Encouraging respect for human rights in the offshore operations of Australian companies: an analysis of the roles of directors’ duties and disclosure

Author: Glenn Palmer

Palmer, Glenn, 2020 Encouraging respect for human rights in the offshore operations of Australian companies: an analysis of the roles of directors’ duties and disclosure, Flinders University, College of Business, Government and Law

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The complicity of companies in the violation of human rights around the world has a history, context and trajectory. In recent years, efforts have been made at an international level, brokered by the United Nations, to address violations. The most recent attempt has been the mandate of Professor John Ruggie, which achieved a degree of consensus and resulted in the publication of the Guiding Principles. This document built upon his Protect, Respect and Remedy Framework, which captured the role of states and businesses, with regard to preventing corporate complicity in the violation of human rights, within international law. With previous initiatives losing momentum or failing to be adopted due to a lack of consensus, this mandate was an important step in efforts to combat an issue that Ruggie himself described as the canary in the coalmine. However, in spite of the mandate’s progress, transnational corporations continue to be implicated in the violation of human rights.

This masters research analyses the issue from an Australian perspective, highlighting the involvement of some companies domiciled in this country in the continued violation of human rights. Analysing the Guiding Principles, this thesis also considers the extent to which the Australian government could use elements of corporate law to address the negative impact of Australian companies in their global operations.

Case studies of overseas operations linked to Australian companies highlight the nature of the problem by demonstrating how their actions produced negative impacts on local communities and workers. Examining international human rights treaties will highlight how those impacts constituted a violation of human rights. Furthermore, analysing the relevant legislation and actions in the host state will shed light on its government’s inability to protect human rights on these occasions. The case studies reveal corporate complicity in human rights violations in developing countries – namely the existence of weak and ineffective regulation, but also what has become the competing demands of protecting human rights versus attracting investment. This issue is key to the problem of businesses violating human rights. With strong and effective regulation of businesses required to protect human rights host states find themselves accepting the violation of rights as an inevitable price for development, and sometimes even relaxing the regulation of companies in order to attract investment. This research demonstrates that this race to the bottom is damaging to human rights and also to businesses who are implicated in rights violations. It also underscores one of the regulatory challenges in this area. With only the host state of an operation obliged under international law to protect human rights, the problem can go unchallenged when the home state of the transnational corporation is not obliged to act.

The ongoing complicity of Australian companies in human rights abuses shows no sign of changing without regulatory intervention, underlining the need for preventative action. Without an obligation such action is dependent on political will, and the thesis sets out an argument in support of the Australian government taking action and consideration is given to what that action might be. While not rejecting any method of preventing the violation of human rights by businesses, the thesis focuses on the how directors’ duties and disclosure could be used in Australia, in keeping with recommendations in the Guiding Principles. This research shapes and frames recommendations on action the Australian government could take.

The complicity of businesses in human rights violations is a key, current issue which is important not only for victims but for efficient functioning markets. This research is important as it examines a key global issue from an Australian perspective. Much has already been written about the SRSG’s mandate and the impact Australian companies have on human rights in their offshore operations. However, to date there has not been an analysis of how recommendations in the Guiding Principles relating to directors’ duties and disclosure may be applied in this country to prevent the complicity of Australian companies in human rights abuses overseas. By analysing how the overseas operations of Australian companies and their partners might be regulated from this country, the research contributes to the general discussion of the issue of business and human rights. Furthermore, it informs the reader of the extent to which corporate regulation in Australia is currently suitable tool for preventing rights violations, and therefore contributes to thinking on steps the Australian government must take.

Keywords: Guiding Principles, Corporate Social Responsibility, Business and Human Rights, Corporate Law, Australia, Extraterritorial Regulation

Subject: Law thesis

Thesis type: Masters
Completed: 2020
School: College of Business, Government and Law
Supervisor: Professor Tara Brabazon