Global business practices and human rights: new directions

McCall-Smith, Kasey (2012). Global business practices and human rights: new directions. In: Pönkä, Ville and Kozlowska-Rautiainen, Daria eds. Business Law Forum, Volume 2012. Helsinki: Lakimiesliiton Kustannus, pp. 313–351.



Across the world global business practice is developing at a frenetic pace. Transnational corporations functioning across multiple states face increasingly complex layers of law and regulation, including human rights. Businesses can no longer afford to ignore human rights and the recent UN ‘Protect, Respect and Remedy’ framework for Transnational Businesses has catapulted the corporate connection to human rights violations into the limelight. This article seeks to flesh out the connection between business and human rights. Specifically it will consider in what ways transnational corporations have been either complicit or complacent in human rights violations and what forward-thinking efforts can prevent future acts of the same.

While it is still uncommon for companies to find themselves direct defendants in human rights cases, an increasing number of cases have been filed in the US utilising the Alien Tort Statute (ATS). While ATS claims for human rights violations are still under scrutiny, early in 2012 the US Supreme Court heard Kiobel v Royal Dutch Petroleum and in October will hear a second round of arguments on the issue of whether victims of human rights violations in any state may sue the alleged perpetrators in US federal court. The potential effects of this case on international business activity are far-reaching. In addition to examining businesses as direct defendants, this article will explore the backlash resulting from successful human rights violation claims against states based on industrial activity. The repercussions for ill-conceived business activities have included exclusion from states and loss of investor confidence but these may represent only the tip of the iceberg. Finally it will consider the ‘Protect, Respect and Remedy’ Framework and the Guiding Principles that seek to embed the framework into global business practice, including the need for human rights due diligence.

Global business activity and practice is multi-faceted and far from homogenous. The one consideration that is common and can no longer be ignored is the responsibility of transnational corporations to respect human rights. While a challenge, there are simple business practices that can ensure companies stay on the right side of human rights.

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