Corporations and Human Rights: A Theory of Legal Responsibility

By Ratner, Steven R. | The Yale Law Journal, December 2001 | Go to article overview
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Corporations and Human Rights: A Theory of Legal Responsibility

Ratner, Steven R., The Yale Law Journal

The last decade has witnessed a striking new phenomenon in strategies to protect human rights: a shift by global actors concerned about human rights from nearly exclusive attention on the abuses committed by governments to close scrutiny of the activities of business enterprises, in particular multinational corporations. Claims that various kinds of corporate activity have a detrimental impact on human welfare are at least as old as Marxism, and have always been a mantra of the political left worldwide. But today's assertions are different both in their origin and in their content. They emanate not from ideologues with a purportedly redistributive agenda, but from international organizations composed of states both rich and poor; and from respected nongovernmental organizations, such as Amnesty International and Human Rights Watch, whose very credibility turns on avoidance of political affiliation. Equally importantly, these groups do not seek to delegitimize capitalism or corporate economic power itself, but have criticized certain corporate behavior for impinging on clearly accepted norms of human rights law based on widely ratified treaties and customary international law.

Consider the following small set of claims challenging private business activity and the arenas in which they occur:

* The United Nations Security Council condemns illegal trade in diamonds for fueling the civil war in Sierra Leone and asks private diamond trading associations to cooperate in establishing a regime to label diamonds of legitimate origin. (1)

* The European Parliament, concerned about accusations against European companies of involvement in human rights abuses in the developing world, calls upon the European Commission to develop a "European multilateral framework governing companies' operations worldwide" and to include in it a binding code of conduct. (2)

* In response to public concern that American companies and their agents are violating the rights of workers in the developing world, the U.S. government endorses and oversees the creation of a voluntary code of conduct for the apparel industry. (3)

* The South African Truth and Reconciliation Commission, in a searching study of apartheid, devotes three days of hearings and a chapter of its final report to the involvement of the business sector in the practices of apartheid. (4)

* Human Rights Watch establishes a special unit on corporations and human rights; in 1999, it issues two lengthy reports, one accusing the Texas-based Enron Corporation of "corporate complicity in human rights violations" by the Indian government, (5) and another accusing Shell, Mobil, and other international oil companies operating in Nigeria of cooperating with the government in suppressing political opposition. (6)

* Citizens of Burma and Indonesia sue Unocal and Freeport-McMoRan in United States courts under the Alien Tort Claims Act and accuse the companies of violating the human rights of people near their operations. The corporations win both suits without a trial. (7)

* Holocaust survivors sue European banks, insurance companies, and industries for complicity in wartime human rights violations, and, with the aid of the U.S. government, achieve several multimillion-dollar settlements. (8)

The creation of a new target for human rights advocates is a product of various forces encompassed in the term globalization: the dramatic increase in investment by multinational companies in the developing world; the sense that the economic might of some corporations has eroded the power of the state; the global telecommunications revolution, which has brought worldwide attention to the conditions of those living in less developed countries and has increased the capacity of NGOs to mobilize public opinion; the work of the World Trade Organization (WTO) and International Monetary Fund (IMF) in requiring states to be more hospitable to foreign investors; and the well-documented accounts of the activities of a handful of corporations.

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Corporations and Human Rights: A Theory of Legal Responsibility


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