Bridging the governance gap? Corporate power, impunity, and the role of the EU’s corporate sustainability due diligence directive in addressing human rights violations in global value chains
Bridging the governance gap? Corporate power, impunity, and the role of the EU’s corporate sustainability due diligence directive in addressing human rights violations in global value chains
Date
2024
Authors
Lorenzoni, Isabela : Lyrio
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Abstract
The emergence of the Business and Human Rights (BHR) debate in the 1990s, driven by
globalization, liberalization, technological advancements, and innovations in corporate
structures, has underscored significant governance gaps arising from the misalignment between
the scope of economic activities and the capacity of political institutions to manage their
adverse consequences. This study explores these governance gaps, as conceptualized by
Ruggie (2008), through the lens of corporate power and impunity, particularly examining their
real-world implications on human rights with a focus on the Guarani Kaiowá indigenous
peoples in Brazil. It also assesses the European Union’s Corporate Sustainability Due Diligence
Directive (CSDDD), a recently approved legislative effort inspired by the UN Guiding
Principles on Business and Human Rights (UNGPs), and its potential in addressing the
governance gaps. The study first examines the evolution of corporate power and the
mechanisms, such as limited liability and separate personality doctrines, that have facilitated
corporate impunity. These mechanisms have enabled Transnational Corporations (TNCs) to
evade effective oversight and accountability for their human rights and environmental impacts.
In the study's second section, the analysis then shifts to the real-world implications of these
mechanisms, using the Guarani Kaiowá case to illustrate how agribusiness power, intertwined
with state interests, has led to systemic human rights violations. Thirdly, the study critically
evaluates the CSDDD as a potential remedy for these governance gaps, highlighting its
approach to mandatory human rights and environmental due diligence obligations. Despite its
significance as the first regional legislation of its kind, the Directive faces limitations including
a narrow scope, vague terms, and procedural challenges that hinder effective remedy for
victims. In conclusion, while the CSDDD marks a pivotal advancement in corporate
accountability, this study asserts that it represents only a preliminary step. Addressing
corporate impunity effectively requires a comprehensive approach that harmonizes stakeholder
interests and promotes gradual progress. Recognizing corporations as integral components of
the global system alongside states is crucial for developing robust and enforceable regulatory
frameworks capable of bridging the governance gap and safeguarding human rights against
corporate abuses.
Keywords: BHR, Governance Gap, Corporate Power, Corporate Impunity, Indigenous
Peoples, CSDDD.
Description
Second semester University: University of Seville
Keywords
business,
human rights,
corporate responsibility,
indigenous peoples