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Topic 3. Corporate Social Responsibility: Codes and Laws

Topic 3. Corporate Social Responsibility: Codes and Laws. Profits `bottom line’ to shareholders Responsibilities to stakeholders (employees, customers, clients) to society (needs and values): good citizenship via Laws/Regulations national transnational? global?

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Topic 3. Corporate Social Responsibility: Codes and Laws

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  1. Topic 3. Corporate Social Responsibility: Codes and Laws Profits `bottom line’ to shareholders Responsibilities to stakeholders (employees, customers, clients) to society (needs and values): good citizenship via Laws/Regulations national transnational? global? via `Soft law’ / Codes of Conduct IBSR Topic 3

  2. Formal Law / Regulation • International: negotiated by governments • binds states, obligation to implement • national law binds legal persons • Transnational • overlapping jurisdictions & laws • Home state law may apply to • branch/ subsidiary /contractor /franchisee • Host State Law may extend to • Parent/ foreign investor/ franchisor IBSR Topic 3

  3. Supranational Law Dualist: specific legislation under national law Monist: treaty may be directly applicable only `self-executing’ provisions e.g. WTO rules create no rights/duties for firms Direct Incorporation into National Law European Communities Act general incorporation: e.g. Tax treaties subsequent law may `override’ only if explicit conflict with prior incorporated treaty interpret national law to comply with international obligations IBSR Topic 3

  4. Global CSR Standards: 1. Treaty e.g. Labour Standards: ILO Conventions now 180+ Conventions, binding on states which ratify All members must submit new standards to competent authority for adoption supervising implementation: http://www.ilo.org/ monitoring compliance/ enforcement: country reports Committee of Experts on Application Art. 24 Representations by workers/employers organisations Art 26 Complaints by other Member States Application to Firms indirect, hence variable Minimum Standards IBSR Topic 3

  5. 2. Global Standards: 2. Codes Directly aimed at firms Not (immediately) binding: `soft law’ may be enacted into national law compliance monitoring procedures Inter-Governmental Organisations - IGOs e.g. ILO : Recommendations Declarations Codes of Conduct Non-Governmental Organisations - NGOs: SW Industry and Corporate Codes: SOCMA IBSR Topic 3

  6. General Codes ILO: Tripartite Declaration on MNEs 1977 OECD: Guidelines for MNEs 1976 Annex to Declaration & Decisions (NT, Investment Incentives) CIIME - BIAC - TUAC monitoring National Contact Points Periodic Reviews - 2000 Review United Nations Code of Conduct for TNCs (Draft) UN Global Compact 2000 International Chamber of Commerce 1974, 2000 IBSR Topic 3

  7. Specific Codes Restrictive Business Practices UNCTAD Set of Principles & Rules for Control of RBPs, UNGA resolution 3563/1980 Expert Group, Review Conference (5th, 2000) OECD: Cooperation on RBPs Affecting Trade Recommendation 1967- (revised 1995) notification & consultation between national authorities Marketing Breastmilk Substitutes WHO Code, Assembly resolution 1981 monitoring by UNICEF and NGOs, IBFAN Financial Market Supervision Basel Committee on Banking Supervision BCBS IBSR Topic 3

  8. Corporate & Industry Codes Sullivan Principles: human rights (SA 1977) Rev. Sullivan The Shell Report: Sustainable Development http://www.shell.com IBSR Topic 3

  9. Enforcement & Compliance Internal: contractual monitoring Audit: specialist firms, e.g. SGS NGOs: as critics, or partners? Legal Status: links to treaty? IBSR Topic 3

  10. Legal Status & Compliance Codes can refer to & incorporate legal standards compliance with national law & ILO core standards amplification of international standard, e.g. bribery Codes can be backed by Law National: e.g. Australian Bill; UK CORE Billhttp://www.publications.parliament.uk/pa/cm200203/cmbills/129/03129.i.html Regional: EC Parliament proposal International Code monitoring audit, complaints, mediation, adjudication by IGO? e.g. ILO, UN Global Compact? role of civil society organisations: e.g. Transparency International TI IBSR Topic 3

  11. CSR Measures & Investment Treaties Treaty provisions on investor rights not responsibilities Deregulatory effect on host state laws National Treatment (NT): `like circumstances’? Anti-expropriation: regulatory takings, e.g. cancelling licence Specific exclusions: e.g. tax, sub-national measures General Exceptions lists reservation of specific regulatory powers No-Lowering of Standards clause IBSR Topic 3

  12. Integrating CSR into Global Rules Binding Rights, Non-binding Responsibilities? Framework Agreement, e.g. WTO package; WHO Tobacco Framework Convention presumed validity of national measures based on international standards (as for WTO-SPS, TBT) associated (optional) Plurilateral agreements Package Deal, including e.g. corporate governance Tax Cooperation Restrictive Business Practices Anti-Corruption & Illicit Practices Core Labour Standards? IBSR Topic 3

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