Read Why Businesses are Nothing Without Human Rights (PDF)Read “Galaxy of Human Rights”(PDF)
DISCUSSION POST: After reading these two articles, post a reflection about the importance of human rights in relation to YOUR BUSINESS FIELD! Where does it intersect? How does your field address human rights? Has your industry/field ever VIOLATED human rights? Give examples.
https://www.weforum.org/agenda/2019/01/5-ways-businesses-can-back-up-human-rights-defenders/
Should be only 150-200 words
ARTICLES
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
ELISE GROULX DIGGS*, MITT REGAN**, AND BEATRICE PARANCE***
ABSTRACT
In the last several years, there has been an increasing tendency to view the
impacts of transnational business operations through the lens of human rights
law. A major obstacle to holding companies accountable for the harms that they
impose, however, has been the separate legal identity of corporate subsidiaries
and of contractors in a company’s supply chain. France’s recently enacted duty
of vigilance statute seeks to overcome this obstacle by imposing a duty on compa-
nies to identify potential serious human rights violations by their subsidiaries
and by companies with which they have an “established commercial relation-
ship.” Failure to engage in such vigilance can subject a company to liability for
damages resulting from such failure.
This Article situates the new French duty of vigilance within a broader set of
norms that can be characterized as the Business and Human Rights Galaxy.
This Galaxy consists of five rings that represent standards and expectations
ranging from classic enforceable “hard law” to voluntary principles generated
by private parties, multi-stakeholder initiatives, and international organiza-
tions. The provisions in these rings are related in fluid and dynamic ways and
exert varying degrees of gravitational influence on one another. Thus, for
* Avocate à la Cour, Barrister & Solicitor (Paris, Québec); Associate Tenant Doughty Street
Chambers (London, United Kingdom); Principal, BI for Business Integrity & Partners
(Washington, D.C.); Co-Director Program Lawyers, Business and Human Rights, Center on
Ethics & the Legal Profession, Georgetown University Law Center. We would like to acknowledge
the important contribution of Ms. Eve Tessera, Attorney at law both in Paris (France) and Verona
(Italy) in helping us conceive and realize the diagrams presented in this Article. We would also
like to acknowledge the contribution of Mr. Anthony Cooper, J.D. Tulane (L.A.) and member of
the New York Bar, for his precious assistance in helping update this Article throughout the review
process. Finally, we would like to express our appreciation to Aure Demoulin-Bouchier,
Georgetown University Law Center class of 2018, for her excellent assistance with this Article.
VC 2019, Elise Groulx Diggs, Mitt Regan, and Beatrice Parance.
** McDevitt Professor of Jurisprudence; Director, Center on Ethics and the Legal Profession,
Georgetown University Law Center.
*** Associate Professor, UPL, Law School University Paris 8 Vincennes – Saint – Denis, France;
Director of the Research or Research Director Center in Private Law and Health Law (EA number
1581˚); Member of the French National Commission for Ethics and Warnings in terms of Public
Health and Environment.
309
instance, what are conventionally regarded as forms of hard law may draw on
voluntary private standards in setting expectations for behavior, and soft law
norms may be incorporated into legally enforceable contract provisions between
companies and their suppliers. This Article suggests that appreciation of these
dynamics can furnish guidance in interpreting the novel duty of vigilance that
the new French statute establishes. In particular, the common law duty of care
and the United Nations Guiding Principles on Business and Human Rights
can illuminate the nature and scope of the duty of vigilance. At the same time,
the introduction of the new French statute into the Business and Human
Rights Galaxy means that it too has the potential to influence provisions in
other rings of the Galaxy.
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
II. THE U.N. GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS 315 III. CONCENTRIC RINGS IN THE GALAXY . . . . . . . . . . . . . . . . . . . . . . 318
A. Ring One: Legal Responsibility for Outcomes. . . . . . . . . . . . 319 B. Ring Two: Legal Responsibility for Reporting . . . . . . . . . . . 321 C. Ring Three: Legal Responsibility for Process . . . . . . . . . . . . 324 D. Ring Four: Private Voluntary Initiatives. . . . . . . . . . . . . . . 332 E. Ring Five: International Soft Law . . . . . . . . . . . . . . . . . . . 339
IV. GRAVITATIONAL FORCES IN THE GALAXY . . . . . . . . . . . . . . . . . . . 340 V. THE DUTY OF VIGILANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345
A. Subsidiaries, Subcontractors, and Suppliers . . . . . . . . . . . . 346 B. The Vigilance Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349 C. Reasonableness and Foreseeability . . . . . . . . . . . . . . . . . . . 353 D. Extraterritorial Application of the Duty. . . . . . . . . . . . . . . . 354
VI. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358 APPENDIX: BUSINESS AND HUMAN RIGHTS GALAXY DIAGRAMS. . . . . . . . . 360
I. INTRODUCTION
Business enterprises over the past few decades increasingly operate
in multiple countries around the globe, manufacturing their products
and acquiring resources in jurisdictions where they find the best
returns on investment. Those returns are affected by the costs of com-
plying with regulations regarding matters such as working conditions,
employee compensation, and the impact of operations on the environ-
ment and local communities. Wide variations in the strength of these
regulations across the world thus create incentives to conduct activities
in countries where legal requirements are least demanding. This cre-
ates a “governance gap” with respect to “the prevention of, and
accountability for, direct or indirect corporate human rights abuses in
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
310 [Vol. 50
host states and the provision of redress to victims of such abuses.”1 This
enables companies to reap financial benefits from their operations
without being responsible for many of the adverse impacts of their
activities.
One way to close this gap would be for companies that control multi-
ple entities in various countries to be subject to regulation by the coun-
tries in which they are incorporated and have their headquarters.
These, generally, are jurisdictions in which regulatory obligations are
more demanding.2 A major obstacle to this, however, is the insulation
of a parent company from liability for the harms inflicted by its subsid-
iaries or by companies that are part of its supply chain.3 The doctrine of
limited liability based on separate legal identity provides that, notwith-
standing their status as members of a corporate family, subsidiaries are
distinct entities that bear sole responsibility for their operations.4
Similarly, suppliers are simply third parties who are engaged in contrac-
tual relationships with parent companies. The result has been to limit
recovery to the assets of the subsidiary or supplier. Perhaps even more
important, it also subjects any claims to review in the legal system in the
jurisdiction in which these entities are incorporated.5 In developing
countries that lack a robust judicial system and rule of law, this can cre-
ate substantial obstacles to any redress.
In 2017, France took a major step toward reducing this impediment
to accountability by enacting a statute that imposes a “duty of vigilance”
on companies with a substantial presence in France.6
Code de Commerce [C. com.] [Commercial Code] art. L. 225-102-4, https://www.business-
humanrights.org/sites/default/files/documents/Texte%20PPL_EN-US.docx (Fr.). Article 1 of
the new Code provides that the law applies to “any company that employs, at the end of two
consecutive years, at least five thousand employees within itself, as well as within its direct or
indirect subsidiaries headquartered on French territory, or at least ten thousand employees
within itself, as well as within its direct or indirect subsidiaries headquartered on French territory
or abroad.” Stéphane Brabant & Elsa Savourey, French Law on the Corporate Duty of Vigilance, a
Such companies
1. PENELOPE SIMONS & AUDREY MACKLIN, THE GOVERNANCE GAP: EXTRACTIVE INDUSTRIES,
HUMAN RIGHTS, AND THE HOME STATE ADVANTAGE 9 (2014).
2. See generally id.
3. Gwynne Skinner, Rethinking Limited Liability of Parent Corporations for Foreign Subsidiaries’
Violations of International Human Rights Law, 72 WASH. & LEE L. REV. 1769 (2015); Régis Bismuth,
La responsabilité (limitée) de l’entreprise multinationale et son organisation juridique interne – Quelques
réflexions autour d’un accident de l’histoire, L’ENTREPRISE MULTINATIONALE ET LE DROIT
INTERNATIONAL, SFDI, PARIS, PEDONE 429 (2017) (Fr.).
4. Meredith Dearborn, Enterprise Liability: Reviewing and Revitalizing Liability for Corporate Groups,
97 CAL. L. REV. 195, 199 (2009) (“This governing principle [of limited liability] of the parent-
subsidiary relationship has influenced corporate law throughout the fifty states, and most
practitioners, judges, and commentators take it for granted.”).
5. Skinner, supra note 3, at 1787-99.
6.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 311
Practical and Multidimensional Perspective, 50 Revue International de la Compliance et de
l’éthique des Affaires (2017); Claire Bright, Creating a Legislative Level-Playing Field in Business
and Human Rights at the European Level: Is the French Law on the Duty of Vigilance the Way
Forward?, SSRN (Aug. 8, 2018), https://ssrn.com/abstract=3262787; Anne Triponel & John
Sherman, Legislating Human Rights Due Diligence: Opportunities and Potential Pitfalls to the
French Duty of Vigilance Law, Int’l Bar Ass’n (May 17, 2017), https://www.ibanet.org/Article/
Detail.aspx?ArticleUid=e9dd87de-cfe2-4a5d-9ccc-8240edb67de3.
are required to establish and implement a “vigilance plan.”7
Code de commerce [C. com.] [Commercial Code] art. L. 225-102-4, https://www.business-
humanrights.org/sites/default/files/documents/Texte%20PPL_EN-US.docx (Fr.).
This plan
must include:
[R]easonable vigilance measures to allow for risk identification
and for the prevention of severe violations of human rights and
fundamental freedoms, serious bodily injury or environmental
damage or health risks resulting directly or indirectly from the
operations of the company and of the companies it controls . . .
as well as from the operations of the subcontractors or suppli-
ers with whom it maintains an established commercial relation-
ship, when such operations derive from this relationship.8
A plan must include the following measures:
1.
A mapping that identifies, analyses and ranks risks;
2. Procedures to regularly assess, in accordance with the risk
mapping, the situation of subsidiaries, subcontractors or
suppliers with whom the company maintains an established
commercial relationship;
3. Appropriate action to mitigate risks or prevent serious
violations;
4. An alert mechanism that collects reporting of existing or
actual risks, developed in working partnership with the
trade union organizations’ representatives of the company
concerned;
5. A monitoring scheme to follow up on the measures imple-
mented and assess their efficiency.
The vigilance plan and its effective implementation report
shall be publicly disclosed[.]9
Companies that fail to meet their vigilance obligation will be respon-
sible for the damage that “the execution of these obligations could
7.
8. Id.
9. Id.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
312 [Vol. 50
have prevented.”10 The French Constitutional Court held that authority
in the statute for a court to impose a civil penalty of between e10–e30
million was unconstitutional, because the scope of the duty was not suf-
ficiently precise as the basis for a fine.11
Conseil constitutionnel [CC] [Constitutional Court] decision No. 2017-750DC, March 23,
2017 (Fr.), https://www.conseil-constitutionnel.fr/decision/2017/2017750DC.htm (French law
on the duty of vigilance of parent corporations and contracting companies).
It otherwise upheld the law.
Parties who claim harm resulting from breach of the duty of vigilance
may file a claim under French tort law.12 Since the duty is an obligation
of process (obligation de moyens) and not of outcomes (obligation de résul-
tat), a plaintiff has the burden of proving that failure of the law led to
the harms that occurred.13
Assemblée Nationale, PPL relative au devoir de vigilance des sociétés mères et des entreprises
donneuses d’ordre no. 2578 (Feb. 11, 2015), http://www.assemblee-nationale.fr/14/propositions/
pion2578.asp (explanatory statement in support of the French law, according to the United
Nations Guiding Principles on Business and Human Rights (UNGPs) adopted unanimously by the
Human Rights Council of the United Nations in June 2011 and according also to the OECD
Guidelines for Multinationals as revised in 2011. The draft legislation was designed to impose a
“duty of vigilance” on multinational enterprises. It was framed to cover both parent companies in
France and major French purchasers of goods manufactured in global supply chains, to establish a
degree of liability for multinational corporations acting in France or abroad, and to secure some
compensation for the victims in case of human rights violations and damage to the environment.).
The statute thus represents a potential major step in holding transna-
tional companies responsible for operations by entities with which they
are closely associated, notwithstanding those entities’ separate legal
identity.14
The German Ministry for Economic Cooperation and Development also is reportedly in
the process of drafting similar legislation applicable to German companies and their foreign
subsidiaries and contractors, which would “require companies to carry out internal supply chain
risk assessments, appoint a compliance officer to monitor compliance with the law’s
requirements, as well as establish an effective complaints mechanism for foreign workers.” German
Development Ministry Drafts Law on Mandatory Human Rights Due Diligence for German Companies,
BUS. & HUMAN RIGHT RES. CTR. (Feb. 12, 2019), https://www.business-humanrights.org/en/
german-development-ministry-drafts-law-on-mandatory-human-rights-due-diligence-for-german-
companies.
As the Constitutional Court’s decision suggests, however, the
law leaves important issues open for interpretation. Its novelty means
that there is no jurisprudence with respect to a comparable statute that
may be helpful in interpreting the law. This does not mean, however,
that there are no sources of guidance available, or that the law that
develops around the statute should proceed in a self-contained way.
10. Id. art. 2.
11.
12. CODE CIVIL [C. CIV.] [CIVIL CODE] art. 1240 (Fr.). According to article 1240 of the French
Civil Code, a person who causes damage to another person by his/her act or omission is bound to
provide remedy when fault is established.
13.
14.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 313
This Article suggests that the French law should be seen as part of what
we call a Business and Human Rights “Galaxy” of norms that has been
emerging over the past several years.15 Various norms in this Galaxy can
offer guidance on how the French duty of diligence should be con-
strued and applied.
The Oxford English Dictionary defines a galaxy as a “system of mil-
lions or billions of stars, together with gas and dust, held together by
gravitational attraction.”16
Galaxy, OXFORD ENGLISH DICTIONARY, https://en.oxforddictionaries.com/definition/
galaxy (last visited Mar. 31, 2019).
As we describe below, the Business and
Human Rights Galaxy is comprised of numerous norms that take the
form of measures such as statutes, regulations, reporting requirements,
common law duties, private voluntary standards, corporate codes of
conduct, non-governmental organization (NGO) best practices, inter-
national organization handbooks and checklists, and other sources. As
we will describe, these norms can be conceptualized as occupying dis-
tinctive concentric rings around a core ring of enforceable “hard” law.
The metaphor of a galaxy underscores that the norms in each ring, and
the rings themselves, exert various degrees of gravitational force on
one another. This can blur sharp distinctions between enforceable
“hard” law on the one hand and voluntary standards and “soft law” on
the other.
As we discuss below, this Galaxy may contain multiple potential sour-
ces of guidance in interpreting the French duty of diligence. Of particu-
lar note, we suggest that duties of care and vigilance occupy a similar
position in the Galaxy that mediates between voluntary and enforcea-
ble obligations. Recognizing the existence of this Galaxy, and the ways
in which norms within it may inform the understanding of the duty of
vigilance, illuminates how international law on the human rights
impacts of business operations is emerging as a distinctive domain.
Part II of this Article will first situate the French duty of vigilance in
the context of the concept of human rights due diligence articulated in
the United Nations Guiding Principles on Business and Human Rights.
Parts III and IV will then describe the norms that occupy positions in
the five concentric rings of the Business and Human Rights Galaxy.
Finally, Part V will suggest how norms in various rings of this Galaxy
may provide guidance on how the duty of vigilance should be inter-
preted and applied.
15. See infra app. at 59-61.
16.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
314 [Vol. 50
II. THE U.N. GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS
The U.N. Guiding Principles on Business and Human Rights
(UNGP) were unanimously adopted by the U.N. Human Rights
Council in 2011.17 That same year, the Organisation for Economic Co-
operation and Development (OECD) Guidelines for Multinational
Enterprises were revised to incorporate these Principles.18
Les principes directeurs de l’OCDE à l’intention des entreprises multinationals (2011),
www.oecd.org/fr/investissement/mne/2011102-fr.pdf.
In just a few
years, an international consensus has been coalescing around these
instruments as expressions of the basic norms that define responsible
corporate behavior.
The UNGPs declare that the fundamental responsibility of busi-
ness organizations is to respect human rights. The Commentary to
Article 11 says that this responsibility is “a global standard of
expected conduct for all business enterprises wherever they oper-
ate,” which “exists over and above compliance with national laws and
regulations protecting human rights.”19 The commentary to Article
12 says that an authoritative list of “the core internationally recog-
nized human rights” is set forth in the International Bill of Rights
and the International Labor Organization’s (ILO) Declaration on
Fundamental Principles and Rights at Work. The former consists of
the Universal Declaration of Human Rights, the International
Covenant on Civil and Political Rights, and the International
Covenant on Economic, Social, and Cultural Rights.20 Article 13 of
the UNGPs says that the responsibility to respect human rights
requires that companies: “(a) [a]void causing or contributing to
adverse human rights impacts through their own activities, and
address such impacts when they occur,” and “(b) [s]eek to prevent
or mitigate adverse human rights impacts that are directly linked to
their operations, products or services by their business relationships,
even if they have not contributed to those impacts.”21
A crucial means of fulfilling these responsibilities is the conduct of
“human rights due diligence.”22 The commentary to Article 18 of the
UNGPs says:
17. UNITED NATIONS GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS, HR/PUB/11/04
(2011) [hereinafter UNGP]; LES PRINCIPES DIRECTEURS DE L’OCDE �A L’INTENTION DES ENTREPRISES
MULTINATIONALS, OECD (2011).
18.
19. UNGP, supra note 17, art. 11, Commentary.
20. Id. art. 12, Commentary.
21. Id. art. 13.
22. Id. art. 17.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 315
The initial step in conducting human rights due diligence is to
identify and assess the nature of the actual and potential
adverse human rights impacts with which a business enterprise
may be involved. The purpose is to understand the specific
impacts on specific people, given a specific context of
operations.23
The commentary emphasizes that due diligence is an ongoing
process:
Because human rights situations are dynamic, assessments of
human rights impacts should be undertaken at regular inter-
vals: prior to a new activity or relationship; prior to major deci-
sions or changes in the operation (e.g. market entry, product
launch, policy change, or wider changes to the business); in
response to or anticipation of changes in the operating envi-
ronment (e.g. rising social tensions); and periodically through-
out the life of an activity or relationship.24
A requirement of due diligence reflects the assumption that prevent-
ing harms is preferable to imposing liability after harms are inflicted,
and that corporations are in the best position to determine how to do
so. Companies have substantial resources devoted to assessing business
risk and performance, as well as legal compliance, which can be
employed to anticipate the harms that may occur as a result of their
operations.
Due diligence is particularly crucial in fragile states or in areas of
weak governance, when local regulations are confusing, vague, or even
nonexistent due to the weakness of the legislative branch. In addition,
the application of these local laws may be susceptible to unpredictabil-
ity due to lack of judicial independence and/or corruption of the judi-
ciary. The result in such cases is inadequate protection for victims of
human rights violations.
Human rights due diligence may appear to resemble diligence for
legal compliance purposes, in that both attempt to ensure that a com-
pany acts in accordance with social expectations. There are at least two
important differences, however, that illuminate the way in which
human rights due diligence involves greater uncertainty for a company.
First, the focus of such diligence is not the risk to the company but to
23. Id. art. 18, Commentary.
24. Id.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
316 [Vol. 50
stakeholders who are affected by its operations.25 Identifying relevant
stakeholders is challenging in some cases, given the wide ripples that a
company may generate from its activities. To whom does the company
have a duty—that is, how far does the circle of stakeholders extend?
What kind of priority should each group have, and how should a com-
pany balance stakeholder interests if they are not harmonious?
Second, legal compliance due diligence assesses risk with respect to
explicit enforceable rules. While there may be some disagreement
about how these rules should be interpreted, there are agencies and
courts that are authorized to provide guidance on what the rules
require and prohibit.26
A first critical analysis and assessment of the first published compliance plans has just been
made public by the Business and Human Rights Association. Study relative to corporate
enforcement of the law on the duty of diligence (“devoir de vigilance”). EDH & B&L,
APPLICATION DE LA LOI SUR LE DEVOIR DE VIGILANCE (Apr. 2018), https://www.e-dh.org/
userfiles/Edh_2018_Etude_FR_V8.pdf.
While some ambiguity may remain, a company
nonetheless has a reasonably clear understanding of what constitutes a
violation of its legal obligations. By contrast, human rights typically are
expressed in broad and general terms, and there is no single source
that provides authoritative guidance on what they mean.27 While there
are egregious cases of clear rights violations, a company otherwise may
find it difficult to know whether its operations contravene its duty to
respect human rights.
For these reasons, it is useful to think of business and human rights
norms not as a hierarchy of binding provisions, but as a Galaxy com-
prised of multiple forms of guidance with differing legal effects, formu-
lated by both public and private entities. These forms may consist of
legislation, case law, industry standards, corporate codes of conduct,
guidelines established by international bodies and NGOs, supplier con-
tracts, loan agreements, and other types of instruments. Some elements
of the Galaxy are applicable in particular industries or regions, while
others pertain to certain types of harms. Some set forth reporting obli-
gations, others stipulate certain procedures, while still others prescribe
substantive behavior. In these respects, we can see the Galaxy as an
example in the business and human rights domain of what has been
called “transnational governance.”28
25. Stéphane Brabant, Elsa Savourey & Charlotte Michon, The Vigilance Plan, Cornerstone of the
Law on the Corpororate Duty of Vigilance, 50 REVUE INTERNATIONAL DE LA COMPLIANCE ET DE
L’ETHIQUE DES AFFAIRES (2017) (Fr.).
26.
27. RHONA K. SMITH, TEXTBOOK ON INTERNATIONAL HUMAN RIGHTS 153-54 (2014).
28. See generally JAN-CHRISTOPHE GRAZ ANDREAS NOLKE, TRANSNATIONAL PRIVATE GOVERNANCE
AND ITS LIMITS (2008); GOVERNANCE ACROSS BORDERS: TRANSNATIONAL FIELDS AND TRANSVERSAL
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 317
This conceptual framework highlights the way in which human rights
norms are expanding and taking shape in an interconnected field in
which traditional distinctions between “hard” and “soft” law, and
between voluntary and mandatory responsibilities, are blurring.
Regardless of its formal status, each element in the Galaxy has the
potential to exert a certain amount of gravitational force on others.
This situation means that corporate boards of directors and counsel
must attend not simply to currently enforceable legal obligations, but
to trends in other parts of the Galaxy that shape stakeholder expecta-
tions. These expectations may pose financial and reputational risks for
companies even if they are not legally enforceable. To the extent that
consensus emerges around these expectations, they also may provide
an indication of future statutory or common law regulations as sources
of legal obligations. Furthermore, so-called public “soft law,” or unen-
forceable voluntary private standards, may acquire the status of “hard
law” through incorporation into contracts, adoption in legislation, or
reliance on them in defining a common law duty of care. Companies
that seek to anticipate and minimize risk therefore must appreciate the
interrelated nature of the norms that comprise the Business and
Human Rights Galaxy, and the ways that liability is expanding within it.
III. CONCENTRIC RINGS IN THE GALAXY 29
One way to conceptualize the Business and Human Rights Galaxy is
as a series of concentric rings of norms that expand outward from: (1) a
ring of legal responsibility for violations of substantive rights; to rings
that include (2) legal responsibility for compliance with non-financial
reporting requirements; (3) legal responsibility for compliance with a
standard of behavior that requires identifying and minimizing the risk
of rights violations, such as the common law duty of care and the
French statutory duty of vigilance; (4) private voluntary standards and
codes of conduct; and (5) guidelines contained in instruments devel-
oped by international organizations such as the U.N. and the ILO. The
THEMES 17-19 (Leonhard Dobusch, Philip Mader & Cigrid Quack eds., 2013); HANDBOOK OF
TRANSNATIONAL GOVERNANCE: INSTITUTIONS AND INNOVATIONS 30 (Thomas Hale & David Held
eds., 2011); NETWORKED GOVERNANCE, TRANSNATIONAL GOVERNANCE AND THE LAW 262 (Mark
Fenwick, Steven Van Uystel & Stefan Wrbka eds., 2014); TRANSNATIONAL GOVERNANCE:
INSTITUTIONAL DYNAMICS OF REGULATION 139 (Marie-Laure Djelic & Kierstin Sahlin-Andersson
eds., 2006); Milton C. Regan, Jr. & Kath Hall, Lawyers in the Shadow of the Regulatory State:
Transnational Governance on Business and Human Rights, 84 FORDHAM L. REV. 2001 (2016); Milton
C. Regan, Jr., Lawyers, Globalization, and Transnational Governance Regimes, 12 ANN. REV. L. & SOC.
SCI. 133 (2016).
29. See infra app. at 59-61.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
318 [Vol. 50
Appendix to this article contains figures that depict these rings, as well
examples of specific types of norms in each that reflect their consider-
able growth from 2000-2019. As we will describe, violations of responsi-
bilities in the first three rings are the basis for civil and, in some cases,
criminal liability. The cluster of norms in each ring of the Galaxy has
the potential to affect norms in other rings. Sources of expectations
and liability thus are diverse and are related in complex ways rather
than in a hierarchical order.
While the Galaxy provides a general description of business and
human rights norms, it also provides a useful way of analyzing norms
that are relevant to specific countries, commercial sectors, and types of
human rights risks. Companies that operate in multiple jurisdictions
must be aware of the different galaxies that are relevant to their opera-
tions, as well as how the extraterritorial scope of some of the norms can
affect the interrelationship among the different rings.
A. Ring One: Legal Responsibility for Outcomes
This first cluster includes provisions that impose liability for
outcomes—violations of human rights. These include domestic crimi-
nal law, such as the U.S. Trafficking Victims Protection Reauthorization
Act (TVPRA)30 and the U.S. law prohibiting peonage and slavery,31
international criminal law relating to crimes against humanity,32 and
statutory civil liability.33
The French law on the duty of vigilance34
CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE] art. L. 225-102-4, https://www.
business-humanrights.org/en/french-duty-of-vigilance-bill-english-translation (Fr.).
is located in Ring One,
because it is the first of its kind to create a legal obligation for corpora-
tions to adopt plans of vigilance and provides for mechanisms of civil
liability (similar to torts law in common law countries) in the event a
plan is not adopted, published and sufficient to prevent and mitigate
risks to human rights and others specified by the law.
The U.K. Modern Slavery Act, for example, prohibits slavery, servi-
tude, forced labor, and trafficking in such activity, with criminal penal-
ties for violating its terms.35
See generally Modern Slavery Act 2015, c.30 (Eng.), http://www.legislation.gov.uk/ukpga/
2015/30/contents/enacted.
Provisions of human rights conventions
30. 22 U.S.C. §§ 7101-14 (2018).
31. See generally, 22 U.S.C. §§ 6901-7002 (2016).
32. See Rome Statute of the International Criminal Court, art. 8, July 17, 1998, 2187 U.N.T.S.
90.
33. The U.S. law on peonage and slavery, for instance, provides for civil liability to victims. See
18 U.S.C. § 1595 (2018).
34.
35.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 319
that countries incorporate into domestic law also provide a source of
potential liability.36 States that ratify many such conventions have an
obligation to secure enjoyment of the rights in them by adopting
appropriate domestic legislation that imposes obligations on private
parties to respect human rights, and to provide penalties for violation
of such rights.37
With regard to the International Covenant on Civil and Political Rights, for instance, see
U.N. Human Rights Comm., General Comment No. 31: The Nature of the General Legal
Obligation Imposed on States Parties to the Covenant, ¶ 8, U.N. Doc. CCPR/C/21/Rev.1/add/13
(May 12, 2004), https://www.refworld.org/docid/478b26ae2.html (“[T]he positive obligations on
States Parties to ensure Covenant rights will only be fully discharged if individuals are protected by
the State, not just against violations of Covenant rights by its agents, but also against acts committed
by private persons or entities that would impair the enjoyment of Covenant rights in so far as they
are amenable to application between private persons or entities.”).
Administrative regulations also may impose substantive responsibil-
ities with respect to outcomes. One such regulation, for instance, is the
U.S. government’s prohibition on human trafficking by federal govern-
ment contractors.38 The rule requires federal contractors performing
work on contracts that exceed $500,000 outside of the United States to
certify that neither they nor any of their suppliers are engaged in any
trafficking activities.39 Contractors must take steps to prevent any pro-
hibited activities, and to terminate any subcontractor who engages in
them.40 Any contractor in violation of the rule may be suspended or
debarred from government contracts.41
36. Countries in the Council of Europe, for instance, generally have incorporated into
domestic law the obligations contained in the European Convention on Human Rights. See, e.g.,
Human Rights Act 1998, c. 42 (Eng.).
37.
38. Federal Acquisition Regulation; Ending Trafficking in Persons, 80 Fed. Reg. 4,967 (Jan. 29,
2015) (to be codified at 48 C.F.R. pts. 1, 2, 9, 12, 22, 42, and 52).
39. Combatting Trafficking in Persons, 48 C.F.R. §§ 22.1703, 22.1705 (2012).
40. Id. § 22.1703.
41.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
320 [Vol. 50
See U.S. DEP’T OF STATE, TRAFFICKING IN PERSONS REPORT 448 (June 2018), https://www.
state.gov/documents/organization/282798.pdf (“DOJ and other federal law enforcement
agencies continued to investigate allegations of debt bondage and excessive recruitment fees
required of third-country nationals working on certain U.S. government contracts abroad, but no
federal criminal prosecutions of employers or labor contractors resulted from these investigations
in FY 2017. DoD took action against noncompliant employers or labor contractors from U.S.
programs resulting in twenty-two suspensions, six debarments, one job termination, and one
compliance agreement”); see also Neil Gordon, POGO Identifies Defense Contractor Recently Sanctioned
for Human Trafficking Abuses, PROJECT ON GOV’T OVERSIGHT (Aug. 21, 2018), https://www.pogo.
org/investigation/2018/08/pogo-identifies-defense-contractors-recently-sanctioned-for-human-
trafficking-abuses/ (“POGO has identified two companies that are not U.S.-based that were
impacted by the law; they were recently sanctioned by the government for violating U.S.
restrictions on human trafficking. An official in the Pentagon’s watchdog told POGO that
Tamimi Global Company and Texas Gulf Global General Trading & Contracting Company were
B. Ring Two: Legal Responsibility for Reporting
The second concentric cluster consists of non-financial legal report-
ing requirements. The California Transparency in Supply Chains Act,42
for instance, requires retailers and manufacturers with $100 million or
more in total worldwide revenues that do business in the state to report
on their efforts to identify and prevent human trafficking in their sup-
ply chains.43 The remedy for a violation of the Act is injunctive relief by
the State Attorney General, although the Act says that nothing in the
legislation is intended to limit the availability of remedies for violation
of other state or federal law.44
The Act requires only that a company disclose its efforts with regard
to trafficking and slavery, and does not require the adoption of any spe-
cific policies regarding these practices. Nonetheless, as one law firm
suggested, “fair trade activists are likely to be aggressive in using the stat-
ute to shame corporations that have deficient anti-human trafficking
programs.”45
SHEPPARD MULLIN, Human Trafficking and Your Supply Chain: New Disclosure Requirements for
Companies Doing Business in California (Oct. 7, 2011), https://www.sheppardmullin.com/
publications-articles-1366.html.
A similar provision, the U.K. Modern Slavery Act, went into effect in
2015.46 Unlike the California Act, it imposes disclosure obligations on
any company with revenue of more than £36.000.000 that does business
in the United Kingdom.47 The Act provides not only for disclosures sim-
ilar to those under the California Act, but also extends the penalty for
persons convicted of holding anyone in slavery or servitude, or engag-
ing in human trafficking, from fourteen years to life imprisonment.48
Another example of a targeted disclosure requirement is the
Extractive Industry Transparency Initiative (EITI), an effort to address
corruption in the extractives industry.49
two of the companies referred to, although not by name, in a recent State Department report.”).
The two aforementioned companies were suspended/debarred, but the government is not
publishing information because of open criminal investigations.
42. California Transparency in Supply Chains Act, S.B. 657, 2010 Cal. Stat. 556 (codified at
CAL. CIV. CODE § 1714.43).
43. CAL. CIV. CODE § 1714.43(a)(2)(A).
44. Id. § 1714.43(d).
45.
46. Modern Slavery Act 2015, c.30 (Eng.).
47. Id. § 54(9) (stating that the Secretary of State can make a determination of revenue).
48. Id. § 5(3).
49. While corruption involves a number of distinct issues beyond the scope of this Article, the
U.N. Office of the High Commissioner for Human Rights suggests that it can be connected in
several ways to human rights abuses. It can lead to violation of a state’s responsibility “to take steps
. . . to the maximum of its available resources, with a view to achieving progressively the full
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 321
Companies in this industry face
realization of the rights recognized in the [International] Covenant [on Economic, Social and
Cultural Rights].” Corruption can also result in discrimination in the provision of such services in
favor of those who can furnish bribes and other benefits to government officials. As the U.N.
notes, “[t]he economically and politically disadvantaged suffer disproportionately from the
consequences of corruption, because they are particularly dependent on public goods.”
EXTRACTIVE INDUS. TRANSPARENCY INITIATIVE, https://eiti.org (last visited Apr. 5, 2019).
the risk that their activities may contribute to human rights abuses by
corrupt governments in the countries in which they operate. The EITI
is a set of reporting standards published by a coalition of companies,
governments, and NGOs.50
How We Work, EXTRACTIVE INDUS. TRANSPARENCY INITIATIVE, https://eiti.org/about/how-
we-work (last visited Apr. 5, 2019).
It requires companies to disclose payments
to governments and governments to disclose the amounts that they
receive from these sources.51
Guide to Implementing the EITI Standard, EXTRACTIVE INDUS. TRANSPARENCY INITIATIVE,
https://eiti.org/guide (last visited Apr. 5, 2019).
Recent revisions require disclosure of pay-
ment information by individual project.52
Project-Level Reporting in the Extractive Industries, EXTRACTIVE INDUS. TRANSPARENCY
INITIATIVE, https://eiti.org/document/projectlevel-reporting-in-extractive-industries (last visited
Apr. 5, 2019).
Adoption of the EITI stand-
ard is discretionary, and implementation is the responsibility of
individual countries that subscribe to it. As a result, the EITI require-
ments must be adopted into national law so that the extractive compa-
nies that operate within the country are subject to it. National laws or
regulations and the process for certifying them are independently vali-
dated by the EITI before the country is deemed to be EITI compliant,
and countries must maintain adherence to all the EITI rules in order to
retain their compliant status. The EITI currently has designated thirty-
one countries as compliant, which includes Kazakhstan, Peru, and a sig-
nificant number of African countries.53
Implementation Status, EXTRACTIVE INDUS. TRANSPARENCY INITIATIVE, https://eiti.org/
countries (last visited Apr. 5, 2019).
The United States, however,
withdrew in November 2017 as an “implementing country” under the
EITI, on the ground that it is unable to comply with all its require-
ments.54
Bill Chappell, US Withdraws from Anti-Corruption Group’s Oil and Petroleum Rules, NAT’L PUB.
RADIO (Nov. 3, 2017, 3:18 PM), https://www.npr.org/sections/thetwo-way/2017/11/03/
561908947/u-s-withdraws-from-anti-corruption-oil-and-petroleum-group.
The United States stated that it would remain one of seventeen
“supporting countries” of the EITI.55 Compliant countries must seek
revalidation every three years.56
50.
51.
52.
53.
54.
55. Id.
56. Id.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
322 [Vol. 50
Broader reporting requirements are contained in provisions such as
the EU Non-Financial Reporting Directive57 and the U.K. Companies
Act.58
Companies Act 2006, c.46 (Eng.), http://www.legislation.gov.uk/ukpga/2006/46/pdfs/
ukpga_20060046_en.pdf.
The former requires that companies publish reports on the poli-
cies that they implement with respect to environmental protection,
social responsibility and treatment of employees, respect for human
rights, anti-corruption and bribery, and diversity on company boards in
terms of age, gender, and educational and professional background.59
The U.K. Companies Act requires companies to issue a Strategic
Report “to inform members of the company and help them assess how
the directors have performed their duty . . . to promote the success of
the company.”60
The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013, SI
2013/1970, art. 3, ¶ 414C(1) (Eng.) https://www.legislation.gov.uk/uksi/2013/1970/pdfs/
uksi_20131970_en.pdf.
It provides that a company listed on a stock exchange
“must, to the extent necessary for an understanding of the develop-
ment, performance or position of the company’s business,” include in
its Report:
information about—
(i) environmental matters (including the impact of the com-
pany’s business on the environment),
(ii) the company’s employees, and
(iii) social, community issues, and human rights issues, including
information about any policies of the company in relation to
those matters and the effectiveness of those policies.61
The Guidance Report on the Act issued by the Financial Reporting
Council (FRC) has clarified that the Act mandates disclosures that
relate to information that is material.62
Guidance on the Strategic Report, FIN. REPORTING COUNCIL (July 2018), https://www.frc.org.
uk/getattachment/fb05dd7b-c76c-424e-9daf-4293c9fa2d6a/Guidance-on-the-Strategic-Report-
31-7-18.pdf.
In addition, the agency has
opined that it “does not believe that it would be best practice for an
unquoted company to prepare a strategic report which omitted, for
example, information on a material human rights issue simply because
57. Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014
Amending Directive 2013/34 EU as Regards Disclosure of Non-Financial and Diversity
Information by Certain Large Undertakings and Groups, 2014 O.J. (L330) 1.
58.
59. Directive 2014/95/EU, supra note 57.
60.
61. Id. ¶ 414C(7)(b).
62.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 323
there was no explicit legal or regulatory requirement to address such
matters.”63
C. Ring Three: Legal Responsibility for Process
The third ring of the Galaxy imposes legal responsibility for taking
steps to identify and minimize foreseeable harms from business opera-
tions. The common law duty of care and the French statutory duty of
vigilance can be seen as occupying this ring. The Child Labor Due
Diligence Law in the Netherlands also can be seen as occupying this
ring. It requires a company registered in the Netherlands, or that deliv-
ers goods or services to the Netherlands twice or more a year, to make a
one-time disclosure of the due diligence it has undertaken to deter-
mine if child labor is occurring in its supply chain.64
Frequently Asked Questions about the new Dutch Child Labour Due Diligence Law, MVO PLATFORM
(Apr. 14, 2017), https://www.mvoplatform.nl/en/frequently-asked-questions-about-the-new-
dutch-child-labour-due-diligence-law/.
Any company that
learns that there is a reasonable presumption that child labor is being
used in its supply chain is expected to prepare an action plan to prevent
this.65
Two features of the common law duty of care make it an especially
useful source of guidance in interpreting the requirements of the new
French statutory duty and of due diligence requirements such as set
forth in the Netherlands law.66 First, requirements of the duty of care
are sensitive to context, which provides the flexibility to take into
account a range of considerations. This is useful in light of the wide va-
riety of business organizations and the diverse nature of their opera-
tions. Second, the duty of care occupies an intermediate place in the
Galaxy between enforceable and non-enforceable norms. It constitutes
an enforceable obligation to anticipate and take precautions against
risks, which is framed in broad and open-ended terms. This means that
the task of determining the steps necessary to fulfill the duty may draw
guidance from norms in other rings of the Galaxy, especially if they
address specific types of risks.
63. Id. at 89-90.
64.
65. Id.
66. See, e.g., Beatrice Parance & Elise Groulx, Regards croisés sur le devoir de vigilance et le duty of
care [Comparative law analysis of Duty of vigilance and Duty of Care], 145 JOURNAL DE DROIT
INTERNATIONAL 21 (2018) (Fr.); Claire Bright, Le devoir de diligence de la société mère dans la
jurisprudence anglaise [The duty of diligence of the parent corporation in English jurisprudence], DROIT
SOCIAL 828 (2017) (Fr.); Sandra Cossart et al., The French Law on Duty of Care: A Historic Step
Towards Making Globalisation Work for All, 2 BUS. & HUM. RTS. J. 317 (2017).
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
324 [Vol. 50
The responsabilité civile quasi-délictuelle (tort liability) in French law is
equivalent to tort law in common law countries. The French liability is
built around the standard of the reasonable person. The threshold
requirement is that an actor has a duty of care to those affected by his
or her actions.67 If this duty exists, she or he may be liable when her/his
negligence causes injury to others.68 The existence of a duty and its obli-
gations are assessed on a case-by-case basis, with case law clarifying their
boundaries.
Human rights lawyer and scholar Douglass Cassel has noted the
dynamic character of the common law duty of care, which evolves
according to what is “fair, just, and reasonable, in accordance with
community expectations and common sense, and reflective of alter-
ing social conditions and standards.”69 U.K. law provides a useful
example of the elements of this duty.70 As declared in the 1990 House
of Lords—now Supreme Court—case of Caparo Industries Plc v.
Dickman, its existence and scope is subject to three requirements:
(1) foreseeability, (2) proximity, and (3) the fairness and reasonable-
ness of imposing a duty.71
The foreseeability element asks whether a reasonable person would
have foreseen that injury would occur from her actions or omissions.72
Proximity requires that there be a sufficiently close relationship
between the victim and the person who caused the injury.73 The fair-
ness and reasonableness element incorporates elements from the other
two requirements: the more foreseeable the consequences and closer
the relationship, the more likely that it is fair and reasonable to find
that an actor had a duty of care. This step also requires consideration of
whether any public policy concerns should prevent or limit the imposi-
tion of a duty. The duty of care under a reasonable person standard
thus is a behavioral standard akin to an obligation de moyens (an obliga-
tion to provide the means) to prevent liability.
67. PHILIPPE BRUN, RESPONSABILITÉ CIVILE EXTRA-CONTRACTUELLE [EXTRA-CONTRACTUAL CIVIL
LIABILITY] 292 (5th ed. 2018) (Fr.).
68. CLERK & LINDSELL ON TORTS ¶¶ 8-01 to 8-214 (21st ed. 2014).
69. Douglas Cassel, Outlining the Case for a Common Law Duty of Care of Business to Exercise Human
Rights Due Diligence, 1 BUS. & HUMAN RIGHTS J. 179, 189 (2016).
70. Professor Cassel has provided a thorough analysis of the ways in which formulations of a
duty of care may formally diverge among common law jurisdictions, but he acknowledges that it is
not clear that these differences lead to significantly different results. See id. at 189-95.
71. Caparo Industries Plc v. Dickman, [1990] 2 AC 605, 617-18 (HL) (Eng.).
72. Id. at 640.
73. Id. at 617-18.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 325
To date, common law jurisdictions have not recognized a general
duty of parent companies to take steps to minimize the risks of harm
inflicted by subsidiaries or suppliers, such as the French law requires.74
Such a step is distinct from a willingness in some cases to “pierce the
corporate veil” in cases on the ground that a subsidiary does not have a
meaningful independent legal identity and the parent company is
using it to commit a wrong.75
Courts in the United Kingdom and Canada have accepted the possi-
bility, however, of imposing liability on parent corporations for the
actions of subsidiaries in circumstances involving conduct by the parent
that creates expectations with respect to its responsibility. In Chandler v.
Cape, for example, a victim suffering from asbestosis, and who had
worked in the asbestos plant of one of Cape’s subsidiaries no longer in
existence, filed suit against the parent company for damages for his
injury.76 The tribunal recognized a duty of care owed by the parent
company to the employee, applying the criteria established in Caparo v.
Dickman.77
The court stated:
The configuration of the asbestos factory dated back to the
time when Cape introduced its Pluto board manufacturing
business into the Cowley Works. By installing its business there,
it must have implicitly undertaken a duty of care to ensure that
its business was carried on without risk to the employees in the
other business of Cape Products carried on at the Cowley
Works. In due course, it required Cape to purchase this
business.78
The court continued, “Cape moreover had superior knowledge
about the asbestos business. It was in a substantial way of business and
74. See Cassel, supra note 69, at 181.
75. Adams v. Cape Industries Plc [1990] Ch 433 (CA) (Eng.). In this opinion, the English
Court of Appeal had to assess which circumstances would allow lifting the corporate veil over
Cape’s subsidiaries, thus ignoring the subsidiaries’ autonomy. While, in the case at hand, the Court
of Appeal ruled that the circumstances for lifting the veil were not met and that the subsidiary was
to remain distinct from the parent company, the court enumerated three alternative criteria which
would allow for lifting the social veil of a subsidiary: (i) whether the subsidiary is fictitious,
(ii) whether the company constitutes a unique economic entity, and (iii) the mandate. This basis
for liability is not, however, the focus of this Article.
76. Chandler v. Cape plc [2012] EWCA Civ 525 [1], 1 WLR 3111 (Eng.).
77. Caparo Industries Plc v Dickman [1990] 2 AC 605 (Eng.).
78. Chandler, EWCA Civ 525 [75].
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
326 [Vol. 50
its resources far exceeded those of Cape Products. Dr. Smither was
doing research into the link between asbestos dust and asbestosis and
related diseases.”79 Moreover, the court said, letters within the company
provided “clear evidence of Cape involving itself in issues relevant to
health and safety policy at Cape Products, for example whether an em-
ployee diagnosed as having asbestosis could continue to be employed
in that business.”80 The court concluded:
Given Cape’s state of knowledge about the Cowley Works, and
its superior knowledge about the nature and management of
asbestos risks, I have no doubt that in this case it is appropriate
to find that Cape assumed a duty of care either to advise Cape
Products on what steps it had to take in the light of knowledge
then available to provide those employees with a safe system of
work or to ensure that those steps were taken.81
Canadian case law has also recognized the possibility of a direct duty
of a parent corporation with respect to alleged human rights violations
by a subsidiary. In Choc v. Hubday Minerals Inc., the Ontario Superior
Court denied a motion to dismiss a claim against a Canadian mining
company based on security forces’ murder, physical assault, and rape of
members of local communities living near the operations of one of its
subsidiaries in Guatemala.82 The defendant claimed that “there is no
recognized duty of care owed by a parent company to ensure that the
commercial activities carried on by its subsidiary in a foreign country
are conducted in a manner designed to protect those people with
whom the subsidiary interacts,”83 and that “a parent corporation cannot
be responsible for the actions of its subsidiary.”84
The court said that the standard for dismissal is that it is “‘plain and
obvious’ that a claim discloses no reasonable cause of action and will
fail.”85 It acknowledged that a direct negligence claim against a parent
company for the actions of its subsidiary was novel, but concluded that
the plaintiffs had pled facts that, if proven, could support a claim
that the injury was reasonably foreseeable, that there was sufficient
79. Id.
80. Id. ¶ 76.
81. Id. ¶ 78.
82. Choc v. Hudbay Minerals Inc., [2013] ONSC 1414 (Can. Ont. Sup. Ct. J.).
83. Id. ¶ 18.
84. Id. ¶ 19.
85. Id. ¶ 55.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 327
proximity between the parties to impose a duty of care, and that there
were no public policy concerns militating against finding a duty.86
With respect to foreseeability, the court noted that, inter alia, the par-
ent company knew that violence frequently was used by security forces
during eviction and had been used in the past; security personnel were
unlicensed, inadequately trained, and possessed unlicensed and illegal
firearms; and that “in general there was a risk that violence and rape
could occur.”87 The court thus concluded that, if the alleged facts were
proven, it would have been “reasonably foreseeable” to the parent com-
pany that “authorizing the use of force in response to peaceful opposi-
tion from the local community could lead to the security personnel
committing violent acts.”88
With regard to the proximity of the relationship, the court noted the
claim that the parent company had made repeated public statements
that it was making efforts to address conflicts over land in connection
with its projects, that it was committed to working with local groups to
resolve such conflicts, and that the company had adopted the
Voluntary Principles on Security and Human Rights for its security
forces.89 The court also observed that plaintiffs alleged that parent com-
pany executives and employees assumed direct responsibility for opera-
tions relating to land issues.90
Finally, the court stated that the case presented competing policy
considerations that would be best considered with the benefit of a full
record, which meant that it was not “plain and obvious” that such con-
siderations supported a motion to dismiss.91
One aspect of the dynamism of the common law duty of care that is
especially relevant to norms in other rings of the Business and Human
Rights Galaxy is the tendency of courts to look to compliance with com-
mon industry practice as probative of whether the duty has been satis-
fied.92 As the court noted in Trimarco v. Klein,
86. Id. ¶ 65.
87. Id. ¶ 64.
88. Id.
89. Id. ¶ 67.
90. Id.
91. Id. ¶ 74.
92. RESTATEMENT (THIRD) OF TORTS: LIABILITY FOR PHYSICAL HARM §13 (AM. LAW INST.,
Proposed Final Draft No. 1, 2005) (noting the influence of custom as a source of legal obligation
and in tort law as the test of “ordinary care”); See generally Michael L. Rustad & Thomas H. Koenig,
The Tort of Negligent Enablement of Cybercrime, 20 BERKELEY TECH. L.J. 1553 (2005).
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
328 [Vol. 50
[W]hen proof of an accepted practice is accompanied by evi-
dence that the defendant conformed to it, this may establish
due care and, contrariwise, when proof of a customary practice
is coupled with a showing that it was ignored and that this de-
parture was a proximate cause of the accident, it may serve to
establish liability.93
Additionally, in a very recent, long expected, decision in the case
of Vedanta, the U.K. Supreme Court affirmed the potential liability of
multinational corporations for harms perpetrated through the acts
of a subsidiary and approved respondents’/claimants’ petition for
their case to move forward on the merits.94 This tort case arises from
alleged toxic emissions from the Nchanga Copper Mine in the
Chingola District of Zambia, affecting upwards of 1,500 people.95
Discussing at length the duty of care of a parent company to third
parties harmed by its subsidiaries, and the notion of substantial jus-
tice with regard to forum non-conveniens, the decision has far-reaching
implications for extraterritorial activity undertaken by multinational
corporations primarily through its subsidiaries.
While the court indicated that the appeal dealt only with the issue of
jurisdiction, the discussion on the existence of a duty of care of a parent
company is lengthy. Noting that “the liability of parent companies in
relation to the activities of their subsidiaries is not, of itself, a distinct
category of liability in common law negligence,” the Court stated that
“everything depends on the extent to which, and the way in which, the
parent availed itself of the opportunity to take over, intervene in, con-
trol, supervise or advise the management of the relevant operations
(including land use) of the subsidiary.”96 In this, the court noted that
just as the existence of a parent-subsidiary relationship does not ipso
facto indicate an obligation or responsibility of the parent company,97
the court is also “not persuaded that there is any such reliable limiting
principle.”98 Existing corporate guidelines about minimizing the social
and environmental impact of inherently dangerous activities, such as
mining, may very well implicate a duty of care if the parent companies
93. Trimarco v. Klein, 56 N.Y.2d 98, 105-06 (N.Y. Ct. App. 1982).
94. Vedanta Resources PLC v. Lungowe, [2019] UKSC 20 (UK).
95. Id. ¶ 1. Further, claimants allege that their health and farming activities have been
damaged by repeated discharges of toxic matter from the Nchanga Copper Mine into those
watercourses from 2005 to date.
96. Id. ¶ 49.
97. Id.
98. Id. ¶ 52.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 329
hold themselves out to supervise implementation.99 Further, when
examining the contours of the application of the duty of care the U.K.
Supreme Court noted three examples where the parent company could
incur liability:
(1) Where it has set down group guidelines which contain sys-
temic errors that cause harm to third parties;100
(2)
Where it has taken active steps to implement guidelines in
the operations of its subsidiary;101 and
(3) Where it has represented that it has relevant degree of
supervision and control (even where it does not in fact).102
Similarly, in Garthe v. Ruppert the New York Court of Appeals stated
that when “certain dangers have been removed by a customary way of
doing things safely, this custom may be proved to show that [the one
charged with a breach of care] has fallen below the required
standard.”103
Courts do not, however, treat compliance with industry custom as dis-
positive evidence of compliance with a duty of care, in light of the fact
that companies in an industry may not have been willing to take suffi-
cient steps to prevent foreseeable harm from their activities.104 As two
authors note, “[c]ustom provides the floor, but not necessarily the ceil-
ing, of reasonable care.”105
Furthermore, a practice need not be universal or ubiquitous to serve
as a standard for satisfying a duty of care. In the notable case of The T.J.
Hooper v. Northern Barge Corp., for example, Judge Learned Hand of the
U.S. Court of Appeals for the Second held that tugboats were negligent
in not using radio sets that could have warned them of weather condi-
tions that resulted in the loss of barges carrying cargo of the plain-
tiffs.106 Judge Hand acknowledged, “It is not fair to say that there was a
general custom among coastwise carriers so to equip their tugs. One
line alone did it; as for the rest, they relied upon their crews, so far as
99. Id. ¶ 53.
100. Id. ¶ 52.
101. Id. ¶ 53.
102. Id.
103. Garthe v. Ruppert, 264 N.Y. 290, 296 (N.Y. Ct. App. 1934).
104. The T.J. Hooper v. Northern Barge Corp., 60 F.2d 737, 740 (2d Cir. 1932).
105. Michael L. Rustad & Thomas H. Koenig, The Tort of Negligent Enablement of Cybercrime, 20
BERKELEY TECH. L.J. 1553, 1588 (2005).
106. See Hooper, 60 F.2d at 737.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
330 [Vol. 50
they can be said to have relied at all.”107 Thus, “here there was no cus-
tom at all as to receiving sets; some had them, some did not; the most
that can be urged is that they had not yet become general.”108
Nonetheless, declared Judge Hand, “Courts must in the end say what
is required; there are precautions so imperative that even their univer-
sal disregard will not excuse their omission.” In this case:
An adequate receiving set suitable for a coastwise tug can now
be got at small cost and is reasonably reliable if kept up; obvi-
ously it is a source of great protection to their tows. Twice every
day they can receive these predictions, based upon the widest
possible information, available to every vessel within two or
three hundred miles and more. Such a set is the ears of the tug
to catch the spoken word, just as the master’s binoculars are
her eyes to see a storm signal ashore.109
The Second Circuit therefore concluded that “had [the tugboats]
been properly equipped, they would have got the [weather] reports.
The injury was a direct consequence of this un-seaworthiness.”110
Torts scholar Richard Epstein suggests that customary practice
should be given the most weight in cases involving parties who interact
in a market or trade, such as merchants.111 With respect to outsiders,
however, liability should be based on a cost-benefit analysis: “whether
the defendant took all cost-justified precautions against the occurrence
of the harm.” This requires an assessment of “the likelihood that the
defendant’s conduct will result in harm, the expected severity of that
harm, and the cost of avoiding the occurrence.”112
Finally, industry practice may also be probative not simply of whether
a duty has been breached, but whether it existed in the first place.
Based on the logic of the T.J. Hooper case, for instance, a court might
use adherence by most companies in an industry to a private voluntary
standard on monitoring working conditions in certain tiers of the sup-
ply chain as an indication that companies in the industry have assumed
a duty to workers in those tiers. A company that was not a signatory to
the standard could be deemed to have such a duty despite its failure to
107. Id. at 739.
108. Id. at 740.
109. Id. at 739-40.
110. Id. at 740.
111. Richard A. Epstein, The Path to the T.J. Hooper: The Theory and History of Custom in the Law of
Tort, 21 J. LEGAL STUD. 1, 4 (1992).
112. Id. at 1.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 331
join the agreement because of the general expectations that the stand-
ard has created.113 The company could then be held in breach of the
duty if its supply chain diligence is less rigorous than the standard.
D. Ring Four: Private Voluntary Initiatives
The fourth ring of norms includes private voluntary standards and
codes of conduct that may be formulated by individual companies or
businesses in a particular sector, sometimes in concert with labor organ-
izations and NGOs. In the apparel industry, for instance, several private
organizations in the United States and Europe have established their
own set of voluntary standards and have attempted to persuade major
companies to agree to adhere to their programs.114 Such programs dif-
fer with respect to features such as the labor standards they contain, the
procedures for implementing commitment to those standards, the pro-
cess of monitoring implementation, and the range of stakeholders
involved in the process.115 One scholar reports that the labor require-
ments of an increasing number of programs follow ILO standards.116
Id. at 162. Most provisions of the ILO Conventions are not regarded as self-executing and
therefore constitute “soft law” in Ring Five. As one source states, “[i]n case of ratification, ILO
conventions have the same impact for Member States as treaties have under international law:
they are under an obligation to implement these rules, whereas the mode of incorporation of
ILO standards into domestic law is governed by the different domestic legal systems themselves.
Depending on the domestic status of ILO conventions and, foremost, on the wording of the
respective norm, i.e. whether a provision is self-executing, ILO conventions may be relied upon in
national courts. . . . In fact, ILO standards are frequently formulated as programmatic norms,
putting an obligation upon governments to pursue a certain policy, without granting individual
parties the right to invoke the provision in court.” Keiko Sauer, International Labour Organization
(ILO), OXFORD PUB. INT’L L. ¶ 13 (Aug. 2014), http://opil.ouplaw.com/view/10.1093/law:epil/
9780199231690/law-9780199231690-e490.
The standards in these programs are not imposed by public law, but
suppliers in a company’s supply chain agree by contract to adhere
to them.117 Companies typically hire third-party audit firms to moni-
tor and certify compliance.118 The failure of a supplier to obtain
113. There is a famous French case in which the Cassation Court recognized Total’s civil
liability following an oil spill, as the company did not comply with the internal safety procedures it
had adopted, when choosing to transport fuel oil on the MV Erika. Cour de cassation [Cass.]
[supreme court for judicial matters] crim., Sept. 25, 2012, Bull. crim., No. 10-82.938 (Fr.).
114. See LUC FRANSEN, CORPORATE SOCIAL RESPONSIBILITY AND GLOBAL LABOR STANDARDS
(2012).
115. See generally id.
116.
117. Sauer, supra note 114, ¶ 13.
118. SHIFT PROJECT, FROM AUDIT TO INNOVATION: ADVANCING HUMAN RIGHTS IN GLOBAL SUPPLY
CHAINS (Aug. 2013).
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
332 [Vol. 50
certification may then be the basis for termination by an apparel com-
pany.119 In this way, voluntary standards adopted by major companies
may constitute a private enforcement scheme when they are incorpo-
rated into contractual requirements.
One example of a private program in the apparel sector is the
Accord on Fire and Building Safety in Bangladesh, created after the col-
lapse of a factory building in Bangladesh in 2013 that claimed more
than 1,100 lives.120
ACCORD ON FIRE AND BUILDING SAFETY IN BANGLADESH, https://bangladeshaccord.org/
about (last visited Apr. 12, 2019).
Some 190 global brands and retailers and unions in
the ready-to-wear garment industry are parties to the agreement.121
Companies disclose under the Accord all factories in Bangladesh where
their garments are manufactured.122 Participants have established
building standards that are designed to “establish a common set of min-
imum requirements that provide a uniform and effective method for
assessing fire and building structural safety in new and existing ready-
made garment factories used by Accord suppliers.”123 The results of
these inspections are made public, and factories that fall short of stand-
ards file a plan to remedy substandard conditions.124 The Accord pro-
vides that brands must “negotiate commercial terms with their
suppliers which ensure that it is financially feasible for the factories to
maintain safe workplaces and comply with upgrade and remediation
requirements.”125
Marc Bain, The International Effort to Fix Bangladesh’s Deadly Factories Has a Basic Math Problem,
QUARTZ (July 5, 2017), https://qz.com/1018430/the-international-effort-to-fix-bangladeshs-deadly-
factories-has-a-basic-math-problem/.
There is some concern, however, about the extent to
which adequate funding has been available.126 The program also
involves safety training for joint management and labor committees,
and a mechanism for workers to file complaints about substandard
conditions.127
Abuses by security forces providing services for business operations
in zones of conflict and weak governance prompted the creation of the
Voluntary Principles on Security and Human Rights for the extractive
119. Id.
120.
121. Id.
122. Id.
123. ACCORD ON FIRE AND BUILDING SAFETY IN BANGLADESH, ALLIANCE FIRE SAFETY AND
STRUCTURAL INTEGRITY STANDARD V 1.1, PART 1 §1.3 (2014).
124. Id.
125.
126. Id.
127.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 333
Workplace Programs, ACCORD ON FIRE AND BUILDING SAFETY IN BANGLADESH, https://
bangladeshaccord.org/workers (last visited May 30, 2019).
industry.128
VOLUNTARY PRINCIPLES, http://www.voluntaryprinciples.org/what-are-the-voluntary-
principles/ (last visited Apr. 12, 2019).
Companies signing on to the Principles commit to obey the
laws of the host state, “to be mindful of the highest applicable interna-
tional standards, and to promote the observance of applicable interna-
tional law enforcement principles . . . particularly with regard to the use
of force.”129 The Principles provide guidance with respect to risk assess-
ments of doing business in weak governance or conflict zones, as well as
contractual relationships with public and private security forces.130
The Principles also state that private security providers should pro-
vide only preventive and defensive services, and should not engage in
activities that are the exclusive responsibilities of state military or law
enforcement authorities.131 Companies are encouraged to incorporate
the Principles into their contracts with private security personnel,132
and to provide for contractual authority to terminate services upon
credible evidence of unlawful or abusive behavior by private security
personnel. Finally, both public and private security providers are
expected not to interfere with fundamental labor rights protected
under the Universal Declaration of Human Rights (“UDHR”) and the
ILO Declaration.133
Governments, extractive companies, and NGOs may become mem-
bers of the Voluntary Principles Initiative.134 The participation criteria
explicitly state that the Principles do not create legally binding stand-
ards and specifically rule out the possibility of legal enforcement by
third parties alleging human rights abuses.135
Another sector in which voluntary principles have become influential
is financial institutions. The International Finance Corporation (IFC)
is a member of the World Bank Group that makes financing available
for private investment in countries developing.136
IFC, https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_
site/home (last visited Apr. 12, 2019).
Its Performance
Standards on Environmental and Social Sustainability are measures
that companies must adopt in order to qualify for funding.137
IFC, PERFORMANCE STANDARDS ON ENVIRONMENTAL AND SOCIAL SUSTAINABILITY 1 (Jan. 1,
2012), https://www.ifc.org/wps/wcm/connect/115482804a0255db96fbffd1a5d13d27/PS_English_
2012_Full-Document.pdf?MOD=AJPERES.
The eight
128.
129. Id.
130. VOLUNTARY PRINCIPLES, supra note 129, at Risk Assessment.
131. Id. at Interactions Between Companies and Private Security.
132. Id.
133. VOLUNTARY PRINCIPLES, supra note 131, at Deployment and Conduct.
134. Id. at Introduction.
135. Id.
136.
137.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
334 [Vol. 50
Standards “provide[e] guidance on how to identify risks and impacts,
and are designed to help avoid, mitigate, and manage risks and impacts
as a way of doing business in a sustainable way.”138
The Standards focus on risks to the environment, health, working
conditions, and involuntary resettlement, but do not include a standard
devoted specifically to human rights. The IFC has stated, however, that
“[e]ach of the Performance Standards has elements related to human
rights dimensions that a project may face in the course of its operations.
Due diligence against these Performance Standards will enable the cli-
ent to address many relevant human rights issues in its project.”139 The
Standards do say that “[i]n limited high risk circumstances, it may be
appropriate for the client to complement its environmental and social
risks and impacts identification process with specific human rights due
diligence as relevant to the particular business.”140 The IFC indicates
that its approach to assessing and managing environmental and social
risks is “broadly convergent” with the U.N. Guiding Principles.141
IFC, U.N. GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS AND IFC SUSTAINABILITY
FRAMEWORK, 1, http://www.ifc.org/wps/wcm/connect/c3dedb0049c51e71886d99da80c2ddf3/
UNGPsandIFC-SF-DRAFT.pdf?MOD=AJPERES (last visited Apr. 12, 2019).
Importantly, the recent U.S. Supreme Court decision in Jam et. Al. v.
International Finance Corp142 has restricted the grant of immunity
awarded to the IFC, bringing it in line with that awarded to foreign gov-
ernments, which, in theory, increases liability and accountability.143
The Equator Principles (EPs) are characterized by its signatories as
“a risk management framework adopted by financial institutions for
determining, assessing, and managing environmental and social risk in
projects being considered for financing.”144
EQUATOR PRINCIPLES, https://equator-principles.com/about/ (last visited May 26, 2019).
It is primarily intended “to
138. Id.
139. Id. at 3.
140. Id. at 7 n.12.
141.
142. Jam et al. v. Int’l Fin. Corp., 139 S. Ct. 759 (2019).
143. In the recent decision regarding Jam v. IFC, the U.S. Supreme Court overturned the U.S.
Court of Appeals for the District of Columbia Circuit, holding that international organizations no
longer enjoy absolute immunity, but are subject the same commercial activity exception to which
foreign governments must adhere. What the Court’s opinion did not address is potentially more
interesting, namely the question of where the line between commercial activity, and necessary
development, lies. However, internal critiques and changes to the CAO, the ombudsmen of the
IFC, remain the primary anticipated consequence of the decision. For more regarding the
workings of the CAO see Brief of Amicus Curiae Professor Daniel Bradlow in Support of Plaintiffs-
Appellants at 12, Jam v. Int’l. Fin. Corp., 860 F.3d 703 (D.C. Cir. 2017) (No. 15-cv-00612). For
legal context of the Court’s decision, see Anthony Cooper, Jam v. International Finance
Corporation: Access to Remedy but Only When We Say So, 26 TUL. J. INT’L & COMP. L. 417 (2018).
144.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 335
provide a minimum standard for due diligence and monitoring to sup-
port responsible risk decision-making by the banking sector.”145 The
Principles were adopted in 2003 by a group of ten project finance
banks, and are linked to IFC performance standards for the social and
environmental sustainability of projects.146
EQUATOR PRINCIPLES, THE EQUATOR PRINCIPLES (June 2013), https://equator-principles.
com./wp-content/uploads/2017/03/equator_principles_III.pdf.
The preamble states that
the aim of the Principles is to ensure that projects financed by the fi-
nancial institutions that adopt them “are developed in a manner that is
socially responsible and reflects sound environmental management
practices.”147 As with the IFC Performance Standards, the Principles do
not explicitly address human rights except insofar as environmental or
social impacts that are the focus of the Principles may have a bearing
on them.
The Principles apply to all industry sectors and to four financial
products: (1) Project Finance Advisory Services, (2) Project Finance,
(3) Project-Related Corporate Loans, and (4) Bridge Loans.148 Currently,
“96 Equator Principles Financial Institutions (EPFIs) in 37 countries have
officially adopted the Principles, covering the majority of international
project finance debt within developed and emerging markets.”149
About The Equator Principles, EQUATOR PRINCIPLES, https://equator-principles.com/about/
(last accessed May 30, 2019).
Furthermore, multilateral development banks, including the European
Bank for Reconstruction & Development, and export credit agencies
through the OECD Common Approaches are increasingly drawing
on the same standards as the EPs.”150 Institutions committed to the
Principles agree not to provide services to projects that do not comply
with them.
The Principles require institutions to place a project in one of three
categories based on its environmental and social impacts according to
the IFC social and environmental criteria.151
Category A includes projects “with potential significant adverse envi-
ronmental and social risks and/or impacts that are diverse, irreversible,
or unprecedented.”152 Category B includes projects with “potential
145. Id.
146.
147. Id. at 2.
148. EQUATOR PRINCIPLES, supra note 147, at 1, 3. (June 2013).
149.
150. Id.
151. EQUATOR PRINCIPLES, supra note 147, at 1, 6 (June 2013). Of note, the Equator Principles
require compliance with IFC standards in “Non-Designated Countries,” instead deferring to host
country laws and regulations when undertaking projects in “Designated Countries.”
152. Id. at 5.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
336 [Vol. 50
limited adverse environmental and social risks and/or impacts that
are few in number, generally site-specific, largely reversible, and read-
ily addressed through addressed through mitigation measures.”153
Finally, projects in Category C are those with “minimal or no adverse
environmental and social risks and/or impacts.”154 Projects in
Category A are subject to the most demanding requirements, while
those in Categories B and C are respectively subject to decreasing
demands.155
The Equator Principles are privately developed standards to which
financial institutions voluntarily agree to adhere.156 This “soft” fea-
ture of the Principles, however, takes on a “hard” edge for borrowers
that must comply with the requirements of the Principles in order to
obtain funding for projects.157 This constraint becomes even more
stringent as other public and private financial institutions incorpo-
rate the Principles into their own lending standards.158
EQUATOR PRINCIPLES, EP ASSOCIATION MEMBERS & REPORTING (2019), https://equator-
principles.com/members-reporting/.
The Thun Group represents another set of financial institutions
that has issued two reports on the implications of the UNGPs, reflect-
ing thoughts on what the Guiding Principles “might mean for banks
in practice and initial guidance to banks keen to address human
rights issues in their core business activities – both to minimise poten-
tial adverse impacts to rights holders and related risks to banks, and
to identify opportunities to promote good practice.”159 The Group’s
second report in 2017 purports to define when bank activity is
“directly linked” to an adverse human rights impact under UNGP
Principle 13.160
153. Id.
154. Id.
155. Id.
156. Id. at 11.
157. Id. at 9.
158.
159. THE THUN GROUP OF BANKS, U.N. GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS
DISCUSSION PAPER FOR BANKS ON IMPLICATIONS OF PRINCIPLES 16–21 at 3 (2013); see also THE THUN
GROUP OF BANKS, DISCUSSION PAPER ON THE IMPLICATIONS OF UN GUIDING PRINCIPLES 13 & 17 IN
A CORPORATE AND INVESTMENT BANKING CONTEXT (2017).
160.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 337
THUN GROUP (2017), supra note 156, at 3. For a criticism of the Group’s approach to
responsibility for adverse human rights impacts, see John Ruggie, Comments on Thun Group of
Banks Discussion Paper on the Implications of UN Guiding Principles 13 & 17 In a Corporate and
Investment Banking Context, HARV. KENNEDY SCH. (Feb. 21, 2017), https://www.ihrb.org/uploads/
submissions/John_Ruggie_Comments_Thun_Banks_Feb_2017.pdf.
The influence of the UNGPs is reflected in the Fédération
Internationale de Football Association (FIFA) embrace of the UNGP.161
FIFA Executive Committee Sets Presidential Election for 26 February 2016, FIFA (July 20, 2015),
https://www.fifa.com/about-fifa/who-we-are/news/fifa-executive-committee-sets-presidential-
election-for-26-february-20-2666448.
The organization’s human rights policy indicates that it is “commit-
ted to respecting human rights in accordance with the UN Guiding
Principles on Business and Human Rights (UNGPs).”162
FIFA’s Human Rights Policy, FIFA, at 5 (2017), https://resources.fifa.com/mm/
document/affederation/footballgovernance/02/89/33/12/fifashumanrightspolicy_neutral.
pdf.
FIFA has
stated that the standards in its policy apply to “FIFA subsidiaries,
FIFA-recognized regional football confederations, FIFA member
associations, entities tasked with organizing FIFA competitions,
FIFA’s commercial affiliates, service providers and suppliers, as well
as other entities that are linked to FIFA through its business relation-
ships.”163 FIFA’s policy reflects its response to recommendations set
forth in a report by John Ruggie, the leading participant in the draft-
ing of the UNGPs.164
John G. Ruggie, “For the Game. For the World.” FIFA and Human Rights, HARV. KENNEDY SCH.
(2016), https://www.hks.harvard.edu/sites/default/files/Ruggie_humanrightsFIFA_reportApril
2016.pdf
.
Ruggie and John Sherman suggest that this step
by FIFA indicates that the UNGPs “are adding significant human
rights punch to private law of contracts, the new lex mercatoria, whose
global reach and enforceability can affect workplace conditions, the
welfare of communities, and environmental practices worldwide.”165
Finally, what are known as International Framework Agreements are
another form of standards that occupy the fourth ring. These are agree-
ments on labor conditions between Multinational Companies (MNCs)
and Global Union Federations (GUFs) that commit MNCs to abide by
core international labor standards across all their operations.166 All
agreements incorporate the core ILO Conventions and the ILO’s
Declaration on Fundamental Rights and Principles at work.167 As Brian
Burkett notes, “The most recent generation of IFAs are noteworthy in
terms of expanding the accountability of corporations in their human
rights footprint by; (1) extending the scope of the IFAs to include
161.
162.
163. Id. at 4.
164.
165. John Gerard Ruggie & John F. Sherman, III, Adding Human Rights Punch to the New Lex
Mercatoria: The Impact of the UN Guiding Principles on Business and Human Rights on Commercial Legal
Practice, 6 J. INT’L DISP. SETTLEMENT 455, 456 (2015).
166. Brian Burkett, Globalization in Transition: A Canadian Perspective, 21 CAN. LAB. & EMP. L.J.
420-421 (2019).
167. Id. at 420.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
338 [Vol. 50
“business partners,” including suppliers, contractors and producers of
the MNCs; and (2) by transferring “decisional power in respect of dis-
putes over human rights violations to a third party, including the ILO
itself.”168
E. Ring Five: International Soft Law
The final ring of norms is comprised of what traditionally has been
called “soft law.” These are non-binding declarations, guiding princi-
ples, and frameworks set forth in international covenants or instru-
ments published by international organizations.169 Examples are the
Universal Declaration of Human Rights and the two human rights cove-
nants ratified pursuant to it (International Covenant on Civil and
Political Rights, and International Covenant on Economic, Social and
Cultural Rights);170 the UNGPs on Business and Human Rights;171
U.N. High Comm’r of H. R., Guiding Principle on Business and Human Rights, U.N. (2011),
https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.
the
OECD Guidelines on Multinational Enterprises;172
OECD Guidelines for Multinational Enterprises, OECD (2011), http://www.oecd.org/daf/
inv/mne/48004323.pdf.
the U.N. Global
Compact;173
The Ten Principles of the UN Global Compact, U.N. GLOBAL COMPACT, https://www.
unglobalcompact.org/what-is-gc/mission/principles (last visited Apr. 12, 2019).
and eight international conventions that the ILO regards
as fundamental: Freedom of Association and Protection of the Right to
Organize, Right to Organize and Collective Bargaining, Forced Labor,
Abolition of Forced Labor Convention, Minimum Age, Worst Forms of
Child Labor, Equal Remuneration, and Discrimination in Employment
and Occupation.174
Conventions and Recommendations. Labour Standards, ILO, https://www.ilo.org/global/
standards/introduction-to-international-labour-standards/conventions-and-recommendations/
lang-en/index.htm (last visited Apr. 12, 2019).
There are also several additional conventions on a
variety of topics, as well as recommendations by the ILO.175
Introduction to International Labour Standards. Labour Standards, ILO, https://www.ilo.org/
global/standards/introduction-to-international-labour-standards/lang-en/index.htm (last
visited Apr. 12, 2019).
As we have
mentioned, the UNGPs state that businesses have a responsibility to
respect human rights as expressed in the UDHR and its two implement-
ing covenants, as well as the ILO’s Declaration on Fundamental
168. Id. at 421.
169. See Andrew T. Guzman & Timothy L. Meyer, International Soft Law, 2 J. LEG. ANALYSIS 171
(2010).
170. International Covenant on Civil and Political Rights, Mar. 23, 1976, 999 U.N.T.S. 171;
International Covenant on Economic, Social and Cultural Rights, Dec. 19, 1966, 1976 U.N.T.S. 4.
171.
172.
173.
174.
175.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 339
Principles and Rights at Work. Over the years the soft law norms of the
OECD, the ILO, and the U.N. have become increasingly integrated.
An example of reliance on these sources of standards is the new
Netherlands Child Labor Due Diligence statute finally adopted by the
Dutch Senate in Amsterdam, on the 14th of May 2019.176 That law suggests
the companies conducting due diligence to determine if child labor is
occurring in their supply chains refer to the process set forth in the Child
Labour Guidance for Business prepared by the International Labor
Organization in collaboration with the International Organization of
Employers.177
Id.; see INT’L LAB. ORG., ILO-IOE CHILD LABOUR GUIDANCE TOOL FOR BUSINESS: HOW TO
DO BUSINESS WITH RESPECT FOR CHILDREN’S RIGHT TO BE FREE FROM CHILD LABOUR (2015),
http://www.ilo.org/ipecinfo/product/download.do?type=document&id=27555.
That document in turn relies substantially on the UN
Guiding Principles on Business and Human Rights.178
IV. GRAVITATIONAL FORCES IN THE GALAXY
In this section, we discuss how norms in various rings of the Business
and Human Rights Galaxy have the potential to influence norms in
other rings. The European Directive on Non-Financial Reporting, for
instance, requires large companies to file a “non-financial statement
containing information relating to at least environmental matters,
social and employee-related matters, respect for human rights, anti-
corruption and bribery matters. Such statement should include a
description of the policies, outcomes and risks related to those matters
and should be included in the management report” of the company.179
The statement “should also include information on the due diligence
processes implemented by the undertaking, also regarding, where rele-
vant and proportionate, its supply and subcontracting chains, in order
to identify, prevent and mitigate existing and potential adverse
impacts.”180 As we have indicated, the Directive thus is located in what
we have described as the second ring of norms that involve reporting
requirements.
The Directive provides that companies may meet their obligations by
drawing on norms contained in other rings of the Galaxy:
176. See MVO PLATFORM, supra note 64.
177.
178. See id. at 9-23.
179. Directive 2014/95/EU of the European Parliament and of the Council of 22 October
2014 Amending Directive 2103/34/EU as Regards Disclosure of Non-financial and Diversity
Information by Certain Large Undertakings and Groups, 2014 O.J. (L 330) 6.
180. Id.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
340 [Vol. 50
In providing this information, undertakings which are subject to
this Directive may rely on national frameworks, Union-based
frameworks such as the Eco-Management and Audit Scheme
(EMAS), or international frameworks such as the United Nations
(UN) Global Compact, the Guiding Principles on Business and
Human Rights implementing the UN “Protect, Respect and
Remedy” Framework, the Organisation for Economic Co-opera-
tion and Development (OECD) Guidelines for Multinational
Enterprises, the International Organisation for Standardisation’s
ISO 26000, the International Labour Organisation’s Tripartite
Declaration of principles concerning multinational enterprises
and social policy, the Global Reporting Initiative, or other recog-
nised international frameworks.181
Similarly, the Guidance Report on the U.K. Companies Act issued by
the FRC has said that in making disclosures on human rights issues,
companies:
[M]ay refer to a source of guidance (e.g. the UN Guiding
Principles on Human Rights) or a voluntary framework that pro-
vides advice on how the entity should conduct its business, sug-
gests ways of monitoring or tracking performance, or provides
examples of disclosures that might be helpful in communicat-
ing information to the entity’s stakeholders. In preparing the
strategic report, the directors may choose to comply fully or
partially with that guidance or voluntary framework, or take a
more general regard of its content.182
Guidance on the Strategic Report, FIN. REPORTING COUNCIL (2014), https://www.frc.org.uk/
accountants/accounting-and-reporting-policy/clear-and-concise-and-wider-corporate-reporting/
narrative-reporting/guidance-on-the-strategic-report.
The FRC guidance thus provides another example of how “soft”
standards, such as the UNGP, in the fifth ring of the Galaxy may be
incorporated into company compliance with “hard” law requirements,
such as reporting obligations, in the second ring.
An example of a more targeted reporting requirement is the EU
Accounting and Transparency Directives for the extractives and logging
industries adopted in 2013.183
Eur. Comm’n., Public Country by Country Reporting (2017), https://ec.europa.eu/info/
business-economy-euro/company-reporting-and-auditing/company-reporting/public-country-
country-reporting_en. (laying down supply chain due diligence obligations for European Union
These provisions are modeled on the
181. Id. ¶ 9.
182.
183.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 341
importers of tin, tantalum, and tungsten, their ores, and gold originating from conflict-affected
and high-risk areas).
Extractives Industry Transparency Initiative (EITI) and apply to all
“listed and large non-listed companies that are active in the oil, gas,
mining or logging sectors” that are either registered in the European
Economic Area or listed on EU-regulated markets, even if they are
incorporated in a non-European country.184
The same EU Directives attempt to address corruption in the indus-
try by requiring these companies to report all material payments to gov-
ernments by country and project, including those for infrastructure
improvements. The EU disclosure requirements apply directly to com-
panies rather than, as with the EITI, to individual countries.185 “These
rules,” says the European Commission, “aim to improve the transpar-
ency of payments made to governments all over the world by the extrac-
tive and logging industries. This helps populations of resource-rich
countries hold their governments accountable for the exploitation of
natural resources, in line with the Extractive Industries Transparency
Initiative.”186
In addition to the EITI, a major impetus for the EU initiative was the
reporting requirement in Section 1504 of the 2010 Dodd-Frank legisla-
tion in the United States. That section requires resource extraction
companies listed on U.S. stock exchanges to disclose all payments to
governments by government entity, business segment making the pay-
ment, and individual project.187 This reflects one way in which an en-
forceable obligation may reflect the gravitational pull of both voluntary
standards and hard law provisions in other countries.
Another example of potential gravitational force is reporting require-
ments in the second ring of the Galaxy. These simply require disclosure
of a company’s efforts and the process that it follows with regard to cer-
tain risks, rather than imposing enforceable substantive obligations.
Consumers, investors, and NGOs, however, may use reports as a stand-
ard against which to evaluate company behavior. This could result in
claims that the company is not living up to the commitments it
describes in its reports, or that the reports misrepresent the company’s
activities and thus create liability for fraud.
184. Id.
185. Id.
186. Id.
187. 15 U.S.C. § 78m(q) (2018); Disclosure of Payments by Resource Extraction Issuers,
Release No. 34-78167, 17 CFR Parts 240 and 249b (Sept. 26, 2016).
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
342 [Vol. 50
As one law firm has suggested, for instance, with respect to the
California reporting requirement on supply chains, one risk for
companies:
[I]s a class action based on misleading disclosures—that is,
false advertising. If your company complies with the statute but
inaccurately describes its practices that could trigger a class
action based on affirmative misrepresentation. Although it is
debatable whether a plaintiff could win class certification on
such a theory, the expense of such a suit—and the public rela-
tions damage—could be significant. So, it’s important to be
careful about what you say.188
Furthermore, “activists may push the envelope in litigation to try to
find ways to use the statute without Attorney General involvement, or
they may use extra-judicial methods to publicize violations.”189 The law
firm suggests that as a result, “companies would be well advised both to
have reasonable fair trade practices in place and, in complying with the
statute, to disclose those practices accurately.”190
In these ways, a reporting requirement may effectively subject a com-
pany to the expectation that it will minimize or eliminate human rights
risks from its operations. Establishment and “enforcement” of this obli-
gation in this case thus may occur, not through the actions of a govern-
mental entity, but through the efforts of coalitions in civil society.
Finally, the content of the hard law obligation of the duty of care con-
tained in the third ring of the Galaxy may be influenced by private vol-
untary norms in the fourth ring. Thus, for instance, a mining company
that does not subscribe to the Voluntary Principles on Security and
Human Rights, or one that does so but does not train its security forces
in accordance with them, could well be presumed to violate its duty
unless it has adopted measures at least as stringent as these Principles.
Patterns of influence such as these in the Business and Human
Rights Galaxy reflect the fact that, in the absence of an international
sovereign with regulatory authority over global corporate activities,
transnational actors have increasingly looked to other forms of “law
making” to regulate business operations.191 The aim is to provide what
188. SHEPPARD MULLIN, supra note 45.
189. Id.
190. Id.
191. See generally Hale & Held, supra note 28.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 343
Niklas Luhmann calls “a social system which depends upon the congru-
ent generalisation of normative behavioral expectations.”192
As our description indicates, the Business and Human Rights Galaxy
has several distinctive features. First, as Jessica Green puts it, “the right to
make rules is not restricted to states.”193 Instead, this right involves partic-
ipation by a range of both public and private actors, such as international
organizations, NGOs, industry groups, professional organizations, and
major corporations. Authority in the Galaxy—the gravitational force of a
particular form of norm—arises not from formal legal enactments, but
from the willingness of others to be bound by a party’s guidance. As
Green argues, “when actors consent to be bound by rules, they create
authority.”194 Such consent largely rests on the legitimacy of the actor,
which in turn is based on qualities such as technical expertise, an inclu-
sive deliberative process, a dominant position in a relevant market, or
perceived acceptance by other relevant actors.
Second, rules and standards in the Galaxy develop in a range of less
formal contexts than those in which traditional governmental regula-
tion occurs. Meetings convened by international organizations and
NGOs, industry conferences, gatherings of professional associations,
and informal communications among actors in various networks are all
possible sites where ideas are proposed, developed, refined, and
adopted.
Related to this feature, the development of norms operates primarily
through networks of loosely connected actors rather than in top-down,
command-and-control fashion. In the classic international law system,
legal rules fall into relatively clear categories and hierarchies, with inter-
national law binding states and national or local law governing legal
persons, even though this system is less integrated and definite than
domestic law. This makes it possible, in principle, to assess the norma-
tive force of rules and to determine which should apply in a particular
situation.
By contrast, in a galaxy comprised of networks, normative systems
overlap and influence one another. An important consequence of the
networked nature of the Business and Human Rights Galaxy is what
transnational law scholars Terence Halliday and Bruce Carruthers
192. NIKLAS LUHMANN, A SOCIOLOGICAL THEORY OF LAW 82 (2d ed. 2014).
193. JESSICA F. GREEN, RETHINKING PRIVATE AUTHORITY: AGENTS AND ENTREPRENEURS IN GLOBAL
ENVIRONMENTAL GOVERNANCE 29 (2014).
194. Id. at 27.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
344 [Vol. 50
describe as “recursivity.”195 This reflects the fact that various actors com-
pete to have their respective descriptions and diagnoses become the
accepted way to identify what is labeled as a problem, as well as the
appropriate response to it.
Finally, as we have described, the clusters of norms in each ring of
the Galaxy are not readily reducible to characterization as “hard” or
“soft law,” or as voluntary or mandatory. Compliance with voluntary
standards in ring four of the Galaxy, for instance, is often monitored by
NGOs, consumer groups, and investors who may criticize a company
for failing to adhere to them. This can serve as a form of informal
enforcement, with serious financial and reputational consequences.
Companies may also incorporate voluntary standards into their con-
tracts with retailers and manufacturers, so that compliance with the
standards becomes a legal obligation. Voluntary standards and princi-
ples also may become sufficiently accepted that they serve as a model
for national legislation. Finally, rules and norms can circulate through-
out networks, with various actors incorporating them into their prac-
tices in ways that reinforce their influence.196 As transnational law
scholar Sigrid Quack has observed, this process “represents global insti-
tution building that involves continuous transformations between ‘soft’
and ‘hard’ regulation.”197
Sigrid Quack, Legal Professionals and Transnational Law-Making: A Case of Distributed Agency, 14(5)
ORG. ART. 643-44 (2007), https://journals.sagepub.com/doi/pdf/10.1177/1350508407080313.
In the next section, we discuss the implica-
tions of these features of the Galaxy for the new French statutory duty
of vigilance.
V. THE DUTY OF VIGILANCE
Several issues remain open for clarification with respect to the opera-
tion of the French statutory duty of vigilance. As we suggest below, ref-
erence to norms in various rings of the Business and Human Rights
Galaxy may be useful in this process as a source of guidance for admin-
istrative guidelines, judicial decisions, and corporate compliance pro-
grams. We will not discuss in detail the provisions of each of these
sources, nor suggest what specific provisions of each source should
inform interpretation of the French statutory duty. Our purpose is sim-
ply to identify a few of the potential sources of guidance that are avail-
able in the Galaxy of which the duty of vigilance is now a part.
195. TERRENCE C. HALLIDAY & BRUCE G. CARRUTHERS, BANKRUPT: GLOBAL LAWMAKING AND
SYSTEMATIC FINANCIAL CRISIS 132 (2009).
196. See generally Hale & Held, supra note 28.
197.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 345
A. Subsidiaries, Subcontractors, and Suppliers
The first issue is the scope of the entities with respect to which a com-
pany has a duty of vigilance. To reiterate, the French law imposes a duty
of vigilance upon a company with regard to the “companies that it con-
trols within the meaning of Article L. 233-16, II [of the Commercial
Code], directly or indirectly, as well as the activities of subcontractors or
suppliers with whom they have an established commercial relationship,
when these activities are related to this relationship.”198
CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE] art. L. 225-102-4, https://www.
business-humanrights.org/en/french-duty-of-vigilance-bill-english-translation. Section 1 of the
French Trade and Industry Code provides that the law applies to “any company that employs, at
the end of two consecutive years, at least five thousand employees within itself, as well as within its
direct or indirect subsidiaries headquartered on French territory, or at least ten thousand
employees within itself, as well as within its direct or indirect subsidiaries headquartered on
French territory or abroad . . . establishes and implement an effective vigilance plan.”
The relevant
section of the Commercial Code relies on consolidated accounting and
the group management report as the basis for a determination of con-
trol that is sufficient to establish a parent-subsidiary relationship.199 As
French lawyers and business and human rights experts Stéphane
Brabant, Charlotte Michon, and Elsa Sovourey note,200 that section
focuses on the ability of a company “to have decision-making power, in
particular over the financial and operational policies of another en-
tity.”201 Such authority may be legal, contractual, or de facto.202 Entities
subject to such control would be regarded effectively as subsidiaries of
the company.
By contrast, the reference in the French statute to subcontractors
and suppliers is more ambiguous with regard to its scope. An initial ver-
sion of the law established responsibility for subcontractors over which
the company exercises “a decisive influence.”203 This concept of deci-
sive influence resembles concepts of business relations in the OECD
Guidelines on Multinational Enterprises, or sphere of influence in the
U.N. Global Compact, which take into account the amount of
198.
199. The original text provides: “A corporation is deemed to exercise control over another
corporation according to Article L-233-16 of the French Commercial Code when it controls
directly or indirectly a majority of the voting shares or when it has authority to appoint the
majority of executive management” (translated by authors).
200. Stéphane Brabant and Elsa Savourey are French lawyers and recognized experts in
Business and Human Rights; Charlotte Michon is a French jurist and also an expert in Business
and Human Rights. She is the executive director of EDH France. See Brabant, Savourey & Michon,
supra note 25.
201. Id. at 2.
202. Id.
203. Assemblée Nationale, supra note 13.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
346 [Vol. 50
influence that the contracting company is capable of exercising on the
subcontractor or supplier.204
Companies could claim that the eventual language of the French law
suggests inclusion only of tier one suppliers and subcontractors. This
interpretation, however, would seem to be inconsistent with the explan-
atory statement accompanying the legislation, which indicates that the
aim of the law is to prevent disasters such as occurred at Rana Plaza.205
In addition, the December 2013 PCN France report regarding the tex-
tile industry highlighted the risks posed by subcontracting by suppliers
in this sector.206
National Contact Point Report on Implementation of the OECD Guidelines in the Textile and
Clothing Sector, Following a Referral from Nicole Bricq, NAT’L CONTACT POINT (Dec. 2, 2013),
https://www.tresor.economie.gouv.fr/Ressources/8507_rapport-du-pcn-sur-la-mise-en-oeuvre-
des-principes-directeurs-de-l-ocde-dans-la-filiere-textile-habillement.
This suggests that a contracting company with reason
to be aware of risks beyond the first tier of suppliers and subcontractors
would have a duty of vigilance with respect to such risks.
Interpretation of this provision might also draw upon jurisprudence
on the common law duty of care, particularly with respect to the ele-
ment of proximity. As international lawyer and scholar Renée-Claude
Drouin has observed, this case law deals with responsibility for the
actions of subsidiaries rather than entities in the supply chain.207
Nonetheless, the requirement of proximity directs attention to whether
“the circumstances surrounding the existing relation between the
plaintiff and the defendant are such that one can conclude that the de-
fendant is required to be attentive to the plaintiff’s legitimate interests
in its business management.”208 As we have described, this may be the
case if, analogizing from Chandler v. Cape, a subcontractor’s or suppli-
er’s employees reasonably expect that a company has assumed responsi-
bility for providing protection from certain risks.209 It also could be the
case if, as in Choc v. Hudbay, a company has made public declarations of
its commitments with regard to the human rights impacts of its opera-
tions and has indicated its intention to work with the local community
to prevent rights violations.210
204. Queinnec, La notion de sp’ère d’influencœur coeur de la RSE, lecture juridique d’un phénomène
normatif, JOURNAL DES SOCIÉTÉS 66 (July 2012).
205. Brabant, Savourey & Michon, supra note 25, at 4.
206.
207. Renée-Claude Drouin, Le développement du contentieux à l’encontre des entreprises
transnationales : quel rôle pour le devoir de vigilance?, DROIT SOCIAL 246, 254 (Mar. 2016).
208. Id.
209. Chandler v. Cape plc [2012] EWCA Civ 525, ¶ 62-71 (UK).
210. Choc v Hudbay Minerals Inc., 2013 ONSC 1414, ¶ 67-68 (Can. Ont. Sup. Ct. J.).
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 347
Brabant, Michon, and Savourey also suggest that drawing on the
UNGPs could lead to an interpretation of the statute that provides for a
robust duty of vigilance to encompass a significant number of entities
in a company’s value chain.211 They note that the duty of diligence in
the UNGPs focuses on adverse impacts that a company may cause
or contribute to through its own activities, or those that may be
directly linked to the company’s operations, products, or services.212
Companies are expected to remedy the first two types of impacts, and
to use their leverage to try to prevent or minimize the third type. This is
because the law focuses on the types of entities in question, rather than
the extent of a company’s involvement in adverse human rights
impacts.213
They suggest, however, that also imposing a duty of vigilance with
respect to impacts to which a company is directly linked would be more
consistent with the intent of the law to reinforce the UNGPs. As they
note, “a company may be linked to an adverse impact through any of
the business partners and its value chain.”214 They propose that this
principle “could therefore interact with that of the established commer-
cial relationship and . . . advocate for a more inclusive, rather than
exclusive, vision of entities falling under the ambit of the vigilance
plan.”215 The potentially wide scope of this duty would be qualified by
the emphasis in the statute on preventing “severe” impacts on human
rights,216
CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE] art. L. 225-102-4, https://www.
business-humanrights.org/en/french-duty-of-vigilance-bill-english-translation (Fr.) (stating that
“the plan shall include the reasonable vigilance measures to allow for risk identification and for
the prevention of severe violations of human rights and fundamental freedoms, serious bodily
injury or environmental damage or health risks”).
and by the acknowledgment in the UNGPs of the need to es-
tablish priorities with respect to the risks that should be avoided.
Defining the scope of the duty of vigilance in this way would be con-
sistent, not only with the UNGP, but with the European Directive on
Non-Financial Reporting. The latter instrument provides that compa-
nies must report on the risks of severe adverse social and environmental
impacts.217 It states that “[t]he risks of adverse impact may stem from
211. Brabant, Savourey & Michon, supra note 25, at 4-6.
212. Id. at 5.
213. Id.
214. Id.
215. Id. at 6.
216.
217. Directive 2014/95/EU of the European Parliament and of the Council of 22 October
2014 Amending Directive 2103/34/EU as Regards Disclosure of Non-financial and Diversity
Information by Certain Large Undertakings and Groups, 2014 O.J. (L 330) 6.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
348 [Vol. 50
the undertaking’s own activities or may be linked to its operations, and,
where relevant and proportionate, its products, services and business
relationships, including its supply and subcontracting chains.”218
There are, no doubt, insights from other types of norms in the
Business and Human Rights Galaxy that may be useful in determining
the scope of a company’s duty of vigilance. Our discussion is simply
meant to emphasize the ways in which norms located in different rings
of that Galaxy, whether legally enforceable or not, may help determine
the scope of this potentially open-ended duty.
B. The Vigilance Plan
Recall that the French statute requires that a vigilance plan include
five components.219
CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE] Art. L. 225-102-4, https://www.
business-humanrights.org/en/french-duty-of-vigilance-bill-english-translation (Fr.).
These are: (1) risk mapping, which involves identi-
fying, analyzing, and setting priorities among risks; (2) regular assess-
ment of relevant subsidiaries, subcontractors, and suppliers; (3) actions
to mitigate risks or prevent severe impacts; (4) a mechanism to alert a
company of the existence or materialization of risks; and (5) monitor-
ing and evaluating the effectiveness of implementation measures.220
These measures correspond to the main elements of the duty to
respect set forth in the UNGPs. Article 13(a) of the UNGPs says that
this duty requires that businesses “[a]void causing or contributing to
adverse human rights impacts through their own activities, and address
such impacts when they occur,” and that they “[s]eek to prevent or miti-
gate adverse human rights impacts that are directly linked to their oper-
ations, products or services by their business relationships, even if they
have not contributed to those impacts.221 Article 17 emphasizes that
conducting human rights due diligence is a crucial way that companies
can identify potential impacts and seek to avoid or mitigate them.222 As
it states, “The process should include assessing actual and potential
human rights impacts, integrating and acting upon the findings, track-
ing responses, and communicating how impacts are addressed.”223
Moreover, the UNGPs emphasize the importance of consultation with
stakeholders in this process.224 The Constitutional Council ruled that
218. Id. pmbl. ¶ 8.
219.
220. Id.
221. UNGP, supra note 17, art. 13.
222. Id., art. 17.
223. Id.
224. Id., art. 18.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 349
this was recommended—rather than required—by the statute,225 but it
will be essential in order to ensure that a plan is not reduced to simply a
form of an internal audit.
What criteria should be used to determine whether a plan has
adequately incorporated these required measures? Soft law instruments
may be useful in answering this question. The OECD, for instance, has
developed Due Diligence Guidance for Responsible Business Conduct,226 as
well as a set of guidelines for conducting due diligence in specific
industry sectors.227 In addition, the International Business Leaders
Forum (IBLF) and the IFC, in association with the U.N. Global
Compact, has published a Guide to Human Rights Impact Assessment and
Management.228 This provides step-by-step guidance on preparation for
conducting due diligence and impact assessment; identification of
human rights risks; engagement with stakeholders; assessment of
impacts; mitigation of harms; implementing a mitigation plan and inte-
grating human rights within business operations; evaluating impacts;
and reporting to stakeholders.229
Guidance also may be available from non-financial reporting direc-
tives. France was a pioneer in requiring such reports as part of its 2001
law adopting new economic regulations.230 This obligation has been
progressively extended to more companies, while the scope of informa-
tion required has widened with respect to “the way in which the com-
pany takes into account the social and environmental consequences of
its activities.”231
Similarly, the 2014 EU Non-Financial Reporting Directive prescribes
that companies communicate “the principal risks related to those mat-
ters linked to the undertaking’s operations including, where relevant
225. Conseil constitutionnel [CC] [Constitutional Court] decision No. 2017-750DC, Mar. 23,
2017 (Fr.).
226. ORG. FOR ECON. CO-OPERATION & DEV. (OECD), DUE DILIGENCE GUIDANCE FOR
RESPONSIBLE BUSINESS CONDUCT (2018).
227. ORG. FOR ECON. CO-OPERATION & DEV. (OECD), GUIDELINES FOR MULTINATIONAL
ENTERPRISES (2011).
228. INT’L BUS. LEADERS FORUM ET AL., GUIDE TO HUMAN RIGHTS IMPACT ASSESSMENT AND
MANAGEMENT (2010).
229. Id. at 6-7.
230. Loi 2001-420 du 15 mai 2001, relative aux nouvelles régulations économiques, art. 116
[Law 2001-420 of May 15, 2001 on relative to new economic regulations, section 116], JOURNAL
OFFICIEL DE LA RÉPUBLIQUE FRANÇAISE [J.O.] [OFFICIAL GAZETTE OF FRANCE], May 15, 2001,
p. 7776.
231. Décret 2012-557 du 24 avril 2012 [concerning companies’ obligations of transparence in
social and environmental matters], JOURNAL OFFICIEL DE LA RÉPUBLIQUE FRANÇAISE [J.O.]
[Official Gazette of France], Apr. 26, 2012.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
350 [Vol. 50
and proportionate, its business relationships, products or services
which are likely to cause adverse impacts in those areas, and how the
undertaking manages those risks.”232 The Directive also requires com-
panies to provide information on “the due diligence processes imple-
mented by the undertaking, also regarding, where relevant and
proportionate, its supply and subcontracting chains, in order to iden-
tify, prevent and mitigate existing and potential adverse impacts.”233
Notably, in light of the fact that the French duty of vigilance requires
measures to identify “severe” adverse impacts, the Directive requires
reporting “in relation to matters that stand out as being most likely to
bring about the materialisation of principal risks of severe impacts, along
with those that have already materialized. The severity of such impacts
should be judged by their scale and gravity.”234
The 2017 French incorporation of the EU Directive provides that
non-financial reporting must present the business model of the com-
pany and, for each relevant category of information, “a description of
the main risks linked to the company’s activity or to all the companies’
activities, including, when that is both pertinent and proportional, the
risks generated by its business relations, its products, or its services.”235
Moreover, the declaration inserted in the report must contain a
description of the company’s policies that are applied with respect to,
when appropriate, due diligence procedures implemented to prevent,
identify, and mitigate risks, as well as the results of these policies,
including key performance indicators.
The most recent requirements of the new French Decree (Ordonnance)
on non-financial reporting, which came into force in July 2017,236 con-
verge with the requirements of the French law on Duty of Vigilance.
232. Directive 2014/95/EU of the European Parliament and of the Council of 22 October
2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity
information by certain large undertakings and groups, 2014 O.J. (L 330/1), art. 1 ¶ 1(d).
233. Id. pmbl. ¶ 6.
234. Id. pmbl. ¶ 8 (emphasis added).
235. Ord. 2017-1180 du 19 juillet 2017, relative à la publication d’informations non financières
par certaines grandes entreprises et certains groupes d’entreprises art. 1, III [Ord. 2017-1180 of
July 19, 2017 regarding the publication of non-financial information by some large companies
and some groups of companies], JOURNAL OFFICIEL DE LA RÉPUBLIQUE FRANÇAISE [J.O.] [OFFICIAL
GAZETTE OF FRANCE], July 21, 2018; Béatrice Parance & Elise Groulx, La déclaration de performance
extra-financière, nouvelle ambition du reporting extra-financier [The Extra Financial Statement, the
New Ambition of Extra Financial Reporting], 11 LA SEMAINE JURIDIQUE ENTREPRISE ET AFFAIRES
1128 (2018).
236. Ord. 2017-1180 du 19 juillet 2017, relative à la publication d’informations non financières
par certaines grandes entreprises et certains groupes d’entreprises art. 1, III [Ord. 2017-1180 of
July 19, 2017 regarding the publication of non-financial information by some large companies
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 351
and some groups of companies], JOURNAL OFFICIEL DE LA RÉPUBLIQUE FRANÇAISE [J.O.] [OFFICIAL
GAZETTE OF FRANCE], July 21, 2018.
Over time, the new Decree may have the effect of strengthening the
French law.
The French Decree establishes an obligation to report (obligation de
dire) while the French Statute on Duty of Vigilance creates an obligation
to act (obligation de faire). Corporations are subject to respect both laws
and must comply using the same corporate information.
The first generation of French legislation on non-financial reporting
(Loi Grenelle 2, 2010 and its decree of 2012)237 could be interpreted as
mandating a box ticking or “checklist” exercise. In contrast, the second
generation of legislation (Ordinance or Decree on Non- Financial
Reporting and Law of Duty of Vigilance of 2017) establishes a series of
more substantial requirements: (1) risk mapping; (2) regular risk
assessments of relevant partners; (3) actions to mitigate risks and pre-
vent severe impacts; (4) alert mechanisms about risks and their materi-
alization; (5) monitoring and evaluation of the effectiveness of
implementation measures.238
Loi 2010-788 du 12 juillet 2010 portant engagement national pour l’environnement; Loi
2012-557 du 24 avril 2012, relatif aux obligations de transparence des entreprises en matière sociale
et environnementale; CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE] art. L. 225-102-4,
https://www.business-humanrights.org/en/french-duty-of-vigilance-bill-english-translation (Fr.).
To meet all these requirements, corpora-
tions need to do more than “box ticking.”
Moreover, exercising the duty of vigilance requires the enterprise to
adopt a global vision of the corporate social responsibility and sustain-
ability policies of the parent corporation, its subsidiaries, subcontrac-
tors, and suppliers. It must reach beyond “silos” of traditional
compliance programs to conduct a wider and more thorough risk
assessment of the corporate group and its key business partners.
The vigilance plan required by the French statute thus must be seen
as but one of several types of reports on human rights impacts that com-
panies have been required to provide in recent years. A company pre-
paring its plan can draw on its own, and other companies’, experience
in complying with similar reporting norms in the second ring of the
Galaxy. In addition, it can look to soft law guidance in the fifth ring of
237. Loi 2010-788 du 12 juillet 2010 portant engagement national pour l’environnement [Law
2010-788 of July 12, 2010 confirming national commitment on the environment], JOURNAL
OFFICIEL DE LA RÉPUBLIQUE FRANÇAISE [J.O.] [OFFICIAL GAZETTE OF FRANCE], July 13, 2010; Loi
2012-557 du 24 avril 2012, relatif aux obligations de transparence des entreprises en matière
sociale et environnementale [Law 2012-557 of April 24, 2012 on the new transparency
requirements of corporations relative to social and environmental issues], JOURNAL OFFICIEL DE
LA RÉPUBLIQUE FRANÇAISE [J.O.] [OFFICIAL GAZETTE OF FRANCE] Apr. 24, 2012.
238.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
352 [Vol. 50
the Galaxy, such as OECD and Global Compact models for due dili-
gence and human rights impact analysis, respectively.
C. Reasonableness and Foreseeability
The French statute requires that a vigilance plan contain “reasonable
vigilance measures adequate to identify the risks and to prevent gross
violations of human rights and fundamental freedoms, of health and
security of people, as well as of the environment.”239 Use of the term
“reasonable” reflects the desire for a balance between the need to pro-
tect human, social, and environmental concerns on the one hand and,
on the other, the fact that a multinational company is involved in activ-
ity in numerous markets and that it relies on numerous parties in an
extended supply chain.
The court in Choc v. Hudbay Minerals Inc. acknowledged these poten-
tially competing concerns in describing the parties’ claims regarding
the public policy considerations relevant to the case. Hudbay Minerals
expressed the concern that holding a parent corporation responsible
for the actions of its subsidiaries would create unduly expansive liability,
expose Canadian companies to numerous lawsuits, and violate the prin-
ciple of limited liability companies based on the separate legal identity
of parent and subsidiary corporations.240 The plaintiffs countered that
finding such a responsibility would encourage Canadian companies to
respect human rights, further the government’s goal of reducing viola-
tions of human rights by Canadian companies’ operations, and reduce
the asymmetry between the global scope of business operations and the
locally limited scope of tort law.241 The court admitted the force of each
set of claims, but concluded that it was more appropriate to attempt to
balance them on a trial record rather than in reviewing a motion to
dismiss.242
The French law’s imposition of a duty on companies to engage in a
particular analytical process, rather than the imposition of liability for
all harms committed by its subsidiaries, subcontractors, and suppliers,
reflects an effort to strike a balance that takes account of the concerns
expressed by both sides in the Hudbay case. The obligation thus is to
239. CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE] art. L. 225-102-4 pmbl. (Fr.) (trans. by
authors).
240. Choc v Hudbay Minerals Inc., 2013 ONSC 1414, ¶ 72 (Can. Ont. Sup. Ct. J.).
241. Id. ¶ 73.
242. Id. ¶ 74.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 353
provide the means (obligation de moyens) rather than to ensure a certain
outcome (obligation de résultat).243
In addition, it is reasonable to assume that compliance with the
French law will involve establishing priorities to ensure identification of
the most serious types of risks. The law itself contemplates this
approach,244 and the UNGPs provide support for it in the commentary
to Article 17:
Where business enterprises have large numbers of entities in
their value chains it may be unreasonably difficult to conduct
due diligence for adverse human rights impacts across them
all. If so, business enterprises should identify general areas
where the risk of adverse human rights impacts is most signifi-
cant, whether due to certain suppliers’ or clients’ operating
context, the particular operations, products or services
involved, or other relevant considerations, and prioritize these
for human rights due diligence.245
Judges, therefore, should be well aware that most companies will not
be able to immediately identify and prevent all risks along their supply
chain. The judges are likely to be receptive to a vigilance plan that
includes gradual but steady growth in prevention and management
measures to address an expanding set of risks, ideally in collaboration
with stakeholders.
Finally, the French duty of vigilance may exert its own gravitational
pull in the Galaxy, encouraging common law jurisdictions to recognize
a duty of care for parent companies with respect to the risk of human
rights violations by their subsidiaries, subcontractors, and suppliers.
Convergence around this norm will provide transnational companies a
set of guiding principles and a common approach to human rights due
diligence.
D. Extraterritorial Application of the Duty
The French law does not directly address whether its scope is extra-
territorial, although the goal of the law would seem naturally to call for
extraterritorial application. The drafters mentioned this issue in the
243. Parance & Groulx, supra note 66, at 21.
244. The law requires a mapping of risks. CODE DE COMMERCE [C. COM.] [COMMERCIAL CODE]
art. L. 225-102-4 at ¶ 1 (Fr.).
245. Human Rights Council Res. 17/4, HR/PUB/11/04, at 19 (June 16, 2011).
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
354 [Vol. 50
law’s explanatory comments.246 The issue should be less difficult for
damages resulting from harm to the environment. Article Eight of the
Rome Regulation assigns competence to the law that governs the opera-
tive event that produces damage, which arguably would be the failure
of the parent company to fulfill its duty of vigilance if the risk of harm is
reasonably foreseeable. Had the French legislature expressly defined
the vigilance statute as a police law, this would have provided a firmer
basis for extraterritorial application of the statute. We anticipate, how-
ever, that practice and legal doctrine will evolve in this direction over
time.
At the same time, courts in the United Kingdom,247 Canada, and the
Netherlands appear to be increasingly less stringent in applying the
doctrine of forum non conveniens in cases involving allegations of
human rights violations in countries where there is some doubt about
the ability of plaintiffs to receive an adequate assessment of their
claims.
U.K. tribunals have shown similar willingness to permit civil tort suits
for alleged violations of human rights perpetrated abroad by companies
headquartered in the United Kingdom.248 Courts rely on the common
law duty of care in doing so.249
Rob Edwards, Liability of a Parent Company: Chandler v. Cape Plc, DWF LLP (July 19, 2012),
http://www.mondaq.com/uk/x/187638/employee+rights+labour+relations/Liability+Of+A+Parent+
Company+Chandler+V+Cape+Plc.
The 2016 decision in Dominic Liswaniso
Lungowe & Others v. Vedanta Resources Plc and KCM reflects this trend. In
this case, the court allowed an action to proceed in the United Kingdom
against Vedanta, a mining company headquartered in England, and its
Zambian subsidiary, Konkola Copper, that alleged grave environmental
damage due to Vedanta’s breach of its duty of care.250
Xandra Kramer, UK Court on Tort Litigation Against Transnational Corporations, CONFLICT
OF LAWS (June 23, 2016), http://conflictoflaws.net/2016/uk-court-on-tort-litigation-against-
transnational-corporations/.
The court also
246. Olivera Boskovic, Brèves remarques sur le devoir de vigilance et le droit international privé,
EUROPÉEN ET INTERNATIONAL, 2016, at 385 (Fr.); Horatia Muir Watt, Devoir de vigilance et droit
international privé: Rev. int. Compliance 2017, dossier spécial Loi relative au devoir de vigilance, une
perspective pratique et multidimensionnelle, SCIENCESPO, May 17, 2018, at 48 (Fr.).
247. Case C-281/02, Owusu v. Jackson, 2005 E.C.R. I-1386 (stating that forum non conveniens
cannot be used for British companies in the United Kingdom, although it can still be an issue for
foreign subsidiaries of British parent companies).
248. Richard Meeran, Tort Litigation against Multinational Corporations for Violation of Human
Rights: An Overview of the Position Outside the United States, 3:1 CITY UNIV. OF HONG KONG L.R. 1
(2011).
249.
250.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 355
found that the doctrine of forum non conveniens251 was inapplicable in
the interests of justice.252 The Civil Division for the Court of Appeal
rejected Vedanta’s appeal in 2017.253
Martyn Day & Oliver Holland, Court of Appeal upholds ruling that claims by Zambian villagers
against mining giant can be heard in UK court, LEIGH DAY (Oct. 13, 2017), https://www.leighday.co.
uk/News/News-2017/October-2017/Court-of-Appeal-upholds-ruling-that-claims-by-Zamb www.
business-humanrights.org.
On January 15 and 16, 2019, the U.K. Supreme Court in London
heard the latest appeal, and issued a decision on April 10 finding in
favor of the complainants.254
Gabrielle Holly, Zambia Farmers Can Take Vedanta to Court over Water Pollution. What Are the
Legal Implications?, BUS. & HUM. RTS. RESOURCE CTR. (Oct. 4, 2018) https://www.business-
humanrights.org/en/zambian-farmers-can-take-vedanta-to-court-over-water-pollution-what-are-
the-legal-implications.
The court quite easily concluded that
the proper place for trial would have been Zambia,255 but for seri-
ous concerns as to substantial justice issues in Zambia, primarily
related to funding. In allowing the suit to proceed on the merits,
the court’s test of substantial justice is derived essentially from two
factors:
First, the practicable impossibility of funding such group
claims where the claimants were all in extreme poverty; and
secondly, the absence within Zambia of sufficiently substantial
and suitably experienced legal teams to enable litigation of this
size and complexity to be prosecuted effectively, in particular
against a defendant (KCM) with a track record which suggested
that it would prove an obdurate opponent.256
In Canada, three recent cases illustrate this trend. Choc v. Hudbay
Minerals, Inc., which we have discussed above, concerned the alleged
forced violent eviction by a Canadian parent company’s security forces
of a local community near a subsidiary’s operations in Guatemala. The
251. It is to be noted that the legal theory of forum non conveniens can no longer be used for
British companies in the United Kingdom following the ECJ 2005 judgment in Owusu v. Jackson,
although it can still be an issue for foreign subsidiaries of British parent companies. Owusu, 2005
E.C.R. I-1386.
252. Id.
253.
254.
255. See Choc v. Hudbay Minerals Inc., 2013 ONSC 1414, ¶ 85-87 (Can. Ont. Sup. Ct. J.)
(noting that concluding the proper place for trial was anywhere but Zambia would offend the
common sense).
256. Id. ¶ 89.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
356 [Vol. 50
Ontario Superior Court allowed the suit to move forward, and Hudbay
decided not to appeal with regard to the forum non-conveniens issue.257
Hudbay Minerals Lawsuits (re Guatemala), BUS. & HUMAN RIGHTS RES. CTR., https://www.
business-humanrights.org/en/hudbay-minerals-lawsuits-re-guatemala-0#c18034 (last visited Apr.
3, 2019).
In January 2017, the British Columbia Court of Appeals in Garcia v.
Tahoe Resources issued a holding with regard to a lawsuit brought
by Guatemalan victims against a Canadian mining company.258
Overturning a 2015 lower court that had ruled that Canada was not the
forum conveniens, the court of appeals decided that the case could be
brought in Canada.259
Susan Taylor, Court Sets Canada as Jurisdiction for Guatemalan Suit Against Tahoe, CAN. CTR.
FOR INT’L JUSTICE, www.ccij.ca/news/court-sets-canada-jurisdiction-guatemalan-suit-tahoe (last
visited Apr. 3, 2019).
This decision260
Susan Taylor, Update 1-Canada Set as Jurisdiction for Guatemalan Suit Against Tahoe Resource,
REUTERS (Jan. 26, 2017), https://www.reuters.com/article/guatemala-mining-tahoe-resources-
idUSL1N1FH004.
was hailed as an important prec-
edent, authorizing jurisdiction in Canada for a suit alleging human
rights violations committed abroad by a Canadian company.
Finally, the November 2017 decision by the British Columbia Court
of Appeals in Araya v. Nevsun Resources Ltd261 confirmed the position
taken in Garcia v. Tahoe Resources. In the Nevsun case the plaintiffs
alleged forced labor, slavery, torture, and perpetration of crimes
against humanity in the exploitation of the defendant’s (Nevsun
Resources Ltd) mine in Eritrea.262 The British Columbia Court of
Appeals admitted that adjudicating the claim in Canada would result in
numerous logistical difficulties. It nonetheless affirmed the lower
court’s decision to accept jurisdiction, because serious doubts existed
as to the possibility that the plaintiffs would receive a fair trial in
Eritrea. The Court of Appeals rejected the defendant’s arguments that
accepting jurisdiction could have political and diplomatic repercus-
sions because it would reflect an implicit criticism of the judicial system
of another sovereign. The court also rejected the claim that individuals
do not have civil remedies with regard to peremptory violations of jus
cogens norms committed by companies because customary international
law does not recognize individuals as legal subjects.263 On January 23,
the Supreme Court of Canada heard an appeal from Nevsun lodging
the arguments that (a) customary international law has no place in
257.
258. Garcia v. Tahoe Resources Inc., [2017] BCCA 39 (Can.).
259.
260.
261. Araya v. Nevsun Resources Ltd., [2017] BCCA 401 (Can.).
262. Id.
263. Counsel for the plaintiffs in the Araya case are law firms Camp Fiorante Matthews
Mogerman LLP and Siskinds LLP and international human rights lawyer James Yap.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 357
Canadian courts, and (b) the “act of state” doctrine indicates this
should be a diplomatic matter, and not a legal one.264
Jamie Kneen, Can Slave Labour Charges Against Canadian Company Be Heard in Court in
Canada? Supreme Court of Canada Hears Arguments Today, MININGWATCH CAN. (Jan. 23, 2019),
https://www.miningwatch.ca/blog/2019/1/23/can-slave-labour-charges-against-canadian-company-
be-heard-court-canada-supreme-court.
The decision is
still pending.
In the Netherlands, several activities related to alleged tort claims suf-
fered by Nigerian nationals resulted in the exercise of Dutch jurisdic-
tion over Royal Dutch Shell, a company headquartered in the
Netherlands, for breach of care that resulted in serious environmental
damages inflicted by its Nigerian subsidiary. The scope of a common
law norm (the duty of care) was applied and interpreted by Dutch tribu-
nals, which operate under a civil law system, because the relevant facts
occurred in Nigeria, a common law country. In 2013, one Dutch court
found Shell liable for the actions of its Nigerian subsidiary and ordered
that the company pay damages to the victims. 265
Anthony Deutsch & Ivana Sekularac, Dutch Court says Shell Responsible for Nigeria Spills,
REUTERS (Jan. 30, 2013), https://uk.reuters.com/article/uk-shell-nigeria-lawsuit-idUKBRE90T
0DC20130130.
In 2015, the Dutch
Court of Appeals held that it could not find in principle that Shell
could not be sued for its subsidiaries’ negligent actions, although proof
of liability would have to be proved at trial.266
Dutch Court: Shell can be liable for Nigeria spills, AL JAZEERA (Dec. 18, 2015), www.aljazeera.
com/news/2015/12/dutch-court-shell-liable-nigeria-spills-151218120516428.html.
This has cleared the way
for trials in the Netherlands based on the claims against the parent
company headquartered in that country.
VI. CONCLUSION
The new French statutory duty of vigilance is one of the most recent
norms to emerge in the Business and Human Rights Galaxy.267
Worthy of mention, without going into detail, is the fact that the French legislature has
adopted a new law: La Loi Pacte (Pact Law) in an accelerated procedure. PACTE means plan
d’action pour la croissance et la transformation des entreprises (action plan for the growth and
transformation of corporations). Amongst its very numerous dispositions, the law contains a
provision, article 61, that modifies the Civil Code and the Code of Commerce in two ways.
(1) First, for all corporations, the reform introduces the requirement to consider the social and
environmental impacts of their activities in the corporation’s social purpose. (2) Moreover, the
reform introduces the notion of benefit-corporation into French corporate law. Corporations
may also include in their social purpose a mission statement that they deem representative. This
Bill was finally adopted in Paris by both the National Assembly and the Senate on April 11, 2019.
The Constitutional Council subsequently confirmed its constitutionality, and it will will enter into
force on May 24, 2019. La loi PACTE adoptée par le Parlement, REPUBLIQUE FRANÇAISE, https://www.
economie.gouv.fr/plan-entreprises-pacte (last visited May 20, 2019).
It
264.
265.
266.
267.
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
358 [Vol. 50
resembles several existing measures in its focus on corporate process
rather than on outcomes and its basis on the premise that business
enterprises are in the best position to identify and take steps to mini-
mize the adverse effects of their operations. Like the common law duty
of care, it is an enforceable obligation that is framed in broad terms.
This means that guidance on its interpretation and application is avail-
able from other sources of norms in the Galaxy, such as common law
tort jurisprudence, voluntary private standards of conduct, and soft law
on due diligence. Each of these elements may exert some gravitational
force in the development of the duty.
At the same time, the duty of vigilance is novel in its application to
subsidiaries, subcontractors, and suppliers. In this respect, it reflects
what Douglas Cassel argues is the next logical step in the evolution of
the common law duty of care.268 This means that the French law has the
potential to exert its own gravitational force on other norms in the
Galaxy, achieving greater alignment between the benefits that parent
corporations receive from separate entities that they control, or with
which they have close relationships, and the responsibility to ensure
that such entities minimize harm to others. We must ultimately remem-
ber, however, that the gravitational forces that compete for influence
are not natural phenomena that operate of their own accord. They,
instead, are the product of politics and human agency, as actors contest
and negotiate the obligations of the modern transnational business
enterprise and its far-flung operations and impacts.
268. See Cassel, supra note 69.
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 359
APPENDIX: BUSINESS AND HUMAN RIGHTS GALAXY DIAGRAMS
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
360 [Vol. 50
BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS
2019] 361
GEORGETOWN JOURNAL OF INTERNATIONAL LAW
362 [Vol. 50
- ARTICLES����������������������������������������
- BUSINESS AND HUMAN RIGHTS AS A GALAXY OF NORMS����������������������������������������������������������������������������������������������������������������������������������������������������������
- ABSTRACT����������������������������������������
- I. INTRODUCTION�������������������������������������������������������������
- II. THE U.N. GUIDING PRINCIPLES ON BUSINESS AND HUMAN RIGHTS����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
- III. CONCENTRIC RINGS IN THE GALAXY�������������������������������������������������������������������������������������������������������������������������
- A. RING ONE: LEGAL RESPONSIBILITY FOR OUTCOMES����������������������������������������������������������������������������������������������������������������������������������������������������������
- B. RING TWO: LEGAL RESPONSIBILITY FOR REPORTING�������������������������������������������������������������������������������������������������������������������������������������������������������������
- C. RING THREE: LEGAL RESPONSIBILITY FOR PROCESS�������������������������������������������������������������������������������������������������������������������������������������������������������������
- D. RING FOUR: PRIVATE VOLUNTARY INITIATIVES�������������������������������������������������������������������������������������������������������������������������������������������������
- E. RING FIVE: INTERNATIONAL SOFT LAW����������������������������������������������������������������������������������������������������������������������������
- IV. GRAVITATIONAL FORCES IN THE GALAXY����������������������������������������������������������������������������������������������������������������������������������
- V. THE DUTY OF VIGILANCE����������������������������������������������������������������������������������������
- A. SUBSIDIARIES, SUBCONTRACTORS, AND SUPPLIERS����������������������������������������������������������������������������������������������������������������������������������������������������������
- B. THE VIGILANCE PLAN�������������������������������������������������������������������������������
- C. REASONABLENESS AND FORESEEABILITY����������������������������������������������������������������������������������������������������������������������������
- D. EXTRATERRITORIAL APPLICATION OF THE DUTY�������������������������������������������������������������������������������������������������������������������������������������������������
- VI. CONCLUSION����������������������������������������������������������
- APPENDIX: BUSINESS AND HUMAN RIGHTS GALAXY DIAGRAMS�������������������������������������������������������������������������������������������������������������������������������������������������������������������������
