Regulation

This theme focuses on the legal regulation of corporate behaviour across a range of industry sectors. Such regulation is often in its infancy, having been recently adopted or in the process of being developed. In principle such regulation can be enacted in both the home countries of transnational corporations (such as the proposed UK corporate accountability law, German and French due diligence laws) and in the host countries where they and national companies operate (such as plans in Colombia for a corporate accountability law). 

Regulation in relation to corporate accountability is also developed at the regional level, such as the EU’s Deforestation Regulation and its Corporate Sustainability Due Diligence Directive. It can also be developed at the international level, such as the ongoing process at the UN to draft a treaty on business and human rights. 

Typically, such regulation addresses matters related to how companies engage and consult with rights holders, such as indigenous peoples and forest peoples, how they conduct and report on their due diligence in relation to potential human rights and environmental impacts, and the mechanisms to hold corporations to account when they cause human rights or environmental harms.

Why is it relevant to indigenous peoples and forest peoples? 

Regulation related to corporate accountability at national, regional, and international levels is of particular significance for indigenous peoples and forest peoples given that many of the states in which these peoples reside have inadequate legal frameworks that fail to protect their rights or fail to guarantee the implementation of those rights in practice.

Corporate accountability regulation in the home countries or regions where companies are registered can place a legal duty on those actors to identify and respect internationally recognised land, cultural, and self-governance rights of indigenous and forest peoples, even if these rights have not been fully guaranteed or domesticated under the national law of the host country where they operate. This can help to ensure that due diligence is carried out, FPIC is obtained, and that remedies are available where human rights are violated and environmental harms are caused.

The present non-legal approaches to ensuring corporate accountability, such as National Actions Plans on Business and Human Rights or voluntary industry standards and multi-stakeholder initiatives related to auditing and certification schemes, often affirm indigenous peoples and forest peoples’ rights as recognised under international standards but fail to ensure that those rights are respected in practice due to a lack of adequate enforcement mechanisms. This implementation gap is one of the main reasons that indigenous peoples and forest peoples have been calling on states to implement corporate accountability laws at the national, regional, and international levels. However, even where such laws exist in home states or regions of corporations, it can be very challenging for indigenous peoples and forest peoples to seek their implementation through judicial or quasi-judicial mechanisms that are located far away from them. This highlights the importance of ensuring that corporations recognise and respect indigenous peoples’ and forest peoples’ own legal systems and dispute resolution processes,  and to the need for adequate corporate accountability laws and remedial mechanisms in the countries in which these peoples reside.