During the last years, there has been an increasing discussion on the role of business in human rights violations and an increase in human rights litigation against companies. The result of human rights litigation has been rather disillusioning because no corporation has been found guilty and most cases have been dismissed. We argue that it may nevertheless be a useful instrument for the advancement of the business and human rights agenda. We examine the determinants of successful human rights litigation in (...) terms of judicial, educational, and regulatory effects. This article reviews more than 40 corporate foreign direct liability cases and their effects on corporate human rights policies and conduct. The review shows that most corporations adjusted their human rights policies and adopted additional measures to cope with human rights issues during or shortly after the legal proceedings. Opening legal channels for human rights litigation may be one way for governments to incentivize firms to respect human rights. These findings have implications for the United Nations Guiding Principles on Business and Human Rights as well as on our interpretation of the most recent U.S. Supreme Court decision in Kiobel v. Shell. (shrink)

While it is commonly accepted that corporations have negative duties to respect human rights, the question of whether rights also imply positive duties for corporations is contentious. The recent reports of the United Nations special representative on business and human rights contend that corporations do not have positive duties, but the arguments this is based on are flawed from an ethical point of view. In particular, the reports fail to consider the implications of interactions between corporations and states. For rights (...) to be secured, corporations may face duties to use their power to pressure governments into performing their assigned duties, and duties not to undermine the role of the government. The interaction of corporations and governments also has implications for choosing effective instruments to advance human rights. International initiatives that do not take this interaction into account will be ineffective or, at worst, counterproductive. (shrink)

Following the situation of poverty in the rights paradigm, this paper explores the links between the rights-based and corporate social responsibility approaches to the realization of socioeconomic rights in the broader context of an emerging recognition of CSR as private regulation of business behaviour. It examines complex theoretical and practical dimensions of responsibility and potential contributions of businesses to poverty alleviation and clarifies the apparent paradox of legal compulsion of essentially voluntary CSR activities. Rather than treat rights and CSR as (...) parallel approaches to protecting socioeconomic rights, it is argued that CSR can be part of a coherent framework of laws and policies for legally translating broad human rights commitments to poverty reduction into concrete programmes. The paper demonstrates how legally propped CSR arrangements can support poverty reduction and appropriate task-specific contextualised definitions and boundaries of CSR that complement the rights-based approach. It is argued that human rights principles have normative dimensions to guide and help formulate policies, programmes and practices, which in turn allow for a creative use of and legal prop to CSR. The conceptualization of human rights is not restricted to one implementation method, and CSR can partly satisfy states’ human rights obligations and transcend the narrow conventional human rights discourse on obligations of non-state actors. (shrink)

ABSTRACT:Increasingly, global businesses are confronted with the question of complicity in human rights violations committed by abusive host governments. This contribution specifically looks at silent complicity and the way it challenges conventional interpretations of corporate responsibility. Silent complicity implies that corporations have moral obligations that reach beyond the negative realm of doing no harm. Essentially, it implies that corporations have a moral responsibility to help protect human rights by putting pressure on perpetrating host governments involved in human rights abuses. This (...) is a controversial claim, which this contribution proposes to analyze with a view to understanding and determining the underlying conditions that need to be met in order for moral agents to be said to have such responsibilities in the category of the duty to protect human rights. (shrink)

The ‘Guiding Principles on Business and Human Rights’ (Principles) that provide guidance for the implementation of the United Nations’ ‘Protect, Respect and Remedy’ framework (Framework) will probably succeed in making human rights matters more customary in corporate management procedures. They are likely to contribute to higher levels of accountability and awareness within corporations in respect of the negative impact of business activities on human rights. However, we identify tensions between the idea that the respect of human rights is a perfect (...) moral duty for corporations and the Principle’s ‘human rights due diligence’ requirement. We argue that the effectiveness of the ‘human rights due diligence’ is in many respects dependent upon the moral commitment of corporations. The Principles leave room for an instrumental or strategic implementation of due diligence, which in some cases could result in a depreciation of the fundamental norms they seek to promote. We reveal some limits of pragmatic approaches to coping with business-related human rights abuses. As these limits become more apparent, not only does the case for further progress in international and extraterritorial human rights law become more compelling, but so too does the argument for a more forceful discussion on the moral foundations of human rights duties for corporations. (shrink)

While it is commonly accepted that corporations have negative duties to respect human rights, the question of whether rights also imply positive duties for corporations is contentious. The recent reports of the United Nations special representative on business and human rights contend that corporations do not have positive duties, but the arguments this is based on are flawed from an ethical point of view. In particular, the reports fail to consider the implications of interactions between corporations and states. For rights (...) to be secured, corporations may face duties to use their power to pressure governments into performing their assigned duties, and duties not to undermine the role of the government. The interaction of corporations and governments also has implications for choosing effective instruments to advance human rights. International initiatives that do not take this interaction into account will be ineffective or, at worst, counterproductive. (shrink)

Key accomplishments of political corporate social responsibility scholarship have been the identification of global governance gaps and a proposal how to tackle them. Political CSR scholarship assumes that the traditional roles of state and business have eroded, with states losing power and business gaining power in a globalized world. Consequently, the future of CSR lies in political CSR with new global governance forms which are organized by mainly non-state actors. The objective of the paper is to deepen our understanding of (...) political CSR and reintegrate notions of state power into political CSR scholarship by highlighting how states set the context within which business takes place, regulate offshore business practices, and play pivotal roles in new global governance mechanisms. (shrink)

The social licence to operate concept is little developed in the academic literature so far. Deployment of the term was made by the United National Guiding Principles on Business and Human Rights and the UN ‘Protect, Respect and Remedy’ Framework, which apply SLO as an argument for responsible business conduct, connecting to social expectations and bridging to public regulation. This UN guidance has had a significant bearing on how public regulators seek to influence business conduct beyond Human Rights to broader (...) Corporate Social Responsibility concerns. Drawing on examples of such public regulatory governance, this article explores and explains developments towards a juridification of CSR entailing efforts by public regulators to reach beyond jurisdictional and territorial limitations of conventional public law to address adverse effects of transnational economic activity. Through analysis of an expansion of law into the normative framing of what constitutes responsible business conduct, we demonstrate a process of juridification entailing a legal framing of social expectations of companies, a proliferation of law into the field of business ethics, and an increased regulation by law of social actors or processes. (shrink)

Human rights declarations are instruments used to introduce universal standards of ethics. The UN’s Protect, Respect, and Remedy Framework (Ruggie, Protect, respect, and remedy: A Framework for business and human rights. UN Doc A/HRC/8/5, 2008; Guiding principles on business and human rights: Implementing the United Nations “Protect, Respect, and Remedy” framework. UN Doc A/HRC/17/31, 2011) intends to provide guidance for corporate behavior in regard to human rights. This article applies concepts from the field of organizational justice to the arena of (...) business and human rights for the purpose of operationalizing the UN Framework. This approach facilitates the recognition of gaps between perceptions of justice held by stakeholders versus businesses and/or the State. Such recognition raises the potential for addressing issues that lead to divergent perceptions of justice, thus potentially improving the human rights performance of businesses. The research also shows the potential for complicity of businesses in human rights abuses and exposes a fundamental weakness in the UN Framework, which attempts to draw a sharp distinction between duties of States versus responsibilities of business. We illustrate this approach through analysis of the case of Goldcorp’s Marlin Mine in Guatemala; an extractive industry project that affects indigenous communities. (shrink)

The present paper explores, theoretically, and empirically, whether compliance with the International Code of marketing of breast-milk substitutes impacts on financial performance measured by stock markets. The empirical analysis, which considers a 20-year period, shows that stock markets are indifferent to the level of compliance by manufacturers with the International Code. Two important issues emerge from this result. Based on our finding that financial performance as measured by stock markets cannot explain the level of compliance, the first issue refers to (...) what alternative types of mechanisms drive manufacturers who comply the least with voluntary codes such as the International Code. Conversely, from our finding that stock markets do not reward the most compliant, the second issue raised is an inherent weakness of stock markets to fully incorporate social and environmental values. (shrink)

This paper studies Corporate Social Responsibility (CSR) from the viewpoint of social risk as part of reputational risk. We adopt the conception of social risk that includes the risks originated by environmental and social sustainability. Any risk involves hazards and opportunities. The success of its management consists of hedging the hazards and turning opportunities into value. CSR is the key for dealing with both goals. Opportunities can be identified through an accurate analysis that leads to discovering the unsatisfied needs contained (...) in societal claims in general and in the private politics of Non Governmental Organizations (NGO) in particular. Bringing these opportunities into line with the corporate know-how and undertaking projects together with the stakeholders with whom synergy is possible enables corporations to create shared value. A direct hedging of social risk hazards is hardly impossible. A good corporate social image constitutes a sound hedging against social risk. We have associated to social image the concept of CSR capital which means the value created through CSR. On this basis, we analyze the meaning and implications of social failure using Leland’s bankruptcy costs model. The quantification of the CSR capital may parallel the quantification of reputational capital about which several papers have been published. Combining the direct net present value created by a CSR expense with its tax savings and the savings it produces in the present value of the social failure costs, we estimate the total net present value created by these expenses. The analysis of social failure costs and the value created by social expenses is accompanied by a numerical illustration. EWW141015DXN. (shrink)