Note on… John Ruggie’s perception of corporate responsibility

October 14, 2010

The 2010 report of John Ruggie, Special Representative on the issue of human rights and transnational corporations provides an interesting although far-reaching description of the extent to which multinational corporations shall respect general obligations under international law.

The term ‘responsibility to respect’ as it suggests, “rather than ‘duty’, is meant to indicate that respecting rights is not an obligation that current international human rights law generally imposes directly on companies”, so that at the international level, the corporate responsibility to respect confines to “a standard of expected conduct”.[1]

 Although Ruggie’s argument is –as the text explicitly suggests– limited to the consideration of corporate obligations towards human rights, the point is polemical insofar as it is illustrative of a more general debate on corporate liability and behaviour.

On the one hand, Ruggie is in theory right in stating that no binding corporate duties towards human rights can be found as far as international hard law is concerned. Indeed, while corporate responsibilities can be found in several instruments (say for instance Article 2 CEDAW, Article 10(1) of the Convention against Transnational Organized Crime, Article 2 of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions), these remain related to the specific subject-matters of the instruments and accordingly hardly create direct corporate obligations towards human rights. Such a position as a matter of fact, was relied upon last month by the US Court of Appeal for the Second Circuit in Kiobel v. Royal Dutch Petroleum (p.35).

On the other hand however, arguing that respecting rights is not an obligation under international human rights law somehow amounts to suggest that a contrario, corporations might be entitled not to respect the rules of international law on which the international regime is founded. Characterising corporate responsibility as a single “standard of expected conduct” lacking any sort of binding value in addition, possibly ignores recent regional regulations, soft-law trends and case-law precedents which by contrast tend to increasingly recognise general corporate duties to ‘behave’.

Of course, the notion of corporate liability has not been recognised by Courts (yet) as discussed in various notes on the Int’Law Notepad (See for instance Sosa v Alvarez Machain, Kiobell, Flomo), and has even been recently rejected by the Canadian House of Commons with regards to Canada’s mining industry (edit 16/12/2010).

As above-mentioned, however, limits are put on corporate behaviours in respect of organised crime, bribery or women’s rights respect. Corporate behaviour regulation in addition, extends towards markets and competitors as emphasised in various ECJ decisions where competition-based tests were relied upon to solve abuses of dominant positions preventing effective competition.  The ability of dominant undertakings to act detrimentally to their competitors, customers and consumers (United Brands v Commission of the European Community 27/76 at 65) and to exercise “appreciable influence on the conditions under which that competition will develop” (Hoffman Laroche [1979] ECR 461, at 39) was indeed emphasised together with the concept of ‘essential facility doctrine’ which also imposed an obligation on firms not to abuse from their dominant position so as to guarantee market access to competitors.

As the 2008 Ruggie report moreover notes, “it is getting somewhat more difficult for defendant companies to have cases alleging harm abroad dismissed on the basis that there is a more appropriate forum” (at 90). Citing Voth v. Manildra Flour Mills Pty. Ltd., the report emphasises that in Australia, defendants must now prove that the forum is “clearly inappropriate” for the forum non conveniens doctrine being applied, which is clearly more difficult to satisfy than showing that another forum is ‘more appropriate’ as it was the case in Spiliada. Similarly, the European Court of Justice in Owusu v. Jackson (at 16), characterised as “bad law” a decision which relied on the forum non conveniens doctrine (See also Note on… the access to justice at the courts of European home states edit 16/12/2010), therefore confirming that national courts in an EU member state may not dismiss actions against companies domiciled in that State on such grounds.

The role of the doctrine with regards to the elaboration process of public international law finally, should not be forgotten. While many legal commentators increasingly emphasise a need to solve a wide-open corporate accountability gap, it could indeed be said that Ruggie’s point on the absence of a duty to respect human rights is far reaching.[2] The need for a general multi-oriented corporate duty to behave, by contrast, seems to be increasingly recognised by international and regional practice.

The practical application of Ruggie’s assumption should also be emphasised. By denying the existence of a ‘general’ obligation to behave and respect rights, the Representative possibly places an excessive burden on states to regulate their companies abroad. Although it is said that governmental authority may indeed be exercised either by action or omission under international law, so that state responsibility might indeed arise from omissions to prevent MNCs harmful activities abroad, the point also known as the ‘failure of attribution’ argument has led to claims in practice. In the 1997 Report on the situation of human rights in Ecuador (available here) as well as NGO reports (FIAN, ‘Ghana: Gold mining company cuts off more than 700 people from their farms’, available here), states were for instance held responsible for foreign corporations’ act as a result of their inability to prevent such acts from taking place.

Placing an exclusive regulatory burden on states however, would be possibly inappropriate insofar as such an approach most likely underestimates the ability of multinational corporations to (a) move from one state to another (b) create complex transnational structures and command chain shielding parent firms from “autonomous” affiliates, and more generally leave unconsidered the fact that in many circumstances, corporations can be more resourceful that poor states or corrupt authorities unable (not to say unwilling) to enforce corporation-unfriendly measures. The argument above-all, finally rejects the consideration that after all corporations could also be held responsible for their own practices and behaviours.

Representative Ruggie’s position can therefore be questioned on (at least) two grounds. First, instead of strictly stating that respecting rights is not a ‘general’ obligation under international law, Ruggie might have also emphasised the growing trend oriented towards the general international and regional recognition of corporate responsibilities. Second, denying the existence of corporate obligations under the Law of Nations places an unbalanced burden on states. Although state failure to regulate must be considered, interpreting corporate good governance as a matter of sole voluntarism makes state’s burden excessive and uneven, especially where multinational corporations may be as (not to say more) resourceful as states.

This however does not mean that – as some suggest – a more extensive obligation to facilitate human rights realisation should fall upon corporations wherever they would be in a position to do so. Corporations indeed, are business structures whose first aim is to generate profits, not to be involved in international philanthropy.

[1] HR Council,’Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises. Business and Human Rights: Further steps toward the operationalization of the “protect, respect and remedy” framework A/HRC/14/27′ (9 April 2010), at 55. This statement was also reiterated in ,’That’s Right! Corporate Responsibility for Human Rights: Concepts, Examples, Approaches. Summary Report’ (

[2] See for instance RE Rauxloh, ‘A Call for the End of Impunity for Multinational Corporations’ 14(2) Texas Wesleyan Law Review ; See also W Kaleck and M Saage-Maaß, ‘Corporate Accountability for Human Rights Violations Amounting to International Crimes The Status Quo and its Challenges’ 8 (3): 699-724 J Int Criminal Justice

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Related notes:

Note on… Sosa v. Alvarez-Machain, on the long road towards international corporate liability recognition under ACTA

Note on… Bhopal, Justin Frewen and international corporate liability

Corporate Participation in International Law: Some Historical Examples (The view from LL2)

One Response to “Note on… John Ruggie’s perception of corporate responsibility”

  1. Robert Grabosch Says:

    SRSG Ruggie is entitled to his personal opinion, but the Guiding Principles claim to be a re-statement of int’l law. An honest re-statement of international law would be: “Int’l law is moving away from the traditional notion that only States are duty-bearers. However, the question whether business enterprises have duties at international law to respect human rights is currently debated and not yet clarified.”
    But Ruggie’s re-statement of current int’l law reads: “[T]hese instruments [the International Bill of Human Rights and the eight International Labor Organization core conventions] do not impose direct legal obligations on business enterprises” (Commentary to DGP 12).
    And – as a re-statement – that’s clearly wrong. Moreover, it’s an unnecessary and patronizing preemption of a continuing debate, and it does not further the business & human rights agenda.

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