Wednesday, November 27, 2013

“Polycentricity in South Asian Human Rights Law": Presentation at the Asian Society of International Law 4th Biennial Conference, New Delhi, India

The Asian Society of International Law has just concluded its excellent 4th Biennial Conference, held this year in New Delhi, India this past 14-16 November 2013 and hosted this year by the Indian Society of International Law

The Conference theme this year, “Asia and International Law in the 21st Century: New Horizons” drew a host of excellent papers and discussions over the course of three days. The call for papers described the conference theme:
Governments, scholars, and civil society in Asia are actively engaged in all facets of the development and implementation of contemporary international law. Asia's leading powers are no longer "emerging" but have emerged. There is, nevertheless, great diversity around the region. While countries in the Asian region may regard certain issues as of particular concern to them, those issues are generally also of great moment in other regions and/or at a global level. This conference will seek to share perspectives on emergent dimensions of international law from around the Asian region, broadly defined, and from beyond.
A number of great papers were presented.  The Conference Schedule can be accessed here.

I was grateful to have been able to present my paper at that conference: Polycentricity in South Asian Human Rights Law: On the Strategic and Simultaneous Use of Multiple Sources of Law to Advance Human Rights Against MNCs in South Asia. My thanks to Surya Deva (City University Hong Kong School of Law) for organizing a great panel.

A summary of the paper follows.

The PowerPoint of my presentation may be accessed HERE.

4th Biennial Conference
Asia and International Law in the 21st Century: New Horizons
Summary of Remarks:

Polycentricity in South Asian Human Rights Law: On the Strategic and Simultaneous Use of Multiple Sources of Law to Advance Human Rights Against MNCs in South Asia.

Larry Catá Backer

Over the last generation there have been significant advances in the development of international substantive standards of human rights defining the responsibility of multinational corporations (MNCs) for the human rights consequences of their activities. These standards have had as their object to extend governance to the impacts of the economic activities of enterprises. To that extent, they represent a substantial move from the traditional bases for state regulation of corporate governance that has been grounded on a variety of related theories of shareholder or enterprise welfare maximization. Several are worth mentioning. Within the architecture of the United Nations, the U.N. Global Compact and the U.N. Guiding Principles for Business and Human Rights are prominent. Among the most influential non-U.N. substantive frameworks for regulating the economic activities of business are those created under the leadership of the Organization for Economic Cooperation and Development (OECD). These include the OECD Guidelines for Multinational Enterprises most recently updated in 2011.

The development of new internationally based substantive frameworks for regulating the economic activities of business has also produced a parallel development of systems for the implementation of these substantive standards. Some of these systems are tied to substantive standards. This is particularly true of the implementation system of the OECD’s Guiding Principles. Under the OECD Guidelines, OECD participating states are obliged to create “national contact points” within their governments whose tasks include receiving complaints ion the violation of the Guidelines by MNCs. Other substantive norm systems do not duplicate the OECD’s more elaborate dispute framework but tend to serve as glosses, sometimes private, of substantive guidelines or guiding principles. This is particularly the case with respect to the human rights due diligence project of the U.N. Guiding Principles.

At the same time, changes in the domestic legal orders of states that also seek to regulate the human rights affecting behaviors of MNCs. Some states have sought to expand the availability of the corporate form to non-traditional enterprises. In the United States, benefit corporation statutes have been enacted over the last several years. Other states have sought to broaden the power of boards of directors to consider effects of corporate activities on constituencies other than shareholders, but these remain discretionary. Still others have sought to use their own market power to transpose international norms into their own investment strategies and their engagement with businesses as shareholders. The Norwegian Sovereign Wealth Fund has proven a leader of this form of transnational internationalism through private market activities.

These changes have been occurring in the shadow of significant advances in private governance arrangements, as global businesses strive to create their own intra-corporate substantive systems based on their supply chain relationships. Large MNCs have increasingly sought to develop coherence in their economic relationships throughout their supply chains by instituting a set of regulatory contractual relations with their downstream supply chain partners. These are sometimes overseen and certified by third party civil society actors. At least internally, these private and supply chain driven governance systems tend to bind all of their participants. They are part of larger private systems in which MNCs are held accountable, not to states, but to global communities of consumers and investors, and by global networks of civil society actors and transparency regimes centered on but not limited to the press.

As a consequence, the emerging governance landscape in much of the world appears to be advancing toward a polycentric model of governance. It appears that no one set of rules can entirely regulate economic activities, especially those that are part of supply and value chains that cross borders. Within every state, no matter how strong its belief in its power to control activities within its borders, there is an increasing amount of economic activity that is no longer wholly internal or disconnected from the global economy and transnational flows of goods, services, capital and investment. As a consequence, borders have become porous as governance power has become fractured especially in the context of economic activity that crosses borders in whole or in part. It follows that, increasingly, it appears that the rules—law and governance constraints—that may manage behavior no longer appear to comfortably run solely from a state (either the home or host state). Rather multiple systems of rules of a variety of distinct character may simultaneously affect the behavior-rule calculus of a particular actor, wherever situated.

In South Asia much of this development has been in line with advances in law that have been framed around the rights of individuals under the constitutional law of the state. India, in particular, has been active in developing a jurisprudence of individual rights that have consequences for the operation of business within the state. Yet increasingly those rules may not be enough. Individual rights based jurisprudence is grounded in a conception of litigation as an efficient means of changing societal behaviors one case at a time. Yet litigation itself may serve as much as a basis of resistance to changes in rights development as it can serve as a source of rights development itself. The recent events around Vedanta’s efforts to mine aluminum in Orissa provides a stark reminder of the limits of national constitutional law and the regimes of individual rights for the advancement of human rights frameworks for MNCs. And the recent efforts by global society to enhance national legal actions with proceedings in private and international for a, even non-judicial and soft law fora, have suggested the extent to which the functional regulation of human rights is being shared among the state and a variety of other actors. In the process human rights advocates are helping to frame a new standard for human rights governance in India, one grounded in but not limited by national constitutional law.

This paper considered the ramifications of this innovation in the advancement of such a project by considering the way in which international soft law private an public standards, advanced through dispute mechanisms beyond those available in host states, and the corporate policies of MNCs operating within India (especially) have been used increasingly in addition to or as a strategic weapon along with litigation in national courts to advance a hybrid standard of human rights against MNCs. The presentation started with a consideration of the emerging legal context in which the regulation of business and human rights is structured. In particular the paper contextualized those developments within emerging frameworks of polycentric governance in globalization. It described an emerging structure of global governance in which the domestic legal orders of states are being de-centered by the emergence of systems of governance developed within public international bodies and global multinational organizations, including MNCs. These governance structures have created a web of regulations that may simultaneously apply, to distinct effect, on individuals, enterprises and transactions. The resulting global system is one in which their is both convergence and dissonance in rules that may apply to all participants on global economic supply chains.

The paper presentation then reviewed the state of legal development at the national and international level of MNC obligation under national law and international soft law. In the South Asian context, of course, that legal development has seen the rise of an elaborate rights based legal infra structure in which the judicial branch, especially, has created a sophisticated jurisprudence around a constitutional framework. But there are difficulties as well—from ineffective legislative efforts to the inconsistencies of judicially crafted legal norms in a stated where too many are too poor to litigate their rights.

It then applied these examinations to the analysis of the emerging phenomenon of cross systemic strategic litigation. It examined carefully several case studies in which human rights advocates invokes both national law and international remedial measures under distinct legal or governance regimes to achieve their goals. In each of these cases, resort to ostensibly "non-binding" international law governance frameworks were invoked to not merely to seek to move national courts, but to develop multiple governance conversations simultaneously involving law (at the national level against the downstream supply chain entity directly involved) and social norms (involving the upstream supply chain multinational under international standards) to affect outcomes within the transnational supply chain.  The result of these deployments of polycentric strategies for positive remedial outcomes were usually not played out in the national courts but through global settlement agreements--invoking cross border regulatory contracts to affect conduct across borders.   

The paper presentation ended with a brief consideration of the consequences of this new approach to advancing human rights and some of the likely trends for India. It concludes that the legal structures and protections of national legal orders will remain a key foundation for the elaboration of individual rights. However, their inherent limitations will continue to erode the centrality of national law as the principal source of rights development or as the source of remedies. Instead, alternative public and private governance and standard setting frameworks will come to more directly influence national law and to drive remedial strategies and substantive standards. Polycentric governance, rather than national or international law, will likely be a substantial element of substantive behavior standards in the coming decades in South Asia and the rest of the world.

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