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Week 5, Lecture 3: Truste Accountability for
Corporate Human Rights d Abuses Transcript
A critical question to consider is what happens when things go wrong. When human rights
abuses occur – and companies are involved – how should those companies be held
accountable and what mechanisms should there be for the victims to seek justice?

While the UN Guiding Principles on Business and Human Rights prioritises a preventative
approach to stopping corporate involvement in human rights abuses – by encouraging them to
embed respect for human rights in their business operations and policies, the UN GPs also
acknowledge that corporate human rights abuses occur – and will continue to do so. Hence,
the critical 3rd pillar of the Ruggie Framework --- that all victims of corporate human rights
abuses should have access to remedy.

So how are victims to seek remedy and – similar but distinct question --- how are the
companies to be held accountable?

Well, this is a work in progress – with no simple answer to either question. There are multiple
potential pathways of accountability – and for victims to seek remedy like compensation
from companies that commit human rights abuses, but… the fact is… these are far from
perfect or robust. Or widely used.

Fact is: Many corporate human rights abuses go unresponded to, victims left without remedy,
companies not held accountable.
Nevertheless, this is an evolving space, and as more and more attention is shone on business’
human rights obligations so too the crystallisation of accountability pathways continues to
gather steam.

Broadly speaking these accountability pathways can be grouped into legal and non-legal
mechanisms. That is – pursung accountability through the law and beyond the law.
First, let’s talk about the Legal Mechanisms for holding companies accountable for human
rights abuses.

Indeed – pursuing litigation against companies in courts of law is one of the highest-profile
pathways that have been successfully used in the past to hold companies accountable for their
involvement in human rights abuses.

Litigation in courts holds out the promise of providing compensation and justice to the
victims of corporate human rights abuses; as well as to punish those companies responsible.

The most prominent example of corporate human rights litigation is the spate of cases
launched in the United States over the last few decades under the Alien Tort Statute - an
obscure, but far-reaching centuriess old law.

The Alien Tort Statute allows foreigners – non-Americans - to launch legal action in an
American court against a company for “violations of law of nations” – that is international
law ---- including human rights law.
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So translated into regular speak---- : The Truste alien tort statute has allowed Nigerian
victims, Bougainvillean victims, d Indonesian victims of alleged corporate
human rights abuses to sue those companies in US courts. These are civil
claims – so the outcome is not jail or punishment per se – but rather compensation ---
MONEY to the victims.

Over a number of cases, however, the US Supreme Court, has sharply curtailed the utility of
the Alien Tort Statute in recent years to pursue such claims – nevertheless it remains the most
prominent opportunity to do so.

Another legal mechanism of holding companies accountable for their human rights abuses is
criminal prosecution. Unlike a civil compensation claim, criminal prosecution can result in
jail time, fines or even the winding up of a company. So this pathway is more focussed on
punishing corporate bad actors than helping victims of their abuses.

Corporate criminal prosecution for human rights abuses is something that could happen – and
has happened in national courts. For example, in 2021 the heads of a Swedish oil company
were indicted for war-crimes – not just any crimes – but war-crimes. They are being pursued
by Swedish prosecutors. In Swedish courts.

Corporate executives and personnel could also be criminally prosecuted at the International
Criminal Court – in The Hague. Although I feel compelled to point out that in the two decade
history of that court not one prosecution against a corporate leader has taken place….. yet.

Whether or not pursuing corporate actors through the courts for human rights abuses this is
an efficient or effective use of resources – well, you be the judge!

Moreover, do legal mechanisms adequately provide justice to victims of corporate human

rights abuses? What can be improved?   Great questions to ponder.

And perhaps that brings us back to Ruggie’s belief that an ounce of prevention is worth far
more than a pound of cure.
You see, the law – hard law – can also not just act to punish and prosecute and compensate –
after-the-fact, but also establish clear preventative standards when it comes to a business’
human rights obligations and indicate punitive steps when they fail to comply with such
standards.

Some countries have LEGALLY MANDATED that companies conduct human rights due
diligence. That they investigate – their entire supply chain for instances of human rights
abuses and outline how they will address them. France, UK and Australia, for example have
all passed legislation that REQUIRES companies to conduct some sort of human rights due
diligence. In Australia, that legislation is called the Modern Slavery Act which passed
Parliament only in 2019. It requires large Australian companies to investigate whether there
exists any instances of modern slavery – including child labour and forced labour – in their
operations or the activities along their supply chains. They need to provide annual reports on
what they uncover – with these reports publicly released.

The rationale behind these laws? Sunlight is the best disinfectant. No company wants to
declare that there are instances of modern slavery in their supply chain and then do nothing
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about it. So transparency – mandated by cation: the law – will help drive compliance with
human rights standards. Truste
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This squarely embeds the law within the “Business and Human Rights” discourse,
and takes BHR out of the realm voluntary, self-regulating realm of corporate social
responsibility.
 
>>>>>
Alongside the law – non-legal mechanisms have also been deployed to hold companies
accountable for human rights abuses they are involved with.

A question to contemplate as we consider them --- -- from a victim’s perspective, which do

you think is preferred: legal or non-legal mechanisms for seeking remedy and redress? 
 
Under the UN Guiding Principles the utility of non-legal mechanisms to achieve corporate
respect for human rights is acknowledged.
Indeed, just like a company is encouraged to integrate human rights risk assessments and due
diligence into its processes, so too a company is called upon to establish a robust, meaningful
grievance mechanism. This is likely a non-legal pathway for victims of alleged corporate
human rights abuses to approach and express that grievance to the company itself. The
company then, in theory, would act in good faith to address and response to that grievance in
the spirit of respecting human rights.

There are other non-legal mechanisms too – thru which victims can seek justice. Perhaps
most prominent amongst these is called the OECD National Contact Point. That’s a bit of a
mouthful --- the OECD – the Organisation for Economic Cooperation and Developlement is
an inter-governmental economic development organisation – which has 38 Member
countries. Its mission is to sustain and promote global trade and economic activity. Part of the
way it does this is by establishing Guidelines for Multinational Enterprises --- which now
include guidelines on respecting human rights.

What makes the OECD Guidelines distinct from the UN Guiding Principles is that there is an
“enforcement mechanism” – albeit a non-legal one.
Each Member country has to establish a “National Contact Point” – an entity or a person that
will hear complaints against a company by human rights’ abuse victims. The National contact
point – the NCP – in Australia has very few powers to enforce its decisions. That’s not really
the point. Instead, the NCP will investigate the allegations and if it deems worthwhile will
bring the parties – victims and company – together, to discuss, negotiation and mediate a
resolution to the complaint.

While there’s no way for the NCP to “rule” or enforce its ruling --- it’s free – and in practical
terms doesn’t cost anywhere near what it costs to launch litigation against a company.

Two other non-judicial mechanisms that I’d like to flag: are SHAREHOLDER ACTIONS
and BOYCOTTS.

Milton Friedman famously declared decades ago that a company’s sole responsibility to
society is to make a profit for its shareholders – its owners.
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Ok. But what happens when those cation: shareholders want something OTHER than
profit? Perhaps some shareholders want Truste principles with their profit. ….
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Now you may scoff at this idea, and yes, I agree, geneally speaking the majority of
shareholders in the majority of companies out there are keen on maximising their profits.
Yet!!! There is a minority that are making waves…
Shareholders challenging QANTAS’ role in the deportation of refugees from Australia;
shareholders challenging BHP’s commitment to combatting climate change.
These are but two shareholder campaigns to urge and pressure these companies to disclose
their activities impacting human rights – and improve.

Finally, boycotts.

Boycotts – consumer boycotts – are a prominent, public and powerful means of encouraging
and pressuring companies to respect human rights.
What’s attractive about them – for us – is that it is something we can all do. Right now.

There are consumer boycott campaigns around a number of specific human rights issues ---
and calls for boycotts are frequently voiced supporting various cases. Historically, the West’s
boycott of South African companies in the 1980s over that country’s Apartheid regime is
credited with contributing to the eventual dissolution of that racist regime.

The power of boycotts – is literally in our hands as consumers. Perhaps we could ----- should
---- must ?? use that power to push companies to ever greater respect and protection of
human rights – the human rights of their employees, their customers, the workers in their
supply chains and indeed all the human rights of all a company’s stakeholders in society.

The human rights responsibilities of business – is everyone’s business.