Acting extraterritorially to tame multinational corporations for human rights violations: who should 'bell the cat'?

The continued impunity of multinational corporations (‘MNCs’) for human rights violations is driving the search for an effective as well as efficient regulatory model. Regulation of MNCs by home states through extraterritorial laws is a recent addition to the measures under review in this ongoing search. The presentation of a Bill in the United States House of Representatives on 7 June 2000 marked an attempt to adopt the extraterritorial model of regulation. This was soon followed by the introduction of a similar Bill in the Australian Senate on 6 September 2000. Though the fate of the US Bill remains undecided, in the case of the Australian Bill the Parliamentary Committee found it to be impracticable, unworkable, unnecessary and unwarranted. Within a theoretical framework of integrated legal responsibility, and in the context of multiple regulatory dilemmas, this article seeks to examine the provisions and the omissions of the two Bills. It argues that the legislative failures of the above Bills are instructive in at least three respects. Firstly, that it is legitimate for a state to impose and enforce internationally recognised human rights obligations upon the overseas activities of the corporations incorporated within its territory, as well as the overseas subsidiaries of such corporations, by enacting an extraterritorial law. Secondly, the failure of the Bills to become law should not be interpreted as a failure of the proposed model itself; if resort is to be had to any state-centric model of extraterritorial regulation, it is the ‘home state’ model of regulation which presents greater potential as compared to the ‘host state’ model. Thirdly, extraterritorial regulation of MNCs, essentially being a variation of the municipal regulatory model, is not self‑sufficient due to this model’s inherent limitations, and therefore needs to be supplemented by an international regulatory mechanism.