Corporate Social Responsibility 1 Introduction

What is CSR about? Corporate Social (and environmental) Responsibility

What is CSR about? EU Commission: “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis” – COM(2001) 366 “Corporate social responsibility concerns actions by companies over and above their legal obligations towards society and the environment.” – COM(2011) 681

Origin: spectacular cases Involvement in coups in Latin America Industrial accidents Bhopal, Ali Enterprises (Karachi), Rana Plaza (Dhaka) Continuous degradation of the environment Shell, Texaco Sweat shops Foxcomm

Why leaving it to the corporations? State regulation vs. Private regulation Large body of environmental law, labour law etc. at the national level Tensions with purely economic approaches Welfare through trickle-down effects Allegedly higher flexibility of private regulation

Limitations to public law regulation Starting point The multinational company Its legal structure: Legal independence of the subsidiaries Its economic and political power Public international law The territorial principle The nationality principle

Limitations to public law regulation The host states Limited experience with regulation Competition between host states for investment Corruption

Limitations to public law regulation The home state of the MNC No jurisdiction over the subsidiaries Regulation of the behaviour of the parent company in relation to its subsidiaries Which could, however, clash with the regulatory powers of the host states Limited political will to engage with the behaviour of multinational corporations abroad Market ideology Failed legislative activities

Limitations to public law regulation International organisations Predominance of free market ideology over social concerns Leading role of the WTO

Why do corporations engage in CSR? Idealistic interests Legal requirements? Not yet formally established Increasingly: reporting requirements Marketing interests CSR is used in advertising to consumers and / or traders CSR may be useful or necessary in tenders of public authorities

Typology of CSR Instruments 1 Internal regulation Handbooks Supply chain management External communication Websites and the like Published codes of conduct

Typology of CSR Instruments 2 Unilateral “our philosophy” ... Codes of conduct of business associations Agreements with environmental associations or trade unions Adherence to an international or state-based system E.g. the Global Compact

Typology of CSR Instruments 3 Reference to (otherwise inapplicable) principles Human rights No double standards ‘International standards of CSR’ Self-developed standards

CSR and the law CSR is voluntary by nature However, …