Enforcing International Law Against Corporations: A Stakeholder Management Approach

Abstract

There is an important but oft neglected relationship between the problems of corporate governance and international law. Corporate managers grapple with how to respond to society’s demands that their enterprises do better when it comes to protecting people and the planet. These demands take many forms, including increased pressure for “sustainability” and “environmental, social and governance (ESG).” These demands are made in response to the economic, social, environmental, and political crises facing our world and a recognition of the responsibility of corporations and other business actors to contribute to their solution. What is often unrecognized is that many of these crises occur because corporations fail to follow international law. Corporate misdeeds often arise from the violation of international law norms on human rights, environmental protection, sustainable development, use of force, among other norms. International law can guide corporate managers on meeting the public’s demand for more responsible business practices if they would only follow it.

The problem is enforcement: corporate actors do not abide by international law because the international legal order lacks adequate mechanisms to ensure their compliance. Specifically, an international legal order based exclusively on enforcement by State actors will fail because, on many occasions, governments are unwilling or unable to ensure that corporations within their jurisdictions obey international law. This Article argues that the solution is to borrow insights from a discipline that has a long history of influencing corporate behavior: stakeholder management. It reveals that corporate actors frequently align their behavior to conform to the values and expectations of a range of non-state actors – corporate stakeholders - such as consumers, employees, insurers, financial institutions, investors, industry organizations, and NGOs, among others. These stakeholders can address important gaps in the international legal order by offering incentives that are currently lacking but necessary to nudge corporate actors towards international law. Descriptively, this Article develops a typology of enforcement strategies practiced by corporate stakeholders: predicative, facilitative, direct, and amplification. Normatively, it invites re-evaluation of how international law is enforced by non-state actors against other non-state actors. It emphasizes the multiple audiences for international law enforcement: The actions of corporate stakeholders not only change the preferences of the targets – the corporate actors – to comply with international law but also the incentives of the intermediaries – other corporate stakeholders – to enforce international law. This Article thereby contributes to the scholarship on who enforces international law, why they do so, and if they can be relied upon to do it again.

Keywords: corporate governance, international law, international human rights, corporations,