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Article

Legal case for doing the right thing

As a wave of legal actions - such as a case alleging that Unocal, the US oil company, used forced labour in Burma - put business responsibility on trial, the voluntary versus mandatory debate is increasingly being overtaken by the law. Many question whether a law passed in 1789 - the Alien Tort Claims Act, through which some US courts have allowed lawsuits that allege US companies have violated international laws abroad - should be used in this way. But whatever the outcome of such cases (no company has yet made any payment) and the result of the debate, the potential liability of multinational companies in relation to corporate responsibility is becoming harder to ignore...Laws on misrepresentation or false advertising can come to bear on what companies voluntarily disclose about themselves. Currently under the spotlight is Nike, which was sued by Marc Kasky, an activist who alleged the company made false statements in press releases about its labour practices...Many of the legal challenges facing companies today are examined in a report released last month. Prepared by the International Institute for Environment and Development, it aims to demonstrate how the law is shaping corporate responsibility.

Part of the following stories

Financial Times article: Multinational firms increasingly facing legal accountability for their social & environmental conduct overseas

Nike lawsuit (Kasky v Nike, re denial of labour abuses)

Unocal lawsuit (re Myanmar)