Multinational corporations: the practice of shared responsibility in international law

Emerging robustly in the 1990s as a global tour de force in the globalisation process, ‘multinational corporations’ (MNCs), also referred to as ‘multinational enterprises’ (MNEs) or ‘transnational corporations’ (TNCs) introduced complex international structures connected to states, but at the same time transcending national boundaries. According to Shaw, MNCs ‘constitute private organisations comprising several legal entities linked together by parent corporations and are distinguished by size and multinational spread’. The operations of multinational corporations raise important questions of shared responsibility, because of the globalised nature of their operations and the impact of their activities. As Clapham correctly pointed out, a single actor by its action can generate multiple violations by a range of actors, thereby raising the question of shared responsibility and allocation of liability. In other words, an MNC through its global transactions with other actors may set in motion a chain of activities that may lead to multiple harmful outcomes and subsequent claims. The situation is further complicated by the structure of international law and the fact that at present there is no international tribunal or court that has jurisdiction over MNCs. It is argued in this chapter that despite the conceptual difficulties in applying shared responsibility to MNCs under international law, there are significant developments at the international level which may facilitate allocation of shared responsibilities between MNCs and other entities implicated in a violation of international law. This chapter starts by contextualising the situations that may lead to shared responsibility between MNCs and other parties under international law (section 2). The chapter thereafter discusses the state of international law on the responsibility of states for the actions of MNCs (section 3). The chapter also examines situations that may lead to shared responsibility in the interaction between home states, host states and MNCs, especially in the context of investment treaties (section 4). The chapter further examines existing soft law rules on the international responsibility of MNCs and their potential implication (if any) for the concept of shared responsibility (section 5). Attention is paid to the United Nation’s Framework for Business and Human Rights (Framework) and the Guiding Principles on Business and Human Rights (Guiding Principles) developed by the former United Nations (UN) Special Representative for Human Rights and Business, John Ruggie, because of their currency and possible potential for the future. The chapter also discusses the relevant case law (section 6) and conceptual difficulties posed by the current structure of international law to shared responsibility of MNCs (section 7)