Improving Corporate Compliance with Human Rights: Building a Better Mousetrap

On November 6th,  AHRCentre Deputy Director Justine Nolan spoke at the Orville H. Schell, Jr. Center for International Human Rights at Yale University on ‘Improving Corporate Compliance with Human Rights: Building a Better Mousetrap’. Justine spoke to Yale faculty and students about practical mechanisms for preventing and redressing violations of human rights by corporations and in particular focused on the effectiveness and legitimacy of multi-stakeholder initiatives (MSIs) in addressing this problem. In a global economy, multinational companies often operate in jurisdictions where governments are either unable or unwilling to uphold even basic human rights of their own citizens. The absence of state regulation presents major business challenges for corporations. Clothing retailers like Walmart and H&M face unsafe factories conditions in Bangladesh in the wake of the Rana Plaza tragedy.  

Internet service providers like Facebook and Google wrestle with their users’ expectations to guarantee freedom of expression in China and other non-democratic regimes. Oil and mining companies like Shell and Newmont operating in conflict zones from Congo to Iraq struggle to provide security for their people and facilities in these inherently dangerous places. In these contexts, MSIs have become the default response for addressing so-called “governance gaps”. MSIs have been growing rapidly over the past two decades. MSIs attempt to establish or reinforce standards of expected conduct that, while not legally binding, may have normative value in prescribing corporate behavior that ‘socially binds’ corporations to respect human rights. Whether MSIs achieve this objective depends on their ability to develop input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). With the proliferation of MSIs, questions about their legitimacy (their accountability and effectiveness of providing and enforcing rules) have become louder and exploring the legitimacy of such “private governance schemes” was the focus of this talk.