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Corporate Moral Agency and the Responsibility to Respect Human Rights in the UN Guiding Principles: Do Corporations Have Moral Rights?

  • Patricia H WERHANE
Abstract

In 2011 the United Nations (UN) published the ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect, and Remedy” Framework’ (Guiding Principles). The Guiding Principles specify that for-profit corporations have responsibilities to respect human rights. Do these responsibilities entail that corporations, too, have basic rights? The contention that corporations are moral persons is problematic because it confers moral status to an organization similar to that conferred to a human agent. I shall argue that corporations are not moral persons. But as collective bodies created, operated, and perpetuated by individual human moral agents, one can ascribe to corporations secondary moral agency as organizations. This ascription, I conclude, makes sense of the normative business responsibilities outlined in the Guiding Principles without committing one to the view that corporations are full moral persons.

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Copyright
Footnotes
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Wicklander Chair Emerita, DePaul University and Ruffin Professor Emerita, University of Virginia, USA. My deep thanks to the editors of the Journal, Michael Santoro and Florian Wettstein for their numerous extraordinarily helpful comments and additions. The errors are unfortunately my own.

Footnotes
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1 In this article I shall only focus on for-profit corporations, and I shall use the terms ‘corporation’ and ‘organization’ interchangeably. I recognize that not all organizations are corporations, and that there may be different criteria for moral agency in various organizations. That is a topic for another article.

2 Human Rights Council, ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’, A/HRC/17/31 (21 March 2011) 1, 13.

3 Ibid, 14.

4 Wettstein, Florian, ‘CSR and the Debate on Business and Human Rights: Bridging the Great Divide’ (2012) 22 Business Ethics Quarterly 739.

5 Ibid; Shue, Henry, Basic Rights (Princeton: Princeton University Press, 1980).

6 Donaldson, Tom, Corporations and Morality (Englewood Cliffs NJ: Prentice-Hall, 1982).

7 Human Rights Council, note 2, 14 (my italics).

8 See Cragg, Wesley, ‘Human Rights, Globalization, and the Modern Corporation’ in Tom Campbell and Seamus Miller (eds.), Human Rights and the Moral Responsibilities of Corporate and Public-Sector Organizations (Dordrecht: Kluwer, 2004); Sumner, LW, The Moral Foundations of Rights (Oxford: Clarendon Press, 1987).

9 Donaldson, Tom, The Ethics of International Business (New York: Oxford University Press, 1989).

10 Arnold, Denis, ‘Transnational Corporations and the Duty to Respect Basic Human Rights’ (2010) 20 Business Ethics Quarterly 371.

11 See Smith, Adam, Lectures on Jurisprudence, R L Meek and D D Raphael (eds.) (Oxford: Oxford University Press, 1978); Wettstein, Florian, ‘Normativity, Ethics, and the UN Guiding Principles on Business and Human Rights: A Critical Assessment’ (2015) 14(2) Journal of Human Rights 162.

12 Human Rights Council, note 2, 5.

13 Encyclopedia, Risk, ‘History of Corporations’, Risk Encyclopedia (n.d.), http://www.riskencyclopedia.com/articles/corporation (accessed 23 July 2015).

14 In 1602 the government of Holland granted similar status to the Dutch East India Company, which operated similarly in the Dutch East Indies, known now as Indonesia. See Britannica, Encyclopaedia, ‘Dutch East India Company’, Encyclopaedia Britannica (8 May 2015), http://www.britannica.com/EBchecked/topic/174523/Dutch-East-India-Company (accessed 23 July 2015); Encyclopaedia Britannica, ‘East India Company’, Encyclopaedia Britannica (11 June 2015) http://www.britannica.com/EBchecked/topic/176643/East-India-Company (accessed 23 July 2015).

15 Carroll, Archie B et al, Corporate Responsibility: The American Experience (Cambridge: Cambridge University Press, 2012).

16 Ibid; Johnson, Lyman, ‘Law and Legal Theory in the History of Corporate Responsibility: Corporate Personhood’ (2012) 35 Seattle University Law Review 1521; Johnson, Lyman, University of St. Thomas Legal Studies Research Paper No. 1219.

17 Trustees of Dartmouth College v Woodward 17 US 518 (1819).

18 Santa Clara County v Southern Pacific Railway Company 118 US 394 (1886).

19 Minneapolis and St. Louis Railway Company v Beckwith 129 US 26 (1889).

20 First National Bank of Boston v Bellotti 435 S 765 (1978).

21 Citizens United v Federal Election Commission 130 S Ct 876 (2010); see also Carroll, note 15; Johnson, note 16; Orts, Eric, Business Persons: A Legal Theory of the Firm (London: Oxford University Press, 2013).

22 Citizens United v Federal Election Commission, note 21, 876.

23 This identification of corporations as associations of individuals in the Citizens United decision comes from the Syllabus and from Justice Scalia’s concurring support of the decision.

24 Pallardy, Richard, ‘Deepwater Horizon Oil Spill of 2010’, Encyclopaedia Britannica (2 July 2015), http://www.britannica.com/EBchecked/topic/1698988/Deepwater-Horizon-oil-spill-of-2010 (accessed 23 July 2015).

25 Locke, John, Two Treatises on Government, Peter Laslett (ed.) (Cambridge: Cambridge University Press, 1967).

26 Nozick, Robert, Anarchy, State and Utopia (New York: Basic Books, 1974).

27 Walzer, Michael, Spheres of Justice (New York: Basic Books, 1994).

28 See, e.g., Dworkin, Ronald, Taking Rights Seriously (Cambridge: Harvard University Press, 1977); Dworkin, Ronald, Justice for Hedgehogs (Cambridge MA: Belnap Harvard University Press, 2011).

29 Blackstone, William T, Environmental Crisis (Athens GS: University of Georgia Press, 1974).

30 Gewirth, Alan, Reason and Morality (Chicago: University of Chicago Press, 1978); Werhane, Patricia H, Persons, Rights, and Corporations (Englewood Cliffs NJ: Prentice-Hall, 1985); Hart, H L A, ‘Are There Any Natural Rights?’ (1955) Philosophical Review 64; Lyons, David, ‘The Correlativity of Rights and Duties’ (1970) 4 Nous 45; Griffin, James, On Human Rights (Oxford: Oxford University Press, 2008).

31 Ibid; Shue, note 5.

32 Werhane, Patricia H and Radin, Tara, Employment and Employee Rights (Malden, Oxford, Melbourne: Wiley-Blackwell, 2003); Werhane, Patricia H and Wren, Thomas, ‘Human Rights as Social Constructions’ (2014) Listening 121.

33 Arnold, note 10; Wettstein, note 4 and note 11; Bishop, John D, ‘The Limits of Corporate Human Rights Obligations and the Rights of For-Profit Corporations’ (2012) 22 Business Ethics Quarterly 119.

34 See also Orts, note 21.

35 Phillips, Michael J, ‘Corporate Moral Personhood and Three Conceptions of the Corporation’ (1992) 2 Business Ethics Quarterly 437.

36 See Citizens United v Federal Election Commission, note 21, 876.

37 See, e.g., Velasquez, Manuel, ‘Why Corporations Are Not Morally Responsible for Anything They Do’ (1983) 2 Business and Professional Ethics Journal 118; Velazquez, Manuel, ‘Debunking Corporate Moral Responsibility’ (2003) 13 Business Ethics Quarterly 531.

38 Prahalad, C K and Bettis, R A, ‘The Dominant Logic: A New Linkage Between Diversity and Performance’ (1986) 7 Strategic Management Journal 485, 490.

39 Phillips, note 25, 440.

40 French, Peter, ‘The Corporation as a Moral Person’ (1979) 16 American Philosophical Quarterly 208.

41 Arnold, note 10, 387–8.

42 Werhane, note 30.

43 Nesteruk, Jeffrey, ‘The Moral Status of the Corporation: Comments on an Inquiry’ (1992) 2 Business Ethics Quarterly 461.

44 Merriam-Webster Dictionary, ‘Collective’, Merriam-Webster (n.d.), http://www.merriam-webster.com/dictionary/collective (accessed 23 July 2015).

45 McMahon, Christopher, ‘The Ontological and Moral Status of Organizations’ (1995) 5 Business Ethics Quarterly 541.

46 Ozar, David, ‘Do Corporations Have Moral Rights?’ (1985) 4 Journal of Business Ethics 277.

47 Donaldson, Tom, ‘Moral Agency and Corporations’ (1980) 10 Philosophy. In Context 54, 58–59.

48 Werhane, note 30.

49 May, Larry, ‘Vicarious Agency’ (1983) 43 Philosophical Studies 69.

50 Werhane, note 30, 58.

51 This conclusion raises other ethical issues that are topics for another essay. When an agent or employee acts on behalf of a company and these actions produce untoward consequences, is that persons or group of persons, as well as the company responsible? I would label this the ‘Eichmann problem’, the infamous Nazi who, when testifying at his trial, claimed he was just following orders on behalf of the Nazi regime. Thus, he argued, he was not personally responsible. See Arendt, Hannah, Eichmann in Jerusalem (New York: Viking Press, 1963, 1964).

52 Orts, Eric and Sepinwall, Amy, ‘Privacy and Organizational Persons’ (2015) 99 Minnesota Law Review 2248.

53 Bishop, note 33, 129.

54 Ibid.

55 Santoro, Michael A, China 2020: How Western Business Can—and Should—Influence Social and Political Change in the Coming Decade (Ithaca: Cornell University Press, 2009); Santoro, Michael A., ‘Post-Westphalia and its Discontents: Business, Globalization, and Human Rights in Political and Moral Perspective’ (2010) 20(2) Business Ethics Quarterly 285.

56 Scherer, Andreas G and Palazzo, Guido, ‘Toward a Political Conception of Corporate Responsibility: Business and Society Seen From a Habermasian Perspective’ (2007) 32(4) Academy of Management Review 1096; Scherer, Andreas G and Palazzo, Guido, ‘A New Political Role of Business in a Globalized World: A Review and Research Agenda’ (2011) 48(4) Journal of Management Studies 899; Matten, Dirk and Crane, Andrew, ‘Corporate Citizenship: Toward an Extended Theoretical Conceptualization’ (2005) 30(1) Academy of Management Review 166.

57 Bishop, note 33, 141.

58 Newburry, William and Gladwin, Thomas, ‘Shell and Nigerian Oil’ in Thomas Donaldson, Patricia H Werhane, and Margaret Cording (eds.), Ethical Issues in Business (Upper Saddle River NJ: Prentice-Hall, 2002) 522541; Center for Constitutional Rights, ‘Factsheet: The Case Against Shell’, Center for Constitutional Rights (24 March 2009), http://www.ccrjustice.org/learn-more/faqs/factsheet%3A-case-against-shell-0 (accessed 23 July 2015).

59 Chandler, Sir Geoffrey, ‘Introduction: Defining Corporate Social Responsibility’ (2001) Ethical Performance Best Practices.

60 See, e.g., Pollman, Elizabeth, ‘Reconceiving Corporate Personhood’ (2011) Utah Law Review 1629.

61 Ryle, Gilbert, The Concept of Mind (London: Hutchison’s University Library, 1949).

62 See, e.g., Pollman, Elizabeth, ‘A Corporate Right to Privacy’ (2014) 99 Minnesota Law Review 27 on whether corporations should be granted rights to privacy.

63 Arnold, note 10, 388.

* Wicklander Chair Emerita, DePaul University and Ruffin Professor Emerita, University of Virginia, USA. My deep thanks to the editors of the Journal, Michael Santoro and Florian Wettstein for their numerous extraordinarily helpful comments and additions. The errors are unfortunately my own.

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Business and Human Rights Journal
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