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This chapter considers why, in light of globalisation, it is necessary to move beyond the domestic sphere to consider the role of international mechanisms when seeking to achieve the twin goals of enhancing corporate decision-making surrounding fundamental rights and developing the substantive content of corporate obligations. Where existing mechanisms are not silent concerning those obligations, they either tend to read off corporate obligations directly from state obligations or to conflate impacts with violations. Most current structures are ‘soft’ and thus have limited authority to issue guidance. I make proposals for reforms to existing initiatives – including the United Nations Guiding Principles - and for establishing new institutional mechanisms that would be capable of providing relatively authoritative guidance in relation to corporate obligations. The multi-factoral model is proposed as a basis for structuring the reasoning of those mechanisms around and deepening our understanding of those obligations.
This chapter begins with a real-life example that sets the scene for the core question engaged in this book: what is the substantive content of the obligations corporations have in relation to fundamental rights? The goal of the book is to develop a general legal analytical framework to answer this question at an intermediate level of determinacy that can guide decision-making in concrete cases. It also considers the institutional changes required to give effect to the framework and render it meaningful. In so doing, it highlights the union of substance, process and institutional design. The chapter outlines the methodological approach I adopt: it combines international and constitutional law; straddles the boundary between public and private law; engages insights from disciplines such as philosophy, economics and political science; and combines the normative and descriptive. The chapter also provides an outline of the structure of the argument in this book and brief description of what is accomplished in each chapter.
The analysis in the last chapters reveals a convergence across the various models and jurisdictions considered in addressing the ‘substantive content’ of the obligations of non-state actors. This chapter attempts to describe and systematise what emerges from these judgments into an analytical framework which I term the ‘multi-factoral approach’. An optimal articulation of this approach, I argue, requires a series of steps, three of which I seek to accomplish in this chapter: namely, identifying the various factors at play in a situation; examining their normative grounding and understanding their relevance to the imposition of corporate obligations; and, developing presumptive principles, that help us understand their implications for corporate obligations. I identify and explore the relevance and weight to be accorded to three beneficiary-orientated factors (interests, vulnerability and impact) as well as three agent-relative factors (capacity, function and autonomy). This chapter also shows that none of these factors is alone sufficient to determine corporate obligations.
This chapter is concerned with understanding the limited liability corporation, the dominant form of conducting business today. First, I consider the relationship between the corporation and the individuals underlying it and argue that this is best captured by a ‘supervenience relation’: the corporation is not reducible to but dependent upon the individuals underlying it. Secondly, I consider the very purpose of forming a corporate entity and argue for a ‘socio-liberal conception of the corporation’. This view understands the corporation as a structure designed to harness the expression of individual economic interests for social benefits. Both the wider social purpose and individual profit-seeking motives are necessary to understand the complex duality that is the modern corporation. These reflections on the nature and purpose of the corporate form – as will be seen later in this book - are of vital importance to explicating the obligations such entities have that flow from fundamental rights.
This chapter considers the institutional implications of the multi-factoral model in national law. Given its involving an ineliminable need for judgment, this chapter argues for an approach to law reform that focuses on enhancing the quality of decision-making within the corporation surrounding its fundamental rights obligations. Doing so, I argue requires focusing much attention on reforms to corporate law that can help ‘constitutionalise’ fundamental rights within the basic legal structure of the corporation itself. I propose a series of law reforms that include expanding the diversity of the directors; developing a new fiduciary duty specifically relating to fundamental rights; enhancing disclosure requirements; developing a new enforcement action allowing directors to be sued in their personal capacity for rights violations; creating regulatory fines and financial penalties for rights violations; implementing an enhanced framework for shareholder obligations; rejecting the business judgment rule where fundamental rights are involved; and the utilisation of dialogical remedies by courts.
This chapter considers the ‘state duty to protect’ model developed at the international level which imposes obligations on the state to protect individuals against harms to their fundamental rights by non-state actors. The model attempts to preserve the state-centric nature of international law but, I argue, is not consonant with the legal normative foundations of fundamental rights which are agnostic as to the agents who must realise them. In particular, I show that the model requires understanding what the state must protect individuals against which, in turn, requires determining what the legally enforceable obligations of non-state actors are. Through examining cases of the European Court of Human Rights, I analyse how the Court in fact reasons about the substantive content of such obligations. I show how it lacks a clear analytical framework but references several normative factors and utilises a balancing process which provide the seeds for the multi-factoral approach developed later in the book.
This chapter examines the ‘direct obligations’ model which accepts that fundamental rights can impose legally binding obligations upon non-state actors. After briefly outlining the contours of this model, and its justification, I consider an important challenge, namely, whether recognising the obligations of non-state actors entails they have fundamental rights. At the international level, I consider the ‘sphere of influence’ approach and the ‘due diligence’ approach (enshrined in the UNGPs). I argue that the latter has an important normative gap at its core: understanding the impacts of a business on rights does not automatically translate into a conception of its obligations. The last part of this chapter considers two jurisdictions – South Africa and Colombia - and the principles they utilize to determine the direct obligations of non-state actors. Neither jurisdiction has articulated a clear legal analytical framework but what emerges is similar to the other models analysed and can form the building blocks of the multi-factoral approach developed in the following chapters.
This chapter considers how we determine the final obligations of a corporation where its actions or policies infringe upon fundamental rights. Since there are competing factors, there is a need to balance different interests. I argue that the proportionality test can be applied successfully to balance the fundamental interests of individuals against the interests of the corporation and thus can provide a structured process of reasoning for determining the final negative obligations of corporations. In making this case, I consider the justification for and challenges to applying the proportionality test to conflicts between non-state actors and individuals with a specific focus upon the corporation. I then consider how each stage of the proportionality analysis – purpose, suitability, necessity and balancing - can apply to corporations and the complexities involved in doing so. In doing so, I will show where each factor – identified in the last chapter - fits into the overall analysis.
This chapter considers the question of whether corporations have positive obligations in relation to fundamental rights and, if so, how to determine the substantive content of those obligations. The chapter examines justifications for the ‘negative obligations model’ which asserts that non-state actors only have negative obligations – to avoid harming – fundamental rights. I show why the negative/positive obligation distinction is not adequate to distinguish the obligations of the state from those of non-state actors and also provide positive justifications for why non-state actors and, particularly, corporations should have such obligations. The multi-factoral model, suitably modified, I argue complimented by a seven-step test – instead of proportionality – provides a structured analytical process for legally determining the substantive content of the positive obligations of corporations. Lastly, I consider the legal instantiation of positive obligations through the courts in South Africa and the legislature in India. The multi-factoral model, I suggest, could be helpful in systematising and guiding these developments.