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Is there such a thing as international law governing company behaviour? The question is not purely academic. Much is made of the emerging framework of international initiatives in this area. The hope, if not the expectation, is that at some point these will coalesce into a coherent body that not merely encourages responsible business behaviour, but requires it. Multinational companies, so the argument goes, operate across national boundaries. The only way to ensure they do so responsibly is through international law.
But powerful obstacles stand in the way. Even before terrorism became a major concern, international efforts to safeguard human rights were in disarray. This is the background to John Ruggie’s deliberations on how the UN should deal with companies’ human rights impacts (see page one). So long as the US detention facility in Guantánamo exists, efforts to strengthen international human rights legislation have scant credibility. Corporations, too, which have international rights but no international duties, have an interest in maintaining the status quo.
Yet all is not lost. At national level, there is considerable scope for non-governmental organizations and others to influence governments to bring forward regulations. Internationally, legally binding obligations on companies to improve their social and environmental performance may be a vain hope for now, but there are several existing tools to hand. All are voluntary and therefore, say critics, ultimately unenforceable. But non-state actors so far are beyond the direct reach of international human rights law and there is anyway no global policeman to act as enforcer.
So, at the international level, voluntarism is the only game in town. Not to be ignored, however, are the various mechanisms that now provide at least an oversight of corporate behaviour. Some of these, such as the Extractive Industries Transparency Initiative, are for particular industry sectors. Others relate to specific issues – the current US Department of Justice investigation of BAE Systems rests on domestic legislation implementing the OECD anti-bribery convention. In all cases, a ratchet effect operates to slowly raise standards, the latest example being the OECD Guidelines for Multinational Enterprises (see page one).
These international initiatives do not have the force of law. But they have what lawyers call ‘normative force’, which is to say they influence behaviour. This is already making a difference in some areas. A current case in point is the pressure China is beginning to feel to modulate the pursuit of its economic interests in Africa. Of course, some companies will still seek to gain competitive advantage by ignoring standards. But capital now operates in a global market increasingly sensitive to the social and environmental consequences of its activities.
But powerful obstacles stand in the way. Even before terrorism became a major concern, international efforts to safeguard human rights were in disarray. This is the background to John Ruggie’s deliberations on how the UN should deal with companies’ human rights impacts (see page one). So long as the US detention facility in Guantánamo exists, efforts to strengthen international human rights legislation have scant credibility. Corporations, too, which have international rights but no international duties, have an interest in maintaining the status quo.
Yet all is not lost. At national level, there is considerable scope for non-governmental organizations and others to influence governments to bring forward regulations. Internationally, legally binding obligations on companies to improve their social and environmental performance may be a vain hope for now, but there are several existing tools to hand. All are voluntary and therefore, say critics, ultimately unenforceable. But non-state actors so far are beyond the direct reach of international human rights law and there is anyway no global policeman to act as enforcer.
So, at the international level, voluntarism is the only game in town. Not to be ignored, however, are the various mechanisms that now provide at least an oversight of corporate behaviour. Some of these, such as the Extractive Industries Transparency Initiative, are for particular industry sectors. Others relate to specific issues – the current US Department of Justice investigation of BAE Systems rests on domestic legislation implementing the OECD anti-bribery convention. In all cases, a ratchet effect operates to slowly raise standards, the latest example being the OECD Guidelines for Multinational Enterprises (see page one).
These international initiatives do not have the force of law. But they have what lawyers call ‘normative force’, which is to say they influence behaviour. This is already making a difference in some areas. A current case in point is the pressure China is beginning to feel to modulate the pursuit of its economic interests in Africa. Of course, some companies will still seek to gain competitive advantage by ignoring standards. But capital now operates in a global market increasingly sensitive to the social and environmental consequences of its activities.
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