Acting Extraterritorially to Tame Multinational Corporations for Human Rights Violations: Who Should 'Bell the Cat'?

Abstract

Regulation of multinational corporations ('MNCs') by home states through extraterritorial laws is a relatively recent addition to the measures under review in an ongoing search for an effective and efficient model for MNCs' accountability for human rights violations. The introduction of Bills in the United States House of Representatives and the Australian Senate in the year 2000 marked an attempt to adopt the extraterritorial model of regulation. Within a framework of the integrated theory of legal responsibility, and in the context of multiple regulatory dilemmas, this article examines the provisions and the omissions of the two Bills. It argues that the legislative failures of the above Bills are instructive in at least three respects. Firstly, that it is legitimate for a state to impose and enforce internationally recognised human rights obligations upon the overseas activities of the corporations incorporated within its territory, as well as the overseas subsidiaries of such corporations, by enacting an extraterritorial law. Secondly, the failure of the Bills to become law should not be interpreted as a failure of the proposed model itself; if resort is to be had to any state-centric model of extraterritorial regulation, it is the 'home state' model of regulation which presents greater potential as compared to the 'host state' model. Thirdly, extraterritorial regulation of MNCs, essentially being a variation of the municipal regulatory model, is not self-sufficient due to this model's inherent limitations, and therefore needs to be supplemented by an international regulatory mechanism.

Keywords: Human Rights Violations by Multinational Corporations, Regulatory Dilemmas related to MNCs, Corporate Code of Conduct Bill 2000 (US)/(Aus), 'Home' versus 'Host' State Extraterritorial Regulation, Integrated Theory of Legal Responsibility