Soft law as a method for enhancing human rights compliance by multinational corporations : a special reference to Malaysia

Abstract

The recent trend of economic globalisation has resulted in massive emergence of profit-oriented international business corporations such as the multinational corporations (MNCs). With minimum emphasis on social and human rights elements, MNCs’ business operations are always associated with corporate-related human rights violations. This phenomenon has prompted the global communities to call for the extension of human rights responsibilities and duties on business entities. Malaysia, as a developing economy, is not spared from this phenomenon where various human rights violations have taken place in the name of development. Among the problems that have contributed to the continued existence of corporate human rights violations are the inadequacies in legal regulation of human rights violations by MNCs. International law does not create concrete and direct legal obligations on non-state actors as they are not subjects of international law. In addition, at the domestic level, there is reluctance of governments to apply human rights laws and regulations against MNCs due to the economic benefits that MNCs bring to the State. There have also been no specific bodies or regulations in Malaysia which cater the issues of human rights violations by MNCs. Thus, this study aims to address these problems by exploring the use of soft law proposed in the form of business-human rights model as a method for enhancing human rights compliance by MNCs operating in Malaysia. This research is qualitative in nature and in achieving its objectives, the research has obtained information from primary and secondary data. Primary data was obtained through semi-structured interviews with a Commissioner at the National Human Rights Commission of Malaysia (SUHAKAM) and a senior officer in Sime Darby Berhad, a Malaysia-based MNC. Secondary data, on the other hand, was gathered through document analyses which involve resources such as textbooks, journals articles, internet-based information, case law, court judgments and commentaries to the judgments on human rights cases in Malaysia. Secondary data was also obtained from binding and non-binding legal instruments such as treaties, guidelines and soft law frameworks developed by various international organisations, in particular the UN. The UN Guiding Principles on Business and Human Rights and the National Action Plan on Business and Human Rights for Malaysia proposed by SUHAKAM will be looked upon to provide further insights on the topic being discussed. The findings from this study, among others, include (1) soft law can provide alternative solution to the insufficient human rights standards to enhance MNCs’ human rights compliance and to help addressing the issues of corporate human rights violations; (2) there is a need for policy and legal empowerment in Malaysia to take MNCs responsible for their human rights violations, and finally; (3) it is useful and vital for MNCs to adopt sustainable and human rights-based business approach as this will keep their good brand image and business sustainability. A success in harmonising economic growth and protecting human rights principles will harness the great power of economic development to align with the great principle of human dignity.