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Accountability for Human Rights: An Analyzing Perspective on

International Accountability Standards and Corporate Human Rights

Abuses

Master Thesis in International Management

Name: Marc Singer (11236159)

Program: Business Administration M.Sc.

Date: 21 March 2017

Supervisor: Dr. Michelle Westermann – Behaylo

Second Supervisor: Dr. Lori DiVito

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Statement of Originality

This document is written by Marc Singer who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

The release of the controversial Friedman Doctrine, initiated an intense debate about the roles and responsibilities of businesses concerning human rights. On the one hand, the only social responsibility of businesses is to generate profits; on the other hand, businesses are asked to be good citizens toward people. In the process of globalization, governments have increasingly failed to find a balance between the power of business and the state’s duty to protect human rights. International accountability standards (IAS) aim to tackle this governance gaps. These standards are meant to guide corporations to operate in a socially responsible way and improve the corporate impact on their workers, natural environments, and effected communities. In recent years, a dramatic increase has occurred in the number and variety of IAS, and critics complain that the adoption of IAS does not necessarily lead to significant improvements in corporate commitments to human rights. Using a multi-case study approach, this study evaluates whether IAS can prevent corporations from perpetrating human rights abuses or not. Qualitative data provided by the Corporation and Human Rights Database, Business and Human Rights Resource Center, newspapers, and company websites are used to analyze three renowned IAS as well as 13 abuse allegations against four companies operating in four different host countries. The study showed that the internalization of IAS and commitment to human rights depends more on a moral commitment than the adoption of IAS.

Keywords: Human rights, international accountability standards, governance gaps, human

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Table of Contents

1 Introduction ...1 2 Literature Review ...4 2.1. Human rights ... 4 2.2. Labor Rights... 6

2.3. The Human Right to a Clean Environment ... 8

2.4. Business and Human Rights ... 11

2.5. The United Nations Guiding Principles on Business and Human Rights ... 13

2.6. Corporate Social Responsibility ... 16

2.7. Due Diligence ... 18

2.8. International Accountability Standards ... 19

2.8.1 OECD Guidelines for Multinational Enterprises ...20

2.8.2 UN Global Compact ...22

2.8.3 ISO 26000 ...25

2.9 Gap and research question ... 28

3 Methodology and Research Design ...31

3.1 Research Design ... 31

3.2 Qualitative multiple case study ... 32

3.3 Data Collection ... 34 3.4 Data Analysis ... 40 4 Results...42 4.1 Case 1: Petrobras ... 43 4.2 Case 2: CNPC ... 46 4.3 Case Chevron ... 49 4.4 Case 3: Rusal... 53

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4.5 Cross-Case Analysis ... 56

5 Discussion and Limitations ...67

5.1 Discussion ... 67

5.2 Limitations and Future Research ... 71

6 Conclusion ...73

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Index of Figures

Figure 1: Conceptual Model ... 30

Figure 2: Chosen Countries and Companies for the Multiple Case Study ... 33

Figure 3: Support for IAS ... 34

Figure 4: Collected Sources, Scope, and Types of Qualitative Data ... 34

Figure 5: Reviewed CAAs of Petrobras; Data Provided by the CHRD Project ... 37

Figure 6: Reviewed CAAs of CNPC and Rusal; Data Provided by the CHRD Project ... 38

Figure 7: Reviewed CAAs of Chevron; Data Provided by the CHRD Project ... 39

Figure 8: Applied Coding Scheme ... 41

Figure 9: Categories of Analyzed CAAs; Data Provided by the CHRD Project ... 43

Figure 10: Number of analyzed CAAs by category; data provided by the CHRD project ... 57

Figure 11: IAS - CAA Timeline of Petrobras ... 58

Figure 12: Petrobras’s Yearly Total Oil Spills in m³ ... 59

Figure 13: Chevron’s Yearly Total Oil Spills in m³ ... 63

Figure 14: Corporate Reactions to CAAs ... 66

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List of Abbreviations

BHRRC Business & Human Rights Resource Centre

CAA Corporate abuse allegation

CHRD Corporations and Human Rights Database Project

CoP Communication on Progress

CSR Corporate Social Responsibility

GRI Global Reporting Initiative

IAS International Accountability Standard

ISO The International Organization for Standardization

MNE Multinational Enterprise

NGO Non-Governmental Organization

OECD The Organization for Economic Co-operation and Development

OHCHR The Office of the United Nations High Commissioner for Human Rights

SOE State-Owned Enterprise

SRSG Special Representative of the Secretary-General

UN United Nations

UNGC United Nations Global Compact

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1 Introduction

In 1970, Nobel Prize-winning economist Milton Friedman initiated an intense debate on the topic of corporate social responsibility (Reis & Barbieri, 2009). His famous article in the

New York Times Magazine entitled “The Social Responsibility of Business is to Increase Its

Profits” examines businesses’ social responsibility. In his words “there is one and only one social responsibility of business – to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud" (Friedman, 1970). His so-called “Friedman Doctrine” is controversial; opponents claim that it impoverishes citizens and enriches corporate elites. The debate has boosted the social responsibility movement and inspired new approaches to corruption, diversity, environmental protection, and human rights in general (Reis & Barbieri, 2009).

The movement also gave rise to the debate about businesses’ roles and responsibilities concerning human rights. Traditionally, international human rights standards have been the responsibility of governments (McCorquodale, 2009; Ruggie, 2008). However, as multinational enterprises (MNEs) have gained greater economic rights and access to markets and mobility in the process of globalization, governments have increasingly failed to find a balance between the power of businesses and the state’s duty to protect human rights (Schutter at al., 2012). Ruggie (2008) described the problem as governance gaps, which are the gaps between “the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences” (Ruggie, 2008, p. 189).

A possible way to tackle governance gaps and the mismatch of transnational governance structures are international accountability standards (IAS) for social responsibility (Behnam & MacLean, 2011; Preuss & Brown, 2012; Ruggie & Nelson, 2015; Wettstein, 2009). What these standards have in common is the goal of contributing to global sustainable development

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2 and establishing best practices and statutory rules regarding human rights. They guide corporations to operate in a socially responsible manner, develop an international consensus, and improve the corporate impact on workers, natural environments, and effected communities (ISO, 2010; Leipziger, 2016). On the other hand, the increasing internationalization of corporate activities has fueled a dramatic rise in the number and variety of IAS (Göbbels & Jonker, 2003; Martin, 2002). As a result, the multitude of IAS exerts considerable pressure on corporations to adopt practices or standards to indicate their commitment to social responsibility (Behnam & MacLean, 2011).

Bielak, Bonini, and Oppenheim (2007) surveyed 391 CEOs of corporations that participate in the United Nations Global Compact (UNGC), a classic example of IAS. The study found that 95% of surveyed CEOs believed that greater expectations existed for companies to assume public responsibilities. Additionally, more than half of the respondents predicted that these expectations would significantly increase over the next five years. Finally, while all 391 of the CEOs surveyed were members of the United Nations Global Compact, one of the most widely adopted IAS, only 27% embedded environmental, social, and governance issues into their operations (Behnam & MacLean, 2011).

Another example is Madariaga and Valor's (2007) study that investigated the corporate social responsibility (CSR) strategies of Spanish companies. According to this study, the CSR strategies of Spanish firms aim to get the companies listed in sustainability indexes. The strategies intend to attract capital and to improve corporations’ reputations by being included in these types of indexes. La Cuesta, Valor, and Holgado (2012) discuss a “me-too effect” among companies in the same industry that occurs because they compete to be listed in the same indexes or achieve better positions in rankings. In response, some scholars complain that the adoption of IAS does not necessarily lead to significant improvements in social accountability because the standards themselves lack accountability (Behnam & MacLean,

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3 2011). Others state that companies claim to act responsibly but are not really accountable to stakeholders because of a lack of legal obligation and the voluntary nature of IAS (Clapp, 2005).

Consequently, it is relevant to ask whether or not IAS can prevent corporations from perpetrating human rights abuses. To fill the gap in research, this study examines the impact of IAS on corporate human rights abuses in a case study based on the data provided by the Business and Human Rights Resource Center (BHRRC).

To proceed, Chapter 2 of this study is a review of the existing literature on human rights, the UN Guiding Principles on Business and Human Rights, corporate social responsibility, human rights impact assessment, and three popular IAS. Chapter 3 explains the methodology and research design used. Chapter 4 presents the results of the developed theoretical framework. Chapter 5 discusses and proposes a link between the influence of IAS and corporate human rights abuses and presents possible limitations of the study and its managerial implications. The study ends with a conclusion about the obtained insights.

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2 Literature Review

The purpose of this chapter is to review the literature on human rights and the United Nations Guiding Principles on Business and Human Rights (UNGPs) in particular to explain how human rights are related to business, labor, and the environment. Furthermore, this chapter explains the concept of corporate social responsibility, the due diligence process, and three different types of IAS: the OECD Guidelines for MNEs, the UN Global Compact, and ISO 26000.

2.1. Human rights

“Human rights are rights inherent to all human beings, whatever our nationality, place of residence, sex, national or ethnic origin, color, religion, language, or any other status. We are all equally entitled to our human rights without discrimination” (United Nations Office of

the High Commissioner for Human Rights, 1996).

Human rights are the moral principles and norms that protect all humans against actions that interfere with their fundamental freedom and human dignity. Many of these rights were developed in the aftermath of the World War II, following the morally appealing idea of adherence to shared standards of justice as a condition of full membership in international society (Donnelly, 1998). The adoption of the Universal Declaration of Human Rights (UDHR) by the United Nations General Assembly on December 10, 1948, was the first step toward the progressive codification of international human rights standards (OHCHR, 2000).

The Universal Declaration of Human Rights establishes the fundamental rights and freedoms of every human being without distinction as to race, color, sex, language, religion, political or other opinion, national or social origin, property, birth, or other status (UDHR, 1948, Article 2; OHCHR, 2000). This first article stipulates that “all human beings are born free and equal in dignity and rights” (UDHR, 1948, Article 1). Thus, human rights are

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5 inalienable and universal in that they are held universally by all people, simply because they are human (Donnelly, 2007).

Article 3 of the UDHR enshrines the right to life, that “everyone has the right to life, liberty, and security of person” (UDHR, 1948, Article 3). This moral principle is based on the belief that every human being has the right to live and that no one should be arbitrarily deprived of his or her life. The broad universal formulation (Donnelly, 2007) claims that every human being is entitled to respect for his or her life and integrity of his or her person.

The integrity of an individual is guaranteed in coexistence with Article 6 of the UDHR. This article proclaims that “everyone has the right to recognition everywhere as a person before the law” (UDHR, 1948, Article 6). The objective is to eliminate the possibility that certain groups of individuals might be deprived of their juridical personality by definitions of humanity that exclude them (Brett, 2012). The concept of recognition as a person before the law establishes the idea that designated civil rights are so fundamental to a dignified life that no one should be forced to live without them (UNCHR, 1948)

All 30 human rights are guaranteed by human rights law and expressed in treaties, customary international law, bodies of principles, and other sources of law to have a binding legal effect on the parties that have agreed to them (OHCHR, 2000). However, national enforcement of internationally recognized human rights is left almost entirely too sovereign states. States are sovereign when they have their own borders and government and are recognized by other sovereign states. No clear rule precisely defines a sovereign state. Thus, the attributes of a sovereign state are more political than legal (Bedjaoui, 1991).

Foreign states are free to raise human rights violations as an issue of concern. Nevertheless, foreign states have no authority to enforce human rights within another state. Limited exceptions to a state’s sovereign jurisdiction are incidents such as genocide, crimes against humanity, certain war crimes, and certain forms of torture and arbitrary execution

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6 (Forsythe, 2009). Thus, human rights are extremely relative and depend on the sovereign state in which a person lives. This relativity is underscored by the almost complete sovereign authority of states to implement human rights in their territories as they see fit (Donnelly, 2007).

2.2. Labor Rights

In general, labor rights are a group of legal rights that determine the labor relations between workers and their employers and are claimed as human rights. However, Kolben (2009) pointed out that “in contrast to human rights, which are universal and possessed by all human beings by virtue of their humanity, labor rights can be defined as the set of rights that humans possess by virtue of their status as workers” (Kolben, 2009, p. 453). The question of whether labor rights are human rights has attracted lawyers, academic scholars, trade unionists, and other activists in recent years and created a heated debate. Mantouvalou (2012) found three different approaches in the literature that examine labor rights as human rights. One approach endorses the character of labor rights as human rights without hesitation, another follows a positivistic approach, and the third claims that labor rights do not have some essential characteristics of human rights and should not be categorized as such.

Following Mantouvalou's (2012) example of a positivistic approach, the UDHR explains several labor rights as human rights. For example, Article 4 prohibits slavery and servitude; Article 23 claims that every person has the right to work in a freely chosen job, receive equal pay for equal work, receive remuneration to guarantee a dignified life for themselves and their families, and form and join trade unions. Article 24 guarantees a right to rest and leisure, including reasonable limitations of working hours and holidays with pay. Thus, labor rights are human rights and an extensive list of these rights is provided in human rights law (Mantouvalou, 2012).

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7 Another answer to the question of whether labor rights are human rights stems from the expert branch of the United Nations in the field of labor rights, called the International Labor Organization (ILO). The International Labor Organization was founded in 1919 and predates all human rights treaties and organizations (Symonides, 2003). The funding date indicates that labor issues became a matter of international concern before human rights (Mantouvalou, 2012). In 1998, the ILO adopted the Fundamental Declaration of Principles and Rights at Work, which binds all ILO Member States to promote and realize the declaration, irrespective of whether they have ratified the relevant conventions (Kellerson, 1998). The declaration contains four core labor rights listed as fundamental human rights: freedom of association and collective bargaining, abolition of forced labor, elimination of child labor, and freedom from discrimination (Kolben, 2009; Mantouvalou, 2012).

However, scholars have criticized the declaration for excluding traditional and important socioeconomic rights such as the right to a minimum wage (Kolben, 2009; Mantouvalou, 2012). Therefore, based on the ILO declaration, no clear answer exists to the question of whether labor rights are human rights. First, it is necessary to ask which labor rights are human rights. The answer to whether labor rights are human rights depends on what the drafters of a particular resolution other than the ILO decided and vary from one country or region to another. Additionally, where different resolutions are applicable and monitoring bodies have overlapping jurisdictions, the answer to whether labor rights are human rights may differ (Mantouvalou, 2012). In particular, nationally conditioned rights such as limits on working hours, minimum wage, minimum working age, and decent working conditions standards pose problems for labor rights advocates (Compa, 1993). These nationally conditioned rights often depend on a country’s level of development. Less developed countries often cannot afford to raise their standards and increase labor costs because they either dedicate their development strategy and economic policymaking to attract foreign

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8 investment and undersell foreign competitors or lack the ability to pay improved salaries and benefits (Compa, 1993).

The spectrum of labor rights is very broad, crossing lines of human rights, international trade, and labor law and policy. This spectrum consists of unarguably universal human rights such as the right of association, freedom from torture, protection from slavery, and the right to privacy (Mantouvalou, 2012). Mere economic benefits such as minimum wages and paid leave and economic and social factors such as workers’ rights to form and join trade unions and participate in union activity (Compa, 1993). In other words, particular labor rights are human rights. Accordingly, these labor rights are stringent normative standards with a universal and timeless entitlement for all workers. Thus, the current study follows the positivistic approach and considers labor rights as being a human right. However, enforceable international fair labor standards are still in their developing stage (Compa, 1993). In the future, these labor standards must catch up with rapid changes in the globalized economy to define fundamental global rights and elaborate standards for a new international law of worker rights in the global economy.

2.3. The Human Right to a Clean Environment

In recent years, the recognition of the links between human rights and the environment has increased substantially (Maguire, Lewis, & Sampford, 2015). For this reason, the Human Rights Council established a mandate on human rights and the environment and appointed John Knox as the first independent expert on human rights obligations relating to enjoyment of a safe, clean, healthy, and sustainable environment (OHCHR, 2012)

“All human beings depend on the environment in which we live. A safe, clean, healthy, and sustainable environment is integral to the full enjoyment of a wide range of human rights, including the rights to life, health, food, water, and sanitation. Without a healthy

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environment, we are unable to fulfill our aspirations or even live at a level commensurate with minimum standards of human dignity” (OHCHR, 2012)

In the past, environmental problems were not on the international human rights agenda. Likewise, specific environmental rights are not listed in the 1948 UDHR, in the human right law, or other human rights declarations and treaties such as the 1950 European Convention on Human Rights or the 1969 American Convention on Human Rights (Forsythe, 2009; Maguire et al., 2015). Concerns about the environment began to increase in the late 1960s when the extent of air, pesticide, and water contamination became more evident. As a result, environmental rights are called third generation rights. These third generation rights emerged later than other human rights such as civil and political rights (first generation) or economic, social, and cultural rights (second generation) (Forsythe, 2009).

A growing number of states have decided to recognize environmental rights in their national constitutions, treaties, and conventions (Forsythe, 2009; Maguire et al., 2015). An early example is the 1972 Stockholm Declaration providing “the fundamental right to freedom, equality, and adequate conditions of life, in an environment of a quality that permits a life of dignity and well-being” (UNEP, 1972, Principle 1). Another example is the 1992 Rio Declaration stating that “human beings are at the center of concerns for sustainable development. They are entitled to a healthy and productive life in harmony with nature” (UNEP, 1992, Principle 1). However, these declarations do not automatically gain binding force as a matter of law. Such declarations and statements that are viewed as influential but initially nonbinding are referred to as “soft laws” (Forsythe, 2009). Soft laws are quasi-legal instruments that encompass soft rules included in treaties, nonbinding or voluntary resolutions, recommendations, codes of conduct, and standards. Additionally soft laws have either no legally binding force or a binding force that is somewhat "weaker" than that of traditional binding laws, often referred to as “hard laws” (Abbott & Snidal, 2000).

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10 However, it remains unclear whether the environment is a human right issue. The relationship between human rights and environmental protection in international law is far from simple or straightforward (Boyle, 2012). The debate of the relationship between human rights and the environment is rarely discussed (Alston, Steiner, & Goodman, 2008; Schutter, 2010). Almost no academic debate addresses whether the environment is a human rights issue or not. Most literature that considers the environment as a matter of human rights is written by environmentalists or generalist international lawyers (Anton & Shelton, 2011; Bodansky, Brunnée, & Hey, 2007; Boyle, 2007; Boyle & Anderson, 1996; Francioni, 2010).

There are convincing reasons why the environment should be treated as a human rights issue. Most obviously, human rights directly address environmental impacts on the life, health, private life, and property of every individual rather than on other states or the environment in general (Boyle, 2012; Forsythe, 2009; Maguire et al., 2015). Accordingly, governments have a positive duty to take appropriate action to secure individuals’ health and private life from environmental impacts. If protection of the environment is treated as a human rights issue, governments become directly accountable for their failure to regulate and control environmental problems. Furthermore, accountability facilitates access to justice, which finally enforces environmental laws to regulate and control, even for corporate environmental abuses (Boyle, 2012; Forsythe, 2009).

Thus, this study considers the right to a clean environment as a human right and integrates it under the concept of sustainable development. This concept follows Boyle’s (2012) view of recognizing “the global environment as a public interest that states have a responsibility to protect” (Boyle, 2012, p. 642).

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2.4. Business and Human Rights

The growing reach and impact of multinational enterprises in the process of globalization and other global developments over the past decades have given rise to a debate about the roles and responsibilities of business concerning human rights (Forsythe, 2009). Traditionally, international human rights standards have been the responsibility of governments through treaties, soft law declarations, and hard law conventions (McCorquodale, 2009; Ruggie, 2008; OHCHR, 2000). States’ national courts guaranteed protection from human rights abuses. The courts enacted and enforced international human rights law, while corporations fulfilled their duty to comply with the laws and respect human rights (Forsythe, 2009). Nevertheless, in its preamble, the Universal Declaration of Human Rights encompasses “every individual and every organ of society” (UDHR, 1948). In other words, MNEs as organs of society are not exempt from to observing human rights among the peoples of territories under UDHR jurisdiction.

When a national judicial system works efficiently, human rights victims can seek redemption from local courts (Seck, 2014). However, in nations states where the government violates or fails to protect human rights, questions of the existence, nature, scope, demands, and realization of human rights duties for corporations become practically relevant (Boyle, 2012; Fasterling & Demuijnck, 2013). Nevertheless, Nolan and Taylor (2009) made clear that where states fails to protect human rights, it is not the duty of corporations to prevent human rights violations committed by others. The OHCHR clarified that “governments retain the primary responsibility for human rights and it is not a question of asking business to fulfill the role of Government, but of asking business to promote human rights in its own sphere of competence” (OHCHR, 2000, p. 75)

A more efficient way to prevent and publicize human rights violations are human rights groups in the form of nongovernmental organizations (NGOs) (Boyle, 2012). In addition to

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12 states’ sovereign jurisdiction and multinational enterprises, these human rights groups play a significant role in advocating for human rights. Rather than only protecting the rights of their constituents, such as political actors, human rights groups seek to secure the same rights for all members of society (Boyle, 2012; Brett, 1995). They build the bridge between the real world of violations and legal-political bureaucratic institutions. Well-known examples of human rights NGOs are Amnesty International and Humans Rights Watch. With their reports, human rights groups try to call attention to cases where human rights violations have occurred. For instance, in 2003 Human Rights Watch accused Alcoa Inc. of preventing workers in the company’s factories in Piedras Negras, Mexico from forming independent unions by firing their union leaders (Human Rights Watch, 2003). In reaction to the report, the public interest and pressure to change was increasingly placed on the company.

In the words of Baumann-Pauly and Nolan (2016, p. 6), “regulating and improving working conditions in global supply chains is a work in progress. Multiple motives (including reputation protection) and pressure points (media, trade unions, NGOs, consumers, workers, investors) and internal leadership within some companies have influenced, and continue to influence, corporate approaches to improving compliance with human rights standards.”

Nevertheless, to better prevent and remedy the adverse effects of businesses in human rights terms, the UN Human Rights Council endorsed the Guiding Principles on Business and Human Rights (Fasterling & Demuijnck, 2013). The goal is to identify who is responsible for what in practice and address the specific responsibilities of states and companies concerning all rights they may impact (Ruggie, 2008). The following section describes the responsibilities and their allocation among parties involved in the Guiding Principles.

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2.5. The United Nations Guiding Principles on Business and Human Rights

In June 2011, the UN Human Rights Council endorsed the Guiding Principles on Business and Human Rights (UNGPs). The Guiding Principles are based on the work of the former UN Special Representative of the Secretary-General (SRSG) John Ruggie (Seck, 2014). His work made a critical contribution to the issue of human rights and transnational corporations and other business enterprises (McCorquodale, 2009). Ruggie’s work is crystalized in his article “Protect, Respect, and Remedy: A Framework for Business and Human Rights” (Ruggie, 2008).

Ruggie’s work focuses on how to narrow or close governance gaps created by globalization between “the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences” (Ruggie, 2008, p. 189). In his opinion, governance gaps provide the permissive environment for wrongful acts, such as human rights abuses, by companies without adequate sanctioning or reparation (Ruggie, 2008). To tackle this issues, Ruggie provided a framework comprised of three principles: states’ duty to protect, corporate responsibility to respect, and access to remedies for victims (Gaughran, 2012; Ruggie, 2009).

The first principle of the state’s duty to protect humans rights (Ruggie, 2009; Seck, 2014) is grounded in international human rights law. This principle is a state’s obligation to protect against human rights abuses by both state officials and non-state actors such as corporations (McCorquodale, 2009). According to this principle: “States must protect against human

rights abuse within their territory and/or jurisdiction by third parties, including business enterprises. This requires taking appropriate steps to prevent, investigate, punish and redress such abuse through effective policies, legislation, regulations and adjudication” (UNGPs,

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14 However, the first principle does not mean that states are held responsible for corporate human right abuses (Seck, 2014). A state’s duty to protect humans rights is rather a question of whether states take appropriate steps to prevent and investigate, punish, and redress corporate abuses (Ruggie, 2009). Nevertheless, the particular human rights states must protect depend on which treaties the government has ratified. However, all states are legally bound by human rights treaties that are part of customary international law that protect from torture and racial discrimination and guarantee self-determination (McCorquodale, 2009).

Nevertheless, it is not enough for companies to claim that states are exclusively responsible for protecting human rights (Nolan, 2014; Ruggie, 2008). As mentioned, in countries where the government violates or fails to protect human rights, the question about corporations’ duty to protect human rights becomes practically relevant (Boyle, 2012; Fasterling & Demuijnck, 2013). The active and direct participation of businesses is necessary to meet business and human rights challenges (Ruggie, 2008; Seck, 2014).

The second principle is corporate responsibility to respect human rights. This responsibility exists independently of states’ duty to protect, so no distinction exists between primary state and secondary corporate obligations (Ruggie, 2008; Seck, 2014). Accordingly, corporations must initialize a due diligence process within their operations to comply with the law, even if this process is not enforced (Greene, 2009; Nolan, 2014; Ruggie, 2008). Due diligence is an investigation or assessment of the risks of significant transactions, projects, and ongoing operations (Sherman & Lehr, 2010). The attitude behind the process is that corporations “should respect the principles of relevant international instruments where national law is absent” (Greene, 2009, pp. 294).

In the end, corporations must become aware of, prevent, and address their human rights impacts (Ruggie, 2008). Their due diligence process should address the country contexts in which their business activities take place, the human rights impact of their operations, and

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15 whether they as companies might contribute to abuses (McCorquodale, 2009; Ruggie, 2008). This whole process should be applied in ways that enable access to remedy (McCorquodale, 2009).

The abovementioned access to remedy is the third principle. According to that principle, states must ensure the effectiveness of judicial mechanisms so that when such abuses occur within their territories and jurisdictions, those effected have access to an adequate remedy (Ruggie, 2009; Seck, 2014). A recent example is the U.S. Alien Tort Statute (28 U.S.C. § 1350; ATS) that enables access to transnational judicial remedy for egregious human rights violations. Unfortunately, as the over twenty-year-old Chevron / Ecuador environmental pollution dispute shows, for example, the hurdles to accessing transnational legal remedies remain impossibly high (Seck, 2014).

Nolan (2014) describes the inability or unwillingness of many governments to fulfill their human rights obligation as protection gaps. According to her, “international human rights law and its state-centric framework for protecting rights is proving inadequate to stem (or redress) corporate rights violations and is proving to be more the backdrop for the development of mechanisms to prevent and protect individuals from corporate rights violations, rather than the prism through which corporate accountability might be filtered” (Nolan, 2014, p. 8).

Consequently, efficient access to remedy should include non-state actors such as NGOs, unions, corporations, and multi-stakeholder groups. Multi-stakeholder groups can be defined as voluntary initiatives in which two or more stakeholders cooperate to “set social and environmental standards, monitor compliance, promote social and environmental reporting and auditing, certify good practice, and encourage stakeholder dialogue and social learning” (Utting, 2001, p. 2). The commitment of non-state actors to human rights becomes particularly important in countries where the judiciary is unable to provide adequate and efficient access to remedy (Ruggie, 2009). Using the example of corporations, the

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16 commitment requires an implementation of corporate responsibility to respect human rights within professional standards and ethical duties (Seck, 2014). As a result, many corporations have made commitments to human rights or implemented grievance procedures within their CSR mechanisms (McCorquodale, 2009).

2.6. Corporate Social Responsibility

Corporate social responsibility is a form of corporate self-regulation that responds to a corporation’s environment and is integrated into its business model. Corporate social responsibility has been defined in a multitude of ways that have evolved over time (Dahlsrud, 2008). It became famous in the 1960s as the understanding of covering a corporation’s moral and legal responsibility. One of the most complete and frequently cited definitions was provided by Archie B. Carroll (1979, p. 500): “the social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time.”

Carroll (1979) defined and divided CSR actions into four dimensions that make up the four layers of a CSR pyramid (Carroll, 1991). First, economic responsibility refers to the profitability of corporations and builds the foundation upon which all others rest. Additionally, legal responsibility is the expectation that corporations obey laws and regulations and to follow meeting society's codification of right and wrong. Ethical responsibility means that corporations should go beyond the laws to behave ethically, avoid harm, and follow the obligation of doing what is right, just, and fair. Finally, philanthropic responsibility is the idea that corporations must be good corporate citizens and contribute resources to the society and improve quality of life. The goal of CSR is to address each of the four layers in order to increase a corporation’s long-term profits and public trust through a positive reputation and high ethical standards.

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17 Additionally McWilliams and Siegel's (2001) more recently defined CSR as corporate actions to encourage the social good. According to this definition, corporations should go beyond the interests of the firm and engage in social efforts that transcend the law. In other words, to meet the expectations of various stakeholders, corporations should also be committed to social welfare and environmental protection. However, especially in the context of IAS, having a CSR policy is not the same as providing protection for all human rights (McCorquodale, 2009; Wettstein & Arnold, 2012). This fine distinction is a reason why many critics solely consider CSR to be driven by public relations or as a cosmetic treatment (Forsythe, 2009).

Ward (2008, p. 10) outlines “two broad types of definitions of CSR: first, those that focus on outcomes - including outcomes in terms of ‘business impacts,’ ‘commercial success,’ and wider societal goals; and, second, those that stress the voluntary nature of CSR (“voluntary” in that CSR relates to business activity that is not mandated by legislation...).” It must be remembered that CSR policies are management-driven and corporate-determined (McCorquodale, 2009). In the end, even if CSR is genuinely aimed at a positive social end, CSR policies are designed to assist and address a corporation's business (Fasterling & Demuijnck, 2013; McCorquodale, 2009; Wettstein & Arnold, 2012).

In contrast to CSR policies, human rights protections have legitimate compliance mechanisms and are person-centered (McCorquodale, 2009). Human rights are an expression of human dignity inherent to all people and they are not voluntary. Additionally, most CSR policies tend to refer to or focus on, a limited range of human rights, such as the right to privacy or freedom from torture (McCorquodale, 2009; Wettstein & Arnold, 2012). However, as Ruggie (2009) made clear, all human rights are relevant to corporations. In other words, CSR policies should encompass the substantive content of all internationally recognized human rights. McCorquodale (2009) concluded that “human rights are an expression of

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18 human dignity and the right to be protected in that human dignity” (McCorquodale, 2009, p. 391).

Therefore, general CSR policy should not be mistaken for corporate commitment to human rights. In the general conceptualization of CSR policy, human rights do not currently play a pivotal role (Wettstein & Arnold, 2012). At this point, IAS come into play and aim to fill the void between corporate interests and social and environmental issues related to corporate activity as well as the lack of transnational regulations (Behnam & MacLean, 2011; Gilbert et al., 2010; Gilbert, Rasche, & Waddock, 2010).

2.7. Due Diligence

As mentioned, due diligence describes an investigation or assessment of the risks of significant transactions, projects, and ongoing operations (Sherman & Lehr, 2010). Corporations want to have a certain standard of care that reduces risk s concerning corporate interests (McCorquodale, 2009). This standard should contribute to informed decision making by enhancing the amount and quality of information that reduce information asymmetries by implication. In case of human rights, Ruggie (2008) describes due diligence as “Human Rights Impact Assessments,” which are the steps a corporation must take to gain awareness of its human rights impact (Hamann et al., 2009).

Ideal human rights due diligence requires corporations to know about, prevent, and address their human rights impacts (Ruggie, 2008). Due diligence is a continuous process consisting of an assessment of actual and potential human rights impacts of a corporation’s activity. The assessment must be integrated into corporate cultures and management systems and decisions about which measures to take to respond to the identified human rights impacts (Fasterling & Demuijnck, 2013; Ruggie, 2009; Sherman & Lehr, 2010). Ruggie (2008) understands the process of due diligence as a comprehensive proactive attempt within a corporation’s “sphere of influence” (Henriques, 2012). He adopted a view of corporate

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19 responsibility that respects human rights and supports them with positive actions rather than simply not doing harm (Henriques, 2012; McCorquodale, 2009; Ruggie, 2008).

The nature of due diligence requires a corporation to ask questions about previously unappreciated risks, and this process may reveal unwelcome facts (Fasterling & Demuijnck, 2013). These critical steps are necessary for corporations to become aware of potential human rights risks and address these risks before they occur (Ruggie, 2008). Due diligence reduces the risk of lawsuits and vulnerability to human rights claims and immunizes corporations from liability (Fasterling & Demuijnck, 2013; Sherman & Lehr, 2010). Following Sherman and Lehr’s (2010) point of view, not conducting due diligence is too risky for both businesses and society.

However, as Fasterling and Demuijnck (2013) discovered, the effectiveness of human rights due diligence depends on a corporation’s vision of human rights as a universal, perfect moral duty. A perfect moral duty is “a duty admitting no exception in favor of inclinations to refrain from acting on it” (Fasterling & Demuijnck, 2013, p. 799). In other words, the effectiveness of human rights due diligence becomes a vague and unclear concept when management does not share the vision that human rights are absolute moral constraints that are universal to all people. International accountability standards constitute a form of regulation to guarantee the quality of the human rights due diligence process. These standards define rules about what those who adopt these rules should and should not do and aim to standardize corporate behavior regarding social and environmental issues (Brunsson & Jacobsson, 2002; Gilbert et al., 2010).

2.8. International Accountability Standards

A current to way to overcome the risk of corporate human rights violations is the implementation of best practices and statutory rules regarding human rights in the form of international accountability standards (Behnam & MacLean, 2011; Gilbert et al., 2010; Preuss

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20 & Brown, 2012). However, the pace of globalization has created a mismatch of transnational governance structures (Behnam & MacLean, 2011; Ruggie & Nelson, 2015; Wettstein, 2009). Because of this mismatch and to establish cross-border fair rules of the game, NGOs, such as the International Organization for Standardization (ISO), and intergovernmental organizations, such as the UN and the Organization for Economic Cooperation and Development, have developed guidelines. The goal is to better govern the social, environmental, and economic impact of corporate activities and fill gaps in legislative frameworks found on an international level (Behnam & MacLean, 2011; Brunsson & Jacobsson, 2002; Preuss & Brown, 2012). Such guidelines offer self-reflective and communicative procedures that allow corporations to improve their understanding of demands placed upon them (Gilbert & Rasche, 2008). Additionally, such guidelines represent predefined norms and procedures for organizational behavior concerning social and environmental issues (Rasche & Esser, 2006). This chapter provides a general understanding of these guidelines by examining the following major global initiatives: OECD Guidelines for Multinational Enterprises, the UN Global Compact, and ISO 26000.

2.8.1 OECD Guidelines for Multinational Enterprises

One of the earliest attempts to clarify businesses’ obligations regarding human rights issues was the OECD Guidelines for Multinational Enterprises adopted in 1976 and last revised in 2011 (Preuss & Brown, 2012). These guidelines are recommendations from governments to corporations and provide principles and standards for corporate conduct; they are not legally binding (Leipziger, 2016). The Organization for Economic Cooperation and Development’s guidelines address business ethics in the fields of employment, human rights, environment, information disclosure, combating bribery, consumer interests, science and technology, competition, and taxation (Ruggie & Nelson, 2015). During the 2011 revision, the OECD integrated particular elements from the UNGPs with active participation of

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21 business, labor, NGOs, non-adhering countries, and international organizations (Leipziger, 2016; Preuss & Brown, 2012).

The OECD added a dedicated human rights chapter concerning corporate obligations to respect human rights. The formulation replicates the UN Protect, Respect, and Remedy Framework and centers on a human rights due diligence process. The chapter aims to provide a system for corporations to meet human rights responsibilities that encompasses not only their own corporate activities but also business relationships (Leipziger, 2016; Ruggie & Nelson, 2015).

Additionally, the “General Policies” chapter of the OECD guidelines reiterates the UNGPs constitution of corporate responsibility to respect human rights by establishing a new due diligence requirement for all covered subjects (Ruggie & Nelson, 2015). Therefore, the OECD clarified the mechanism of National Contact Points. These National Contact Points are responsible for promoting the guidelines on a national level and address issues that may arise from the guidelines through assistance and mediation (Leipziger, 2016). This unique dispute resolution mechanism (Baumann-Pauly & Nolan, 2016) has become “a potential venue to which human rights complaints can be brought against multinational enterprises operating in or from the 46 countries that adhere to the Guidelines” (Ruggie & Nelson, 2015, p. 6). Finally, the OECD guidelines effectively extend the due diligence requirements from a corporation’s operations to the entire value chain. Similar to the UNGPs, this stipulation includes all business relationships.

However, while the UNGPs and OECD guidelines further define due diligence requirements and a corporation’s responsibility along the value chain, both lack an operational guidance concerning human rights (Mareș, 2012). The intention of the OECD guidelines is the provision of a degree of home state direction for MNEs conducting business in developing host countries (Buhmann, 2012). The guidelines aim to prevent interferences

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22 between home and host country regulations that might impose restrictions on the rights of foreign investors. Gilbert et al. (2010) describe the OECD guidelines as principle-based standards. Such principle-based standards “represent broadly defined principles with regard to social and environmental problems that are mainly used as a guideline for action and a starting point for dialog, learning, and the exchange of best practices” (Gilbert et al., 2010, p. 26).

Buhmann (2012) emphasizes the soft character of the guidelines because they address themselves only indirectly to companies. The guidelines are only recommendations from states to companies hosted within their jurisdiction and are not legally enforceable. Additionally, while the concept of National Concept Point complaints seems innovative, it has not yet proven to be effective. In other words, the OECD guidelines are a set of principles that aim to shape corporate behavior by providing a baseline of foundational values (Gilbert et al., 2010). Accordingly, the effectiveness and the influence of these principles on corporate human rights violations depends on management’s vision of human rights and how the guidelines might affect this vision, a question this study seeks to answer.

2.8.2 UN Global Compact

To encourage business to voluntarily embrace and enact socially responsible and sustainable policies, the UN launched the UN Global Compact in 2000 under the lead of former UN Secretary-General Kofi Annan, (Baumann-Pauly & Nolan, 2016). The UN Global Compact states ten principles for companies that address topics such as human rights, labor rights, the environment, and anti-corruption. Additionally, the United Nations Global Compact (2015) is the world's largest corporate sustainability initiative, with over 8,000 companies and 4,000 non-business participants based in over 160 countries. Due to its size, scholars describe the UNGC the most widely accepted principle-based initiative (Gilbert et al., 2010; Leisinger, 2006). The concept behind the UNGC is that through communication of

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23 the progress of implementation, the voluntary involvement of companies in the areas of the ten principles can encourage innovation and concern (Rasche, 2009). According to scholars, such a concept addresses these topics more adequately than regulations can (Cetindamar & Husoy, 2007; Leipziger, 2016).

Similar to the UNGPs and the OECD Guidelines for Multinational Enterprises, the UNGC discusses a corporation’s sphere of influence within its core operations, business partners, and host communities (Preuss & Brown, 2012). In the Global Compact Annual Review, the UN communicates progress made in implementing the ten principles based on the Communication on Progress (CoP) that every signatory must file (Gilbert et al., 2010). The Communication on Progress is a stakeholder report including a statement by the CEO expressing continued support and commitment for the UNGC, a description of practical actions the company has taken or will take to implement the ten principles, and a measurement of outcomes. This process allows stakeholders to gain insight about the policies signatories have implemented to ensure compliance with the ten UNGC Principles and judge signatories’ implementation performance (La Cuesta et al., 2012; Rasche, 2009).

An inclusive and communicative multi-stakeholder approach such as the UNGC is a definite step forward in the future of international cooperation (Rasche, 2009). The UN Global Compact sees its future in global partnership through good corporate citizenship rather than the traditional multilateralism of nation states (Cetindamar & Husoy, 2007; Leipziger, 2016). Strengthened international cooperation offers opportunities for discussion and serves as a network for governments, companies, labor organizations, and civil society organizations. Stakeholder dialogue has a central role in the UNGC and is constituted in the compact’s three problem-solving approaches (Knight & Smith, 2008; Williams, 2014). First, the compact focuses on establishing a learning network through which signees can report on their progress in promoting the ten principles. Additionally, it encourages policy discussion

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24 among the signees about challenging situations and appropriate corporate conduct. The compact also uses public-private partnership projects to tackle particular third-world problems such as HIV/AIDS (Knight & Smith, 2008; Leipziger, 2016; Williams, 2014).

However, the UNGC are faces criticism. Organizations such as CorpWatch consider the UNGC as a step of the UN toward the interests of corporations. In the opinion of such organizations, the UNGC offers corporations the opportunity to exploit the UN’s prestige for reputational capital and public relations gains and misuse the UNGC as public relations tool. Thérien and Pouliot (2006, p. 68) describe this phenomenon as a “free PR ride.” Their study of the largest Spanish companies, (La Cuesta et al., 2012) found that within their sample, companies had established vague, general, formal commitments to human rights, often by adopting the UNGC. The results suggest that “companies have not made specific commitments to all the rights included in the UN Norms” and “do not spread their commitment throughout their business units and affiliates at different locations” (La Cuesta et al., 2012, p. 76)

Additionally, the UNGC relies on voluntary compliance and self-policing. The compact is a promotional endeavor without any mechanisms of external monitoring, verification, or sanctioning, and it lacks adequate accountability structures. These issues might increase the possibility of adopting the UNGC in form but not function (Behnam & MacLean, 2011; Knight & Smith, 2008; Leipziger, 2016; Williams, 2004). Arevalo and Fallon (2008) and Deva (2006) criticize the annual reporting requirement. In their opinion, the UNGC does not provide sufficiently detailed and standardized information about firms’ adoption behavior.

Finally, the UNGC raises the issue of whether nonbinding measures such as the promotion of corporate social responsibility can lead to a redistribution of global wealth (Thérien & Pouliot, 2006). Leipziger (2016) concludes that the flexible structure of the UNGC is both a source and strength. On the one hand, the Global Compact Office does not have the mandate

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25 or resources to monitor corporate activities. On the other hand, it is easier to attract a critical mass of companies with general principles than highly specific criteria.

In the end, the UNGC is more of an educational initiative that “lacks adequate accountability structures” (Williams, 2004, p. 700). It is useful for peer learning because it raises awareness around businesses and human rights issues and induces corporate change by identifying and promoting good practices (Baumann-Pauly & Nolan, 2016; Ruggie, 2002). Williams (2004, p. 711) describes the UNGC as “a forum under the umbrella of the United Nations with its visibility, global reach and convening power where some of the best members of civil society (…) can come together to discuss the changing role of business and its moral purpose.” Gilbert et al. (2010) conclude that if the goal is to make companies answerable for their actions, more discussion must focus on how stakeholders can hold themselves accountable to these standards. Due to its principle-based standards, the UNGC is easy to adopt but does not require any substantive organizational change (Behnam & MacLean, 2011). Therefore, the effectiveness and the influence of the UNGC on corporate human rights violations again depends on management’s vision on human rights and how management internalizes this vision, a question this study seeks to answer.

2.8.3 ISO 26000

The latest and most promising approach is the ISO 26000 Guidance on Social Responsibility (Henriques, 2012). International Organization for Standardization released ISO 26000 on November 1st, 2010. It is an international guidance standard that provides guidance on socially responsible behavior and possible actions applicable to all organizations, regardless of size, location, context, and activity (Atler, 2011; Leipziger, 2016). The voluntary guidance includes key themes such as governance, environment, labor practices, fair operating practices, consumer issues, community involvement, social development, and human rights (Leipziger, 2016).

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26 According to the International Organization for Standardization ISO 26000 is “based on international consensus among expert representatives of the main stakeholder groups, and so encourages the implementation of best practice in social responsibility worldwide” (ISO, 2010, p. 3). What makes ISO 26000 so unique is its remarkable consensus (Henriques, 2012) among the 164 developing standard-setting bodies with representatives of the six main stakeholder groups of industry, labor, government, consumers, NGOs, and service, support, and research (Leipziger, 2016).

Additionally, ISO 26000 is related to other social responsibility guidelines to ensure consistency and integrity with relevant declarations and conventions (Henriques, 2012; Leipziger, 2016). Consistency and integrity are secured through a Memorandum of Understandings with important organizations such as the International Labor Organization, the United Nations Global Compact Office, and the OECD (Atler, 2011; ISO, 2010). Referring to Atler (2011), the work of the UN SRSG and , in particular, the UN Protect, Respect, and Remedy Framework, strongly impacted the content and overall consensus of the human rights sections of the ISO 26000 Guidance Standard. A high degree of overlap exists between Ruggie’s Protect, Respect, and Remedy Framework and that of the UNGPs (Jonge, 2011; Vanclay & Esteves, 2011). Nevertheless, because ISO 26000 is an international standard, Vanclay and Esteves (2011) suggest that ISO 26000 is likely to have greater permanence, impact, and opportunity for operationalization than Ruggie’s framework. However, Ruggie’s framework is easier to understand, freely accessible, and has more detailed.

The main advantage of the guideline is that it defines the scope of CSR in a broad international consensus and provides guidance on how to implement CSR (Henriques, 2012; Vanclay & Esteves, 2011). Companies can use the guideline in three different ways (Leipziger, 2016). First, the guideline provides a common language and framework for a

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27 corporation’s CSR approach, focusing on the seven core themes that may be most important at an international level (Leipziger, 2016). Additionally, the guideline provides orientation for CSR policies and assists organizations in socially responsible behavior by offering substantive guidance on the seven core themes (Atler, 2011; Ward, 2011). Corporations can also use the list of issue areas as a basis for company-external discussions and cross-border dialogues to report on CSR activities (Henriques, 2012; Leipziger, 2016).

However, the guideline’s non-certifiable nature remains an issue (Henriques, 2012). ISO 26000 has been developed as a market-driven guidance standard that offers sound advice based on agreement; the guideline contains no requirements (Mueckenberger & Jastram, 2010; Vanclay & Esteves, 2011). Thus, it is not a requirements standard, management standard, management systems standard, such as ISO 9001 or 14001 (Henriques, 2012; Jonge, 2011; Vanclay & Esteves, 2011). Gilbert et al. (2010, p. 30) define ISO 26000 as a process standard, as these standards focus on the question of how corporate accountability can be achieved by corporations and offer essential managerial guidance (Gilbert et al., 2010; Leipziger, 2016).

In other words, as a nongovernmental organization, the ISO has no power to enforce the compliance or implementation of norms; the corporate statement of intention is its central value. The International Organization for Standardization encourages operations to reconsider their social responsibility, identify ISO recommendations, report the actions taken to stakeholders, and solicit feedback (Vanclay & Esteves, 2011). Nevertheless, Gilbert et al. (2010) emphasize that “without an explicit focus on high-quality implementation processes, improvements in social and environmental performance cannot be achieved” (Gilbert et al., 2010, p. 29). Therefore, as with IAS, the influence of ISO 26000 on corporate human rights violations depends on management’s vision and how management internalizes this vision.

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2.9 Gap and research question

Based on the data provided by the Business and Human Rights Resource Center, it is clear that many corporations do not respect human rights, even though many have committed to some form of IAS. Therefore, it is relevant to ask whether or not IAS are capable of preventing corporations from perpetrating human right abuses. It is also important to consider whether the motivation behind the adoption of such guidelines was for strategic, altruistic, or coercive reasons. Sherman and Lehr (2010) suggest that due diligence should automatically immunize corporations from liability. Due diligence would motivate corporations to reveal unpleasant facts and ultimately lead to a good faith defense for human rights. However, due diligence within the corporate sphere of influence is a core value of the examined IAS (Preuss & Brown, 2012); this situation might transform the adoption of IAS into immunity for corporations.

Considering the motivation to adopt IAS, Balzarova and Castka (2008) argue that only certain organizations would adopt these standards if their most salient stakeholders recognize and value them. Furthermore, Fasterling and Demuijnck (2013) found that corporate human rights impact assessment depends on the moral commitment of a corporation and its managers. Gilbert et al. (2010) question the entire concept of IAS because of the missing control over results and because the standard setting entities themselves are not accountable. Bendell (2005) and Balzarova and Castka (2012) have indicated that many IAS are driven by what a few stakeholders, such as MNEs, NGOs, or consultants push for. Other scholars have criticized the limited impact of factory auditing in global supply chains, suggesting that the accountability of IAS is limited (Locke, Amengual, & Mangla, 2009; O'Rourke, 2000, 2003; Stigzelius & Mark-Herbert, 2009). Therefore, it is relevant to question if the adoption of IAS makes a better company.

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29 The current study aims to answer the following research question: how do international accountability standards for social responsibility influence the likelihood of multinational corporations perpetrating human rights violations? In particular, the study examines the impact of IAS on corporate abuse allegations (CAAs). A corporate abuse allegation is a record in which a group or individual accuses a corporation of a human rights violation. This study distinguishes between three types of violations: physical abuse, environment, and labor. Additionally, this study evaluates the influence of adopting IAS on corporations’ responses to CAAs within their spheres of influence. The study compares a sample of companies with operations in different host countries; the companies and the host countries either do or do not support some of the above-mentioned IAS. The comparison aims to reveal regional and corporate differences in fields such as human rights due diligence, CAA response, and corporate practices with the adoption of IAS. In particular, the study examines how corporations have internalized IAS in their corporate vision, leadership, empowerment, and policies and strategies. To accomplish its goals, the study considers the change in topics such as corporate human rights rhetoric used to describe a company’s human rights commitment, corporate CAA response, litigation, and time for redemption, which describes the judicial and non-judicial remedy process.

Finally, this study compares the above-mentioned IAS and asks questions about impact at the corporate level. Whether the presence of IAS reduce human rights abuses in countries and corporations that have declared it. Or, whether there is a change over time. To answer these questions, the study focuses on the comparison of a pre- and post-implementation stage based on corporate rhetoric.

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Figure 1: Conceptual Model

Based on the theoretical framework, the conceptual model presents the following four propositions (P1 – P4):

P1: Corporations that have implemented or committed themselves to IAS have internalized the IAS guidelines and human rights commitment into their vision, leadership, empowerment, and policies and strategies.

P2: Corporations that have implemented or committed themselves to IAS are less likely to perpetrate human rights abuses.

P3: The extent to which a corporation has implemented or committed to IAS influences its likelihood of perpetrating human rights abuses.

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3 Methodology and Research Design

This section explains the methodology and research design used in this study. First, the importance of grounded theory is presented. Afterward, the multiple-case research design and data collection and data analyses are discussed. This discussion includes the selection of cases and considers important quality criteria associated with the research design. The study aims to investigate the impact of IAS on corporate human rights abuses by analyzing four different MNEs operating in four different host countries. In order to understand the influence of IAS on MNEs’ likelihood of perpetrating human rights violations, 13 allegations committed by the four MNEs in the proposed countries were chosen. Lastly, the chapter will conclude with a description of the data collection and analysis.

3.1 Research Design

This study used a qualitative research design to examine the impact of IAS on corporate human rights abuses. Qualitative research is suitable when researchers aim to establish beliefs, perceptions, and motivations related to a particular phenomenon (Eisenhardt, 1989; van der Velde et al., 2004). Qualitative research has been described as “multi-method research that uses an interpretative, naturalistic approach to its subject matter” (Rynes & Gephart, 2004, p. 455). Referring to Yin (2014), the proposed method is appropriate strategy “when ‘how’ or ‘why’ questions are being posed” and when a study investigates how a particular phenomenon occurs. Since the current study focuses on the influence of IAS and the motivation behind their adoption, it uses a qualitative research design.

Within the concept of qualitative research, two different approaches exist for conducting research: deductive and inductive (Saunders et al., 2011). While the deductive approach aims to test a theory, an inductive approach is concerned with the generation of new theory emerging from the data (Saunders & Lewis, 2011). In the context of this study, an important determinant of the research method was the “description and understanding of human

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