Without a Court: Ensuring Corporate Accountability

Non-judicial strategies for promoting corporate accountability in Syria


By: Shaden Abusaleh


There are various non-judicial strategies through which NGOs can hold businesses accountable, these include non-judicial grievance mechanisms and economic pressure tactics.


Over the past year, the unrelenting persistence of the Syrian conflict, one of the deadliest humanitarian crises of our time, has been coupled with the seemingly premature steps to reconstruct the country – the estimated costs of which will be between $100 to $350 billion, with some putting it as high as $1 trillion.

As the country scrambles for investments and multinational corporations race for contracts, dilemmas will likely arise. It will be near impossible to avoid the regime’s power system of patronage, interdependency, and widespread corruption, which the country’s business elites and government actors have long engaged in. Licenses for mobile phone networks, for example, have gone to Rami Makhlouf, Bashar al-Assad’s first cousin, concentrating profits in his hands. Makhlouf also controls free trade zones and runs more than 200 foreign companies operating in Syria. In 2011, it was estimated that his net worth sat at $2 billion, with some Syrian economists putting it at $6 billion.

As such, intensive scrutiny needs to be paid towards business enterprises operating in the country so as to hold these multinational corporations accountable for any war crimes and/or human rights violations they may be complicit in.

Under international criminal law, business actors and stakeholders may be held liable for committing, planning, ordering, aiding or abetting criminal acts which “threaten the peace, security, and well-being of the world.” A single act or omission by a corporation can be sufficient to attract criminal liability. This includes, for example, the provision of moral support, goods, services, information, personnel, logistical or financial assistance.

However, as there is yet an international court to look into the crimes committed in Syria, and given that national courts are still slow in dealing with such crimes, alternative methods of putting pressure on companies to respect human rights needs to be explored by international and Syrian NGOs. This blog post lists a few.

One example, is a non-judicial grievance mechanism, which is a formal complaint process against business-related human rights abuses. These complaints can be filed through corporate-level grievance mechanisms – ranging from well-established mechanisms to hotlines – or via self-regulatory initiatives found in different sectors, such as the Roundtable on Sustainable Palm Oil and the Fair Wear Foundation.

National human rights institutions and development finance institutions, which finance the activities of the corporation in question, can receive complaints as well. The procedure can also take place as part of international agreements between states such as mechanisms linked to UN treaty-based and charter-based bodies and the International Labour Organization’s Committee on Freedom of Association.

NGOs can also push for the creation of a system whereby companies’ social performance is regularly monitored by independent, impartial outside auditors. While not in the context of a conflict, some of the main NGOs that have taken on this approach are the Fair Labor Association and Social Accountability International.

NGOs that favour engagement can choose to adopt less confrontational tactics by drawing in corporations through the use of dialogue and moral argumentation backed by research in order to persuade corporations to voluntarily act socially responsible.

Additionally, NGOs can look at adopting economic pressure strategies. One such example is filing shareholder resolutions. By doing so, NGOs can exert economic and moral influence at shareholder meetings. Such a tactic does not usually succeed in attracting a majority of votes at these meetings, but will get the attention of a business’s board of directors and top managers.

Other economic pressure tactics include advocating for the boycott of a company’s products and stock divestment, a strategy that can have considerable impact on a corporation’s profits and investments, which are central to its existence. Proponents of this strategy look to boycotts against Nestle, Nike, Starbucks, and most prominently the BDS (Boycott, Divestment, and Sanctions) movement. BDS is a global campaign that seeks to pressure the Israeli state to comply with international law and uphold the rights of Palestinian citizens by promoting various forms of boycott against Israel.

NGOs can also advocate to their local or national governments to adopt selective purchasing or selective procurement laws. These are indirect sanctions aimed at condemning human rights violations, such as those adopted by American cities and counties in protest of the South African apartheid regime. Another example is the 1997 Massachusetts Burma Law, which penalized corporations that continued to conduct business with the repressive Burmese regime through adding a surcharge to contracts.

Advocating at the government level is critical, because in addition to setting standards for multinational corporations, governments provide tax and other regulatory incentives as a reward for corporations’ good behaviour, which they may lose if they engage in abuses.

Economic pressure strategies, which are more confrontational, may have more effective outcomes in view of the fact that when a corporation’s financial interests are threatened, it is more likely to act. Such strategies are generally adopted by NGOs that view engagement as ineffective due to the absence of enforcement mechanisms and the belief that corporations will only act by means of economic coercion and legally binding obligations.

In addition to the aforementioned strategies and tactics, NGOs need to mobilize consumers and governments. A company’s power lies in the marketplace, ergo, if consumers remain ill-informed or indifferent to the negative practices adopted by a multinational corporation, it is unlikely that these mechanisms will prove successful.

For this reason, a widely practiced confrontational method by NGOs is moral stigmatization, more commonly known as “naming and shaming.” That is, publicly smearing business enterprises found to be in violation of human rights. This method will likely force companies, which are sensitive to public criticism, to act responsibly.

However, such strategies also risk corporate backlash and consequently economic instability. Business enterprises can choose to withhold capital for economic growth by refusing to provide new investments in an economy, this is known as capital strike. Capital flight can take place as well, meaning corporations can relocate, resulting in a large-scale withdrawal of financial assets and capital. Therefore, tactics adopted by NGOs in the Syrian context need to be carefully thought of.

Reconstruction in Syria seems to be on the way and it will be on the shoulders of the international human rights community, including Syrian NGOs, to ensure that the protection of civilians’ security and rights is made a priority by keeping multinational corporations accountable to their actions through exploring all possible means.



Links:

A brief outline on non-judicial grievance mechanisms and their limitations:

http://humanrightsinbusiness.eu/portfolio/the-patchwork-of-non-judicial-grievance-mechanisms-addressing-the-limitations-of-the-current-landscape/

Guide on judicial and non-judicial recourse mechanisms:

https://www.shiftproject.org/resources/publications/corporate-accountability-human-rights-abuses-guide-victims-ngos-recourse-mechanisms/

On conducting a human rights impact assessment:

https://www.bsr.org/reports/BSR_Human_Rights_Impact_Assessments.pdf

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