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The Commitment Curve: Global Regulation of Business and Human Rights

  • Tori Loven KIRKEBØ and Malcolm LANGFORD
  • Please note a correction has been issued for this article.

Abstract

The divide between hard law and soft law approaches to global regulation of corporations in relation to human rights is partly based on empirical assumptions. Taking a step back, we assess the claims concerning the current state of global regulation and political feasibility of hard law approaches. Moving beyond the usual suspects, we map 98 existing standards that regulate corporations and find a great variation in how different sectors treat human rights and accountability issues. Turning to the explanation of the current jungle of global business and human rights regulation, we contrast and test dominant and competing expressive theories with a consequentialist commitment curve, in which corporations and states seek to minimize human rights commitments. We find support for all approaches to regulatory reform, but argue that greater attention should be given to the consequentialist insights, and how political economy can be leveraged to strengthen regulatory outcomes.

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Copyright

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Footnotes

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*

Research Fellow, Faculty of Law, University of Oslo. She is also the Project Coordinator for Nordic Branding: Politics of Exceptionalism and former Senior Executive Officer, PluriCourts Centre of Excellence, University of Oslo.

**

Professor of Public Law, University of Oslo. He is also the Co-Director, Centre on Law and Social Transformation, University of Bergen and CMI, and Affiliate Researcher, PluriCourts Centre of Excellence, University of Oslo.

Footnotes

References

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1 Human Rights Council, ‘Human Rights and Transnational Corporations and other Business enterprises’, A/HRC/26/L.1 (15 July 2014). See also Human Rights Council, ‘Elaboration of an International Legally Binding Instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights’, A/HRC/26/L.22/Rev.1 (14 July 2014).

2 See, e.g., Bilchitz, David, ‘The Necessity for a Business and Human Rights Treaty’ (2016) 1:2 Business and Human Rights Journal 203 . See also Treaty Alliance, http://www.treatymovement.com (accessed 16 May 2018).

3 Deva, Surya, Regulating Corporate Human Rights Violations: Humanizing Business (London: Routledge, 2012) 64 .

4 Bilchitz, David, ‘Introduction: Putting Flesh on the Bone’ in Surya Deva and David Bilchitz (eds), Building a Treaty on Business and Human Rights. Context and Contours (Cambridge, Cambridge University Press, 2017) 20 .

5 Hathaway, Oona A, ‘Do Human Rights Treaties Make a Difference?’ (2002) 111 Yale Law Journal 1935 .

6 Simmons, Beth, Mobilizing Human Rights: International Law in Domestic Politics (Cambridge: Cambridge University Press, 2009) 59 .

7 See discussion of interdependence theory in Baccini, Leonardo and Koenig-Archibugi, Mathias, ‘Why do States Commit to International Labor Standards? Interdependent Ratification of Core ILO Conventions, 1948–2009’ (2014) 66:3 World Politics 446 .

8 Melish, Tara, ‘Putting “Human Rights” Back into the UN Guiding Principles on Human Rights: Shifting Frames and Embedding Participation Rights’, in Cesar Rodríguez-Garavito (ed.), Business and Human Rights: Beyond the End of the Beginning (Cambridge: Cambridge University Press, 2017) 76, 82 .

9 John Ruggie, ‘A UN Business and Human Rights Treaty?’, Issues Brief (28 January 2014), http://www.hks.harvard.edu/m-rcbg/CSRI/UNBusinessandHumanRightsTreaty.pdf (accessed 5 January 2018).

10 Ruggie, John, ‘What Makes the World Hang Together? Neo-Utilitarianism and the Social Constructivist Challenge’ (1998) 54:4 International Organization 855 .

11 One can argue that many corporations fail to act rationally from a long-term perspective as they fail to include the costs of under-regulation such as environmental damage, consumer and labour revolts, etc. See, e.g., Deva, note 3, ch. 2.

12 Baccini and Koenig-Archibugi, note 7.

13 Simmons, note 6, 64. Emphasis added.

14 See, e.g., Deva, note 3, ch. 3.

15 Abbott, Kenneth and Snidal, Duncan, ‘The Governance Triangle: Regulatory Standards Institutions and the Shadow of the State’, in Walter Mattli and Ngaire Woods (eds.), The Politics of Global Regulation (Princeton: Princeton University Press, 2009) 44.

16 Vogel, David, ‘Private Global Business Regulation’ (2008) 11 Annual Review of Political Science 261 .

17 We refer to the database as G-CSR rather than G-BHR because the majority of standards reflect a CSR perspective, label themselves as CSR and not all include human rights.

18 ILO, ‘Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration) – 5th Edition’, http://www.ilo.org/empent/areas/mne-declaration/lang--en/index.htm (accessed 11 May 2018)

19 Business and Human Rights Resource Centre ‘Text of standards’, https://www.business-humanrights.org/en/text-of-business-human-rights-standards (accessed 11 May 2018).

20 This is partly due to the challenges of identification amongst a plethora of national laws and policies but also because they are not strictly needed in addressing our question.

21 It is arguable that ICESCR creates a duty on states to regulate extraterritorially. See Narula, Smita, ‘International Financial Institutions, Transnational Corporations and Duties of States’, in Malcolm Langford et al. (eds.), Global Justice, State Duties: The Extraterritorial Scope of Economic, Social, and Cultural Rights in International Law (Cambridge: Cambridge University Press, 2013) 114 .

22 For a full list of the standards, see Annex 1.

23 Eberlein, Burkard et al., ‘Transnational Business Governance Interactions: Conceptualization and Framework for Analysis’ (2014) 8 Regulation & Governance 1, 3 .

24 See also Braithwaite, John and Drahos, Peter, Global Business Regulation (Cambridge: Cambridge University Press, 1992) 29 .

25 G-CSR database.

26 World Trade Organization, ‘World Trade Statistical Review 2017’ (2017), ch. 2, https://www.wto.org/english/res_e/statis_e/wts2017_e/wts17_toc_e.htm (accessed 17 May 2018).

27 For a discussion, see Deva and Bilchitz, note 4.

28 Klaus Leisinger, On Corporate Responsibility for Human Rights (2006) http://www.reports-and-materials.org/sites/default/files/reports-and-materials/Leisinger-On-Corporate-Responsibility-for-Human-Rights-Apr-2006.pdf (accessed 30 November 2015); Campbell, John, ‘Why Would Corporations Behave in Socially Responsible Ways? An Institutional Theory of Corporate Social Responsibility’ (2007) 32:3 The Academy of Management Review 946 .

29 ICCPR, ICESCR and the UDHR.

30 See Annex 2 for the distribution of human rights.

31 See Annex 2 for human rights included in standards.

32 Alston, Philip, ‘“Core Labour Standards” and the Transformation of the International Labour Rights Regime’, (2004) 15:3 European Journal of International Law 457 .

33 Human Rights Council, ‘Protect, Respect and Remedy: A Framework for Business and Human Rights. Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises’, A/HRC/8/5 (7 April 2008).

34 Taylor, Mark, ‘The Ruggie Framework: Polycentric Regulation and the Implications for Corporate Social Responsibility’ (2011) 5:1 Nordic Journal for Applied Ethics 9 .

35 SA800, ‘SA8000 Side By Side 2008 and 2014 Latest’, http://sa-intl.org/_data/n_0001/resources/pending/SA8000%20Side%20By%20Side%202008%20and%202014%20Latest.pdf (accessed 6 March 2016).

36 Ibid.

37 ILO, ‘Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy’ http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---multi/documents/publication/wcms_094386.pdf (accessed 5 April 2018).

38 Ibid, p 1.

39 Which arguably includes a ‘logic of arguing’.

40 March, James G and Olsen, Johan P, ‘The New Institutionalism: Organizational Factors in Political Life’ (1984) 78 American Political Science Review 734 .

41 Mattli and Woods, note 15; John Gerard Ruggie, ‘Multinationals as Global Institution: Power, Authority and Relative Autonomy’ (2017) Regulation & Governance, https://onlinelibrary.wiley.com/doi/10.1111/rego.12154 (accessed 01 June 2018); Elster, Jon (ed.) Rational Choice (Oxford: Blackwell, 1986).

42 Meyer, John W et al. ‘World Society and the Nation‐State’ (1997) 103:1

American Journal of Sociology 144, 153. States, and arguably multinational corporations, are a ‘worldwide institution constructed by worldwide cultural and associational processes’, and adopt ‘prescribed institutions of modernity’.

43 DiMaggio, Paul J and Powell, Walter W, ‘The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields’ (1983) 48:2 American Sociological Review 147, 150151 .

44 ‘By acculturation, we mean the general process by which actors adopt the beliefs and behavioral patterns of the surrounding culture.’ Goodman, Ryan and Jinks, Derek, ‘Incomplete Internalization and Compliance with Human Rights Law’ (2008) 19 European Journal of International Law 725 .

45 ‘The authority does not merely add to or provide sufficient reasons to act in a particular way, but rather alters the domain of reason on which one may act at all.’ Raz, Joseph, ‘Law, Authority and Morality’ in Joseph Raz (ed.), Ethics in the Public Domain (Oxford: Oxford University Press, 1994), as summarized by Yankah, Ekow, ‘The Force Of Law: The Role of Coercion in Legal Norms’ (2008) 42 University of Richmond Law Review 1195 .

46 See, e.g., Richardson, Benjamin and Sjåfjell, Beate, ‘Capitalism, the Sustainability Crisis and the Limitations of Current Business Governance’, in Beate Sjåfjell and Benjamin Richardson (eds.), Company Law and Sustainability: Legal Barriers and Opportunities (Cambridge: Cambridge University Press, 2015), 1 .

47 See critique in Melish, note 8.

48 Mattli and Woods, note 15.

49 Ruggie, note 41, p 9, ‘Discursive power is the ability to influence outcomes through promoting ideas, setting social norms and expectations, and even shaping identities. Its exercise involves persuasion and emulation, not coercion.’

50 On strategic behavior generally, see Elster, note 41. In the case of corporations, see Walter Mattli and Ngaire Woods, ‘In Whose Benefit? Examining Regulatory Change in Global Politics’, in Mattli and Woods, note 15.

51 Gillies, Alexandra, ‘Reputational Concerns and the Emergence of Oil Sector Transparency as an International Norm’ (2010) 54:1 International Studies Quarterly 103 .

52 Mattli and Woods, note 15, 21.

53 See discussion in Abbott and Snidal, note 15.

54 See the discussion of the effects of market competition on openness to regulation in Campbell, note 28.

55 Corporate behaviour may also be influenced by a prisoner’s dilemma, whereby corporations may strategically not comply – particularly when there are high levels of competition. See Deva, note 3. However, for the moment, let us assume it does not happen.

56 We have coded for corporate lobbyism to the extent that that was a formal actor in multi-stakeholder adoption or drafting, but we have not captured informal lobbying through other channels.

57 Complaints mechanisms that allow employees to bring complaints against their employer are not included here due to their narrow focus on one corporation.

58 See UN Global Compact ‘Why Report’, https://www.unglobalcompact.org/participation/report (accessed 26 February 2016).

59 Creamer, Cosette and Simmons, Beth, ‘Ratification, Reporting and Rights: Quality of Participation in the Convention Against Torture’ (2015) 37:3 Human Rights Quarterly 579 .

60 Auld, Graeme, Guldbrandsen, Lars and McDermott, Constance, ‘Certification Schemes and the Impacts of Forests and Forestry’ (2013) 33 The Annual Review of Environment and Resources 187 .

61 Fransen, Luc, ‘Multi-Stakeholder Governance and Voluntary Programme Interactions: Legitimation Politics in the Institutional Design of Corporate Social Responsibility (2012) 10:1 Socio-Economic Review 3 .

62 Abbott and Snidal, note 15.

63 Caspar van Vark, ‘Behind the Label: Can We Trust Certification to Give us Fairer Products?’, The Guardian (10 March 2016) https://www.theguardian.com/sustainable-business/2016/mar/10/fairtrade-labels-certification-rainforest-alliance (accessed 17 May 2018).

64 For example, our database only includes five binding standards but one of these contains a complaint and reporting mechanism.

65 They measure effectiveness by independence, representativeness, expertise and operational capacity.

66 Embedment in national law will make the standard legally binding, but given that we have the standard and not its implementation as our unit of analysis, we do not analyse these developments.

67 Analysis of how the standards are enforced would require an in-depth analysis of practice beyond the content of our current database. Thus, this is not included in this article.

68 Laufer, William S, ‘Social Accountability and Corporate Greenwashing’ (2003) 43 Journal of Business Ethics 253 . See also Posner, Eric A, The Twilight of Human Rights Law (Oxford: Oxford University Press, 2004).

69 For discussion on legal liability in the BHR field, see Bilchitz, note 2.

70 Mico, Apostolov, ‘Governance and Enterprise Restructuring in Southeast Europe’ (2013) 40:8 International Journal of Social Economics 680 .

71 As we do not assess compliance with the standards, we cannot say anything about how they actually protect.

72 See further discussion in Langford, Malcolm and Kirkebø, Tori Loven, ‘Regulatory Evasion or Embrace? Transnational Business Governance and Human Rights’ in Beate Sjåfjell, Linn Anker-Sørensen and Kurt Strasser, Corporate Groups and Regulatory Evasion (Cambridge University Press, forthcoming).

73 Mattli and Woods, note 15.

74 Abbott and Sindal, note 15.

75 In light of the limited reference to human rights treaties, their possible strength in the legal perspective may be nonetheless smaller. If there is an overlap between the six standards that reference treaties and have a full inclusion of human rights – this could indicate stronger standards. However, the strength of the standard is also reflected in the language framing the inclusion of treaties and rights.

76 As noted earlier, we do not consider complaint mechanisms under individual codes of conduct.

78 Beth Simmons, note 6.

79 Sauvant, Karl, ‘The Negotiations of the United Nations Code of Conduct on Transnational Corporations: Experience and Lessons Learned’ (2015) 16:1 The Journal of World Investment and Trade 16 .

80 For an argument for this approach, see Human Rights Council, ‘Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises,’ A/HRC/17/31 (24 March 2011). See also de Schutter, Olivier, ‘Foreword: Beyond the Guiding Principles’, in Surya Deva and David Bilchitz (eds.), Human Rights Obligations of Business: Beyond the Corporate Responsibility to Respect? (Cambridge: Cambridge University Press, 2013) xv .

81 OECD Guidelines for Multinational Enterprises (1976) available at: http://www.oecd.org/daf/inv/mne/50024800.pdf (accessed 3 March 2016).

82 Ibid.

83 OECD Guidelines for Multinational Enterprises (2016) ‘About’, available at: http://mneguidelines.oecd.org/about/ (accessed 3 March 2016).

84 IFOAM (2016) ‘IFOAM Standard’, http://www.ifoam.bio/en/ifoam-standard (accessed 3 March 2016).

85 Ibid.

86 Forest Stewardship Council (2012), https://us.fsc.org/en-us (accessed 3 March 2016).

87 See Fransen, Luc and Conzelmann, ThomasFragmented or Cohesive Transnational Private Regulation of Sustainability Standards? A Comparative Study’ (2015) 9:3 Regulation and Governance 259 .

88 There is some evidence that well-structured and legitimate deliberative forums, which prevent defection and motivate performance, catalyse more expansive action. The WHO Tobacco Convention provides one pertinent example, although notably only states participated directly in its drafting.

89 Note that there are also examples of the commitment curve moving to the left in practice.

77 Only 80 of the standards in G-CSR have some sort of accountability mechanism, thus the number included here.

* Research Fellow, Faculty of Law, University of Oslo. She is also the Project Coordinator for Nordic Branding: Politics of Exceptionalism and former Senior Executive Officer, PluriCourts Centre of Excellence, University of Oslo.

** Professor of Public Law, University of Oslo. He is also the Co-Director, Centre on Law and Social Transformation, University of Bergen and CMI, and Affiliate Researcher, PluriCourts Centre of Excellence, University of Oslo.

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