From Corporate Social Responsibility to Accountability

1
From Corporate Social Responsibility to
Accountability

• ICDAA Panel at the Montreal Conference on June 5,
  2006
• Dr. Carolin Hillemanns (ICDAA Montreal)

2
Outline

• TNCs and human rights-between philanthropy and
  accountability.
• International human rights obligations for
  non-state actors?
• Lessons from Nürnberg and international criminal
  law
• Soft compliance mechanisms on the international
  level
• Strong enforcement mechanisms on the national
  level
• Conclusions

3
EU Commission, Green Paper Promoting a European
Framework for CSR 2001
Introduction to CSR

• Business concept integrating social and
  environmental concerns in operations and
  interactions with stakeholders
• On a voluntary basis
• Leads to sustainable business success

• Beyond legal requirements
• Moral expectations
• Voluntary

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CSRs playground
Introduction to CSR

• Management
• Consumption
• Investment
• Project Funding

• Codes of conduct,management standards,
  sustainable reporting

Labels, certificates, e.g. Kimberly Process
Certification Scheme
Indices, e.g. Goldman Sachs Energy Env. and
Social Index, Principles for RI
Equator Principles Banks, IFC/World Bank, ECA
Human Rights benchmarks
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Introduction to CSR
Nobel Prize winning Economist Milton Freedman,
New York Times Magazine 1970 The Social
Responsibility of Business is to Increase its
Profits While conforming to the basic rules of
society, both those embodied in law and those
embodied in ethical custom.
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TNCs and Human Rights

• What is the relationship between business and
  international human rights law?
• Which responsibilities do businesses have in
  regards to human rights?
• What goes beyond those responsibilities and thus
  forms part of pure philanthropy, charity and good
  will?

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Business and Human Rights-an unequal equation?
Obligations for Non-State Actors

• Traditional human rights doctrine contract
  between the individual and his/her own government
• Historical understanding reaction to the
  omnipotent power of the absolute monarchy in
  Europe
• John Locke State was created to protect the
  individual from his fellow men
• Holocaust and WWII State-centred approach

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Obligations for Non-State Actors

• Universal Declaration of Human Rights
• Preamble "every organ of society
• Text "every one has the right to life, liberty
  and security of person

and

• Businesses can be as powerful as States
• Businesses assume similar functions (prison,
  water management, private international security
  firms,de facto control of large portions of
  lands)
• Weak governments cannot protect their citizens

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Obligations for Non-State Actors
TNCs have subsidiary and complementary human
rights obligations in cases where the very
dignity of the human being is threatened.
Paradigm shift
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Paradigm shift acknowledged in
Obligations for Non-State Actors

• UN documents
• Reports of Truth Reconciliation Commissions
• Existing plethora of codes of conducts and
  principles issued and endorsed by different
  stakeholders on CSR
• Court decisions

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Prominent examples
Obligations for Non-State Actors

• OECD Guidelines for MNE (1976), art. 22
• respect human rights of those affected by
  their activities consistent with the host
  governments international obligations and
  commitments
• ILO Tripartite Declaration (1977), 8 Chapter on
  General Policies All parties concerned should
  respect the UDHR and the corresponding
  International Covenants as well as the
  Constitution of the ILO and its principles
  according to which freedom of expression and
  association are essential to sustained progress.

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Obligations for Non-State Actors
Prominent examples (cont.)

• Global Compact (1999) Forum for discussion, best
  practice, mutual learning process
• P1 Business should support and respect the
  protection of internationally proclaimed HR
  within their sphere of influence.
• P2 Business should make sure that they are not
  complicit in HR abuses.

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Lessons from International Criminal Law

• ICJ, art. 34 Only States may be parties
• ICC, art. 25 jurisdiction over natural persons
• ICTY/ICTR, art. 1 power to prosecute persons
  responsible for serious violations of
  international humanitarian law
• SC for Sierra Leone, art. 1 power to prosecute
  persons who bear the greatest responsibility for
  serious violations of international humanitarian
  law

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Nürnberg
Lessons from intl. criminal law

• Individual business leaders tried for their
  implications in the crime against peace, war
  crimes and crimes against humanity under the
  instrumentalisation theory (Control Council Law
  No. 10)
• e.g.
• US v. Krauch (I.G. Farben case)
• US v. Krupp

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Soft compliance mechanisms on the international
level

• NGO monitoring
• Certification schemes
• Incentives
• OECD Guidelines National Contact Points
  (promotion, inquiries, offer good services)
• ILO Tripartite Declaration Follow-up mechanism
  does not disclose corporation that allegedly
  violated human rights

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Soft compliance mechanisms

• Panel of Experts on the Illegal Exploitation of
  Natural Resources and other Forms of Wealth of
  the DRC refers to OECD Guidelines, disclosed
  corporations, recommended sanctions
• UN Norms on the Responsibility of TNC and other
  Business Enterprises with regards to HR (2003)
  prompt, effective, and adequate reparation
  enforced by national courts and/or international
  tribunals

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Strong enforcement mechanisms on the national
level

• Criminal liability of corporations for serious
  violations of international human rights and
  humanitarian law (e.g., Canadian CAHWCA)
• Civil liability of corporations for violations of
  international human rights law with ius cogens
  quality (ATCA)

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UNOCAL case

• 1996 Villagers sue company in CA courts,
  claim building of Unocals pipeline led to
  killings, rape, forced labor, which the military
  government employed to clear the way for the
  pipeline in order to fulfill its contract with
  Unocal
• Plaintiffs claim Unocal benefited from HR
  violations and knew that they occurred
  (complicity)
• NGO takes up litigation on behalf of villagers
• Company denies wrongdoing or awareness of HR
  violations
• 2004 Settlement between Burmese villagers and
  Unocal

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Conclusions

• TNCs have a subsidiary and complementary
  responsibility to respect fundamental
  international HR norms.
• Uncertainty how to apportion the responsibility
  of States and of TNCs. Limits?
• Multiplicity of soft compliance mechanisms on the
  intl. level.
• Strong enforcement mechanisms on the natl. level
  (civil and criminal liability of corporations)
• Role of NGOs both in regards to soft compliance
  and strong enforcement mechanisms.