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Chapter 6 discusses the attempts of the European institutions, especially the European Commission and the European Parliament, to change the way in which corporations are structured and operate. This chapter tracks the European Commission’s initial ambitions to transform corporations by simultaneously improving their administrative capacity (due diligence) and reforming certain corporate fundamentals (civil liability and the remuneration of directors). After pushback by its own internal body, the Regulatory Scrutiny Board, the Commission retreated from its more transformative plans, narrowing its focus mostly to due diligence. At the time of writing, however, even the resulting less ambitious proposal was facing intense (and to an extent even unexpected) resistance. Despite the drawbacks, there may be other avenues for the EU to transform corporations. In the last section, I discuss the possibilities for engaging more directly with the fundamentals of corporate activity – by legally facilitating those organisations consciously founded on different principles (ownership and governance), such as social enterprises, which are more distributive and inclusive by design.
The outbreak and continuation of armed hostilities can sometimes cause harm to bordering States not directly involved in the hostilities. This has occurred in many military operations conducted during the last few decades. The scope of the provisions relating to the protection of the environment during armed conflict appears to be strictly limited to the territory in which the operations are taking place. It is therefore important to determine the extent to which a belligerent State at the origin of acts that have had devastating consequences on the territory of one or more States not involved in the conflict can be held internationally responsible for those acts based on the principle of international liability for injurious consequences arising out of acts not prohibited by international law, which is still under discussion. The argument put forward in this article is based on the hypothesis that this principle is at least implicitly recognized when it comes to environmental damage caused in the context of an armed conflict. In our view, this is grounded both in the principle of the inviolability of neutral States and in the no-harm principle, whereby a State cannot use its territory in a way that is harmful to other States not involved in the armed conflict. These principles are based on the notions of fault and risk.
In international human rights law, the notion of due diligence concerns a qualifier of behaviour to realize human rights protection, including the protection against non-state actor interferences. However, the question remains what due diligence obligations of states in the context of non-state actor interferences exactly entail in international human rights law. The present article aims to address this matter by comparing case law of the European Court of Human Rights (ECtHR) with that of the Inter-American Court of Human Rights (IACtHR). Using a working model of due diligence that has been introduced in recent scholarly work, this article further explores this model and attempts to give further meaning to its two paradigms: ‘regulation’ and ‘risk management’. In that way, it maps out the relevant elements of this foundational concept that lies at the heart of human rights protection.
Medearis and his two cofounders of Silicon Valley Bank wished to tackle the antiquated banking practices that led to a massive reduction in the number of banks, the disappearance of community banks, and the mergers of Big Banks. Bank regulations and culture prevent banks from embracing tech startups and entrepreneurs as lending clients. The SVB founders knew about Bank of America’s abandonment of its early tech lending, missed opportunities, and bank failures to capture tech startups and entrepreneurs. The old, conservative banking environment during the early days of the tech sector presented the founders with an opportunity.
The unique success enjoyed by Silicon Valley Bank was the result of a long process that began at the vision of the bank by the original three founders, Medearis, Biggerstaff, and Smith. The key to success involved convincing the regulators to establish a bank for the tech sector. Educating the regulators required ongoing efforts in the first decade and thereafter. SVB lenders, including Harry Kellogg, convinced the regulators about the efficacy of tech lending.1
International humanitarian law (IHL) does not address business entities, except in situations where they directly participate in hostilities, and there is no reference to business actors in the International Committee of the Red Cross's recent Guidelines on the Protection of the Natural Environment in Armed Conflict. Yet, there has been an increasing reaffirmation of specific “duties”, “obligations” or “responsibilities” imposed on private companies operating in conflict zones. For instance, the UN Guiding Principles on Business and Human Rights suggest that business entities should respect IHL rules in addition to human rights during armed conflicts, and the third revised draft of the international legally binding instrument on transnational corporations and other business enterprises refers to IHL as an interpretative framework of human rights obligations of States and businesses. The International Law Commission's 2022 Draft Principles on the Protection of the Environment during Armed Conflicts are even more specific, providing that corporations should exercise due diligence concerning the protection of the environment when acting in conflict-affected areas. However, these references to IHL as applicable to business activities remain vague and lack elaboration. This paper intends to close this gap by clarifying whether and, if so, the extent to which IHL imposes environmental obligations upon private companies in conflict situations. It submits that business entities bear environmental duties during armed conflicts deriving from IHL rules and other complementary sources of international law. The paper further discusses the content of the obligation of business entities not to harm the environment as well as their due diligence obligation.
Multilateral development banks (MDBs) are international organizations subject to the law of international responsibility. Yet, the relationship between their accountability mechanisms and the International Law Commission (ILC) Articles on the Responsibility of International Organizations (ARIO) remains unclear. Understanding this relationship is essential in fully realizing the right to remedy in the development finance context. A comparative analysis of these legal frameworks clarifies that notwithstanding their different rationale, scope and functions, the two are not normatively conflicting and both serve to control public power. While the accountability mechanisms correct the ARIO's State-centric orientation by granting legal standing to project-affected people, they have their own deficiency concerning the actions they can prescribe to MDBs upon a finding of noncompliance. Highlighting that the MDBs’ mandate to ‘do no harm’ and pursue sustainable development is left unfulfilled by the accountability mechanisms’ deficient remedial function, this article identifies specific ARIO provisions to complement rather than undermine the MDBs’ accountability system. The ARIO's residual character, combined with the proposition that remedies arise not only from wrongful conduct but also from harm suffered by one party due to another's risky activities, justify this complementarity.
This article opines that corporations should utilize leverage in procurement contracts with states to prevent human rights abuses. Capitalizing on leverage over state business partners should be understood as an under-explored but intriguing dimension to the advancement of human rights. This article uses the example of the Pfizer-Israel procurement contract to provide mRNA COVID-19 vaccinations as a case study. While the Pfizer-Israel contract required Israeli governmental compliance with various laws, and referenced other legal obligations, no reference to human rights, such as the right to informed consent, was referenced in any contractual provision. The failure of Pfizer to insert contractual provisions regarding the Israeli government’s duty to obtain informed consent provides a glaring exemplar of a missed corporate opportunity to fulfil the corporate responsibility to respect human rights.
Investor–state dispute settlement (ISDS) has been heavily criticized from the perspective of human rights. However, the potential adverse human rights impacts of ISDS and the responsibilities of businesses to avoid causing or contributing to those impacts under the UN Guiding Principles on Business and Human Rights have yet to be spelled out. Although states are currently reforming ISDS, progress has been slow, and businesses have an independent responsibility to ensure that their operations do not harm human rights. Against this background, this article unpacks how businesses might contribute to three non-exhaustive examples of potential human rights impacts of ISDS: namely, the chilling effect on human rights regulation, crippling mega-awards and direct impacts on third-party rights. This article breaks new ground by exploring how human rights due diligence could be a useful tool for businesses to identify and address these impacts.
A threshold question for designing liability rules is the degree of fault required to impose liability. This chapter begins with a discussion of the policy considerations that underlie the policy choice between strict liability and due diligence approaches to liability and an examination of the distributive implications of this choice. The chapter then describes the approaches to standards of liability found in the law of state responsibility and civil liability regimes, before examining the specific fault requirements that structure liability in the Antarctic, deep seabed and high seas regimes.
Potential harm to human rights and the environment, including by corporate actors, is amplified in situations of conflict. This article focuses on applying the right to a healthy environment in relation to armed conflicts and corporate responsibility. In particular, it analyzes and compares due diligence requirements in the European Union Conflict Minerals Regulation and the International Law Commission's Draft Principles on Protection of the Environment in Relation to Armed Conflicts and examines how these align with the right to a healthy environment.
This article studies human rights due diligence by private corporate creditors in the context of sovereign debt restructurings. First, the legal bases of this specific due diligence are presented and systematized. Then, by providing empirical statistical evidence, the article analyses whether haircuts applied by creditors across countries regularly consider the social and economic human rights situation of the debtor countries in question, as part of creditors’ due diligence. Also, the main characteristics of bond markets that contribute to understanding the asymmetric power relationship between private lenders and sovereign borrowers are described. Finally, Argentina’s latest debt restructurings are studied in depth to determine whether human rights were taken into account when agreeing on the size of haircuts. From quantitative and qualitative data, this article concludes that the haircuts agreed by creditors are regularly not sensitive to the social and economic human rights situation of debtor populations or to the impact that debt agreements could have on them.
The scope of protection of the environment in relation to armed conflict has continued to expand since the issue was first introduced on the international agenda in the 1970s. Today, it is recognized that the environment is a prima facie civilian object and as such it is entitled to the same layers of protection during an armed conflict as any civilian person or object. Thus, there is a legal obligation to prevent environmental harm in armed conflict, before the event. Given the magnitude of environmental damage that can be anticipated in relation to armed conflict, the obligation to prevent such damage in the first place is critical. In this regard, it is important to note that the legal obligation to prevent environmental harm originates from international environmental law. Furthermore, the obligation to prevent harm is an ongoing obligation. This article illustrates that the general preventive obligations found in international environmental law can shed much-needed light on the general preventive obligations already established under the law of armed conflict, in furtherance of environmental protection.
This article examines the legal principles governing the sharing of benefits deriving from the exploration and use of outer space. It shows that, over time, three strands of State practice have developed different understandings of the content of the obligation contained in Article I, paragraph 1 of the Outer Space Treaty. While drawing parallels with other areas of international law, the article examines the role of equity in the structure of the obligation and evaluates the possibility of replacing considerations of equivalence with a proportionality test to facilitate the fulfilment of the benefit sharing obligation under the Outer Space Treaty.
This chapter assesses the impact of the 2013 UN Human Rights Due Diligence Policy (HRDDP) and the 2016 IOM-UN agreement on the IOM’s relationship to human rights protection. In doing so, it contextualizes the ongoing debate of the organization’s normative framework, (controversial) human rights practices and relationship to the UN. The authors argue that by signing the 2016 UN-IOM agreement, the IOM is indirectly bound by the principles underlying the HRDDP as far as it cannot act against its core norms. At the same time, the article argues that given the policy’s limitations, one should not put too much hope into the applicability of the HRDDDP to the IOM. This is because it only aims at preventing “grave violations” of human rights in specific contexts. Therefore, the chapter concludes with some suggestions on how the HRDDP could be reformed in light of the IOM’s new relation with the UN to protect human rights more effectively.
The UN Guiding Principles (UNGPs) and their concept of human rights due diligence (HRDD) cannot succeed in their current form, because they reify neoliberalism’s public/private divide. This article establishes this argument across historical, theoretical, and normative dimensions, and charts a new way forward. The UNGPs’ separation of the ‘state duty to protect’ from the ‘corporate responsibility to respect’ reflects a contestable conception of companies as private actors: free to act/transact in any way that is not harmful. This is a problem because harm is often invisible, even when taking an active due-diligence approach. To resolve this, HRDD practices must also be based on the positive value of equality. However, businesses are more than mere agents; they also coordinate production and enable social connections. These structural features reveal a ‘missing fourth pillar’ of the UNGPs: a collective political responsibility to challenge and change our current world order.
The projected impacts of climate change and greenhouse gas emissions pose a significant threat to marine life and biodiversity. Ocean warming might affect fish stocks, their health and migratory routes. Ocean acidification and de-oxygenation are two phenomena that affect certain marine species as well as entire marine ecosystems. Rebuilding of overexploited and depleted fisheries and managing fisheries sustainably will require comprehensive governance structures for port, flag, coastal and market States, which also need to address the causes and impacts of climate change. Addressing both concerns under the United Nations Convention on the Law of the Sea (UNCLOS) could open opportunities for comprehensive and synergetic regulation. This Chapter addresses potential synergies between oceans and climate governance. Suggestions to this end include (i) increasing ocean-based renewable energy, (ii) decarbonizing ocean-based transport, (iii) pursuing integrated management of fisheries and aquaculture, and (iv) enhancing CO2 uptake in ocean ecosystems.
Spaceflights may cause pollution of the Earth’s environment, including its maritime dimension, by emissions of harmful substances and jettisoned parts of space launch vehicles and de-orbited spacecraft. Although potentially significant, this source of pollution has received little international attention. In the absence of specific environmental provisions in the international law of outer space, the applicable environmental law provisions are derived from general environmental laws and multilateral environmental agreements such as the UN Convention on the Law of the Sea. This Chapter argues that an effective environmental legal regime in the space sector needs to be developed further through more active cooperation between States. Such cooperation should first of all be aimed at gathering scientific knowledge about the marine environmental impact of spaceflights and strengthening the international institutional framework, before any substantive provisions on prevention of pollution can feasibly be developed.
This Chapter analyses the legal challenges raised by the use of new technologies for marine environmental restoration purposes, using as a case study the Ocean Cleanup’s plastic cleanup activities in areas beyond national jurisdiction. While the objective of both proponents and opponents of such technological ‘solutions’ is ultimately the same – protection of the marine environment –the underlying conceptions of the ‘risks’ and ‘benefits’ involved seem to diverge. When seeking guidance from the rule of law on how to assess and balance these different perceptions of risk, challenges arise where uncertainty remains and the law in turn relies on extra-legal knowledge, such as scientific data, to give content to legal standards.
Due diligence is absolutely key to stem possible problems with investment migration programs. Focusing on examples from Canada, Saint-Kitts and Nevis, and the European Union, this chapter offers a critical assessment of the strengths and weaknesses of due diligence practices.