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Article

1 Jul 2008

Author:
Menno T. Kamminga, Maastricht University

More lawsuits needed against multinationals

One of the great hidden secrets of multinational enterprises is that they owe much of their success to a worldwide accountability gap…caused by the fact that multinational enterprises are not regulated by a single legal system…[C]ompanies can maintain with some justification that conduct such as the destruction of a rainforest…is perfectly legal as long as it is not contrary to local laws.  The…way to reduce this accountability gap is to agree on international minimum standards…combined with an efficient international supervision system to ensure compliance with these standards…Remarkably, multinational enterprises have so far managed to convince the international community…that…improvement of their conduct can be achieved through [voluntary] mechanisms…In my view there are only two ways in which this deadlock can be broken.  First, the occurrence of another major industrial accident…Pressure from public opinion following that accident resulted in various initiatives to curb corporate abuses…The second option is the filing of domestic lawsuits against multinational enterprises in various countries…[L]awsuits with unexpected outcomes in different jurisdictions around the world may turn multinational enterprises into advocates of the establishment of a global level playing field…