Emerging Voices: “Do No Harm” and The Development of General Corporate Human Rights Obligations

by Gabriel Armas-Cardona

[Gabriel Armas-Cardona received his J.D. from New York University and was a legal officer at Lawyers Collective in New Delhi, India where he managed the Global Health and Human Rights Database.]

Human rights activists have long complained of legal lacunae in domestic and international law over the regulation of corporations. This is why last year’s United Nations Human Rights Council resolution to elaborate binding obligations on corporations was cheered by activists (and derided by business). The UN’s previous attempt to develop a general framework of responsibilities in the 2011 Guiding Principles on Business and Human Rights did not impose binding obligations, likely one of the reasons it was generally praised by corporations.

Corporate behavior is primarily regulated through two domestic legal systems: tort and a corporate regulatory regime. The first is the traditional remedy system for individuals while the latter is the State impositions on business to promote a social good. In well-regulated States, these two distinct systems have grown to more effectively protect that society. But many developing countries don’t have legal systems in place that effectively protect their society and almost no State regulates corporate action abroad for the protection of other societies. The value of binding legal obligations is that they can remove the lacunae by having universal and consistent obligations for all corporations within States and in the interstitial space between jurisdictions.

These obligations would be distinct from and would not dilute State human rights obligations. Having multiple dutybearers, even qualitatively different ones, is not problematic. Corporate obligations would positively interplay with States’ duty to protect to further realize human rights. When a violation by a corporation occurs, it would be the State’s duty to provide a remedy system, stemming from a State’s duty to protect, and the corporation’s duty to cooperate with that system, stemming from the secondary duties mentioned in the duty to fulfill, or to directly provide reparations to the victim (in normal parlance: go to court or settle). If the corporation cannot provide reparations (e.g. due to bankruptcy), then the State would have to provide reparations directly. Either way, the victim is made whole.

Underlying the challenge is that there currently is no principled framework for universally applicable corporate obligations. One can’t simply copy State obligations and apply them to corporations; their obligations must reflect that they are private actors. The Guiding Principles state that corporations “should avoid infringing on the human rights of others” (Principle 11), or as the Special Representative of the Secretary-General that wrote the Guiding Principles said, the responsibility of a corporation is “put simply, to do no harm.” The principle of “do no harm” has been used as a touchstone in corporate human rights obligations since at least 2002 and is a surprisingly suitable standard for developing a structure for general obligations.

As dutybearers, the same tripartite typology of human rights can apply to corporations as States; i.e., a human right would impose duties on corporations to respect, protect and fulfill. The Shue/Eide typology recognizes that the realization of rights can require measures of varying degrees of activity by dutybearers. Corporations can violate rights as producers, industry players, or employers; thus, depending on the situation, corporations may be required to stop selling defective goods, protect victims from violations done by the corporation’s supply chain or provide reparations for a prior harm. The majority of obligations falls within the duty to respect, but the duties to protect and fulfill provide new and interesting duties that respond to the concerns of corporate violations.

To understand what substantive obligations arise from “do no harm,” it helps to use the example of a particular right, such as the right to health. As economic entities, corporations are able to directly infringe on the realization of economic, social, and cultural (ESC) rights. The right to health is one of the most developed and broadest ESC rights, making it useful to use here.

The content of corporate obligations vis-à-vis the right to health

Below are some example obligations demonstrating the content of a corporate right to health obligation. Only a few of the examples are discussed in depth due to space constraints.

Duties to respect

  • A corporation cannot sell harmful products without warning. This is comparable with current product liability law.
  • A corporation cannot discriminate based on the health status of the applicant (e.g. someone who is HIV+) during hiring without a bona fide occupational qualification.

Duties to protect

  • A corporation cannot abet human rights violations in its business relations as defined by civil and criminal law. The responsibility to not abet violations may be broad and has been used to condemn corporations for any violations caused by the corporation’s supply chain, but the obligation cannot extend beyond current civil and criminal sanctions for vicarious liability due to agents, partners and co-conspirators. Human rights activists have argued for other legal tools, like piercing the corporate veil, to impose liability on a corporation for the actions of its business relations, but doing so is a misappropriation of those legal tools and this misappropriation isn’t supported by the “do no harm” standard, even if the goal of accountability is the same.
  • A corporation has a duty to disclose when it is aware of a current or imminent human rights violation by other corporations due to being privy to privileged information. A corporation cannot have a general duty to protect as that would extend beyond its role as a private actor, but it can have a duty to protect in regards to its close business relationships. The duty arises with the special access to privileged information, similarly to how a whistleblower is someone who reveals entrusted

There are two scenarios that would engage this duty: parent-subsidiary relationships and competitors selling similarly harmful products. Under the first scenario, if the parent becomes aware due to privileged information of its subsidiary currently committing or about to commit violations, it must disclose those violations to the victims. There is no contradiction with the previous bullet point stating that the parent is not liable for the actions of its subsidiary. There is no chain of liability based on the subsidiary’s duty to respect but instead an independent obligation derived from the parent’s duty to protect.

The second scenario is when a corporation becomes aware through its own product research that the similar products of its industry competitors are harmful. This scenario isn’t common but is exemplified by the asbestos and tobacco industries before the harms became public knowledge. A manufacturer of asbestos or tobacco that conducted research on the safety of their product and discovered its harmful effects would have known that the products of their industry competitors were also harmful. Not disclosing the harm to all industry consumers (essentially the public) would violate this duty to disclose. The value of this extra duty is that it provides legal leverage to encourage dissension within an industry as the first company to admit the truth of the harm would no longer be in violation of this duty to disclose.

Duties to fulfill

  • A corporation must cooperate with any legal system clearly empowered to enforce these rights. This is similar to the secondary duties of States. Currently this would mean cooperating with whatever State’s domestic legal system has appropriate jurisdiction. In the future, it could include cooperating with a UN-established international tribunal with corporate human rights violations included in its mandate.
  • A corporation must provide a healthy work environment. This is in-line with current domestic obligations. The right to a healthy work environment is both a distinct right (ICESCR, Art. 7(b)) and an underlying determinant of the right to health.

Legal and practical impacts

While baseline binding human rights obligations may be a radical legal development, the obligations listed above don’t seem that radical. Well-regulated states already have most of the duties listed above, making the real added value the universality and consistency in their application in States with less developed legal systems and in the space between States. The biggest change on the ground would be the novel duties to protect. These duties are a departure from typical domestic corporate regulation but would go far to close the accountability gap.

One significant challenge is establishing the doctrine that bridges different national standards with the international standard. International law already uses multiple doctrines to make that bridge, such as the margin of appreciation or the “unwilling or unable” doctrines. Determining the doctrine to use here is beyond the scope of this blog post, but the ultimate system would need to be primarily based on domestic interpretation and enforcement. Domestic courts have been adjudicating based on international human rights law—including economic, social and cultural rights—for decades, without resulting in significant jurisprudential schisms between jurisdictions.

I’ve used “corporation” throughout to refer to transnational corporations instead of “TNCs” because the resolution may be the first step to also regulate non-transnational corporations and unify domestic regulations and tort law with human rights obligations. The EU already proposed expanding the scope of the resolution beyond only TNCs. Other traditional areas of law have already become more “internationalized” like administrative law and contracts, and it’s reasonable that two areas of law made to protect the person should also align.

http://opiniojuris.org/2015/08/28/emerging-voices-do-no-harm-and-the-development-of-general-corporate-human-rights-obligations/

6 Responses

  1. Isn’t this a simple matter of a duty; doesn’t talk of rights confuse the issue?

  2. Hi Limey,

    Rights are important because they empower the victim. A legal obligation that is not anchored on the individual depends on the State for enforcement. But States might be unable or unwilling to enforce. Or worse, the state could collude with the corporation, conduct a superficial investigation and only give a slap on the wrist. Even with an international agreement, it would be up to the signatory States to monitor each other, which may not lead to sufficient pressure for effective enforcement. By making this a matter of rights, the implementation of the duty must include access to an effective remedy and other forms of accountability (e.g. access to information) for victims.

  3. The U.S. Supreme Court has recognized in 20 cases that corporations and companies can have duties and rights under international law. E.g., http://ssrn.com/abstract=1701992
    and so have some foreign courts
    http://ssrn.com/abstract=1548112
    some corporate atty’s refuse to acknowledge these facts.

  4. And regarding private duties under human rights law, see, e.g., http://ssrn.com/abstract=2446693
    Corp. att’ys should advise their clients accordingly.

  5. Hi Jordan,

    Thanks for the links and I apologize for my late reply.
    I completely agree with you that the question of imposing international obligations on corporations is settled. My favorite article on the subject is Steven Ratner’s 2001 article “Corporations and Human Rights: A Theory of Legal Responsibility” http://www.yalelawjournal.org/article/corporations-and-human-rights-a-theory-of-legal-responsibility. Attorneys should now be advising their corporate clients on these legal duties. However, since the court cases are mostly scattershot, it’s easy for those attorneys to not recognize their importance. I will commend the UN Guiding Principles for at least putting human rights responsibilities on the corporate radar, even if it imposed no legal requirements.

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