One thing that has united the sometimes disparate organisations campaigning for greater corporate responsibility is the call for international legal frameworks to govern the behaviour of multinational companies. Existing multilateral agreements such as the ILO Tripartite Declaration, or the OECD Guidelines, while seen as a step in the right direction, are criticised because they are not legally enforceable.
In the past few weeks, there have been developments that have led some to hail the arrival of a de facto international regime to oversee the behaviour of companies and individuals.
The first example is the ongoing Alien Tort Claims Act (ACTA) case against Talisman Energy. The case alleges that the Calgary-based oil company aided genocide in southern Sudan, and was filed in a New York district court in 2001 by the Presbyterian Church of Sudan. The case has continued to dog Talisman, despite the fact that the company withdrew from the Sudanese oil industry two years ago.
The reason that the case has made the news again is an attempt – leaked in the Toronto Star newspaper – by the Canadian government, to put pressure on the US authorities to have the case thrown out. This is the third attempt that the company has made to get the case dismissed.
Afghan prosecuted in London
On the other side of the pond, an Afghan warlord was in July convicted in the UK courts on charges of kidnap and torture in his own country. Faryadi Zardad had been living in the UK for about two years, working in a pizza restaurant in south London. This groundbreaking case stems from a House of Lords decision that certain crimes are so serious that, if they are not to be prosecuted in the country where they allegedly took place, then they can be dealt with in the UK when the accused is resident there.
There have been interesting developments, too, in Belgium. Here a controversial human rights law was introduced that claims global jurisdiction. So far the law has led only to a raft of lawsuits claiming human rights violations by world figures, such as Israeli leader Ariel Sharon and US president George Bush. However, in the first case to involve a company rather than an individual, four Burmese refugees launched a case alleging crimes against humanity committed by the French oil giant Total.
Although the case has been dismissed by the Supreme Court of Appeals, this was because the refugees who brought the case did not have the same rights as a Belgian citizen to file a complaint, rather than because the law was not applicable.
So do all these cases mean we are seeing the development of an international framework for corporate legal accountability?
Tempting though it may be to answer this question, it is not actually the right one to ask.
Those who call for “an international framework for corporate legal accountability” misunderstand a vital aspect of international law – that no global governance structure exists that could debate, create and enforce laws of this type. In a national context, laws are developed and brought into force by the national legislature, and enforced by the police and civil authorities, as appropriate.
At an international level, no analogous structure exists. In international affairs, the nation state is the paramount unit. International law – be that the law of the sea, of armed conflict or of anything else – is a matter of international treaties between individual states. As things stand at present, a global framework for corporate legal accountability would require a series of international treaties to make it work. Given the difficulties of getting, for example, the Kyoto agreement to work, such a treaty seems a distant possibility.
One thing that may change this status quo is the “In Larger Freedom” paper on the future of the UN to be discussed at the Security Council in September. This envisages intervention by “the international community” in countries where human rights are being abused. The principle underlying this proposal could potentially open the way for companies being called to account, too.
However, the developments we are seeing at a national level may actually be a more effective way forward. In the absence of any overarching global legal structure governing companies, national legal frameworks can nonetheless be extremely effective. In Canada, for example, companies seeking listing on stock exchanges have to declare payments made in third countries. In the US, the Foreign Corrupt Practices Act (FCPA) fulfils a similar role.
Perhaps the most significant but least discussed piece of national legislation that impacts in this area is the US Patriot Act. Introduced in the autumn of 2001, in the immediate wake of the terrorist attacks in Washington and New York, the act was recently extended by the House of Representatives.
The full title of this legislation is the rather clumsy Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 – hence the usual reference to the US Patriot Act. As the name suggests, the act was introduced to help combat terrorism. To “provide the brave men and women of law enforcement with critical tools in their efforts to combat terrorism and protect the American people”, as the US attorney-general put it.
The act contains provisions vastly expanding the authority of law enforcement and intelligence agencies to monitor private communications and access personal information. Opponents say many of its provisions infringe civil liberties.
However, from the perspective of the corporate responsibility debate, the US Patriot Act can be construed as a step forward as it allows in-depth and aggressive investigation of the behaviour of US corporations overseas as well as in the US.
Nonetheless, as the history of FCPA demonstrates, national laws governing the behaviour of the US’s companies internationally can be hard to enforce. Quite simply, how can a national jurisdiction effectively investigate allegations made about events in a far-flung location?
However, the recent UK case shows these difficulties can be overcome. Additionally, the use of national legislation puts responsibility firmly onto the desk of corporate legal functions, and therefore at the heart of a company. We are a long way from seeing a coherent international framework for enforcing corporate responsibility. However, recent developments demonstrate clearly that companies will increasingly have to account for their actions overseas in the courts of their home country.