This report summarizes the findings based on extensive research and consultation with corporate law experts in multiple jurisdictions regarding the links between corporate and securities law and human rights.
May 2011 | John G. Ruggie; UN Human Rights Council | Pages: 48
This resource is an addendum to the report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, John Ruggie. It was submitted to the UN Human Rights Council in 2011. An update to this report was written by Shift in 2013.
The summary is excerpted from the resource.
Corporate and securities law directly shapes what companies do and how they do it. Its implications for human rights, however, remain poorly understood. Corporate law and human rights are often viewed as distinct legal and policy spheres, populated by different communities of practice.
In early 2009, the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises established the Corporate Law Project (CL Project). The Project involved more than 20 leading corporate law firms from around the world (appendix I) assisting pro bono to identify whether and how corporate and securities law in 39 jurisdictions (appendix II) encourages or impedes companies’ respect for human rights. The firms explored issues such as incorporation and listing; directors’ duties; reporting; and stakeholder engagement (see appendix III for the Project’s research template). The Special Representative also convened several expert consultations to discuss key findings and next steps. To the Special Representative’s knowledge, the Project is the first in-depth, multi-jurisdictional exploration of the links between corporate and securities law and human rights.
The jurisdiction-specific surveys indicated that corporate and securities law around the world does intersect with human rights. Simply put, where the impact on human rights may harm a company’s short- or long-term interests if it is not adequately identified, managed and reported, companies and their directors and officers may risk non-compliance with a variety of rules promoting corporate governance, risk management and market safeguards. Even where the company itself is not at risk, several States recognize through their corporate and securities laws that responsible corporate practice should avoid negative social or environmental consequences, including for human rights.
Despite these links, the CL Project also highlighted two other patterns. One is a lack of clarity in corporate and securities law regarding not only what companies or their directors and officers are required to do regarding human rights, but, in some cases, even what they are permitted to do. The other is the limited coordination between corporate regulators, on the one hand, and Government agencies responsible for implementing human rights obligations, on the other. As a result, in most of the jurisdictions studied, companies and their directors and officers lack effective guidance on how best to ensure or oversee corporate respect for human rights.
Key trends from each part of the CL Project include:
The Special Representative hopes that the CL Project will stimulate discussion among the key actors involved, including human rights lawyers and advocates, corporate and securities law experts, company representatives and government regulators, and lead to additional research beyond the 39 jurisdictions included in the Project.