Abstract
The modern corporation offers significant potential to contribute to the human rights project, in part because it is free from the challenges posed by national sovereignty. That promise has begun to be realized in businesses practicing corporate due diligence with regard to the human rights of persons involved in or affected by those enterprises. Yet due diligence preserves the self-seeking orientation of the conventional corporation and seeks only to protect itself from committing human rights abuses. This approach, typified by the UN Guiding Principles on Business and Human Rights, does not address background conditions for and root causes of vulnerability to human rights abuses. My alternative, the human rights corporation, takes an other-regarding orientation that advances human rights within the corporation and in its human, social, economic, and natural environments. It moves beyond the due diligence carrot-and-stick model to a model in which the corporation produces not only goods and services but also human rights consciousness and practice as well.
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25 February 2022
A Correction to this paper has been published: https://doi.org/10.1007/s12142-022-00659-z
Notes
UNCTAD, World Investment Report 2013 (Geneva 2013):135.
International Labour Organization, Decent Work in Global Supply Chains (2016), http://www.ilo.org/ilc/ILCSessions/105/reports/reports-to-the-conference/WCMS_468097/lang--en/index.htm
This notion includes small and medium enterprises as well as business enterprises owned or controlled by the state, or that receive substantial state support.
UN Doc. HR/PUB/11/04 (2011) [www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf]
The movement began with the1984 draft UN Code of Conduct on Transnational Corporations.
See Favotto and Kollman (2020) in this issue.
Other authors intimate grounds for corporate human rights advancement but none develops such grounds in the direction I propose: corporate advocacy for human rights. Wettstein (2015:171) argues for “positive contributions to human rights improvement rather than merely with negative impacts and nonviolation.” According to Wood (2012:63), a corporation has a “responsibility to exercise leverage even though [...] [it] did nothing to contribute to the situation” if the threat to human rights is “substantial,” if it can “make a contribution to ameliorating the situation,” and if it can do so “at modest cost.” And Mende (2017:9) imagines an identity of corporate self-interest and human rights commitment: “Dient die menschenrechtliche Verantwortung auch dem Selbstinteresse oder ist sie zumindest damit vereinbar, erhöht das die Bereitschaft von Unternehmen, entsprechenden Forderungen nachzukommen.”
See e.g., the United Nations “Guiding Principles on Business and Human Rights” (https://www.ohchr.org/documents/publications/GuidingprinciplesBusinesshr_eN.pdf); it outlines a “corporate responsibility to respect human rights.”
Friedman (1962:133) correspondingly claimed that “there is one and only one social responsibility of business to use its resources and engage in activities designed to increase its profits” as long as it “engages in open and free competition without deception and fraud.”
To be sure, enterprises may be “held liable for acts committed abroad by their subsidiaries” (CLTP 2009:6).
For one of the Reports on Corporate Law Tools: see https://www.ohchr.org/EN/Issues/Business/Pages/SRSGTransCorpIndex.aspx
There are no specific “restrictions on circulating shareholder proposals which deal with impacts on non-shareholders, including human rights impacts” (CLTP 2009:18).
This defensive position characterizes the Business and Human Rights model in general. See, e.g., the 2015 United Nations document Transforming our World: The 2030 Agenda for Sustainable Development (https://www.unfpa.org/resources/transforming-our-world-2030-agenda-sustainable-development), which would foster a “dynamic and well-functioning business sector, while protecting labour rights and environmental and health standards in accordance with relevant international standards” (para. 67).
As Ruggie (2017:14) emphasizes in the next sentence: direct violators “should provide for or cooperate in” remediation; corporations not themselves violators but linked through a business relationship to violators should “exercise leverage to prevent or mitigate the harm.”
In Gregg (2016) I confront the contradiction between human rights and nation state sovereignty by cultivating another institution that might advance human rights independently of, even against, the nation state: a social movement of self-selected citizens who advocate for the inclusion of human rights in the national constitution. They do so as a metaphorical “human rights state.”
I analyze corporate due diligence as a particular form of self-seeking behavior marked by instrumental logic. I distinguish it from the human rights corporation as a form of other-regarding behavior oriented by communicative logic. This distinction reflects a rich tradition of differentiating among various ways in which humans orient their behavior for different tasks. My own framing begins with Weber’s (1975) distinction between two types of “ethic.” An “ethic of responsibility” (Verantwortungsethik) is concerned with achieving the best means to a given end. It is a technical matter of calculating how to achieve a desired consequence. An “ethic of conviction” (Gesinnungsethik) focuses on the end itself. It is driven by value-commitments, “ultimate decisions through which the soul … chooses its own fate”—or, for my purposes, ultimate decisions through which a political community, including its private sector, collectively decides the standards of decent treatment of individuals (Weber 1949:18). I then connect Weber’s “ethic of responsibility” to Horkheimer and Adorno’s (1972) notion of an instrumental reason oriented solely on self-interest and self-preservation. And I connect Weber’s “ethic of conviction” to the kind of reason that Horkheimer (1993:21) describes as seeking “human emancipation” from domination and oppression. People deploy such reason when they attempt to be “producers of their own historical form of life.” Then I tie this conception to Habermas’s (1990:32) depiction of a capacity for the moral evaluation of social and political practices. He calls this capacity “communicative rationality.” It facilitates individuals’ participation in achieving mutual understanding within their political community about its proper ends. And it identifies bureaucratic as well as economic imperatives that undermine civic participation and common ends. Where Habermas (1987) speaks of the instrumental reason of strategic forms of social action oriented on achieving goals, I speak of corporate due diligence. Where Habermas (1998, ch. 7) speaks of a communicative rationality of actors freely coordinating their behavior in pursuit of consensually shared goals embraced by all members as reasonable or worthy, I speak of a human rights corporation. On the one hand, the instrumental logic of due diligence cannot generate the solidarity between a corporation and its stakeholders that the communicative logic of human rights advocacy can. On the other hand, the demands on participants of first achieving and then maintaining agreement on corporate advocacy of human rights would be significant and cumbersome. Participants would always confront forces that encourage them to relax that agreement in favor of the less demanding program of corporate due diligence.
I use the terms instrumental reason and means-end rationality synonymously; and the terms value-rationality and communicative reason synonymously.
The “lifeworld” refers to the everyday world shared intersubjectively by members of a community, for example in family life, in school, in culture and in informal social interactions, but not in formal economic institutions or in administrative bureaucracies. According to Habermas (1987:154), the kind of rationality that orients behavior in the economic system (as well as in the bureaucratic–administrative system) does not require (indeed, does not allow) “norm-conforming attitudes and identity-forming social memberships.”
This does not mean that all corporate norms are oriented in terms of communicative rationality.
Comprising the Universal Declaration of Human Rights and the main instruments through which it has been codified (the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights).
Raising the question can corporations be partly responsible for global (and not just national) human rights welfare?
Note that “poverty is not considered a human rights violation or a breach of international law” (Meyersfeld 2017:180).
In the context of corporate accountability, Bernaz (2020) advocates regulation and enforcement of this sort.
Human rights advocates cannot realistically expect states to foster human rights–oriented cultures, as I argue in Gregg (2012). This inspiration for this essay is the intuition that some corporations today might themselves undertake to revise their corporate culture in the ways I imagine an HRC.
UNGPs, para. 21: corporate communications about operations that endanger human rights should “not pose risks to affected stakeholders, personnel or to legitimate requirements of commercial confidentiality.”
https://www.unglobalcompact.org/
In Gregg (2018) I argue that artificial intelligence is similarly incapable.
A case from 1886 states that the Fourteenth Amendment to the U.S. Constitution (which reads in part: “nor shall any state ... deny to any person within its jurisdiction the equal protection of the laws”) “applies to … corporations” (Santa Clara County v. Southern Pacific R. Co., 118 U.S. 394 (1886)). This case interprets the term any person” now to include a corporation! And a case from 1910 states that the following legal proposition is “no longer open to discussion”: “That the corporation is a person, within the meaning of the Fourteenth Amendment” (Southern Railway Co. v. Greene, 216 U.S. 400 (1910)). Note that the American model “has been aggressively exported through contemporary rounds of economic globalization” (Barkan 2013:42).
Hence my argument, in the section titled “The Instrumental Logic of Due Diligence in Contrast to the Communicative Logic of Advocacy” for human rights as social and economic rights championing material equality.
See note 16.
Another means to mediating this structural conflict would be an array of outside organizations that could provide support to an HRC, as I show in the section titled “Motivation and External Support for a Human Rights Corporation.”
Sen (2001) analyzes poverty in part as a person’s lack of political rights and choice.
https://www.nbim.no/en/the-fund/responsible-investment/exclusion-of-companies/
https://www.corporatebenchmark.org/
https://www.business-humanrights.org/en/knowthechain-benchmarking-2016
See Brodie (2012).
https://www.humanrights.dk/
https://www.globalreporting.org/Pages/default.aspx
But consider contemporary developments that appear somewhat compatible even if much less ambitious, e.g., Jena McGregor, Washington Post, 19 August 2019: “Group of top CEOs says maximizing shareholder profits no longer can be the primary goal of corporations” at https://www.washingtonpost.com/business/2019/08/19/lobbying-group-powerful-ceos-is-rethinking-how-it-defines-corporations-purpose/
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Acknowledgments
My notion of an HRC takes inspiration from Li and McKernan’s (2017:265-266) suggestion that “in an age where corporate power tests and sometimes exceeds the capacities of state control,” my notion of a human rights state (Gregg 2016) could be extended to corporations toward “carrying the recognition of moral responsibility for human rights into business culture,” reshaping “expectations against which managers in particular corporations hold themselves to account”—including a “dissensual moment” that would advocate from within the corporation for “those whose lives and rights are adversely affected by corporate activity.”
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Gregg, B. Beyond Due Diligence: the Human Rights Corporation. Hum Rights Rev 22, 65–89 (2021). https://doi.org/10.1007/s12142-020-00605-x
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DOI: https://doi.org/10.1007/s12142-020-00605-x