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Fitzgerald, Sarala --- "Corporate Accountability For Human Rights Violations in Australian Domestic Law" [2005] AUJlHRights 2; (2005) 11(1) Australian Journal of Human Rights 2

Corporate accountability for human rights violations in Australian domestic law

Sarala Fitzgerald*

International law — and human rights law in particular — has traditionally concerned itself with state responsibility, rather than the responsibility of non-state actors such as companies. With companies holding immense power within both international and domestic communities, they have the potential to do both great harm and great good in the human rights sphere. Although companies are not directly regulated by international law, in Australia they are extensively regulated both by specialist corporations laws and by general laws. Many of these laws can be used in ways that protect and enforce the human rights of those who come into contact with companies — whether they be employees, customers, shareholders or others who are affected by a company’s activities. This article explores the various domestic avenues for protecting those human rights that Australia has committed to protect at international law and the extent to which these laws can be used to punish and prevent corporate human rights abuses.


Companies are a major influence on our lives. This article examines how companies can be made accountable for their human rights breaches in Australian law. Although companies are impervious to the moral force that human rights law usually exerts, this is balanced by the fact that companies are a construction of law so law can change them. While Australia does not have a bill of rights, there are certain human rights protections scattered throughout our law. As Australian companies can be held liable for both criminal and civil wrongs (Redmond 1992: 164), some of Australia’s human rights protections can be enforced directly against companies.

International law focuses almost exclusively on the rights and obligations of states. As a result, human rights law has been ‘virtually silent with respect to corporate liability for violations of human rights’ (Harvard Law School 2001: 2025). As the economic power of multinational corporations outstrips that of many states, this silence is being questioned. While many rights are most appropriately protected by the state, there are specific rights that companies are best placed to protect.

In looking at corporate accountability for human rights violations in Australian domestic law, I will map out the legal environment in which these issues arise. I will then undertake a general review of the laws in Australia that impose human rights responsibilities or restrictions on companies. The substantive areas of law I will discuss are employment, environment, native title, privacy, property and intellectual property, trade practices, torts and corporate law. I will look at corporate law in some detail because of its central importance to companies and because of the lack of attention paid to it in the human rights context. I will then look at some of the problems with the available enforcement mechanisms and briefly outline some solutions to the problems raised.

The scope of this article is limited to a discussion of corporate responsibility for human rights violations that are directly linked to the business enterprise, rather than corporate responsibility for the promotion of human rights in the community generally. Further, I propose to limit my discussion of human rights to those rights where companies have the most impact, and to use as the basis for my assessment those human rights generally recognised in international law. I do not propose to examine the extent to which any of these rights actually exist in international law. Finally, while I accept that various formulations of human rights are open to the charge of cultural relativism (see Pritchard 1995: 4), I will only engage with this debate where particularly relevant to corporate responsibility.

The legal environment

Corporate responsibility versus state responsibility

Companies now undertake a large range of activities once performed by the state that give them substantial influence over Australia’s economy — for example, energy distribution, transport, media, telephone services and financing (Post et al 1996: 275). On a global level, companies possess great economic power — for example, the 10 largest US companies generate more sales annually than the entire national output of Australia (above: 273–4). Not only do companies possess power, they use it. International financial markets heavily influence national policy priorities and various areas of many national economies have been deregulated to facilitate investment (Alston 1998: 29). Philip Alston notes that with this transfer of power from states, there has been ‘a corresponding increase in the role and even responsibilities attributed to private actors in both the corporate sector and in civil society’ (above: 29).

With the increasing power of corporate entities throughout the world, and the staggering economic power of a small group of multinational corporations,1 human rights advocates have begun to demand responsibility from the bearers of this power (see Schwartz and Gibb 1999: 4). This is an effective approach to defending human rights because the activities of companies have a large impact on rights, particularly economic, social and cultural rights (see Scott 2001: 564). Ideally, companies would use their influence in ways that protect human rights and fulfil the claim that they ‘serve as transmission belts for human rights improvements’ (Hongju Koh 2000: 1311). Some companies have started to acknowledge these responsibilities. For example, Royal Dutch Shell’s 1999 social report states: ‘We must take economic, environmental and social considerations into account in everything we do ...’ (quoted in Joseph 2000: 20). However, in international law, at least, human rights have always been seen as the responsibility of states (see Dixon and McCorquodale 1991: 158; Bianchi 1997: 182). In fact, companies do not have any compulsory international legal obligations (McCorquodale 2002: 94). Further, companies have traditionally rejected human rights obligations, focusing on the fact that the imposition of such obligations would create ‘unclear priorities and potentially conflicting responsibilities’ (BIAC ELSA Committee 2000: 103).

Why should companies now be made accountable for violations of human rights? First, international law is changing, and non-state actors are now involved as both developers and subjects of international law (see Dixon and McCorquodale 1991: 158; Bianchi 1997: 180). In certain areas, international law duties and responsibilities have already been applied to non-state actors (see Steiner and Alston 2000: 221). There are also multilateral treaties — such as the Convention Against Transnational Organized Crime — that are based on the presumption that corporations can commit international crimes, which provide for national enforcement mechanisms (see Harvard Law School 2001: 2032–3).

Second, while human rights law has developed in the international arena, the vast majority of human rights breaches take place in the domestic sphere. In order to fulfil the obligations imposed under the various human rights treaties, states are often obliged to introduce domestic legislation prohibiting behaviour that infringes protected rights.2 States have international responsibility ‘to protect individuals against interference with their rights by nonstate actors’ (Steiner and Alston 2000: 222). Often, the best way to fulfil this obligation is to impose direct responsibility on nonstate actors — including companies — for certain human rights.

Third, the legal framework in which companies operate is partly responsible for the large amount of power some companies have. In return, the law can justifiably demand responsibility and accountability in the use of that power.

Limited legal liability allows the owners of the company — who profit from its activities and, through the election of directors, control its actions — to avoid legal responsibility for the actions of the company (Redmond 1992: 107). Other factors specific to companies that allow human rights violations and prevent redress are the separate legal status of companies; the presumption of shareholder primacy; and the separation of ownership from control (Bottomley 2002: 50).

Incorporation brings a company into existence as a separate ‘legal person’. However, unlike people, companies can be difficult to control because they have neither conscience, nor soul, nor a body to be imprisoned (Lord Chancellor Thurlow, quoted in Redmond 1992: 165). The gift of limited liability to companies facilitates entrepreneurial activity and the taking of risks, which, the theory goes, benefits the broader community. This gift, however, entails various legal responsibilities, and the legal fiction is sometimes ignored when these responsibilities are not fulfilled. Ignoring the fiction has been called ‘piercing the corporate veil’ (Redmond 1992: 164), and it often involves holding those who direct the company responsible for its actions (Bottomley 2002: 51). The courts have ignored the separate legal personality of companies in cases involving fraud, improper conduct and agency, and in certain circumstances the relationship between companies in corporate groups has been recognised (Redmond 1992: 173). In time, perhaps a failure to observe human rights responsibilities will be an occasion for piercing the corporate veil.

International law versus domestic law

While Australia is a party to all six of the major UN human rights treaties,3 these treaties are not directly enforceable in Australian domestic law (Kirby 2000: 1014). As a result, the wide range of human rights norms established in international law, which Australia has committed to promote, is not directly enforceable in Australian courts (see Eastman and Ronalds 1998: 220). This fact does not mean that international human rights laws can have no influence in Australian courts. Australian judges may use the content of Australia’s international legal undertakings in a number of indirect ways — as a legislative interpretation tool; to establish a legitimate expectation in administrative law; as an aid to developing the common law; and as an influence on constitutional interpretation (above: 320).

Another obstacle in the way of holding companies liable for human rights abuses is that international human rights instruments bind the states that sign up to them. In contrast, companies ‘are subject only to domestic law and to the vagaries of enforcement by national authorities’ (Hepple 2000: 8; also see Joseph 2000: 78). However, in order to fulfil their treaty obligations, states may be expected to enact legislation that requires non-state actors to uphold certain rights.

Importantly, a number of the human rights contained in the various human rights treaties, or developed through customary international law, are directly enshrined in Australia’s domestic law, at either the State or federal level. In their introduction to the research being done in this area by the Castan Centre for Human Rights, David Kinley and Sarah Joseph note that there is domestic legislation that deals with ‘labour rights, anti-discrimination, environmental protection, occupational health and safety, and product safety’ (Kinley and Joseph 2002: 7). As will be discussed below, some of this domestic law imposes obligations directly on companies.

The ‘public’ versus the ‘private’

The so-called ‘public/private divide’ has had a significant influence on international law (see Charlesworth 2000: 216) and is a useful explanatory tool in looking at why the law is the way it is and how it can be changed. While the meanings of these terms vary with their contexts (see Steiner and Alston 2000: 220), one distinction that is useful to examine is the difference between ‘public’ and ‘private’ law. This distinction can be defined by the involvement or lack of involvement of government in enforcing that law. It is important because governments only take enforcement responsibility for ‘public’ areas of the law, while ‘private’ law must be enforced by one individual against another. As will be seen below, much of the law through which human rights are enforceable in Australian law is private law.

On another level, the notional divide between what is considered ‘public’ or ‘private’ influences the extent to which the law intervenes in aspects of our lives. Traditionally, the business community has been viewed as falling within the ‘private’ realm, rather than the ‘public’ one (see above: 221), and as result some consider that the law should not intervene in this area. On the other hand, the growing realisation of the extent of influence that business and companies have in the public realm has caused the appropriateness of this classification to be questioned (see Alston 1998: 30). The human rights movement itself has weakened this distinction by expanding the coverage of human rights norms into areas traditionally considered ‘private’ (see Steiner and Alston 2000: 220). Alston notes that the role of multinational corporations in domestic affairs highlights the inconsistency of legal notions of the public/private dichotomy (Alston 1997: 442). John McMillan also discusses how this traditional distinction has been eroded by the commercialisation of government activities through outsourcing, privatisation and government involvement in business (McMillan 2002: 268; also see Schwartz and Gibb 1999: 5).

Various feminist authors discuss the concept of the public/private dichotomy and the way it has been used to shield certain areas of life from public scrutiny (Thornton 1995: 9). Their assessment is useful in understanding why various legal remedies are infrequently used. Thornton notes that the ‘private appellation’ has long shielded ‘the dark underside of family life’ from scrutiny (above: 9). The same can be said in relation to commercial life and what happens behind ‘the veil’. It is often assumed that human rights have no place in corporate law or in business because human rights involve social or public issues that should not be mixed with business. However, this opinion suggests that the business or corporate world is separate from the society in which it operates. In reality, whenever a company hires an employee it is making a social decision (Schwartz and Gibb 1999: 97) and companies are influential in determining cultural values (above: 101; see also Birch and Glazebrook 2000: 51). Sarah Pritchard’s criticism of human rights law is that it incorporates the public/private dichotomy, and thus ‘immunises from its purview non-governmental sources of human rights abuse and facilitates the entrenchment of less visible power structures’ (Pritchard 1995: 3). While this is a valid criticism, the focus on the responsibility of companies and other non-state actors for human rights is increasing, as may be evident from this article.

The barrier between business issues and social issues is also being eroded by the increased popularity of ‘ethical investment’. The ethical investment market is gaining mainstream acceptance in Australia, with institutions such as Westpac, Rothschild and ING now offering ‘ethical’ products (Cooper 2002). These products are screened either by selecting those investments that benefit society or by eliminating investments that are damaging to society (Hunter Hall 2002). Human rights issues feature significantly in these screens (Allen Consulting Group 2002). While in 2002 ethical funds represented just over 1 per cent of funds managed in Australia ($1.3 billion) (State Chamber of Commerce NSW 2001), this figure is forecast to rise to $40 billion by 2020 (Cooper 2002).

Corporate liability for human rights abuses

Employment, discrimination and equal opportunity

The most influential contact most individuals have with companies is through their employment. There are a number of human rights recognised at international law that arise in the context of this relationship. The International Covenant on Economic, Social and Cultural Rights (ICESCR), 1966, includes the right to work (art 6), the right to enjoy just and favourable working conditions (art 7) and the right to form and join trade unions (art 8). In addition, art 2(2) provides that the rights in the Covenant ‘will be exercised without discrimination’ (Otto 2002). Various employment rights are also contained in the International Covenant on Civil and Political Rights (ICCPR), 1966, various International Labour Organisation (ILO) conventions, the International Convention on the Elimination of All Forms of Racial Discrimination (CERD), 1966, and the Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), 1979, as well as the Universal Declaration of Human Rights (UDHR), 1948 (Norris 2000: 128).

Australian domestic law provides protection for some of these human rights and at times such rights can be enforced against companies. The Australian legislation relevant to employment rights is the Workplace Relations Act 1996 (Cth) (WRA), the Race Discrimination Act 1975 (Cth) (RDA), the Sex Discrimination Act 1984 (Cth) (SDA), the Affirmative Action (Equal Employment Opportunity for Women) Act 1986 (Cth) (Affirmative Action Act) and the Human Rights and Equal Opportunity Act 1986 (Cth) (HREOC Act) (Norris 2000: 132). The RDA prohibits employer discrimination on the grounds of race, colour or national or ethnic origins (s 15). The SDA prohibits employer discrimination on the grounds of sex, marital status, pregnancy or family responsibilities (s 14). Further, s 106 of the SDA provides for vicarious liability of employers for acts done by other employees. The Affirmative Action Act requires employers of 100 or more employees to implement affirmative action programs to eliminate discrimination against women and promote equal opportunity for women (s 3).

As you would expect, the WRA also contains a number of employment rights. The various divisions of the WRA purport to give effect to various ILO and other human rights conventions. Section 170CK of the WRA prohibits the termination of a person’s employment on the grounds of race, sex, age, disability, pregnancy, religion, political opinion, trade union membership or family responsibilities. However, termination is permitted ‘if the reason is based on the inherent requirements of the particular position concerned’ or if the employment is:

... as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed if the employer terminates in good faith to avoid injury to the religious susceptibilities of adherents to that religion or creed.

This last caveat is a clear reassertion of the public/private boundary in that it precludes legislative intervention in the ‘private’ realm of religion. Interestingly, this caveat is also an instance of the acceptance of the argument that human rights are not universal but relative and an example of the choices that must be made when two human rights conflict. In this instance the right of religious institutions to exclude people on whatever basis they want trumps individuals’ rights to freedom from discrimination.

Various other rights are protected by the WRA — for example, the entitlement to maternity leave (albeit unpaid) for 52 weeks following the birth of a child, which is found in s 170KA. There is also a provision in s 170BB for equal remuneration for work of equal value, as between men and women. Finally, Part XA of the WRA provides for the freedom to join an industrial association and also for the freedom not to join. The WRA provides a number of remedies for breaches, including fines and injunctions.

Rae Norris’s assessment of the human rights protections provided in the employment field finds that Australia’s protections leave much to be desired. As a result, companies can act in ways that may breach the rights — particularly the economic rights — of employees without being in breach of the law. Norris notes that the WRA limits both the right to take industrial action specifically and the power of employees generally (Norris 2000: 145). The ILO Committee of Experts has also criticised the WRA because it gives legal priority to individual employment contracts over collective agreements, which is inconsistent with the obligation to encourage and promote collective bargaining (Weeks 2002: 290). As a result, there are significant areas where companies can breach the human rights of their employees without breaking the law.

Environment, health and safety

Companies have a high profile as offenders in the areas of environmental, health and safety law. Compared to other human rights issues, companies are given a significant amount of guidance about their environmental responsibilities (Schwartz and Gibb 1999: 120). While existing human rights treaties cover rights to health (ICESCR, art 12) and the right to a safe and healthy working environment (ICESCR, art 7) (Anderson 1996: 5), broader environmental rights are not generally accepted as being fundamental human rights (Boyle 1996: 43). However, the right to health and an adequate standard of living (ICESCR, art 11) may require the reduction of pollution (Churchill 1996: 108).

In Australia there is legislation in each jurisdiction that establishes a National Environment Protection Council. The object of the Council is ‘to ensure that all Australians enjoy equal environmental protection from pollution and, relatedly, that jurisdictional variations in environmental protection do not influence investment decisions of the business community’ (Stein 2002: [180-184]). This initiative removes the temptation of ‘forum shopping’ within Australia by companies that wish to avoid environmental regulation. Other than the Council, each jurisdiction has its own environment legislation, which gives power to an administering agency to enforce that legislation through notices, orders or directions (above: [180-110]). Further, a person who has committed an offence against the legislation may also be subject to court orders (above: [180-110]). Generally, environmental law can be enforced through civil remedies or criminal sanctions (above: [180-6000]).

In Victoria, for example, the primary legislation regulating this area is the Environment Protection Act 1970 (Vic) (EPA). The EPA contains a number of guiding principles that highlight the importance of the environment in the human rights context — for example, the principle of ‘integration of economic, social and environmental considerations’ and the principle of ‘intergenerational equality’ (ss 1B and 1D). Australia-wide, there are more than 180 statutes dealing principally with environmental and planning matters (Brunton 1998: 227). The various Australian regulatory authorities have differing approaches to the use of civil and criminal proceedings to enforce environmental legislation (above: 236). Generally, the community is allowed to participate on some level in decisions that affect the environment (above: 241).

The employer’s responsibility for the health and safety of employees is regulated and enforced under specific health and safety legislation in each State. These Acts cover a broad range of requirements for the protection of the physical health and safety of employees, which appear to satisfy the protections required by art 7 of the ICESCR, depending of course on the level of enforcement of these provisions in the different Australian jurisdictions.

One way in which individuals can directly enforce health, safety and environmental rights against corporations is through tort law, which is discussed below. However, not all of the rights discussed in this section — particularly environmental rights — are enforceable by individuals through tort law. For example, in the case of major environmental threats such as the hole in the ozone layer, it would be difficult for an individual to claim direct damage to his or her property by an ozone depleting activity (Coyne 1993: 48).

Native title, self-determination and the right to development

The protection of native title under Australian law supports the right of self-determination (ICESCR, art 1; ICCPR, art 1) and the right to take part in cultural life (ICESCR, art 15). Native title is protected by, but is not a product of, Australian law (see Neate et al 2002: [5-5005] and [5-5010]). The term ‘native title’ refers to the interests and rights in land of indigenous people under their traditional laws, and its origin and content are in those laws (Butt and Eagleson 1998: 41). The central piece of legislation affecting the behaviour of companies on indigenous lands is the Native Title Act 1993 (Cth) (NTA). This legislation was amended in 1998 to prioritise business interests in commercially significant circumstances (Horrigan 2002: 307). Those amendments also established a regime for Indigenous Land Use Agreements (ILU Agreements) (above: 307). Sections 48 to 54 of the NTA provide for monetary compensation in most cases where native title is extinguished (Couvalis and Macdonald 1996: 145).

A number of Australian mining companies have entered into ILU Agreements with indigenous Australians, some of which cover not only land use but also issues of cultural protection and the provision of training for local indigenous peoples (Robinson and Sidoti 2000: 38; for a discussion of the Rio Tinto ILU Agreement, see Hall 2002: 15). One example is the Yandicoogina Land Use Agreement, which provides for the development of local indigenous business opportunities (Burnup 2000: 90). These agreements go some way towards recognising the importance of development to human rights and, in particular, to the collective right of self-determination, of which economic self-determination is an important element (Sullivan and Hogan 2002: 75).

Assessed from a human rights perspective, the native title laws only partially promote indigenous self-determination and development rights (McMillan 2002: 308) and they breach certain other rights. For example, the right to take part in traditional cultural practices may be breached by allowing a company to have exclusive use of land for mining where that land is central to those cultural practices. The priority given to certain business interests over native title and the provision for ‘lawful’ extinguishment of native title affect the development right and the right to self-determination of indigenous Australians. Further, in order to take advantage of the development opportunities provided by the NTA, Aboriginals often have to accept the mining of their lands, which may itself breach their cultural rights. On the other hand, the economic benefits that flow from mining may be welcomed by some Aboriginal communities.


Privacy is a right that is often infringed by companies now that the electronic storage and dissemination of information is so widespread. Companies hold large amounts of personal information about individuals, and the misuse of that information can cause serious breaches of human rights, in particular the right to privacy. With companies taking over functions that involve the collection of highly sensitive information (such as health care, essential services and corrective services), it is imperative that safeguards are imposed to ensure that the right to privacy is protected.

The right to privacy is set out in art 17 of the ICCPR. While there is no general right to privacy in Australian law (Bailey 1999), the Commonwealth Government has recently extended the Privacy Act 1988 (Cth) to cover the private sector. Section 13 of the Privacy Act stipulates that an act or practice is an interference with the privacy of an individual if it breaches a National Privacy Principle in relation to personal information that relates to the individual. However, if a company has an approved privacy code, it will have its own privacy principles that must be observed (because the code must be approved, a company’s principles will generally be as onerous as their National Privacy Principle equivalent). Non-compliance with the Privacy Act exposes a company to complaints to, and possible investigation by, the Privacy Commissioner. Section 52 of the Privacy Act provides that the Privacy Commissioner may make a declaration for compensation or performance of an act, or require a course of conduct to redress any loss or damage suffered by the complainant. A complainant or the Privacy Commissioner can enforce a determination made under the Privacy Act in court. It appears that these laws adequately protect against corporate invasions of privacy.

Property and intellectual property

Article 15 of the ICESCR outlines the right to ‘the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is author’. Article 11 of the ICESCR provides for the right to an adequate standard of living, which includes adequate food, clothing and housing. This right involves the right to certain types of property necessary to provide an adequate standard of living. Property rights — intellectual and otherwise — have an ambiguous relationship with human rights, as they can be used both to promote and to violate human rights. In the Western legal system, the property right, in the form of the ‘negative’ right not to be deprived of one’s property, is one of the most rigorously protected rights. It has often been used by companies to deprive others of various rights, such as the rights to development, to participate in cultural life and share in scientific advancement, to freedom of expression, to an education, to health and even to life (Ricketson 2002: 194). However, the ‘positive’ property right in the form set out in the ICESCR is rarely protected in Western legal systems (see Scheinin 2001: 38).

Australian domestic law provides for copyright protection for written and artistic works (Copyright Act 1968 (Cth)), a system for the registration and protection of designs (Designs Act 1906 (Cth)), a patent system where inventions that are disclosed to the public are granted monopoly protection for a limited term (Patents Act 1990 (Cth)) and a trade marking system to protect marks that signify the origin of goods (Trade Marks Act 1995 (Cth)).

One area where companies are in a position to violate intellectual property rights is with respect to indigenous Australians. For example, to have protection as a patent you must file a patent application. Many indigenous inventions are not patented and therefore may be copied without redress. With the rising popularity of natural remedies, large pharmaceutical companies may look to traditional indigenous practices for the solutions to problems that Western medicine has been unable to solve. While there are no provisions in Australian intellectual property law dealing specifically with indigenous rights, these rights can sometimes be protected through its general provisions — for example, copyright law has often been used to protect indigenous artworks (see Milpurrurru v Indofurn). Nielsen and Martin (1998: 106) note that a variety of other laws can also be used to protect indigenous interests in intellectual property:

... such as legislation dealing with cultural heritage, museums, and racial vilification, ss 52 and 53 of the Trade Practices Act 1974 (Cth) (TPA), the tort of passing off, breach of confidence, breach of contract, defamation and blasphemy.

While Australian law inevitably conceptualises Aboriginal culture and knowledge very differently from the way Aboriginal customary laws do, Linda Ford notes that it can still provide ‘the opportunity to have a voice in protecting cultural and society’s values’ (Ford 1997: 13).

Trade practices law

Trade practices law is not usually considered an area involving the protection of human rights, so human rights advocates rarely use it (Kinley and Joseph 2002: 8). Section 52 of the Trade Practices Act 1974 (Cth) (TPA) prohibits misleading or deceptive conduct by a company where that conduct takes place in trade or commerce. Various social and environmental claims are made by companies to sell their products; these claims may be misleading or deceptive, and if so they can be challenged (McCloskey et al 1993: 85).

If a manufacturer makes claims about itself or its product that are misleading or deceptive (for example, about working conditions or environmental impact), individuals, and the Australian Competition and Consumer Commission, can take action against the manufacturer under the TPA. A trade practices action was taken in California against the Nike group of companies in relation to its working conditions, which ‘alleged that Nike’s advertising and public statements presented to Californian consumers a deceptive image of the corporations’ — the case settled (Duffield 2000: 204). While ensuring truth in advertising will not always protect human rights, it will ensure that companies cannot pretend to be protecting such rights when they are not. One corporate group that attempted unsuccessfully to ‘green’ its image was BP — the group’s new green leafy logo actually made it a target for environmentalists (McCloskey et al 1993: 85). McCloskey et al discuss this example and note that ‘attempts to market a green image will eventually require companies to live up to the marketing hype’ (above: 85). The TPA is one way to make sure companies do live up to their hype.

The law of torts

Tort law provides the basis of many private law protections of person and property. While it has rarely been used to protect the human rights of the disenfranchised in society, tort law provides protections that could be fruitfully exploited by human rights advocates. Action could be taken against companies when ‘injury has been sustained as a result of a breach of duty recognised by law’ (Davis et al 2002: [415-5]). Importantly, given the nature of companies, a company can be liable in tort for its own breaches and for those of its employees and agents (above: [415-120]). Craig Scott notes that ‘basic common law tort categories can be understood in terms of remedies for human rights violations without necessarily the need to develop specific “human rights” civil causes of action’ (Scott 2001: 591). While this is true, later in this article I discuss the benefits of having specific human rights laws.

While the current categories of torts are capable of expansion (Davis et al 2002: [415-5]), the two traditional forms are the action in trespass and the action on the case (above: [415-10]). An action in trespass protects bodily integrity, possession of goods and rights in the possession of land (above: [415-320]) An action on the case is usually associated with harm caused by negligence and requires proof of damage (above: [415-10]). The human rights that could possibly be protected under tort law are the right to be free from torture or cruel, inhuman or degrading treatment or punishment (ICCPR, art 7); the right to liberty and security of person (ICCPR, art 9); and the right not to be subjected to arbitrary or unlawful interference with one’s privacy, family, home or correspondence (ICCPR, art 17). It is interesting to note that these rights all fall within the ‘civil and political’ rights grouping, rather than the ‘economic, social and political’ rights grouping.

One example of where tort law has been used to support human rights is the case of Dagi v BHP and Ok Tedi Mining Ltd (No 2). This case is an example of how overseas offending and corporate groups can be dealt with in tort law, in this case via a negligence claim. While the case settled, it shows how breaches of certain human rights can be formulated as torts. The plaintiffs, who had suffered damage caused by the Ok Tedi copper mine in Papua New Guinea, brought the case in the Victorian Supreme Court. The defendants attempted to have the action dismissed for want of jurisdiction over the subject matter. However, Justice Byrne held that he had jurisdiction (for a discussion of the human rights implications of this case, see Scott 2001: 590).

In the Ok Tedi case tort law was used to avoid some of the obstacles that arise in the context of corporate groups. A common obstacle is that Australian law, which affords rights protections that some countries don’t have, will not usually govern the activities of foreign companies in their home jurisdiction. To take advantage of this fact, Australian companies may use a foreign corporate vehicle, wholly owned by them, to conduct a business whose activities breach Australia’s laws. Provided the parent company has sufficient control, knowledge and involvement in its subsidiary’s business, it may have a duty of care to those affected by the subsidiary’s operations (Meeran 2000: 261). This is important when it is the parent company that holds the group’s assets.

Australian civil law also provides solutions for some of the problems that result from overseas offending by companies. The approach of our courts in deciding which jurisdiction should hear a particular matter has allowed overseas plaintiffs to sue Australian companies in Australian courts. To avoid the jurisdiction of Australian courts, ‘Australian companies must demonstrate that the use of the local jurisdiction is so unreasonable as to amount to harassment by the foreign plaintiff’ (Steiner and Alston 2000: 1080). This approach encourages Australian companies to bring the standards of their overseas operations into line with those of their domestic operations, because issues relating to those overseas operations may be litigated in Australian courts under Australian law, even where the overseas jurisdiction does not have laws covering the issues (Scott 2001: 592).

Corporate law

The area of law that governs the existence, operation, powers and protections afforded to companies is corporate law, which is made up of both legislation and common law. Corporate law is not commonly used to hold companies accountable for human rights in Australia. The general view appears to be that ‘[h]uman rights concerns are for the most part extraneous to corporate regulation, culture and remedies’ (Redmond 2002: 23). However, with the privatisation of many government functions and the increase in corporate regulation, the conceptual barriers between corporate law and human rights law are slowly being broken down. There are various ways in which corporate law can be used to protect human rights. Some of these mechanisms involve direct action being taken by individuals under the Corporations Act 2001 (Cth) or the common law, while others involve action being taken by the Australian Securities and Investments Commission (ASIC) as regulator and enforcer of the Corporations Act.


‘Disclosure’ is a major theme of the modern corporate regulatory system. It involves the provision of information by companies to the public in a variety of different ways. Australian Stock Exchange Ltd (ASX) Listing Rule 3.1, which is given legislative force by s 674 of the Corporations Act, is the foundation of the ‘continuous disclosure’ regime for public companies. The Listing Rule requires that once an entity ‘becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information’ (subject to certain exceptions).

The Corporations Act also requires annual reports containing detailed information about the activities and financial position of public companies to be lodged with ASIC and made publicly available. In some circumstances, specific information in the form of disclosure documents, explanatory statements for schemes and takeover documents must be provided to shareholders. If a company is raising funds from the public the prospectus content rules require disclosure of:

... all the information that investors and their professional advisers would reasonably require to make an informed assessment of ... the assets and liabilities, financial position and performance, profits and losses and prospects of the body [s 710].

When companies enter into schemes of arrangement to reconstruct their businesses, the explanatory statement sent to members or creditors must set out:

... information that is material to the making of a decision by a creditor or member whether or not to agree to the compromise or arrangement, being information that is within the knowledge of directors’ [s 412].

Finally, a bidder’s statement for a takeover must include details of ‘the future employment of the present employees of the target’ and:

... any other information that:

(i) is material to the making of a decision by a holder of bid class securities whether to accept an offer under the bid; and

(ii) is known to the bidder; ... [s 636].

The disclosure requirements outlined above may require discussion of human rights issues relevant to a company’s business, because of the impact those issues are likely to have on the business. Such issues will be particularly important to companies that spend a significant amount on developing and advertising their brands. These companies will be particularly vulnerable to damage to their reputations, which can be caused by a company’s involvement in breaches of human rights (Sullivan and Hogan 2002: 82). Some sectors of the investment community even view the ethical policies of a company as a predictor of the financial success of its business (Outlook Media Centre 2002). Janice Carpenter agrees with these investors:

... companies within [ethical investment] funds are performing better because they are avoiding environmental risks, have less problems with their employees and are working in areas that are at the forefront of technology. [Quoted in Carswell 2002.]

Increasingly, even traditional profit focused investors want to be kept informed of the wider social impacts of the companies in which they invest (Owen 1993: 64). This expectation, coupled with the existing disclosure requirements, could force companies to address human rights more publicly than ever before.

The explanatory statement lodged with ASIC in late 2002 by the then WMC Ltd to de-merge that company provides a good example of how disclosure documents can be used as a source of useful information for human rights campaigners, and how information relevant to shareholders’ decisions will often include information about human rights. That explanatory statement discussed the impact of the de-merger on the WMC Group employees (WMC Ltd 2002: 142); the measures taken by WMC to implement an environmental management system compatible with ISO 14001 (above: 107); the independent environmental audit to which WMC was subject (above: 107); the ethical code of conduct to which all WMC directors and employees were subject (above: 107); important environmental, health and safety aspects of WMC’s operations (above: 107); the impact that Kyoto Protocol related carbon emission restrictions might have on WMC’s businesses (above: 108); and the native title claims over areas where the company operated (above: 116). These are all human rights issues.

The amendments to the Corporations Act introduced by the Financial Services Reform Act 2001 (Cth) signal a change in legislative thinking about how disclosure can be used in the human rights context. Section 1013D of the Corporations Act now requires that issuers of financial products with an investment component disclose ‘the extent to which labour standards or environmental, social or ethical considerations are taken into account in the selection, retention or realisation of the investment’. This legislative requirement recognises that these factors play a role in the investment decisions of many people and it will no doubt have the effect of raising the profile of these issues further. It is hoped that the amendments will ensure that investors are given information about the environmental, social and ethical considerations relevant to their investment decision (Monitor Money 2001). The information required to be provided in these various documents can provide a valuable tool in light of the growing impact of the ‘ethical investment’ movement, the adverse publicity associated with the release of poor environmental practices and the public outcry caused by unfair workplace practices. These events can affect share price, access to markets and employee retention (Sullivan and Hogan 2002: 81). Information gained from the formal sources discussed above can be used to generate negative publicity to support consumer boycotts, initiate regulatory action or inspire shareholder activism (Joseph 2000: 81).

Shareholder activism

With growing numbers of Australians owning shares, shareholders are beginning to reflect the broader community’s concerns with the behaviour of ‘their’ company. While share ownership is invariably more prevalent among the affluent in our community, who may be less likely to experience human rights abuses themselves, some shareholders are concerned with human rights and may use their voting power to force companies to respect these rights. Australia’s ageing population may contribute to an increase in shareholder activism. The NSW Chamber of Commerce notes that:

Demand for ethical investment products has been largely driven by an aging population and the associated growth in superannuation holdings, increased demands for greater transparency and disclosure of business activity, and general shareholder and consumer activism. [State Chamber of Commerce NSW 2001.]

Shareholders have a number of avenues through which to ensure that companies do not violate human rights. Section 249D of the Corporations Act provides that shareholders with at least 5 per cent of the votes that may be cast at the meeting, or at least 100 members who are entitled to vote at the general meeting, may request that the directors of a public company hold a general meeting. The shareholders can then propose resolutions to be voted on at the general meeting. In this way, relatively small groups of shareholders can have issues raised for consideration by the broader shareholder body, and can seek to ensure that the company’s agenda reflects the interests of its shareholders.

Shareholders can also exert informal influence on the activities of a public company through its board of directors. Large institutional shareholders often exercise this type of influence over companies in which they hold a significant stake. For example, Solomon Lew was ousted from his position as chair of the board of directors of Coles Myer Ltd at the demand of major institutional shareholders in 1995 (Westfield 2002: 17). A number of larger Australian companies have shareholder groups that are specifically concerned with the company’s social responsibilities. One such group is BHP Billiton Shareholders for Social Responsibility, who appear to have been able to influence BHP Billiton Ltd’s management. This group wrote to the company asking it to allow some small magnetite leases in environmentally sensitive areas to lapse. Those leases were allowed to lapse (Lionidis 2002).

As Australians have greater amounts of superannuation invested through large funds, citizens can justifiably demand that these funds use their influence to improve companies’ human rights activities. Over time, the expansion of share ownership will make it harder to draw a distinction between the community in general and the company’s shareholders. The blurring of this distinction will give greater force to the argument that directors should act in the interests of the community, as well as in the interests of shareholders.

Directors’ duties

While the duties imposed on directors under the common law have been used to prevent issues of social responsibility intruding on directors’ decisions (Senate Standing Committee on Legal and Constitutional Affairs 1989: 86), they could be used to promote respect for human rights in the corporate sphere. Directors’ duties are owed to the company as a whole (Redmond 1992: 361). This is usually interpreted as providing for duties to shareholders, and to creditors when a company is insolvent or nearing insolvency (Walker v Wimbourne; Kinsela v Russell Kinsela Pty Ltd), but not to employees, customers, contractors or the community in general (Ipp 2002: [8.20]). In most cases, it is true that ‘courts have consistently refused to acknowledge openly the interests of outsiders’ (Corkery 1987: 63). However, certain cases have accepted that it is not a breach of directors’ duties for directors to take other interests into account, if doing so would benefit the company as a whole (see Hampson v Prices Patent Candle Co). Broader interests are usually protected only when they coincide with the interests of shareholders (Corkery 1987: 63).

Corporate self-interest may itself encourage respect for human rights. A director acting in the best interests of the company as a whole should avoid human rights abuses because in the long run these may cause economic detriment to the company or its shareholders. Mayne Nickless Ltd argued that ‘the “traditional” duties owed by the company [are] sufficient to cover wider responsibility’ when the Senate Standing Committee on Legal and Constitutional Affairs considered widening the scope of directors’ duties (Senate Standing Committee on Legal and Constitutional Affairs 1989: 92). Not only does a bad human rights record increase the risk of consumer sentiment turning against a company’s business — which is bad for the company’s brand — it may also cause certain types of investors to abandon the company’s shares. If its shares are sold in large enough numbers, the company’s share price will fall, and with it the value of the shareholders’ investments. In addition, a number of human rights abuses are also torts or breaches of environmental legislation, so a company that breaches human rights may incur significant civil liability or administrative fines. Phillipa Weeks illustrates the breadth of the liabilities that can arise out of human rights breaches by companies:

... title invalidity, compensation liability, prospectus liability, corporate negligence, professional negligence by internal and external advisors, breach of director’s duties, breach of reporting and disclosure obligations, breach of auditing and accounting standards, breach of valuation standards, taxation implications of native title compensation, rating and governmental charges for native title land, and contractual risk allocation in indigenous agreements. [Weeks 2002: 297.]

The interests of the company’s shareholders have usually been based on their interests as investors. The distinction between the shareholder as investor and as human is an artificial one that is increasingly being questioned by the ethical investment movement. A company would be wise to avoid human rights abuses that cause detriment to the company’s shareholders as humans rather than investors. For example, breaches of human rights involving environmental degradation might directly affect shareholders. While the interests of shareholders have primarily been considered in an economic sense, this limitation is found in the common law and is therefore amenable to change as society changes (for a discussion of the ability of the common law to keep track with changes in Australian society in the context of native title, see the judgment of Brennan J in Mabo v Queensland (No 2)). If it is accepted that breaches of human rights affect society as a whole, the full range of human rights might be protected under the guise of ‘shareholders’ interests’.

The Parliamentary Joint Committee on Corporations and Financial Services is currently conducting an inquiry into corporate responsibility and triple bottom line reporting. The terms of reference include a reference on ‘the extent to which regard should be had for the interests of stakeholders other than shareholders, and the broader community’ (Commonwealth Government 2005).

Limits on restructuring to avoid payment of employee entitlements

One fairly recent area in which the Corporations Act provides for the protection of human rights abuses by companies is s 596AB, which prohibits a person from entering into an agreement or transaction with the intention of preventing or significantly reducing the recovery of employee entitlements. This section protects aspects of the rights set out in art 7 of the ICESCR, regarding just and favourable working conditions. The growing concern to prevent the corporate form being exploited to the detriment of employees can also be seen in the McCluskey v Karagiozis judgment. In that case, the directors of the asset-holding parent company purported to move the employees of the group into a subsidiary company that had no assets. The company subsequently went into administration and the administrators sought direction from the Court as to which company in the group owed the employee entitlements. Justice Merkel held that the original employer, the parent company, owed the debt. This finding markedly improved the employees’ chances of receiving their entitlements. The judgment appears to have been influenced by rights concerns — his Honour noted that the directors treated the employees ‘as if they were serfs, rather than free citizens entitled to choose their own employer’ (at [16]).

Problems with available enforcement mechanisms

Government enforcement versus individual action

Many of the domestic mechanisms for enforcement of the human rights responsibilities placed on companies must be initiated by individuals, rather than enforced by governments. Individuals who are subject to human rights abuses are often not well placed to take civil action. Not only does this type of action involve considerable expense, it also requires a level of education about rights and legal remedies that many people whose rights have been violated do not possess. Further, in many contexts raising human rights concerns may expose the individual to greater persecution or greater harm. For example, in the employment context an employee may lose his or her job if that employee complains about rights abuses in the workplace.

In contrast, where the government is responsible for ensuring companies do not breach human rights, there may be adequate resources but a lack of political will to prosecute (see Steiner and Alston 2000: 1349). Muchlinski notes that states are often prepared to formulate policy that benefits their larger home-based companies (Muchlinski 1997: 91). This policy can frustrate the effectiveness of human rights laws, particularly where there is no alternative civil remedy for the breach. One problem that arises out of the so-called ‘globalisation’ of business, and in particular out of the mobility of capital, is that states may be discouraged from enforcing the domestic protections that do exist for fear that companies will take their business to other countries with lower human rights protections (see Hinkley 2000: 291; Hamilton 2000: 54; McCorquodale 2002: 97). The lowering of human rights protections, caused by the self-reinforcing nature of the above concerns, has been termed ‘the race to the bottom’ (Green 2000: 150). While a failure to enforce these laws may constitute a breach of Australia’s international obligations under human rights treaties, there are few avenues of complaint for individuals under international law.

Breaches of human rights outside Australia

Australian law will not usually cover a company’s overseas operations4 and in many developing countries the state does not enforce or even enact laws regarding the human rights protections provided in Australian law. Given the increasing use of overseas labour by Australian companies, this leaves it open for Australian companies to breach human rights with impunity in significant parts of their business (Meeran 2000: 252).

Not all human rights are protected

Another notable problem with the human rights enforcement mechanisms available in Australia is that our domestic law does not address all the human rights treaty commitments that Australia has made. There is not room here for a full assessment of the human rights not protected by Australian law. However, a number of absences relevant to the activities of companies are of note: there is no right to work (ICESCR, art 6); the right to negotiate collectively has been undermined (ILO Freedom of Association and Protection of the Right to Organise Convention, 1948); the cultural rights of Aboriginals continue to be violated (ICESCR, art 15); there is no right to paid maternity leave (ICESCR, art 10); and women are still under-represented in the higher levels of business (ICESCR, art 3). It is interesting to note that all these unprotected rights fall within the ‘economic, social and cultural’ grouping. Heyns and Viljoen note that there was a lack of understanding of the requirements of the ICESCR when Australia signed it (Heyns and Viljoen 2002: 53), and this remains the case. Australia’s failure to implement economic, social and cultural rights is similar to the practice of many states and the views of some commentators who claim that this group of rights are ‘aspirational’ rather than enforceable (Beetham 2000: 255).

Individual legal personality allows parent company to escape liability

One of the features of larger corporate enterprises is that they are often made up of groups of legally discrete companies. However, corporate law does not usually recognise such a thing as a corporate group — each company in the de facto group is a separate legal entity (Wimbourne v Brien). While these groups often operate as parts of a single business, they can associate and disassociate their constituent parts at will (Kinley 2002: 44) so that the sins of one company within a corporate group cannot usually be visited on the others (Corkery 1987: 72; Bottomley 2002: 53). Richard Meeran notes that complex group structures are often used ‘to distance and separate the parent, headquarters, company, from the local operating subsidiaries, thereby protecting the [multinational corporation] from legal liability’ (Meeran 2000: 252). When dealing with corporate groups, particularly where one company holds all the debt of the group and employs the group’s employees and another company holds the group’s assets, the separateness of the companies can be used to avoid paying for the damage or debts of one member of the group. This tactic was used in the industrial relations dispute between Patricks Stevedores and the Maritime Union of Australia (Rees and Wright 2000: 4). In that case, the employees were employed by a services company that had no assets, aside from a debt for services owed by the company conducting the stevedoring business.

Reliance on economic impact

It is encouraging to see investors looking at the impact of human rights breaches on the long-term profitability of a company, and to see companies respecting human rights so as to avoid consumer backlash with its inevitable loss of sales. However, the focus of these concerns is on the economic impact of human rights breaches on the company, rather than a concern for protecting human rights per se. For example, in order to insist on disclosure of human rights breaches by a company, the breaches must impact on the prospects of the company (in the case of disclosure documents), be ‘price sensitive’ (in the case of continuous disclosure) or be relevant to shareholders’ decisions about voting on resolutions (in the case of schemes or takeovers). Alston observes that the human rights that are most frequently validated by Western legal systems are those that contribute to the functioning of the market and economic efficiency (Alston 1997: 442). This lack of validation of human rights breaches that do not have an economic impact on the company is unsatisfactory.

No single corpus of human rights law

The fact that Australia does not have a bill of rights containing all the human rights protected in Australian law makes it difficult for human rights advocates to access and specialise in all areas relevant to these rights. The difficulty of locating the full range of human rights laws is reflected in the fact that few of the human rights possibilities of the Corporations Act and the TPA have been exploited. A single body of human rights law would enable the development of appropriate enforcement mechanisms and case law. This specialist case law is vital — the focus in non-human rights cases is often economic detriment, which should not be the central concern of human rights law. It is important that a connection is made between domestic laws and human rights because ‘linking these often scattered provisions ... enables them to be seen as a whole that is governed by coherent principles’ (Bailey 1999).

Possibilities for greater enforcement

Access to justice

Like most areas of the law where individuals must take their own action to protect their rights, a lack of access to the legal system is a major impediment to the fulfilment of human rights. The provision of legal aid funding for the prosecution of human rights breaches would assist in a greater number of these breaches coming before the courts. This increase in litigation is itself likely to ensure greater compliance by companies. However, legal aid would not overcome the non-monetary access issues, like the lack of rights education in Australia and the disenfranchisement of many who suffer rights abuses. The establishment of publicly funded legal centres charged with the promotion of these rights and the provision of assistance to those whose rights have been breached may address these issues. In addition, if the state increased its direct role in promoting human rights and taking action where there have been human rights breaches, we may also see greater compliance by companies.

Impose human rights obligations on companies and directors

While the various ways that corporate law can be used to promote corporate human rights compliance have been discussed, Australian corporate law does not contain a duty not to breach the human rights of those affected by a company’s behaviour. With legislative amendment, or the development of the common law, such a duty could be imposed on companies and/or their directors. Sarah Pritchard notes that ‘common law does not necessarily conform with international law, but international law is a legitimate and important influence on the development of common law’ (Pritchard 1995: 19). It is to be hoped that over time more human rights protections found in international law will be imported into the common law through this influence.

Hinkley explores the idea of a Code for Corporate Citizenship, which would add to directors’ current duties by requiring that they should not fulfil their current duties ‘at the expense of the environment, human rights, the public safety, the communities in which the corporation conducts its operations or the dignity of its employees’ (Hinkley 2000: 292). The introduction of such a caveat on the operation of directors’ duties may affect the competitiveness of Australian companies, as foreign companies would not have the same restrictions. On the other hand, in the long term this restriction may be beneficial if it reduces the company’s tort liabilities, industrial action and administrative fines. Apparently, these ideas are entrenched in some European countries — in Germany, corporations ‘are thought to operate for the common good — for the benefit of the shareholders, workers, creditors, and communities’ (McCorquodale 2002: 109), and in the European Union the right to equal pay for equal work is being invoked directly against private employers (Scheinin 2001: 47).

Another method of enforcing corporate responsibility for human rights is to include rights requirements in the Corporations Act. ASIC undertakes policy development, as well as regulatory and enforcement activities in relation to the Act, and its current consumer protection function could be extended to protect not only investors but also other stakeholders. The imposition of administrative fines for human rights abuses, and ASIC’s ability to undertake targeted surveillances and campaigns, may put human rights on the corporate agenda. One shortcoming of this proposal is that ASIC’s structure and skills are aimed at dealing with the economic focus of corporate law, while protecting human rights may require a different focus. Arguments against the corporate law approach claim that it is best to provide for responsible corporate behaviour in specific non-corporate law statutes (Senate Standing Committee on Legal and Constitutional Affairs 1989: 98). Others, like Paul Redmond, see the prospects for the respect of human rights becoming part of corporate law as low. However, the discussion in this article reveals that there have already been some small moves in this direction. Alternatively, it may be more appropriate to provide for corporate responsibility in a solely rights focused document.

Another possible solution to the commission of human rights breaches by companies is the further development of regional or international norms relating to corporate responsibility, which would put a stop to ‘the race to the bottom’. Joseph notes that ‘the fear of competitive disadvantage ... disappears if uniform international levels are prescribed as a matter of obligation’ (Joseph 2000: 87). This would involve the imposition of human rights responsibilities on companies, not just states, under international law (this option is discussed in Joseph 2000: 75–93). Put simply, ‘it no longer makes sense that international law addresses obligations to respect human dignity to states and to individuals but not to corporations’ (Kamminga 1999: 568). On the other hand, some observers suggest that what is needed is ‘an international treaty that specifies the human rights obligations of corporations and requires states parties to provide criminal, civil, or administrative remedies for violations of those obligations’ (Harvard Law School 2001: 2046). However, requiring individual states to enforce these obligations may not be appropriate for multinational enterprises, given their mobility and power (Joseph 2000: 78). The benefits of imposing direct international regulation on multinational enterprises include that a more uniform interpretation of human rights duties would be created; international bodies would be more sensitive to issues of cultural relativism; direct regulation would be a greater deterrent to abusive multinational enterprises with corrupt or weak home states; and it would be a shift away from ‘the State-centric focus of international law’ (above: 87–8).

The success of imposing duties directly on companies at international law is evidenced by the significant impact that the ILO Tripartate Declaration of Principles Concerning Multinational Enterprises and Social Policy 1977 has had (Diller 2000: 23). This Declaration has been effective because it applies not just to governments, but also to enterprises, which have a particularly large impact on human rights in the area of labour law (above: 23). The basis of the success of the ILO system has been the ‘tripartite participation of governments, workers and employers’ (Scheinin 2001: 46). To regulate companies effectively, particularly multinational companies, they should not only be involved but also made directly responsible under international law.

The UN is encouraging companies to take responsibility for human rights through its Global Compact, which is ‘structured as a learning forum and value-based platform’ (Quinn and Dunlevie 2002: 10). However, the Global Compact has been criticised for allowing companies ‘to pay lip service to such ideals — raking in all the respectability of association with the UN, but doing nothing to earn it’ (Johnson 2002: 15). While this criticism may be valid, the former High Commissioner for Human Rights supports the move from a completely voluntary system to a basic regulatory system in this area (Robinson 2002). This move would require companies to do more than ‘pay lip service’ to human rights. The UN has also developed some detailed norms for the responsibility of transnational companies for human rights in its Norms on Responsibilities of Transnational Corporations and Other Business Enterprises. These norms specify that although states have primary responsibility to promote and protect human rights, transnational corporations and other business enterprises have an obligation to promote and secure the fulfilment of human rights within their spheres of activity and influence. This recognises that in a number of areas corporations have as much of an influence on people’s lives as states do.

It is disheartening to note that the Statute of the International Criminal Court only provides for jurisdiction over ‘natural’ persons, thereby excluding companies (Harvard Law School 2001: 2032). The controversy surrounding corporate criminal liability during negotiation of this statute (above: 2047) reveals the extent of the opposition that a proposal for the direct international responsibility of corporations is likely to face.

Overseas offending

As mentioned above, Australian companies committing human rights abuses outside Australia cannot generally be held accountable for those breaches in Australian courts. One option to address this issue is to introduce laws providing for the extraterritoriality of any human rights responsibilities imposed on Australian companies. Australia could assert jurisdiction over such matters on the basis that the defendant is an Australian national, which is a recognised basis of jurisdiction under international law (Dixon and McCorquodale 1991: 323). In 2000 the Democrats proposed a Bill that dealt with the environmental, labour and human rights regulation of Australian companies overseas. However, as a result of lobbying by the business community, the Corporate Code of Conduct Bill 2000 (Cth) was not passed (Rix 2002: 19).

Sarah Joseph suggests that multinationals should be regulated by their home states, because that state is usually a developed nation that is more able to match the power of the company (Joseph 2000: 79). While it has been argued that these extraterritorial laws may ‘constitute an unacceptable intrusion into the host State’s sovereignty’ (above: 86), or may constitute ‘jurisdictional imperialism’ (above: 568), it is hard to see how the unregulated intrusion of a foreign owned multinational company is any less offensive.

The US Alien Tort Claims Act (ATC) has been used to overcome some of the jurisdictional problems that arise when companies commit breaches outside their state of incorporation. The ATC covers private individuals who commit torts in the course of violating international law (Steinhardt 1999: 11). The ATC provides that ‘the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States’ (above: 4). The European Union Parliament has requested a study into the appropriateness of a European version of the ATC so that human rights standards can be applied directly to corporations in the European Union (Howitt 2000: 78). The Australian federal Parliament should do the same.

Encourage a rights culture

The lack of rights culture and rights jurisprudence in Australia may contribute to the low use of existing remedies by those whose human rights have been breached. There needs to be greater education about rights and about avenues of redress for rights breaches. The creation of a constitutionally protected bill of rights would contribute to the broader acceptance and awareness of rights in Australia (Mason 1998: 27).

Is law the way?

Lawyers often presume that additional legal remedies are the best way of improving the protection of human rights. This presumption must be questioned. In the context of environmental rights, Michael Anderson notes that ‘it is environmental movements and activism, rather than generous legal drafting, which leads to effective implementation’ (Anderson 1996: 20). The same can be said for human rights more generally (Joseph 2000: 82). Pritchard claims that ‘the dependency of rights claims on legal processes’ is dangerous because it does not challenge the various other factors that ‘drive the politics of litigation’ (Pritchard 1995: 2). Further, a focus on legal remedies can force rights discourse to adopt a legal framework, which may rob it of its revolutionary potential. Douzinas claims that to the extent that human rights become positivised, ‘they share the quest for subjecting society to a unique and dominant logic which necessarily violates the demand for justice’ (Douzinas 2000: 368). These concerns are valid to the extent that they remind us that law is not the only, or even the best, way to promote human rights. They also highlight the fact that the law is often complicit in human rights abuses, and is not value neutral. As a lawyer, it is perhaps not surprising that I am unable to give up on the law’s ability to provide justice. However, it is clear even to me that the law is not the only way to protect human rights.


The foregoing analysis of the legal remedies available for corporate human rights abuse highlights the possibilities and problems facing human rights advocates in Australia. While there are numerous laws that can be used to protect against corporate breaches of human rights, the lack of a single bill of rights means they are difficult to find and insufficiently used. Although Australian domestic law provides some scope for the creative advocate to promote human rights, the majority of human rights are not effectively protected. In addition, there are many rights that are not enshrined in Australian law at all. These tend to be economic, social and cultural rights.

I have attempted to show that there are various laws that allow individuals and government agencies to take action against companies for human rights breaches. In focusing on the way this can be done through corporate law, I question the assumption that social responsibility and business do not mix. I have also examined the enforcement problems specific to companies — namely, their power, their legal nature and their ability to move jurisdictions with ease. A number of ways of improving the enforcement of human rights norms against companies have been discussed. These will no doubt face opposition from the business community. In light of the growing power of multinational companies, the international community will have to work together to overcome this opposition and control errant corporate behaviour.

* Lawyer, Australian Securities and Investments Commission. The views expressed are those of the author, not of the Commission.

1 What I call ‘multinational corporations’ or ‘multinational enterprises’ are corporate groups in which the constituent entities have been granted legal status under the laws of various different domestic legal systems.

2 For example, art 2 of the International Covenant on Economic, Social and Cultural Rights provides that the adoption of legislative measures is one of the steps that might be taken to ensure realisation of the rights in the Covenant. Article 2 of the International Covenant on Civil and Political Rights also provides that the parties must take steps to adopt legislative or other measures to give effect to the rights in the Covenant.

3 These are the International Covenant on Civil and Political Rights, 1966; the International Covenant on Economic, Social and Cultural Rights, 1966; the Convention on the Elimination of All Forms of Discrimination Against Women, 1979; the International Convention on the Elimination of All Forms of Racial Discrimination, 1966; the Convention on the Rights of the Child, 1989; and the Convention Against Torture and Other Cruel, Inhuman and Degrading Treatment, 1984.

4 However, note the discussion in this article about how companies can be held accountable for torts committed overseas if a foreign plaintiff takes action in an Australian court.


Australian cases

Dagi v BHP and Ok Tedi Mining Ltd (No 2) [1997] 1 VR 428

Kinsela v Russell Kinsela Pty Ltd (in liq) (1986) 4 ACLC 215

Mabo v Queensland (No 2) (1992) 175 CLR 1

McCluskey v Karagiozis [2002] FCA 1137; BC200205328

Milpurrurru v Indofurn (1994) 30 IPR 209

Walker v Wimbourne [1976] HCA 7; (1976) 137 CLR 1

Wimbourne v Brien (1997) 15 ACLC 793

UK case

Hampson v Prices Patent Candle Co (1876) 24 WR 754

Australian legislation

Affirmative Action (Equal Employment Opportunity for Women) Act 1986 (Cth)

Copyright Act 1968 (Cth)

Corporate Code of Conduct Bill 2000 (Cth)

Corporations Act 2001 (Cth)

Designs Act 1906 (Cth)

Environment Management and Pollution Control Act 1994 (Tas)

Environment Protection Act 1970 (Vic)

Environment Protection Act 1986 (WA)

Environment Protection Act 1994 (Qld)

Environment Protection Act 1997 (ACT)

Environmental Protection Act 1993 (SA)

Financial Services Reform Act 2001 (Cth)

Human Rights and Equal Opportunity Act 1986 (Cth)

Industrial Relations (Consequential Provisions) Act 1988 (Cth)

Native Title Act 1993 (Cth)

Occupational Health and Safety Act 1983 (NSW)

Occupational Health and Safety Act 1984 (WA)

Occupational Health and Safety Act 1985 (Vic)

Occupational Health Safety and Welfare Act 1986 (SA)

Patents Act 1990 (Cth)

Privacy Act 1988 (Cth)

Protection of the Environment Operations Act 1997 (NSW)

Race Discrimination Act 1975 (Cth)

Sex Discrimination Act 1984 (Cth)

Trade Marks Act 1995 (Cth)

Trade Practices Act 1974 (Cth)

Waste Management and Pollution Control Act 1998 (NT)

Workplace Health and Safety Act 1989 (Qld)

Workplace Health and Safety Act 1995 (Tas)

Workplace Relations Act 1996 (Cth)

US legislation

Alien Tort Claims Act

International legal materials

Convention Against Torture and Other Cruel, Inhuman and Degrading Treatment, 26 June 1987, GA Res 39/46, UN Doc A/39/51 (1984)

Convention Against Transnational Organized Crime, adopted 15 November 2000, GA Res 55/25, UN Doc A/45/49 (I) (2001)

Convention on the Elimination of All Forms of Discrimination Against Women, 3 September 1981, GA Res 34/180, UN Doc A 34/46 (1979)

Convention on the Rights of the Child, 2 September 1990, GA Res 44/25, UN Doc A/44/49 (1989)

Freedom of Association and Protection of the Right to Organise Convention, 9 July 1948, 68 UNTS 17

International Convention on the Elimination of All Forms of Racial Discrimination, 4 January 1969, 660 UNTS 195

International Covenant on Civil and Political Rights, 23 March 1976, GA Res 2200A (XXI), UN Doc A6316 (1966)

International Covenant on Economic, Social and Cultural Rights, 3 January 1976, GA Res 2200A (XXI), UN Doc A6316 (1966)

Norms on Responsibilities of Transnational Corporations and Other Business Enterprises, 26 August 2003, Commission on Human Rights, UN Doc E/CN.4/Sub.2/ 2003/12/Rev.2

Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, adopted November 1977, ILO DOCNO: 28197701

Universal Declaration of Human Rights, adopted 10 December 1948, GA Res, 217A (III) UN Doc A/810 (1948)

Books and articles

Allen Consulting Group (2002) Socially Responsible Investment in Australia The Allen Consulting Group, Melbourne

Alston P (1997) ‘The myopia of the handmaidens: international lawyers and globalisation’ 8(3) European Journal of International Law p 435

Alston P (1998) ‘The Universal Declaration in an era of globalisation’ in B Tahzib-Lie and B Van Der Heijden (eds) Reflections on the Universal Declaration of Human Rights: A Fiftieth Anniversary Anthology Martinus Nijhoff Publishers, The Hague

Anderson M (1996) ‘Human rights approaches to environmental protection: an overview’ in A Boyle and M Anderson (eds) Human Rights Approaches to Environmental Protection Clarendon Press, Oxford

Bailey P (1999) ‘Implementing human rights: the way forward’ 5(2) Australian Journal of Human Rights p 167 [Online] Available: < 1999/31.html> [2002, November 4]

Beetham D (2000) ‘What future for economic and social rights?’ in H J Steiner and P Alston International Human Rights in Context: Law, Politics, Morals Oxford University Press, Oxford

BIAC ELSA Committee (2000) ‘Contribution on the employment and industrial relations chapter of the OECD Guidelines for Multinational Enterprises’ in R Blanpain (ed) Multinational Enterprises and the Social Challenges of the XXIst Century: The ILO Declaration on Fundamental Principles at Work. Public and Private Codes of Conduct Kluwer Law International, The Hague

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