Fundamental Rights and the Legal Obligations of Business
On Wednesday 16 February (at 15h00 to 17h00 GMT/UTC), there will be an online book launch hosted by the Bonavero Institute of Human Rights, University of Oxford and SAIFAC, University of Johannesburg discussing Prof Bilchitz’s new book and comments by three panelists, Prof Bonita Meyersfeld (Wits), Prof Danwood Chirwa (UCT) and Prof Stephen Gardbaum (UCLA). To register, go to the event page here and click register.
Fundamental Rights and the Legal Obligations of Business (2021) Cambridge University Press
Prior to the launch, ALM caught up with Prof Bilchitz to ask him about his new book:
1. What is the book’s central question and how is it particularly relevant in an African context?
The focus of fundamental rights discourse has often been on the state and its obligations. However, increasingly it has been recognised that powerful nonstate actors such as corporations can have a significant effect on fundamental rights.
That effect can be both negative – polluting the environment, for instance, and affecting the right to health – as well as positive – contributing to economic opportunities and thus enabling individuals to achieve their socio-economic rights. These impacts have led to a debate concerning whether corporations, for instance, have obligations flowing from fundamental rights.
The book tackles a related but different question: what is the substantive content of the obligations of corporations in relation to fundamental rights? Consider, for instance, a major pharmaceutical company: does it have a duty to make its drugs available for free to poor countries? Does it have an obligation to share its intellectual property?
This question has particular relevance to the African continent – indeed, some of the impetus for modern discussions around business and human rights in fact emerged from newly independent African countries in the 1970s who wished to create a new international economic order.
The more recent treaty initiative has also been supported by many African countries and for good reason – African individuals have often been at the receiving end of serious violations of fundamental rights by corporations and there is a serious need for economic opportunities and corporate investment. Consequently, a clearheaded view of the obligations of corporations is of great importance to the continent.
2. Can you please sketch for us the outlines of the answer you give to this question and your methodological approach?
When investigating the obligations of corporations, the first step is to understand the nature of the corporation itself – that is the subject of my first chapter. I argue that the corporation must be understood as having a public purpose – namely, to achieve social benefits – but that it does so in a particular way – through harnessing individual self- interested maximising behaviour.
With this conception of the corporation in mind, the first part of the book investigates existing legal approaches to the obligations of corporations and determining their substantive content.
I identify four models and identify a fascinating overlap in the approach adopted in each model towards determining the substantive content of corporate obligations.
In the second part of the book, I build upon this overlap and systematise, justify and develop what I term the ‘multifactoral approach’. Simply put, the multifactoral approach recognises that there is no one principle or factor on the basis of which corporate obligations are determined. There are in fact multiple normative considerations that need to be taken into account in constructing their obligations.
“A clearheaded view of the obligations of corporations is of great importance to the continent.”
The book attempts to identify and examine these multiple factors but also recognises that there is a need for a framework which involves some form of balancing to arrive at the final obligations of corporations. In relation to negative obligations (not to harm rights), I suggest that the proportionality enquiry – familiar from addressing the limitation of rights in the context of state obligations – can be adapted to guide arriving at the final obligations of corporations.
In relation to positive obligations, matters are a bit more complex and I propose a novel seven-step test to arrive at final obligations. Given the multiple factors and balancing, it is clear that there is an inevitable degree of discretion involved in arriving at final judgements concerning corporate obligations in relation to fundamental rights.
That sets the scene for the last part of the book which grapples with how to enhance decision-making in this regard. I first consider a series of corporate law reforms, I argue, are necessary to ensure corporate decision-makers take their fundamental rights responsibilities seriously and reach defensible conclusions.
I lastly consider how to improve the global framework surrounding corporate obligations to ensure greater guidance on the content of these obligations as well as better decision-making both within corporations and national institutions.
3. South Africa is used as an exemplar jurisdiction in the discussion of various doctrinal models for addressing the substantive obligations for non-state actors in the book. Please explain why South African jurisprudence should be of interest to a global audience.
My book seeks to advance the global discussion around the substantive content of corporate obligations with respect to fundamental rights. In order to investigate which models already existed, I needed to focus on particular jurisdictions and I deliberately wanted to include some jurisdictions from the Global South. I chose to engage with the jurisprudence of two of the most impressive Constitutional Courts there, namely Colombia and South Africa.
In relation to South Africa specifically, it is notable that from the outset of South Africa’s new democracy in 1994, there was a vigorous debate as to whether the interim Constitution envisaged direct or indirect obligations upon corporations.
The final Constitution of 1996 included section 8(2) which seems on its face to recognise direct obligations and two features which guided a determination of their content – ‘the nature of the right’ and ‘the nature of the obligations’. Nevertheless, the Constitutional Court has, at times, applied an indirect approach as well as subsuming private actors within the domain of the state where they perform public functions.
The Court’s approach has also interestingly evolved from only recognising that non-state actors have negative obligations not to harm rights to expressly affirming they can have positive obligations to advance the realization of rights.
For all these reasons, South African jurisprudence offers a rich opportunity to consider the different approaches, their merits and demerits and critically evaluate which is preferable. It also provides a source of structural continuity between the chapters and an excellent comparison with the other jurisdictions that are discussed.
4. Considering the power dynamic between corporations and states on the continent, how can the analytical framework developed in the book be applied in an African context?
The dimension of power is taken account of in the analytical framework itself in three ways. The first is through the focus on the vulnerability of individuals to the exercise of corporate power (an insight drawn explicitly in Colombian jurisprudence).
The second is through the importance placed on understanding the capacity of the corporation to affect individual interests. Lastly, the function dimension also involves an understanding of power relations as the more the function relates centrally to a fundamental right, the greater the power of the entity concerned – and its concomitant obligations.
The question of course is how to ensure the framework is applied properly in decision-making given the reality of existing power relations. In my view, African countries should seriously consider the corporate law reform proposals I make but they should also work collectively to ensure that international frameworks for fundamental rights and trade address the substantive obligations of corporations and ensure viable and effective mechanisms for their enforcement.
5. Could you give an example of how the multi-factoral approach could enhance fundamental rights on the African continent?
Let’s take an example that’s on everyone’s mind at the moment – namely, access to COVID-19 vaccinations. Currently, the global frameworks around trade have allowed a small number of corporations to make very large profits through supplying, initially at least, mostly developed countries.
The number of people in Africa who are fully vaccinated is less than 10%. This is a direct result of focusing on protecting intellectual property as well as commercial and trade considerations rather than fundamental rights.
The multi-factoral approach would consider the significant health interests at stake and the vulnerability of individuals in Africa to the pricing decisions of multinational pharmaceutical corporations. It would recognise the capacity of multi-national corporations to harm the fundamental rights of individuals and to restrict the supply of life-saving vaccines.
It would acknowledge that the function of a corporation that develops a vaccine cannot be understood as an ordinary commercial one, given the significant interests that it affects. It would also recognise that pharmaceutical corporations are not public entities and have an autonomy interest in being able to pursue their economic interests.
As such, they cannot be rendered loss-making entities without effectively changing their nature. Finally, it would be taken into account that there are multiple pharmaceutical companies with capacity in this area and that the burden of vaccine provision could be shared amongst them.
“The number of people in Africa who are fully vaccinated is less than 10%.”
What then practically should be done? It could be argued that pharmaceutical manufacturers must make vaccines available for free across the world – yet, that appears akin to rendering these private companies extensions of the state and so failing to respect their autonomy at all.
Instead, the more defensible alternative would be for such companies to be obliged to share their technology with other companies who have the capacity to produce and supply it – thus increasing supply across the world. There could be a concomitant obligation to price the vaccine at a level that differs between developing and developed countries which would help ensure it is affordable to all.
The latter understanding of corporate obligations does justice both to the serious need for increased vaccine access amongst the poorest in Africa and the rest of the world but also retains some respect for the companies’ ability to pursue their own economic objectives.
The multi-factoral approach thus does not seek to destroy the corporation nor is it anti-business: rather, it seeks to create a space for corporations to function but also to harness their power to advance the fundamental rights of individuals.
