2.1 Corporate social responsibility

CSR is featured primarily within Anglo-American governance systems and, as such, this paper focuses primarily on the Anglo-American scholarship in the area (McBarnet, Reference Mcbarnet and O'Brien2005, p. 205). Originally designed by companies as a means of self-regulation, it is increasingly used by corporations as a way to contribute to the social good of the region in which it operates and, to an extent, avoid more rigorous government-level regulation. In recent years, there has been a move, in some jurisdictions, to regulate the scope and extent of CSR activities through, for example, US state-level constituency statutes and industry-level standards (such as the International Council of Mining and Metals). This has been met with varied degrees of success. Mostly, this remains closely aligned to the ‘light-touch’ regulatory characteristics of the usually Anglo, but also American, governance regime. Throughout this piece, reference is made to both the Anglo and American regimes (and their associated understanding and regulation of CSR-style practice). We tend to focus primarily on the Anglo version of CSR for reasons outlined below. The potential of CSR has been lauded by many, with Carroll (Reference Carroll1999, p. 292) noting that it ‘has a bright future, because, at its core, it addresses and captures the most important concerns of the public regarding business and society relationships'. As the idea of CSR has developed, it has begun to embrace a wider protection of rights, including human rights. This paper therefore seeks to explore the routes by which MNCs can be held accountable for their damaging activities within the extractive industries in particular.

Ideas of individual responsibility are well documented (Collins and Hoyt, Reference Collins and Hoyt1972). Within the context of human rights abuses by corporations, the limitations of individual responsibility mechanisms lie in the small number of human rights violations that amount to crimes within the context of individual responsibility, notably ‘true atrocities’ such as genocide, war crimes and crimes against humanity (Ratner and Abrams, Reference Ratner and Abrams2001). Less developed, and more controversial, is the concept of collective responsibility associating blame with a group and situating moral responsibilities in the collective actions taken by these groups. Some questions do arise around whether the components (individuals) have the same value set individually as collectively in order to be a robust moral agent of the group. When looking at the corporation, the value set is to produce profit. This is a universal and primary aim of the group – producing profit for shareholders. Another (lesser) aim is protecting stakeholders/victims from corporate action/abuses. Thus, this becomes a value of the corporation (usually articulated through CSR policies) and it is one to which they can be held to account. Corporations are ideal candidates for this understanding of collective responsibility given the structural organisation of the company with an identifiable moral agent (the board) and articulated group intentions (profit/CSR/sustainable development, etc.). It is within this understanding of the relationship between human rights and CSR that this debate can be situated. Corporations must be held collectively responsible for human rights infringements, as human rights and related protections are articulated within a company's CSR policy – therefore, a value set of the company. Thus, we advocate an understanding of responsibility for human rights violations under the collective responsibility of the corporation.

CSR can be, and has been, used as an accountability mechanism when companies do not meet their responsibilities. Increasingly included within this are human rights issues. However, the language around and regulation of CSR is vague, particularly so when talking about remedying corporate abuses or indeed when CSR has failed. Existing laws focus on punishing the company rather than offering a remedy to the victim. This section of the paper therefore addresses CSR as an accountability mechanism, as well as how it is characterised and complemented within the extractive industries, finishing with a focus on the tentative relationship between CSR and remedies. It becomes despairingly clear that, despite a plethora of CSR literature and attempts to evolve and revolutionise the concept, a multitude of codes, principles, standards laws and regulations, those who suffer the most from corporate abuses are those left inadequately protected by the industry solution to the ‘social’ role of the corporation in light of these governance shifts.

This subsection will address the evolution of CSR, and how it can be understood through a range of interdisciplinary interpretations of business, globalisation and the global system. Whereas we recognise that much has been written in this area as it relates to global regulatory governance, global administrative law and societal constitutionalism, we believe that a consideration of the interplay between companies responsibilities as articulated by their CSR policy and human rights protections is timely given the discussions emerging post the UN Guiding Principles on Business and Human Rights. With the paper's focus on the energy-extractive industries, we will use this sector as a base to understand both the development of CSR as it relates to human rights and its shortcomings. These criticisms will be centred particularly on the idea that CSR provides corporations with tools to legitimise their actions and activities in the region in which they operate – the ‘licence to operate’. Although recognising the flaws of the Anglo-American conceptualisation of CSR, we posit that, due to EU communication embracing the Anglo trajectory of CSR (2001), it is necessary to consider how this manifestation of CSR can be best used to protect against human rights violations. Traditionally, the norms and laws that bound nation-states were not extended to corporations (Teubner, Reference Teubner, Joerges, Sand and Teubner2004, p. 3). In apparent recognition of the shift in governance structures, there is a move towards ‘an interplay between national, international, public and private law systems in allocating and competing for regulatory power’ (Backer, Reference Backer2006, p. 288). The 2003 Norms (United Nations, 2003) enlist MNCs as agents of international law implementation (Backer, Reference Backer2006, p. 294). This is evident in both soft- and hard-law mechanisms discussed below through the lens of the energy-extractive industries, and in particular the Extractive Industries Transparency Initiative (EITIFootnote ⁴ ).

2.2 International law and human rights

International law has historically been between states, which are treated as subjects with legal personality. Allowing them the power to draft and consent to international agreements that regulate their affairs and relationships with each other, it contrasts with domestic law, as it goes beyond the internal affairs of a state to impinge upon the interests of other states and the international community as a whole, such as gross violations of human rights. At least in theory, states can be held responsible for their actions for violating international law, as well as their inactions where they do not act with due diligence, fail to protect their citizens from private actors, such as MNCs (Velásquez Rodríguez v. Honduras Footnote ¹⁵ ) or do not investigate, prosecute and punish those who commit crimes or enable access to remedies (Art. 146, Geneva Convention, Osman v. United Kingdom Footnote ¹⁶ ). Human rights law changes this horizontal regime between states, by protecting the vertical dimension between individuals and the state.

The traditional model of accountability in international law has concentrated on state responsibility, which arises when a state violates an international obligation, such as under an international treaty (Art. 2, RSIWA). The state is identified as the principal duty-holder – as a party, it signs and ratifies international treaties with other states imposing reciprocal obligations. A breach of primary rules under international law by a state is considered a wrongful act, such as invading a sovereign state, requiring the responsible state under secondary rules, namely on responsibility, as a legal consequence to cease the breach and provide reparations to any injured state or individual (United Kingdom v. Albania Footnote ¹⁷ ; David, Reference David, Crawford, Pellet and Olleson2011; Zegveld, Reference Zegveld2010; Art. 33(2), RSIWA; ICJ Reports, 2004). As stated in the Factory at Chorzow Footnote ¹⁸ (Art. 31 RSIWA) case, ‘[i]t is a principle of international law that the breach of an engagement involves an obligation to make reparation in an adequate form’. State responsibility therefore allows a remedy to be made to an injured party, while also functioning as a condemnation of the state's breach and the ‘restoration of the international legality, [and] respect for international law’ (Pellet, Reference Pellet, Crawford, Pellet and Olleson2011, p. 15).

Responsibility to provide a remedy where a duty is breached is connected to accountability, which is concerned with ensuring that those who are culpable for causing the violation are appropriately sanctioned (Kleffner, Reference Kleffner, Wilt and Nollkaemper2009, p. 240). For the purpose of reparations, this is not punitive, but to hold those individuals or organisation responsible to remedy the harm they have caused. Mallinder and McEvoy define accountability in broad terms as the constraint of power, with its narrower ‘operationalisation’ including common characteristics of:

This understanding of accountability reflects the role of reparations in international law, although the institute that can be held to account as well as the accountability and enforcement mechanisms have traditionally been state-centric. The problem with MNCs is that, where states are unwilling or unable to hold them to account, no alternative mechanism for redress exists. While states are empowered to hold MNCs as decision-makers to account, their power over the country's economy or access to resources may prevent a state from doing so. Importantly, no enforcement process that transcends the state exists to make MNCs answerable for their actions both at home and abroad.

2.3 Bridging the quasi-private/public-law divide: the Ruggie Principles

Previous sections of this paper bemoaned the regulatory shortfall in monitoring CSR, and the emerging legal personality of MNCs at the international level. Aside from a few select attempts of limited effectiveness, CSR has remained within the confines of the self-regulatory landscape of corporate governance with little codification in international law (Mitchell, Reference Mitchell1992; Kaey, Reference Kaey2010; s. 172(1)(d), Companies Act, 2006; Bradshaw, Reference Bradshaw2013; Zerk, Reference Zerk2014; Moffett, Reference Moffett2014). At the international level, attempts to regulate MNCs were initiated with the UN Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with regard to Human Rights (2003, UN Doc E/CN.4/Sub.2/2003/12/Rev.2, Preamble). In looking at the human rights element in particular, the identification of responsible actors in respecting human rights is outlined in the Universal Declaration of Human Rights, which recognises the rights of all individuals to be respected by everyone and every entity, without limiting obligations to states (Clapham, Reference Clapham2010, p. 24). The extent to which these rights are enforced is subjective in nature, due, in part, to the inadequacy of the state-centric system. As some states are more powerful and have a greater regulatory reach than others, there is an imbalance in justice when it comes to holding corporations to account. Due to this imbalance (and indeed, fostering the development of this imbalance), multinational corporations can forum shop and move their operations to other jurisdictions. Using a cost–benefit analysis, it may be that relocation is a cost-effective means of avoiding stringent regulation, enforcement and remedies. This feeds into work on the ‘development of underdevelopment’ through reliance on FDI (Frank, Reference Frank1991). The idea supposes that, in trying to attract and retain capital (and therefore development in the traditional growth indications), the regulatory structure is compromised in order to ensure that capital does not leave the region for a more regulatory-friendly region.

There is a gradual shift in the discourse of ‘responsibility’ for human rights protection. Increasingly, MNCs are viewed as being ‘organs of society’ with the preamble of the United Nations Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with regard to Human Rights,

For activists, this development presented the opportunity of a more nuanced series of obligations being placed on MNCs (beyond industry standards and multilateral standards such as the UN Global Compact).

The backlash against the Norms, and the subsequent decision by the Secretary-General's Special Representative on Business and Human Rights (SRSG), declaring the Norms as not legally binding, raised some broader issues about the legal vacuum in which corporations operate, and indeed the tentative balance between self-regulation via CSR and more sweeping obligations under international law (Ruggie, Reference Ruggie2007). The Norms highlighted corporate distaste for positive obligations, as well as emphasising (in the manner in which the Norms were abandoned (or rethought, depending on your viewpoint)) the disproportionate power and control that MNCs have over state-level governments – and perhaps also international entities such as the UN. The contribution of the Norms to human rights/responsibility discourse lies in the formal recognition of MNCs as international subjects with obligations (although noting that they are not actors). An associated limitation of the Norms, in recognising the MNCs as international subjects, is that they fail to articulate the more fluid and complex relations between states and MNCs, where states enter into partnerships with MNCs and concession-granting in return for profits and/or lucrative tax revenue streams.

Post 2003 Norms, embedding corporate responsibilities at an international law level has been the task of the United Nations Guiding Principles on Business and Human Rights (Ruggie Principles, 2011). Apparently building on the 2003 Norms, the Ruggie Principles sought to bridge the gap and mend other issues that had been identified in the response to the Norms. In advocating a three-pillar approach – protecting human rights (the state duty to protect human rights), respecting rights (the corporate responsibility to respect human rights) and remedies (the provision of remedies where business have not met their responsibilities or where states have failed in their duty to protect human rights) – the Ruggie Principles have sought to achieve a common ground between corporate responsibilities and state obligations. In seeking to achieve common ground, we believe that the strengths of the principles have been significantly diluted, with the winners in the Guiding Principles being MNCs, and to a lesser extent states, and the losers being those who seek a remedy for the failures of corporate responsibility. The shift in the language used, from ‘transnational corporations and other business enterprises, as organs of society, are responsible for promoting and securing the human rights set forth in the UN Declaration’ (Preamble, 2003, emphasis added) to ‘[b]usiness enterprises should respect human rights. This means that they should avoid infringing on the human rights of others and should address adverse human rights impacts with which they are involved’ (Ruggie Principles, 2011, Principle 11, emphasis added), indicates the unwillingness of the UN to alienate MNCs. Indeed, it is this devolution of human rights to market-level language that in essence encapsulates our reluctance to embrace the Ruggie Principles insofar as it offers sufficient remedy to victims. It is interesting to contrast the language used in the Ruggie Principles with earlier work from Ruggie (Ruggie, Reference Ruggie2007; Kytle and Ruggie, Reference Kytle and Ruggie2005). By subsuming voluntary language into required obligations (i.e. the pillars), the value of the Ruggie Principles seems to lean pro market as opposed to protecting victims. As a result, this approach comes at the expense of accountability, in terms of victims' access to redress and the enforcement of remedies. The shift in language is more akin to the principles approach advocated by CSR, as opposed to the more positive obligations that bind other actors in international law. Whereas many arguments are put forth elsewhere on the need for this compromise (Ruggie, Reference Ruggie2007), the detrimental impact in access to remedies must not be overlooked.

The Ruggie Principles (2011) dedicate a section to remediation and access to remedies within Principles 22 to 25 (inclusive). Principle 22 notes that ‘[w]here business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes'. Again, it is interesting to note the use of ‘should’ as opposed to language suggesting a more positive obligation, such as ‘must’ or ‘shall’. In articulating the access to remedy, Principle 25 notes that

This in itself presents an issue as placing a subsidiary responsibility on the state to provide remedy or to ensure that a remedy is enforced. Even aside from that, as we noted above, in the extraction industry, one of the key issues is that the governments collecting ‘rents’ from corporations tend to be ‘weaker’ due to systemic limitations and there tends to be a weaker civil society to encourage governments to participate. In enforcing remediation on states, those most affected (communities in lesser-developed areas) may be those less able to use state frameworks to seek a remedy.

In terms of remedies themselves, the Ruggie Principles incorporate the language of human rights conventions of ‘effective remedy’. The principles themselves are silent on reparations as a means of ensuring an effective remedy. It is only the additional commentary by Ruggie himself that articulates the types of reparation that ‘may’ be appropriate, such as ‘apologies, restitution, rehabilitation, financial or non-financial compensation and punitive sanctions (whether criminal or administrative, such as fines), as well as the prevention of harm through, e.g. injunctions or guarantees of non-repetition’ (Commentary on Principle 25) These types of reparations, while more expansive than traditional private-law remedies, do not reflect the entire position in international human rights law of also including acknowledgement of responsibility, memorials and investigations. It is these types of reparations that go towards the more public accountability of MNCs (UNBPG, 2005). Furthermore, remedies will only be effective through monitoring and enforcement at the regional or international level to ensure states are allowing individuals and communities to access redress against responsible MNCs, rather than as monetary leverage on vulnerable groups.

The experience of state compliance before the International Criminal Court indicates that having legislation and domestic mechanisms to hold private actors to account, albeit for individual criminal responsibility, is not always effective in ensuring accountability owing to weakness of the state, whether through its inability or its unwillingness (Moffett, Reference Moffett2014). The Ruggie Principles place too much faith in states to ensure MNCs provide remedies to victims, or the state itself to provide redress where corporations are unable to do so. A more effective way to ensure victims have access to a remedy for gross violations of human rights would be an international mechanism to act as a court of last resort where states are unwilling or unable to provide a remedy to victims. This would also help alleviate concerns that perceived ‘weaker’ governments are less equipped to drive an effective remedial agenda at state level. The experience of regional human rights courts evinces the need for such an additional level of accountability. The new protocol of the African Court of Justice and Human Rights for an International Criminal Law Section provides for corporate responsibility and reparations, reflecting African concerns for justice for victims against MNCs (Art. 46, Protocol on Amendments, 2014).

The Ruggie Principles do provide for National Contact Points (NCP) being utilised to enforce the principles. The NCP is defined as ‘a government office responsible for encouraging observance of the Guidelines in a national context and for ensuring that the Guidelines are well known and understood by the national business community and by other interested parties' (National Contact Points for the OECD Guidelines for Multinational Enterprises). Although referring specifically to the OECD Guidelines framework, there is some application here with regard to Ruggie. Whilst recognising the perceived importance of the NCP, we would stress how a country's individual needs can perhaps impact on the manner in which they ‘commit’ to such guidelines. This is of course difficult to gauge, especially giving the lack of monitoring of compliance and enforcement of international laws at the national level. In short, the value of the NCP seems to lie more in the publicising of the standard as opposed to ensuring compliance or to the enforcement of the remedial aspect of the principles (Aaronson and Reeves, Reference Aaronson and Reeves2002).

There is also a disparity in the effectiveness of the NCP and the reports that arise as a result of investigations. Addressing the numbers of reports in relation to the OECD Guidelines, for example, it becomes clear that the value of the NCP does differ depending on the state viewpoint. If, then, there exists a disconnect in the use of the NCP on a transnational level, the effectiveness of the NCP as a means to hold MNCs accountable or indeed to enforce remedies can be questioned. The Ruggie Principles, in contextualising the three pillars, particularly remedies and enforcement, within the framework of the NCP have diluted the potential for obtaining remediation, but also the potential of the principles themselves.

The Ruggie Principles were designed with compromise in mind. Intent on bringing together business and governments, the Ruggie Principles sought middle ground, which, although gaining support from huge numbers of stakeholders, has stagnated the potential of the rights, responsibility and accountability discourse. The failure to articulate a strong framework for remediation, independently of the NCP, has diminished the potential of the principles as a viable mechanism to protect affected stakeholders/victims (Deva, Reference Deva, Deva and Bilchitz2013). The value of the principles therefore lies in raising awareness of the need for effective remedy when corporations fail to adhere to their responsibilities. The enforcement of these remedies seems to lie beyond the remit of the existing UN framework. This is not to say that victims have received no remedy; numerous groups have initiated litigation against MNCs for failure to adhere to their responsibilities. The success of such litigation is limited (Zerk, Reference Zerk2014). Lessons of accountability can be learnt from public international law in grasping the responsibility of MNCs beyond national borders.

3.1 Public-law remediation and the energy-extractive industry

Public international law, in contrast to private law, is concerned with the obligations imposed on the state. Human rights law, in particular, has over the past two decades developed the notion of positive obligations on states to protect individuals, as well as to ensure mechanisms that can effectively investigate and remedy violations of human rights, even where they are committed by private actors. As distinguished in the Ruggie Principles, the overriding principle is that the state is responsible for providing access to remedies to victims where private businesses commit abuses (Principle 25). As noted above, the Ruggie Principles, while not going as far as to find that MNCs have human rights obligations, recognise a responsibility to respect human rights and to provide remediation, or at least cooperation in such processes. Yet, as Zerk (Reference Zerk2014) points out, a lack of certainty and clarity on key issues of corporate responsibility for gross violations of human rights, despite the Ruggie Principles, encourages adversarial domestic civil proceedings and limits the effectiveness of litigation as an avenue to remedying such harm for other victims (p. 60). As the current international regime stands, only those victims of state abuses can claim reparations before regional human rights courts, despite comparable violations committed by non-state actors.

Regional human rights courts have in a number of cases found states in violation of individuals' or communities' rights, despite the role of MNCs in contributing to or committing such violations. The responsibility of the state reflects its obligations under the principle of due diligence and its failure to satisfy positive obligations to ensure the rights of those within its jurisdiction. Enforcement of human rights obligations on states for violations contributed by MNCs in the energy-extractive industry raises three relevant points on redressing gross human rights violations as part of an accountability framework: (1) reparations; (2) legislation; and (3) enforcement mechanisms.

First reparations, rather than just compensation, are central in decisions in holding the state to account for its positive acts or failure to exercise due diligence to prevent such violations. Reparations serve to acknowledge the harm suffered by the injured party, by making the responsible party provide measures to remedy the harm caused. The traditional civil litigation approach in seeking damages against MNCs does allow victims the flexibility to spend the money as they see fit, as Grotius (Reference Grotius1625) states that ‘money is the common measure of valuable things'. Yet damages can be insensitive in redressing gross violations of human rights, as it can be perceived as ‘blood money’ and reduces the value of human life and dignity to ‘homo oeconomicus’ (Loayza Tamayo v. Peru Footnote ²⁴ ). Where states have been found to commit gross violations of human rights, regional human rights courts do order them to provide compensation, as well as restoration of the environment, measures of satisfaction such as acknowledgements of responsibility and guarantees of non-repetition (Shelton, Reference Shelton2005, pp. 9, 65; UNBPG, 2005; Río Negro Massacres v. Guatemala Footnote ²⁵ ; SERAP v. the Federal Republic of Nigeria Footnote ²⁶ ). This broader construction of remedies beyond compensation is necessary to effectively repair the harm caused, going beyond the individual and monetary expense, to recognising the impact upon the environment and the long-term living standards of communities. The public acknowledgement by the responsible party for its wrongdoing is integral and is usually made with an apology to those affected (Kichwa Indigenous People of Sarayaku v. Ecuador Footnote ²⁷ ).

Orders against a state can be complemented by reparation programmes engaged with by non-state organisations, reflecting the responsibility of both groups in contributing to the violations suffered by victims. For example, in the Río Negro Massacres v. Guatemala Footnote ²⁸ case, state forces between 1980 and 1982 massacred over 440 members of the Río Negro community who refused to move off land that was later flooded as part of the Chixoy Hydroelectric Dam (sponsored by the World Bank and the Inter-American Development Bank). The dam's reservoir destroyed the community's homes and sacred sites (Los Encuentros), forcibly displacing and reducing them to poverty in a deprived part of the country. The Inter-American Court ordered the state to compensate the victims, to provide infrastructure and basic services to the surviving members of the community, such as food security, potable water and sewage system, schools and health-care centre, specialised medical care, as well as to rescue and preserve the Maya Achí culture, and make a public acknowledgement of the state's responsibility. To complement this order, in January 2014, the US Congress passed the 2014 Consolidated Appropriation Act, which requires the World Bank and Inter-American Development Bank to report on their implementation of the 2010 Reparation Plan claimed by the Río Negro community (April 2010 Reparation Plan for Damages Suffered by the Communities Affected by the Construction of the Chixoy Hydroelectric Dam in Guatemala, <http://www.internationalrivers.org/files/attached-files/plan_de_reparacion1.final_.pdf>). Although this case involved an international organisation, it does suggest that other non-state actors can be responsible for obligations to make reparations to victims. Such approaches reflect the complementary responsibility of the state and non-state actors for remedies of gross violations of human rights where, in reality, there is not a clear distinction between the two in committing atrocities.

Where violations have been committed by MNCs that affect communities, or armed groups have destroyed MNCs' oil pipelines, regional human rights courts have held the state responsible for remedying the harm caused, reinforcing the state-centric compliance model found in international law. Moreover, rather than a criminal justice approach, such responsibility is based on negligence of the organisation, instead of intent, capturing wider causation and conduct of such organisations. In the SERAP case, involving leaks and explosions from oil pipelines in the Niger Delta, claimants from a number of communities brought proceedings against Nigeria before the ECOWAS Community Court of Justice. The court declined to order the $1billion in damages sought by the victims, due to the large number of victims affected, who could potentially number in their hundreds of thousands. The court instead ordered the state to take all effective measures to restore the environment in the Niger Delta, prevent the recurrence of such damage to the environment, and to hold the perpetrators responsible for such damage (SERAP v. the Federal Republic of Nigeria Footnote ²⁹ ; The Social and Economic Rights Action Center and the Center for Economic and Social Rights v. Nigeria Footnote ³⁰ ).

The Inter-American Court of Human Rights in the Sarayaku case took a more prescriptive approach. Here, a state partnership with a private oil company carried out oil exploration on the Sarayaku people's land without consulting them or obtaining their consent. Using explosives to explore possible oil reservoirs, the company destroyed sacred sites and contaminated their water supply. Numerous unexplored ordnance remained on their land, causing the Sarayaku to cancel their annual festival and livelihoods in order to protect their land. The Court recognised the Sarayaku people's intrinsic spiritual connection with the land was necessary to protect their physical and cultural way of life. On the basis of restitution, the state was ordered to recover over 1,300 kilograms of explosive left on the Sarayaku people's land, amongst other reparations (Kichwa Indigenous People of Sarayaku v. Ecuador Footnote ³¹ ; UN Human Rights Committee Communication, No. 167/1984, Canada, 10/05/90, CCPR/C/38/D/167/1984). Although not holding the private corporation to account, the Inter-American Court's decision would bind the Ecuadorian state's future engagement with corporations in the oil industry ensuring that vulnerable communities are effectively protected both in consultation and consent in how their land is used in the future (Delgamuukw v. British Columbia Footnote ³² ).

The willingness of the Inter-American Court to move the boundaries of the law to reflect the lived reality of individuals and communities, in how gross violations of human rights impact onto their way of life, and spiritual and cultural connection with the land is an important contribution to protecting such vulnerable groups. Reparations awarded by regional human rights courts, as with all court judgments, are generally limited to those victims who can bring claims before them. Unless there is a class action which represents all victims, some individuals are likely to be left without any reparations, in particular those victims of violations committed only by MNCs, requiring more of a general commitment at the domestic level of states to create effective domestic remedial mechanisms.

Second, human rights courts have held that passing legislation to protect individuals' human rights and the environment is insufficient by itself, but requires a commitment to ensure access to effective remedies to victims and prosecution of those responsible (Kichwa Indigenous People of Sarayaku v. Ecuador Footnote ³³ ). As stated by the ECOWAS Community Court of Justice,

Such needs for those individuals and communities affected in the Niger Delta by oil companies are apparent in the continuing litigation by the Bodo community against Shell (The Bodo Community v. Shell, 2014, Claim No.HQ11X01280). Suggesting a wider challenge for the law to effectively capture the experience of such violations to victims and to redress the harm caused by MNCs, there is a need for both effective regulation and enforcement measures to ensure compliance with human rights law and to prevent repetition of violations, for which legislation is key.

Third, international or regional mechanisms are needed to monitor compliance of states with human rights obligations and to offer an alternative forum for redress for victims where they cannot access an effective remedy domestically, owing to the state's unwillingness or inability. MNCs are created to make profit and to promote private interests, thus self-regulation by companies' compliance with human rights norms is likely to be ineffective, as with CSR, as it is likely to be used to assist the company's business rather than social protection (McCorquodale, Reference Mccorquodale2009, pp. 391, 394). In contrast, the state is supposed to protect its citizens and promote public interests but its inability or unwillingness, such as economic interests in maintaining MNC investment, does not always enable individuals to seek or enforce remedies against MNCs. Nevertheless, the risk of a state being brought before a regional human rights court and found responsible for violating individuals' human rights and ordered to provide reparation could be a strong incentive on states to establish remedial mechanisms that can allow individuals to seek reparations from MNCs. Such regional courts, by their nature, do not have universal jurisdiction, with their scope only emerging in continents such as Africa, or small or non-existent in Asia-Pacific, the Middle East and North America. Perhaps a quasi-private/public-law approach is required in holding MNCs to account for gross violations of human rights.

3.2 An international court of reparations: a halfway house?

MNCs are responsible actors under international law, due to their role in gross violations of human rights. Individuals of MNCs can already be criminally responsible for international crimes at the international plane, and so should the corporate body, where their actions and omissions contribute to such violations. Remedies in human rights law are not punitive, in contrast to some private-law jurisdictions, but are meant to remedy victims' suffering. Reparations can more generally deter MNCs from committing violations in the future through due diligence so as to avoid the ‘cost’ of future awards. Such a position bolsters the normative obligations of human rights beyond states, rather than the diluted language under the Ruggie Principles of ‘responsibility to respect’ and ‘impact’ (Deva, Reference Deva, Deva and Bilchitz2013). Perhaps the distinction between negative and positive obligations under human rights law could be useful in delineating the remedial responsibility of MNCs. Negative obligations involve a party to refrain from engaging in certain activities, such as torture, whereas positive obligations require them to carry out some activity or institution building to prevent violations occurring. As such, negative obligations can apply to both state and non-state actors, whereas, due to its permanence, capacity and identity in international law, the state is better situated and accountable to fulfil positive obligations. For MNCs that commit gross violations of human rights, their responsibility to provide reparations could be directly invoked against them, rather than responsibility for such violations resting on the state.

Despite the commentary accompanying the Ruggie Principles (2011) stating that businesses are likely to be legally implicated in gross violations of human rights given the ‘expanding web of potential corporate legal liability arising from extraterritorial civil claims' (Principle 23, Commentary, 2011), there remain numerous difficulties in civil litigation. Notwithstanding the aspirational nature of the Ruggie Principles, the enforcement of human rights obligations remains on states. As Nolan and Taylor note, MNCs are ‘able to operate largely in a legal vacuum, devoid of obligations at the international level’ (2009, p. 437). Although individual members of MNCs who directly or indirectly acted, perpetrated or facilitated international crimes can be held to account theoretically before the ICC, there have been no such cases before the Court so far. A similar mechanism for the responsibility of MNCs in providing remedies does not currently exist in international law. Given the difficulty in establishing the responsibility of an individual to the criminal standard of beyond reasonable doubt, in comparison to the civil-law evidential standard of a balance of probability, an international remedial body could allow violations to be more easily proved.

A halfway house of an international court of reparations could be an effective way of developing universal jurisdiction and remedy for violations committed by MNCs, based on quasi-private/public-law principles so as to close accountability loopholes and barriers that exist in domestic jurisdictions. Such a court could encourage the development of great clarity and consistency in domestic law, and ensure compliance with international principles through monitoring and determination in contentious cases where states are unable or unwilling to hold those responsible to account. This is a gargantuan challenge to develop rules of evidence, procedure and substantive law that can reconcile disparate domestic legal regimes and rules, which would require domestic ratification of any possible international treaty to establish such a court. As aspirational as such a court may be, it is not impossible, as the International Criminal Court has shown with international criminal law. This approach is conceivably naive given the complex negotiations and interests involved in reaching the compromise position of the Ruggie Principles.

The suggestion of an international mechanism of redress is unlikely to be met warmly by MNCs or states who wish to retain their control over such issues. Nonetheless, given the almost insurmountable challenges in holding MNCs to account and diversity of legal jurisdictions, there is a need to recognise that the current state-level implementation of obligations is insufficient. This lacuna may lead to the underdevelopment of national laws and regulations as legal forum shopping becomes the norm in an endeavour to compete, attract and retain investment in an increasingly competitive capitalist market. In addition, this paper has noted that those countries with the most resources in terms of the energy-extraction industry tend to be historically lesser-developed regions. An international court of this level would be a means to ensure individual protection without exploitation whilst at the same time offering an avenue for the development of development in terms of a national framework of laws, regulations and policies.

An international reparations court would need to be based on a treaty, such as the Rome Statute of the International Criminal Court, to ensure wide consultation and deliberation by states and non-state organisations on its legal basis and competence. This treaty would follow on from the Ruggie Principles by providing an enforcement model to emerging norms in holding MNCs accountable. Such a court would require investigative powers to determine whether violations occurred and determine who is responsible, and parties to proceedings would include states, MNCs and victims, with other interested parties to provide amicus curiae to assist the work of the court. To protect state sovereignty, the court could be based on the ICC principle of complementarity, in that such international courts only act where states are unable or unwilling to investigate and prosecute such crimes (Rome Statute, Arts 1 and 17). For an international reparation court, this would mean that victims who have exhausted domestic remedies for gross violations caused by MNCs could seek redress on broader grounds and with more responsible actors than the current regional human rights courts, which only operate in Latin America, Europe and Africa, allow. It would mean that the international reparations court would need investigative powers to determine the occurrence of such violations. This would require state and MNC cooperation obligations for disclosure and assistance in such investigations.

The ratione materiae of such a court would be wider than ICC, to encompass not just international crimes, but also gross violations of human rights. Given the problems in holding non-state armed groups to account, the court could also hold them responsible for serious breaches of international humanitarian law. The Rome Statute already includes ‘long-term and severe damage to the natural environment’ as a war crime, but it needs to occur during an armed conflict (Art. 8(2)(b)(iv)). Outside of war, events like Deepwater Horizon would not be covered. Instead, some groups have advocated at the Assembly of State Parties at the ICC for a crime of ecocide, but further definitional clarity would be required for such a crime to be a basis for reparations in the future. Returning to the definition of gross violations of human rights above, the Deepwater Horizon disaster could amount to such a gross violation where it caused grave suffering to victims that impinged upon ESC rights. Moreover, under the principle of non-retroactivity, the court, like the ICC, would only have prospective jurisdiction once it was established (Rome Statute, Art. 11) and would thus be unable to investigate and remedy past violations before it would come into operation.

It could be argued that the ICC should be tackling MNCs who are involved in aiding and abetting or more directly committing international crimes, and seems like an institution already established to deal with such issues. Moreover, the ICC has the power to request cooperation of states to identify, trace, freeze and seize the proceeds, property and assets of crime for the purposes of forfeiture and reparations (Rome Statute, Art. 93(1)(k)). The ICC Trust Fund for Victims is already a repository for such seizures, as in the case of former Congolese Vice-President Jean-Pierre Bemba, as well as donations from states and others for its assistance programmes and reparations. That said, the ICC reparations are based on the conviction of an individual perpetrator, a higher standard than civil liability and very much a back-ended process that does not primarily seek to remedy harm for victims, as prosecution of suspects is the priority (Moffett, Reference Moffett2013). Moreover, expanding the ratione materiae of an international court of reparations to gross violations of human rights and victims' harm places more attention on remedying victims' harm caused by collective entities such as MNCs than being predicated on individual perpetrators being identified and running the risk of a successful prosecution.

For developing states, such an international reparations court could enable the capacity-building of domestic practitioners and legal regulation, through the cooperation of other Member States, and improve their bargaining power position with MNCs. Where parent companies of MNCs originate and have shares on the stock exchanges, the treaty could be a bulwark against undue pressure on the economies of developing states. For MNCs, engagement and adherence with such a court would ensure that they take the management of the organisation in respecting human rights obligations seriously and are willing to accept responsibility and remedy it where they cause harm. For victims, it would overcome weaknesses in domestic civil litigation by giving them a further level of redress that can help to improve the universality and consistency of justice against MNCs. A legal aid fund should be available for eligible victims to facilitate such claims. For all parties involved, an international reparation court would ensure greater certainty, coherence and consistency in the regulation of violations by MNCs. The African Court's International Criminal Law Section represents willingness amongst some states to ensure such an avenue for redress, by including trafficking in hazardous wastes, illicit exploitation of natural resources and corruption (Art. 28A, 2012 Amendment Protocol, African Union).

We accept that what we are proposing in this paper is ambitious. An international mechanism to hold MNCs to account for reparations is only the first step in shaping the regulatory structures that monitor corporate behaviour beyond nation-state relations. This paper has referred to ‘inter’-national regulations and mechanisms. The term ‘international’ suggests some interaction between states and, indeed, this is something generally accepted in the literature. The MNCs that we are seeking to hold accountable are not ‘inter’-national. They owe no loyalty to a particular state, region, people or culture (Backer, Reference Backer2008; Sklair, Reference Sklair2001). Instead, the purpose of their existence is to make profit. They are transnational entities with relationships beyond state interplay and, indeed, states exist as mere external stakeholders. This in itself is not a negative, but recognises the limitations on the influence that a state can have over corporate behaviour (Mitchell et al., Reference Mitchell, Agle and Wood1997).

In terms of characterising governance development, there exists a pathway from regional–national–federal–international–transnational–global. Perhaps an international court of reparations and universal implementation of legislation to affect it in domestic courts could normalise developing international customary law in this area and connect these governance pathways. We have stated throughout this piece that, whereas the drivers of the global economy and governance discourse are MNCs (and thus operating at a transnational level), the regulatory mechanisms in place to regulate corporate behaviour are grounded at the predominately national/federal stage (Chimni, Reference Chimni2007). Responsibility without accountability, via effective laws and sanctions, is an empty vessel. Responsibilities, before the mechanisms by which to hold them to account have caught up, are irrelevant. We are proposing that the international level of regulations needs to be more robust in order to develop effect trans- or global regulations, which are, ultimately the endgoal in ensuring accountability and remediation for failure to adhere to obligations and responsibilities.