22 December 2020

Corporate Persons and Rights

'Corporate Human Rights?' by Andreas Kulick in (2021) European Journal of International Law (forthcoming) comments 

Do corporations have human rights? This 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 ECHR and ECtHR jurisprudence. In a nutshell, it argues that what subsequently will be called ‘the individualistic approach’, i.e. purporting that the corporate form itself cannot be bearer of human rights, counter-intuitively, leads to almost unfettered human rights entitlements of corporations. Thereby, this 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 entitlements to some extent under a functionalist theory emerges as the preferable approach – theoretically, doctrinally and practically. The article draws on ECtHR jurisprudence, general legal as well as corporate law theory and on comparative constitutional law in order to corroborate its argument.

Kulick argues 

 To some, they are anathema – to others, such as the European Court of Human Rights (‘ECtHR’), they seem to be self-evident. Flying under the radar until fairly recently, the issue of corporate human rights – i.e. whether, and if so to what extent, corporations can be bearers of human rights – has gained much less scholarly and public attention than its sister issue, corporate human rights obligations. At first glance it may appear almost absurd: mere creatures of the law, not of flesh and blood, claiming human rights protection; ‘artificial’ creatures thus, which above all oftentimes accumulate tremendous power – whereas human rights are intended to protect the weak against the powerful, and not vice versa. This may very well be the reason why some international human rights instruments grant human rights exclusively to individuals, such as Article 1(2) of the American Convention on Human Rights (‘ACHR’), or Article 2(1) of the International Covenant on Civil and Political Rights (‘ICCPR’). However, the European Convention on Human Rights (‘ECHR’) is less clear in this regard. While containing indications, the Convention does not make explicit mention of a general acceptance of human rights of corporations, i.e. separate legal entities. Nonetheless, as stated above, the ECtHR usually does not spend much time on the matter, assuming that corporations enjoy the rights enshrined in the Convention. For those who argue that corporate human rights are nothing short of a perversion, such scant reasoning appears particularly outrageous. 

Regardless, however, whether one embraces or rejects the concept of corporate human rights, the prevalent view in human rights scholarship and practice seems to subscribe to what I will call in the following the ‘individualistic approach’: that the corporate form itself cannot enjoy human rights protections. On this notion, only human beings ultimately deserve the protections of, e.g., the ECHR. Hence, this means that, either corporations cannot have human rights at all (‘no corporate human rights’ position) or corporations may only enjoy human rights to the extent that the human beings behind them are entitled to human rights protections (‘derivative rights’ position). Underlying this individualistic approach is the narrative that granting human rights to the corporate form itself is dubious or even perverse and that focusing on the human beings as (at least eventually) the sole entities capable to possess human rights limits and prevents the expansion of corporate human rights and thus corporate power. 

In this article, I will seek to demonstrate that this individualistic approach leads to the exact opposite, i.e. the unfettered expansion of corporate human rights. In the following, I will offer a theoretical argument why, counter-intuitively, acknowledging corporate human rights – i.e. granting (some) human rights to the corporate form per se – serves to limit them. The focus of this article is on the ECHR. Its considerations are tailored primarily for the specific framework of the Convention and submit a new approach that is intended first and foremost as the adequate solution within such framework. Other human rights instruments and mechanisms may require different nuancing. However, the arguments employed regarding the nature of the corporate form and the functional approach as alternative to the prevalent individualistic approach may potentially prove convincing beyond the realm of the ECHR. 

Part 2 will flesh out the individualistic approach to corporate human rights in more detail and will elaborate on its two variants, the no corporate human rights and the derivative rights positions. In Part 3, the ECtHR’s take on the matter of corporate human rights will be examined. The stock-taking here is a mixed one. It reveals that the Court takes a rather pedestrian approach. The Court assumes that corporations are entitled to ECHR rights. It does so without explaining its underlying theory and without displaying a consistent view on whether it is the corporate form for its own sake or only the human beings behind it that can enable the corporation to enjoy human rights. In Part 4, I will investigate examples of derivative rights approaches in constitutional law jurisprudence, focusing on case law from the U.S. and Germany, that indicate a cautionary tale with respect to the ability of the individualistic approach to limit corporate human rights. In fact, so I submit in Part 5, employing basic insights from legal theory, the individualistic approach is founded on a naturalistic misconception of legal personhood that leads to corporate apotheosis and thus to the opposite of what it intends to achieve. Instead, as Part 6 seeks to explain, a functional approach, taking seriously the corporate form and the social reality that it represents, is indeed the more adequate alternative. It avoids the naturalistic trap and promises to curb much better corporate human rights expansion. Part 7 concludes this article.