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Enhancing Corporate Accountability for Human Rights Violations: Is Extraterritoriality the Magic Potion?

Journal of Business Ethics volume 117, pages 493–511 (2013)Cite this article

Abstract

The United Nations Guiding Principles on Business and Human Rights, resulting from the work of John Ruggie and his team, largely depend on state action and corporate good will for their implementation. One increasingly popular way for states to prevent and redress violations of human rights committed by companies outside their country of registration is to adopt measures with extraterritorial implications, some of which are presented in the article, or to assert direct extraterritorial jurisdiction in specific instances. Some United Nations human rights bodies and non-governmental organisations are clearly supporting the use of extraterritoriality and have argued that international human rights law places an obligation on states to embrace extraterritoriality so as to better control the activities of companies registered on their territories. In this context, the article aims to determine whether extraterritoriality is the magic potion that will help enhance corporate accountability for human rights violations committed overseas. The article explores whether such obligation exists and, beyond this, whether extraterritoriality should be further encouraged.

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Notes

  1. UN Human Rights Council, UN Doc. A/HRC/17/31, 21 March 2011.

  2. UN Human Rights Council, UN Doc. A/HRC/RES/17/4, 6 July 2011.

  3. See generally Clapham (2006).

  4. See for example in the case of Esther Kiobel, et al., v. Royal Dutch Petroleum Co., et al., Brief of the Governments of the United Kingdom of Great Britain and Northern Ireland and the Kingdom of the Netherlands as Amici Curiae in support of the respondents, 3 February 2012.

  5. The Oxford English Dictionary (1989).

  6. Ibid.

  7. Scheffer and Kaeb (2011a).

  8. Amnesty International, Submission to the UN Universal Periodic Review, United Kingdom, May–June 2012.

  9. Campbell (2004) and Leigh (2009).

  10. Zerk (2010a).

  11. See generally Akehurst (1972–1973).

  12. UN International Law Commission, Report of the International Law Commission, Annex E, U.N. Doc. A/61/10 (2006). p. 519.

  13. Ibid, pp. 517–518.

  14. Public Law 107–204, 107th Congress, July 30 2002, 116 STAT. 745.

  15. Feeney (2002). The Merger Regulation is Council Regulation 4064/89 on the Control of Concentrations Between Undertakings, 1990 O.J. (L 257), amended by Council Regulation 1310/97, 1997 O.J. (L 180). More generally, see Roth (1992).

  16. De Schutter (2006a).

  17. See for example Council Regulation (EC) No. 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and the Enforcement of Judgments in Civil and Commercial Matters, Official Journal L.012, 16/01/2001, pp. 0001-0023.

  18. Scheffer and Kaeb (2011b).

  19. UN Guiding Principles with commentary, A/HRC/17/31, p. 7.

  20. Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, A/HRC/14/27, 9 April 2010, para. 49.

  21. Zerk (2010b)

  22. See for example Born (1992), Ward (2001), and Donovan and Roberts (2006).

  23. Main Board Listing Rules, Chapter 18.05, (6)(a), http://www.hkex.com.hk/eng/rulesreg/listrules/mbrules/documents/chapter_18.pdf. Accessed on 15 April 2012.

  24. Main Board Listing Rules, Chapter 18.05, (6)(g).

  25. Main Board Listing Rules, Chapter 18.05, (6)(h).

  26. Revenue Watch, Hong Kong: Stock Exchange to Require Greater Transparency, 28 May 2010. http://www.revenuewatch.org/news/hong-kong-stock-exchange-require-greater-transparency. Accessed on 17 April 2012.

  27. Susanne Schaller, CSR Navigator Country Profile—France. http://www.bertelsmann-stiftung.de/cps/rde/xbcr/SID-1CD17B89-2A495ED4/bst_engl/CSR_Navigator_Chapt_France.pdf, p. 62. Accessed on 17 April 2012.

  28. Among them are Malaysia, the United Kingdom, South Africa, Israel and more recently Brazil. See Domini Social Investment, Innovations in Social and Environmental Disclosure Outside the United States, November 2008, http://www.domini.com/common/pdf/Innovations_in_Disclosure.pdf. Accessed on 17 April 2012, p. 5. See also Robert Kropp, Brazilian Stock Exchange Nudges Companies Toward CSR Reporting. 9 January 2012, http://www.greenbiz.com/blog/2012/01/09/brazilian-stock-exchange-nudges-companies-toward-csr-reporting. Accessed on 17 April 2012.

  29. Hong Kong Stock Exchange, Listing Committee Report 2011, p. 28. http://www.hkex.com.hk/eng/listing/listcomrpt/Documents/AnnualRpt_2011dec.pdf. Accessed on 17 April 2012.

  30. Christopher Avery, Business and Human Rights at a Time of Change (1999), chapter 2.8, http://198.170.85.29/Chapter2.htm#2.8. Accessed on 19 April 2012.

  31. 1996 Mass. Acts 239, ch. 130.

  32. Ibid. 240.

  33. Ibid. 241.

  34. Crosby, Secretary of Administration and Finance of Massachusetts, et al. V. National Foreign Trade Council 530 U.S. 363.

  35. Baker (2000–2001).

  36. United States—Measure Affecting Government Procurement, WT/DS 88 and DS 95, terminated on 11 February 2000.

  37. For more detail on selective purchasing laws and WTO rules, see McCrudden (1999).

  38. Proposal for a Directive of the European Parliament and of the Council on Procurement by entities operating in the water, energy, transport and postal services sectors, COM(2011) 895 final 2011/0439 (COD), 20 December 2011.

  39. Proposal for a Directive of the European Parliament and of the Council on public procurement, COM(2011) 896 final 2011/0438 (COD), 20 December 2011.

  40. Committee on the Internal Market and Consumer Protection, Report on new developments in public procurement (2009/2175(INI)), A7-0151/2010, 10 May 2010, para 45.

  41. Proposal for a Directive of the European Parliament and of the Council on Procurement by entities operating in the water, energy, transport and postal services sectors, para. 45 and Proposal for a Directive of the European Parliament and of the Council on public procurement, para. 39.

  42. Proposal for a Directive of the European Parliament and of the Council on Procurement by entities operating in the water, energy, transport and postal services sectors Para. 47; Proposal for a Directive of the European Parliament and of the Council on public procurement para 41.

  43. Proposal for a Directive of the European Parliament and of the Council on Procurement by entities operating in the water, energy, transport and postal services sectors, article 70(5); Proposal for a Directive of the European Parliament and of the Council on public procurement article 54(3).

  44. European Commission, Guide to Taking Account of Social Considerations in Public Procurement, October 2010, p. 47.

  45. Final Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, A renewed EU strategy 2011-14 for Corporate Social Responsibility, COM(2011) 681, 25 October 2011, p. 5.

  46. Ibid, p. 6.

  47. Introduction to UK Export Finance. http://www.ukexportfinance.gov.uk/about-us/introduction-to-ecgd. Accessed on 30 April 2012.

  48. See for example: WTO, Canada—Export Credits and Loan Guarantees for Regional Aircraft, Dispute WT/DS222.

  49. Evans (2010a).

  50. Expert meeting: 14 September 2010, pp. 2–3. On Business and Human Rights Resource Centre’s website, Special Representative, Extraterritorial jurisdiction, page 2.

  51. OECD, Arrangement on Officially Supported Export Credits, 1 September 2011.

  52. OECD, Common Approaches on the Environment and Officially Supported Export Credits, 12 June 2007; OECD Council Recommendation on Bribery and Officially Supported Export Credits, 18 December 2006.

  53. Tvardek (2010).

  54. To reflect this, some have proposed a revision on the Common Approaches on the Environment and that they be renamed Recommendation on Common Approaches on Human Rights, Labour Standards and the Environment: Evans (2010b).

  55. UK Export Finance, Buyer Credit Application Form. http://www.ukexportfinance.gov.uk/assets/ecgd/files/prods-servs/apli-forms-specimens/july-2011-revisions/buyer-credit-application-form-july2011.pdf. Accessed on 30 April 2012, para. 10.2.2.3 and 10.2.2.4.

  56. ECGD Buyer Credit Guarantee Application: Schedule. http://www.ukexportfinance.gov.uk/assets/ecgd/files/prods-servs/apli-forms-specimens/july-2011-revisions/buyer-credit-schedule-july2011.pdf. Accessed on 30 April 2012, para. 5(v).

  57. Ibid. p. 1.

  58. http://www.ukexportfinance.gov.uk/assets/ecgd/files/prods-servs/apli-forms-specimens/july-2011-revisions/export-insurance-policy-proposal-form-july2011.pdf. Accessed on 30 April 2012.

  59. http://www.ukexportfinance.gov.uk/assets/ecgd/files/prods-servs/oii-application-form.pdf. Accessed on 30 April 2012.

  60. http://www.ukexportfinance.gov.uk/assets/ecgd/files/prods-servs/debt-purchase-application-form.pdf. Accessed on 30 April 2012.

  61. Credit Finance Facility Application Form. http://www.ukexportfinance.gov.uk/assets/ecgd/files/prods-servs/apli-forms-specimens/july-2011-revisions/supplier-credit-financing-facility-proposal.pdf. Accessed on 30 April 2012, para. 3.2.1, 11.5.1.2.3 and 11.5.1.2.4 and pp. 1–2.

  62. Category A Projects. http://www.ukexportfinance.gov.uk/publications/operational-data/cat-a-projects. Accessed on 30 April 2012.

  63. ECA Watch, Export Credit Agencies Explained. http://www.eca-watch.org/eca/ecas_explained.html. Accessed on 30 April 2012.

  64. C-300 Bill, Article 3.

  65. Ibid., Article 5.

  66. Keenan (2008).

  67. See for example: Corporate Responsibility (CORE) Coalition, Towards an Effective UK Regime for Environmental and Social Reporting by Companies, May 2011.

  68. Among them, Section 1502 of the Dodd-Franck Act, which “requires publicly traded companies whose products use certain minerals commonly mined in strife-torn areas of Central Africa to report to shareholders and the S.E.C. whether their mineral supply comes from the Democratic Republic of Congo” and which cannot be implemented until the Securities and Exchange Commission adopt the necessary regulation (H. R. 4173). See Wyatt (2012).

  69. California Transparency in Supply Chains Act of 2010, SB 657.

  70. Ibid.

  71. Apparel Industry Study, 12 April 2012. http://www.udel.edu/udaily/2012/apr/apparel-compliance-041212.html. Accessed on 2 May 2012.

  72. Eradication of Slavery (UK Company Supply Chains) Bill 2010-12. http://services.parliament.uk/bills/2010-12/eradicationofslaveryukcompanysupplychains.html.

  73. See for example: Sepúlveda (2006).

  74. McCorquodale and Simons (2007a).

  75. International Covenant on Civil and Political Rights, 999 U.N.T.S. 171, Article 2(1); International Convention on the Elimination of All Forms of Racial Discrimination, 660 U.N.T.S. 195, Article 3; Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, 1465 U.N.T.S. 85, Article 2; Convention on the Rights of the Child 1577 U.N.T.S. 3, Article 2; International Convention on the Protection of the Rights of All Migrant Workers and Members of their Families, 2220 U.N.T.S. 3, Article 7; European Convention on Human Rights, Council of Europe Treaty Series, No. 5, Article 1; American Convention on Human Rights, 1144 U.N.T.S. 123, Article 1.

    There is no such clause in the African Charter on Human and Peoples' Rights, 1520 U.N.T.S. 217; the International Convention for the Protection of All Persons from Enforced Disappearance, G.A. Res. A/61/177 (2006); the International Covenant on Economic, Social and Cultural Rights, 993 U.N.T.S. 3 and the Convention on the Elimination of All Forms of Discrimination against Women, 1249 U.N.T.S. 13.

  76. Milanovic (2011).

  77. McCorquodale and Simons (2007a).

  78. Committee on Economic, Social and Cultural Rights, General Comment No. 14 (2000), The right to the highest attainable standard of health (article 12 of the International Covenant on Economic, Social and Cultural Rights), E/C.12/2000/4, 11 August 2000, Para 39.

  79. Committee on Economic, Social and Cultural Rights, General Comment No. 15 (2003), The right to water (arts. 11 and 12 of the International Covenant on Economic, Social and Cultural Rights), E/C.12/2002/11, 20 January 2003, para. 33.

  80. General Comment No. 17 on the right of everyone to benefit from the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he or she is the author (article 15, paragraph 1 (c), of the Covenant), E/C.12/GC/17, 12 January 2006, para. 55.

  81. General Comment No. 19 on the right to social security (Article 9 of the Covenant), E/C.12/GC/19, 4 February 2008, para. 54. See Coomans (2011).

  82. Special Representative of the Secretary-General on Human Rights and Transnational Corporations and Other Business Enterprises, Mapping State obligations for corporate acts: An examination of the UN Human Rights Treaty System Report No. 1: International Convention on the Elimination of All Forms of Racial Discrimination, 18 December 2006, para. 91.

  83. Ibid.

  84. Concluding observations of the Committee on the Elimination of Racial Discrimination, Canada, CERD/C/CAN/CO/18, 25 May 2007, para. 17.

  85. Concluding observations of the Committee on the Elimination of Racial Discrimination, Canada, CERD/C/CAN/CO/19-20, 9 March 2012, para. 14.

  86. Committee on the Elimination of Racial Discrimination, CERD/C/GBR/CO/18-20, 14 September 2011, para. 29.

  87. While it does not explicitly mention corporate actors, Article 5 of the Convention against Torture requires that states exercise their jurisdiction over acts of torture committed by their nationals, even if the acts were committed abroad. See the series of reports prepared by the Special Representative of the Secretary-General on Human Rights and Transnational Corporations and Other Business Enterprises on the Business and Human Rights Resource Centre’s website: http://www.business-humanrights.org/SpecialRepPortal/Home/Materialsbytopic/Extraterritorialjurisdiction. Accessed on 12 April 2012.

  88. UN Security Council Resolution 310 (1972), para. 5.

  89. Schwelb (1973).

  90. Report by the Secretary-General on the Implementation of Security Council Resolution 301 (1972), S/10752, 31 July 1972, p. 14.

  91. The text was adopted with 13 votes Argentina, Belgium, China, Guinea, India, Italy, Japan, Panama, Somalia, Sudan, Union of Soviet Socialist Republics, United States of America and Yugoslavia. Two states abstained: France and the United Kingdom.

  92. Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, A/HRC/17/31, 21 March 2011, 7.

  93. Ibid.

  94. Ibid.

  95. Ibid.

  96. Statement to the Delegations on the Human Rights Council 2011, 17th Session, Agenda Item 3, http://www.fian.org/news/press-releases/CSOs-respond-to-ruggies-guiding-principles-regarding-human-rights-and-transnational-corporations/pdf. Accessed on 28 March 2012. The statement by another group of NGOs including Amnesty International, Human Rights Watch, the FIDH and the International Commission of Jurists, contains similar and at times identical wording. See ‘Joint Civil Society Statement on the draft Guiding Principles on Business and Human Rights’, January 2011, http://www.fidh.org/IMG/pdf/Joint_CSO_Statement_on_GPs.pdf. Accessed on 28 March 2012.

  97. De Schutter (2006b).

  98. The consortium has a webpage on Lancaster University’s website: http://www.lancs.ac.uk/fass/projects/humanrights/. Accessed on 28 March 2012. Among the members is Professor Sigrun Skogly from Lancaster University. On these questions, see also, by the UN Special Rapporteur on Extreme Poverty, Sepúlveda (2006).

  99. Maastricht Principles on Extraterritorial Obligations of States in the area of Economic, Social and Cultural Rights, http://209.240.139.114/wp-content/uploads/2012/03/maastricht-principles-commentary.pdf. Accessed on 29 October 2012.

  100. Ibid., preamble.

  101. De Schutter (2010).

  102. On mainstreaming business and human rights in the work of the United Nations, see Institute for Business and Human Rights, ‘Submission to the United Nations Office of the High Commissioner for Human Rights concerning inputs to the Secretary-General’s report on business and human rights and the UN system’, March 2012, http://www.ihrb.org/pdf/2012_03_26_Submission_to_the_UNHCHR-SG_Report.pdf, accessed on 28 March 2012. See also Middlesex University’s submission on the Business and Human Rights Resource Centre’s website: http://www.business-humanrights.org/media/documents/middlesex-submission-unsg-report-business-human-rights-mar-2012.pdf, accessed on 30 March 2012.

  103. De Schutter (2006c).

  104. Permanent Court of International Justice, The Case of the S.S. Lotus (France v. Turkey), Series A, No. 10, 7 September 1927, p. 18.

  105. Sander (2012).

  106. McCorquodale and Simons (2007b).

  107. For a thorough and critical analysis of extraterritorial jurisdiction see: Parrish (2008–2009).

  108. Lisa Blatt (Supreme Court advocate and a partner at Arnold & Porter in Washington, DC), quoted in Lawrence Hurley, “Panic at the Chamber of Commerce”, California Lawyer, February 2012.

  109. Sterio (2007).

  110. UN International Law Commission, Report of the International Law Commission, Annex E, U.N. Doc. A/61/10 (2006), pp. 529–530.

  111. Mattei and Lena (2000–2001) and Grundman(1980).

  112. Parrish (2008–2009), see also: Stephan (2002).

  113. Parrish (2008–2009), Choudhury (2005).

  114. Choudhury (2005).

  115. Stephens (2004).

  116. Council Regulation (EC) 44/2001 of 22 December 2000.

  117. American Bar Association, Resolution 109, February 2012.

Abbreviations

ECA:

Export Credit Agency

EU:

European Union

G.A.:

United Nations General Assembly

OECD:

Organisation for Economic Cooperation and Development

Res.:

Resolution

UN:

United Nations

U.N.T.S.:

United Nations Treaty Series

WTO:

World Trade Organisation

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    Nadia Bernaz

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Bernaz, N. Enhancing Corporate Accountability for Human Rights Violations: Is Extraterritoriality the Magic Potion?. J Bus Ethics 117, 493–511 (2013). https://doi.org/10.1007/s10551-012-1531-z

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Keywords

  • Business and human rights
  • Accountability
  • Extraterritoriality
  • Stock exchange
  • Procurement
  • Reporting
  • Export credit
  • International human rights law
  • United Nations
  • Alien Tort Statute