Corporate Human Rights?

Human rights are human rights. Granting them not only to human beings but also to corporations seems like a perversion—not only because corporations have neither body nor soul but also because corporations may accumulate tremendous social, financial and political power, whereas human rights are intended to protect the weak against the powerful. Such is, in a nutshell, the prevalent view in international human rights scholarship. And it appears, at first sight, an intuitively plausible approach. However, what if such intuition betrays on more thorough inspection? What if granting human rights to the corporate form, this non-natural legal construct, actually serves to limit corporate human rights?

Indeed, this is the central idea I submit in my article ‘Corporate Human Rights?’, which is forthcoming in the European Journal of International Law in 2021. The article addresses a to date rather understudied issue of the corporations and human rights debate: whether and to what extent corporations can be bearers of human rights, with a focus on the European Convention on Human Rights (ECHR) and European Court of Human Rights (ECtHR) jurisprudence. It argues that what I term ‘the individualistic approach’, ie purporting that the corporate form itself cannot be bearer of human rights, counter-intuitively, leads to the opposite of what it intends to achieve. Either, it leads to limiting protection of human activity that needs protection or it entails unlimited and unfettered corporate human rights entitlements. Thereby, my piece provides a critique of both established corporate law thinking as well as the dominant view in human rights scholarship. Instead, it is submitted that taking the corporate form seriously and granting it some human rights entitlements to some extent under a functionalist theory emerges as the preferable approach—theoretically, doctrinally and practically.

The naturalistic trap

As a first step, the article contends that the classical corporate law theories—natural entity, artificial entity and aggregate theories—help little to grasp the matter of whether, and if so how, corporations can be bearers of human rights. Instead, it invites approaching this issue from a different perspective, asking who is deemed the bearer of human rights: the corporate form itself, or the human beings behind the corporation? If one prefers the second alternative, one prefers the predominant individualistic view. Such individualistic view comes in two variants. A first variant denies corporations human rights altogether. Vulnerability of the human body or soul is for its proponents why human rights exist and thus only human beings themselves may enjoy them. The second variant of the individualistic view, which I name ‘derivative rights approach’, insists that corporations by themselves cannot have human rights. However, it submits that corporations may enjoy human rights protection to the extent and for the purpose of promoting the human rights of the individuals behind the corporation.

Why does this dominant individualistic view not hold up? Corporations are creations of the law. The law creates them in order to facilitate the business dealings of human beings, of single or of several or even large numbers of individuals. This is why it creates them as entities separate from the shareholders or employees, ie from the human beings behind them. While a legal person is a legal construct, the same applies to the concept of personhood altogether and, by extension, to so-called ‘natural persons’. Hence, both legal and ‘natural’ persons are juristic concepts and in that sense ‘legal’ persons. It is the law, and not nature, that bestows them with legal subjectivity. However, the individualistic view appears to fall into such naturalistic trap. 

Corporate Apotheosis

The result of such ill-advised naturalism, to my mind, is disastrous. Focusing exclusively on the human beings behind the corporation and denying the corporate form itself the ability to be bearer of human rights has two alternative consequences, depending on whether one subscribes to the no corporate human rights or to the derivative rights variants of the individualistic approach. If one holds the position that corporations cannot have human rights whatsoever, one excludes human activity from human rights protection that is doubtless worth protecting: some human activity is only possible in corporate form, think, most prominently, of newspaper or broadcasting corporations and their right to freedom of the press. Granting human rights protection merely to the shareholders of the corporation or the journalists employed by the news outlets does not capture the specific social phenomenon of a press organ with its distinctive voice, outlook and thrust. 

On the other side, the derivative rights position grants corporations human rights to the extent that their shareholders, employees and management need protection. This sounds plausible at first glance, but on closer inspection means that there are no limits as to which rights the corporation may claim. On such notion, a corporation may claim its (!) violations of the right to life or of the prohibition of torture if its shareholders or employees have suffered such infractions. Taking a comparative law perspective, the Hobby Lobby judgment of the U.S. Supreme Court (USSC, Burwell v. Hobby Lobby Stores, Inc., 573 US (2014)) illustrates the problem of such derivative rights premise: The Court effectively argued that a corporation may refuse paying for its employees’ health insurance plans that include abortion treatment claiming violation of its (!) freedom of religion because the corporation’s majority shareholders are devout evangelicals.

Taking Social Reality Seriously

Instead, one should take seriously the corporate form and the social reality of corporations. Through the corporate form, by creating an entity separate from human beings, corporations enable human activity that otherwise would not be possible and that in itself has a considerable impact on economic, social and political life. However, what should distinguish protecting human rights of corporations from protecting human rights of human beings is the underlying background justification why a law-maker bestows them with such status. While in the case of human beings such justification should be ontological—they are protected because they exist—in the case of corporations such justification can only be teleological: The law creates such social realities because they serve certain socio-economic functions. Consequently, the approach to determining the scope of corporate human rights must be functional. They may only enjoy human rights protections under three conditions: (1) if the corporate form itself can enjoy the specific human right in question; (2) if the activity in question is directly linked to the corporate purpose; and (3) if the corporation in fact has acted in pursuit of the purpose for which it claims human rights protection in the specific instance.

Andreas Kulick is a Senior Research Fellow at Eberhard Karls University Tübingen, Germany and, currently, visiting professor (Lehrstuhlvertreter) at the Ruprecht-Karls University Heidelberg, Germany.