Westphalian State: Has It Outlived its Purpose?) d The United Nations The un, in effectuating the mandate under its Charter, has sought to exercise its moral authority to broker a resolution to the conundrum that leaves individuals and indigenous peoples without any recourse under international law for business-related human rights abuses. The Norms created false hopes among human rights activists that the un would quicken the pace of human rights protection. Some business representatives and states did not welcome the un entry into the fray.24 e The Media Generally, the media is not considered a participant in the lawmaking process because they merely report or disseminate information. Yet, reporting and disseminating are communication functions. This makes the media the “nerves of the international legal process”25 and makes the media’s role a “critical function in the international legal process.”26 The media provides instantaneous and around the clock information, which allows it to operate in the background at a deeper level of the public subconscious. All human rights campaigns have used the media as a channel through which to organize and garner 24

David Kinley, Justine Nolan & Natalie Zerial, The Politics of Corporate Social Responsibility: Reflections on the United Nations Human Rights Norms for Corporations, 25 C. & slj 30, 31 (2007), available at http://ssrn.com/abstract=962981 (last visited Apr. 30, 2010). 25 Hakimi, supra note 19, at 2. 26 Id.

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support for their causes. Likewise, multinational corporations have used and continue to use media to oppose binding regulations and to demonstrate the good works that corporations do through philanthropy and corporate social responsibility initiatives, or simply to tell their side of the story. The media, perhaps more so than any other participant besides the nation-state and individuals, participates in the prescription, codification, invocation, application and termination of international law.27 f Observers There are various legal experts who function as participants in their individual capacities and on behalf of others. These experts are grouped based upon whether they cling to the traditional concepts of international law or not. David Weissbrodt and John Ruggie will be highlighted because these two were instrumental in assisting the un with drafting obligations to protect human rights. B The Westphalian Nation-State: Has It Outlived Its Purpose? In today’s globalized world, many scholars contend that the Westphalian concept of the nation-state has outlived its purpose and usefulness. Geopolitical events have always effectuated changes in domestic and international economies and foreign and domestic affairs. One such event, Europe’s Thirty Years War, which ended with the Peace of Westphalia in 1648,28 engendered the concept of the “nation-state” that forms the basis of the modern international system: the Westphalian system. Modern international relations theorists consider the Peace of Westphalia as the beginning of the international system with which the discipline deals.29 The treaty, to a great extent, controls how 27 28

29

For a detailed review of the media’s role as a participant, see Hakimi, supra note 19. The Peace of Westphalia is comprised of a pair of treaties (the Treaty of Münster and the Treaty of Osnabrück) that ended both the Thirty Years War and the Eighty Years War. The treaties were signed on October 24 and May 15, 1648 and involved the Holy Roman Emperor Ferdinand III, Germany, Spain, France, Sweden and representatives from the Dutch republic. The Treaty of the Pyrenees, signed in 1659, ending the war between France and Spain, is also often considered part of the treaty. For the full text, see Treaty of Westphalia, Peace Treaty between the Holy Roman Emperor and the King of France and their respective Allies, The Avalon Project, Documents in Law, History and Diplomacy, Yale Law School, available at http://avalon.law.yale.edu/17th_century/westphal.asp (last visited Jan. 12, 2010). Winston P. Nagan & Craig Hammer, The Changing Character of Sovereignty in International Law and International Relations, 9 [hereinafter Nagan, Character of Sovereignty], available at http://milestonesforlife.com/thetaxistand/sov.pdf (last visited Dec. 15, 2009).

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international law is applied to nation-states. The treaty’s key principles are (1) the principle of sovereignty of states and the fundamental right of political self-determination; (2) the principle of (legal) equality between states; and (3) the principle of non-intervention of one state in the internal affairs of another state.30 In addition to establishing fixed territorial boundaries for many of the countries involved in the Thirty Years War, (as well as for the “New World,” and future worlds – “First,” “Second” and “Third” Worlds),31 the Peace of Westphalia changed the relationship between citizens and their rulers. Before the war, people had overlapping political and religious loyalties. With the signing of the treaty, citizens of a particular nation were subjected to the laws of their own respective governments instead of neighboring governments or powers, whether religious or secular. The war, which began as a religious conflict between Protestants and Catholics, established the modern-day system for organizing nation-states into secular and not religious enclaves,32 as well as a precedent of solidifying national boundaries as a result of conquest. Human society strives for predictability and certainty; however, the continued adherence to the Westphalian system seemingly disregards (1) the status of the world’s citizenry when the system evolved in 1648; (2) the technological advancements since then; (3) the traditional state activities that are currently 30

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Although the traditional concept of sovereignty is traceable to the Peace of Westphalia, the current understanding of sovereignty, the equality of member states, began with the 1945 United Nations Charter. “The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in accordance with the following Principles. 1. The Organization is based on the principle of the sovereign equality of all its Members.” un Charter, art. 2, para. 1. The terms First, Second and Third World are outdated models of the geopolitical world beginning with the Cold War and denote the spheres of influence of regional-world powers. The “First World” refers to those countries, primarily Western democratic, industrialized countries, within the American or European political/economic sphere. The “Second World” refers to those countries known as the Eastern bloc of the communist-socialist states. The “Third World” refers to those countries that were nonaligned with the First or Second Worlds and are populated primarily by people of color. All of these terms are political concepts. Economist Alfred Sauvy coined the term “Third World” in 1952 to designate countries that were not aligned with either the First World economic powers of the West or the Soviet Union and its satellites, which were referred to as the Second World. See Ruth Gordon, Afro America and the Third World in the Wake of Hurricane Katrina, 21 Nat. Black L.J. 3, 33 (2009), available at http://journals.cdrs.columbia.edu/nblj/index .php/nblj/article/viewFile/24/17 (last visited Feb. 20, 2011). See generally Nagan, Character of Sovereignty, supra note 29. “The Treaty of Westphalia put an end to religious strife in Europe and laid the juridical foundations of sovereign independence for the European nation-State.” Id.

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delegated or “assigned” to for-profit commercial entities, and the interaction between these entities and the state’s citizenry; and (4) the preeminent prominence of non-state actors, specifically multinational corporations in today’s global economy. The “world”33 in 1648 was undoubtedly vastly different from what it is today, which at that time consisted of only “civilized nations,” which in essence meant European nations. The term “sovereignty” and the Westphalian nation-state were reactions to the Holy Roman Empire’s imperialism.34 The notion of sovereignty arose with the ascendancy of the independent nation state. As European countries began to shake off the influence of the Papacy, the concept of sovereignty provided those in authority with a dual justification for their position. Not only did sovereignty mean that a state was independent from the influence of other states (and arguably, to a lesser extent, the Church), but it also meant that the government-asstate had the right to impose its will on those who resided within its territory.35 The ongoing resistance to holding multinational corporations accountable for human rights violations finds support in Westphalian principles. Principles that John Hilla asserts are the result of “literary effect” and “myth.”36 After tracing the 33

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The “world,” as the term is used here, referred only to Europe. The Western Hemisphere, specifically North and South America, became known as the New World circa 1492, when Spain’s Queen Isabella financed Christopher Columbus’ transnational commercial expedition to find a new route to the East Indies under the doctrine of discovery. See supra note 312 (discussing the doctrine of discovery). Columbus considered the indigenous peoples of the New World his greatest discovery. At that time, Spain refused Columbus’ suggestion to open the new world to slave trading. See Christopher Minster, The First New World Voyage of Christopher Columbus (1492), About.com Guide, (last visited Feb. 2, 2009) available at http:// latinamericanhistory.about.com/od/latinamericatheconquest/p/Columbusfirst.htm. See Nagan, Character of Sovereignty, supra note 29, at 8; see generally Anthony Anghie, Imperialism and the Making of International Law (Cambridge: Cambridge University Press 2005) (International law is based upon a European concept of sovereignty, which focuses on who grants it and who is denied it based upon European countries’ interaction with and conquest of non-European countries). Janet Dine, Companies, International Trade and Human Rights 73 (Cambridge University Press: Cambridge 2005). See generally John Hilla, The Literary Effect of Sovereignty in International Law, 14 Widener L. Rev. 77, 111 (2008). Understanding the historical origins of how the Westphalian system originated is necessary in order to deconstruct and reconstruct a new system that adequately reflects the political, social and economic realities of today’s world.

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historical roots of sovereignty, Hilla concludes that sovereignty did not originate with the Peace of Westphalia. He presents a cogent argument for extending international law to nonstate actors37 by acknowledging that sovereignty as a legal concept has not remained frozen in time. Instead, he asserts that “[s]overeignty has evolved into a concept of international law and relations through roughly five centuries of modification and redefinition by philosophers, political scientists, and legal academicians.”38 Other scholars agree with Hilla’s thesis that sovereignty (even if it did originate with the Peace of Westphalia) has evolved and is still evolving.39 Scholars point to the international human rights regime as eviscerating the principle of nonintervention,40 sovereignty’s main linchpin. Sovereignty, as a concept, was introduced into political science by Jean Bodin in 1577,41 and is defined as “the absolute and perpetual power in a state” limited only by “the commandments of God and the laws of nature.”42 During the 16th century, sovereignty was viewed as being restricted by a constitution or positive law.43 Thomas Hobbes, however, postulated that sovereignty was not bound by anything, not even religion.44 In the 18th century, sovereignty underwent another transformation and was divided into perfect full sovereignty and a relative, imperfect, not full or half sovereignty.45 In the 19th century, the concept that sovereignty was indivisible was reconsidered.46 Over its life span, sovereignty has meant different things to different people depending upon the context in which it has been used. Historically, sovereignty, as employed by monarchs who used the term to insulate themselves 37 38 39

Id. at 78. Id. at 81 See W. Michael Reisman, Sovereignty and Human Rights in Contemporary International Law, 84 Am. J. Int’l L. 866 (1990) [hereinafter Reisman, Sovereignty and Human Rights]; see also Louis Henkin, Sibley Lecture/Keynote Address: Human Rights and State “Sovereignty,” 25 Ga. j. Int’l & Comp. l. 31, 31–32 (1996) [hereinafter Henkin, State Sovereignty]; A. Claire Cutler, Critical Reflections on the Westphalian Assumptions of International Law and Organization: Crisis of Legitimacy, 27 Rev. Int’l Stud. 133 (2001), available at http:// journals.cambridge.org/action/displayAbstract?fromPage=online&aid=74937. 40 Reisman, Sovereignty and Human Rights, supra note 39; Henkin, State Sovereignty, supra note 39. 41 Oppenheim, supra Chapter 1, note 121. 42 Id. 43 Id. 44 Id. 45 Id. 46 Id.

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from “legal scrutiny,” came to be defined as “matters solely within domestic jurisdiction.”47 With the American and French Revolutions, sovereignty evolved into “popular sovereignty” in which the governing body’s legitimacy, “political sovereignty,” was based on the consent of “We the People.”48 The concept of popular sovereignty is evinced in Article 1(3) of the United Nations Charter, which sets forth that one of the purposes of the un is to develop friendly relations between states “based on the respect for the principles of equal rights and self-determination of peoples.”49 While some scholars still insist that sovereignty as used in international law and international relations refers to the “sovereign’s sovereignty,” the traditional meaning derived from the absolute monarchs that once ruled Europe, Reisman, however, provides clear evidence that the traditional concept has been eroded over time and irrevocably changed by international human rights law.50 Globalization has also changed the traditional concept of sovereignty.51 Thus, what sovereignty means under international law has reflected societal responses to internal and external geopolitical events. Hilla attributes the tensions in the current debate regarding how to impose human rights obligations on tncs not to Westphalian sovereignty, but rather to the sovereignty as articulated in the un Charter.52 He challenges the un to resolve the tensions that the “schizophrenic nature of the un Charter” has created “over the primacy of sovereign equality and human rights norms protective of individual rights.”53 Both the idea of Westphalian sovereignty, its applicability and practice have been questioned from the mid-20th century onwards by a variety of scholars.54 Many scholars cite the impacts that globalization has had on Westphalian sovereignty, thus making the system obsolete and an “abject failure.”55 47 48 49 50

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See Reisman, Sovereignty and Human Rights, supra note 39, at 867. Id. Id.; un Charter, art. 13. See generally Reisman, Sovereignty and Human Rights, supra note 39, at 869 (Scholars who cling to the traditional notion of sovereignty based upon the territorial boundaries of nation-states are ignoring how the human rights movement has affected international law). See generally Thomas Franck, Fairness in International Law 3 (Oxford: Clarendon Press 1995). “Globalism [or globalization] poses new and visible challenges to national sovereignty that demands we rethink what sovereignty means.” Id. See Hilla, supra note 36. Id. at 133. See Charles Sampford, Challenges to Concepts of ‘Sovereignty’ and Intervention, in Human Rights in Philosophy and Practice 355 (Burton M. Leisert & Tom P. Campbell, eds., Dartmouth: Ashgate Publishing, Ltd. 2001). See Susan Strange, The Westfailure System, 25 Rev. Int’l Stud. 345 (British International Studies Association 1999).

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Professor Louis Henkin suggests that Westphalian sovereignty, as initially conceptualized, is no longer applicable to today’s modern realities. He argues that sovereignty is a “mistake, indeed a mistake built upon mistakes, which has barnacled into an unfortunate mythology….[It] has been transmuted into an axiom of the inter-state system, which has become a barrier to international governance, to the growth of international law, and to the realization of human values.”56 Henkin advocates deconstructing Westphalian sovereignty, stripping it of its myth, identifying its essential elements and retaining only its valuable values.57 He premises his argument on the fact that the geopolitical events that necessitated the international human rights regime have resulted in more than a “half century” of derogation of the traditional assumptions of sovereignty.58 He sets forth five areas that have resulted in a derogation of sovereignty: (1) The international system has moved beyond state values towards human values and towards commitment to human welfare broadly conceived; (2) The international law of human rights has penetrated the once impermeable state entity and now addresses the condition of human rights within every state; (3) The international law of human rights now includes important norms to which some states have not consented; (4) The international system has developed institutions for enforcing human rights law against “sovereign” states and has sometimes encouraged states to “intervene” in other states in support of human rights; and (5) International law has importantly influenced – and been influenced by – national constitutions and constitutional systems.59 Despite Henkin’s well-reasoned argument, other scholars and states cling to the Westphalian system simply because there is no other system to replace it. States refuse to give up their power, which will affect the status quo. Perhaps, more importantly, sovereignty is equated with the use of military force to enforce territorial boundaries and to react against intervention in internal affairs by other nation-states. Consequently, the control of territorial space is still maintained by force and that force is carried out by the traditional nationstate. This line of reasoning rings hollow, however, where it is evident that 56 Henkin, State Sovereignty, supra note 39. 57 Id. 58 Id. 59 Id. at 32–33.

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belligerents and other non-state actors forcibly control territorial spaces of failed states.60 International law scholars agree that international law, as originated, was not based upon concepts of human dignity and democracy.61 And neither was the Westphalian system.62 These two principles are at the core of international human rights law. The absence of these core principles prompted former nato Secretary-General Javier Solano to support the creation of a “new international order,”63 one that considers the social and political structures of today’s world.64 In 1998, at a Symposium on the Continuing Political Relevance of the Peace of Westphalia, Secretary-General Solano cited the absence of “humanity and democracy – two principles [that were] essentially irrelevant to the original Westphalian order”65 as reasons why the system has outlived its purpose. Solano recognized that the Peace of Westphalia was a product of its time and that the concepts surrounding the treaty’s creation are to serve only as “guideposts” for 60

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A “failed state” is generally defined as one that is “incapable of protecting individuals within [its territory].” See Karen Musalo, Jennifer Moore & Richard A. Boswell, Refugee Law and Policy: A Comparative International Approach (3rd ed., North Carolina: Carolina Academic Press 1997). The social, political and economic structures of the state are virtually nonexistent or are not maintained by a legitimately recognized governing body. Sudan, Somalia, Afghanistan, and Iraq represent states where nonstate actors control or controlled vast swaths of territories and provide essential government services as a means of controlling the population and thwarting allegiances with and to a formally recognized government. The Taliban, for all of its misguided efforts steeped in delusional and antiquated religious concepts, was and, in many instances, still is in many remote provinces in Afghanistan and Pakistan the only entity providing quasigovernmental type services to the people. In parts of Mexico, the drug cartels are battling with the government for control of the economy. In Colombia, farc, the Revolutionary Armed Forces of Colombia, have long been known for their violent control over vast swaths of land in Colombia. See Andrew Hurrell, Power, Principles and Prudence: Protecting Human Rights in a Deeply Divided World, in Human Rights in Global Politics 277, 278 (Tim Dunne & Nicholas J. Wheeler eds., Cambridge: Cambridge Univ. Press 1999). Hurrell noted that the model of international society that developed in Europe and became global in the course of European expansion provided a political framework that was fundamentally inhospitable to the promotion by states of both human rights and political democracy. Arguably after 30 plus years of war, ending the Thirty Years War can be viewed as realizing the human cost of war and the violation of human dignity. Dr. Javier Solano, Securing Peace in Europe, Speech at the Symposium on the Political Relevance of the 1648 Peace of Westphalia, North Atlantic Treaty Organization (Nov. 12, 1998), http://www.nato.int/docu/speech/1998/s98112a.htm (last visited Feb. 28, 2009). Id. Id.

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creating a structure that addresses 21st century problems and realities.66 When concepts such as “humanity and democracy,” which form the foundation of today’s international human rights regime, were not within the negotiators’ realm of perspectives, Westphalian sovereignty cannot be maintained as a basis for disallowing international law to be reformulated to apply in some form to tncs. Solano departs with the original or strict construction of international law and instead supports an interpretation of international law in light of today’s realities. Accordingly, the rationale that tncs cannot be held accountable for human rights violations under international law should not be constrained by the system as it is presently structured. Former German Foreign Minister Joschka Fischer has also acknowledged that the Peace of Westphalia is obsolete.67 Fischer recognized that the problems and challenges Europe faces as a result of globalization cannot be addressed within the “existing framework.”68 Leading European scholars and foreign ministers lamenting about the restraints that the Westphalian system has placed on their nations, the very nations the system was devised to protect, realize that a treaty, which is almost 400 years old, should not preclude providing a remedy under international law to individuals whose human rights have been abused by tncs simply because tncs are not traditional subjects of international law. To cling to the precept that tncs must remain outside the ambit of international law because of a fossilized treaty is akin to resuscitating a dinosaur by breathing life into its skeletal remains. As Jason Farr notes “[a]ttributing over three centuries of international relations to a single document should warrant skepticism and reexamination.”69 Reisman admonishes international lawyers who fail to challenge the Westphalian concept of sovereignty because it may be too complicated to restructure international law to address today’s issues. No one is entitled to complain that things are getting too complicated. If complexity of decision is the price for increased human dignity on the planet, it is worth it. Those who yearn for “the good old days” and continue to trumpet terms like “sovereignty” without relating them to the 66 67

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Id. Joschka Fischer, From Confederacy to Federation – Thoughts on the Finality of European Integration, Speech at Humboldt University, Berlin (May 12, 2000), http://www.futurum .gov.pl/futurum.nsf/0/1289AFAAE84E5075C1256DA2003D1306 (last visited Feb. 28, 2010). Id. Jason Farr, Point: The Westphalia Legacy and the Modern Nation-State, 80 Int’l Soc. Sci. Rev. 3 (2005), http://findarticles.com/p/articles/ mi_m0IMR/is_3-4_80/ai_n27864045/?tag =content;col1 (last visited Mar. 10, 2010).

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human rights condition within the states under discussion do more than commit an anachronism. They undermine human rights.70 Many scholars have noted that the Westphalian system is a failure. They welcomed the collapse of the system, blaming it for many of the social, environmental and economic woes plaguing today’s global world. Susan Strange,71 in her prescient 1999 article The Westfailure System, argues that the system has been an “abject failure” and that it is incapable of solving 21st century problems because of one basic principle – nonintervention.72 She claims that “[i]t is a system purporting to rest on mutual restraint (non-intervention): but it is also a system based on a mutual recognition of each other’s ‘sovereignty’ if that should be challenged from whatever quarter.”73 Strange points out that the Westphalian system cannot be isolated from the market economy that the European nations, from the mid-17th century onwards, both nurtured and promoted.74 She cites three areas in which the system has failed: ecological (environmental), financial and social. [T]he system is failing Nature – the planet Earth – which is being increasingly pillaged, perverted and polluted by economic enterprises which the state-system is unable to control or restrain. It is failing Capitalism in that the national and international institutions that are supposed to manage 70 Reisman, Sovereignty and Human Rights, supra note 39, at 876. 71 Susan Strange (1923–1998) was a British scholar in international relations and a leading specialist in the modern study of international political economy. Her book, Mad Money, When Markets Outgrow Governance (1998), should have served as a primer for policymakers on how to avoid the 2008 financial crisis. Mad Money analyzed the erratic nature of change and innovation in financial business in the ten years since Strange’s Casino Capitalism (1997) and discussed the weak points – political as well as economic and technical – of a system driven more by volatile markets than by governments. Mad Money “anticipated the hubris of financial leaders and policy-makers – in their belief not just that one upon another set of bogus practices and inflated loan systems could be sustained, but in that what they had created somehow corresponded to a natural and hence implicitly eternal order.” Fred Halliday, The Revenge of Ideas: Karl Polanyi and Susan Strange, Open Democracy (Sept. 24, 2008), http://www.opendemocracy.net/article/the -revenge-ofideas-karl-polanyi-and-susan-strange (last visited Nov. 10, 2010). As demonstrated by the 2008 financial crisis, and the unprecedented governmental interventions into the financial system, the belief that unregulated financial institutions and tncs would not wreak havoc on the economy is rooted in an ignorance of history. 72 See Strange, supra note 55, at 345. 73 Id. 74 Id.

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financial markets are progressively unable – as recent developments in east Asia demonstrate – to keep up with the accelerating pace of technological change in the private sectors, with potentially dire consequences for the whole world economy. And it is failing world society by allowing a dangerously wide gap to develop between the rich and powerful and the weak and powerless.75 Some scholars argue that sovereignty as originally envisioned and interpreted needs to be reformulated or reconceptualized. “[I]t is time to rethink the fundamentals of international law to reflect the reality of where the power lies,”76 which today resides with tncs. The primacy of nation-states in international law has created the vacuum that allows tncs to operate virtually with no impunity under international law. Scholars, including McDougal and Lasswell, offered a different perspective to the state centric approach of international law based on the simple premise that the “nation-state” is a fiction; without individual human beings there is no nation-state. The nation-state in all of its various forms, dysfunctions, and permutations is nothing more than a collection of individuals linked together either by identification patterns or indices, which include language, culture, religion, race, tribal or ethnic allegiances and political ideologies. Under this concept, the individual is at the center of international law and all the functions of the state radiate out from the individual for the benefit of the individual under the collective name or identification of the nation-state. McDougal, Lasswell and Reisman remind us that the un Charter states that it is founded by the “‘peoples of the world’ rather than by the states of the world.”77 1 Global Financial Crises are Hindered by the Westphalian System In spite of foreshadowing how the Westphalian system would cause the global fissures that threatened to create irreversible damage to the world, Strange’s warning fell on deaf ears. If heeded, the 2008 financial crisis might have been averted if the regulatory causes of the 1997 Asian economic crisis were taken seriously by policy makers. According to Strange, the 1997 Asian economic crisis was caused by a “failure to manage [the] credit-creating system of finance” that was regulated or should have been regulated by a “two-level system of governance”: national, state regulatory agencies, and international financial organizations, such as the International Monetary Fund and the Bank for 75 Id. at 346. 76 Dine, supra note 35, at 177. 77 McDougal, & Reisman, World Constitutive Process, supra Chapter 1, note 109, at 262.

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International Settlements in Basel.78 Stephen Kobrin also noted that the Asian crisis illustrated that wholly unregulated “global” markets were not good for the majority of the world’s people or for transnational corporations.79 The lack of adequate, or in most instances, the absence of any international financial regulations and ill-conceived and unrestrained residential and commercial real estate developments, without pause as to the environmental consequences, have a direct correlation to the 2008 financial crisis.80 When the long range effects of the 2008 financial crisis are relegated to the annuals of history, one wonders whether historians will link the human casualties81 caused by the crisis to the government’s reluctance to regulate transnational financial institutions.82 Although the 2008 financial crisis has resulted in numerous human rights violations, according to the unctad, the current financial and economic crisis is different in nature and magnitude from those of the last 20 years, for at least three reasons: 78 Strange, supra note 55, at 348. Strange recognized that derivatives, which are touted as being responsible for the 2008 economic crisis, were problematic even in 1997, due to a lack of governmental supervision, regulation and control of banks and other institutions. 79 See Stephen J. Kobrin, Private Political Authority in Public Responsibilities: Transnational Politics, Multinational Firms and Human Rights, 19 Bus. Ethics q. 3, 349 (2009) (noting that the collapse of the Mexican economy in 1990 and the 1997 Asian economic crisis were the results of lax or no regulations on financial markets). 80 The 2008 financial crisis is unprecedented in the amount of money that was spent to bail out financial institutions and markets. The u.s. Congress approved $700 billion. The Federal Reserve spent over $1.3 trillion to bail out institutions and markets with investments in various risky assets. See Austin Murphy, An Analysis of the Financial Crisis of 2008: Causes and Solutions (Nov. 4, 2008) (unpublished manuscript on file with author) (discussing the causes of the 2008 financial crisis massive credit default swaps market), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1295344 (last visited Oct. 19, 2010). 81 See generally Mark Weissbrodt, Globalization: A Primer, 69 (Oct. 1999), Center for Economic and Policy Research, http://www.cepr.net/documents/publications/globalization_primer_1999_10.pdf (last visited Apr. 18, 2007). The 1997 Asian economic crisis resulted in tens of millions of people being thrown into poverty and reduced many Indonesians to earning less than the amount necessary to purchase a subsistence quantity of rice. Id. It is well-documented that the 2008 financial crisis has resulted in eviscerating America’s middle class and deepening, if not creating, an irreparable economic chasm between the haves and have nots. The financial crisis has made many former members of the middle class the newest members of the poverty stricken. 82 The European community, Russia and China cite the lack of regulations on financial institutions headquartered in the u.s. as the cause of the financial crisis. See generally Medvedev: u.s. to blame for global financial crisis, usa TODAY, Nov. 3, 2008, http://www

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(a) [O]riginating in the developed countries, it has rapidly impacted the world economy as a whole due both to its unusual scale and to the existence of large diffusion channels related to globalization; (b) it is not a “usual” business cycle incident, but is a more profound nature – it reveals structural weaknesses in the regulation of the world financial system, such as lack of transparency and control mechanisms and the incapacity to prevent hazardous behaviors excessively focused on the search for short-term profitability; and (c) it might also reflect changes in economic power between the advanced economies – considerably affected by the crisis, including foreign direct investment fdi flows – and emerging and cash-rich developing countries, the position of which the world economic and financial system is presently strengthening.83 John Ruggie, the Special Representative of the un Secretary-General on the issue of human rights, transnational corporations and other business enterprises,84 also concluded that the 2008 financial crisis would have an adverse impact on human rights. Human rights are most at risk in times of crisis, an economic crisis poses a particular risk to economic and social risk. The same types of governance gaps and governance failures that produce the current economic crisis also constitute a permissive environment for corporate wrongdoing

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.usatoday.com/news/world/2008-11-03-russia-medvedev_N.htm (last visited Dec. 11, 2010). The lack of financial regulations cannot rest on the lack of u.s. regulations. The governments of most industrialized countries relaxed their regulations in the wake of the Reagan-Thatcher years. See Kobrin, supra note 79. u.s. President Ronald Regan and British Prime Minister Margaret Thatcher pushed deregulation as a means of fostering smaller government premised mostly on the belief that the “free market” was the best economic model. This philosophy generally became known as the Washington Consensus, which benefitted large multinational corporations. See generally Dine, supra note 35, at 21, 27. UNCTAD, Oct. 2008; Maria Caracota Dimitriu, The impact of investments in Global Financial Crisis, Presentation at The Ninth National International Conference “Investments and Economic Recovery” (May 22–23, 2009), 12 Economia Seria Mgmt. 2, 19–25 (special/2009), available at http://ideas.repec.org/s/rom/econmn.html”>Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 12(2 Special), pages 19-25, July (last visited Sept. 1, 2014). See un Resolution 2005/69, 59 meeting, 20 April 2005 (appointing John Ruggie the Special Representative to the Secretary-General (srsg)).

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in relation to human rights. Business and human rights matter more than ever because progress on this front directly contributes to the transition we all see toward more inclusive and sustainable economic growth.85 And as Clair Methven O’Brien observed, the economic crisis affects various levels of human rights all tied to the right to food, health and adequate housing. With the global economic downturn, to those human rights questions connected to economic development and normal business operations, are added risks associated with the incidence of economic contraction – unemployment, diminishing or loss of income, decreased educational and training opportunities, as well as risk to all the most fundamental human rights our enjoyment of which depends on both individual and collective national incomes – such as the right to food, health and housing, for example.86 Some may argue that the financial crisis cannot be tied to human rights abuses, since many of the toxic assets were the results of consumers (homeowners) borrowing beyond their means. But there is more than ample support that it was the lack of governmental regulations that provided the impetus, if not the actual cover, for financial institutions to engage in practices where the values of loans were inflated in order to gain exorbitant profits. Indeed, it was the corporate misconduct of the late 1960s and 70s that prompted much of the governmental regulation during the 1970s.87 Since then, businesses88 have 85 Special Representative of the Secretary-General for Business and Human Rights Presentation of Report to un Human Rights Council, Geneva, (June 2, 2009) (by John Ruggie), http://www.reports-and-materials.org/Ruggie-statement-to-UN-Human-Rights-Council -2-Jun-2009.pdf (last visited June 10, 2009). 86 Report on the icc and ohchr Side event, Engaging nhris in Securing the Promotion and Protection of Human Rights and Business, 2, held during the Human Rights Council, 11th session, (June 2–18, 2009) (last visited Oct. 8, 2010) http://www.humanrightsbusiness .org/files/ICC%20working%20group/Reports/officialreportnhrisideevent5jun20091.pdf. 87 See infra Chapter 2, note 246 and accompanying text. 88 Although the term business is used broadly to refer to all business entities, from sole proprietorships, domestic publicly traded corporations, small multinational enterprises to large scale multinationals, it has been the lobbying arm of large tncs that have advanced the goal of self-regulation in exchange for reduced or relaxed regulation. See generally Carol Liao, Rethinking U.S. Corporate Governance Reform in the Wake of the Global Financial Crisis (Aug. 2010) (discussing how corporations lobbied to limit the Frank Dodd Act,

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advanced their agenda to “self-police” themselves as the optimum mechanism to ensure their survival. Fearing “death by regulation” in the 1970s, the business community deregulated in the 1980s. Large corporations extricated themselves from staunch governmental oversight, which was “choking the entrepreneurial spirit by [the government’s] meddling in the marketplace.”89 Based on the premise that the marketplace will force business to do the right thing and not the fear of government imposed sanctions, an era of “self-policing” or “voluntary enforcement” replaced government regulation.90 The rationale behind self-policing was that bad corporate practices that affected a corporation’s bottom line by driving consumers away provided far greater incentive for a corporation to behave than government regulation.91 The financial crisis of 2008 reveals the folly in this argument and gives teeth to the argument that binding regulations are the only way to hold corporations accountable for their actions that violate human rights.92 While the exact

which was enacted as a response to the 2008 financial crisis), available at http://circle .ubc.ca/bitstream/handle/2429/27724/ubc_2010_fall_liao_carol.pdf?sequence=1 (last visited July 23, 2010). 89 Kobrin, supra note 79 (noting that the neo-liberalism trend in the 1980s led many governments to oppose binding regulations or codes of conduct in favor of deregulation). 90 Id. 91 Id. 92 Large financial institutions created the financial crisis by steering homeowners into subprime mortgages or adjustable rate loans, which the homeowners could not afford when the rates adjusted upwards. In the traditional sense this would not be considered a human rights violation. Yet, the economic fallout from the subprime mortgage debacle has violated human rights such as the right to food, health and housing. Some governments have used the economic crisis as an excuse to set aside their obligations to human rights. “The financial crisis has had an immediate and direct impact on the realization of human rights within the u.s. and worldwide, leading to significant retrogression in many areas.” Towards a Human Rights-Centered Macroeconomic and Financial Policy in the u.s., Submission to the United Nations Human Rights Council United States of America Periodic Review, Ninth Session of the Working Group on the upr, Human Rights Council (November/Dec. 2010), Submitted by Center for Women’s Global Leadership, Rutgers University; Economic Policy and Human Rights Initiative of the International Network for Economic, Social and Cultural Rights (escr-Net); Political Economy Research Institute, University of Massachusetts (Apr. 19, 2010), http://www.cwgl.rutgers.edu/ component/docman/doc_download/461-may-2010-macro-econ-report-us-upr (last visited Dec. 11, 2010). See also Aldo Caliari (Center for Concern), Sally-Anne Way (Center for Economic & Social Rights), Natalie Raaber & Anne Schoenstein (Asso. For Women’s Rights in Development), Radhika Balakrishan (Center for Women’s Global Leadership at Rutgers), and Nicholas Lusiani (escr-Net), Bringing Human Rights to Bear in Times of Crisis: a Human Rights Analysis of Government Responses to the Economic Crisis, (United

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cause or causes of the financial crisis of 2008 are still being debated in political and academic circles, it is generally accepted that the crisis, which began in the United States, was the result of subprime mortgage lending practices coupled with the lack of government and supervisory regulations, along with other factors.93 According to a joint report authored in 2010 by several nonprofit and nongovernmental organizations analyzing, primarily, the United States government’s response to the 2008 financial crisis, the cause of the crisis was “[i] rresponsible financial risk-taking, combined with loose monetary policy and failures in banking regulation…”94 Richard Posner,95 until recently, a staunch advocate of the Chicago School of Economics,96 in his book A Failure of Capitalism: The Crisis of ‘08 and the

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States: Creative Contributions 2010) [hereinafter Human Rights to Bear] (analyzing primarily the United States’ government’s duty to respect, promote and protect human rights during the 2008 financial crisis), www.escr-net.org/usr_doc/HRResponsesto EconCrisis_Final.pdf (last visited May 21, 2011). Human Rights to Bear compares the 2008 financial crisis to the Asian financial crisis and notes that “the lack of counter-cyclical policies in times of crisis often risks jeopardizing hard-fought gains in housing, education, health, water and employment.” Id. at 5. It is generally agreed that the subprime mortgage lending practices and an unregulated over-the-counter derivatives market resulted in the crisis. See Lynn Stout, How Deregulating Derivatives Led to Disaster, and Why Re-Regulating Them Can Prevent Another (July 10, 2009), 1 Lombard Street 7 (2009) ucla School of Law, Law-Econ Research Paper No. 09–13, (discussing how lawyers who specialize in securities regulation predicted that the deregulation of financial derivatives by the enactment of the Commodities Futures Modernization Act of 2000 would eventually result in a financial crisis), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1432654 (last visited Nov. 20, 2010). See also Glenn Simpson, Lender Lobbying Blitz Abetted Mortgage Mess, Wall St. Journal, Dec. 31, 2007; Ruth Gordon, The Dawn of a New International Economic Order?, 72 Law & Cont. Probs. 131 (2009) [hereinafter Dawn of nieo] (noting that the root cause of the financial crisis has been traced to the technology boom and bust of the 1990s, which led to the lower interest rates that fueled the housing bubble). Human Rights to Bear, supra note 92 at 11. Richard Posner is the author of several books and a u.s District Court of Appeals, Seventh Circuit, Judge. He was a proponent of deregulation that shaped public policy for the past three decades. The Chicago School of Economics, also known as the Chicago School, is part of the neoclassical school of economics that favored an unfettered free market economy with little government intervention as opposed to the Keynesian school of economics developed by John Maynad Keyes that was based upon a mixed-economy, predominately private sector with a large public sector [government] role. Specifically, under the Keyneisan economic model, free markets have no self-balancing mechanisms that lead to full employment and therefore, the government’s intervention into the economy through public programs

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Descent into Depression, cites the lack of government regulation as one of the factors leading to the crisis. By having a period of decades [of unregulated banking and credit], the government inadvertently allowed the rational self-interested decisions of private actors – bankers, mortgage brokers, real estate salesman, homeowners, and others – to bring on a financial crisis that the government was unable to prevent from molting into a depression. A profound failure of the market was abetted by governmental inaction.97 Prior to the 2008 financial crisis, Posner promoted and believed that deregulation, the less government intervention through regulatory means, was best in a free market, laissez faire, economy.98 In Posner’s latest book, The Crisis of Capitalist Democracy, he admits that he held an erroneous belief that “markets were perfect, which is to say self-regulating, and that government regulation in them always made things worse.”99 Posner now suggests that government has a role in regulating the corporate behavior that adversely impacts nonshareholder’s economic and social rights.100 Moreover, he

and policies that will lead to full employment and price stability is necessary. Proponents of the Chicago School were and are such influential scholars as Friedrich Hayek, Ronald Coase, Milton Friedman, the Honorable Richard Posner, and Gary Becker. The Chicago School formed the underlying economic policies of the Reagan administration and the Washington Consensus. In the wake of the 2008 financial crisis, the Chicago School has been criticized as contributing to the crisis based upon the notion that the market would self-regulate itself. Richard Posner now reluctantly acknowledges that it was wrong to insist that “deregulation” would be beneficial to all. Other scholars, however, counter that the lack of governmental regulation and excessive spending were the causes of the crisis. 97 Richard Posner, A Failure of Capitalism: The Crisis of ‘08 and The Descent Into Depression 242–243 (Cambridge: Harvard University Press 2009). 98 According to economic historian Karl Polanyi, there is no such thing as a “free market.” The free market exists because of state intervention, and public regulation is necessary to ensure that markets do not implode. “There is nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course… laissez-faire itself was enforced by the state.” James K. Rowe, Corporate Social Responsibility as a Business Strategy, 13 (unpublished dissertation, University of California, Santa Cruz 2005) (quoting Karl Polanyi, The Great Transformation 145 (Beacon Press: ma, 1944)) firgoa.usc.es/drupal/files/James_Rowe.pdf (last visited Dec. 15, 2009). 99 Richard Posner, The Crisis of Capitalist Democracy (Cambridge: Harvard University Press, 2010). 100 See Richard Posner, How I Became a Keynesian, THE NEW REPUBLIC, Sept. 23, 2009, http://www.tnr.com/print/article/how-i-becamekeynesian (last visited Nov. 13, 2010). See

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concedes that the 2008 financial crisis highlights how and why self-regulatory measures are insufficient. According to Posner, a free market economy “can cause people to take reckless and irrational risks, with short-term profit-maximizing behaviour jeopardizing society’s long-term interests.”101 Prior to the 2008 financial crisis, Posner viewed government regulation as anathema to a free market. But for the time being, he acknowledges his solidarity with Keynesian economic principles that government needs to play a strong role in the economy, particularly in stimulating demand during recessionary times.102 Timothy Geithner,103 in his speech at the Council on Foreign Relations Corporate Conference, summed up the 2008 financial crisis as follows: The origins of this crisis lie in the complex interaction of a number of forces. Some were the product of market forces. Some were the product of market failures. Some were the result of incentives created by policy and regulation. Some of these were evident at the time, others were apparent only with the benefit of hindsight. Together they produced a substantial financial boom on a global scale.104

supra note 96 (discussing the difference in John Maynard Keynes’ economic model as opposed to the Chicago School, which Posner until recently fiercely promoted). Keynesian economic theory favors a mixed economy consisting of a predominantly private sector, but with a moderate role of government and public sector. The Keynesian economic theory was used to jettison America out of the Great Depression, World War II, and the post-war economic expansion (1945–1973). The advent of the global financial crisis in 2008 has caused a resurgence in Keynesian thought. Some argue that the recent debate in the United States Congress to raise the debt ceiling with its emphasis on government spending cuts in critical human [rights] services programs is the death of Keynesian economics. See Elise Foley, Durbin: Debt Deal Will be the Death of Keynesian Economics, Politics, The Huffingtonpost, July 31, 2011, www.huffingtonpost.com/2011/07/31/ durbin-debt-deal-keynes-deficit_n_914356.html (updated Sept. 9, 2011). 101 Don Tapscott, The Capitalist Crisis – Who Does What Next? The Huffington Post, Apr. 24, 2010, (reviewing Richard Posner’s book The Crisis of Capitalist Democracy), http:// www.huffingtonpost.com/don-tapscott/the-capitalist-crisis-w_b_550716.html (last visited Feb. 17, 2011). 102 Id. 103 Tim Geithner is the former Secretary of the Treasury in the Obama Administration. He is the former President and ceo of the Federal Reserve Bank of New York. 104 Tim Geithner, The Current Financial Challenges: Policy and Regulatory Implications, Mar. 6, 2008, http://www.newyorkfed.org/newsevents/speeches/2008/gei080306.html (last visited Sept. 1, 2014).

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The 2008 financial crisis highlights that voluntary regulations are tantamount to no regulations.105 In response to the financial crisis and lack of regulations over derivatives, the then sec Chairman Christopher Cox, a longtime champion of deregulation, stated “that the last six months have made it abundantly clear that voluntary regulation does not work.”106 Likewise, Nobel Laureate for Economics Joseph Stiglitz stated that “[o]ne of the reasons that we have this crisis is that the Fed flooded the economy with liquidity and had lax regulations. Part of that was this ideology that regulations were bad, but part of it was that the economy was weak.”107 Accordingly, if regulations could have averted much of the financial crisis, then binding regulations with concrete, tangible remedies are the only realistic way to provide remedies to individuals whose human rights have been abused by corporations. In response to the financial crisis, the United States government enacted the Housing Rescue and Foreclosure Prevention Act of 2008108 and the Emergency Economic Stabilization Act of 2008109 and the Restoring American Financial Stability Act of 2010 also known as the Frank-Dodd Act.110 The Frank-Dodd Act’s goal is to improve accountability and transparency in the financial system, protect consumers from abusive financial services practices, to prevent 105 But see Richard M. Salsman, Altruism: The Moral Root of the Financial Crisis, Capitalism Magazine, Apr. 27, 2009, http://www.capmag.com/ article.asp?ID=5503 (last visited July 19, 2009). Salsman blames government intervention through “government sponsored entities” such as “Freddie Mac,” “Fannie Mae,” and “Ginnie Mae,” which practiced “altruistic” lending practices and promoted “the American dream of home ownership” as the root cause of the collapse of the housing market and the financial crisis of 2008. Acceptance of altruism leads people to abandon their self-interest, the profit motive, the basic principles of economics, and the basic principle of America: the principle of individual rights. These values are essential to good living, to wealth creation, to a healthy economy, and to a just society. America’s financial market is suffering not because of greed or freedom, but because of the widespread acceptance of altruism and the consequent government intervention in banking. Id. 106 Anthony Faiola, Ellen Nakashima & Jill Drew, What Went Wrong, Washington Post, Oct. 15, 2008, http://articles.washingtonpost.com/2008-10-15/business/36794845_1_derivatives -futures-levitt (last visited Oct. 15, 2008). 107 Joseph Stiglitz, Democracy Now! Nobel Laureate Joseph Stiglitz: Bail Out Wall Street Now, Change Terms Later, Global Issues (transcript of video, Oct. 2, 2008), http://www .democracynow.org/2008/10/2/nobel_laureate_joseph_stiglitz_bailout_wall (last visited Oct. 13, 2008). 108 Housing Rescue and Foreclosure Prevention Act of 2008, hr. 3321. 109 Emergency Economic Stabilization Act of 2008, P.L. 110–343. 110 The Frank-Dodd Wall Street Reform and Consumer Protection Act, P.L. 111–203, H.R. 4173.

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future bailouts and to prevent financial institutions from “tak[ing] risks that threaten the whole economy.”111 Many scholars argue that until the root causes of the financial crisis are addressed, regulatory measures will not be enough. At the root of the crisis is the “lack of ethics, principles of values in the classic entrepreneurial model,” which are based upon a pure economic profit model.112 The interconnectedness of global financial markets and other aspects of globalization and the state’s inability to protect its citizenry from deleterious effects of the global economic crisis have, according to some scholars, ­hastened the end of the traditional state-centric system.113 Other scholars contend that globalization is not eroding state control. “Sovereignty confronts the challenge of globalism. This does not mean the demise of sovereignty; it means change.”114 This change may reflect a strengthening of sovereignty to meet new needs and opportunities or the limiting of its capacities to deny international responsibilities and domestic obligations.115 It is undeniable that globalization and its effects have presented challenges to Westphalian sovereignty. Two of the indices of globalization, the speeds in which communication and the transfer of finances traverse the globe, have altered the basic concept of sovereignty. It is this same increased information flow that has also aided the human rights regime. Reliance on the internet and other communication technologies have served as catalysts for organizing everything from consumer boycotts to toppling despotic and authoritarian governments, as witnessed in the Arab Spring.116 Nation-state borders once viewed as sacrosanct are now impenetrable by the tentacles of technology. 111 The efficacy of the Frank-Dodd Act succumbed to intense lobbying by American tncs, resulting in a water-downed bill, which further highlights the unparalleled power tncs have over the legislative process when it comes to binding regulations. Various industries, including automobile dealers and certain financial institutions, lobbied for exemptions from the regulatory oversight provisions of the bill. For a detailed discussion of the corporate lobbying efforts to derail or limit the regulatory effects of the Frank-Dodd Act, see Liao, supra note 742, at 51. 112 Fernandez-Jeijoo Souto, Crisis and Corporate Social Responsibility: Threat or Opportunity? 2 Int’l. J. Econ. Si. & Appied Res. 1, 37 (2009), www.ijsear.org/docs/ volume2_issue1/crisi.pdf (last visited Nov. 2, 2010). 113 See Sampford, supra note 54; see also James Rosenau, Turbulence In World Politics: A Theory Of Change And Continuity (Princeton: Princeton University Press 1990); Anne-Marie Slaughter, A New World Order (Princeton: Princeton University Press 2005). 114 Nagan, Character of Sovereignty, supra note at 29. 115 Id. 116 See supra Chapter 1, note 96 (discussing the Arab Spring).

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C The Role of Corporations in the International Legal Order The question of whether human rights obligations should be imposed on tncs is not a novel one. As it is currently framed, it yields to circular reasoning because it rests upon the traditional tautology: only subjects of international law have human rights obligations and tncs are not subjects of international law. The role that corporate entities should have as members of society reflects an ideology that has existed for centuries. This role is not necessarily limited by international law. Attempts to address the question have resulted in reframing the question. No longer is it a matter of whether human rights obligations should be imposed on tncs. Instead it is how and when to provide a remedy for victims of human rights abuses committed by tncs by holding them accountable for such abuses. As trite as it may sound, because the world has become more interdependent and interconnected, all “organs of society” and individuals are called upon to engage in concerted efforts to ensure the sustained viability of the planet. The realization that the Earth cannot heal itself from environmental pollutants produced as by-products of corporate manufacturing, that mineral and natural resources’ extraction has left jagged and gaping chasms in the Earth’s epidermis, that the costs of modernity are depleting the ozone layers, and that violent climate changes have produced unprecedented levels of drought, floods and natural disasters have revitalized the need to have tncs, the most powerful global nonstate actor, held accountable for their planetary activities not only to the environment but also to human beings. Rebecca Bratspies considers the issue of what to do about the lack of accountability of multinational corporations for human rights abuses as one of the main challenges confronting the 21st century. Reining in these powerful, for-profit tnes [transnational enterprises], many with resources that rival those of states, will be the central human rights challenge for the twenty-first century. There is no other way to ensure respect for human rights in a world increasingly peopled by powerful actors who are neither states nor individuals. One need not expect tnes to ‘proactively create positive social value’ in order to demand that they adhere to the same jus cogens norms to which we hold individuals and states.117 The issues surrounding what to do about the unfettered power of tncs reemerged as a debate between international relations and international law scholars, human rights scholars and activists and other decision makers in the early 1970s amid the calls for a “new international economic order” (nieo). 117 Bratspies, Organs of Society, supra Chapter 2, note 87, at 6.

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Once countries in Africa, Asia and Central and South America gained their independence from their former colonial masters (Britain, France, the Netherlands, Belgium, Spain and Portugal),118 these countries campaigned for a nieo. These former colonies, known as the “Group of 77,” pushed the un to support the newly independent states’ agenda for economic parity and the “right to economic self-determination,” which included the right to control resources and economic and political independence from former colonial regimes,119 and sovereignty over their natural resources.120 In 1974 the un General Assembly adopted a declaration on the establishment of the nieo upon recommendation by the Economic and Social Council (ecosoc)121 and established the un Commission on Transnational Corporations.122 The Commission’s agenda was threefold: (1) to monitor and provide reports on the activities of tncs; (2) to strengthen the capacity of developing countries to deal with tncs; and (3) to draft proposals for normative frameworks for the activities of tncs.123 Initially the global North did not view the proposed regulations as a threat to their economic interests. Eventually, however, the proposed regulations were viewed as something that “might gradually evolve into a mechanism which would unduly limit and restrict…the activities that constitute the core responsibilities of business.”124 Proponents of the nieo envisioned binding regulations for tncs; they received Agenda 21,125 which was something significantly less and did nothing 118 See Muchlinski, supra Chapter 2, note 84, at 5. 119 Id. The Group of 77 was formed in 1964 at the un Conference on Trade and Development (unctad) and consisted of 77 member states, which has now expanded to include 135 nations. 120 See Gordon, Dawn of nieo, supra, note 93 (discussing the fact that the movement to exercise permanent sovereignty over natural resources began in the 1960s, culminating in the un’s resolution, Permanent Sovereignty over Natural Resources, G.A. Res. 1803 (XVII), 17 gaor Supp. (No. 17) at 15 un Doc. A/5217 (Dec. 14, 1962)). 121 ecosoc was established in accordance with Article 68 of the un Charter. Its purpose was to “set up commissions in economic and social fields and for the promotion of human rights, and such other commissions as may be required for the performance of its functions.” un Charter, art. 68. 122 Declaration on the Establishment on a New International Economic Order, G.A. Res. 3201 (VI), 4 un Doc. A/3201 (May 1, 1974). 123 Rowe, supra Chapter 2, note 485, at 7. 124 Id. 125 Instead of a binding and monitored code of conduct for tncs, the United Nations Conference on Environment and Development (unced) passed Agenda 21, which promoted voluntary business self-regulation. Prof. Dr. Hartwig Hummel, The United Nations and Transnational Corporations, Presentation, Global Conference and the Power of Business, Wittenberg (Dec. 8–10, 2005) (The un has a long and inconsistent record of dealing with tncs), available at

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to silence the human rights and business debate. Consequently, opponents of any binding regulations sought and achieved voluntary restrictions on tncs through csr initiatives. In response to the nieo, the oecd began work on voluntary, self-regulatory initiatives, which became known as the oecd Guidelines on Multinational Corporations. These Guidelines, as Rowe argues, were “invented to forestall the binding regulation of tncs.”126 To support his argument, Rowe cites the speed with which the business community, working through its lobbyists – the Business and Industry Advisory Committee at the oecd, which actively participated in drafting the Guidelines – the International Chamber of Commerce,127 and decision makers found the political will to present a tangible plan to the un that would “confront and dampen the developing countries’ clamour…for more radical and compulsory control.”128 Rowe further explains his position. “Northern efforts to derail negotiations on a binding code for transnational corporations were successful. By the time negotiations for the Code began in 1977, it had already been agreed that it would be voluntary.”129 Currently, the proponents who advocate for voluntary, self-regulatory measures are prevailing. Although the u.s. Supreme Court has failed to recognize that corporations have a legal duty to respect human rights law,130 the Universal http://www.world-economy-and-development.org/downloads/hummelunandtncs2005 .pdf (last visited Dec. 12, 2012). Agenda 21 is a comprehensive plan of action to be taken globally, nationally and locally by organizations of the United Nations System, governments, and major groups in every area in which human impacts on the environment, see generally Agenda 21, http://sustainabledevelopment.un.org/content/documents/ Agenda21.pdf. 126 Rowe, supra Chapter 2, note 485, at 8. 127 Id. at 9. 128 Id. 129 Id. 130 In Kiobel v. Royal Dutch Petroleum, Co., 621 F.3d 111 (2d Cir. 2010), the Second Circuit reiterated the Supreme Court’s rejection of the proposition that the udhr is not an authoritative source of international law. Our holding in Flores is consistent with the Supreme Court’s rejection of the proposition that the Universal Declaration of Human Rights is an authoritative source of customary international law. 414 F.3d at 259–262 (explaining that the Universal Declaration of Human Rights is ‘not [a] proper source[ ] of customary international law because [it is] merely aspirational and [was] never intended to be binding on member States of the United Nations’). And it is consistent with the views of several of our sister Circuits. See, e.g., Igartua-De La Rosa v. United States, 417 F.3d 145, 150 (1st Cir. 2005) (en banc (‘The Universal Declaration of Human Rights is precatory: that is, it creates aspirational goals but not legal obligations, even as between states’.); Haitian Refugee Ctr. v. Gracey, 809 F.2d 794, 816 n.17, 257 u.s. App. D.C. 367 (D.C. Cir. 1987) (noting that the

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Declaration of Human Rights,131 mandates that “every individual and every organ of society”132 has the duty to promote and respect the human rights133 Universal Declaration of Human rights ‘is merely a nonbinding resolution, not a treaty, adopted by the United Nations General Assembly’). But see Reisman, Sovereignty and Human Rights, supra note 39, at 869 (noting that the Universal Declaration of Human Rights is “now accepted as declaratory of customary international law.”). The International Court of Justice has held that the udhr constitutes at least partly customary international law. See United States Diplomatic and Consular Section in Tehran (United States of America v. Iran), icj Reports (1980) 3, 42. 131 International Bill of Human Rights: Universal Declaration of Human Rights, G.A. Res. 217A (III), at 72, un gaor, 3d Sess., 1st plen. mtg., un Doc. A/810 (Dec. 12, 1948). Arguably the udhr is not a binding international human rights instrument, however, the principles enshrined therein are universally accepted as a minimum standard of human rights that are to be promoted, respected and adhered to by states, nonstate actors, and individuals. Many of them reflect customary international law. 132 Id. Partial text of the udhr is set forth below: PREAMBLE 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, Whereas disregard and contempt for human rights have resulted in barbarous acts which have outraged the conscience of mankind, and the advent of a world in which human beings shall enjoy freedom of speech and belief and freedom from fear and want has been proclaimed as the highest aspiration of the common people, Whereas it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law, Whereas it is essential to promote the development of friendly relations between nations, Whereas the peoples of the United Nations have in the Charter reaffirmed their faith in fundamental human rights, in the dignity and worth of the human person and in the equal rights of men and women and have determined to promote social progress and better standards of life in larger freedom, Whereas Member States have pledged themselves to achieve, in cooperation with the United Nations, the promotion of universal respect for and observance of human rights and fundamental freedoms, Whereas a common understanding of these rights and freedoms is of the greatest importance for the full realization of this pledge, Now, therefore, The General Assembly, Proclaims this Universal Declaration of Human Rights as a common standard of achievement for all peoples and all nations, to the end 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, both among the peoples of Member States themselves and among the peoples of territories under their jurisdiction. 133 Id.

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as set forth in the udhr or other human rights instruments. “Every organ” has been interpreted to include corporations. Although the term “organs of society” is not defined in the udhr, Henkin has expressly stated that “[e]very individual includes juridical persons. Every individual and every organ of society excludes no one, no company, no market, no cyberspace. The Universal Declaration applies to them all.”134 Thus, by simple construction of what the term “organ of society” does not apply to – individuals or states – the udhr applies to multinationals and other business entities. As early as 1954 articulated that corporations are “organs of society” because of their status. [T]he enterprise is an organ of society and its actions have a decisive impact on the social scene. It is thus important for management to realise that it must consider the impact of every business policy and business action upon society. It has to consider whether the action is likely to promote the public good, to advance the basic belief of society, to contribute to its stability, strength and harmony.135 Transnational corporations, however, do have an enormously important role as “organs of society.”136 Some critics of corporations escaping accountability for human rights abuses assert that the importance placed on tncs’ roles as generators of wealth have allowed governments and policy makers to blindly absolve tncs of any wrongdoing by rationalizing that they fall outside the ambit of international law and international human rights law. At first blush, under the traditional view of international law and international human rights law as originally envisioned, this may be true. But with the onset of an increasingly more globalized and interconnected world, international law and international human rights law have had to expand in order to comply with today’s realities. It was not originally envisioned or contemplated that tncs would be entitled to claim rights set forth in the udhr, but they do. tncs

134 Henkin, State Sovereignty, supra note 39; see also Bratspies, Organs of Society, supra Chapter 2, note 87, at 8. “By any definition, tnes are important ‘organs of society’. They own property; pay taxes; consume raw materials; generate goods, services and wastes; and play a central role in the lives of their workers and customers.” Bratspies, Organs of Society, supra Chapter 2, note 87, at 8. 135 Peter Drucker, The Practice of Management (New York: Harper Perennial Publications 1954). 136 See Bratspies, Organs of Society, supra Chapter 2, note 87, at 8, n. 25 (discussing tnes claims under art. 17(2) of the udhr).

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claim the right to own property137 and the right to freedom of opinion and expression.138 II

The Participants’ Competing and Conflicting Claims

Another component of the second intellectual task, after identifying the participants, is to identify their conflicting or competing claims,139 perspectives and bases of power. The participants/claimants’ conflicting claims will depend upon political, economic, social and cultural factors.140 Conflicting claims are important parameters of any problem because they help guide the focus of inquiry. The conflicting claims in the human rights and business debate involve a gamut of factors. Prioritizing what claims get addressed first is not an easy task and often involves subjective choices. Wiessner suggests that prioritizing claims will result in propagating a solution that is oriented on the “needs and aspirations of the human beings involved.”141 In this case, the human beings involved are grouped into three categories of claimants: (1) individuals, indigenous peoples and other vulnerable groups – natural persons; (2) the collective grouping/association of natural persons – the nation-state; and (3) the voluntary grouping of individuals into the corporate form, known as corporations, business entities or tncs. tncs have some of the same rights as natural persons do, but none of the corresponding legal or moral duties. tncs also do not have the same legal obligations and duties as the nation-state, which is a collective grouping/association of natural persons. The interactions among these claimants, one being natural persons, the other legally recognized as “fictitious persons” by the state (tncs), 137 Universal Declaration of Human Rights, art. 19, G.A. Res. 217 (III) A, un Doc. A/810 at 71 (1948) [hereinafter Universal Declaration or undhr]. 138 Id., art. 17(2); Bratspies, Organs of Society, supra Chapter 2, note 87. 139 Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 326. Corporate social responsibility identifies the stakeholders based upon their proximity to the corporate structures, i.e., shareholders, employees, or individuals in the community where the corporate activities occur. All of these stakeholders have demands and can make claims that may conflict. “Almost any response to a call for socially responsible behavior by one stakeholder group is likely to produce complaints by other groups.” Donald P. Robin & Eric Reidenbach, Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap between Concept and Application, 51 J. MARKETING 44 (1987), available at http://www.jstor.org/discover/10.2307/1251143?uid=3739688&uid=2129&uid=2&uid=70& uid=4&uid=3739256&sid=21102907983877. 140 Siegfried Wiessner, The Movement Toward Federalism in Italy: A Policy-Oriented Perspective, 15 St. Thomas L. Rev. 301, 315 (2002) [hereinafter Wiessner, Toward Federalism]. 141 Id. at 313.

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and the other a legal fiction (the state), have given rise to diverse and competing claims. With respect to the human rights and business debate, the main battle lines are drawn between those who favor voluntary codes of conduct over binding regulations. Within these two areas additional conflicting claims arise based upon whether international law as originally envisioned and currently interpreted and applied can be a vehicle through which regulations are obtained. The purpose of law is to serve a world public order of human dignity and to show “‘right ways’ to humanity.”142 For Wiessner, the purpose of law is to “serve human beings and their needs.” If law is to serve the people it binds, then proposing legal solutions to the human rights and business debate must further a world public order of human dignity. From this vantage point, under policyoriented jurisprudence, the conflicting claims are prioritized according to the purpose of international human rights law. Academic scholars, generally international law or international relations practitioners, who ardently adhere to the traditional “theory of [international] law”143 that tncs cannot be held accountable for human rights abuses, rely on a robotic recitation of international law principles. The intellectual acumen of scholars, who cling to the traditional view that tncs are not subjects of international law – that is international law as it was originally conceived and promulgated, is not necessarily wrong – their observational standpoints make their contentions correct, but not absolute.144 Likewise other scholars, who consider the geopolitical underpinnings of international law and acknowledge that a changing world requires international law to evolve, insist that the law must be applied in the context of today’s society. Their observational standpoint is also correct, but not absolute. These competing/conflicting claims 142 See generally S.G. Sreejith, Transcending Jurisprudence: A Critique of The Architectonics of International Law 14 (Lapland University Press 2010). 143 The New Haven School distinguishes between a “theory of law” and “theory about law.” A theory of law traces its origins to the notion that law is the command of a political superior. A theory of law does not account for the authoritative component of law and does not address this missing component. See generally Reisman, Theory About Law, supra Chapter 1, note 24, at 937. It was the deficiencies of Legal Realism that gave rise to the term “theory about law” as championed by McDougal. For him, a theory about law should “establish and sustain a free society.” Id. McDougal was “not content with some so-called theory or rational choice by means of which individuals deliriously libidinalized with greed, might pursue private matters on the happy assumption that, in the end, the great Invisible Hand would sort everything out for the best.” Id. 144 See generally Wiessner, New Haven School of Jurisprudence, supra Chapter 1, note 10, at 46 (noting that the major flaw of traditional legal theory is that it is based on the assumption that there is one correct decision to a given problem).

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have resulted in both sides yielding little ground as to why or how tncs should be made accountable for human rights abuses. Moreover, the stakeholders in the human rights and business debate – individuals, corporate ceos, stockholders, international and domestic business groups, ngos, igos, and civil society – also have competing/conflicting claims. International lawyers, political scientists, stakeholders and decision makers readily acknowledge that globalization has resulted in a confluence of issues that have few analogous historical counterparts and that globalization impacts the human rights and business debate in a myriad of concrete, tangible ways. The effects of globalization have heightened the cry from some stakeholders and decision makers to fashion “justice” so that all participants in today’s globalized world have obligations that accompany their rights. Claims of Individuals, Indigenous Peoples and Other Vulnerable Groups Some of the pertinent claims of individuals and indigenous peoples are as follows:

A

1.

2.

People, either individuals or collectively as indigenous peoples or other vulnerable groups, are entitled to respect of their rights and a remedy under international law for human rights abuses committed by tncs. This translates into the individual’s fundamental claim, the right to human dignity and to various other civil, political, social economic and cultural rights, as well as, in the case of indigenous peoples, their collective claim to their lands, their cultural identity, and self-governance; claims to, e.g., safeguarding of cultural identity and non-discrimination are advanced by other vulnerable groups.145 International law must be interpreted according to today’s realities. The subject-object dichotomy is unrealistic and is based upon a fallacious

145 Traditionally, the individual made this claim on the state. See Ratner, International Law, supra note 12, at 18. It was so recognized by the positive law concepts of human rights and constitutional/civil rights. In addition, as recognized by the International Law Association’s Resolution No. 5/2012 of August 30, 2012, indigenous peoples’ claims to autonomy, cultural integrity, and their traditional lands are now part and parcel of customary international law. For the text of the resolution evidencing international law under the American Law Institute’s Restatement (Third)’s Foreign Relations Law of the United States, 103 Reporter’s Notes No.1 (1987), see http://www.ila-hg.org/en/comittees/index. cfm/cid/1024 (last visited Oct. 27, 2013). For an explication of the content and legal effect of this resolution No. 5/2012, see Siegfried Wiessner, The State and Indigenous Peoples: The Historical Significance of ila Resolution no. 5/2012, in Der Staat im Recht. Festschrift

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premise, which, in and of itself, does not represent the actualities of international law when it was conceived. Since most tncs are more powerful than some states, with power comes responsibility. Therefore, tncs have a responsibility to conduct their operations in a manner that does no harm. Only binding international norms will deter harmful corporate conduct. tncs as “organs of society” have human rights obligations and duties. In certain settings, tncs already possess rights and duties under international law and the capacity to enforce those rights.

B Claims of Transnational Corporations Some of the pertinent claims of tncs are as follows: 1. 2. 3. 4. 5.



tncs are unable to comply with an individual’s demand for remedies under international law for human rights abuses committed by tncs, because tncs are not subjects of international law. Even, if tncs were subjects of international law, human rights, as configured, apply only to states, with the exception of some international crimes. It is the Chief Executive Officers of tncs who make policy and carry them out, therefore, there can be no liability on the corporate form. Corporations owe a duty to protect the property rights of its shareholders and these property rights are also human rights. tncs are not subjects of international law; they lack international legal personality.146

Für Eckart Klein zum 70. Geburtstag 1357 (M. Breuer et al. eds, Berlin, Duncker & Humblot 2013). As to the concept and claims of vulnerable groups, see Siegfried Wiessner, Faces of Vulnerability: Protecting Individuals in Organic and Non-Organic Groups, in The Living Law of Nations 217–226 (Gudmundur Alfredsson & Peter Macalister-Smith eds., 1996). 146 The lack of international legal personality is not really a conflicting claim. See Reparations for Injuries Suffered in the Service of the United Nations, 1949 I.C.J. 174. In Reparations the question before the icj was whether the United Nations could bring a legal suit to recover damages for the death of its employee. It could do so, only if it had legal personality, on which the un Charter is silent. The Organization was intended to exercise and enjoy, and is in fact exercising and enjoying functions and rights which can only be explained on the basis of the possession of a large measure of international personality and the capacity to operate upon an international plane…it could not carry out the intentions of its founders if it was devoid of international personality. Id. at 179.

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tncs are not sure what corporate activities violate human rights or even how these rights are being violated. Voluntary codes of conduct are the best way to accommodate victims’ claims. Claims of Nation-States The principles of sovereignty preclude one state from interfering in the domestic affairs of another state, such as a home state’s tnc abusing human rights outside of the home state’s borders. States have the sole obligation under international law to protect the human rights of its citizen, not of foreign nationals. States have the sovereign right not to be included in international regulatory mechanisms. States have no authority to unilaterally assert jurisdiction over a foreign tnc that causes human rights abuses in a foreign host state.

Interestingly, neither tncs nor States will assert that victims are not entitled to a remedy, but assert reasons why a remedy is unavailable. D 1. 2. 3. 4.

Claims of Nongovernmental Organizations and Civil Society Victims are entitled to a remedy. Sovereignty is no longer a bar to holding tncs accountable under international law for human rights abuses. Voluntary initiatives to protect victims’ human rights are insufficient. Transnational corporations influence states through lobbyists to make laws that favor the interests of tncs.

E Claims of Decision Makers Decision makers are not claimants in the traditional sense, although they do have conflicting claims. These claims may be based upon their theories of international law, the purpose it serves and whose interests the decision makers represent. Some of those decision makers are the United Nations, the Global Compact Office, the oecd, the ilo, the World Bank, the International Chamber of Commerce, the wbscd, David Weissbrodt, John Ruggie, ngos’ spokespersons, corporate ceos, leaders/representatives of indigenous groups, civil society leaders. All of these decision makers have values, and perspectives, and operate from certain bases of power, utilize resources and engage in strategies to maximize the values sought.

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F The Participants’ Perspectives on International Legal Personality Perhaps the most contentious conflicting claims pertain to the definition of international legal personality and its applicability in today’s globalized world. Despite a history of transnational corporations participating in the international legal system, nation-states have been resistant to formally recognizing such participation. Power – who has it, who wants it, and who must retain it – is at the heart of this resistance. Power is at the core of international law,147 thus making sovereignty illusory. Nation-states premise sovereignty, in principle, on all nation-states being equal. But in practice, there is no equality among nation-states. The ability to invade sovereign borders is backed by the power of military force and might. The ability to lobby against and evade sanctions for violating human rights is based upon the political, economic and military power of the voting members of the un Security Council. The ability to thwart and derail un attempts to adopt binding regulations for transnational corporations is based upon the power of domestic tncs to exert influence on their and other nation-states delegates to the un. Conversely, the power to rein in tncs through domestic and international measures or the fashioning of extraterritorial jurisdiction resides solely with the nation-states. Jonathan Charney cites power as the main reason why nation-states do not want to recognize that tncs have international legal personality,148 even though, tncs are clearly de facto participants in the international lawmaking process. In an effort to limit [tncs’] influence, states continue to regard the nation-state government as the main (if not sole) participant in the international legal system and to exclude, or at least severely limit the nonstate entities’ role. Their resistance to tncs’ participation is motivated not merely by a nostalgic desire to return to the days when the state was ‘sovereign’ but by the nation-states’ belief that a power struggle is taking place between themselves and the tncs.149 Charney cites several examples that give credence to his position. In particular, he notes that (1) the economic largesse of tncs has made them more powerful than some states; (2) tncs’ mobility and global activities make them less subject 147 See Jonathan I. Charney, Transnational Corporations and Developing Public International Law, 1983 Duke L.J. 748 (1983). Charney traces the history of the conflicts that led to the Thirty Years War and the signing of the Peace of Westphalia. He concludes that the treaty was the result of a power struggle pitting the nascent state system against the Church and the Holy Roman Emperor. Id. at 759. 148 Id. 149 Id. at 765.

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to the will of individual states and enable them to play states off against each other; and (3) history is replete with tncs involvement in third world governments that has resulted in tncs exerting enormous influence on host governments that contravene the home government’s best interests.150 If there is indeed a power struggle, then one wonders if it is because the nation-state recognizes that the judicial precedent that knighted the corporation with personhood in 1886 has unleashed insatiable beasts (“hungry ghosts”) and now the nation-state is unable to tame the dragons.151 Some scholars contend that the academic exercises of whether tncs are or are not subjects of international law and the extent to which such obligations exist are counterproductive to finding a solution to the social problem. An entity becomes a subject of international law if it has a legal personality. tncs are considered to lack international legal personality. This lack of international legal personality does not, however, insulate tncs from responsibility. “The creation of the legal fiction of separate corporate personality cannot absolve from responsibility the societies for whose benefit they operate any more than the fiction of dehumanising the negro could absolve the society that tolerated slave-trading from its responsibilities.”152 For Charney, it is immaterial whether tncs have international legal personality in order to be considered a participant in the international system. tncs, as far as he is concerned, do have “international legal personality and they have participated in the international legal system for some time,”153 going back to the Dutch East India and British East India Companies.154 Duruigbo likewise urges the participants to move beyond these “unhelpful intellectual debates” about whether tncs are subjects of international law and work to construct solutions to the myriad of problems created by globalization.155 Higgins aptly recognizes the object-subject dichotomy as a ruse to obfuscate the real issue: that individuals do not have remedies under international law for human rights abuses caused by tncs.156 Thus, the

150 Id. 151 Hungry ghosts is a Buddhist term for spirits that roam the earth, always eating, never sated. See Jensen, supra Chapter 2, note 179 (discussing how corporations are referred to as beasts and dragons that need to be tamed). 152 Dine, supra note 35, at 4. 153 Charney, supra note 147, at 765. 154 Id. at 762, n. 31. 155 Duruigbo, supra Chapter 1, note 122, at 225. 156 See Rosalyn Higgins, The Development of International Law Through The Political Organs of The United Nations (Oxford University Press 1963) [hereinafter Higgins, International Law].

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fact that international law as originally conceived applies only to the relations between states is not contested. But to accept this maxim as fait accompli ignores the transcendent nature of human existence. It is this transcendency that gives rise to the cacophony of participants seeking to interpret international law to comport with today’s realities and those participants who seek to maintain the status quo. tncs accept that international law is law, but in the context that law is what the sovereign determines it to be. States have agreed that the sources of international law are those set forth in Article 38 of the icj Statute. Subsumed in Article 38 is that legal personality is necessary to have legal capacity under international law. tncs contend that since they do not have such capacity they are not obligated under international law to provide remedies to victims of corporate-related human rights abuses. In this sense, what controls this perspective are theories about international law. The concept of what is international law has itself changed over time to recognize other actors/participants. Specifically, if the original text of international law was still applicable, a vast majority of the nations in the world would not be subjects of international law, since these nations were neither “civilized states” nor “Christian nations” when international law was first formulated. With a shift in political consciousness and the recognition of other states as sovereign equals, the definition of international law expanded and became more inclusive.157 McDougal and other scholars evince that the premise that international law deals only with relations among states is a fallacy or as McDougal surmises, a “nineteenth century canard.”158 The principle that tncs are excluded from international law as a subject is “a derogation from historical understandings of international law that garnered greater strength more recently as a product of 19th century positivism.”159 The lack of international legal personality benefits tncs because it allows them to evade responsibility. When faced with a pragmatic proposal by George Ball, former Under-Secretary of State and un Representative in the George W. Bush Administration, for the “denationalization” of tncs, which would have provided a sort of supranational citizenship for tncs, the proposal failed to gain traction among business leaders.160 Others 157 See Duruigbo, supra Chapter 1, note 122, at 232. 158 McDougal & Leighton, The Rights of Man, supra Chaper 3, note 4, at 74 (1949). 159 Duruigbo, supra Chapter 1, note 122, at 234. 160 See Sol Picciotto, Public-Private Interactions in International Regulation for Corporate Social Responsibility, http://www.researchgate.net/publication/228802746_PUBLIC-PRIVATE _INTERACTIONS_IN_INTERNATIONAL_REGULATION_FOR_CORPORATE_SOCIAL _RESPONSIBILITY (last visited Apr. 27, 2010); see also Charney, supra note 147, at 766–767.

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have also called for revising the notion of corporate nationality because it is outdated. tncs consist of networks of businesses that make the corporate identities based upon nationalities difficult, if not practically impossible to ascertain.161 tncs are often called invisible because they hide behind this penumbra of nationality in order to evade control and responsibility.162 tncs’ lack of legal personality is the main impediment to them being recognized as subjects of international law. The subject-object dichotomy, some scholars would argue, has outlived its usefulness, if such a dichotomy was ever really at the core of international law. Higgins points out that there is no substantive reason, other than the predilections of the leading jurists of the positivist school of international law, why the international legal system is divided into “objects” and “subjects.” She staunchly disagrees with this contrived division. “[T]he whole notion of ‘subjects’ and ‘objects’ has no credible reality, and, in my view, no functional purpose. We have erected an intellectual prison of our own choosing and then declared it to an unalterable condition.”163 Policy-oriented jurisprudence does not box itself in with the subject-object dichotomy. Partly because international law is not designed to serve the purposes of the nationstate, but rather to serve the purposes of human beings. The state is simply the conveyor belt of this human interaction. In 1965, Professor D.P. O’Connell also rejected the subject-object dichotomy and asked and answered the following: Does it not suffice to admit that the individual’s good is the ultimate end of law but refuse the individual any capacity in the realisation of that goal? Is the good in fact attained through treating the individual as an instrumentality of law and not as an actor? Philosophy and practice demonstrate that the answer to all these questions must be in the negative…164 A more apt approach is to consider the participants that engage in the international lawmaking process. tncs are one of the main participants in this arena. Whereas states used to be the sole participants in international negotiations, tncs’ participation in international negotiations has increased exponentially. The subject-object dichotomy allows tncs to pursue legal claims without exposing them to legal responsibility. 161 See generally Geoffrey Jones, Nationality and Multinationals in Historical Perspective (2005), http://www.hbs.edu/faculty/Publication%20Files/06-052.pdf (last visited Jan. 12, 2010). 162 Id. 163 Higgins, International Law, supra note 156, at 49. 164 Id. at 50–51 (internal citations omitted).

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G Claim that tncs are not Subjects of International Law International law is being deconstructed and reconfigured, to what no one is quite sure. But the issue as to whether tncs are subjects of international law for the purpose of holding them accountable for human rights abuses is highly contested. Some scholars clinging to the traditional view that states are, if not the sole subjects of international law, the primary subjects of international law do not countenance reconfiguring international law to embrace tncs. Other scholars contend that most modern human rights instruments create private duties on tncs either expressly or by implication.165 These two competing claims have recently been challenged by Ruggie, the srsg,166 who injects a third competing claim into the discourse, which falls somewhere in the middle.167 He concedes that a shift in international law has occurred, but that the shift is not as clear cut as some scholars suggest.168 In his report, he opines that over the years, international law has relaxed its stance on whether tncs are subjects of international law and now considers tncs to be bearers of limited duties under international law, but only in the international criminal law context.169 He does offer hope and a prophesy. “Significant changes are occurring in the domestic and international contexts that suggests a more far-reaching shift will more fully integrate private business enterprises into the international legal system will occur sometime in the near future.”170 III

Perspectives of the Participants

The claims that a participant makes are derived from her perspectives, which are based upon different variables. These variables, environmental, social, 165 See Paust, Private Rights and Duties, supra Chapter 1, note 105, at 1242–1243 (citation omitted); Jordan J. Paust, Human Rights Responsibilities of Private Corporations, 35 Vand. J. Trans. L. 3, (2002); see also Special Representative to Secretary-General, Business and Human Rights Mapping International Standards of Responsibility and Accountability for Corporate Acts, Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Entities (by John Ruggie), un Doc. A/HRC/4/35 (Feb. 9, 2007). 166 See Duruigbo, supra Chapter 1, note 122, at 223–224. 167 Id. 168 Id. at 223; see also John Gerard Ruggie, Business and Human Rights: The Evolving International Agenda (June 2007), ksg Working Paper No. RWP07-029, [hereinafter Ruggie, Evolving International Agenda], http://ssrn.com/abstract=976547 (last visited May 13, 2012). 169 See Duruigbo, supra Chapter 1, note 122, at 224. 170 Id.

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educational, political, economic status, and access to power, contribute to shaping the participant’s claims. Value judgments about whether a claim is right or wrong, reasonable or unjust are simply labels attached to how, when, where and through what means the message is communicated by the receiver. The observer has to sift through this communication process, recognizing that all claims are valid based upon the claimant’s predispositional variables. In structuring a resolution to a problem, the observer’s challenge is to have the claimants attach values to their claims and then proceed to resolve the problem in manner that maximizes the common interests of all. Everyone involved in the social process has a perspective. Participants, just like observers, have a perspective. A comprehensive analysis needs to describe the participants’ perspectives – from what vantage point do they see the problem; it needs to uncover their patterns of identification and misidentification, their expectations of authority and their demands for values.171 Many factors shape perspectives, including the culture, class, interests, personality and crisis experience of the participants, financial, economic and political status, education, group associations and nationalities. Of course, the role that participants have is important and will affect their perspectives. Victims and perpetrators of human rights abuses are not expected to have similar perspectives.172 Participants make demands for certain values with certain expectations of the conditions under which these values will be obtained.173 Participants making demands may be doing so in their individual capacities or as a member of a larger group or entity. Individuals who represent groups or entities, tncs or nation-states, bring their own “human psychology and perspectives”174 to issues. Perspectives of the Victims: Individuals/Indigenous Peoples and Other Vulnerable Groups The perspectives of victims can be distilled into a matter of what is right and moral, juxtaposed against all of the advances in technology and modernity. They envision their rights as directed against anybody who can infringe upon them – holders of public as well as private power. An example would be a mining company extracting precious minerals from lands deemed sacred by an indigenous community. It is not right that victims do not have a remedy under international law for human rights abuses caused by tncs. The prevailing reasons why there

A

171 See Wiessner, Law in the 21 Century, supra Chapter 1, note 99, at 143. 172 See Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 323. 173 See McDougal & Reisman, World Constitutive Process, supra Chapter 1, note 109, at 275. 174 See Suzuki, supra Chapter 1, note 62, at 24. The “state” is a legal fiction that is represented by individuals whose personalities have been formed by predispositional variables.

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is no remedy are moribund and no longer applicable in today’s globalized world. Victims are entitled to a remedy or redress for the abuses caused by tncs. B Perspectives of the Perpetrators: tncs Multinational corporations have one main perspective, which is generally couched in terms that we are doing the best we can do, for rarely, if at all, would a corporation seek to deliberately violate human rights. From a multinational corporation’s perspective their business operations may have had unintended consequences that resulted in human rights violations, but they are trying to do the right thing. Inherent in this perspective are pro and con arguments as to why victims’ demands can or cannot be achieved. Some tncs agree that business has a social obligation, as a theoretical matter, to individuals in the immediate communities where the business operates. Some tncs even agree that this obligation extends to other individuals in the corporate structure, their supply chains and/or other entities within the tncs’ sphere of influence. Some tncs implicate corporate law and the laws of agency as barriers to acceding to individuals’ demands. Other tncs acknowledge that public sentiments about business operations can jeopardize brand images and negatively impact sales and the bottom line. They still, nonetheless, with diplomatic aplomb, present the facade of the concerned citizen, but stress that this is not a legal obligation. Instead it is based upon the social expectations of the community. This social expectation is often referred to as “the social license to operate.” Other tncs steadfastly proclaim their desire to acknowledge, respect and promote the principles in the udhr and other applicable human rights instruments, but drape themselves in the legal excuse that it is the state’s duty to provide a remedy or redress under international law. C Perspectives of the Nation-State The perspective of nation-states as to whether individuals are entitled to a remedy is generally a resounding “yes,” followed mostly by incoherent mumbles reflecting various reasons why a remedy is not or will not be available. The seminal reason why nation-states are resistant to fashioning a remedy under international law is power. They do not want to relinquish power to or share it with multinational corporations. Power is the linchpin of international law and the international relations system. It was the struggle to control this power and exercise it over others that resulted in the Peace of Westphalia. States wrested this power from the Church and the Holy Roman Emperor. Maintaining it is the states’ primary objective.175 175 See generally Charney, supra note 147.

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States, in response to individuals’ demands, operate from some of the following perspectives: (1) International law precludes states from exercising jurisdiction over foreign tncs; therefore victims must pursue their remedies, to the extent that there are any, in the tncs’ home state or the host state; and (2) states are the sole subjects of international law. Of course, some states do not accept this “states only” dichotomy and have sought to and have, in limited instances, imposed mandatory obligations on tncs. Those seeking to impose international norms on tncs have had limited success.176 D Perspectives of ngos and Civil Society Organizations Many individuals and indigenous peoples as victims express their perspectives though various ngos and civil society organizations. Their perspectives are simple and straight forward. They demand that international law (the how is unimportant) be reconfigured to provide victims with remedies against tncs. They also demand that these remedies become concretized in a legally binding fashion, either through a new treaty or new human rights instruments, through the auspices of a supranational organization, by amending existing human rights instruments, or by authorizing existing institutions to develop enforcement mechanisms. E Perspectives of John Ruggie, as the srsg Ruggie has, at times, been both an observer and a participant in the human rights and business debate. Thus, he is not a newcomer and is well-versed in the different perspectives of the ngos and business community as they relate to holding tncs accountable to victims whose human rights have been abused by tncs. Perhaps, more importantly, Ruggie, considered as “one of the premier authorities on corporate citizenship and responsibility,”177 has always been a 176 In 2010, Spain changed its Criminal Code to extend criminal liability to companies, in addition to those managing a company, committing a crime acting expressly on the authority of those managing a company, or who failed to exercise adequate control so as to avoid liability Organic Law 5/2010 (June 22, 2010), which amends Organic Law 10/1995 of 23 November 1995, on the Criminal Code (lo 5/2010 of 22 June, which modifies lo 10/1995 of 23 November of the Criminal Code) (“lo 5/2010”) establishes for the first time in the Spanish Criminal Code (Código Penal) (“cp”) an express provision on the criminal liability of legal entities for crimes committed on their behalf by their representatives, de facto and de jure administrators, employees and/or workers. The law does not exert extraterritorial jurisdiction. See Clifford Chance, Client Briefings – Legal Entity: Criminal Liability, (Mar. 11, 2011), http://www.cliffordchance.com/publicationviews/­ publications/2011/03/­ client_briefing_-legalentitycriminalliability.html (last visited Nov. 14, 2013). 177 Press Release, Author of un Guiding Principles on Business and Human Rights to Join Foley Hoag, July 26, 2011. Foley Hoag is an international law that has a Corporate Social

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staunch proponent of csr as the most effective means to rein in tncs. Suffice it to say that Ruggie’s primary opposition to the premise that binding international norms should be the only instrument used to provide remedies to victims of corporate-related human rights abuses is that the treaty route is too long and unsure.178 Ruggie has worked on establishing a methodology for business to engage in voluntary csr standards under the auspices of the United Nations since 1997 when he was appointed un Assistant Secretary-General by former Secretary-General Kofi Annan. Together Ruggie and Annan set about to effectuate Annan’s vision for a partnership between tncs and the un as articulated in the 1998 report Entrepreneurship and privatization for Economic Growth and Sustainable Development,179 which formed the backdrop for the Global Compact. Ruggie worked on the Global Compact from 1997 to 2000, when it became operationalized. He continued to serve as Special Advisor to the Compact from 2001 until 2005, when he was appointed by Annan as the Special Representative to the Secretary General. Ruggie proudly proclaims the Compact as “the world’s largest [voluntary] corporate social responsibility initiative, with some 3,000 participating companies and forty national networks.”180 Due to the voluntary nature of the Compact many human rights ngos, activists and lawyers viewed Ruggie’s appointment as srsg with skepticism. Still, they held on to a thread of hope that Ruggie would continue to press for binding international norms, even if the Norms were not used as a template. Ruggie quickly dashed those hopes. From his perspective, his mandate did not require him to “endorse or build upon the draft Norms.”181 Ruggie acknowledged that his interpretation of the mandate was at odds with major international human rights organizations, including Amnesty International, Human Rights Watch, and the Federation international des ligues des droits de l’Homme (fdhi).182 Ruggie also recognized that other participants in the human rights and business debate, under which the Norms were produced, had their own perspectives and exerted different strategies designed to achieve their particular objectives.

Responsibility Practice that “advises multinational corporations, governments, and multilateral institutions on a range of social, political, and environmental issues in the global marketplace.” Available at http://www.foleyhoag.com/new-and-events/news/2011/july/ john-ruggie-foley-hoag (last visited Nov. 22, 2013). 178 John Ruggie, Treaty road not traveled, Ethical Corporation (May 6, 2008), http:// www.hks.harvard.edu/m-rcbg/news/ruggie/Pages%20from%20ECM%20May_FINAL _JohnRuggie_may%2010.pdf (last visited Mar. 5, 2011). 179 un Doc. A/52/428 (1998). 180 Ruggie, Evolving International Agenda, supra note 168, at 2. 181 Id. at 4. 182 Id. at 32, n. 17.

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It would be surprising if all major actors in the ‘Norms’ debate, quite apart from the substantive merits of their arguments, did not also behave strategically, in keeping with their perceived interests. Business typically dislikes binding regulations until it sees their necessity or inevitability. Governments often support the preferences of corporations domiciled in their countries and/or compete for foreign investment. And the imprimatur of “un Norms” would have provided ngos with a powerful campaign tool: declaring certain corporate acts to be ‘illegal’ has far greater social purchase, even in the absence of viable enforcement mechanisms, than merely claiming corporate ‘wrongdoing’.183 Ruggie, however, asserted that he was not bound by, and therefore would not consider, these perspectives in carrying out his mandate.184 It is undeniable that the Norms were vehemently opposed by the business community and their lobbyists. And the Norms had firm support among many leading international ngos, even though many international law scholars and international human rights scholars doubted the legal principles that the Norms elevated to the status of international law.185 The human rights and business debate when Ruggie was appointed srsg had become political. Accordingly, he approached his mandate with the goal of engaging in the political aspects of the furor surrounding the Norms and the human rights and business debate, rather than trying to ignore it or escape it. This approach had its limitations. Policyoriented jurisprudence has been accused of conflating law and policy. Ruggie allowed the political dynamics of the debate to influence his approach to the problem. One can hardly criticize this approach since the politics that infused the debate surrounding the Norms had produced a stalemate. Conversely, however, there are those who viewed Ruggie’s appointment as the ultimate demonstration of tncs’ power and how tncs have co-opted the United Nations into 183 Id. at 5. 184 Id. at 6. The srsg mandate was not bound by these prior positions, however, nor was it intended simply to search for the lowest common denominator among them. Indeed, because the draft Norms were the only comprehensive business and human rights proposal on the table, I believed they merited careful assessment to see if they could serve as a sound basis for moving forward. But I found instead that they embedded sources of conceptual as well as factual confusion, with potentially deleterious consequences for the realization of rights. Id. 185 See John H. Knox, The Ruggie Rules: Applying Human Rights Law to Corporations, 3 (Aug. 16, 2011) (discussing the controversy that the Norms created by suggesting that human rights law already did apply directly to corporations), available at http://papers.ssrn.com/ sol3/papers.cfm?abstract_id=1916664.

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doing their bidding – insuring that binding international norms do not see the light of day. “Part of Ruggie’s unspoken mission was to assure that the Norms, whose expansive nature made them a non-starter to many businesses and governments, never saw the light of day outside the sub-commission.”186 Perhaps, in hindsight, had David Weissbrodt and the Working Group anticipated that political sabotage would engulf the Norms and mollify its detractors, the Norms could have delayed a rendezvous with death. On the other hand, international human rights law has always been cast in the flames of political engagement, for the “[u]ltimate purpose of any human rights initiative for business is not to placate or stifle business but to ensure that human rights are protected, respected and upheld as part of good business practice. Formal human rights standards will inevitably place some burden on business.”187 IV

Common Assumptions of the Participants

There are common assumptions that weave their way through all perspectives. First, individuals are demanding that tncs accept that they have an obligation to avoid violating the human rights of others. tncs are demanding that individuals accept that the obligation is not a legal one, and that even if it is, it must be balanced against the purpose of a corporation. Some nation-states have the same perspective as tncs and are demanding that individuals accept that it is the nation-states’ duty to protect individual human rights and that the nation-state cannot resolve this issue overnight. Other nation-states demand that tncs accept that they have at least a moral obligation and to do something that will provide victims a mechanism for redress. V

Participants’ Bases of Power

Power is the corner stone of international law. In arguing for the United States to live up to the “self-evident truths” set forth in the Declaration of Independence 186 Ralph Steinhardt, Just Business: Multinational Corporations and Human Rights, Ethics & Int’l Affairs (Sept. 16, 2013) (reviewing Just Business: Multinational Corporations and Human Rights, John Gerard Ruggie (New York: W. W. Norton & Company 2013)), available at http://www.ethicsandinternationalaffairs .org/2013/just-business-multinational-corporations-and-human-rights-by-john-gerard -ruggie/ (last visited Nov. 22, 2013). 187 Kinley, Nolan & Zerial, supra note 24, at 39.

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and to eradicate the transnational slave trade and slavery, the eloquence of Frederick Douglas,188 a runaway slave, reminds us that power in today’s contemporary world is not easily or seldom relinquished without a fight. Let me give you a word of the philosophy of reform. The whole history of the progress of human liberty shows that all concessions yet made to her august claim, have been born of earnest struggle. The conflict has been exciting, agitating, all-absorbing, and for the time being, putting all other tumults to silence. It must do this or it does nothing. If there is no struggle there is no progress. Those who profess to favor freedom and yet depreciate agitation, are men who want crops without plowing up the ground, they want rain without thunder and lightning. They want the ocean without the awful roar of its many waters. This struggle may be a moral one, or it may be a physical one, and it may be both moral and physical, but it must be a struggle. Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress. In the light of these ideas, Negroes will be hunted at the North, and held and flogged at the South so long as they submit to those devilish outrages, and make no resistance, either moral or physical. Men may not get all they pay for in this world; but they must certainly pay for all they get. If we ever get free from the oppressions and wrongs heaped upon us, we must pay for their removal. We must do this by labor, by suffering, by sacrifice, and if needs be, by our lives and the lives of others.189

188 Frederick Douglass, born Frederick Augustus Washington Bailey, escaped slavery and become one of the greatest abolitionists of the anti-slavery movement and a staunch supporter of the women’s suffrage movement. A great orator, he denounced slavery and the hypocrisy of the Fourth of July in his infamous speech What to a Slave is the Fourth of July? He is also known for his autobiographies, where he sets forth the wretchedness of slavery: Escape From Slavery, The Life and Times of Frederick Douglass (1881 revised 1892), My Bondage and My Freedom (1855), and Narrative of the Life of Frederick Douglass (1845). 189 Frederick Douglass, The Significance of Emancipation in the West Indies, Speech delivered in Canandaigua, New York, August 3, 1857; collected in pamphlet by author, The Frederick Douglass Papers. Series One: Speeches, Debates, and Interviews, vol. 3: 1855–63, p. 204 (John W. Blassingame, ed., New Haven: Yale University Press 1985).

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The shift to provide victims remedies under international law for human rights abuses committed by tncs is undoubtedly a power struggle. Money is the key sustaining component of this power struggle. It is often quipped that tncs have more money than God! They have been able to control judges to contort the original intent of the 14th Amendment to disenfranchise AfricanAmericans, stripping away their God-given and constitutionally recognized inalienable rights in Plessy under the rationale that freed slaves were not “persons.” Judges have bestowed these same inalienable rights on the corporate form via Santa Clara without any declaration in the body of the opinion or supported by oral argument that corporations are “persons.” The corporate struggle to wield its power to distort and contort the law has been essential in fending off binding regulations in international law. “[A]ttempts to tame corporate power and efforts to subject corporations to novel regulatory regimes also trigger corporate counter-efforts to evade, oppose, de-legitimize and coopt such ‘unwarranted pressures’.”190 Simply because this “power trumps” in many areas of international law, Reisman counsels lawyers to persevere and not “to lose their sense of indignation at injustice and violations of human dignity.”191 Advocates and agitators for social justice, freedom, equality and human rights remind us that all of the great civil, political and human rights victories were fought against seemingly insurmountable powerful structures. It was through the tenacity and perseverance of the seemingly powerless that produced these victories. The participants in the human rights and business debate operate from a range of power bases. They all have different resources from which they draw on in order to achieve their demands. Policy-oriented jurisprudence considers the participants’ bases of power in resolving a problem. The bases of power for transnational corporations, individuals and states are varied. Businesses have unlimited wealth and can use their wealth for lobbying, political campaign ads and judicial advocacy. Individuals can exercise power through their electoral votes, boycotts, and legal challenges.192 States, as the ultimate decision maker, have their bases of power in their legislative functions, as well as the ability to sanction violators and to exercise military force. 190 Ronen Shamir, Between Self-Regulation and the Alien Tort Claims Act: On the Contested Concept of Corporate Social Responsibility, 38 Law & Soc’y Rev. 635, 644 (2004). 191 Sloane, supra Chapter 1, note 9, at 523–524. 192 ats claims have been foreclosed by the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013). Labor and employment discrimination claims of collective groups of plaintiffs (certain types of class actions) have been foreclosed by the Supreme Court’s decision in Wal-Mart v. Dukes, 131 S. Ct 2541 (2011).

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The Kiobel decision exemplifies the participants’ various bases of power. More than 82 amicus briefs were submitted, on both sides or in support of neither party, by governments, legal experts, international law and international relations experts, human rights activists, ngos, indigenous groups, individuals, corporate lobbyists, trade unions and business associations, various multinational corporations and organizations, and the u.s. State Department. Some of the briefs supported the plaintiffs’ position, others supported the defendants, and others provided elucidation and clarification on disputed issues of international law or the status of current international norms.193

Individuals/Indigenous Peoples and Other Vulnerable Groups’ Bases of Power On the international plane as well as domestically, individuals’ bases of power reside in their ability, in democratic societies, to replace members of the legislative body, and as exemplified by the Arab Spring, the ability to protest despotic and tyrannical regimes. Individuals also demonstrate their bases of power by litigating claims before domestic and international tribunals, alleging facts that will give rise to judicial pronouncements reflecting the moods of the times by assigning liability to tncs for human rights abuses. Technology has allowed more people to be informed about abuses by tncs. The use of technology to inform people is a base of power for individuals.

tncs’ Bases of Power The bases of power for tncs is their economic wealth that enables them to lobby for or against laws and regulations based upon their interests. tncs use foreign direct investment as a leverage for favorable treatment in bilateral or multilateral trade agreements. Nation-States’ Bases of Power While many scholars posit that law is meant to serve people and that in democratic societies people elect representatives to make laws for them, the nationstates’ bases of power reside in the electoral process, the legislative process and, ultimately, in its ability to enforce sanctions against those who violate the law. On the international plane, the nation-states’ bases of power is premised upon the state-centric principle that only states can enter into treaties or consent to customary international law norms. 193 All briefs of the briefs in Kiobel are available at http://www.scotusblog.com/case-files/ cases/kiobel-v.-royaldutch-petroleum-et-al/.

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Strategies and Outcomes

Many participants in the ngos community have viewed the United Nations as caving in, time and time again, to the dictates of tncs when it comes to providing remedies to victims of corporate-related human rights abuses, if the remedies entail mandatory binding regulations. It may be unreasonable and patently unfair to imply that the un, by not supporting such regulations, has abandoned its role to ensure that states promote, respect and protect human rights of individuals and indigenous peoples. Under policy-oriented jurisprudence, the un is a decision maker. Generally decision makers are influenced by the strategies that participants employ in order to achieve a particular outcome. With regard to the human rights and business debate, each time the un has tried to resolve the debate, tncs (through their lobbyists) were able to get the un to avoid proposing binding regulations. For instance, although the un supported the G77’s push for a nieo, tncs were able to get a different outcome: Agenda 21. In the case of the Norms, the business lobby’s vociferous attack on the Norms derailed their acceptance by the Human Rights Commission. Whereas, because the business community supported Ruggie’s position to not recommend that the un pursue a treaty or any other interim measure for binding regulations, the Human Rights Council unanimously accepted the voluntary Framework and Guiding Principles proposed by Ruggie. ngos, human rights lawyers and activists also decried the Supreme Court’s handling of the Kiobel matter. The original issue that was before the Court during the first oral argument was whether the ats applied to corporate entities or only to natural persons.194 In attempts to resolve the human rights and business debate, the two main participants, tncs and individuals, have employed a range of strategies based upon the base values demanded. “Strategies are the effective management and manipulation of base values to create desirable value outcomes.”195 These strategies consist of a modality and an instrument. The modality can be either coercive or persuasive. A coercive modality occurs when value demands are 194 This issue was before the court after the Second Circuit Court of Appeals dismissed the case against Shell in 2010, holding that the ats did not apply to companies, which conflicted with decisions in other circuits, creating a split. Kiobel v. Royal Dutch Petroleum Co., 132 S. Ct. 472 (2011) (cert. granted); see also Sarei v. Rio Tinto, plc, 671 F.3d 736 (9th Cir. 2011) (en banc), vacated, 133 S. Ct. 1522 (2013); Bomiah Flomo v. Firestone Natural Rubber Co., 643 F.3d 1013 (7th Cir. 2011). 195 Suzuki, supra Chapter 1, note 62, at 26.

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communicated to respondents and the respondents have limited options from which to choose.196 A modality is persuasive when respondents are free to choose from a range of options based upon what they prefer most.197 Those participants who contend that international law is outdated and the concept of sovereignty is no longer a viable bar to extending duties and obligations to tncs use coercive strategies and ideological instruments in attempts to achieve binding regulations. Although the Norms were presented in draft form with the understanding that the final document would reflect discussed and negotiated changes, the Norms were, nonetheless, promoted by certain ngos, who approached the debate from a victims-centered perspective, as a take it or leave it document. Business organizations and states responded to this ultimatum as one that left them very few options. tncs, in opposing the Norms, used both persuasive and coercive strategies. Business lobbyists and business organizations successfully campaigned to have decision and policy makers reject the Norms by persuading States and the Human Rights Commission that the Norms sought to invade upon the sole province of states with regard to tncs and international law. tncs successfully sought and maintained their option to choose what they preferred the most, which was self-regulation. In those instances where tncs and ngos were at odds, tncs resorted to using diplomatic, and/or economic instruments. Some of these strategies and outcomes were in play with the debate over the srsg’s final reports and are still employed presently. The outcomes that the two main participants seek are the immediate results of the interactions among the participants that resulted from the strategies utilized. These interactions take the form of value deprivations or value indulgences. Deprivations are viewed as either the loss of values or the blocking of gains; whereas indulgences are actual gained or blocked losses.198 Policyoriented jurisprudence tracks outcomes to determine how the participants in the context under scrutiny have been affected by the events that have transpired. Here, in the event under scrutiny (the various instances where tncs have been accused of violating human rights from the transnational slave trade to the use of child labor in the production of athletic wear and apparel to the export, sale and the trafficking in conflict diamonds) tncs have sought to minimize the harm caused by negative press by agreeing to voluntary industry standards, dialoguing with ngos, and participating in the Global Compact,

196 Id. 197 Id. 198 See generally Reisman, Theory About Law, supra Chapter 1, note 24.

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and other codes of conduct, and now by endorsing the United Nations Guiding Principles on Business and Human Rights. The fear of the unknown has also been a strategy that individuals and organizations employ to maintain the status quo. tncs have used the fear of “global governance” as a strategy to resist binding regulations. This fear is often couched in terms of the unwarranted extension of rights to powerless and disenfranchised individuals and groups at the expense of the politically and economically powerful and wealthy elites. This fear is buttressed by the embedded hegemonic policies of the economically and militarily powerful nation-states that consider it their self-designated duty to set the guidelines for how the rest of the world is to operate in today’s global marketplace. Opponents against binding regulations mistakenly espouse that binding regulations are tantamount to global governance and that this will be the beginning of a “world government.” Fear mongering and a deliberate, albeit, erroneous extrapolation that binding regulations will eviscerate sovereignty are simply strategies that tncs and States use to obfuscate the issue. The term global governance has more to do with globalization because the vast reach of tncs is beyond the territorial boundaries of their home states.199 Global governance is linked to globalization because of the economic impact of globalization. It is because of this interconnectedness of states through global webs that sovereignty is being reconceptualized. The objective of the participants in the human rights and business debate is to make “law.”200 Law, in this sense, may be or may not be that cadre of written 199 Id. 200 Ruggie notes that in the Kiobel case, Shell’s litigation strategy may end up disrupting the trend in csr. But what would the corporate responsibility to respect human rights involve in a case like Kiobel? What would it imply for a corporation that proclaims and aspires to socially responsible conduct? My professional encounters with Shell suggest that it has such commitments and takes them seriously. Of course, the company must be free to argue, in the courts and elsewhere, that it met both the law and its wider responsibilities to respect human rights whenever it believes that to be the case. Yet questions remain. Should the corporate responsibility to respect human rights remain entirely divorced from litigation strategy and tactics, particularly where the company has choices about the grounds on which to defend itself? Should the litigation strategy aim to destroy an entire juridical edifice for redressing gross violations of human rights, particularly where other legal grounds exist to protect the company’s interests? Or would the commitment to socially responsible conduct include an obligation by the company to instruct its attorneys to avoid such far-reaching consequences where that is possible? And what about the responsibilities of the company’s legal representatives? Would they encompass laying out for their client the entire range of risks

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rules known as law. In fact, under policy-oriented jurisprudence, law encompasses, but is not defined or limited to, written rules. Participants either want to make “positive law” or to make “no law,” which in essence is making law under policy-oriented jurisprudence. Proponents of binding norms want a legally binding, written and authoritative document regulating tncs with regard to human rights abuses. Opponents of binding norms want no such written instrument and instead prefer voluntary codes of conduct, to the extent that these proponents adhere to the concept of “corporate citizenship,” which do not have the force of law, and as far as international law is concerned will not morph into customary international law. The strategies and outcomes participants use may fluctuate or even change in midstream depending upon the resultant effect or the outcomes sought. Consequently, if one strategy is not achieving the desired outcome, another one may be employed. This is what occurred when the Supreme Court decided to rehear Sosa v.Alvarez-Machain and Kiobel.201 In Sosa, tncs through their lobbyists urged diplomats to appeal to the u.s. government to limit the reach of the ats,202 while at the same time, business groups filed amicus briefs to persuade the Court to enter a judicial interpretation limiting the scope of the ats.203 The strategies of the two main participants resulted in two opposing entailed by the litigation strategy and tactics, including concern for their client’s commitments, reputation, and the collateral damage to a wide range of third parties? I don’t know what the correct answers to these questions are, but because the stakes are so high Kiobel may be the ideal case for starting the conversation. What I do know is that if, on top of the many other reputational and legal challenges it has faced over the years, Shell also ends up being held responsible for so radically constricting the ats, its road back to the corporate social responsibility fold will be long and hard. John Ruggie, Kiobel and Corporate Social Responsibility: An Issues Brief by John G. Ruggie (Sept. 4, 2012), http://www.hks.harvard.edu/m-rcbg/CSRI/KIOBEL_AND_CORPORATE _SOCIAL_RESPONSIBILITY%20(3).pdf (last visited June 21, 2012) [hereinafter An Issues Brief ]. 201 542 u.s. 692 (2004). 202 See Shamir, supra note 190. The International Chamber of Commerce in opposing the use of the ats against multinationals sought the help of other governments, urging them to contact Washington and oppose the reach of the ats. Id. 203 Id. at 654. In Sosa, several business groups, the National Foreign Trade Council, usaEngage, National Association of Manufacturers, u.s. Chamber of Commerce, u.s. Council for International Business, and the Washington Legal Foundation, filed amicus briefs opposing the ats being used as a vehicle to litigate human rights claims against tncs. Several ngos and human rights advocates, Amnesty International, Center for Con­ stitutional Rights, Center for Justice and Accountability, Earth Rights International, Human Rights First and International Labor Rights Fund, filed briefs supporting the ats’ extraterritorial reach.

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outcomes or objectives in litigation. The victims wanted a judgment that supported their position that tncs can be held liable for human rights abuses under the ats. When the Court decided to hold a second oral argument in Kiobel, on an issue that was never raised by the parties, the strategies and outcomes changed. Ruggie described Shell’s strategy and preferred outcomes in Kiobel. It was (1) “to dismiss claims against it” and (2) “also to negate the statutory basis making it possible to use u.s. courts as a forum to adjudicate civil liability for gross human rights violations committed abroad – even when those violations are committed by u.s. nationals, and even if the Americans are natural persons.”204 Ruggie clearly opposed the corporate defendant’s second outcome, suggesting that the defendant wanted to make “law” that would have been “extraordinary [and] farreaching.” For the Court to make law to comport with the defendant’s outcome would have upended international law. Ruggie made the following observation Had this view held all along, there would have been no Filártiga, no successful Holocaust survivors’ claims, no statutory basis for civil action by foreign victims even against u.s. nationals for gross human rights violations abroad, whether committed by legal persons or natural persons. What is more, there might never have been the knock-on effects of ats jurisprudence for legal developments in other countries and also for the growth of voluntary corporate social responsibility initiatives at home and abroad, adopted by companies at least in part to avoid ats-type liability.205 Perhaps more importantly for Ruggie, Shell’s desired outcomes would have derailed “the growth of voluntary corporate social responsibility initiatives at home and abroad, adopted by companies at least in part to avoid ats-type liability.”206 Ruggie had more than a cursory interest in keeping csr initiatives intact. After all, two of the most widely accepted global csr initiatives are those that he authored: The Global Compact and the un Guiding Principles. The Guiding Principles had received unanimous un support and is being implemented by various tncs. Ruggie recognized that Shell’s desired outcome, winning at all costs, “to adopt whatever tactic seems likely to get the result sought”207 could have unintended 204 Ruggie, An Issues Brief, supra note 200. 205 Id. 206 Id. 207 Myres McDougal & Harold Lasswell, Jurisprudence in Policy-Oriented Perspective, 19 U. Fla. L. Rev. 486, 497 (1966). McDougal and Lasswell criticized “client centered

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consequences for csr initiatives on the international plane, derailing them from becoming “soft law,” which eventually could provide the basis for “hard law.” In fact, it was Shell’s deliberate mischaracterization of Ruggie’s work as srsg that prompted him to enter the fray and file an amici brief to correct his position.208 And although Ruggie does not equivocate about Shell’s right to present a legal defense to the claims, he questions the role a company plays when it tries to upend the law in order to avoid liability and the ethical responsibilities of its lawyers. Ruggie frames the issue as follows: Should the corporate responsibility to respect human rights remain entirely divorced from litigation strategy and tactics, particularly where the company has choices about the grounds on which to defend itself? Should the litigation strategy aim to destroy an entire juridical edifice for redressing gross violations of human rights, particularly where other legal grounds exist to protect the company’s interests? Or would the commitment to socially responsible conduct include an obligation by the company to instruct its attorneys to avoid such far-reaching consequences where that is possible? And what about the responsibilities of the company’s legal representatives? Would they encompass laying out for their client the entire range of risks entailed by the litigation strategy and tactics, including concern for their client’s commitments, reputation, and the collateral damage to a wide range of third parties?209

jurisprudence.” The win at all costs philosophy of client centered jurisprudence fails to actually “focus on the problems which confront the community as a whole.” Id. 208 “I would not be involved in it at all were it not for the fact that Shell’s initial Supreme Court brief and its lead attorney’s oral argument misconstrued a central finding of a United Nations report I had authored.” Ruggie, An Issues Brief, supra note 200, at 2. 209 Id. at 6

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Past Trends in Decision I

Trend Analysis – International

The third intellectual task is to conduct trend analysis. “Trends are characterized by authoritative response to the demands made by contending claimants that controversies stemming from their social interaction be solved.”1 This is essentially a historical function, one which identifies and organizes trends in pertinent past decisions in terms of the goal expressed. Trends are based upon past decisions, what happened in the past, not to unearth precedents, but instead to determine how similar situations were resolved. Accordingly, trends are grouped together and analyzed to determine how past decisions were made and how participants’ values are shaped and their goals achieved.2 Past trends in decision may include statutes and court judgments in domestic laws, and treaties as well as state practice leading to customary international law on the international level. In the human rights and business debate there are two conflicting goals based upon the two main participants’ perspectives. The goal of victims is to have effective remedies, whether domestically or internationally, preferably binding regulations for business-related human rights abuses.3 The goal of tncs is to keep the status quo, when it comes to any aspect of international human rights law being applicable to tncs. But more specifically, the goal of tncs is to prevent the establishment of any international binding norms that will hold tncs accountable for business-related human rights abuses. Such decisions, abstracted from context, however, do little to accurately project future trends. “Trends in past decision [are] useful to the projection of future possibilities and the invention of alternatives only if the factors which conditioned these decisions can be identified.”4 Under policy-oriented jurisprudence, past trends in decision are scrutinized in order to determine not only how the international system reacted to 1 Suzuki, supra Chapter 1, note 62, at 38. 2 Id. 3 It is generally accepted that corporations have limited human rights obligations under international criminal law for certain crimes. 4 Reisman, In Memoriam Lasswell, supra Chapter 1, note 37, at 159.

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conflicting claims but also to see “why it succeeded or failed.”5 The description of past trends in decision with regard to providing remedies to victims of corporate human rights abuse is indispensable to ascertaining how a particular community resolved conflicting claims.6 The seminal question, thus, becomes, how the world community responded in the past to the conflicting claims (or similar variations) to those currently under scrutiny. In describing past trends in decision, the observer is able to draw upon the “wisdom of the past,”7 but does not rely exclusively on it to predict future trends. The past trends in decision must be viewed contemporaneously with the conditioning factors that gave rise to the decision, the mood of the times, and the background of the decision makers or the actors in the international arena.8 The background of the decision makers is crucial to understanding the past trends in decision because decision makers are rarely objective. They are conditioned by factors in their immediate environment and the social and political contexts in which they operate and live in. Generally, the background of decision makers is often 5 See Wiessner & Willard, Human Rights Abuses in Internal Conflict, supra Chapter 1, note 1, at 327. 6 See MCDOUGAL, Chen, & LASSWELL, supra Chapter 2, note 69, at 306. 7 The “wisdom of the past,” as McDougal, Lasswell and Chen explained, is contextual and considered only for future guidance. See id. Past trends cannot be distilled from the context in which they occurred. This context includes the predispositional factors that the observer and the decision maker bring to the issue to be resolved. 8 See generally Wiessner, New Haven School of Jurisprudence, supra Chapter 1, note 10, at 49. Presently, “the mood of the times” as it applies to the business and human rights debate appears to favor tncs. Until recently, none of the cases litigated under the Alien Tort Claims Act, which had been used by victims of alleged corporate-related human rights abuses, resulted in adverse judgments against tncs. In April 2013, the Supreme Court in Kiobel virtually foreclosed the use of the Alien Torts Claims Act as a potential remedy for extraterritorial human rights abuses committed by tncs. When it comes to extending constitutional rights to corporations, the Court, under Chief Justice Roberts, has been extremely magnanimous. The business lobby has been quite successful in advocating for the rights of corporations to the detriment of natural persons. The grassroots movement to limit and in some cases rescind some of the judge-created and interpreted constitutional rights for corporations still presses forward. The money and power of the business lobby is not deterring individuals from their goal to limit the influence of corporations in American politics and to hold tncs accountable of human rights abuses. See Petition by Al Franken, Put Citizens United in Dumpser of Bad Ideas, MoveOn.Org, http://pac.petitions.moveon.org/sign/put-citizens -united-in (last visited June 29, 2014); Tonya Robinson, Building a Government that Serves Ordinary Americans Not Special Interests, Official Whitehouse Response to Restore democ racy by ending corporate personhood, https://petitions.whitehouse.gov/response/building -government-serves-ordinary-americans-not-special-interests (last visited June 24, 2014).

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considered in litigation and arbitration, even when tncs are not involved. Lawyers know that certain predispositional factors can affect a judge’s decision9 as much as environmental factors can, e.g., the mood of the times. Both of which do and can change over time.10 The mood of the times clearly affected the Supreme Court’s decision under Chief Justice Earl Warren when the Court rejected over fifty years of precedent as established in Plessy v. Ferguson, and ruled unanimously in Brown v. Board of Education that “separate but equal” had no place in American society.11 Similarly, but with a result that many viewed as empowering corporations at the expense of natural persons, the Robert’s court in its 5-4 ruling in Citizens United v. Federal Election Commission12 set aside 100 years of precedent when it ruled that corporations enjoy the same First Amendment rights as natural persons.13 The participants’ conflicting claims must be juxtaposed against today’s modern world, which, as a result of globalization, is more interdependent, interrelated and more complex. In the human rights and business debate, the conflicting claims involve resolving and eliminating the deprivation, degradation, infringement and denial of human dignity that result from deleterious corporate commercial activities, both domestically and internationally. History is replete with examples of past trends in decision that deterred commercial entities from engaging in business practices that violated basic norms of human decency or that levied sanctions against commercial entities that violated these norms. This section will explore past trends in decision that have been used to regulate, or proposed as a means to regulate, corporations or 9 See Milton J. Horwitz, The Warren Court and the Pursuit of Justice, 50 Wash. & Lee L. Rev. 5 (1993) (discussing the background and predispositional factors of the members of the Warren Court and how these factors influenced the Brown decision and subsequent court decisions). Id. at 10–13. 10 See generally Wiessner & Willard, Human Rights Abuses in Internal Conflict, Chapter 1 supra note 1, at 327 (discussing how environmental factors and the mood of the times must be considered in analyzing past trends in decision when seeking to use past trends as future guidance). 11 See Horwitz, supra note 9 for a detailed discussion of how the Court reached its decision in Brown. The Warren Court in overruling Plessy relied upon the mood of the times as well as social science research that had evolved since 1896, when Plessy had been decided. Specifically and importantly, the Court relied upon “social psychology studies that show[ed] that segregation is stigmatizing to blacks and, hence, is inherently unequal.” Brown, 347 u.s. at 495, n. 11. 12 103 S. Ct. 876 (2010), 558 u.s. 50, 175 L. Ed. 2d 753. Citizens United is another example of how judge-created law has interpreted the constitution to extend rights to corporations which the drafters of the constitution clearly did not intend to do so. 13 Id.

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commercial ventures for their business practices and procedures that have a deleterious impact upon human dignity. Although not couched as violations of human rights, past trends in decision that ultimately recognized the inherent worth and dignity of individuals can be traced to the edicts or decrees prohibiting slavery that were issued by the Cyrus Cylinder in 539 bc,14 Ashoka in the 3rd Century bc,15 and later to the Chinese Emperor Wang Mang in 9th Century ad.16 Historically, people became  slaves because they were either insolvent debtors, sold into slavery by  their parents, born to slave parents, captured in war, or were kidnapped by  slave merchants or pirates.17 The commerce of trading, buying or selling human beings was an accepted way of life, fully established in all societies prior to it being abolished by domestic and international law. Prior to the explosion of the transatlantic slave trade, the majority of slaves were Caucasians or Europeans. In fact, the origin of the word “slave” is traced to the Eastern European ethnic group, the Slavs, who were enslaved by Spanish Muslims in  the 9th century ad.18 Slavery, however, as it became known with the 14

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The Cyrus Cylinder, an ancient Persian clay cylinder with Persian inscriptions, is claimed to be the “first declaration of human rights.” See The British Museum, The Cyrus Cylinder Travels to the u.s., thebritishmuseum.org, http://www.britishmuseum.org/about_us/ news_and_press/press_releases/2012/cyrus_cylinder_travels_to_us.aspx (last visited Oct. 10, 2013). Emperor Ashoka (302–232 bc) was the third king of the Maurya Dynasty in what is now part of modern India. Ashoka’s life, like that of many great rulers, exhibited human contradictions. Prior to his conversion to Buddhism, Ashoka was known for his brutal war campaigns. After his conversion, he became tolerant of others and stressed compassion and peaceful co-existence. Ashoka is credited with issuing edicts to ban slavery, although not the slave trade. He also ended capital punishment and instituted environmental regulations. See Teach India Project, Who Was Emperor Ashoka?, http://www.teachindiaproject .org/Ashoka.htm (last updated Mar. 2011). Interestingly, Ashoka is the name of a nonprofit social entrepreneur program that is leading the fight to eradicate human trafficking, the modern day version of slavery and the slave trade. See Ashoka, www.ashoka.org. Emperor Wang Mang freed China’s slaves circa 9 ad. See MARY STANTON & ALBERT HYMA, STREAMS OF CIVILIZATION: EARLIEST TIMES TO THE DISCOVERY OF THE NEW WORLD 224 (Christian Liberty Press: Illinois 1976). For a detailed discussion on slavery and how it violates the eight values under policyoriented jurisprudence, particularly the value of respect, see McDougal, Lasswell & Chen, Protection of Respect, supra Chapter 2, note 72. See bbc World Service, The Story of Africa, The Roots of Slavery, http://www.bbc.co.uk/ worldservice/africa/features/storyofafrica/9chapter1.shtml (last visited July 29, 2011). See also Robert Davis, Christian Slaves, Muslim Masters: White Slavery in the Mediterranean, the Barbary Coast, and Italy, 1500–1800 (Palgrave Macmillian 2004).

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t­ransatlantic slave trade,19 quickly became synonymous with the capture, enslavement, and the extreme human degradation of people from sub-Sharan African.20 More recent attempts to regulate or curtail commercial entities or business ventures that violated human dignity can be traced back to movements to eradicate piracy, to abolish the trade in dark chattel and slavery, and to intervene in World War II in order to halt the Nazi’s quest for lebensraum at the expense of ethnic and religious minorities and disenfranchised groups. These trends in decision, however, must be juxtaposed against the realities of their time. But they provide a template to move forward with creating mechanisms to provide remedies to victims of corporate-related human rights abuses. Transnational commercial activities, like maritime piracy and the slave trade, that violated human rights threaten international peace and security. One of the main purposes of the United Nations is to maintain international peace and security, and to that end: to take effective collective measures for the prevention and removing of threats 19

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Historically there were two slave trades that emanated from the African continent: the Islamic slave trade and the European slave trade. The European slave trade evolved into the transatlantic slave trade, which began in 1444 and continued for more than 400 years. The Islamic slave trade, however, lasted much longer, almost 14 centuries, and in parts of the Muslim world, it still continues in some form to this day. While much of the literature and legislation surrounding the slave trade focused on the transatlantic slave trade, the Islamic slave trade was just as horrific, if not more so, because of the vast numbers of human cargo transported to Arab countries. The difference in the scope of the slave trades is that the transatlantic slave trade was an economic engine that catapulted Europe and, in particularly, the United States into economic and political dominance that persists to this day. Lerone Bennett, Jr. details how the transatlantic slave trade differed from ancient slavery. In 1610, a “Dutch man of war” ship manned by pirates and thieves, landed in Jamestown, Virginia carrying a cargo of 20 indentured servants. This began the slave trade in the United States. The us slave trade cannot be understood if it is not placed in the flow of history from which vantage point it will appear that slavery is not a disgrace peculiar to blacks but a universal phenomenon that has been practiced in almost all countries since the beginning of recorded history. The crucial difference, however, between ancient slavery and the transatlantic slavery is that ancient slavery, which had little or nothing to do with race, was justified primarily by the rules of war. Christians and Moslems added a new dimension to this ancient institution, capturing and enslaving one another for religious reasons. The same rationale served both groups when economic interests and improved technology focused world attention on Africa. See Bennett, supra Chapter 1, note 2, at 34.

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to the peace and the suppression of acts of aggression or other breaches of the peace and to bring about by peaceful means, and in conformity with the principles of justice and international law, adjustment or settlement of international disputes or situations which might lead to a breach of the peace;21 There has been a steady and progressive recognition and acceptance by the business community that “there are particular moral and ethical duties that multinationals must recognize.”22 Moreover, the world community recognizes that corporate-related human rights abuses lead to breaches of international peace and security. tncs, therefore, should have a legal duty that holds them accountable for their harmful business practices. A The Anti-Slavery and Abolition Movement Transnational commercial activity is the inevitable result of geographically defined areas of distinct groups of people linked together by race (phenotypical characteristics and traits), languages, customs, or religious belief systems bartering or trading goods and natural resources between each other. In too many instances, the goods or natural resources were humans – men, woman and children – relegated to a life of servitude as it was defined by their masters, cultures and nation-states. Once having been bartered, sold or traded as chattel, the quality of life for these humans depended upon the benevolence of their masters, until laws, religious or secular, decided their fates. Clearly, the early merchant caravans traversing the North African, Middle Eastern and Asian trade routes paled in comparison to the global reach of today’s tncs and the corporate-related human rights abuses attributed to these tncs. The dynamics, however, are strikingly similar. Some merchants, viewing their human goods as precious cargos, may have taken great care to feed and care for them, just as they did their livestock. Others, having rationalized that a certain amount of spoilage or loss of perishable goods was inevitable, failed to take the requisite care of their human merchandise. In any event, the business of human commodity trading was a transnational business venture and economic system that violated the human rights of individuals, families, communities and peoples.23 21 22 23

U.N. Charter, Chapter 1. Barbara A. Frey, The Legal and Ethical Responsibilities of Transnational Corporations in the Protection of International Human Rights, 6 Minn. J. Global Trade 153, 164 (1997). tncs have been assailed for locating in host countries where they degrade and pollute the environment, neglect and violate indigenous peoples’ cultural and land rights, and abuse

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The slave trade as a commercial venture is considered the oldest trade; and slavery, which constituted the ownership of people as property and was not based upon racial superiority or ethnic animus, is as old as mankind.24 The recorded origins of slavery can be traced back to 6800 b.c. to the city of Mesopotamia, where enemies were captured and forced to work.25 When viewed in its temporal context, slavery and the sale of human flesh, which predated Christianity, was normal and desirable.26 In ancient Greece,27 slaves were both legal subjects and “a thing.”28 Greek philosophers Aristotle and Plato supported slavery. Aristotle did not consider slavery a violation of the laws of nature. But is there any one thus intended by nature to be a slave, and for whom such a condition is expedient and right, or rather is not all slavery a violation of nature? There is no difficulty in answering this question, on grounds both of reason and of fact. For that some should rule and others be ruled is a thing not only necessary but expedient: from the hour of their birth, some are marked out for subjection, others for rule.29 Plato considered a man’s wealth tied inextricably to the number of slaves he owned.30 Some of the most preeminent Christian theologians, however, did

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the human rights of individuals in communities where they locate. A detailed account of slavery and the slave trade and how it violates all of the eight values set forth in policyoriented jurisprudence is set forth in, McDougal Lasswell & Chen, Protection of Respect, supra Chapter 2, note 72. See Bennett, supra Chapter 1, note 2, at 34. The enslavement of human beings is the “world’s oldest trade.” Markus Vink, The World’s Oldest Trade: Dutch Slavery and Slave Trade in the Indian Ocean in the Seventeenth Century, 14 J. World History 2 (2003), available at http://www.historycooperative.org/journals/jwh/14.2/vink.html (last visited Feb. 27, 2007); see also McDougal Lasswell & Chen, Protection of Respect, supra Chapter 2, note 72, at 947–948. See Kevin Bale, Understanding Global Slavery: A Reader 28 (University of California Press 2005). Id. at 29. See David Brion Davis, Inhuman Bondage: The Rise and Fall of Slavery in the New World 54 (New York: Oxford University Press 2006). See McDougal, Lasswell & Chen, Protection of Respect, supra Chapter 2, note 72, at 953. Aristotle, Politics 58 (Benjamin Jowett trans, Random House 1943) (350 b.c.e.). Plato said that 50 or more slaves represent possessions of a wealthy man. See Peter D. Hammond, Racism, Slavery & Terrorism, Frontline Fellowship, http://www.frontline.org .za/articles/racism_slavery_terrorism.htm (last visited Mar. 29, 2010).

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not view slavery as the natural order of things, but rather looked upon it as the result of sin. Both St. Augustine and Thomas Aquinas viewed slavery as the just recompense for sin, but that in most instances slaves should be treated humanely.31 Generally, when scholars speak of slavery and the slave trade in terms of human rights, the time line begins with the transatlantic slave trade for several reasons: (1) it was the most expansive and pernicious commercial trading venture in recorded history; (2) it was based upon the denigration of people simply because of their race; and (3) it formed the basis of a comprehensive, complex and large-scale transnational economic system. The main trading countries – Spain, Portugal, the Netherlands, England, and France – were able to make a significant profit on each leg of the triangular journey. Many European cities flourished courtesy of the profits from agricultural industries built and sustained literally on the “backs” of African slaves.32 Few international commercial ventures have surpassed the level of the horrors perpetrated on African natives and the indigenous peoples of North, Central and South America and the Caribbean during the transatlantic slave trade.33 The slave trade was a visible and vicious affront on the human dignity of societal devalued human beings, which slave merchants viewed, in many instances, as the cost of doing business. Eric Williams, in his seminal work, Capitalism and 31

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See Gerard O’Daly, Augustine’s City of God: A Reader’s Guide 206 (Oxford University Press 1999). Rule and authority over other humans are consequences of original sin. Slavery is an extreme instance of those consequences. Slavery is only natural inasmuch as it is a feature of our sinful, fallen condition. It is therefore, a form of punishment, and so should be preserved as part of the order of nature, constituted in the conditions of society as it now is. But rule over slaves should be exercised with a view to the welfare of all the members of the household. Id. at 204. See Eric Williams, Capitalism and Slavery (University of North Carolina Press 1994). Dr. Eric Williams, a Caribbean historian, was the first Prime Minister of Trinidad and Tobago, serving from 1956 until his death in 1981. His book, Capitalism and Slavery, inflamed British academicians because it openly challenged the myth that England abolished slavery because of moral and humanitarian concerns. Instead, Williams opined that it was the decline in the profitability of the slave trade that led to its eradication. For a detailed discussion of how European nations profited from the slave trade see also United Nations, International Day for the Commemoration of the 200 Anniversary of the Abolition of Slavery – Mar. 25, 2007, Background Information, http://www.un.org/ events/slaveryabolition/backgrounder.shtml (last visited Apr. 12, 2007). See Bennett, supra Chapter 1, note 2, at 4. Bennett provides a detailed history of Africa and African Americans before Europeans colonized the United States.

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Slavery,34 describes the enormous profits that resulted from the slave trade. Goods manufactured in England were shipped to Africa, exchanged for slaves and other commodities, which were transported to the West Indies, and exchanged at a profit for sugar, rum, tobacco, rice, cotton and other goods that were imported to England.35 According to Williams, the West Indies’ slave trade was abolished only when it became economically prohibitive for the sugar colonies to use slave labor.36 Williams also demonstrates how the profits from the slave trade served as the capital for the Industrial Revolution. Many of those engaged in the slave trade became bankers and used slave profits to finance major industrial projects.37 Historically, opposition to slavery in Europe was couched as a moral issue and was the result of the Enlightenment and revolutionary movements in Europe.38 Is it morally right for man to be the property of another man? The anti-slavery laws are viewed as moral codes, instead of binding international human rights law. 39 Moral codes, however, are not new. They evolved as 34 35 36 37 38

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See generally E. Williams, supra note 32. Id. Id. Id. Several European nations abolished domestic slavery and slave trading long before the transatlantic slave trade was abolished. In 1117, Iceland abolished slavery. In 1214, the Statute of the Town of Korcula (Croatia) abolished slavery. In 1315, King Louis X of France decreed that any slave setting foot on French ground would be freed. In 1335, Sweden abolished slavery. In 1416, the Republic of Ragusa (modern Croatia) abolished slavery and slave trading. In 1569, an English court ruled in the Cartwright Case, 2 Rushworth 468, a case involving a Russian slave, that English law did not recognize slavery. The pendulum in English courts sung back and forth until 1807, when slavery was legally abolished. For a detailed review of the laws in the United Kingdom (England) and the issue of slavery, see generally V.C.D. Mubani, African Slaves and English Law, archive.lib.msu.edu/DMC/ African%20Journals/…/.pula003002007.pdf (last visited Dec. 12, 2009). In the 16th century, Portugal passed a law banning the selling and buying of Chinese slaves. See Maria Suzette Fernandes-Dias, Legacies of Slavery: Comparative Perspectives (Cambridge Scholars Publishing 2007). Other non-European countries also prohibited slavery. Japan prohibited Portuguese traders from exporting Japanese as slaves. See THEMBA SONO, JAPAN AND AFRICA 42–43 (hsrc Press 1993). In the Americas, Providence Plantations, which at one time consisted of parts of Rhode Island, abolished slavery in 1652. This ban did not extend to the area that later became known as Rhode Island. Spain abolished slavery in Chile in 1683. See Bennett, supra Chapter 1, note 2. See also Judicial Cases Concerning American Slavery and the Negro 25 (Helen Tunnicliff Catterall, ed., Washington, D.C.: Carnegie Institution of Washington 1926). See generally Martinez, Anti-slavery Courts, infra note 42.

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hunting gave way to agriculture, then to industry, and to the present market economy. As societal mores and values progressed and the sanctity of human life became more valued, or at least balanced against the cost of doing business, many business activities that directly violated human rights were prohibited. Slavery was one of them. One of the earliest recognized human right was the right not to be a slave – a right independent of one’s nationality, religion or race. Under a policy-oriented jurisprudence analysis, slavery represented the most extreme deprivation of freedom of choice and violated the value of respect.40 A slave was denied access to the process of authoritative decision. Social and cultural practices that are now universally considered affronts to human dignity must be viewed in their proper historical contexts. They must also be viewed as a primer on how world societies have used morality to change the law and law to change morality. Opposition to the transatlantic slave trade evidences that transnational commercial entities (the precursors to the modern tncs) always vigorously resisted any binding regulations on commercial activities that violated or may have the potential to violate the human rights of individuals in home and host states. The movement to abolish slavery was an international attempt to regulate large scale transnational commercial (corporate) activities that were the most hideous and flagrant violations of human rights. It is well documented that the first prong of eradicating slavery as an institution was to abolish the slave trade.41 Most scholars fail to view this historical juncture as precedent for imposing human rights obligations on corporations and creating binding legislation to protect individuals from corporate activities that violate basic human rights and human dignity because it predates the modern international human rights regime. Such a nonchalant lack of acknowledgment that transnational corporate activities have been and should be regulated by international binding law diminishes how and why law is made. Additionally, the regulation of the slave trade by binding international law quells the argument that “only nation-states” have been and are the subjects of international law.42 40 41

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See McDougal, Lasswell & Chen, Protection of Respect, supra Chapter 2, note 72, at 943. “Because of the historic difficulties in securing the abolition of slavery and the slow progress toward amelioration of its incidents, international efforts at the turn of the nineteenth century were directed principally toward prohibiting the slave trade so as to reduce the number of slaves.” Id. at 955. During the slave trade, vessels and merchants were subject to international law. See Jenny S. Martinez, Anti-slavery Courts and the Dawn of International Human Rights, 117 yale L.J. 550 (2007) [hereinafter Anti-slavery Courts]; see also Andrew J. Wilson, Beyond Unocal: Conceptual Problems in Using International Norms to Hold Transnational Corporations

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Although the slave trade predates the adoption of the udhr, many international human rights lawyers view the slave trade as one of the first instances of corporate abuse of human rights.43 In one historically significant instance, the justifications for individual accountability and business accountability, and the corresponding limits of state responsibility, all came together -- international efforts to outlaw the slave trade. The slave trade represented, in a sense, the worst form of private enterprise abuse of human rights. To end it, abolitionists eschewed sole reliance upon state responsibility, both because traders operated on the high seas and because many states tolerated the practice. Instead, they convinced governments to conclude a series of treaties that allowed states to seize vessels and required them to punish slave traders. Thus the first true example of international human rights law was a response to commercially oriented violations of rights.44 1

The British Abolition Movement: The Precursor to the Human Rights ngos and the Movement to Impose Human Rights Obligations on tncs The transnational shipment of slaves from Africa to the Americas was via the Middle Passage. The average Englishman on the street was kept in the dark as to what was actually happening in the Middle Passage. In response to a question posited by Cambridge University for an essay contest, “Is it lawful to make slaves of others against their will?”, Thomas Clarkson answered affirmatively that it was not. His response, An Essay on Slavery and Commerce in the Human Species, Particularly the African, won first prize.45 Clarkson is credited with informing the average Englishman of the plight of Africans traversing the

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Liable in the Alien Tort Claims Act, in TRANSNATIONAL CORPORATIONS AND HUMAN RIGHTS 43 (Olivier de Schutter ed., 2006). See A. Yasmine Rassam, Contemporary Forms of Slavery and the Evolution of the Prohibition of Slavery and the Slave Trade Under Customary International Law, 39 Va. J. Int’l L. 303, 329–342 (1999) (showing the evolution of international law on the slave trade to cover a broad array of practices). Steven R. Ratner, Corporations and Human Rights: A Theory of Legal Responsibility, 111 Yale L.J. 443, 465 (2001) [hereinafter Ratner, Theory of Legal Responsibility]. See Thomas Clarkson, An Essay on Slavery and Commerce in the Human Species, Particularly the African, Translated from a Latin Dissertation, Which Was Honoured with the First Prize in the University of Cambridge, for the Year 1785, with Additions, (London: J. Phillips 1786), Project Gutenberg, http://www.gutenberg.org/files/10611/10611-h/10611-h.htm (last visited May 25, 2010).

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Middle Passage in the bowels of slave ships headed not for opportunities and liberty, but for degradation, despair and, as too often was the case, death. Once the deplorable conditions of the slave trade became known, women and men of good conscience began to fight for the abolition of such a horrific commercial venture. One of the earliest volunteer organizations in Britain was devoted to a single cause – the anti-slavery movement.46 In 1782 a committee of 12 individuals supported the anti-slavery movement, including six members of the Society of Friends (Quakers).47 The Quakers helped set up a committee of their own in 1783 in order to obtain, publish, and disseminate “such information as to end the abolition of the slave trade.”48 Two other committee members, Thomas Clarkson and Granville Sharp, published pamphlets detailing how slaves were packed into ships under dehumanizing conditions, hoping to create public outrage against the slave trade.49 In a New York’s Time review of two books on the anti-slavery movement, Marilynne Robinson described Granville Sharp, who would have been considered a modern day human rights activist. [A] minor government clerk who educated himself in the law in the course of defending the rights of Africans brought into England and slaves. He devoted himself and his slender resources to this work over decades with the object of finally putting an end to slavery itself. The trial [R v. Knowles, ex parte Somerset, (1772), 20 State Tr 1], which is said to have abolished slavery within England by legal precedent, was centered on the question of Steuart’s right to sell Somerset into the West Indies. Lord Mansfield ruled in favor of Somerset on the grounds that slavery “is so odious that nothing can be suffered to support it but positive law.” There 46 47 48

49

The early volunteer organizations are analogous today’s ngos. Quakers in Britain, Quakers initiate the abolition movement in Britain, http://www.quaker .org.uk/quakers-initiate-abolition-movementbritain (last visited Dec. 27, 2010). The Quakers’ campaign to abolish the slave trade was based upon a fundamental belief in the equality of all human beings. Two hundred seventy-three Quakers signed a petition to abolish the slave trade and presented it to the British Parliament. See generally Rufus Matthew Jones, The Later Periods of Quakerism, vol. 1, 322 (London: MacMillian & Co. 1921). According to Clarkson’s research, 10% of the slaves would normally die during the Middle Passage. Strong men fetched as much as 40 pounds while the women and children were sold in cheap batches with the sick and weak men. The slave trade had a spillover effect in England. Roughly 18,000 people were employed in making goods to trade for slaves in Africa. This trade accounted for 4.4% of British exports. See The Scourge of Muslim Slavery (last visited July 29, 2011), available at http://grendelreport.posterous .com/the-scourge-of-muslim-slavery.

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being no such law in England, “the Black must be discharged.” This decision freed an estimated 15,000 Africans then held slaves in England.50 Clarkson used common law to secure the human rights of slaves, thereby using law to change morality. The rhetoric offered by opponents and proponents of slavery and the slave trade reflect many of the contemporary debates and conflicting claims raging against efforts to impose human right obligations on tncs.51 State sovereignty, the lack of a transnational enforcement body, the economic hardships tncs would suffer if binding legislation is imposed on them and the fact that smaller companies would continue to conduct “business as usual,” placing tncs at a competitive disadvantage, are reasons against binding norms. Ironically, even the most insulting reason, that tncs raise the standard of living of some of the most wretched individuals in the communities where the tncs operate is appallingly analogous to the Christian slave owners’ rationale that slavery was saving the savage from his pagan ways. 50

51

Marjie Bloy, Ph. D., The Anti-Slavery Campaign in Britain, The Victorian Web (quoting Marilynne Robinson, Though the Heavens May Fall and Bury the Chains: Freed, ny TIMES Magazine, Jan. 9, 2005, (last visited Dec. 27, 2010), available at http://www.victorianweb .org/history/antislavery.html. But see E. Williams, supra note 32 (dismissing the notion that the Somerset case was formative to the abolition movement in England). According to Williams, the notion that the abolition movement was to free the slaves is nothing more than “merely poetic sentimentality translated into modern history.” E. Williams, supra note 32, at 45. Some of the proslavery arguments were (1) trade was necessary to the wealth of Britain and the Americas. The end of slavery and the slave trade would result in a collapse of the economy; (2) if Britain did not engage in the trade, other countries, Britain’s commercial rivals would; (3) African nations practiced slavery; (4) Africans were pagans and therefore slavery made it better for Africans who no longer had to live in their homelands; (5) African were unfit for other work; (6) slavery was based upon Biblical principles; (7) slaves were not mistreated unless they rebelled; and (8) the conditions on the slave ships were acceptable. See Arguments and Justifications: The Abolition of Slavery Project, http://aboli tion.e2bn.org/ (last visited Dec. 5, 2011). Some of the arguments proffered by business proponents against binding international norms are (1) traditionally, only states are the subjects of international law; (2) enforcement mechanisms will not only be impractical but problematic; and (3) binding legislation will hurt profits. Such arguments simply demonstrate the lack of will on the part of the government, the un, and other international bodies and organizations. The advances in technology and the flow of information have been two factors that have directly quickened the scope and rapidity with which tncs have extended their global reach. These same factors can be utilized to employ enforcement mechanisms to monitor human rights violations by tncs and, accordingly, to hold them accountable.

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Efforts to abolish slavery were not the sole preoccupation of abolitionists in Britian. Sir John Gladstone, a plantation owner in the West Indies formed an important political group that opposed the abolition of the slave trade.52 By the late 18th century, moral and political opposition to the slave trade was growing in Britain and the u.s. as well as in other parts of Europe. The campaigns to end slavery served as prototypes for modern human rights campaigns. Abolitionists used many advocacy tools that we now take for granted, including investigative research, parliamentary lobbying, media work, consumer boycotts, judicial challenges, the single-issue campaign, branding and merchandising.53 In 1807, after much agitation and civil disobedience by anti-slavery organizations and one too many slave revolts, both the United States and Great Britain entered into a bilateral treaty prohibiting the transnational commercial activity known as the transatlantic slave trade.54 In efforts to effectively halt the slave trade and penalize corporate entities and individuals that engaged in it, other binding international regulations (treaties) were enacted. These regulations were some of the first successful international regulations of transnational commerce that violated human rights. They provide guidance and precedent for developing binding legislation on tncs for human rights violations. From 1817 to 1871, Mixed Commissions for the Suppression of the Transatlantic Slave Trade or Mixed Courts of Justice were the first international human rights tribunals.55 These anti-slavery courts are rarely mentioned in today’s human rights discourse with regard to tncs,56 except as a brief reference or a footnote. The Mixed Commissions have a seminal importance to the discussion of imposing human rights obligations on tncs because most international human rights legal scholars discount any normative regulation of human rights violations that predate World War II and the Nuremberg trials of Nazi corporate actors’ complicity in the Holocaust.57 In fact, the nineteenth century abolition movement was the first successful international human rights campaign, and international treaties and courts were its central features.58 52 53

54 55 56 57 58

See Bloy, Ph.D., supra note 50. See Roland Quinault, Gladstone and Slavery, 52 THE HISTORICAL J. 363 (2009) (last visited Aug. 1, 2011), available at http://journals.cambridge.org/action/displayFulltext?type=1&fi d=5570228&jid=HIS&volumeI d=52&issueId=02&aid=5570220. Slave Trade Act of 1807, 47 Geo III Sess. 1 c. 36. See Martinez, Anti-Slavery Courts, supra note 42. Id. See, e.g., LOUIS HENKIN, THE AGE OF RIGHTS 1 (Columbia University Press 1990); see, e.g., Antonio Cassese, International Law 376, n. 1 (Oxford University Press 2005). See Martinez, Anti-slavery Courts, supra note 42.

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The history of the anti-slavery courts also reveals a more complex interrelationship between state power, moral ideas, and domestic and international legal institutions than many contemporary theories of international law and international relations acknowledge. All historical events must be juxtaposed against the social, political and moral ethos of the time in which they occurred. Anti-slavery courts are evocative of contemporary problems in international relations, including efforts to foster democracy and human rights both through the use of force and/or through international legal institutions, including courts. The anti-slavery movement’s use of international law and legal institutions as part of a broader social, political and military strategy can help us better understand the potential role of international law today in bringing about improvements in human rights vis-à-vis tncs. Acknowledging the breadth and scope of these courts and treaties changes the debate about binding human rights regulations on business. Compared to the post-World War II, Nuremberg-centric story, an understanding of international human rights law that begins with the anti-slavery movement places a much greater emphasis on nonstate actors – both the slave traders and vessels who were the human rights violators and the civil society leaders of the abolitionist movements in various countries. Changes in the world economy in the 19th century created the conditions that made the abolition of the slave trade more feasible. Slavery and the slave trade were eradicated, intentionally, by people who believed it was morally wrong. It was eradicated in part by military force, but also by coordinated legal action, including the use of international courts. In using the abolition of the slave trade as a template to enact binding international human rights regulations on tncs, one must keep in mind that it was not accomplished without vocal and vehement opposition. The abolition movement is very analogous to ngos and civil society’s attempts to impose human rights obligations on tncs. The anti-slavery movement was a persistent and dedicated movement, the progression of which was oftentimes slow and tedious and accomplished in phases.59 The current 59 Martinez, Anti-Slavery Courts, supra note 42, at 14. Early abolition efforts did not strike at the heart of the problem -- the institution of slavery itself, which was not abolished in the British colonies until 1833 -- but focused first, on limiting the geographical reach of slavery and second, on restricting the trade in slaves from Africa to the New World. Halting the commerce of the transnational transport of slaves from the African coast across the Middle Passage was easier than an outright abolition of slavery. The most horrific human rights abuses that evoked the most religious indignation was the condition in which slaves were transported in slave ships across the Middle Passage, after all ‘[t]he slave trade was viewed as the cruelest part of the system’. (internal citations omitted). Id. at 14.

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movement to impose binding regulations on tncs involves slow, tedious incremental steps. That should not thwart the ultimate goal: binding regulations, whether it is done through a treaty or through domestic laws with extraterritorial reach by a tribunal of competent jurisdiction taking the necessary and bold leap of interpreting international law to bring it in line with today’s realities. In spite of the pros and cons about regulating tncs, one constant truth remains – commercial activities can and many times do produce immoral effects. It is immoral to engage in activities that impinge human dignity. The anti-slavery movement clearly established the trend to denounce and condemn the commercial venture of owning another person as property or benefitting from the forced labor of another human being. The anti-slavery movement started first as a public awareness campaign, followed by boycotts and then domestic legislation, which later found their way into bilateral and multilateral treaties. Slavery and the slave trade are now prohibited as jus cogens norms. The circumstances surrounding the slave trade and its abolition cannot provide definitive answers to the human rights and business debate, but they do provide insight into possible solutions. Many scholars are pressing for a World Court of Human Rights to address the role of corporations in grave human rights abuses.60 Slavery and the slave trade, ultimately, ended in various legal ways: by decree of a sovereign ruler, judicial judgment, common law principles, public advocacy, constitutional amendments, jus cogens principles, and eventually binding international and human rights law.61 Mauritania, the last country to 60 61

See World Court of Human Rights, infra Chapter 6. The following is a list of international laws prohibiting slavery and the slave trade. In the Brussels Conference Act of 1890 the signatories “declared that they were equally animated by the firm intention of putting an end to the traffic in African slaves.” International Agreement for the Suppression of the “White Slave Traffic,” opened for signature May 18, 1904, 35 Stat. 1979, 1979 (entered into force July 18, 1905); International Convention for the Suppression of the White Slave Traffic, May 4, 1910, Gr. Brit. T.S. No. 20 (1912) (Cd. 6326), as amended by Protocol Amending the International Agreement for the Suppression of the White Slave Traffic, and Amending the International Convention for the Suppression of the White Slave Traffic, May 4, 1949, 2 u.s.t. 1999, 30 u.n.t.s. 23, entered into force June 21, 1951; International Convention for the Suppression of the Traffic in Women and Children, League of Nations, opened for signature Sept. 30, 1921, 9 L.N.T.S. 415; the 1926 Slavery Convention or the Convention to Suppress the Slave Trade and Slavery, Sept. 25, 1926, T.S. 778, 60 L.N.T.S. 253, amended by Slavery Convention Protocol, opened for signature Dec 7, 1953, 7 u.s.t. 479. Its forerunner was the General Act of the Brussels Conference of 1889–90; Convention Concerning Forced or Compulsory Labour, adopted June 28, 1930, 39 u.n.t.s. 55; International Convention for the Suppression of the Traffic in Women of Full Age, Oct. 11, 1933, 150 L.N.T.S. 433; Convention for the

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abolish slavery in this century, exemplifies the various past trends in decision that denounced slavery. In 1905, slavery was abolished by a colonial decree, which implemented French law adopted in 1848 abolishing slavery in all French colonies. When Mauritania gained its independence from French colonial rule in 1961, its Constitution reaffirmed the abolition of slavery when it incorporated the principles of the udhr. Socio-cultural and economic practices, which are embedded into the fabric of society, are hard to eradicate with law. In 1980, in response to the public outcry of the sale of a female black Moor, Mauritania’s President issued a formal statement denouncing slavery. That statement became law in 1981. In 2007, Mauritania passed the Slavery Act, which criminalized slavery and slave-like practices. Unfortunately, however, slavery still exists Mauritania and in other parts of the world.62

Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others, United Nations, opened for signature Mar. 21, 1950, 96 u.n.t.s. 271; Supplementary Convention on the Abolition of Slavery, the Slave Trade and Institutions and Practices Similar to Slavery, Sept. 7, 1956 adopted, 18 u.s.t. 3201, 266 u.n.t.s. 40; Convention Concerning the Abolition of Forced Labour, adopted June 25 1957, 320 u.n.t.s. 291; Convention Concerning the Prohibition and Immediate Action for Elimination of the Worst Forms of Child Labour, June 17, 1999, T.I.A.S. No. 13045; Optional Protocol to the Convention on the Rights of the Child on the Sale of Children, Child Prostitution and Child Pornography, opened for signature May 25, 2000, T.AS. No. 13, 095 (entered into force Jan. 18, 2002); Trafficking Victims Protection Act of 2000, Pub. L. No. 106–386, Division A, 114 Stat. 1464 (2000), expanded federal anti-slavery laws to reach psychological coercion and provides special immigration provisions so alien victims of modern-day slavery can remain safely in the United States; and Rome Statute of the International Criminal Court, adopted on July 17, 1998, 2817 u.n.t.s. 3, entered into force July 1, 2002. The International Criminal Court has jurisdiction only over national persons (including corporate officers) but not over legal or juridical persons, such as corporations or business entities. Rome Statute, icc, art. 25. See Andrew Clapham, The Question of Jurisdiction Under International Criminal Law Over Legal Persons: Lessons from the Rome Conference on an International Criminal Court, in Liability of Multinational Corporations Under International Law 143–145 (Menno T. Kamminga & Saman Zia-Zarifi eds., 2000) [hereinafter Clapham, Question of Jurisdiction]. 62 Report of the Special Rapporteur on contemporary forms of slavery, including its causes and consequences, Human Rights Council, A/HRC/15/20/Add.2 (Aug. 15, 2010) (by Gulnara Shahinian), available at http://www2.ohchr.org/english/issues/slavery/ rapporteur/docs/A.HRC.15.20.Add.2_en.pdf (last visited Oct. 22, 2013). The slave trade has been resurrected in the form and context of human trafficking. See generally Roza Pati, States’ Positive Obligation with Respect to Human Trafficking: The European Court of Human Rights Breaks New Ground in Rantserv v. Cyprus and Russia, 29 Boston U. Int’l L. J. 79 (2011). In August 2012, the Holy Father, Pope Benedict XVI

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B The Nuremberg Trials and the Liability of Corporations The Holocaust serves as a reminder that if corporations are complicit in human rights violations, the victims have a legal right, if not a moral right, to compensation from those corporations63 During wwii, many American companies, ibm and others, lent their technology, resources and sold goods to Nazi Germany, reaping enormous profits.64 The abuses of the Holocaust contributed to the development of new approaches to human rights, this time focusing on corporate human rights violations and the line between the legally acceptable pursuits of profit and criminal or tortious behavior.65 Corporate involvement in the Holocaust illustrates how business managers were able to maximize profits to benefit shareholders, thus insulating shareholders from the human consequences of their investments.66 Even though corporate actors were implicated in the Nuremberg trials, only individual corporate officers were formally prosecuted for, among other things, crimes amounting to genocide.67 Still, in United States v. Krauch, the IG Farben case, the u.s. Military Tribunal stated that “[t]he action of Farben and its representatives…cannot be differentiated from acts of plunder or pillage committed by officers, soldiers, or public officials of the German Reich.… Such action on the part of Farben constituted a violation of the Hague Regulations.”68 This means, at least, that corporations have a duty under international law not to violate the laws of war. While the Nuremberg trials did not explicitly express that corporations can be liable for human rights abuses that are tantamount to war crimes, crimes against humanity and genocide, several scholars do not consider it a stretch to impose such liabilities on corporations.69 In fact, in Presbyterian Church of Sudan v. appointed Professor Pati to be a Member of Pontifical Council for Justice and Peace, at the Vatican. She is the only Council member representing the United States. 63 See Beth Stephens, The Amorality of Profit: Transnational Corporations and Human Rights, 20 Berkley J. Int’l L. 45 (2001). 64 Id. at 46. 65 Id. 66 Id. 67 See United States v. Krupp, IX Trials of  War Criminals Before the Nuremberg Military Tribunals (1948). In the Krupp trial, the Krupp firm’s use of forced labor (criminal intent) was imputed to the corporation, even though the court did not actually declare the Krupp Corporation a criminal organization. In the Farben case, corporations were implicated as criminal instrumentalities. U.S. v. Krauch, reprinted in 8 Trails of War Criminals Before the Nuernberg Military Tribunals Under Control Council Law No. 10 (1953), available at http://www.mazal.org/archive/nmt/07/NMT08-C001.htm. [emphasis added]. 68 U.S. v. Krauch, id. at 1081. 69 Ratner, Theory of Legal Responsibility, supra note 44, at 478. According to Ratner, the Nuremberg Tribunals evince an acknowledgment that corporations can be liable for

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Talisman Energy, Inc.,70 the court pointed out that the Nuremberg trials established that corporations could be liable for war crimes.71 Michael Kelly argues that since states are simply fictitious entities and can be held liable for genocide, then, logically, so can other legal persons, including corporations.72 What can be done in theory has a wide hurdle to overcome in reality. Kelly, nonetheless, provides a reasoned argument based upon what the drafters of the 1948 Genocide Convention on the Prevention and Punishment of Genocide possibly could have conceived – that corporations could be responsible for committing genocide.73 In addition, as mentioned above, corporations are most probably liable at least for violations of the laws of war. II

Trend Analysis: United Nations Attempts to Regulate Transnational Corporations

The United Nations has on four occasions attempted to lead in regulating transnational corporations. The first attempt was made in the early 1970s in response to the G-77 nations’ demand for a nieo. The next was in 1992 at the United Nations Conference on Environment and Development. The final two attempts were from 1997–2003, the Norms, and from 2005–2011, the Guiding Principles. A Draft un Code of Conduct In 1977, the United Nations Commission of Transnational Corporations (unctc) began work on a voluntary Code of Conduct on Transnational Corporations (Draft un Code).74 The purpose of the Draft un Code was to

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international human rights abuses. Cf Peter Muchlinski, Human rights and multinationals: is there a problem? 77 INT’L AFF. 1 (2001) (noting that the Nuremberg trials may not provide guidance on holding corporations liable for human rights violations since the corporate entities implicated in Nuremberg trials were not private corporations. These corporations were actually representing the Nazi state.). 244 F.Supp. 2d 289 (S.D. N.Y. 2003). See U.S. v. Krauch, supra note 68 (discussing that the Nuremberg trials provided a precedent for finding corporate liability for violations of international law). Michael J. Kelly, The Status of Corporations in the Travaux Preparatoires of the Genocide Convention: The Search for Personhood, 43 Case W. Res. J. Int’l L. 483 (2010). Id. Kelly noted that the term “persons,” at the time the Genocide Convention was drafted, was applicable to artificial as well as natural persons. The draft code was made public in 1984. See United Nations Draft International Code of Conduct on Transnational Corporations, 23 ilm 626 (1984); Development and

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c­ reate linkages between tncs and national development goals in developing countries. The Code was designed to be comprehensive and legally binding. However it was never adopted. Disagreements over the pertinent provisions of the Code such as the Code’s relationship to international law,75 the United Nation’s role in administering the Code, economic sanctions against apartheid South Africa, and Eastern European attempts to exempt public organizations from the Code resulted in stalled negotiations. The Draft un Code required tncs to respect human rights and fundamental freedoms in the countries in which they operated.76 In 1992, in the face of lobbying efforts by the United States to eliminate the unctc,77 the unctc disbanded and many of the areas sought to be regulated by the unctc were transferred to the United Nations Conference on Trade and Development (unctad). B The Global Compact The Global Compact represents Secretary-General Kofi Annan’s response to the G-77 nations’ demand for binding regulation to address the disparities that American tncs were exerting over natural resources in developing countries. Many critics suggest that the Global Compact was Annan’s way of appeasing American tncs by demonstrating that the un was aware of American corporate interests. When Secretary-General Annan took the helm of the United Nations in 1997, he promised to reform the way the un operated and to create stronger ties between the un and the business community. In 1997, he appointed John Ruggie as un Assistant Secretary-General and chief advisor for strategic planning. Ruggie immediately set out to effectuate Annan’s desire for greater synergy between business and the un. In 1999, Annan announced the formation of the Global Compact, urging business leaders to join efforts with

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International Economic Cooperation: Transnational Corporations, un DOC. E/1990/94 (1990). See David Weissbrodt & Maria Kruger, Business as NonState Actors, in Non-State Actors and Human Rights 391, n. 17 (Phillip Alston, ed., New York: Oxford Univ. Press 2005). United Nations Draft International Code of Conduct on Transnational Corporations, para. 13. President George H. Bush’s administration pressured then un Secretary General Boutros Boutros Ghali to change the focus of the Centre for Transnational Corporations. See Susan Ariel Aaronson, Minding Our Business: Corporate Social Responsibility Pressures and the Failure to Develop Universal Global Rules to Govern Investors and States, J. World Investment (3)3, 16 (June 2002), available at http://www.gwu.edu/~iiep/assets/docs/ papers/Aaronson_IIEPWP2010-26.pdf (last visited Jan. 25, 2011).

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the un in “giv[ing] a human face to the global market.”78 He called upon business to “embrace, support and enact a set of core values in the areas of human rights, labour standards, and environmental practices.”79 The Compact, under Ruggie’s leadership, was not a code designed to regulate transnational corporations. Membership in the Compact, although it did include labor organizations, civil society, tncs and un agencies, was voluntary. The Compact’s mechanisms or sanctions were nonexistent. The Compact consists of ten principles80 that were derived from the udhr, the ilo’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the un Convention Against Corruption. The Compact has educated tncs about their responsibilities, albeit ­voluntary and not legally binding, under human rights laws. Yet, it is this 78

Press Release, Secretary-General Propose Global Compact on Human Rights, Labour, Environment, in Address to World Economic Forum in Davos, un Press Release SG/SM/6881 (Feb. 1, 1999), http://www.un.org/News/Press/docs/1999/19990201.sgsm6881 .html. 79 Id. 80 The un Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption: Human Rights Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses. Labour Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation. Environment Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Global Compact, http://www.unglobalcompact.org.

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v­ oluntariness that has resulted in continued criticisms being levied against the Compact. “Historically, the Global Compact emerged as an attempt to protect tncs from more stringent and binding regulations, like the un draft norms recently, and voluntarism has been an important condition for business participation.”81 The participants in the Compact are divided into seven categories: The un agencies, business associations, labour, civil society, academic participants, public sector and cities.82 While the Compact may be a success in terms of increasing awareness among businesses that they should be cognizant that their activities can and often do have human rights implications, it has not succeeded in halting or curbing human rights abuses by tncs. 1 Criticisms of the Compact The Compact, since its formation, has been assailed by ngos, but hailed as a success by business organizations and businesses alike. ngos claim that the Compact is nothing more than “bluewashing.” It allows some of the largest and richest corporations to drape themselves in the United Nations’ blue flag, thus giving the appearance that these companies are above reproach and compliant with human rights obligations.83 In 2010, the un Joint Inspection Unit (jiu) issued a stinging rebuke of the Compact in its report titled United Nations corporate partnerships: The role and functioning of the Global Compact.84 The 81 Hummel, supra Chapter 3, note 125, at 26, (The un has a long and inconsistent record of dealing with tncs); Justine Nolan, The United Nations’ Compact with Business: Hindering or Helping the Protection of Human Rights? 20 (Feb. 2010), University of New South Wales Faculty of Law Research Series 2010. Working Paper 10, [hereinafter Nolan, United Nations], http://law.bepress.com/unswwps/flrps10/art10 (last visited Nov. 15, 2013). “The Compact is being used by some as an avoidance technique to avoid introduction of stronger corporate accountability measures at either national or international levels.” Nolan, United Nations, supra note 81. 82 Global Compact, un Global Compact Participants, http://www.unglobalcompact.org/ ParticipantsAndStakeholders/index.html (last updated May 29, 2013). 83 See Nolan, United Nations, supra note 81, at 2. 84 See Papa Louis Fall & Mohamed Mounir Zahran, United Nations corporate partnerships: The role and functioning of the Global Compact, (Geneva: United Nations 2010) [hereinafter jiu Report], https://www.unjiu.org/en/reports-notes/archive/United%20Nations%20 corporate%20partnerships%20-The%20role%20and%20functioning%20of%20the%20 Global%20Compact.pdf (last visited Mar. 1, 2011). In preparing the report, the jiu interviewed more than 50 un officials and participants, prepared and reviewed questionnaires/ surveys and conducted an in-depth analysis of the results. The jiu was unable to get independent views from participants on the performance and success of the Compact Office because it declined to provide contact information for business and non-business participants on the grounds of confidentiality and “client survey fatigue.” See id. at 1, para 6.

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jiu’s report sets forth 16 recommendations directed to the General Assembly, the Secretary-General and the Global Compact Office. The jiu found that while the Compact has succeeded in its objective of being a “learning tool” and engaging the un with business partners in the private sector, “the lack of a clear and articulate mandate has resulted in blurred focus and impact; the absence of adequate entry criteria and an effective monitoring system to measure actual implementation for the Organization, and the [Global Compact] Office’s special set up has countered existing rules and procedures.”85 Many of the jiu’s criticisms of the Compact are similar to those of ngos and human rights activists. Several of the jiu’s key recommendations support the growing consensus among ngos, civil society groups, business organizations, academicians and human rights activists that voluntary measures will not, have not, and cannot ensure a business’ compliance with or adherence to human rights obligations and that ultimately regulatory measures are needed. According to the jiu, the Compact lacks a regulatory and institutional framework and lacks effective screening and monitoring of engagement of participants.86 The management and funding structure of the Compact, which is currently heavily dependent on businesses, makes the Compact susceptible to yielding to business interests.87 Additionally, the membership on the Compact’s board is not inclusive of small and medium size businesses, ngo representatives, Member States representative or core un agencies.88 Although the un General Assembly has never given the Compact a clear mandate, the Compact nonetheless, views its mission and objectives as: [T]o be the world’s most inclusive voluntary initiative to promote responsible corporate citizenship, ensuring that business, in partnership with other societal actors, plays its essential part in achieving the United Nations’ vision of a more sustainable and equitable global economy, by making the Compact and its principles an integral part of business operations and activities worldwide; and by encouraging and facilitating dialogue and partnerships among key stakeholders in support of the ten principles and broader United Nations goals, such as mdgs [Millennium Development Goals].89 85 86 87 88 89

Id. at iii. Id. at iii. Id. at iv. Id. at v. Id. at 5, para. 16.

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The jiu, after reviewing all of the General Assembly’s resolutions on global partnerships, failed to find support for the Compact’s self-stated mission and objectives.90 The jiu concluded that the Compact’s mission and objectives exceed those stated in relevant General Assembly resolutions.91 As a consequence of there not being a clearly articulated goal by the General Assembly, the jiu recommended that “[t]he General Assembly…set a clear mandate for the Global Compact Office at its 66th session and request the SecretaryGeneral to publish within one year a bulletin outlining its functions in accordance with the mandate entrusted to it.”92 The jiu found that the Compact focuses more on “quantity” than “quality.” The report stated that “the issue is no longer how many new actors are joining, but who is and who is not in and why.”93 The jiu found that focusing on “quantity” has resulted in the Compact not having any established selection process for screening business participants.94 One of the main arguments from ngos is that the Compact allows corporate abusers to join without effectively screening them for their human rights records. The jiu recommended that “[t]he General Assembly…call for the institution of a selection process in which business and nonbusiness applicants are screened against pre-set entry criteria, so as to mitigate brand management risk and enhance the Office’s accountability for accepting new participants in the Global Compact initiative.”95 Many other scholars and human rights activists also have criticized the Compact on a number of grounds. Surya Deva points out that although the Compact seeks to promote responsible corporate citizenship, it does not define corporate citizenship.96 Thus, what is responsible corporate citizenship becomes subjective. Additionally, Deva argues that the Compact’s ten principles are too vague to provide “adequate and concrete guidance to corporations about the conduct expected from them.”97 Specifically, he states that “the 90 91 92 93 94 95 96

Id. at 5, para. 17. Id. Id. at 5, Recommendation 1. Id. at 12, para. 44. Id. at 13, para. 51, 57. Id. at 14, Recommendation 5. Surya Deva, Global Compact: A Critique of the U.N.’s “Public-Private” Partnership for Promoting Corporate Citizenship, 34 SYRACUSE J. INT’l & COM. 107, 111–112 (2006). Citizenship, as defined by the Oxford Companion to Law, is “[t]he legal link between an individual and a particular state…under which the individual receives certain rights, privileges, and protections in return for allegiance and duties.” DAVID M. WALKER, THE Oxford Companion To Law 220 (Oxford: Oxford University Press 1980). 97 Deva, id. at 96.

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Compact is not clear or certain on what it wants to achieve and what it leaves to be achieved by other regulatory initiatives.”98 Susanne Soederberg provides a critical analysis of the Compact, identifying the social relations of power struggles inherent within the initiative. She considers the Compact “a neoliberal strategy that is a highly exclusionary, corporate-led attempt to legitimate the growing social power of tncs across the world, but particularly in the global South.”99 She contends that the Compact’s main objective is to depoliticize anti-corporate struggles and discredit the drive to tame corporate behavior with legally binding codes by stressing that voluntary measures are more effective and viable in achieving socially accountable behavior than regulatory means.100 C The un Norms The work on the Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights101 (the Norms) began in 1998 under the auspices of David Weissbrodt, a member of the Working Group.102 The Sub-Commission on the Promotion and Protection of Human Rights established the five member Working Group for a three-year period to take “into account the principle of equitable geographic distribution, to examine the working methods and activities of transnational corporations.”103 The tasks of the Working Group tasks included: identifying issues, examining information regarding the effects of transnational corporations on human rights, examining investment agreements for their compatibility with human rights agreements, making recommendations regarding the methods of work and activities of 98

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Id. at 144; see generally Nolan, United Nations, supra note 81 (criticizing the Compact for lack of clarity in content and scope of the ten principles and limited accountability and transparency). Susanne Soederberg, Taming Corporations of Buttressing Market-Led Development? A Critical Assessment of the Global Compact, 4 Globalizations 4, 501 (2007), http:// nvardmanasian.files.wordpress.com/2011/02/soederberg-corp-glob.pdf (last visited May 5, 2009). Id. at 502. Approved August 13, 2003, by u.n. Sub-Commission on the Promotion and Protection of Human Rights resolution 2003/16, u.n. Doc. E/CN.4/Sub.2/2003/L.11 at 52 (2003). Id. Sub-Commission on the Protection and Promotion of Human Rights, Working Document on the Impact of the Activities of Transnational Corporations on the Realization of Economic, Social and Cultural Rights, un Doc. E/CN.4/Sub.2/1998/6.

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t­ransnational corporations in order to ensure the protection of human rights, and considering the scope of the state’s obligation to regulate transnational corporations.104 In 2001, after it became apparent that the Working Group needed additional time to complete its tasks, the Sub-Commission extended the Working Group’s mandate for another three years.105 The Working Group was asked to “contribute to the drafting of relevant norms concerning human rights and transnational corporations and other economic units whose activities have an impact on human rights.”106 In March 2003, the Working Group submitted a draft of the Norms of Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights,107 to the Sub-Commission. In August 2003, the Sub-Commission unanimously adopted the Norms.108 The Sub-Commission acknowledged that the Norms “reflect most of the current trends in the field of international law, and particularly international human rights law, with regard to the activities of transnational corporations and other business enterprises.”109 In the process of drafting the Norms, the Working Group consulted representatives of ngos interested in corporate responsibility, human rights, development and the environment; representatives of companies and unions, and several scholars. The Norms reflected the input of various participants whose constituencies are, have been or can be impacted by transnational corporate activities. In spite of this broad swath of participants, which included large business organizations, corporate groups 104 David Weissbrodt & Maria Kruger, The Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, 97 Am. J. Int’l L. 901, 904 (2003) [hereinafter Weissbrodt & Kruger, The Norms]. 105 Sub-Commission on the Protection and Promotion of Human Rights, Report of the Sessional Working Group on the Working Methods and Activities of Transnational Corporations on Its Second Session, un Doc. E/CN.4/Sub.2/2000/3, para. 4. 106 un Sub-Commission on the Promotion and Protection of Human Rights, Res. 2001/3, un Doc E/CN.4/Sub.2/RES/2001/3. 107 The final version of the Norms and the title reflects the concerted efforts to prepare a document that not only responded to the mandate, but also to craft a document that conveyed the purpose of the document. See generally Weissbrodt & Kruger, The Norms, supra note 104, n. 20 (discussing the various changes to the name of the document and the reasons for the changes). 108 Sub-Commission on the Promotion and Protection of Human Rights, Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights, un Doc. E/CN.4/Sub.2/2003/12/Rev.2 (2003), http://www.unhchr .ch/html/men2/2/55sub/55sub.htm. 109 Sub-Commission Res. 2003/16, un Doc. E/CN.4/Sub.2/2003/L.11 (2003).

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lamented that the Norms did not involve them sufficiently in the consultation process.110 Amnesty International and other ngos considered the Norms a pivotal step in the right direction.111 The moral weight of human rights lies in the near-universal recognition of the primary importance of upholding human dignity. The un Norms seek to clarify what adherence to different rights should entail in practice for companies, while stressing from the outset that the primary responsibility for upholding human rights continues to lie with member states of the United Nations. Moreover, it is the opinion of [Amnesty International] that it is the international framework of human rights, and indeed the interpretation of it that we find in the un Norms, that establishes the most logical and robust framework for addressing business responsibility. As a tool for reviewing risk and for assisting in the anticipation of future regulation and societal pressure, the un Norms provide the best framework for moving forward.112 Deva, likewise, considered the Norms a step in the right direction, even if it was an imperfect step.113 He argued that the Norms represented a paradigmatic shift that was previously dominated by csr initiatives “that have been responsible for the ineffective regulation of corporate conduct impinging on human 110 See Sir Geoffrey Chandler, infra Chapter 4, note 131. 111 See Joint Letter on the Human Rights Responsibilities of Business to the UN Commission on Human Rights, (Mar. 31, 2005) (last visited Dec. 12, 2013), http://secure.humanrightsfirst .org/workers_rights/issues/norms/un-norms-joint-letter-033105.pdf. The letter was submitted on behalf of 80 organizations worldwide representing various interests, including Amnesty International, Human Rights Watch and Greenpeace. See Amnesty International, The United Nations Human Rights Norms for Business: Towards Legal Accountability (Jan. 18, 2004), http://www.amnesty.org/en/library/info/ior42/002/2004 (last visited Jan. 3, 2010); Human Rights Watch, Nongovernmental Organizations Welcome the New UN Norms on Transnational Business (June 4, 2004), available at http://digitalcommons.ilr.cornell .edu/cgi/viewcontent.cgi?article=1015&context=codes (last visited Jan. 3, 2010). 112 Alyson Warhurst & Katy Cooper, The un Human Rights Norms for Business, 6 (July 26, 2004), http://www.social-standards.info/news/news_juni_2005/UN_HumanRightsNorms forBusiness.pdf (last visited Dec. 15, 2010). 113 See generally Surya Deva, un’s Human Rights Norms for Transnational Corporations and Other Business Enterprises: An Imperfect Step in the Right Direction, 10 Ilsa J. Int’l & Comp. L. 493 (2004), available at http://papers.ssrn.com/sol3/papers.cfm?abstract _id=630422 (last visited Jan. 31, 2011).

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rights.”114 The Norms required tncs to observe the same standards of human rights, whether operating at home or abroad.115 Deva’s main criticism of the Norms is that its enforcement mechanisms do not provide for multiple sanctions. At the time the Sub-Commission began its work on a draft code of conduct related to tncs, there were only voluntary codes of conduct, and yet the deleterious effects that business practices and policies had on the lives of human beings had not been averted and seemingly were increasing as the need to maximize profits increased. In fact, many of the voluntary codes of conduct were not aimed at deterring human rights abuses and did not even mention human rights.116 Consequently, it was against this backdrop that the SubCommission set out to fill in the gap that existed in international law, the lack of regulations on tncs, and proposed binding regulations.117 This was the optimum way in which to make “law.” The United Nations is cloaked with “lawmaking authority.” And many of the international human rights principles and treaties that have emanated from the un, begin as soft law, next as customary international law, and finally became hard law.118 It is unequivocal that the Sub-Commission drafted the Norms with this evolution in mind. But it is disingenuous criticism that the Norms as drafted was an ­automatic fait 114 Id. at 497. 115 Id. at 511. 116 Weissbrodt, supra note 8, at 64. 117 The Norms, according to Sir Geoffrey Chandler, was intended to fill the gap between the voluntary initiatives, such as the Global Compact, the oecd Guidelines and the Sullivan Principles, and provide a detailed account of what was expected from companies on human rights. See Sir Geoffrey Chandler, infra Chapter 4, note 131. The Norms had an eminently sensible objective. This was to distill into meaningful principles for companies the vast array of un treaties and instruments which could apply to corporate operations.…[The Norms] consolidated an important development which had gone inadequately noticed. This was the elision of meaning of the words human rights: from applying only to civil and political rights covering a much broader spectrum of corporate responsibilities -- from labour conditions to the impact on the social, physical and political environment. Id. Chandler, an initial supporter of the Norms, abandoned them when they became “indefensible.” 118 Weissbrodt, himself, opined that the because of the un’s stature and authority, any un body could adopt the Norms, which would cloak them with the imprimatur of un support. See Weissbrodt, supra note 8, at 69. Ruggie also opined that the imprimatur of the Norms would have resulted in ngos “declaring certain corporate acts to be ‘illegal’…even in the absence of viable enforcement mechanisms.” Ruggie, Evolving International Agenda, supra Chapter 3, note 168, at 3–4.

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accompli and that debate on the substance of the Norms would not have produced a more palatable draft, one that would have maximized the values of all participants and produced a remedy for the intended b­ eneficiaries of international human rights law – individuals and indigenous peoples. In 2005, after the Human Rights Commission failed to adopt the Norms in draft form, Weissbrodt responded to the unwarranted, vitriolic criticisms hurled at the Sub-Commission by the business community, international relations and international law scholars, and even some ngos,119 in his article Business and Human Rights.120 He argued that the Norms was “the next logical step” in the human rights and business debate, demonstrating that the Norms built upon the many existing and “previous [private and public] initiatives regarding corporate social responsibility.”121 Weissbrodt identified five significant attributes of the Norms: (1) the Norms do not diminish the human rights obligations of governments; (2) the Norms apply to tncs and national companies and local businesses according to “their respective spheres of activity and influence”; (3) although the Norms build upon the ilo and oecd Guidelines and the Global Compact, the Norms are more comprehensive in scope, but “principally reflect, restate and refer to existing international norms”; (4) the Norms are not legally binding, but are intended to be eventually considered “‘soft law’ and could be the basis for drafting a human rights treaty on corporate social responsibility”; and (5) the Norms contain implementation procedures.122 Weissbrodt reminded his critics that the Norms was based upon concepts, principles and issues addressed or articulated in the ilo Tripartite Declaration, the oecd Guidelines and the Global Compact.123 Simply put: the Norms did not reinvent the wheel, just redesigned a better one for the journey ahead and the terrain to be traversed. This did not mollify his critics. In fact, the same power dynamics that derailed previous un led attempts to regulate tncs 119 Certain ngos felt that the Norms did not go far enough. Thus, credence in the axiom that you can please some of the people some of the time, but you can’t please all of the people all of the time. 120 Weissbrodt, supra note 8. Weissbrodt, also in taking the highroad, was more than magnanimous toward Ruggie than Ruggie was to the SubCommission when he decapitated the Norms. See Interim Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, un Doc. E/CN.4/2006/97 (Feb. 22, 2006), at http://www.ohchr.org/engllish/ bodies/chr/docs/62chr/E.CN.4.2006.97.pdf. 121 Weissbrodt, supra note 8, at 64. 122 Id., at 64–67. 123 Under policy-oriented jurisprudence, Weissbrodt clearly based the Norms on past trends in decision in proposing a resolution to the human rights and business debate.

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resurfaced. The business community, like the Titans in Greek mythology, unleashed an avalanche of threats on the un, clothe in the unmistakable garbs of the Gods – money and power aimed at lobbying against the adoption of the Norms.124 The two most vocal business critics of the Norms were the International Chamber of Commerce and the International Organization of Employers (ioe). These two organizations, which represent some of the largest transnational corporations, were against the Norms almost from the beginning. Contrary to their assertions that the Norms were not inclusive of and did not consult businesses, the International Chamber of Commerce and ioe did participate, even if it was limited.125 The lack of any serious participation by business interest was a strategic decision to undermine the Norms.126 The International Chamber of Commerce and ioe’s main point of contention with the Norms was the principle that corporations, as nonstate actors, cannot be “subjected to human rights principles.”127 A premise that has been categorically rejected by many preeminent human rights scholars, jurists and even several federal district courts. (Although it is unclear how this principle will manifest itself going forward after the recent Kiobel decision annihilated plaintiffs’ hopes that the atca could be used to attach liability to corporate defendants) Another and perhaps the sole reason why the International Chamber of Commerce and ioe opposed the Norms is because they have been adamant that they “will accept only voluntary guidelines.”128 Weissbrodt offers a third reason why the International Chamber of Commerce and ioe opposed the Norms. It was because they still cling to the archaic premise that the only responsibility of business is maximizing profits.129 Nothing more, nothing less. 1 The Criticisms of the Norms Specifically, the International Chamber of Commerce, the ioe, the u.s. Council for International Business (uscib),130 and other business groups objected to 124 Chandler characterizes the business onslaught on the Norms as an “intemperate assault” against which ngos put up an inadequate defense. Sir Geoffrey Chandler, Business and human rights: Ruggie report – Finally, let the real work begin, June 2, 2008, Ethical Corporation, available at http://www.ethicalcorp.com/governance-regulation/business -and-human-rights-ruggie-report-%E2%80%93-finally-let-real-work-begin (last visited June 29, 2014). 125 Weissbrodt, supra note 8, at 70. 126 See Chandler, infra Chapter 4, note 131. 127 Weissbrodt, supra note 8, at 70. 128 Id. 129 Id. at 70–71. 130 The uscib is the United States’ arm of the International Chamber of Commerce.

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the way the Sub-Commission carried out its mandate, claiming that the consultation process was too narrow.131 They also claimed that the Norms privatized human rights.132 Although they favored voluntary regulations,133 they objected to the inclusion of the terms “complicity” and “sphere of influence,”134 and felt that the Norms would eliminate investment incentives for economic development.135 131 See International Chamber of Commerce, International Organisation of Employers, Joint views of the ioe and the icc on the draft Norms on the responsibilities of transnational corporations and other business enterprises with regard to human rights, 19 (Mar. 2004) [hereinafter icc & ioe, Joint views], www.reports-and-materials.org/IOE-ICC-Exec-Summary -views-UN-Norms-March-2004.doc (last visited Sept. 22, 2011); Timothy E. Deal, “Business and Human Rights: The Proposed Norms on The Responsibilities of Business Regarding Human Rights,” statement to the Fund for Peace, Human Rights and Business Roundtable, Washington dc, (Feb. 6, 2004);Bernadette Hearne, Proposed un Norms on human rights: Is business opposition justified?, Ethical Corporation, May 3, 2004. But see generally Weissbrodt & Kruger, The Norms, supra note at 104, (discussing the entire drafting process of the Norms); see also Warhurst & Cooper, supra note 112, at 16. Warhurst and Cooper noted that the criticism that the consultation was too narrow is simply a ruse to discredit the Norms. The drafting process took over four years. The Working Group called for input from all relevant stakeholders and held several public hearings in which representatives from business, unions, ngos and academia were all involved. See also Sir Geoffrey Chandler, Commentary on the United States Council for International Business ‘Talking Points’ on the United Nations Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights (noting that the uscib had ample opportunity to comment in the formative stages of the Norms, “but failed to do so.”, http://www.coc-runder-tisch.de/ inhalte/texte_grundlagen/tk_news_Commentary_US_ Council_International_Business.htm (last visited Apr. 10, 2009); Justine Nolan, With Power Comes Responsibility: Human Rights and Corporate Accountability, 28 UNSW L. J. 581, 584 (2005). “Various versions of the Norms were circulated and commented on by a diverse group including representatives from governments, inter-governmental organisations, transnational corporations, business, the United Nations, and other interested ­parties.” Id. 132 See icc & ioe, Joint views, id. at 23; see also David Cow, cbi cries foul over un human rights code, The Guardian, Mar. 7, 2004, Guardian News & Media Limited, http://www.guardian .co.uk/business/2004/mar/08/globalisation (last visited May 25, 2011); see Nolan, United Nations, supra note 81, at 585. 133 See Cow, id. 134 See icc & ioe, Joint views, supra note 131, at 26. Business groups vehemently opposed the inclusion of the terms “complicity” and “sphere of influence” in the Norms, but these terms were originally used in the Global Compact, which was not opposed to by business groups. 135 See Deal, supra note 132, at 4.

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Led by the u.s., business groups orchestrated a full court press to encourage the un Commission on Human Rights to reject the Norms.136 In April 2004, the Commission adopted a uk-sponsored resolution entitled Responsibilities of transnational corporations and related business enterprises with regard to human rights,137 which requested, among other things, that the Office of the High Commissioner for Human Rights compile a report “setting out the scope and legal status of existing initiatives and standards relating to the responsibilities of transnational corporations and related business enterprises with regard to human rights…and identifying outstanding issues.”138 The resolution also affirmed that the un Norms would “have no legal standing and…that the Sub-Commission should not perform any monitoring function in this regard.”139 In sum, big business, aided by the countries where the most tncs are located, pressured the Commission into rejecting the submission of the Norms, under the pretext that “it was never asked for.” Notwithstanding the Norms’ failure, the international lawmaking process, the bottom-up approach, has not been thwarted. Without waiting for a decision maker such as the un to declare what is “law,” several participants and observers pressed forward with the principles enshrined in the Norms, even if the nomenclature was not used. Amnesty International, Christian Aid, Human Rights First, Human Rights Watch, and oxfam are using the Norms. Barclay’s bank and Novo Nordisk and the International Business Leaders Forum (iblf) support the Norms. Hewlett-Packard, Novartis and other members of the iblf are road testing the Norms.140 136 See Nolan, United Nations, supra note 81, at 595 n. 17; see also David Kinley & Rachel Chambers, The un Human Rights Norms for Corporations: The Private Implications of Public International Law, 6 Hum. Rts. Rev. 447 (2006) (discussing how the Human Rights Commission succumbed to intense lobbying by the International Chamber of Commerce and ioe, and as a result, the U.S, U.K. and Australia supported the lobbyists’ position that the Norms should have no legal effect. This was done in spite of the fact that  more than 190 ngos, academicians and human rights advocates took opposite positions. 137 E/CN.4/2004/L.73/Rev.1. 138 United Nations Press Release, Action on Draft Resolution on the Report of the SubCommission on the Promotion and Protection of Human Rights, (Apr. 10, 2004). 139 Commission on Human Rights, Agenda Item 16, un Doc. E/CN.4/2004/L.73/Rev.1 (2004). In actuality, the Human Rights Commission capitulated as a result of the intense lobbying efforts by tncs and rejected the Norms. See also Duruigbo, supra Chapter 1, note 122, at 244, n. 142; Kinley & Chambers, supra note 136, at 460. 140 The iblf is comprised of companies such as Novartis, Transco Grid, Body Shop, Barclay’s Bank, mtv Europe, Novo Nordisk, abb, Hewlett Packard and Gap, Inc.

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None will dispute that the Norms were a departure from the classical model of international law, which does not impose obligations directly on nonstate actors.141 Assuming, arguendo, that the classical model is based upon a fallacy as McDougal and Leighton contend,142 then the Norms could be considered an attempt, no matter how misplaced, to correct this fallacy, and reconfigure international law to what it was intended to be and what it should be. The Norms must be considered a part of the lawmaking process as described by policy-oriented jurisprudence. The Norms is an authoritative formulation; although it is not law in the traditional sense because it was rejected by the Human Rights Commission. 2

The Guiding Principles on Business and Human Rights: Implementing the United Nations Protect, Respect and Remedy Framework On April 20, 2005, the un Commission on Human Rights adopted a resolution requesting “the Secretary-General to appoint a special representative on the issue of human rights and transnational corporations and other business enterprises.”143 In July 2005, Secretary-General Kofi Annan appointed John Ruggie as the Special Representative for three years. His mandate authorized him to do the following: (a) to identify and clarify standards of corporate responsibility and accountability for transnational corporations and other business ­enterprises with regard to human rights; (b) to elaborate on the role of States  in  effectively regulating and adjudicating the role of transnational corporations and other business enterprises with regard to human rights, including through international cooperation; (c) to research and clarify the implications for transnational corporations and other business enterprises of concepts such as “complicity”144 and “sphere of

141 See generally Carlos M. Vazquez, Direct vs. Indirect Obligations of Corporations Under International Law, 43 Colum. J. Int’l L. 927 (2005). 142 See McDougal & Leighton, The Rights of Man, supra Chapter 3, note 4. 143 un Commission on Human Rights, E/CN.3/Res/2005/69 [hereinafter Human Rights Mandate]. 144 According to the un Commissioner for Human Rights, a corporation is guilty of complicity if it “authorises, tolerates or knowingly ignores human rights abuses committed by an entity associated with it, or if the company knowingly provides practical assistance or encouragement that has a substantial effect on the perpetration of human rights abuse.”, ohchr Briefing Paper on The Global Compact and Human Rights: Understanding Sphere of Influence and Complicity, in Embedding Human Rights Into Business Practices

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­influence”;145 (d) to develop materials and methodologies for undertaking human rights impact assessments of the activities of transnational corporations and other business enterprises; and (e) to compile a compendium of best practices of States and transnational corporations and other business enterprises.146 The un Human Rights Council extended the srsg’s mandate for an additional three years, from 2008–2011.147 The srsg concluded his final report in October 2010, which was presented to the un in June 2011 and was officially endorsed by the un Human Rights Council.148 Ruggie approached his mandate full throttle, seeking first to dissuade those who anticipated and hoped that he would build upon the good and viable components of the Norms or that any part of them would or could be salvaged. In essence, this was the human rights and business debate as seen through Ruggie’s focal lenses, which for him did not mean pulling any survivors from the “train wreck”149 that he so cavalierly called the Norms. One of the many (Joint Publication of the United Nations Global Compact & the Office of High Commissioner for Human Rights), www.ohchr.org/Documents/Publications/Embeddingen.pdf (last visited June 1, 2009). According to Amnesty International, corporate complicity as used in the Norms represents an emerging area of law that has not been clearly defined. See generally Irene Khan, Understanding Corporate Complicity: Extending the Notion Beyond the Existing Laws, Speech, London (Dec. 8, 2005), www.amnesty.org/en/library/asset/…/001/…/pol340012006en .pdf (last visited Mar. 27, 2010). The concept of complicity as it relates to human rights is broad in scope. “Just as the concept of impunity in the sphere of human rights has taken on a meaning so much more multifaceted, sophisticated and colorful than the strict historical legal meaning of impunity, in the context of business and human rights, the concept of complicity is now used in a much richer, deeper and broader fashion than before.” International Commission of Jurists, Corporate Complicity and Legal Accountability, Facing the Facts and Charting a Legal Path, Report of the icj Expert Legal Panel on Corporate Complicity in International Crimes, vol. 1, 3 (2008), http://www.icj.org/default.asp?nodeID=349&sessID =&langage=1&myPage=Legal_Document ation&id=2285 (last visited June 30, 2009). 145 The term “sphere of influence” is defined as “the individuals to whom the company has a certain “political, contractual, economic, or geographic proximity.” (ungc/unhchr, 2004). Ruggie introduced the term “sphere of influence” in the un Global Compact Ten Principles in July 2000. The term gained importance with adoption of the Norms in 2003 by the un Sub-Commission on the Promotion and Protection of Human Rights. 146 Human Rights Mandate, supra note 143. 147 Human Rights Council, Resolution 8/7 (June 18, 2008). 148 Human Rights Council, Resolution A/HRC/RES/17/4 (July 6, 2011). 149 John Ruggie, Remarks, Delivered at Forum on Corporate Social Responsibility, CoSponsored by the Fair Labor Association and the German Network of Business Ethics,

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faults that Ruggie had with the Norms was that they included rights that states had reached no consensus on. These included “consumer protection, the ‘precautionary principle’ for environmental management, and the principle of ‘free, prior and informed consent’ of indigenous people and communities.”150 Whereas the Norms received unwarranted criticism from the business community that the consultation process was too narrow, human rights groups representing the victims of human rights abuses stressed that the srsg failed to provide sufficient means to hear the voices of the victims, and instead focused primarily on business concerns and those of States. As a participant, the srsg superimposed his perspective under the rubric that his mandate required him to move the debate forward in a manner that reflected the current state of existing international law and that “there is no single silver bullet solution…in the business and human rights domain.”151 And he offered none. Instead, he unabashedly punted the singular issue plaguing the world community, how to regulate tncs, to the States, which continued the state-centric dogmatic sovereignty rhetoric that seeks to deny the realities of today’s globalized world by excluding tncs as subjects of international law.152 Perhaps the srsg’s Weltanschauung as an international relations and political science scholar, and not that of an international law scholar or lawyer, obscured his views of today’s world and kept him ensconced and cemented to a “theory of” international law instead of a “theory about” international law. Ruggie spared no time is seeking to discredit the work done in the process of developing the Norms. His first report in February 2006153 criticized the Bamberg, Germany (June 14, 2006), available at 198.170.85.29/Ruggie-remarks-to-Fair -Labor-Association-and-German-Network-of-Business-Ethics-14-June-2006.pdf (last visited May 31, 2011). 150 Ruggie, Evolving International Agenda, supra Chapter 3, note 168, at 9. 151 John Ruggie, “Human Rights in Business: No Silver Bullet”, Panel Discussion, The Third Annual Trygve Lie Symposium on Fundamental Freedoms “Advancing the International Agenda on Business and Human Rights: Protect, Respect and Remedy” (Sept. 24, 2010), International Peace Institute, New York, http://ipacademy.org/events/panel-discussions/ details/233-human-rights-in-business-no-silver-bullet.html (last visited June 23, 2011). 152 See Kinley, Nolan & Zerial, supra Chapter 3, note 24, at 39 (discussing that Ruggie shares the traditional view that the best way to regulate tncs is through the State but acknowledges that States often lack the will to do so.). 153 Special Representative of the Secretary-General, Promotion and Protection on Human Rights, Interim Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, u.n. escor, Comm’n on Hum. Rts. 62d Sess., Provisional Agenda item 17, u.n. E/CN.4/2006/97 (2006).

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Norms for its “un-un like” language and called the Norms a “distraction”154 engulfed in “doctrinal excesses,”155 “exaggerated legal claims and conceptual ambiguities.”156 In keeping with Lasswell’s theory of how communication is used to frame the issues, the srsg, as he did with the Global Compact, moved the debate away from regulating tncs by attacking the message contained within the Norms. In doing so, he positioned himself as a key decision maker in the human rights and business debate and, ostensibly, as someone who had been cloaked with the authority to make “authoritative and controlling decisions.” Scott Jerbi, Senior Advisor with Realizing Rights, the Ethical Globalization Initiative, and formerly with the United Nations Office of Commissioner for Human Rights, in his article Business and Human Rights at the un: What Might Happen Next?,157 emphasized civil society’s disappointment with Ruggie’s process as they viewed his appointment with skepticism.158 And yet, Jerbi was surprised that more supporters of the Norms did not step forward to challenge Ruggie’s analysis.159 Weissbrodt, the architect of the Norms, did challenge certain aspects of Ruggie’s critique.160 So did the International Federation for Human Rights.161 Other scholars do not share Ruggie’s view that the Norms were a failure. They have not discarded them with such rapt and callous indifference simply because of the process through which the Norms emerged. Australian Human 154 155 156 157

Id. ¶ 68. Id. ¶ 69. Id. ¶ 59. Scott Jerbi, Business and Human Rights at the un: What Might Happen Next?, 31 Hum. Rts. Q. 299 (2009). 158 Id. at 308. 159 Id. 160 Id., n. 37; Weissbrodt specifically assailed Ruggie’s assessment of the Norms as being “extremely negative and unproductive,” and unoriginal. Weissbrodt pointed out that Ruggie’s assessment was inspired, if not copied word for word, from the advocacy of the International Chamber of Commerce and the ioe. Even leaving aside the highly contentions though largely symbolic proposal to monitor firms and provide for reparation payments to victims, its exaggerated legal claims and conceptual ambiguities created confusion and doubt even among many ‘mainstream international lawyers and other impartial observers’. The srsg does not cite a single one of these ‘mainstream international lawyers and other impartial observers’, but relies on the tendentious and highly biased views of lawyers employed by the International Chamber of Commerce. David Weissbrodt, un Perspectives on “Business and Humanitarian and Human Rights Obligations,” 100 Am. Soc’y Int’l L. Proc. 135, 138 (2006). 161 Jerbi, supra note 157, at 308.

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Rights lawyers David Kinley, Justine Nolan and Natalie Zerial posit that the Norms were not a failure. They view the Norms as keeping the human rights and business debate alive and at the forefront of the political consciousness. “[T]he Norms have been a beneficial and fruitful initiative, reinvigorating debate on the issue of business and human rights, raising new and insightful concepts regarding regulation of tncs and enforcement of human rights obligations, and articulating a core set of standards for going forward.”162 They contend that the Norms highlighted the perceived problems that might flow from soft laws made hard and from the alleged inappropriateness of placing human rights obligations on corporations.163 Under a policy-oriented jurisprudence analysis this stance represents an analysis of past trends in decision. 1

Participants’ Perspective and Competing Claims on the srsg’s Mandate, the Framework and the Guiding Principles Many of the same participants that had conflicting claims and perspectives about the Norms also have conflicting claims and perspectives about the srsg’s mandate. The srsg views one of the flaws in the Norms as the lack of inclusiveness in the consultation process. Conversely, the srsg’s mandate has been deemed a success because of its inclusiveness. It is hard to dispute that Ruggie used the Norms as a blueprint for what not to do. Unlike the Sub-Commission that drafted the Norms and consulted with the victims of human rights abuses, the srsg, however, did not consult as many victims and, arguably, did not ­adequately incorporate their voices into the results his mandate. Accordingly, participants in the debate are categorized as (1) those who favor and support the principles invoked in the Norms, binding regulations; (2)  those who oppose the srsg’s Framework and Guiding Principles because they lack recommendations for binding regulations; (3) those who support the Framework and Guiding Principles because something is better than nothing; and (4) those who s­upport the Framework and Guiding Principles because it has brought business back into the debate in a positive manner and did not promote binding regulations. The participants in the human rights and business debate can now be categorized according to pre-2005 when the Norms were proposed and post-2010 when the srsg’s report the Framework and the Guiding Principles were submitted to the Human Rights Council. While it is neither feasible nor practicable to set forth the perspectives of all of the participants in detail, those highlighted exemplify a sampling of the issues that have not been settled. And 162 Kinley, Nolan & Zerial, supra Chaper 3, note 24, at 39. 163 Id. at 33.

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thus the debate continues, although not in the same contentious manner that was brought about by the Norms. It is interesting to note that many of the participants, even those who “supported” or “welcomed” the srsg’s results, did so with reservations. David Weissbrodt’s Response to Ruggie’s Framework Weissbrodt acknowledges that the srsg’s mandate, while not explicitly mentioning the Norms, does infer that the mandate requires him to take into account the Norms and the wants and desires of the stakeholders who supported the Norms. Specifically, the Commission stated: “[T]he Special Representative of the Secretary-General should take into account in his or her work the report of the United Nations High Commissioner for Human Rights and the contributions to that report provided by all stakeholders, as well as existing initiatives, standards and good practices.”164 Ruggie, however, disavowed that his mandate required him to take into account the various past trends in decision, which formed the backbone of the Norms. Indigenous Groups Indigenous communities around the world expressed their dismay that Ruggie’s Framework and the Guiding Principles did not actualize their concerns. The International Indian Treaty Council (iitc) voiced its concerns about Ruggie’s mandate noting that it directly and profoundly affects the rights and survival of indigenous peoples throughout the world. Indigenous lands and territories are under attack, in scope, scale and at an accelerated pace by transnational corporations in search of natural resource exploitation.165 It is not anecdotal that tncs backed by host governments have disregarded indigenous peoples’ rights that are firmly ensconced in the un Declaration on the Rights of Indigenous Peoples. The iitc appeared perplexed that the srsg could conclude his mandate without conducting extensive consultations with indigenous peoples from indigenous communities.166 The iitc urged Ruggie to include, at a minimum, the Right to Free Prior and Informed Consent, in any 164 C.H.R. res. 2005/69, u.n. Doc. E/CN.4/2005/L. 11/Add.7, at 68 (2005). 165 Written Statement submitted by the International Indian Treaty Council (iitc), a nongovernmental organization in special consultation status, Promotion and Protection of All Human Rights, Civil, Political, Economic, Social and Cultural Rights, Including The Right to Development, AHRC/8 NGO/1 (May 26, 2008). 166 In 2008, the iitc noted that the consultations the srsg had with impacted stakeholders included “few if any…Indigenous Peoples from Indigenous Communities actually affected by human rights abuses of transnationals.” Id. at 2.

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framework or proposal that was issued under his mandate. The iitc also requested that Ruggie conduct a detailed analytical study of the relationship between climate change and human rights.167 Additionally, the iitc noted that Ruggie had very few consultations with indigenous peoples from indigenous communities, that his list of human rights vulnerable to abuse did not include any rights of Indigenous Peoples, and that going forward, any consultations should be with indigenous representation selected according to procedures in different indigenous communities.168 Ruggie was also urged to use the un Declaration on the Rights of Indigenous Peoples as a framework for assessing both the effect and possible solutions to human rights abuses by tncs.169 Indigenous communities expressly wanted Ruggie to consider the past trends in decision that affected their communities, specifically, the Declaration on the Rights of Indigenous Peoples, which recognized the rights of indigenous peoples. The Declaration balanced those rights against the deleterious business practices of extractive industries, big agricultural and farming corporations and pharmaceutical companies with regards to indigenous land rights, cultural customs and intellectual property. Civil Society Stakeholders/Pressure Groups/ngos Members of the world community were able to register their comments to the srsg’s mandate.170 Ruggie consulted with civil society stakeholders on October 11–12, 2010.171 Several participants discussed extraterritorial jurisdiction and whether there would be support for binding relations. Ruggie reiterated that this would be left up to States, but that there appeared to be support for 167 168 169 170

Id. Id. Id. One of the advantages of technology has been the ability of participants from various corners of the world to receive and respond to information almost instantaneously. The srsg used this technology in making the work of his mandate transparent and accessible to all. With funds from several businesses and governments, the srsg developed a website housed and operated by Business & Human Rights Resource Center to receive comments and suggestions and to provide access to voluminous materials that were considered under the mandate. See Business & Human Rights Resource Center, http:// www.business-humanrights.org/SpecialRepPortal/Home. When the srsg submitted his proposed Final Report, the world community was able to comment on the report. 171 Consultation with Civil Society Stakeholders on the Implementation of the un “Protect, Respect and Remedy” Framework, Summary Note (Oct. 11–12, 2010), http://www.business -humanrights.org/media/documents/report-from-ruggie-civil-society-consultation -geneva-11-12-oct-2010.pdf (last visited Dec. 12, 2011).

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binding regulations with regard to “gross human rights abuses” that amount to international crimes. Ruggie noted, however, that the extent to whether the Alien Tort Claims Act would extend liability to corporations appeared doubtful in light of pending litigation in the u.s. courts.172 In January 2011, several ngos and other civil society organizations issued the Joint Civil Society Statement on the draft Guiding Principles on Business and Human Rights (Joint Statement).173 The Joint Statement identified several critical areas of concern in the Guiding Principles that “unless addressed these gaps will prevent the Guiding Principles from effectively advancing corporate responsibility and accountability for human rights and so may fail to gain widespread acceptance by civil society.”174 The Joint Statement set forth five areas that should be clarified in the Guiding Principles or cured to make the Guiding Principles more palatable and acceptable to civil society. The main one was to “provide clear recommendations to States consistent with internationally recognized human rights standards.”175 The Guiding Principles, as far as the civil society participants are concerned, did not provide sufficient guidance to States and business to close the governance gaps identified by the srsg as the root cause of the corporate-related human rights abuses.176 The srsg responded to the Joint Statement in an interesting manner. He warned, or probably, more precisely issued a veiled threat, that Amnesty International, Human Rights Watch and the other civil society members’ 172 The decision established that human rights abuses that occurred outside of the us do not fall within the ambit of ATS unless the presumption against extraterritoriality is rebutted. See supra Chapter 4, The Future of the Alien Tort Statute. 173 Joint Civil Society Statement on the draft Guiding Principles on Business and Human Rights (Jan. 2011), www.fidh.org/IMG/pdf/Joint_CSO_Statement_on_GPs.pdf (last visited Jan. 15, 2011). This joint statement was prepared by Amnesty International, cidse, The International Network for Economic, Social and Cultural Rights (escr-Net), International Federation for Human Rights (fidh), Human Rights Watch, International Commission of Jurists, and Rights and Accountability in Development (raid). 174 Id. at 1. 175 Id. 176 Id. The Joint Statement also requested that the Guiding Principles clarify the following: (1) Specifically address the governance gaps created by globalization; (2) Be clearer on the human rights responsibilities of business enterprises; (3) Provide more robust guidance on protecting and respecting the rights of women, children, Indigenous peoples, and human rights defenders; and (4) Provide more explicit recognition and greater consideration of the human rights to an effective remedy or individuals and communities who have suffered business related human rights abuses. Id. at 2–3.

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approach would result in business-related human rights abuses continuing and remaining unchecked at the international level for another generation.177 So let ai and hrw hold out the promise to victims that something good may come their way in another generation. My aim, as I have stated explicitly from the beginning, is to reduce corporate related human rights harm to the maximum extent possible in the shortest possible period of time. And I am doing so primarily by recommending significant changes in policies and practices, on the part of governments and businesses alike.178 Ruggie framed his response to Amnesty International and the other civil society’s members as a self-serving edict that resonated with the childless taunt, “It’s my way or the highway.” For all of the proponents of the Framework and the Guiding Principles who praised Ruggie for including various claimant and conflicting claims, he failed to accept or acknowledged that business associations and lobbying groups made a full court press to derail all previous un  attempts to regulate tncs for violating human rights.179 He chided civil society  groups for urging the Human Rights Council not to adopt the Framework and  the Guiding Principles, basically lambasting civil society for  being obstructionists and not looking out for the best interests of those 177 John Ruggie, Response Letter to Arvind Ganesan of Human Rights Watch (Jan. 28, 2008), www.business-humanrights.org/…/ruggie-response-toletter-by-arvind-ganesan -28-jan-2011.pdf (last visited May 2, 2011). 178 Id. Interestingly, the srsg replaces the phrase “human rights abuses” with “human rights harm.” This semantic substitution may not matter much. That is, it is probably not a matter of elevating form over substance. One wonders if this is a deliberate way of controlling the debate by controlling the language of the debate. Assuming that binding regulations are eventually forthcoming, do human rights harms require a higher threshold of proof than human rights abuses? Or does a human right harm require a lower threshold in order to prove causation? Which term carries the greatest legal significance or meaning under civil, common law or international human rights law? Are the words “harm” and “abuse” synonymous? Or does this change in terminology support the srsg’s proscription that corporations should “do no harm?” 179 After scouring all of Ruggie’s responses to either the Framework or the Guiding Principles, I have not found any remarks by Ruggie to businesses, business associations or lobbyists assailing their efforts to derail binding regulations. As an observer and/or decision maker under a policy-oriented jurisprudence analysis, Ruggie’s retort to Amnesty International’s position clearly demonstrates that he has not engaged in a self-assessment of his predispositions and biases and that maybe he has not approached his mandate with objectivity.

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they profess to represent, doubting with incensed incredulity such a self-­ professed edict. Amnesty and the others would have a lot to answer for if they actually were to oppose the Human Rights Council endorsement of this hard-won initiative. In 2004, they heavily promoted a scheme for regulating companies that had no champions among governments and triggered the vehement and unified opposition of the business community. What was the result? Victims of corporate-related human rights harm, for whom these organizations claim to speak, got nothing. Now, seven years later, we have a proposal on the table that enjoys broad support from governments, business associations, individual companies, as well as a wide array of civil society and worker’s organizations. Do Amnesty and others really urge its defeat -- delivering ‘nothing’ to victims yet again? How much longer will they ask victims to wait in the name of some abstract and elusive global regulatory regime when practical results are achievable now?180 Ruggie’s disbelief that Amnesty International and other “pressure groups” would dare to defy and criticize his battle to win the hearts and minds of business organizations to support, yet again, another nonbinding initiative would be laughable if his diatribe to the “pressure groups” did not belie the falsity in his statement.181 Even if the substance of the Norms were problematic for business, the Norms were presented to the international community with the intention that they would be the subject of amendments, debate and reform182 before they would be considered for formal adoption by the un Human Rights Commission. Thus, the Norms were not a fait accompli. One wonders if the 180 John Ruggie, srsg, Letter to Editor in response to the Joint Civil Society Statement of January 2011, Financial Times, Jan. 17, 2011, www.business-humanrights.org/…/ruggie/ruggie -response-to-financial-time (last visited Jan. 31, 2011). To be fair, Amnesty InternationalUnited Kingdom disagreed with Amnesty International-Secretariat, Human Rights Watch and the other civil society members who urged the Human Rights Council not to adopt the Guiding Principles. Amnesty International-uk’s position was one of something is better than nothing, arguing that binding regulations, which are the long-range goal of most civil society groups, would take too long to achieve, and victims were in need of something that “could be done in the meantime.” Response to letter by Arvind Ganesan, supra note 177. 181 The blihr supported the Norms and road tested the Norms. Therefore, while the Framework and the Guiding Principles do enjoy broad support from business, the Norms also had some support from business. 182 See Kinley, Nolan & Zerial, supra Chapter 3, note 24, at 34.

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only proposals for reining in tncs, no matter how elusive they may be, are those that have Ruggie’s imprimatur. Ruggie’s view that the Norms triggered intense opposition from business misrepresents why the opposition existed. Business has repeatedly throughout history rejected any attempts at external regulation. Such was the case from the anti-slavery movement to the u.s. Civil War Amendments to the Foreign Corrupt Practices Act and un led attempts to regulate tncs. Some scholars contend that business’ opposition to the Norms was largely an “artificial division,” spurred on by those who wanted acceptance or rejection of the Norms as a whole, instead of seeking compromise through further dialogue and amendments as the term “Draft Norms” connotes. As Kinley and his colleagues state in their reflection on the Norms: This has split the proponents of the Norms between those who can envisage substantive changes to the Norms that will still achieve the aims of human rights regulation of business, and those who believe that Norms need to be preserved wholly or largely in their present form. The polarisation has also allowed those companies who dislike the Norms for the simple self-serving reason that they wish to avoid their human rights obligations to hide behind the more eloquent and often cogent arguments of those who oppose the Norms for particular formal or practical reasons. Companies can conveniently denigrate the Norms without hurting their corporate image.183 oxfam International Oxfam International considered the Guiding Principles “a significant step toward strengthening corporate accountability for human rights abuse.”184 Oxfam expects that the Framework and the Guiding Principles can play an important role in closing the governance gap that all too often allows corporations to operate with impunity and to exploit the powerlessness of poor communities.185 While supporting the Framework and the Guiding Principles in general, Oxfam, nonetheless, criticized the Guiding Principles because of its lack of “forceful[ness] and clear articulation of the duties of State and corporations,” 183 Id. 184 Oxfam International’s Perspective on the Draft Guiding Principles for the Implementation of the United Nations “Protect, Respect and Remedy” Framework (Jan. 31, 2011), http:// www.business-humanrights.org/media/documents/ruggie/oxfam-comments-on-draft -guiding-principles-31-jan-2011.doc (last visited Apr. 17, 2011). 185 Id.

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and its failure to provide “more concrete support for affected communities and individuals to vindicate their human rights.”186 Oxfam views the wording of the draft Guiding Principles as ambiguous and tending to obscure the m ­ andatory nature of the State and business obligations.187 Instead of placing individual victims at the center of the human rights and business debate, Oxfam noted that the Guiding Principles fail to reaffirm the rights of victims to not have their human rights violated by corporations and to have redress for such violations. To rectify these gapping deficiencies, Oxfam recommended that the un Human Rights Council establish “a high level and authoritative process, backed by a representative body of independent experts and sufficient resources to follow up on the Framework and Principles,” which will pursue, inter alia, “facilitating the development of a binding international treaty based on the Framework and Principles.”188 oxfam Australia Oxfam Australia noted that the role of the Framework in developing national government policy in Australia had not been tested in 2010. It views the Framework as a useful reference point for civil society to frame its demands with regards to the Australian mining companies. Oxfam Australia encouraged the srsg to visit Australia to meet with the government, civil society and business representatives. It also encouraged the srsg to tailor the Framework to apply to smaller companies who have a limited understanding to the Framework and the matters its raises.189 186 Id. 187 Id. 188 Id. Oxfam also made the additional recommendations to the Human Rights Council: (1) To develop concrete and authoritative guidance to implement the Framework and Principles, including receiving and responding to concrete cases of violation of the State duty to protect and the corporate responsibility to respect; (2) To draw attention to particularly serious human rights violations, including those relating to large scale land acquisitions by corporations and private investors in developing countries and other deprivations of access to natural resources or rural communities, farmers, landless workers, women and indigenous peoples; (3) To promote legislative, administrative and adjudicative measures to increase the agency of vulnerable groups to prevent and address human rights abuses; and (4) To integrate the Framework and Principles into relevant multilateral institutions, instruments and processes. Id. 189 Oxfam Australia, Closing the Governance Gaps, Submission to the un “Protect, Respect, Remedy” Framework – Expert Multi-Stakeholder Consultation, Berlin (Jan. 2010), http:// www.reports-and-materials.org/Submission-to-Ruggie-Berlin-consultation-by-Oxfam -Australia-Jan-2010.pdf (last visited Nov. 5, 2010).

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cidse The cidse, representing an international alliance of 16 Catholic development agencies from 15 countries, supports the Framework and Guiding Principles in principal, but acknowledged that the Guiding Principles are not as ambitious as the cidse would have liked, but they do, however, represent a “useful starting point for minimum threshold standards.”190 Still much more needs to be done to deliver actual improvements in the lives of communities, workers and consumers.191 cidse urged the Human Rights Council to design a follow-up mechanism that required States to periodically assess the laws requiring business enterprises to respect human rights and address any gap.192 Thus, it appears that cidse has not given up on binding regulations or judicial precedents that affix liability to tncs. Additionally, for cidse, inter alia, any followup mandate should be referred to a Special Rapporteur or a Working Group193 rather than a multistakeholder steering committee, which is what the International Chamber of Commerce, biac and ioe advocate.194 For the cidse, the success of the Guiding Principles will be whether, in practice, states uphold their duty to protect, companies meet their responsibility to respect, and victims are able to exercise their right to an effective remedy.195 Various Human Rights ngos and Civil Society Organizations Twenty-nine ngos and civil society organizations sent a Statement to the Delegations on the Human Rights Council 2011196 opposing the adoption of 190 cidse, Shaping the follow-up to the mandate of the UN Special Representative on Business and Human Rights, cidse Briefing for the 17th Session of the un Human Rights Council (May 30–June 17, 2011), http://www.cidse.org/content/publications/business-a-human-rights/ bahr-in-the-united-nations/follow-up-mandate-ruggie.html (last visited June 20, 2011). 191 Id. at 1. 192 Id. 193 Id. cidse also wants the follow-up mechanism to (1) examine and evaluate how the Framework and Guiding Principles are being used in practice; (2) take stock, discussing trends, challenges and good practices, which should consist of multistakeholder dialogue that would enable actors from the South to share their experiences and expertise; (3) develop an approach that works more closely with that of other Special Procedures. The srsg’s report failed to provide linkages between his work and that of other Special Procedures, i.e. rights of indigenous peoples, protection of human rights defenders and the rights to health, to food and to water; and (4) develop a strategic approach to capacity building. Id. at 2–3. 194 Id. at 3. 195 Id. 196 See Statement to the Delegations on the Human Rights Council 2011, 17 Session, Agenda Item 3: Final Report of the srsg on the issue of human rights and transnational

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Ruggie’s Final Report. They claimed that the report failed to provide guidance on the regulation of tncs. According to the human rights ngos, Ruggie did not address how to regulate tncs or the challenges related to such regulation. The two main critiques of the final report were that it failed to address the governance gaps created by globalization and it lacked clear recommendations consistent with international standards. With regard to the later, the ngos pointed out that “international law calls for international cooperation in solving human rights problems – including regulatory problems with tncs.”197 They insisted that multilateral and global regulatory measures are needed and that Ruggie failed to make any recommendations in this regard. They considered the report a “step backward compared to the standards set by the un human rights system.”198 Moreover, the report contained glaring deficiencies in failing to protect the human rights of victims and simply giving a pass to continue abuse as usual. These ngos stated in unequivocal terms that “[t]he draft should not be accepted by the hrc. The draft guiding principles are not a suitable means for advancing the cause of human rights in the field of business. The task of providing suitable guiding principles should be included in the follow-up mandate.”199 ActionAid was disappointed also in the original terms of the srsg’s mandate. It disagreed with Ruggie on his approach because he did not consider the “perspectives of victims, their experience of business-related human rights violations and their proposed solutions for accessing justice.…”200 Concerned that Ruggie’s mandate, to clear the baggage left by the divisive debates over the Norms, resulted in stalling the progress on “developing internationally recognised human rights standards for companies,” ActionAid urged Ruggie to work on improving effective means of redress within the next phase of the mandate.201 Accountability Counsel, although pleased to have participated in the srsg’s consultations, made several comments on the Framework and the Guiding corporations and other business enterprises, http://www.tni.org/sites/ www.tni.org/files/ statement.pdf (last visited Nov. 5, 2010). 197 Id. 198 Id. 199 Id. The twenty-nine human rights organizations also made the following recommendations to the Human Rights Council: (1) the hrc should go forward on strengthening human rights’ obligations for tncs; (2) the hrc should follow a comprehensive framework; (3) the hrc should avoid promoting ineffective mechanisms; and (4) the hrc should establish its own complaint procedures. Id. 200 ActionAid, Letter to John Ruggie (June 30, 2009), http://www.reports-and-materials.org/ ActionAid-letter-to-Ruggie-30-Jun-08.doc (last visited Sept. 6, 2010). 201 Id.

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Principles. Specifically, Accountability Counsel recommended clarifying the term “business enterprise” in the Guiding Principles to include private banks and other lending institutions to ensure that there are no gaps that detract from the effectiveness of the Framework.202 Moreover, Accountability Counsel aligned itself with the Joint Statement for the need for “clear recommendations.” It noted that the Guiding Principles should delineate precise steps needed to identify, remedy, monitor and report on implementation of action plans to redress violations.203 It also recommended that the srsg adopt an explicit statement that the State’s duty to remediate human rights violations is a component of the State’s duty to protect.204 Member States Under a state-centric theory of international law, states would be one of the two primary participants in the human rights and business debate. Under a policy-oriented jurisprudence approach, states are one of the participants, but not necessarily the primary or the main participant. On October 6, 2010, Ruggie convened a meeting with representatives from un member states.205 The purpose of the meeting was for Member States to share their views on the operationalization of the Framework. Member States delegates206 also discussed options and recommendations as to how the hrc and other un actors might follow up on the human rights and business agenda after the srsg’s mandate ended in June 2011. Some delegates questioned whether a binding international regulatory framework for businesses should be considered.207 In response, Ruggie stated that this was left up to the states.208 Under policy-oriented jurisprudence, Ruggie as an observer and decision maker could have made a recommendation. In fact, his mandate clearly provided him with the authority to make such 202 Accountability Counsel, Letter to srsg, Re: Guiding Principles for the Implementation of the United Nations ‘Protect, Respect, and Remedy’ Framework (Jan. 31, 2011), www .business-humanrights.org/…/accountability-counselcomments-principles…pdf (last visited May 4, 2011). 203 Id. 204 Id. 205 Consultation with Member States on the Implementation of the un “Protect, Respect and Remedy” Framework, Summary Note (Oct. 6, 2010), www.business-humanrights.org/…/ report-from-ruggie-govts-consultation-geneva-6-oct2010.pdf (last visited Feb. 2, 2011). 206 More than 40 delegations participated in the consultation, including all five permanent members of the un Security Council. Id. 207 Id. 208 Id.

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a recommendation to be considered by the Commission “on the role of States in effectively regulating and adjudicating the role of transnational corporations and other business entities with regard to human rights, including through international cooperation.”209 There was enough leeway in his mandate for him to recommend binding regulations as a means of “international cooperation.” The un Charter allows an inference that the regulations on transnational corporations are essential to international cooperation. More specifically, the lack of regulations of tncs has in the past threatened and continues to threaten international peace and security. It has been shown, although not judicially determined, that corporate human rights abuses, can and do threaten international peace and security.210 Several member states’ representatives noted that some corporations directly profit from conflict and wanted to know the responsibility of “home” and “host” states in these situations.211 Additional discussions centered around issues of how to ensure victims access to a remedy if a state does not accept the justiciability of some human rights claims; potential limitations of operational-level grievance mechanisms; the importance of legitimate representation of victims; the relevance of international framework agreements and work councils; the role of international human rights institutions; and the role of external stakeholders in the context of grievance mechanisms.212 Experts Several experts in international law, international human rights law, corporate law, international relations, and international criminal law weighed in on the issue of whether tncs have responsibilities under international law for human rights abuses. Very few of these experts have approached the human rights and business debate from the perspective of whether individuals are entitled to remedies for human rights abuses caused by the policies, practices and business activities of tncs. The views of these experts are as divergent and diverse as their academic disciplines. These experts, as members of the world community, also have conflicting claims and demands with regard to the debate. Some of these experts, depending upon their group associations and identifications, may participate in the debate as observers, participants, or decision makers. Experts can generally be 209 See Human Rights Mandate, supra note 143, at ¶ 1. 210 The demand for conflict diamonds have been directly tied to human rights abuses in fueling armed conflict in Liberia and Sierra Leone. 211 See supra note 205. 212 Id.

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grouped according to those who support binding norms, pre and post the Norms, and those who have aligned themselves with the srsg’s position that international law, as originally envisioned, does not encompass corporations as nonstate actors, and consequently tncs cannot be held responsible under international law. Both Weissbrodt and Ruggie consulted experts. Many of the experts who participated in the Norms were the designated experts that comprised members of the Sub-Commission Working Group on the Methods and Activities of Transnational Corporations. Many of the experts consulted by Ruggie were appointed by their member states.213 Ruggie convened a meeting on September 14, 2010 with experts to discuss extraterritoriality issues in the business and human rights debate.214 The expert participants consisted of international corporate/commercial lawyers, international law firms, international public law professors and a representative of business industries and employers.215 The purpose of the meeting was to “explore the role and limits of extraterritoriality in the business and human rights domain, especially vis-àvis countries in which multinational corporations are domiciled.”216 The experts discussed four overarching themes: (1) that extraterritoriality consists of a broad array of measures; (2) understanding stakeholders’ concerns on extraterritoriality; (3) the “reasonableness” of factors that States consider with regard to extraterritoriality; and (4) providing effective remedies to victims of the worst types of business-related human rights abuses.217 In addressing stakeholders’ concerns, the experts considered business’ concerns regarding whether the exercise of direct extraterritorial jurisdiction may create an uneven playing field with increased risks of litigation and transaction costs.218 They also recognized that for many victims of business-related human rights abuse, extraterritorial measures may provide the only remedy for holding tncs accountable where host states either lack the will or capacity to prevent and address such harm.219 213 The mandate required the srsg to consult with the Special Adviser to the Secretary General for the Global Compact, other stakeholder and senior executives from companies and experts from particular industries and business sectors. See Human Rights Mandate, supra note 143, at ¶¶ 3, 5. 214 Exploring Extraterritoriality in Business and Human Rights, Summary Note of Expert Meeting (Sept. 14, 2010), http://www.business-humanrights.org/media/documents/ ruggie-extraterritoriality-14-sep-2010.pdf (last visited Nov. 3, 2010). 215 Id. 216 Id. at 1. 217 Id. at 2. 218 Id. at 3. 219 Id.

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Business The Business Leaders Initiative on Human Rights welcomed Ruggie’s 2008 report and noted that it would be helpful for him to clarify the circumstances under which companies might have more extensive responsibilities in order to respect human rights.220 International Business Leaders Forum acknowledged the Framework as a “first step in a long journey.”221 The iblf recommended adding an additional component to the Framework – a human rights impact assessment. The human rights impact assessment should include other stakeholders and provide for a “stakeholder engagement process and a grievance mechanism at the project level” that will enable a company to obtain direct information on how their business activities might impact the rights of their stakeholders.222 Adding an impact assessment to the Framework would promote consistency in the development and/or refinement of existing methodologies and provide comfort to companies that a marketed human rights ‘human rights impact assessment’ is aligned to a set of internationally agreed principles and processes.223 Christophe de Margerie, ceo of Total, voiced his company’s support for the srsg’s approach to resolving the human rights and business debate because, inter alia, it fairly and clearly defined the respective roles and responsibilities of States and companies, and it took a “consensual approach” by ensuring the broad support of its stakeholders, i.e., States, companies and ngos and it is operational and universal. Perhaps most significantly, the srsg’s approach comported with Total’s perspective that unilateral laws with extraterritorial effect, imposed on companies and third party companies would not prevent human rights violations or improve governance in developing regions.224 220 Initial Statement by the Business Leaders Initiative on Human Rights in Response to the 2008 Report of the un Special Representative on Business and Human Rights (last visited May 22, 2011), http://www.reports-and-materials.org/BLIHR-statement-Ruggie-report -2008.pdf. 221 iblf’s submission to the srsg consultation on the Protect, Respect and Remedy Framework (Nov. 10, 2010), http://www.iblf.org/events/latestnews/2010/~/media/ae6211 6e0b274bbb91cc625a9ce83b0f. ashx (last visited June 2, 2011). 222 Id. at 2. The atca is of course foreclosed as an extraterritorial means to provide remedies to victims. 223 Id. 224 Christophe de Margerie’s [ceo of Total] Key Note Speech, United Nations “Special Representative of the Secretary General on Business and Human Rights,” International Business Consultation, Paris (Oct. 5, 2010), http://www.business-humanrights.org/ SpecialRepPortal/Home/Commentaries/2010 (last visited Oct. 6, 2011).

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In essence, Total views business compliance with human rights norms as an ethical matter that cannot be achieved through mandatory regulation.225 jsl Stainless Ltd., part of the OP Jindal Group and the largest stainless steel  manufacturers in India, used the Framework and the Policy-oriented Principles as templates in drafting the Indian Voluntary Guidelines for Responsible Business. jsl views the Policy-oriented Principles as a means through which the company continues its goal of treating people with human dignity.226 Business Industry Associations Placing business at the core of their interests, the International Council on Mining & Metals (iccm) considers the Framework and Guiding Principles as “a coherent and comprehensive basis for ensuring that the distinctive yet complimentary responsibilities of States and business with respect to human rights can be understood and effectively discharged,”227 but only to the extent that remedies for victims of business-related human rights abuses be provided for at the local level.228 For the iccm, redress and remedies should be determined by local values. This is akin to the old cultural relativism argument.229 Only in this instance, the remedy would be culturally specific. Arguably if there is no local societal deprivation for environmental harms that result in birth defects or deaths, then these victims would be without a remedy.

225 The corporate scandals of the 1990s prove that business, if left to their devices, will not operate ethically unless there are regulations that set the minimum ethical standards. See supra Chapter 2, note 431 and accompanying text. 226 Ratan Jindal, jsl Stainless Ltd, Letter to srsg (May 24, 2011) (last visited Dec. 1, 2011). 227 Guiding Principles for the Implementation of the un ‘Protect, Respect and Remedy’ Framework, icmm response to the Special Representative of the Secretary-General on the issue of Business and human rights, icmm Secretariat (Jan. 27, 2011), www.businesshumanrights .org/media/docments/ruggie/icmm-comments-on-draft-guiding-principles-27-jan-2011 .pdf (last visited May 26, 2011). 228 Id. 229 The underlying rationale for dismissing the Flomo case was based upon whether, under customary international law, the national culture of a family structure is relevant in determining if child labor is tantamount to a human rights abuse. Specifically the Seventh Circuit held that although child labor is bad and can rise to the level of a human rights abuse, “the working conditions at the Firestone plantation, while bad, are not that bad – more precisely, the plaintiffs haven’t presented evidence that would create a triable issue of whether they’re that bad.” Flomo v. Firestone, 643 F.3d at 1023.

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Trade Unions The International Trade Union Confederation (ituc), Confederation Syndicale Internationale (csi) and Internatinaller Gewerkschaft Sbund (igb)230 strongly supported the Guiding Principles and acknowledge that the Framework changed the entire discussion on human rights and business in a positive way. “The Framework is a fresh approach that is quite different from the usual Corporate Social Responsibility (csr) practices. Its emphasis on due diligence with respect to established standards of human rights offers a more satisfactory basis for addressing the responsibility of business for its impacts on society.”231 Business Organizations/Lobbyists The ioe, the International Chamber of Commerce and the Business and Industry Advisory Committee (biac) to the oecd welcomed the Guiding Principles and “supported the pragmatic approach adopted by the srsg that allowed the framework to emerge through a robust and open consultation process232 involving all stakeholders.”233 These groups got what they wanted from 230 ituc, csi and igb are a group of global unions that consulted with the srsg. They thought the consultation process was open and thorough and that Ruggie listened to and considered their views and arguments. 231 International Trade Union Confederation, Confederation Syndicale Internationale, Internationaler Gewerkschaftsbund’s Letter to Ruggie, srsg, from the trade unions listed above (May 27, 2011), http://www.ituc-csi.org/IMG/pdf/Letter_to_Mr_John_G_Ruggie _.pdf (last visited September 24, 2011). 232 The ioe, International Chamber of Commerce and biac’s applause of the “robust and open consultation process” is an obvious swipe at the Norms, which they wrongly and unjustly criticized claiming that the consultation process of the Norms “was too narrow.” See icc & ioe Joint views, supra note 131. Kinley and other scholars debunk this criticism and point out that the Norms did conduct multistakeholder consultations, which included the iblf and the World Business Council for Sustainable Development. Kinley suggests that business groups never intended to participate in good faith with the consultation process and instead of communicating their concerns directly to the “working group [they chose] backchannel lobbying against the Norms.” See Kinley, Nolan & Zerial, supra Chapter 3, note 24, at 35. The International Chamber of Commerce believes that business does have responsibilities in relation to human rights, but fails to disclose what those responsibilities are and instead offers the truism that business responsibilities differ from those of governments. The Chamber favors the oecd Guidelines, the ilo Tripartite Declaration and the Global Compact as the instruments business should use as a framework for standards of responsible business practices. 233 Joint Statement on Business & Human Rights to the United Nations Human Rights Council, (May 30, 2011), www.businesshumanrights.org/…/ioe-icc-biac-submission-to_the-un-hrc -may-2011.pdf (last visited Dec. 1, 2011).

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the srsg – principles that were universal, clear, flexible, practical, simple and stable234 and that do not “seek […] to create new international legal obligations or to assign legal liability.”235 Interestingly, in citing that the Principles are “useful to all actors – business, government and other stakeholders,”236 noticeably missing are individuals and indigenous peoples, the victims of corporate human rights abuse, to the list of actors. While lauding the srsg’s approach, in reaching a resolution favorable to business’ interest, these business groups lobbed a cautionary threat to the hrc that it would be business as usual – obstruction, avoidance, and political pressure – if the Council veered from the dictates of business and sought to institute a follow-up mechanism based on the traditional approach of a Special Rapporteur with a complaints-receiving mandate. We believe that such an approach would undermine the very productive consultative process developed by the srsg and significantly increase the risk that the process would return to the highly contentious debate that preceded his mandate.237 These business lobbyists are unequivocal in their promise to intentionally obstruct any attempts to enact binding regulations.238 Enterprises pour les Droits de l’Homme (edh), a French-speaking business group, appreciated the work Ruggie performed under his mandate because it set forth the issues and challenges that confront the social players in the human rights and business debate by encouraging “business to find appropriate ways to implement the Universal Declaration of Human right (sic) (‘udhr’) in their operational activities.”239 edh advised its business members to implement the Framework into their operations in two ways: (1) by developing a centralized initiative with a set of standards on human rights; and (2) integrating human rights into the company’s ethics charter of code of conduct, making human rights an integral component of the organization’s business ethics or business principles. 234 235 236 237 238

Id. at 2. Id. Id. Id. at 3. And to think that the srsg blamed the members of the Joint Civil Society Statement for being obstructionists by urging the hrc not to adopt the Guiding Principles! See supra note 178. 239 Entreprises pour les Droits de l’Homme (edh), Towards an operational implementation of human rights in business practice, Position Paper, Oct. 5, 2010, http://en.sanofi.com/csr/ download_center/download.aspx?file=position_paper_to_contribute_to_the_un _guiding_principles.pdf (last visited May 25, 2011).

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Employers Bundesvereinigung der Deutschen Arbeitgeberverbände (bda, Confederation of German Employers) welcomed the Guiding Principles, stating that it distinguishes between the responsibilities between the various players and clarifies the complex nature of the business and human rights debate. Placing the employers’ (business) interest at the core, bda made several recommendations to Ruggie for future consideration. Perhaps the most salient one is that any expectations made on business to respect human rights “must comprise a cost-benefit element assessing their impact, including any negative consequences.”240 Invariably, predicating human rights obligations on whether it is too costly for a business to comply, even with voluntary standards, will do little to deter corporate behavior that results in human rights abuses. Investors Numerous investors confirmed their support for Ruggie’s mandate and the findings of his reports. These investors represented that they were committed to using their leverage to encourage more responsible corporate conduct and to promote a deeper understanding and respect for international human rights standards as a part of business. The investors also recognized that direct violations of human rights and/or complicity in such violations can have serious material risks for ­corporate investments in corporations that engage in such actions.241 International Law Firms Stephane Brabant of the international law firm Herbert Smith, llp, who represents undisclosed international business interests, prepared a commentary,242 in response to the Joint Statement, inferring that the signatories of the Joint 240 German employers’ position on the “Guiding Principles” proposed by John Ruggie, un special representative for business and human rights, Dec. 21, 2010, http://www.business -humanrights.org/media/documents/ruggie/bda-comments-on-draft-guiding-principles -21-dec-2010.pdf (last visited Feb. 24, 2011). 241 Statement by Socially Responsible Investors to the Eighth Session of the Human Rights Council on the Third Report of the srsg of the un Secretary-General on Business and Human Rights, http://www.reports-and-materials.org/SRI-letter-re-Ruggie-report-3-Jun-2008.pdf (last visited May 23, 2009); see also u.s. Social Investment Forum Applauds United Nations for Extending the Mandate of the un Special Representative to Secretary-General on Human Rights and transnational corporations, http://www.newschannel5.com/story/8610030/us -social-investment-forum-applauds-united-nations-for-extending-the-mandate-of-the-un -special-representative-to-secretary-general-on-human-rights (last visited on May 23, 2009). 242 Stephane Brabant, Herbert Smith llp, Commentary regarding joint civil society statement on draft Guiding Principles on business and human rights, Jan. 25, 2011, www.business -humanrights.org/…/brabant-commentary-re-ngostatement-on-draft-guiding-principles

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Statement243 were unreasonable in their criticisms of the Guiding Principles and Ruggie’s work in fulfilling his mandate. Brabant readily conceded that the voluntariness of the Principles will become the new “Human Rights’ international (soft) law”244 with regard to business responsibilities for human rights abuses and that this “soft law” carries inherent consequences for international businesses in the forms of “[damaged] reputation, access to financing, share value, license to operate, employee recruitment and retention.”245 Questioning whether “hard law” will actually make a difference in corporate behavior, Brabant assailed Amnesty International and the other civil society members as too focused on their unwavering goal of binding and regulations. In recommending that the principles should not be adopted -- mainly because they are voluntary (and also in Amnesty’s view because they are not sufficiently clear on how the government and companies should reach these objectives) -- Amnesty International and others run the risk that there would be nothing equivalent (or at least not for some time), despite the willingness from companies to act now and agree for certain principles and guidelines of Human Rights’ international (soft) law to apply.246 In 2008, two leading American corporate law firms took opposite positions on the Framework. Their critiques of the Framework and the Guiding Principles could not be more at odds. One firm, while recognizing that the Framework and the Guiding Principles makes a positive contribution to the business and human rights debate, nonetheless, foreshadowed doom for corporations by portraying them the losers in the debate. The other firm scoffed and dismissed the notion that the Framework and the Guiding Principles created new legal obligations for corporations. Martin Lipton and Kevin Schwartz of Wachtell, Lipton, Rosen & Katz portrayed the report to its clients as the beginning of a  global Sarbanes-Oxley regime for human rights.247 They warned that the -25-jan-2011.doc (last visited Mar. 2, 2011). Stéphane Brabant leads the firm’s energy and infrastructure group in Paris and is also the head of the firm’s Africa practice and global head of the mining group. 243 See Joint Statement, supra note 233. 244 Brabant, supra note 242. 245 Id. 246 Id. This statement is indeed a concession that the Guiding Principles could become customary law. The discussion on the acceptance of the Guiding Principles is an integral part of the lawmaking process. 247 Michael D. Goldhaber, A Sarbanes-Oxley for Human Rights?, The Am Law Daily, June 2, 2009, http://amlawdaily.typepad.com/amlawdaily/2008/06/titans-of-corpo.html (last visited Jan. 29, 2010).

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Framework “advances the cause of social responsibility activists who propose proxy resolution and take other actions to pressure corporations”248 to conduct their operations in a manner that does not violate human rights. Among the many problems that Wachtell has with the Framework, its biggest objection centered on the human rights impact assessment component that is required of business. Their contention that the Framework requires that a business assess its impact on human rights based upon the substantive “‘benchmarks’ of international human rights instruments like the Universal Declaration of Human Rights and the International Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights,”249 as if this is a completely new and contrived artifice to impose human rights obligations on corporations, is disingenuous. The Global Compact, the ilo Tripartite Declaration and many voluntary codes of conduct require corporations to adhere to the udhr and other international human rights instruments. Still, Wachtell argued “that the generalities and ambiguities of Ruggie’s proposals do create the opportunity for inviting new litigation and imposing new liabilities on corporations and their directors in ways that would hinder, rather than advance, the most effective protection of human rights.”250 Weil, Gotshal & Manges llp prepared a memorandum for its clients, which include Oxfam America, to allay the fears that the Framework and any subsequent reports by the srsg would unduly place American companies at a competitive disadvantage is unfounded.251 Weil Gotshal reminded its clients that American companies had the same concerns about the fcpa, which turned out to be unfounded.252 Referring to the concepts embodied in the Framework as “sound,” Weil Gotshal also reminded its clients that the primary responsibility for defining what human rights obligations will be binding duties and how  those duties will be enforced rests with the United States and foreign

248 Watchell, Lipton, Rosen & Katz, A United Nations Proposal Defining Corporate Social Responsibility for Human Rights, The Am Law Daily 4–5, May 1, 2008, http://amlawdaily .typepad.com/amlawdaily/files/wachtell_lipton_memo_on_global_business_human _rights.pdf (last visited Jan. 30, 2010). 249 Id. at 2. 250 Id. 251 Weil, Gotshal & Manges llp, Memorandum, Corporate Social Responsibility for Human Rights: Comments on the un Special Representative’s Report Entitled “Protect, Respect and Remedy: a Framework for Business and Human Rights,” The Am Law Daily, May 22, 2008, http://amlawdaily.typepad.com/amlawdaily/files/weil_gotshal_response_to_un_report _on_human_rights_and_business_final.pdf (last visited June 25, 2009). 252 Id.

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g­ overnments and that the srsg was not advocating any “new legal obligations.”253 This is an obvious reference to the Norms, which did impose legal obligations on business. Weil Gotshal did prepare its client for what ultimately may be an inevitable certainty in the distant future that the voluntary human rights standards may evolve into “firm societal expectations” and become hard law.254 This evolutionary process, the firm noted, would simply reflect the natural lawmaking process. Additionally, Weil Gotshal set forth the business case for human rights by stating that violations of human rights pose significant risks to u.s. companies, at home and abroad, and that complying with existing human rights norms makes good business sense. “Rather than being alarmed, u.s. corporations should welcome [these] proposals as a means to facilitate leveling of the international corporate playing field by bringing foreign firms in line with u.s. standards for respect of human rights.”255 Experts on Corporate Law and Human Rights Approximately nineteen law firms donated their services (pro bono) to participate in the Corporate Law Tools Project. The project focused on identifying existing laws that foster a corporate culture respectful of human rights and how corporate regulators and courts apply the law to require or facilitate consideration by companies of their human rights impacts and preventive of remedial action where appropriate.256 Some of the participants noted that many jurisdictions require or at least allow companies to consider human rights in some way, but did not necessarily do so using “human rights language.”257 The participants discussed whether case law versus statutory approaches was the appropriate means for integrating human rights into corporate law, and the pros and cons of each approach. With regard to implementation and enforcement of human rights, some participants posited that under some national constitutions corporate law may be interpreted to require respect for human rights. Such interpretations may result in causes of action against corporations for failing to respect human rights. In November 2009, a follow-up expert meeting of the Corporate Law Tools Project was held to discuss the preliminary findings of the law firms’ mapping 253 254 255 256

Id. Id. at 2. Id. Corporate Law Tools Project Meeting, June 30, 2009, http://www.reports-and-materials .org/Ruggie-corporate-law-tools-meeting-summary-30-Jun-2009.pdf (last visited Jan. 15, 2010). 257 Id. at 3.

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of existing corporate laws that have human rights implications and to discuss how corporate law and securities law and policy fits in to the Framework.258 The International Commission of Jurists The International Commission of Jurists (icj) expressed extreme dismay and regret that Ruggie did not consult with jurists and that the Guiding Principles did not provide clear guidance to business with regard to their human rights obligations.259 Specifically, the icj recommended that the hrc take steps to further develop the srsg’s statement that “the corporate responsibility to respect is not a law-free zone.”260 The need for certainty in legal standards serves as an underlying basis for the icj’s request for the Guiding Principles to consist of clear guidelines that inform corporations about “(a) the content of their human rights obligations, (b) the modalities in which business may directly or indirectly become involved in human rights abuses, and (c) the steps they must take to put in practice those responsibilities.”261 Perhaps what is more important is that the icj did not retract from its firm support and push for victims to have effective means of redress. The icj made the following statement to the President of the Human Rights Council. Legal remedies are a prerequisite for human rights implementation: without access to effective means of redress, human rights are rendered meaningless. The icj has always paid special attention to this key element with respect to companies’ duties under domestic law, and is at present conducting a series of country studies to unveil the potential as well as the gaps that exist in this domain in natural jurisdictions. All our work is based on the fundamental tenet in international law that legal remedies are designed to address situations of human rights violations. We note that the srsg uses the term “remedies” in a broad sense. His focus is mainly on “grievance” mechanisms of a non-judicial character. While these may be useful in some cases, we stress the international obligation of states to provide effective legal remedy as part of national 258 Expert Meeting on Corporate Law and Human Rights: Opportunities and Challenges of Using Corporate Law to Encourage Corporations to Respect Human Rights, Toronto, Nov. 5–6, 2009, http://www.valoresociale.it/detail.asp?c=1&p=0&id=316 (last visited Dec. 1, 2010). 259 Statement by International Commission of Jurists, icj Intervention in the interactive dialogue with the Special Representative of the Secretary General on the issue of human rights and transnational corporations and other business enterprises, June 1, 2010, p. 1, http://www .icj.org/dwn/database/ICJStatement-HRC-01062010-BHR.pdf (last visited Mar. 23, 2011). 260 Id. 261 Id.

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implementation. To finish, Mr. President, if companies across the globe do not have the same enforceable duties, we risk situations of “unfair competition” between companies that choose to take their responsibility seriously and those who choose to ignore them. As well as the risk that countries engage in a race to the bottom in lowering protection standards, thereby dwarfing international expectations of company compliance with human rights responsibilities. We would like to ask Prof Ruggie: how we can avoid such a situation?262 The Media and Technology The Association for Progressive Communications supported the Guiding Principles, in part, because they provide a means for transnational internet corporations and other internet businesses to work with the State to uphold human rights standards with regard to ensuring the free flow of information and access to the internet.263 Yahoo!, Inc. also wanted the srsg to provide guidance to States with their obligation to protect, respect and promote human rights by refraining from enacting domestic laws that interfere with internet technology as a communications modality for people.264 Decision Makers Navanethem Pillay,265 the High Commissioner for Human Rights, Office of High Commissioner for Human Rights (ohchr), reiterated that international law imposes “direct legal” duties only on States, with the limited exceptions of direct obligations on individuals in the area international criminal law. The High Commissioner, nonetheless, acknowledged that a paradigmatic shift, a “milestone,” has occurred that is chipping away at this state-centric view of 262 Id. 263 Association for Progressive Communications (apc), Statement Submitted to the Human Rights Council: apc’s comment on human rights with regard to the internet and transnational corporations, May 30, 2011, www.apc.org/en/node/12435/ (last visited June 30, 2011). 264 Ebele Okobi-Harris, Remarks, United Nation’s Office of the High Commissioner for Human Rights’ Consultation on Business and Human Rights, Oct. 6, 2009, http://www2 .ohchr.org/english/issues/globalization/business/docs/RemarksEbele_Okobi_Harris.pdf (last visited Nov. 15, 2010). 265 The current un High Commissioner for Human Rights, Navanethem Pillay, was appointed by the General Assembly on July 28, 2008. Her mandate has been renewed for two years beginning on Sept. 1, 2012. The High Commissioner heads the ohchr and spearheads the United Nations’ human rights efforts by providing leadership and working objectively to educate and take action to empower individuals and assist States in upholding human rights.

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international law when she stated that the hrc should adopt a resolution266 that states in relevant part: “transnational corporations and other business enterprises have a responsibility to respect human rights.”267 Expressing her office’s unequivocal support for the Framework, the High Commissioner stressed that one of most significant challenges a business faces will be to exercise the requisite due diligence, as outlined in the Framework, in order to discharge their responsibility to respect human rights. While Weissbrodt and Ruggie may not be considered stakeholders with regard to the outcome of the human rights and business debate, they are observers and even decision makers under a policy-oriented jurisprudence approach. Their positions, however, on whether or how to hold tncs accountable for human rights abuses have proven to be incompatible. The un has the moral authority to break this logjam of differing perspectives and not to permit the incompatibility of positions result in another abandoning of efforts to give one of the most important corresponding attributes of citizenship to tncs – the obligation not to harm another citizen.268 The Global Compact, 266 Human Rights Council Resolution 8/7 (June 18, 2008). 267 Navanethem Pillay, The Corporate Responsibility to Respect: A Human Rights Milestone, Annual Labour & Soc. Pol’y Rev., www.ohchr.org/…/Press/HC_contribution_on _Business_and_HR.pdf (last visited July 5, 2011). 268 Plans for the United Nations, successor to the League of Nations, were created prior to the end of World War II, in Dumbarton Oaks in Washington, D.C. The un’s Charter is based upon establishing and maintaining peace “in conformity with the principles of justice and international law.” Further, under the Charter, one of the un’s major purposes is “[t]o achieve international cooperation in solving international problems of an economic, social, cultural or humanitarian character” and “to promote universal respect for human rights and for and observance of fundamental freedoms for all without distinction as to race, sex, language or religion.” UN Charter, arts. 1, 55 (e). Prior attempts by the un to regulate transnational corporations were either ineffectual or abandoned. See generally Hummel, supra Chapter 3, note 125 (noting that the un has a long and inconsistent record of dealing with tncs), www.wdev.eu/downloads/ hummelunandtncs2005.pdf. The un’s relationship with tncs has spawned hopes and frustrations. Since the mid-seventies to the present, the un has been called upon to assert its moral authority to rein in tncs. In 1974, at first blush, it appeared that the un would be apolitical and support the Group of 77’s (G77) push to claim their fair rights under art. 29 of the un Charter for a New International Economic Order. After casting off the shackles of imperialism and colonialism, the G77 nations initiated the establishment of the Commission on Transnational Corporations with the goal to draft an international convention to reign in tncs. Specifically the G77 sought, inter alia, the assistance and legitimacy of the un in securing full sovereignty, on par with the sovereignty enjoyed by their former colonial masters. Europe, more so than the United States, amassed its wealth and

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spearheaded by Ruggie,269 represents the view that business should be allowed to engage in self-regulatory measures, which are generally termed csr or cr initiatives, in response to their human rights obligations, to the extent that there are any. The Norms, the work of a sub-commission of the Human Rights Commission under the chairmanship of law Professor David Weissbrodt,270 represent the view that transnational corporations do have human rights obligations and that these obligations should be backed by binding regulations. Ruggie, who is not a newcomer to the human rights and business debate, in his capacity as srsg, has taken a somewhat middle position. He views tncs as having some obligations thrust upon them in the area of international criminal law, but not in the area of international human rights law. Consequently, the most current attempts by the un to resolve the issue of tncs’ obligations to individuals or indigenous peoples vis-à-vis international human rights have been authored by either Weissbrodt or Ruggie. Based upon the traditional view that law is a body of rules, lawmaking is seen as being top down. That is, it is made by the state, the political superior, and disseminated downward to the politically inferior. Some scholars, however, contend that much of international law that has been made and is being power by pillaging the national resources, land, people, minerals, timber, precious jewels of their former colonies. Armed with the knowledge that minerals, oil, gas and agricultural resources were limited, the G77 sought to become economically self-sustaining, if not as economically co-dependent on their former colonial masters. In 1992 at the Rio Earth Summit, civil society groups had envisioned that the un would actively support a call to regulate tncs’ environmentally destructive activities. Instead transnational business organizations organized and participated in and influenced global politics and policies. In response to the G77’s push for binding regulations, business groups banned together and pushed back. The Business Council for Sustainable Development emerged from the summit, later merging with an initiative of the International Chamber of Commerce to form the World Business Council for Sustainable Development. See generally Hummel, supra Chapter 3, note 125, at 11. 269 See generally John Ruggie Joins GPPi advisory Board, Global Public Policy Institute News, Aug. 14, 2009, (referring to Ruggie as the principal architect of the Global Compact, http:// www.gppi.net/index.php?id=147&tx_ttnews%5Btt_news%5D=2025&cHash=3681a84d92 (last visited Mar. 6, 2010); see also Hummel, supra Chapter 3, note 125, at 14 (also referring to Ruggie as the “architect of the Compact”). Ruggie has a long history of involvement with the United Nations. In 1997, Kofi Annan appointed Ruggie as the Assistant SecretaryGeneral and chief adviser for strategic planning. Under a policy-oriented jurisprudence, Ruggie’s relationship with the un certainly cloaked him with the requisite “authority” needed in lawmaking process. 270 See generally Duruigbo, supra Chapter 1, note 122, at 244 (referring to Weissbrodt as “an architect of the Norms.”).

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made today is actually bottom-up lawmaking.271 Janet Koven Levit rejects the traditional view of how international law is made as operative today. Specifically, she contends that the nation-state is not the primary lawmaker, the treaty is not the preeminent form of international law and that international law is not an “off the shelf” process that political elites orchestrate.272 Levit presents a cogent argument that considers why formal labels and classifications were used to divide international law elevating treaties and official state customs above everything else. They were used as a way to organize international law as a discipline. For her, such organization is unnecessary today because international law is here to stay. In quoting McDougal, Lasswell and Reisman, Levit reiterates why it is illogical to adhere to terminology for its own sake. She urges us to liberate ourselves from its grasp. “[I]nherited terminology has become an obstacle rather than an instrumentality of scholarship.”273 Today, globalization is the engine that is driving bottom-up lawmaking. “International lawmaking in the era of globalization is not solely in the realm of the state’s diplomatic elite; it is also the domain of corporations, insurance companies, ngos, inter-governmental organizations, sub-national entities, cities, judges, bureaucrats, technocrats, the media and individuals.”274 Levitt, like other policy-oriented scholars, recognizes that lawmaking involves various participants and that their perspectives, values and strategies that they use to achieve their goals and objectives impact how the “law” is ultimately made.275 International Criminal Court More than fifty years after the Nazi Holocaust, the world witnessed one of the worst acts of genocide in Europe since wwii, the wanton and indiscriminate slaughter of thousands of people in Bosnia and Herzegovina and Serbia, the former Yugoslavia. In response, in 1993 the un Security Council, by binding resolution, established the International Criminal Tribunal for the former Yugoslavia (icty).276 In 1994, genocide occurred once again, but this time on the African continent in Rwanda. The Rwandan genocide exceeded that in the former Yugo­ slavia in scope (more than 800,000 are estimated to have died) and brutality. 271 See generally Janet Koven Levit, Bottom-Up International Lawmaking: Reflections on the New Haven School of International Law, 32 L. J. INT’L L. 393 (2007). 272 Id. at 395. 273 Id. at 415. 274 Id. at 410. 275 The New Haven School does not necessarily view law as either bottom-up or top down, but instead considers it to be inclusive of all of the participants’ perspectives in obtaining a solution to a common problem. 276 S.C. Res. 827, ¶ 7, u.n. Doc. S/RES/827 (May 25, 1993).

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The Security Council, by binding resolution, established the International Criminal Tribunal for Rwanda (ictr).277 Both of these tribunals solidified the need for a permanent international criminal court. These tribunals did not, however, allow the prosecution of business entities as possible perpetrators. On July 17, 1998, on hundred and twenty States adopted the Rome Statute of the International Criminal Court, the legal basis for establishing the permanent International Criminal Court (icc). The Rome Statute entered into force on July 1, 2002 after ratification by 60 countries. Although the Rome Statute was signed by the Clinton administration in 2000, Clinton did not submit it for ratification, citing that he feared that u.s. citizens might be held accountable for major human rights crime committed outside of the u.s. The Bush administration failed to support the court and stated that the u.s. would not join the icc. Consequently, the United States is not a party to the icc; however, under the Obama administration, the u.s. has established a working relationship with the court. During the formative discussions regarding the jurisdictional reach of the icc, the French made a proposal at the Rome Conference on the icc to extend the icc’s jurisdiction to “legal persons.”278 The draft text contained language that allowed the icc to have jurisdiction over legal persons, other than states, when the crimes were committed on behalf of, or by agents or representatives of, the legal person.279 The general notion of corporate criminal responsibility between states and procedural issues led to extended negotiations over the French proposals.280 In the end, the proposal was withdrawn due to time constraints and disagreements over whether to include language to cover terrorist organizations.281 III.

Trend Analysis – Intergovernmental Organizations’ Guidance to tncs

A The oecd Guidelines Faced with the prospect of having their business activities regulated, corporations282 organized to oppose any proposed regulatory schemes developed by 277 S/RES/955 (1994) (Nov. 8, 1994). 278 Clapham, Question of Jurisdiction, supra Chapter 4, note 61, at 144. 279 Id. 280 Id. 281 Id. 282 It should be noted here that the main corporations that resisted the development of binding codes were American companies, which were the ones viewed as being out of control. Rowe, supra Chapter 3, 98, at 39.

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the Commission on Transnational Corporations and instead championed for an alternative means for regulating conduct. The alternative means became the oecd Guidelines for Multinational Enterprises,283 which were developed in 1976. The Guidelines, a voluntary code of conduct in the form of recommendations to governments based upon principles and standards of best practices, is considered the first international document on corporate responsibility.284 Some scholars contend that the Guidelines were a direct response to the pressure for binding norms.285 The speed with which corporations, through their government representatives,286 created the oecd Guidelines, demonstrates that csr initiatives or any self-regulating measures are “invented to forestall the binding international regulation of tncs.”287 The Guidelines were revised in 2000 and updated in 2011. The 2011 revisions contain a section on human rights, principles on the need to exercise due diligence, including down to the supply chain, and a reference to reducing and reporting on the green gas emissions in the context of climate change. One of the main criticisms of the oecd Guidelines is that they are voluntary and not legally enforceable. Many scholars, ngos and human rights activists view the Guidelines as ineffectual and “having little impact on global business operations.”288 Specfically, the Guidelines are viewed as “complex, legalistic, long and confusing.”289 While the new Guidelines are considered an improvement, for some ngos these new Guidelines do not go far enough in correcting the “structural and procedural weaknesses” in the National Contact Points 283 The oecd Guidelines for Multinational Enterprises, Revision 2000 (June 2000), (last visited Mar. 2, 2008), www.oced.org/daf/investment/guidelines/faq.htm. The oecd, the successor organization to the Marshall Plan, was created in 1961. It consists of countries “sharing a commitment to democratic government and market economy.” oecd, www .oecd.org. 284 See Jernej Letnar Cernic, Corporate Responsibility for Human Rights: A Critical Analysis of the oecd Guidelines for Multinational Enterprises, 3 Hanse L. Rev. 1, 71, 77 (Sept. 2008), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1317263. 285 See Utting, supra Chapter 2, note 469, at 376. 286 The international business lobby – working through the Business and Industry Advisory Committee at the oecd – actively participated in drafting the Guidelines. At the same time, the International Chamber of Commerce lobbied against the Draft Norms, forcing the Human Rights Commission to reject the Norms. 287 Rowe, supra Chapter 3, note 98, at 8; Cernic, supra note 284, at 77 (noting that the timing of the Guidelines is not coincidental. The Guidelines were adopted during the discussion on the Draft Norms, which were to be binding in scope.); see also de Schutter, supra Chapter 1, note 135. 288 Cernic, supra note 284, at 78. 289 Id.

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(ncp), which allow countries to avoid scrutinizing home state tncs.290 Specifically, oecd Watch, a coalition of more than 80 civil society organizations, criticized the revisions because they lacked “credible enforcement mechanisms.”291 An ongoing criticism of the Guidelines by ngos is that the agencies charged with overseeing the ncp are pro-business, lack transparency, lack mandatory time lines for responding to complaints and requests, often do not engage in fact-finding functions, and are viewed as generally an unwelcome place for individuals and communities to resolve their grievances.292 Pro-business lobbyists have also logged criticisms against the Guidelines claiming that they are long, wordy and imprecise. They, however, disagree with the proposals put forward by ngos to restructure the ncp to provide for a uniform process and to have investigative powers. The Business and Industry Advisory Committee, which represents u.s. business interests in the oecd, on the other hand, welcomed the revisions, and supported the addition of a business and human rights section, only “to the extent that it is consistent with and follows from the un framework on business and human rights”293 developed by Ruggie. The biac opposed giving the ncp investigative powers to resemble “either a regulatory body or a judicial process.”294 ilo’s Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy In 1977, following on the heels of the un’s first attempt to regulate tncs, the International Labor Organization adopted the ilo’s Tripartite Declaration of  Principles concerning Multinational Enterprises and Social Policy.295 The Tripartite Declaration was designed to provide guidance to tncs, governments, workers and organizations in the areas of equal opportunity and

B

290 See the oecd Watch statement on the update of the oecd Guidelines for Multinational Enterprises, http://oecdwatch.org/publications-en/Publication_3675 (last visited Dec. 2, 2013). 291 Id. 292 See Brad Weikel, oecd Guidelines Update: Substantive Improvements, Procedural Disappointments, EarthRights International, http://www.earthrights.org/print/1697 (last visited June 14, 2011). 293 Peter M. Robinson, President & ceo, United States Council for International Business, Letter to Secretary of State Hillary Rodham Clinton, (Apr. 5, 2010),