“The Regulatory Grass is Greener”: A Comparative Analysis of the Alien Tort Claims Act and the European Union’s Green Paper on Corporate Social Responsibility

Joshua M. Chanin
J.D./M.P.A. candidate, May 2006
Indiana University--Maurer School of Law

Heightened economic incentives and increasingly ineffective legal regimes have combined to create a single-minded monolith of MNCs. These organizations have little incentive to respect human rights and the environment in the wake of their profit grabbing. Consider the list of MNCs operating within the boundaries of repressive states, and in some cases in conjunction with these regimes, as a telltale example. This “race to the bottom” has not gone unnoticed or unchallenged. This Note evaluates two important regulatory trends undertaken by the United States and the European Union (EU) in order to reconcile two realities of the globalized world economy: first, the corporate-led drive to lower prices and increase profit margins, and second, the disrespect for basic human rights that has resulted. Section I evaluates the effect that globalization has had on human rights, focusing specifically on the lack of existing regulation and the tricky legal environment in which this conflict must be addressed. Section II provides an in-depth analysis of the current civil-liability movement in the United States, highlighting important recent developments in Alien Tort Claims Act (ATCA) litigation. Section III analyzes the latest regulatory development in Europe, focusing specifically on the 2002 Green Paper that is supposed to shape EU policy toward corporate compliance. After examining the strengths and weaknesses of each regulatory movement, Section IV proposes a hybrid solution.

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