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Lauber, Sabina --- "Opinion" [2002] AltLawJl 1; (2002) 27(1) Alternative Law Journal 2

Corporate responsibility and human rights

The rights debate within a legal frame­ work has tended to be framed predict­ ably, with the individual as the innocent and entitled, the corporation as the evil perpetrator and government as the reluctant but responsible enforcer. This paradigm is now being challenged. The way that individuals, corporations and governments behave, interact and choose to be perceived has changed. Even more important is that the possibility to recreate the roles of these entities and the way that they interact, has become a reality.

The aim of this edition of the Alter­ native Law Journal is to fuel the debate on this possibility. The notion of corporate responsibility for human rights, the role of government and the impact of globalisation on these issues have been hotly debated overseas for some time. In Australia, the debate is in its infancy, particularly amongst lawyers. How­ ever, the topic is gaining momentum with recent events such as the Tampa incident, where a corporate owned ship confronted the Australian government on its human rights policies. Some strong research is currently being done into this area, as evidenced in the articles by David Kinley and Sarah Joseph, and David Birch.

How is corporate responsibility connected with human rights? The law recognises corporations as individual legal entities. They attract many of the rights that a person is entitled to under Australian law. Fuelled by globalisation, corporations move freely across borders, skilfully placing themselves so as to grow and multiply. Many multinationals have yearly profits that exceed the GOP of small nations.

There is no doubt that some corporations have amassed both power and status akin to or greater than that of some governments. These entities exist amongst complex structures and relationships, skilfully planned to maximise output and profit. We see corporations beginning to appear at the United Nations as non-government organisations, lobbying at international meetings for an outcome that will support their business objectives.

Are these developments good or bad? Such a question so oversimplifies the issue that it cannot be answered. In­ stead, it is clear that this issue raises many questions that cannot be answered without further research and de­ bate. In particular, there is the simple premise that with rights come responsibilities. Corporations have amassed numerous rights and privileges, but by definition this must come with obligations to respect the rights of others, especially human rights, in return. There has been a reluctance at the international level to enshrine a genuine and enforceable statement of corporate responsibility. Many trade pacts such as those negotiated through the World Trade Organisation and regional agreements such as APEC, are negotiated by governments to strengthen trade opportunities for corporations. But they lack a statement of the primacy of human rights. Fierce battles have been fought to prevent any linkage of trade agreements to international human rights documents.

Several attempts have been made to develop an international statement of responsibility for human rights, most recently the Global Compact launched by the UN Secretary-General, Kofi Annan. Paul Redmond discusses these varied attempts in his article. Nearly all such initiatives lack enforceability and leave the question of effectiveness unanswered. However, when one examines the notion of international enforceability against multinationals in detail, the paradox of legal personality again arises. What is the legal personality of an inter­ national conglomerate of entities? If a multinational were to breach fundamental human rights, who should be prosecuted? A copy of an annual report? Which annual report? What about subsidiaries, parent companies, outsourced service providers? And which national principles of corporate regulation should be used as a benchmark by which to prosecute? At what point should the corporate veil be pierced and directors made accountable? If the world were so keen to answer these questions, then the Nuremberg war crimes trials would have included the prosecution of the corporations that made their fortune from the construction and operation of Nazi death camps.

So, where do governments fit into all of this? Governments are traditionally the regulator, the watchdog of human rights under international law, a major domestic employer and social welfare provider. Internationally, this appears to be changing. Australia is one of many governments that is downsizing, privatising and outsourcing. As governments are regulating less, and leaving more to the market, what is happening? What is the new role of government and where does power now lie?

And what happens when corporations start to behave like good, responsible citizens? When they are found to not fit within the role of a mysterious evil entity that swallows all in its wake? Even the more radical human rights warriors are becoming more sophisticated in their view of corporations. Despite the legal construction, corporations are not an individual. They are a collection of people, working, many trying to survive in an increasingly complex and competitive world. They are often the same people who demand rights for themselves and for others

Many consumers, also employees, are beginning to realise the power of consumer democracy. Under democratic political systems, each person has one vote. However, in the corporate world, each purchase is a vote. In affluent countries like Australia, consumers vote several times a day.

With the Australian government increasingly leaving more decisions to the market, corporations can go either of two ways. They can exploit the gaps and build their business on consumer exploitation. An example of this-pay day ending - is explored by Chris Field. Indeed, the collapse of seemingly indestructible corporations like Ansett, HIH and Enron, has cemented the need for increased accountability and ongoing quality government intervention and regulation of the market.

On the other hand, corporations can seize the opportunities of this increased power to do business in a more creative and responsible way. John Hall discusses the way that Rio Tinto has approached this challenge. It is ironic that Rio Tinto has seized the opportunity to find ways of increasing recognition for native title in Australia, at a time when the government is seeking to claw back new found rights in this area. Several articles about the role of pro-bono work by lawyers also explore this increasingly popular notion of corporate philanthropy. A piece from Earthwatch examines the role that non-government organisations can take in guiding corporations into the world of doing good.

What should the role of government be when it takes on a project that requires it to act as a corporation? This question is raised in the article by Christopher Martin that examines public dissent and assembly during the Sydney Olympic Games.

The aim of this issue is not to answer questions, but to raise them. The articles that have been selected are from a variety of sources - economists, political scientists, legal academics, non- government organisations and corporations. Not all readers will agree with what is said in the articles. But they are intended to fuel the debate and provoke discussion, encourage scepticism, inspire new ideas and pose new questions. Is corporate responsibility a threat or an opportunity? Is it a new or an old phenomenon? And when we are confronted by a national government that strategically decides to obstruct a corporate-owned ship, the Tampa, trying to take 433 asylum seekers to safety on Australian land, how do we continue to define the human rights relationship between governments, individuals and corporations?

Sabina Lauber

Sabina Lauber is a Sydney lawyer and consultant.

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