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1. Introduction
Corporate social responsibility (CSR) has gained tremendous recognition in recent times. However, debates about CSR seem to have moved from whether corporations have other responsibilities apart from profit maximization to how corporations can comply with broader responsibilities. One way of complying which is increasingly being used is through voluntary initiatives. Modern CSR is generally associated with voluntary non-binding rules that corporations adhere to in an attempt to be socially responsible.
There is greater awareness of the need for corporations to be responsible commensurate with their increasing power. This awareness is being raised by corporations themselves; international civil society, which has greater public scrutiny and exerts pressure on corporations to behave responsibly; and the real and potential threat of international legal action regarding foreign direct liability. It is leading to global changes, forcing broader corporate social responsibilities, and the development of CSR universal standards in the areas of human rights, the environment and anti-corruption.
The enforcement of such standards is typically through the use of soft law initiatives. This article will address the issue of CSR enforcement of these standards using soft law initiatives. It will examine the positive and negative aspects of soft laws, the relevance of hard laws (regulations) if applicable, and provide suggestions on how soft law initiatives can be more effective.
CSR cannot be beyond rules, but should include clearly mapped out rules to which corporations should adhere. This is necessary to ensure that corporations are held accountable and guided towards certain acceptable actions. These rules should be mirrored across the globe to ensure that corporations are held accountable irrespective of the country in which they carry out their activities. Universal standards need a universal approach. A universal approach would take account of the need for adequate and effective enforcement, which would address issues including:
- for which standards corporations can be held responsible;
- how corporations can be held responsible; and
- what sanctions and deterrents would be most effective.
In the area of human rights, environment and anti-corruption, the many codes and guidelines which will be discussed in this article will demonstrate that there has been much response to the question regarding for which standards corporations should be held responsible. Soft law initiatives create awareness and make...