Corporate Social Responsibility in

Weak Governance Zones

Larry Catá Backer

Symposium on "Critical Global Business Issues: When Theory

Meets Practice”

Santa Clara University

6-7 Feb 2015

The Context

--the parameters of MNE legal compliance and societal obligations are well understood

--compliance becomes more difficult in weak governance zones

--allegations of the worst cases of corporate-related human rights harm occur in WGZ

--little guidance from states

--international organizations have sought to incorporate this issue into the general question of the responsibilities of enterprises

Problem

--How to develop guidance for corporate responsibilityin weak governance zones with corporate buy in

--where corporations leery of substantial public role

--Focus on two international soft law efforts

1--UNGP

2—OECD Risk Awareness Tool and the OECD Guidelines for Multinationals.

Roadmap

FIRST: Describe the standards and how they are supposed to work

SECOND: consider the challenges they pose both with respect to their respective internal logic and as a coherent system

UNGP Approach

UNGP 7: State management of MNE activities in WGZ

UNGP 23: Evaluating MNE activity as a matter of legal compliance—the complicity model.

Risk Awareness Tool

--targeted for use in those contexts in which there was not a market failure requiring regulation, but analogously, a governance institutional failure that may require additional responsibilities of enterprises operating within them

I) Obeying the law and observing international instruments

II) Heightened managerial care

III) Political activities

IV) Knowing clients and business partners

V) Speaking out about wrongdoing.

VI) Business roles in weak governance societies – a broadened view of self interest

Challenges

A. Coherence—Scope of Coverage

B. B. What Are Weak Governance or Conflict Zones and Who Decides?

C. C. Risk and Complicity.

D. The Perils of the Heightened Managerial Care Standard.

E. Legitimate and Illegitimate Political Activities.

CONCLUSION--Both the UNGP and the Risk Awareness Tool have had significant effects.

--Both approaches are grounded on the superiority of international norms, irrespective of their character as law within the domestic legal orders of states.

--Both acknowledge the autonomy of enterprises as directly responsible for the operationalization of international norms wherever they operate. Yet both also open the door to extraterritorial application of law.

--The same framework that advances the governance autonomy of enterprises also envisions them as the vehicles through which home states may project national power within host states with weak governance regimes.

-- And this tension built into both frameworks, a tension that goes to the dual character of enterprises as both autonomous governance actors and as creatures of the states n which they are domiciled, that mark the potential and the challenge to the internationalization of regimes of CSR.