Corporate environmental accountability and responsibility

The aim of this paper is to explore the best method to regulate the activities of transnational companies (TNCs) so that they are accountable for the effects that their activities could have on surrounding environment. The traditional approach at international law is to regulate the rights and duties of states which, in turn, through their domestic legal systems, may place duties on corporations. However, as a result of the globalisation phenomenon, TNCs are gaining in political and economic influence whereas the system of international law has continued to be focused on states. Many areas of environmental protection could be undermined by non-state actors who do not consider themselves obliged to follow international treaties and conventions and could evade the provisions of environmental agreements. The Plan of Implementation of the World Summit on Sustainable Development (WSSD) indicates that urgent action is required at all levels to promote corporate responsibility and accountability. A method of self-imposed responsibility that has been popular amongst companies is the adoption of codes of conduct. However these codes lack legal enforcement so it is necessary for new approaches to be adopted. One option would be to encourage states to adopt an international treaty (or convention) specifically directed to the obligations of companies to adhere to principles of corporate social responsibility. This agreement could also encompass other issues such as human rights and labour law as well as the protection of the environment. Another possible option may be the refining and concurrent operation of national laws by states with specific direction to transnational companies operating within the jurisdiction of the state. So, in effect, these laws would have an extra territorial reach. This paper investigates these issues and the author argues that amendments to national legislation in Australia may provide an alternative solution.