Alexandra R. Harrington Doctor of Civil Law Candidate, McGill University Senior Manager &...

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Transcript of Alexandra R. Harrington Doctor of Civil Law Candidate, McGill University Senior Manager &...

  • Slide 1
  • Alexandra R. Harrington Doctor of Civil Law Candidate, McGill University Senior Manager & Associate Fellow, CISDL
  • Slide 2
  • I. Corporate Law Background II. What is Corporate Social Responsibility (CSR)? How does it relate to environmental concerns? II. International regimes III. Regional measures IV. State measures V. Industry measures VI. Examples VII. Conclusion
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  • Generally, corporations do not, as a matter of law, exist as a person for purposes of criminal and civil law, and thus cannot be held liable for their actions. However, corporate liability is created at law through the designation of a corporate entity as a legal person. This status is very important in CSR instruments because using it gives CSR instruments a wider scope of application and jurisdiction.
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  • Jurisdiction of a state over the conduct of an actor is very important in CSR.
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  • Internationally (and domestically) some corporations engage in contracting for goods or services with states, regional entities/banks, and international organizations. In the contracting system, the term debarment is used when a contractor is removed from eligibility or otherwise sanctioned this can occur for many reasons, including corruption. Debarment can result in a contractor losing an already awarded contract. Debarment usually results in the imposition of a period during which the contractor is not allowed to bid for or otherwise seek contracts or sub-contracts with or related to the debarring institution.
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  • What is CSR? How does CSR relate to environmental matters?
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  • Rio Declaration Overall, the Rio Declaration stresses the need to protect the environment and health of all peoples, especially when in relationship to development. This was also stressed regarding trade and national legislation to create and implement liability for environmental degradation.
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  • Agenda 21 Created as a wide-ranging, worldwide policy statement, addressing the following areas in relationship to the environment, sustainable development, and economic growth.
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  • Kyoto Protocol The Kyoto Protocol, which will expire in 2012 unless extended by State Parties, created the framework for carbon markets international, regional or national and their functioning. Included in the carbon market framework were the Clean Development Mechanism and Joint Implementation, which provides ways for developed countries to fund emissions reducing projects in both the developing and developed worlds and receive credits that could be used in the carbon market system.
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  • The regulations that have been promulgated to govern CDM & JI projects in part ensure that the projects that have been contracted for are actually completed in a sustainable way that meets the asserted emissions reductions targets. This is an important consideration for corporate social responsibility in that the CDM and JI rules will ensure that these projects are undertaken in a responsible way that does actually result in emissions reductions at the project site.
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  • It should also be noted that, if there is an act of bribery or corruption that involves circumventing environmental laws/regulations, for example the completion of a meaningful environmental impact assessment, there are international and regional corruption regimes that are related to CSR. UN Convention Against Corruption OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions Uniform Framework for Preventing and Combating Fraud & Corruption Asian Development Bank, OAS Inter-American Convention Against Corruption, Council of Europe & EU,
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  • The European Union has identified corporate social responsibility as being key to sustainability and economic growth. In Europe, corporate social responsibility has been extended to small and medium enterprises as well as the large corporate entities with which it is usually associated. This has been done through an EU-wide education campaign, creating awareness and stressing the importance of good business practices.
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  • Corporate social responsibility has also been identified by the EU as important to the development of business competitiveness.
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  • Liability & Polluter Pays & Precautionary Principle Under EU Directives, corporate entities are required to make restitution for environmental damages incurred as a result of their actions/fault.
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  • Sixth Environment Action Programme, 2010 States that efforts to ensure corporate compliance with environmental regulations and voluntary commitments regarding environmental protection are a key part of the EUs strategy to combat environmental problems.
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  • USEPA Compliance mechanisms The USEPA provides businesses and other regulated entities assistance in complying with the terms of US environmental laws and regulations. Compliance mechanisms are non-punitive and generally consist of voluntary EPA inspections, and auditing/self- disclosure policies.
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  • USEPA enforcement mechanisms There are several mechanisms through which the USEPA enforces the compliance of businesses. One mechanism is through civil sanctions, such as financial penalties. Another mechanism is through the enforcement of cleanup provisions in the event that there has been a form of spill. Finally, criminal mechanisms are available against corporate entities, for example in the event of illegal dumping.
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  • CERCLA responsibility provisions Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) businesses which currently are polluting or who have polluted. Based on CERCLAs responsibility provisions, it is possible for the current owner of a property on which a toxic substance was spilled to sue up the chain of owners to get to the owner(s) responsible for the actual pollution.
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  • Guidelines for Multinational Enterprises General Principles Stresses that good corporate governance and corporate profit are not exclusive; Stresses the need for corporate operations to be aware of environmental and social factors of operations; Ch. V Environment
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  • OECD Risk Assessment Awareness Tool for Multinational Enterprises in Weak Government Zones Provides corporations in these situations with questions that they might face and realistic answers, including questions relating to the application of laws and environmental standards.
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  • Uniform Framework for Preventing and Combating Fraud & Corruption Signed by the World Bank, African Development Bank, ADB, EBRD, EIB, IMF, IADB. Creates Joint International Financial Institute on Anti-Corruption Task Force. Also provides basic agreement on the actions of these banks regarding financing and lending Strengthens cooperation and coordination between institutions regarding fraud and corruption.
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  • Uniform Framework for Preventing and Combating Fraud & Corruption Requires that member entities ensure that they are involved in transactions and relationships where laws, including environmental laws, are followed.
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  • Lending policies & project design/Environmental Assessment The World Bank now requires that potential funding projects undergo significant and meaningful Environmental Impact Assessments for the communities in which the project would be located and/or effect. The World Banks lending policies include requirements that the environment be included in the consideration of the project overall.
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  • Compliance assurance departments within the World Bank In order to self-monitor, as well as to monitor the outside entities that are involved in the World Banks projects, as well as their internal procurement departments, there are compliance assurance departments. Among the considerations of these departments is whether the project/contractor is fulfilling its environmental requirements.
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  • Paris Declaration emphasises the importance of environmental impact assessments for both donor and partner countries.
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  • ADB/OECD Anti-Corruption Initiative for Asia Pacific Emphasizes the importance of Corporate Responsibility and Accountability
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  • Lending practices/requirements Among the ADBs lending requirements is the requirement that the project to be funded does not cause environmental damage.
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  • Lending principles and guidelines Among the IADBs lending requirements is the requirement that the project to be funded does not cause environmental damage.
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  • Lending practices/requirements Among the African Development Banks lending requirements is the requirement that the project to be funded does not cause environmental damage.
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  • Environmental Impact Assessments are required for projects that are to be undertaken by the European Development Bank. These must be thorough and convincing, and examine the impacts on the affected communities.
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  • Incorporation of environmen