7 Case Studies of Business and Human Rights
8.3 Extraterritoriality and the State Duty to Protect
Government gaps continue to be at the core of business and human rights complexities. Human rights violations typically occur in host states that are unwilling to address infringements. Home states that might wish to tackle such issues are unable to do so as sovereignty, which depicted in Chapter 2, prohibits states from extraterritorially regulating multinational corporations from their own jurisdiction. The problem emerges that home states cannot extraterritorially
804 Creutz (n 128) 79.
regulate their multinational corporations over state borders. However after reviewing the current domestic regulative measures depicted in Chapter 6, states are increasingly attempting to find solutions by using domestic legislation with a level of extraterritorial reach.
The CESR has noted that states should ‘prevent third parties from violating the right in other countries, if they are able to influence these third parties by way of legal or political means, in accordance with the Charter of the United Nations and applicable international law’.805 States should therefore ‘take steps to prevent human rights contraventions abroad by corporations that have their main seat under their jurisdiction, without infringing the sovereignty or diminishing the obligations of host states under the Covenant’.806 Similarly, the CESCR notes that
‘state parties have to respect the enjoyment of the right to health in other Countries, and prevent third parties from violating the right in other countries, if they are able to influence these third parties by way of legal or political means’807. The CESCR therefore asks states to have an extraterritorial level to their responsibilities of the duty to protect and to apply this responsibility to multinational corporations.
This means that the responsibility extends from their jurisdictions to a global responsibility.
Extraterritorial regulation was discussed in Section 2.1.3, which illustrates that in certain situations states can enact domestic laws with extraterritorial effects.
According to Peter Muchlinski, three of the discussed acceptable justifications of extraterritoriality can be used in relation to multinational corporations: the nationality, the protective and the objective territorial principle.808 Without an in-depth conversation on the other plausible principles, the use of the national principle is widely used in the various domestic laws that have been reviewed. The nationality principle can be used through shareholder nationality of the parent to exclude the foreign nationality of subsidiaries to follow home country standards.809
The state’s right to regulate human rights norms of companies extraterritorially by imposing and enforcing an exterritorial law has been defended by Surya Deva.810 Deva argues that business and human rights regulation implements international policies instead of national ones and this it is also more acceptable to have domestic laws with extraterritorial reach than typical domicile laws.811 The same human rights
805 General Comment No. 14 (n 125) 39.
806 Committee on Economic, Social and Cultural Rights, Statement on the Obligations of States Parties regarding the Corporate Sector and Economic, Social and Cultural rights’ E/C.12/2011/1 (2011) 5.
807 Committee on Economic and Social and Cultural Rights, ‘General Comment No. 12: The Right to Adequate Food (Art. 11), E/C.12/1999/5’ (1999) E/C.12/1999/5) (1999) 39.
808 Muchlinski (n 149) 126.
809 Muchlinski (n 97) 126.
810 Deva (n 611) 40.
811 ibid 48.
instrument should be anyway enforced based on the duty to protect in home and host states, which make the extraterritoriality more substantiated in this sense.
In this aspect, the less universal the policy becomes, the less acceptable using extraterritoriality becomes. When both the extraterritorially regulating state and the country which is impacted by the foreign extraterritorial policy share a common value encompassed in the policy, the extraterritorial feature may be thought of as more acceptable.812
Others argue that home states may regulate their companies extraterritorially if the requirements do not breach the laws of the host state.813 This applies to home states which can regulate the parent ‘in relation to the extraterritorial action of a subsidiary’.814 In many states, national laws can actually protect rights or the environment, but national enforcement by the state is lacking. For example, Nigeria has strict environmental laws, but has not enforced them. Extraterritorial laws, which discuss fundamental rights, should not therefore breach the laws of any country, which would make their extraterritoriality acceptable. Not all rights are however universally accepted. For example, equality between the sexes or non-discrimination against LGBT individuals in hiring practices of companies may violate domestic laws in countries where women are not allowed in the workforce or laws forbid homosexuality. Similarly, not all nations accept unionisation and hence organisation rights may violate domestic laws. In these situations, an extraterritorial domestic law requiring non-discrimination or rights of unionisation could not have an extraterritorial effect.
Extraterritorial laws obviously may be seen as Western countries enforcing their domestic view on human rights in other parts of the world.815 Human rights are already a politically charged field and the strengthening of Western domicile courts could lead to international political conflicts between countries not only fighting for jurisdiction, but also attempting to restrict each other’s jurisdiction.
The best example of the watchdog phenomena can be seen in domicile US courts.
Although the US itself is not a party to various key human rights treaties and has not accepted the Rome Statute and hence the jurisdiction of the ICC, it has been handling international human rights cases in the form of torts under the ATS.
812 Muchlinski (n 97) 175.
813 McCorquodale (n 88) 99.
814 ibid 100.
815 Daniel Augenstein and David Kinley, ‘When Human Rights “Responsibilities” Become Duties: The Etxra-Territorial Obligations of States That Bind Corporations’ in Surya Deva and David Bilchitz (eds), Human Rights Obligations of Business - Beyond the Corporate Responsibility to Protect (2013) 292.