Corporate Social Responsibility in Recent Bilateral and Regional Free Trade Agreements: An Early Assessment

Abstract

When looking at international trade and investment, there is a quite remarkable gap between the commercial power companies gain through international bilateral and regional trade agreements (Free Trade Agreements or FTAs) and investment treaties that facilitate their access to foreign markets and the norms of these agreements which address corporate behaviours in order to align them with sustainable development objectives. For instance, there is a strong perception by the public opinion that the recent Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP) negotiations, harshly criticized for lack of transparency, would favour multinational corporations and other business operators at the expenses of the protection of public interests. Recently negotiated FTAs contain dedicated chapters to social, labour and environmental protection issues, including corporate social responsibility (CSR) norms. The opening of FTAs and their investment chapters to sustainable development concerns is – or should be – a way to rebalance the level playing field in these interstate agreements by envisaging public interest standards applicable to business operators. Disagreements between the Parties regarding these provisions may be solved through implementation mechanisms where non-state actors can actively participate. Notwithstanding this shift towards the inclusion of non-trade and non-state actors consideration, the provisions of bilateral and regional FTAs remain of an intergovernmental nature and do not provide for direct obligations for corporations. Despite the lack of vertical effects and the consequent limited implications on enterprises, the presence of CSR clauses testifies the recognition of the crucial role that these actors play as potential promoters, on the one hand, but also of potential infringers, on the other hand, of human and labour rights and of environmental protection. This contribution first examines the approach and the provisions of selected bilateral and regional FTAs that are relevant for the protection of human and social rights and the environment. It then analyses one of the latest developments in this decade-long normative evolution, which are the CSR clauses included in the more recent FTAs concluded by the European Union. While these clauses, for the time being, are rather programmatic and are coupled with soft implementation mechanisms, some reflections are proposed de lege ferenda on how they could ‘harden’ and become more stringent.