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BUSINESS AND HUMAN RIGHTS: TOWARDS BINDING LEGAL OBLIGATIONS
PRESENTATION BY DR DAVID BILCHITZ
SOUTH AFRICAN INSTITUTE FOR ADVANCED CONSTITUTIONAL, PUBLIC, HUMAN RIGHTS AND INTERNATIONAL LAW
PRESENTATION OUTLINE The Impact of Corporations on Fundamental
Rights The Voluntaristic Framework Problems with Voluntarism International Developments Towards
Binding Obligations The South African Constitutional Paradigm Implications: Reform of Corporate Law
Voluntary Approaches
International Initiatives OECD Guidelines Tripartite Declaration The United Nations Global Compact Individual Company Codes of ConductIn South Africa: Corporate Social Investment King II Report: non-financial reporting JSE Sustainability Index
The Problems With Voluntarism Conceptual Problems
Fundamental rights obligations are not voluntary
• Content of Norms Vague and lack specificity Variable
• Enforcement Mechanisms Self-regulation No remedies for non-compliance
Towards Binding Obligations: International Developments
Transnational Human Rights Litigation UN Draft Norms on Responsibilities of
Multi-National Corporations and Other Business Enterprises
The Ruggie Framework State duty to protect individuals from
corporate violations
The South African Context: The Impact of the Constitution
Company law and Constitutional Law regarded as separate
Express Application of Bill of Rights to natural and juristic persons
Focus has been on corporate rights rather than obligations Hyundai: privacy FNB: property Primacy though of natural persons
What are Corporate Obligations?
Section 8(2) of the Constitution: “A provision of the Bill of Rights binds a natural or a juristic person if, and to the extent that, it is applicable, taking into account the nature of the right and the nature of any duty imposed by the right”.
Features that render rights applicable to corporations
Which features render rights applicable?
What are Corporate Obligations?
Constitutional Court (Khumalo) Intensity of Constitutional Right Potential Invasion of Right Nature of the party before it and role in
democracy(media) Two main factors:
Recipient perspective: Impact of Corporations on HR Agency Perspective: the Capabilities of Corporations
• Need to apply factors to specific rights to determine more concrete obligations
Implications for Reform of Corporate Structure and Law
What are implications of horizontality for reform of corporate law?
Focus of corporations has been on realizing profit for shareholders
At times, realisation of economic profit is in tension with some of ideas surrounding wider social/environmental responsibilities
Requiring Reform of Corporate Structure
As with public structures, all private structures subject to constraints of constitution
Creation of structure that can pursue profit at expense of HR is not meaningful
Inherent in structure of company is now demand it respect HR to extent applicable
Change of nature of corporation
Requiring Reform of Corporate Law Memorandum of Association of Company
should require respect and promotion of HR to extent applicable to Company
Add fiduciary duty of director to realise fundamental rights to the extent they are required to.
Impose personal liability on directors for decisions that violate human rights
Impose mandatory, standardised non-financial reporting obligations with compliance office to monitor
Conclusion Constitutional Framework moves us beyond
voluntarism Implications of framework have not yet
impacted largely on corporate law Need for law reform Continuation of parallel voluntary initiatives Power of corporation placed within
constraints such that do not harm fundamental interests of persons and often actively promote their development