International law, in general, does not impose direct human rights obligations on corporations (also known as “companies”). Rather, national governments are required to protect people from human rights abuses by corporations, and are expected to take steps to prevent and punish any such human rights abuses. The usual way for governments to regulate corporations is by making and enforcing laws, such as environmental or labour laws. Unfortunately, many countries fail to properly regulate corporations.
Exceptionally, corporations may be directly responsible for breaches of international criminal law. That is, corporations may be directly prohibited from perpetrating international crimes, such as genocide, crimes against humanity and war crimes.
A corporation can operate in many different countries. A “multinational corporation” may be based in one country, but have operations in several different countries at the same time. This can make it difficult to regulate multinational corporations. Increasingly, countries are attempting to regulate the overseas operations of multinational corporations based in their country. However, it is currently unclear whether international human rights law obliges countries to do this.
The difficulty in regulating multinational corporations is increased by the fact that the law may consider it not as one big corporation, but as separate corporations in each country where it operates. After all, each corporation is a separate legal “person”. While each corporation’s “separate legal personality” may promote business interests, it can also make it difficult to properly regulate multinational corporations. For example, a wealthy “parent” corporation will rarely be held legally responsible for the actions of a poorer “subsidiary” corporation that has harmed human rights, even if the latter company is unable to pay the compensation. This has led to suggestions that a group of corporations should be treated as a single entity in certain circumstances, for example where they are highly integrated.
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