Private Political Authority and Public Responsibility: Transnational Politics, Transnational Firms, and Human Rights

Abstract

Transnational corporations have become actors with significant political power and authority which should entail responsibility and liability, specifically direct liability for complicity in human rights violations. Holding TNCs liable for human rights violations is complicated by the discontinuity between the fragmented legal/political structure of the TNC and its integrated strategic reality and the international state system which privileges sovereignty and non-intervention over the protection of individual rights. However, the post-Westphalian transition—the emergence of multiple authorities, increasing ambiguity of borders and jurisdiction and blurring of the line between the public and private spheres—should facilitate imposing direct responsibility on transnational firms. Mechanisms for imposing direct responsibility on TNCs are considered including voluntary agreements and international law. However, I conclude that a hybrid public-private regime which relies on non-hierarchical compliance mechanisms is likely to be both more effective and consistent with the structure of the emerging transnational order.

On the effectiveness of private transnational governance regimes—Evaluating corporate sustainability reporting according to the Global Reporting Initiative

“…The starting point for this paper was the rise to prominence of novel forms of transnational governance that complement the state and blur the lines between the responsibilities of public and private sector actors (Held & McGrew, 1998;Kobrin, 2009;Scherer & Palazzo, 2011).…”

“…In the words of Strange (1996, p. 4): "Where states were once the masters of markets, now it is the markets which, on many crucial issues, are the masters over the governments of the states." The traditional dominance of the state has increasingly given way to the emergence of multiple authorities, in particular in the transnational arena, as well as a blurring of responsibilities between public and private sectors (Held & McGrew, 1998;Kobrin, 2009;Scherer & Palazzo, 2011). The result is a world that is more fragmented politically.…”

“…It is a key feature of the emerging polycentric system of governance (Kobrin, 2009) that it is significantly shaped by "the apparent assumption by TNCs and global business associations of roles traditionally associated with public authorities" (Ruggie, 2004, p. 502). Such private forms of regulation operate through non-state, market-based frameworks to address a wide range of externalities of corporate activity, from environmental degradation through labour practices in supply chains to violations of human rights (Vogel, 2010).…”

“…These emerging transnational governance systems are not only confronted with new challenges, such as climate change (Levy & Egan, 2000); moreover, their very nature is changing as alternative actors emerge, such as non-governmental organizations (NGOs) or transnational corporations (TNCs) (Kobrin, 1998;Rosenau & Czempiel, 1992;Teegen, Doh, & Vachani, 2004). In particular, TNCs have emerged as actors with significant political clout and authority as they push for a substitution of institutional arrangements by forms of 'soft' regulation (Kobrin, 2009). In addition to TNCs from developed economies, non-Western TNCs clamour to influence the international institutional environment too (van Tulder, 2010).…”

10 Years’ Equator Principles: A Critical Appraisal

“…This chapter has dealt with the special role of financial institutions as (de facto) "global sustainability regulators" ( 78 This 'post-Westphalian world order' (Kobrin 2009) is characterised by the following characteristics: shift from government to governance (Foucault 2008); erosion of the regulatory power of the nation-state; fragmentation of legal-political authority and power; existence of regulatory or governance gaps; increasing ambiguity of borders and jurisdictions; blurring of the separation between private have taken the lead in fostering CSR and sustainable development, particularly in politically unstable and/or socially and environmentally fragile contexts such as developing countries and emerging markets. By introducing developed-country social and environmental standards into developing regions, they have adopted the role of quasi-regulators.…”