Of Enterprise Principles & Corporate Groups: Does Corporate Law Reach Human Rights?

Abstract

In recent years, a number of international and cross-sectoral initiatives have attempted to respond to the human rights impacts of corporations. Foremost among these is the United Nations’ 2008 “Protect, Respect, and Remedy” Framework and its Guiding Principles on Business and Human Rights, adopted in March, 2011. The Framework is noteworthy, in part, because it considers the potential intersections of corporate law and human rights. Conventional wisdom, however, maintains that corporate law is largely irrelevant to questions of human rights. It is generally viewed to be enabling, rather than prescriptive, and concerned with private contracting rather than the public interest. From a practical standpoint, human rights impacts often involve conduct by remote affiliates and business partners of vast multinational corporate organizations. Corporate law, in contrast, governs the "internal affairs" of discrete legal entities within a given jurisdiction, each protected by a limited liability shield. Questions of global corporate accountability for human rights practices have therefore been viewed as beyond its reach. This Article challenges this accepted wisdom by exploring the extent to which corporate law reaches the multinational enterprise. It argues that notwithstanding the centrality of entity-level principles within corporate law, some dimensions of corporate law in fact extend across the formal internal legal boundaries of the multinational corporation. Although corporate law enforcement mechanisms do not offer direct remedies for victims of human rights violations, corporate law is nonetheless an integral part of the emerging institutional infrastructure supporting the human rights responsibilities of corporations.