MULTINATIONAL CORPORATIONS TRANSNATIONAL LAW THE UNITED NATION S NORMS ON THE RESPONSIBILITIES OF TRANSNATIONAL CORPORATIONS AS HARBINGER OF CORPORATE SOCIAL RESPONSIBILITY IN INTERNATIONAL LAW Larry Cat Backer Pennsylvania State University Dickinson School of Law 150 South College Street Carlisle PA 170 13 1 717 240 5243 direct 1 717 241 3501 fax lcb11 psu edu http www personal psu edu lcb11 ABSTRACT This article considers the ramifications of current efforts to internationalize the regulation of corporate social responsibility The primary focus will be on current United Nations efforts to regulate transnational corporations through the development of its Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises With Regard to Human Rights The Norms are critically important for two reasons First the Norms themselves point to the evolution of fundamental changes in global thinking about corporations the character and source of their regulation that together will have significant ramifications for American domestic law The Norms evidence an increasing taste at the international level for a shift from a private to a public law basis for corporate regulation The corporate social responsibility debate is ultimately a debate about the fundamental character of corporations as principally private or public entities Second the development and continued life of the Norms and the ideas it embodies illustrate the development of a mechanics of interplay between national international public and private law systems in allocating and competing for power to regulate The regularization and institutionalization of these mechanics evidence transnational law coming into its own as a separate field of power The article first briefly describes the traditional domestic context of the debates about so called corporate social responsibility and its relation to basic issues of corporate governance The article then turns to the changing context in which the Norms were conceived A critical analysis of the Norms in this context points to potential critical changes in global consensus with significant ramifications for American domestic law First the Norms considerably alter the framework of the debate about corporate social responsibility Corporations seen as social political and economic actors would serve not merely a broadened set of traditional stakeholders but also the state and international community as well Traditional constraints on action against shareholders and especially corporate shareholders would be effectively disregarded for virtually all purposes Second the Norms enlist transnational corporations as agents of international law implementation even against states that have either refused to ratify certain international instruments or have objected to the gloss advanced by international institutions The Norms create an effective system for the implementation of international law norms through private law The Norms are implemented through the law of contract between individuals rather than by treaty or state action Because the Norms are based on a number of international instruments that have not been ratified by all states the Norms use transnational corporations as a means of end running states and in the process create the basis for the articulation of customary international law principles that will apply to states Third the Norms substantially alter the balance of power over corporate governance between inside stakeholders shareholders lenders etc and outside stakeholders community society the state by providing a substantial role to NGOs to monitor TNC conformity to the requirements of the Norms The article ends with a preliminary consideration of the Norms in a broader context It analyses the Norms not as substance but as symptom of two great fundamental changes in the allocation of governance power in a global setting First it illustrates rearrangements in the relative power of systems of domestic international public and private systems of governance Second the Norms provide a template for the character and form of interaction and communication among these systems of governance COPYRIGHT 2005 Larry Cat Backer MULTINATIONAL CORPORATIONS TRANSNATIONAL LAW 37 Colum Hum Rts L Rev 2005 Larry Cat Backer October 31 2005 1 Multinational Corporations Transnational Law The United Nations Norms on the Responsibilities of Transnational Corporations as a Harbinger of Corporate Social Responsibility in International Law Larry Cat Backer This Article considers the ramifications of current efforts to internationalize the regulation of corporate social responsibility The primary focus will be on the United Nations efforts to regulate transnational corporations through the development of its Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises With Regard to Human Rights 1 The Norms are unlikely to be adopted in any sort of binding form in the current round of negotiation respecting its final form 2 Professor of Law Pennsylvania State University Dickinson School of Law An earlier version of this article was presented for the plenary panel on Corporate Social Responsibility Reform and Race at the Second National People of Color Legal Scholarship Conference George Washington University Law School Washington D C October 7 2004 Special thanks to my research assistant Michael Davey Penn State 05 for his very able work on this project 1 U N Econ Soc Council ECOSOC Sub Comm on Promotion Prot of Human Rights Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises With Regard to Human Rights U N Doc E CN 4 Sub 2 2003 L 8 August 7 2003 draft resolution prepared by Alfonso Mart nez et al available at http www unhchr ch huridocda huridoca nsf Documents OpenFrameset This document was subsequently revised See ECOSOC Sub Comm on Promotion Prot of Human Rights Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises With Regard to Human Rights U N Doc E CN 4 Sub 2 2003 12 Rev 2 Aug 26 2003 resolution adopted Aug 13 2003 a v a i l a b l e at http www unhchr ch huridocda huridoca nsf 0 64155e7e8141b38cc1256d63002c55e8 OpenDo cument hereinafter Norms All references to the Norms are to the revised Norms issued August 26 2003 For the official commentary on the Norms see ECOSOC Sub Commission on the Promotion and Protection of Human Rights Commentary on the Norms on the
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