Towards a More Realistic Vision of Corporate Social Responsibility through the Lens of the Lex Mercatoria

By Bellish, Jonathan | Denver Journal of International Law and Policy, Fall 2012 | Go to article overview

Towards a More Realistic Vision of Corporate Social Responsibility through the Lens of the Lex Mercatoria


Bellish, Jonathan, Denver Journal of International Law and Policy


Globalization has led to a shift in power away from states and towards the private sector, which has resulted in multinational corporations taking a place among the most powerful international actors. This phenomenon has had many positive consequences, but it has also resulted in human rights, labor, and environmental abuses in developing nations. Such abuses are inconsistent with the way these multinationals behave at home and have led to a subsequent call for increased corporate social responsibility ("CSR") through enforceable norms. Though there is substantial agreement as to the contents of CSR norms, there is little such accord where enforcement is concerned. Some have suggested that binding CSR norms will ultimately emerge from multinational corporations themselves along the lines of the lex mercatoria. This article seeks to counter that argument by suggesting that, even if the traditional narrative of the lex mercatoria is true--an assertion upon which considerable doubt has been cast--modern multinational corporations are not likely to take the lead in developing and enforcing such norms. This is because, while lex mercatoria norms tend to increase profits and reduce liability, CSR norms tend to shrink margins and expose corporations to an additional form of liability. From this assertion, the article concludes that political and macroeconomic developments are likely to overtake legal and normative developments, particularly those emanating from the corporate suite, in leading to corporate responsiveness to a broader community of stakeholders.

I. INTRODUCTION

When an American court hears a medical malpractice tort claim, it applies the professional standard of care to the doctor's actions to determine liability. (1) This standard requires the court to look into the prevailing practice of doctors who are similarly situated to the defendant to determine whether or not the doctor-defendant was negligent in a particular case. Centuries from now, when legal historians look back at the widespread application of the professional standard of care as applied to doctors in the United States of America, they are unlikely to conclude a multi-state, American lex doctoria created independently binding legal norms governing a doctors' treatment of patients, despite the prevalence of different state courts using the doctor's custom to determine legal liability. Rather, these historians will conclude that twenty-first century courts applied the legal standard of reasonableness, looking into the custom of doctors as factual matter to support their legal argument, as was indeed the case.

Yet the existence of mercantile custom and the explicit insertion of that custom into medieval mercantile disputes have led to the conclusion that there was an international lex mercatoria that created independently binding legal obligations. Some scholars have even gone so far as to use the concept of the lex mercatoria to characterize norms of corporate social responsibility ("CSR"). This paper argues that, even if the prevailing characterization of the lex mercatoria is historically accurate, an extension of this characterization to norms of corporate social responsibility is unfounded. To characterize corporate social responsibility norms as a new lex mercatoria is to ignore the stubbornness of the shareholder primacy model of the corporation as well as the practical effects of CSR norms on a given corporation.

Where actual implementation is concerned, market-driven CSR norms have been the most successful in shaping corporate behavior. This is mainly because multinational corporations find themselves outside the reach of home country laws, (2) host country laws, (3) and international law. These corporate actors generally adhere to the shareholder primacy model of the corporation in which managers' only goal is to maximize shareholder returns. Some scholars view the success of market-driven CSR norms to suggest that the larger world of corporate social responsibility is properly seen as a new lex mercatoria. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Towards a More Realistic Vision of Corporate Social Responsibility through the Lens of the Lex Mercatoria
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.