Protection of Human Rights in Multinational Corporations

The protection of human rights is not traditionally considered a responsibility of corporations. The domestic laws of many states fail to impose adequate human rights duties on corporations, while it is unlikely that there are any direct duties imposed by international law. Yet corporations, especially multinational corporations (MNCs), are very powerful entities in the current world order. Their impact on the wellbeing of communities and individuals, including in terms of human rights, is evident wherever they operate.

While there is considerable scope for that impact to be positive, corporate activity is often perceived to have had, and has had, a detrimental impact on human rights protection. The most notorious MNC abuses occur in the developing world, including for example complicity in the brutality of host states, police and military, the use of forced and child labour, suppression of rights to freedom of association and speech, violations of rights to cultural and religious practice, infringement of rights to property (including intellectual property), and gross infringements of environmental rights.

However, infringements by MNCs also occur in developed nations typically in respect of the environment, rights to privacy, consumer rights to health and information, as well as freedom of association. Yet, despite this surge in interest in corporate human rights responsibilities, there remain certain important countervailing factors. Chief among these is the dissonance between the objects and practice of the globalization of human rights on the one hand, and that of economic globalization on the other.

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It is often argued, for example, that the acceleration of the process of economic globalization under the auspices of such bodies as the WTO, the World Bank and the International Monetary Fund, has been prioritized at the expense of other goals, such as social welfare and human rights considerations. Certainly, international trade law essentially grants numerous rights to MNCs and very few enforceable duties, and few of any apparent significance in respect of human rights. The legal duties of MNCs within the various domestic laws of states can be readily clarified in most instances.

Such duties may arise for example in the context of criminal laws, civil rights laws, and consumer protection laws. However, the legislative sources of human rights pressure may be on occasion surprising. For example, trade practices laws prohibiting . misleading and deceptive conduct. can perhaps be used to restrain a company from portraying itself as an ethical entity when the contrary is true. Unfortunately, domestic laws have proven an inadequate means for controlling the human rights excesses of certain MNCs.

In some instances, an MNC is more powerful, economically and de facto politically, than a state it is operating in, particularly when that state is a developing nation which perceives that it needs foreign direct investment in order to achieve satisfactory levels of economic development. MNCs may threaten disengagement if a state tries to increase its regulation of their activities, particularly if other states offer greater deregulation. For example, in the context of labour rights, this phenomenon has led to what is often called a race to the bottom, whereby states compete for foreign direct investment by offering the cheapest labour forces. MNCs are therefore in a uniquely powerful position to resist attempts by states, especially developing nations, to control their domestic operations. Hence, there is a need for other sources of MNC human rights obligations. Two such sources are extraterritorial regulation and international regulation. The direct legal human rights duties of MNCs in international law are particularly opaque, despite the existence of numerous relevant international documents.

Most international law documents regarding corporate human rights duties are not strictly legally binding, though it is possible that some . soft law. provisions have hardened into legal obligation. Furthermore, the indirect duties imposed via the doctrine of horizontality have rarely been clarified in international human rights caselaw, with only a few cases, mainly before the European Court of Human Rights, addressing the issue of a state. s alleged failure to control private sector human rights abuse. In our project, hope to tease out the nature and content of existing international legal duties, both direct and indirect. According to Lee R. Raymond, “ The main professional responsibility of a person in business is business. He or she must be successful in economic terms, but always within an ethical framework. Whether his or her constituency is a corporation and its shareholders or the customers in a small and privately held business, his or her first responsibility is to serve that constituency. But I also feel strongly that when a person is successful in an economic way, he or she thereby gains the tools to do many more things.

That means supporting the broad activities of the corporation, including the people who work for that company and the communities in which it operates. It is important to remember that all business has an impact on the lives of real people. In order to gain the tools to fully address the broad impact of business on society, economic success is indispensable. It makes no sense to talk of the social obligations of the corporation without reference to its economic obligations. The two are intertwined . Organizations are managed for effectiveness.

Is there a conflict between ethics and effectiveness? Effectiveness, in the sense of achieving results for the organization’s growth, may point to the need for violation of law or falsification of accounts or support of an illegal activity. For example, the several prosecutions of industrial houses have been for violations and improprieties in law, which may be seen as improper even without the provisions of law. Some questions which arise are:

1. Is good business the determinant of good ethics?
2. Is it necessary that a corporate body should be a moral (ethical) person?
3. Should organizations set standards of ethical behavior for others in society?

If the first question is answered in the negative, the second question automatically gets a positive answer. A moral organisation supports and encourages moral behavior from its constituents. Malfeasance may be an individual offence, as much as the result of an organizational value. The third question about organization’s attempt to influence society is as difficult as the individual’s responsibility to influence the organisation- a subsystem influencing the bigger system.

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