In recent years interested individuals and pressure groups have expressed considerable concern over the alleged complicity of multinational enterprises (MNEs) in violations of human rights. While such allegations are not historically unprecedented, the context in which they arise has changed. In particular, the increased integration of the global economy has created a perception that MNEs should take more responsibility for the social dimension of their actions, a perception that enterprises themselves have in part accepted through inter alia the issuing codes of corporate conduct. Furthermore, the rise of identity and lifestyle politics has made MNEs, as purveyors of products and services that help to define consumer lifestyles, a target of concern. These changes have significant implications for the evolution of human rights theory. In particular, they require a shift in the traditional view that corporations can only be victims of violations of human rights committed by states, towards one that extends responsibility for the commission, prevention and avoidance of such violations to MNEs themselves. On the other hand, there exist strong arguments against such an extension of human rights responsibilities. In particular, it is said that MNEs should only be responsible for the conduct of their business and should not be forced to involve themselves in such wider social issues. They are also private law entities and so should not possess the same responsibilities as states. This articles posits that such arguments in favour of extension, though strong and likely to remain influential, cannot answer the need for an extension of responsibility for human rights violations to MNEs where appropriate, on the basis that any attack on human dignity, whatever that legal nature and functions of its originator, must be liable to legal sanction. The technical legal means by which this might be done are considered. None the less, the article ends with a caution that any extension of human rights responsibilities to MNEs must not be allowed to deflect attention from the primary responsibility of states, as the most likely perpetrators of human rights violations, to avoid human rights violations on their own part and to establish a legal order in which the risk of such violations committed by private entities can be minimized, whether through effective national regulatory laws or international agreements on standards of corporate conduct.

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ABSTRACT:The UN Framework on Human Rights and Business comprises the State’s duty to protect human rights, the corporate responsibility to respect human rights, and the duty to remedy abuses. This paper focuses on the corporate responsibility to respect. It considers how to overcome obstacles, arising out of national and international law, to the development of a legally binding corporate duty to respect human rights. It is argued that the notion of human rights due diligence will lead to the creation of binding legal duties and that principles of corporate and tort law can be adapted to this end. Furthermore, recent legal developments accept an “enlightened shareholder value” approach allowing corporate managers to consider human rights issues when making decisions. The responsibility to respect involves adaptation of shareholder based corporate governance towards a more stakeholder oriented approach and could lead to the development of a new, stakeholder based, corporate model.

In his seminal work The Multinational Challenge to Corporation Law Professor Phillip Blumberg assets that, “jurisdiction continues to be one of the most litigated areas involving the clash of enterprise and entity.”1 Indeed, in a world where business is increasingly conducted through the medium of economically integrated multinational enterprises (MNEs), the question of whether a forum has jurisdiction over disputes arising out of the operations of non-resident entities of the MNE brings into contrast the mismatch between the territorial reach of the legal system and the transnational reach of the enterprise. In terms of corporation law this raises the further matter of whether, and how far, the legal organisation of the MNE into distinct legal entities, in distinct legal jurisdictions, should affect the applicable rules of private international law as to the reach and scope of forum jurisdiction. Such issues have recently been aired before the English courts in a series of cases, arising out of the asbestos mining and milling operations of the British based MNE Cape plc in South Africa, which culminated in a judgment given by the House of Lords on 20 July 2000. It is the purpose of this paper to explore the issues of jurisdiction over non-resident entities of MNEs, first, through an examination of these cases in the light of Cape's industrial and management structure. It is striking how little such matters are addressed in the Anglo-American legal literature pertaining to private international law. Rather than considering the economic realities of the cases in issue, and developing new doctrines to deal with them, lawyers have tended to rely on legal concepts—in particular, the territorial nature of legal jurisdiction and the single unit corporate form—to lead them to often unsatisfactory results that would appear to a lay person not to accord with justice. A clearer understanding of the economic realities of group operations thus seems essential for the development of law in this area.

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