Human Rights and International Law (15): Human Rights and Business, and the Problem of Legally Enforceable “Corporate Social Responsibility”

Something more on the impact of businesses or companies on human rights.

What is “Corporate Social Responsibility”?

Companies, like any other human entity with the power to act and influence people’s lives, should respect human rights and should do all that is possible in order to avoid that its activities somehow violate human rights. This is part of “corporate social responsibility” (CSR). The concept of CSR describes the responsibilities of corporations or companies to the wider social environment in which they operate. These responsibilities go beyond the interests or needs of shareholders, workers, employees and customers, and include care for the natural environment and for the human rights of people who are affected in some way by the activities of companies.

Potentially, CSR is of a global nature, because a company can affect the environment of places far away, and the human rights of people in distant countries. Transnational companies (TNCs) especially may have such a global impact, but other kinds of companies as well. For example, an arms producer doesn’t have to be a TNC in order to be complicit in rights violations in different parts of the world.

How can companies violate human rights?

So, human rights are part of corporate social responsibility. The activities of companies can violate human rights in various ways. Just a few quick examples:

  • Workers and employees can be forced to accept labor conditions which violate the rights described in articles 23 and 24 of the Universal Declaration. These labor conditions can even amount to slavery (violating article 4) or child labor (violating article 26) and should include the labor conditions in the supply chain and in companies that work as subcontractors (including outsourcing).
  • A company’s products and services can be harmful to the health of its customers, violating articles 3 and 25.
  • Apart from directly violating human rights, a company can also be complicit in violations committed by others. It can, for example, sell arms and other commodities to authoritarian and dictatorial governments, or governments engaged in an unjust war.
  • Its economic activity in a country can be beneficial to a dictatorial government and can prop up this government (e.g. buying diamonds from a government exploiting its people).
  • Etc.

Making companies responsible for human rights violations?

Many companies have already adopted a code of conduct, voluntarily or forced by public opinion or consumer action (see here for an example). But others haven’t. And there are still numerous companies actively engaging in activities which they know contribute to rights violations. So the question has been raised if companies should be forced to respect human rights. Or, in other words, if corporate social responsibility in general and corporate responsibility for human rights in particular, should be made legally enforceable. And, if so, how this should be done.

Of course, many laws, including human rights laws, already apply to companies and can be used to force companies to respect human rights (for example laws on labor standards, safety, non-discrimination etc.). However, perhaps it would be better to say that many such laws apply to individuals within companies rather than to companies themselves. And that’s ok, because most of the time, human rights are violated by individuals. Someone, somewhere in a companies always decides to sell arms to a warlord, to invest in a dicatorship, to impose grossly inadequate labor conditions etc. So it’s possible to find someone who’s legally responsible. (The ICC, for example, can prosecute individuals acting in their capacities as directors, employees or agents of corporations).

Some problems and solutions

However, there are two problems with this kind of reasoning. One problem is that enforcement of laws is difficult in the case of TNCs or other companies with activities abroad. A company may have its headquarters in one country, which, as it happens, is a country with good laws and good enforcement mechanism. But it’s activities generate rights violations elsewhere in the world, in countries that cannot do much about it, either because they are afraid to scare away the TNCs, or because the governments there are complicit in the human rights violations. So there’s a problem of enforcement.

And the second problem: it may not be so easy to determine exactly which individual(s) within a company are responsible for the harmful activities of the company.

A few solutions to these two problems have been proposed.

  • The first is to use international law and international enforcement mechanisms (in the style of the ICC). I have no problem with that.
  • A second potentially useful solution is to include extra-territoriality in national legislation. Companies can then be prosecuted by the country in which they have their headquarters, and under the law of this country, even if the violations have occured elsewhere. (One can even imagine some kind of universal jurisdiction).
  • A third possible solution is more troublesome: make companies separate entities punishable by (international) law, like individuals and states already are. I see some problems with this one. It would allow individual perpetrators to hide behind their companies and escape responsibility. And it would mean, in some case, that people are punished for the misbehavior of their company. For example, if a company is held liable for rights violations, and forced to pay damages which lead to bankrupcy, the company’s employees would suffer, even though they carry no responsibility for the actions of the company (or for the actions of those in the company making the decisions). That would be collective punishment, which is a morally odious concept.
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3 thoughts on “Human Rights and International Law (15): Human Rights and Business, and the Problem of Legally Enforceable “Corporate Social Responsibility”

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