Global Corporate Social Responsibility, Human Rights and Law: An Interactive Regulatory Perspective on the Voluntary-Mandatory Dichotomy

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Corporate social responsibility (CSR) is often understood as an inherently voluntary corporate endeavour that inhabits the area stretching ‘beyond compliance’ with law. However, a growing number of writers and practitioners deem this understanding of CSR inaccurate and unproductive. In this article, the notion of CSR as ‘beyond compliance’ is questioned on logical, descriptive and normative grounds; once freed from its conceptual straitjacket, CSR research is encouraged to look more deeply into the mutual interaction between corporate voluntarism and law. When it comes to the regulation of CSR the key notion is that of discretion not voluntarism: regulating CSR is not about replacing voluntarism with hard law, but about guiding discretion through law in such a way that it neither overrides discretion nor leaves it untouched. For such purposes lawmakers employ various strategies to summon the regulatory potential of companies and their stakeholders. When it comes to CSR's impacts on law, effects are discernible at various stages, from law-making to law-specification to law-enforcement; responsible business practices contain benchmarks of due diligence and may enhance local capacities in host countries. Following illustrations and analysis of such interactions, CSR is characterised not merely as ‘self-regulation’ but as an emerging norm, resulting from a bottom-up process, that interacts with legal systems in both home and host countries. Furthermore this article identifies two legal baselines key to the business and human rights area: the ‘corporate baseline’, regarding the responsibility of a parent company for its affiliates' operations where human rights abuses take place, and the ‘governance baseline’, regarding the legal protections in the host country available to rightholders. In the context discussed herein, the fact that both of these baselines have barely been sketched renders the characterisation of CSR as a matter of ‘beyond compliance’ with law problematic. Instead CSR should be analysed for its role in the legal institutionalisation of the baseline. The specific context of respecting human rights in developing countries throughout the operation of large corporate networks such as multinational enterprises (MNEs) requires an attuned concept of CSR and an informed understanding of CSR's relation to law.