Redirecting Human Rights: Facing the Challenge of Corporate Legal Humanity

The U.S. Supreme Court’s Citizens United decision last year– opening the floodgates for corporate monetary influence over elections – was a landmark victory for the “business civil liberties” movement founded by the Chamber of Commerce in the early 1970s. At that time the Chamber invited Lewis Powell (shortly before his appointment to the Supreme Court) to circulate a strategic white paper describing how business could go on the offensive against student activists, consumer advocates and anyone else who challenged the supremacy of the business community.  Following Powell’s advice, the Chamber and a raft of non-profit “free enterprise” law firms supported by Olin, Scaife and other foundations launched a campaign to advance corporate interests by advocating expanded constitutional rights for corporations. The boundaries of commercial and political speech doctrines consequently expanded as corporations managed to convince the Court to block or overturn public health and consumer regulations. Meanwhile, the Chamber and its allies mounted a virulent campaign for “tort reform,” threatened SLAPP suits, and lobbied for other legislation (e.g. food disparagement laws) designed to stifle consumer, student and citizen activism.

By the 2000s Powell’s framework was taken to the international level primarily through corporate-friendly trade agreements festooned with investor rights provisions that trumped national and sub-national regulations. The insertion of corporations into international human rights law was a direct extension of the corporate rights strategy. Unfortunately, this latter development has been obfuscated by debates over corporate complicity with human rights abuses. In part that consequence is a reflection of human rights activists’ success in mounting high-profile campaigns, and lawyers’ skillful use of the Alien Tort Claims Act of 1789, which put many multinational corporations on the defensive. In response to these and other pressures, corporations worked to integrate human rights concerns self-interestedly into their agenda. At least 270 companies worldwide adopted human rights policies, according to the Business Leaders Initiative on Human Rights. At the same time, with activists exposing major weaknesses in international accountability mechanisms (e.g. the exemption of corporations from the International Criminal Court), the UN is struggling to operationalize its Norms on the (human rights) Responsibilities of Transnational Corporations, adopted in 2003.

None of these activist interventions prevented corporations from strengthening their standing under international human rights law or continuing to mount claims, a phenomenon that received less organized resistance from activists (especially in the U.S.), and scant attention from legal theorists.  The boundaries are being constantly pushed at the European Court of Human Rights (ECtHR), in ways that enable corporations to prevail in commercial disputes and to overturn national or subnational regulations. In the 2002 case Societe Colas Est v. France, for example, publicly traded companies successfully relied on ‘the right to respect for private and family life’ under Article 8 of the European Convention (ECHR), and specifically for the right to respect for their ‘home’ to challenge a police raid on the corporate premises during an investigation into anti-competitive practices. Invoking the need for a “dynamic interpretation of the Convention,” the court suggested that Article 8 “may be construed as including the right to respect for a company’s registered office, branches or other business premises.” Quite an impressive stretch, legal and otherwise.

Although the ECtHR does not always rule in favor of corporations (in the so-called McLibel case the court found that the activists had been denied the right to a fair trial and denied their freedom of expression), between 1998 and 2003 it delivered 126 judgments in response to complaints submitted by companies. How could a system of international human rights law established after the horrors of the holocaust have become so susceptible to corporate exploitation? The answer can be found in Anna Grear’s new book Redirecting Human Rights, which meticulously cross-examines the theoretical underpinnings of corporate human rights claims.  Grear locates the problem in the weak cognitive architecture of human rights law, and its abstract universality which makes it especially vulnerable to clever corporate exploitation.

In contrast to other regional and global human rights arrangements, the ECHR offers specific openings that corporations successfully exploited. Article 1 of the First Protocol in particular extends the protection of private property to “every natural and legal person.” Although the ECHR framework is the most important, it is not unique. Conceptual slippages in the concept of legal personhood allow corporations, as “disembodied jural entities,” to fit the entire template of human rights law in ways that socially situated human beings do not.

Lacking an historical examination of key precedents (much of that territory was already covered by other scholars, including Maurice Emberland and Upendra Baxi), Grear unfortunately cannot make it clear how corporations first established themselves as legitimate claimants.  Did the acceptance of certain conceptual distortions occur from the ECHR’s inception?  Did key cases create a doctrinal shift?  What’s clear is that the ECtHR’s conveyance of human rights to corporations happened without any adequate formal review or examination.  The court “simply (has) not engaged in a fully explicated, normative assessment of whether or not companies are appropriate beneficiaries of human rights protection,” Grear writes.  Nor “has the court engaged in a technical legal sense with the question of whether the artificiality of the corporation imposes limitations on its ability to be the victim of a rights violation.” The issue is not an issue, it’s an ideological fait accompli, a self-fulfilling assumption.

In the infamous Santa Clara decision of 1886, the Supreme Court extended 14th Amendment protections to corporations, thereby embedding the notion of corporate personhood into American jurisprudence: “(T)he court does not wish to hear argument on the question ….We are all of the opinion that it does,” the justices stated, a passing remark that the court’s clerk (a former railroad attorney) elevated in importance. As justices Black and Douglas later observed, “there was no history, logic, or reason given to support that view. Nor was the result so obvious that exposition was unnecessary.” Black described the import of the decision by observing that in 50 years of Supreme Court decision-making following the Santa Clara decision, over half of the cases in which the Court applied the 14th Amendment involved extending its benefits to corporations.

The Supreme Court’s failure to address the question of corporate constitutional rights was noted during oral arguments for the Citizens United case by Justice Sotomayor. She noted that the courts themselves “created corporations as persons” and suggested “there could be an argument made that that was the court’s error to start with…[imbuing] a creature of state law with human characteristics.” Although the plasticized concept of “legal person” is assumed to mean any rights-bearing entity, Grear reminds us that this was not always the case. When the concept of a “person” was first established in Roman law, it did not denote the basic legal unit or subject of law. Abstract entities were capable of legal relations, but were not “persons.” Slaves were considered “persons,” but were devoid of legal existence. Thus, there was no amalgamation of the concept of personhood and legal subjectivity. Accordingly, in Roman law, there was an inbuilt resistance to any potential (or temptation) for confusing human beings and legal persons.

It was the historical emergence of liberal individualism and universal rights (wherein the individual became the fundamental unit of law) that ushered in the use of “person” as the bearer of rights.  As espoused by Hobbes and Locke, society was founded upon an assumed contract based on free assent. Contract-driven social relations reinforced the notion of the “possessive individual” as the fundamental unit of law, linking the rise of the new liberal social order to a conception of personhood predicated upon ownership. The use of the anthropomorphic ‘person’ as a legal term, however, could only complicate legal reasoning about rights-bearing entities. By designating both the legal subject (i.e. rights-bearing entity) and the human individual as “persons,” much confusion was created, a confusion that continues deleteriously today.

Grear suggests that the best way for legal advocates to create an “ethically satisfying theory of human rights” and protect human rights law from being dominated by corporations is to focus legal standing on the notion of “embodied vulnerability.” Just as the creation of an abstract universal “person” allowed corporations to insert themselves as claimants, so pressure for “embodiment” is necessary to resist such claims. It is the inherent capacity to “suffer harms associated with human rights violations” that should have critical normative bearing upon how the law is interpreted. A-historical arguments to define rights-bearing entities as abstract universals should be resisted, she suggests, since such exercises can exclude individuals in greatest need of protection.  Proposals to define rights-bearers as “citizens,” for example, would not only exclude undocumented aliens, but forget that one of the Nazis’ first acts in preparing its victims for extermination was to strip them of their status as citizens.

One of the dimensions of Grear’s examination that might have been explored more deeply is the theory of the corporation itself.  Theories of the corporation have had a large bearing on the justification, if not the creation of corporate rights.  Although dominant theories of the corporation continue to assume that they are “rights bearing entities” by definition, there is no convincing argument that this should be the case.  Nor did such a theory always have legitimacy. During the early nineteenth century, the reverse was true. Corporations were artificial entities, “existing only in contemplation of law,” as Justice Marshall put it. States created corporations by charter, a franchise or concession that defined their existence, usually with the public interest in mind. The 1819 Dartmouth case marked the first departure from the notion that corporations were subordinate to the will of the state. In Britain, the 1862 Companies Act similarly effected a subtle shift in company law that imbued corporations with legal subjectivity. Then, just as Santa Clara established legal personhood for corporations in the U.S. in 1886, the British Interpretation Act of 1899 stipulated that the expression ‘person’ should be assumed to signify any body of persons.

A restoration of the notion that corporations are “creatures of law” established (through the process of incorporation) by governments, which in turn draw their legitimacy from a sovereign people, would be useful for challenging corporations.  As creations of law, they are not entitled to the same unalienable rights reserved to real people. It would follow, therefore, that human rights law is an unfit and illogical place to give them standing. Unfortunately, the context for raising this challenge (outside of legal theory) is currently missing.  Thus, instead of burrowing critically into corporate theory, Grear argues for “structuring the normative field of focus,” offering a more supple challenge to corporate standing and entitlement that, while less clear, seems more consistent with political reality.

Although corporate claims should be resisted at the ECtHR and elsewhere, Grear concludes that more effective ways may emerge than challenging corporate standing directly within the existing human rights framework.  Even the suggestion that the same abstract universalism that opened the door to corporate claims could be used to raise the status of countervailing claimants (i.e. animals, plants and even inanimate objects that might just as easily be shoehorned into anthropomorphic frameworks) cheapens human rights. Instead of pushing the notion of “embodiment,” new frameworks might be constructed to clarify the place of human beings within human rights law, as well as reshape property relations in a manner that enhance community rights and the natural resource commons.

Current battles over water are a “paradigm example” of how this can occur.  Rather than struggle with “property constructs,” the focus is on elevating the perceived human right to water to a higher norm (as the UN General Assembly did when it adopted a resolution recognizing the human right to “safe and clean drinking water and sanitation”) and thereby delegitimize its commodification.  The result is the expectation that human beings (and natural resource commons) obtain greater legitimacy in the law. Other examples include the UK Countryside and Rights of Way Act 2000, which challenges traditional private powers of territorial exclusion in order to improve public health and reduce social divisions, and the Marine and Coastal Access Bill 2008, which would expand public access to the coast of England.

The corporate human rights claims represent the most perverse and radical extension of centuries-long jurisprudence, and for the illegitimate advancement of corporate interests over the broader public interest. Although such claims may not be the first weapon of choice for any particular company, because they are so counter-intuitive and illogical on their face, they represent a litmus test of civil societies and their governments’ ability to rescue international law from corporate colonization.  Grear’s book helps illuminate the path ahead for global justice activists and legal theorists wishing to do so.

Charlie Cray is a policy analyst and director of the Center for Corporate Policy in Washington DC.  He is co-author of The People’s Business: Controlling Corporations and Restoring Democracy and is former associate editor of Multinational Monitor magazine

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