Making the Case for a U.S. Corporate Accountability Agenda

Making the Case for a U.S. Corporate Accountability Agenda

Making the Case for a U.S. Corporate Accountability Agenda

April 24 marked nine years since the collapse of the Rana Plaza building in Dhaka, Bangladesh. Just the day before, dangerous structural cracks were discovered in the building and although the stores in the lower floors of the building closed immediately, the garment factories forced their workers to return to work the next day. That day the building collapsed, killing at least 1,100 people and injuring more than 2,500. After the collapse, researchers had to piece together what brands produced clothing at these factories from shipping records and photos, labels and documents found in the rubble, and it took years for victims of the collapse and their families to receive compensation. The tragedy in Rana Plaza called attention to how corporations, including U.S. corporations, exploit global supply chains and continue to prioritize profit over the rights of workers. Rana Plaza also drove home the failure of voluntary corporate social responsibility measures to prevent business-related human rights abuses, hold corporations to account, or bring meaningful justice to impacted communities.

Although the corporate accountability movement in the United States has made some meaningful progress over the last decade such as the closure of the consumptive demand loophole and the passage of the Uyghur Forced Labor Prevention Act, serious gaps still remain that allow corporations to evade liability for abuses like the Rana Plaza disaster and deprive those harmed of meaningful remedies. In response, the business and human rights community has developed a number of proposals that would work to fill these gaps, but these ideas have not yet been compiled and organized into an overarching vision for a corporate accountability framework in the United States. As a result, coordinated advocacy surrounding key pieces of corporate accountability legislation is more difficult. Without a comprehensive vision for corporate accountability, it is harder for the community to advance the numerous moving pieces of corporate accountability with a unified voice. All of the needed changes are unlikely to move forward with one single piece of legislation, but by working together to progress the movement through coordinated advocacy surrounding multiple pieces of key legislation, we can more effectively drive meaningful change.

To address this need, ICAR is facilitating the development of a U.S. Corporate Accountability Agenda that will detail the diverse legislative proposals of the corporate accountability movement, framing them each as complementary pieces of a unified movement. Not only will the agenda publicly clarify the community’s goals, ICAR hopes it will serve as a touchstone and roadmap for the U.S. corporate accountability movement going forward. An agenda like this is not a novel concept. Although new to the corporate accountability movement, other initiatives across a variety of social and economic issues have utilized public agendas to solidify their values and publicize their goals such as the Movement for Black Lives’s 2020 Policy Agenda and the Center for Climate and Energy Solutions’s 2019 U.S. Climate Agenda. Now, the business and human rights community needs an agenda like this that can fortify the corporate accountability movement.

The Need: The State of Corporate Accountability in the United States

Having a comprehensive agenda is crucial given the systemic and multifaceted nature of corporate abuse of people and the planet. Corporate abuse is perpetuated by interconnected failures of the American accountability regime. Systems of impunity allow businesses to shield themselves from liability, substantive gaps in the law allow corporations to evade accountability, and barriers to civil society efforts to fill those gaps hinders meaningful progress. And although there are a number of tools that now exist to push back on undue corporate power, they do not form a comprehensive system for accountability that addresses the many faces of corporate abuse. Instead, what exists are a set of disparate tools that are insufficient to fill the existing gaps.

Systems of Impunity. Corporations have successfully built global economic structures that allow them to profit off of exploitation with relative impunity. For instance, global supply chains  are structured in a way that relies on layers of subsidiaries and subcontractors based in foreign countries that allow parent companies to distance themselves from the abuses that occur in their supply chains. The distance created by these intentionally complex global supply chains also allows corporations to claim ignorance of these abuses and even deny knowledge that their products are manufactured by these subsidiaries–despite the fact that they intentionally aim to benefit financially from utilizing foreign subsidiaries. Corporations also often fail to map or trace their own supply chains, allowing them to continue to exploit workers primarily based in the Global South and obscure their connection to their own manufacturing facilities. In short, supply chains are not opaque by accident–they were designed that way. Moreover, many of the “accountability” regimes established over the last few decades have often relied on a top-down, voluntary approach to corporate social responsibility. This approach, which frequently defers to corporate practice and voluntary commitments, has failed to produce meaningful change in working conditions in most industries.

Vulnerable communities are also disproportionately impacted by corporate human rights abuses. Our economic and social systems have consistently pushed women, migrants, and people of color into lower wages and substandard working conditions, and corporations have intentionally exploited indigenous communities and workers in the Global South to maintain their profits. Our justice system also continues to prioritize the interests of the white and wealthy, leaving more marginalized communities with little access to justice. These systems have worked together to allow businesses to continue to evade meaningful accountability and maintain the status quo.

Substantive Gaps. The persistence of business-related human rights abuses, including labor abuses in corporate supply chains, is enabled by gaps in the legal corporate accountability framework in the U.S. Despite the reach of U.S. corporations, victims of corporate human rights abuses abroad have no effective private right of action to bring claims against U.S. companies and are therefore left with no remedy for the harms committed. And although we do have legislation that prohibits companies from engaging in bribery and requires accurate recordkeeping, we do not have parallel prohibitions against human rights abuses or requirements that companies provide key information about their supply chains.

Even the laws currently on the books that can address corporate abuse are often insufficient to provide meaningful accountability. For instance, although companies have been prohibited from importing into the United States any goods made “wholly or in part” through forced labor since the passage of the Tariff Act in 1930, the Act was used sparingly until the closing of the consumptive demand loophole in 2016. Moreover, the opacity of corporate supply chains still makes it difficult to meet the burden of proof needed to block imports, and CBP is only able to block a fraction of the total number of goods produced with forced labor each year. And although the Uyghur Forced Labor Prevention Act (UFLPA) is a good step forward, it is limited in scope, and there remain insufficient traceability tools for CBP and other enforcement agencies to make the connections necessary for successful investigation and enforcement.

Additionally, although laws like the Alien Tort Statute (ATS) allow non-citizens to sue in federal court for certain human rights violations, the Supreme Court has interpreted the statute so narrowly over the last 20 years that corporations are often shielded from liability for even the most egregious of abuses. The Court ruled in Kiobel v. Royal Dutch Petroleum Co. that the presumption against extraterritoriality extends to the ATS and that U.S. courts only have jurisdiction over claims when the conduct alleged is sufficiently linked to the United States. This interpretation, combined with the requirement that plaintiffs must show that defendants violated a “specific, universal, and obligatory”  international norm, means that U.S. corporations are often shielded from liability for most abuses committed abroad, even if those abuses involved corporate decision making that took place in the United States. This leaves those harmed by corporations for activities occurring outside of the United States with little avenue for effective remedy–which is essential to any meaningful corporate accountability regime.

But Corporate America’s abuses do not only occur abroad. Workers within the United States are often exploited and subjected to unsafe working conditions. For instance, after decades of corporate campaigns to erode unions, which are crucial for bargaining for fair pay and working conditions, our labor laws often fail to protect workers rights to organize, in part because of a lack of real consequences for violating these rights. Under the National Labor Relations Act (NLRA), the leading law for collective bargaining protections, there are no civil monetary penalties for companies that violate workers’ rights and no assurance that workers will have timely access to justice. This means that even though there are laws on the books that should protect workers in the United States, there are often insufficient enforcement mechanisms to ensure compliance.

Barriers to Advocacy. A number of barriers also exist that hinder community efforts to advocate for corporate accountability. Corporate lobbying, campaign contributions, and the revolving door have allowed corporations to have undue influence over U.S. legislative and regulatory bodies, courts, and elections. Because of this influence, corporations can manipulate government policies to benefit corporate interests over the public’s. As a result, corporations can block efforts to pass laws that hold them accountable for human rights abuses and can undermine efforts to advance corporate accountability.

Corporations also often use their influence to suppress speech that is critical of corporate activities and abuses. The Business and Human Rights Resource Centre recorded 615 attacks against human rights defenders raising concerns about business practices in 2021, nearly 70% of which were against climate, land, and environmental rights defenders. Large companies also often have the resources to harass activists who expose harmful business practices with costly, frivolous lawsuits that individuals might not have the time or resources to properly defend. These SLAPP suits chill speech and can hinder advocacy efforts on the ground. Addressing these barriers to advocacy is a necessary component of meaningfully advancing corporate accountability in the United States.

Building a Corporate Accountability Agenda

Although the gaps and obstacles discussed above are not exhaustive, they do provide a snapshot of the breadth and depth of the gaps in American corporate accountability and the work that still needs to be done. If the United States aims to be a global leader in promoting human rights, it must become an active participant in the corporate accountability movement. As discussed above, the voluntary “corporate responsibility” measures of the last two decades have proven to be largely ineffective—underscoring the need for legislative action. Congress and the Biden administration, armed with well-informed policies, could move innovative ideas forward that would hold corporations accountable for human rights violations in the U.S. and abroad. Strong, clear laws and regulations governing corporations and robust enforcement are the tools needed to usher in a sea change in corporate practices.

To combat the multifaceted, and structural nature of corporate abuse, the business and human rights community in the United States has developed a diverse set of expertise that spans across multiple fields, including technology and privacy, labor rights, and sustainability, among many others. Harnessing the strength of this diverse community requires a unified, coordinated effort. But to date, there has been no comprehensive corporate accountability agenda focused on the U.S. published in any one location and no concerted effort to compile the diverse ideas of the business and human rights movement.

To meet this need, ICAR will facilitate the development of a Corporate Accountability Agenda for the United States. The Agenda will aim to clarify the community’s values of preventing and punishing corporate harm in meaningful ways while centering rights-holders and the voices of victims of corporate abuse. It also hopes to demonstrate the unified strength of the corporate accountability movement in a way that is representative of the community’s blue sky thinking without the weights of prioritization or political limitations. However, we hope that after its publication it will serve as a guidepost for future advocacy efforts where we can leverage our collective interests toward congressional action, with our partner organizations championing different pieces of the Agenda.

To ensure that the Agenda is comprehensive and represents a variety of stakeholder interests, the Agenda will be developed in consultation with stakeholder groups within and outside of the traditional corporate accountability movement. These include our members, partner organizations, and other experts, such as those focused on technology and human rights, labor rights, racial justice, and Indigenous rights, among others. In line with ICAR’s commitment to centering the voices of impacted communities, throughout this consultation process ICAR will place a particular emphasis on integrating the views and ideas of stakeholders closest to the issues to ensure an accurate representation of the challenges on the ground.

Conclusion. It is our hope that a U.S. Corporate Accountability Agenda will become a tool for advocacy across the corporate accountability movement, and one that explicitly places the interests of impacted communities at the forefront, and recognizes the intersectional impacts of corporate human rights violations. In compiling the diverse ideas within the business and human rights community, we can demonstrate the strength of the movement and press for much-needed changes in the U.S. corporate accountability regime.