January 12, 2021
Can companies that violate human rights be held accountable? The answer, historically, has often been no. Despite many accusations and even indictments, vanishingly few multi-national companies from mining to manufacturing have been convicted of violating human rights.
But companies operate with an implicit social license alongside their legal corporate charter. Flagrant human rights violations, even when courts aren’t around to enforce the punishment, can threaten their ability to do business by disrupting companies’ access to markets scaring away investors, suppliers, or customers or trashing their reputation.
In a recent working paper, Oxford University economist Nathan Lane and his co-authors at Monash University examined the use of this power in civil society, assessing how the killings of mining activists affected the financial fortunes of companies associated with those murders. They show it’s surprisingly potent.