Top 10 Emerging Challenges for 2010 - Issue 1

Clarifying responsibilities "beyond borders"

The need for governments to live up to their human rights obligations, including the duty to protect against abuses involving corporations, has become a growing subject of debate over recent years.

As the United Nations Special Representative on Business and Human Rights, Professor John Ruggie, has pointed out, some governments, particularly in developing countries, may lack the institutional capacity to enforce national laws and regulations involving transnational firms doing business in their territory.

And even when the will and resources are present, governments may feel constrained from tackling abuses involving companies because of concerns over having to compete internationally for investment. At the same time, home states of major firms operating globally may be reluctant to regulate against overseas harm by corporations, either because the permissible scope of relevant regulation remains poorly understood, or out of concern that firms based in these states might lose investment opportunities or relocate their headquarters.

At the international level, increasing calls for action are heard today, including by United Nations expert bodies which monitor state compliance with treaty obligations. At national level, initiatives such as The Corporate Responsibility (CORE) Coalition’s proposal for a UK Commission for Business, Human Rights and the Environment [59 pages, 3.37mb] seek to clarify the responsibilities of home state governments in this area. High-profile cases such as involving Trafigura in Ivory Coast have further raised debate over the need for further action.

In a recent statement to an EU conference on Corporate Social Responsibility [5 pages], John Ruggie addressed the issue of extra-territorial obligations directly, noting:

"This status quo does no favors to victims of corporate-related human rights abuse; to host governments that may lack the capacity for dealing with the consequences; to companies that may face operational disruptions or find themselves in an Alien Tort Statute suit for the next decade; or to the home country itself, whose own reputation is on the line."

2010 will see increasing attention to these issues including through the process of updating the human rights content of the OECD Guidelines for Multinational Enterprises.

Clearly the OECD Guidelines and the U.S. Alien Tort Statute mechanisms are important pieces of a larger jigsaw – but it is a puzzle where many pieces are still missing.