2011/2012 Course Period 4

Corporate Social Responsibility

Course book

University of Maastricht

Faculty of Law

Introduction a. Description of the course

Corporate Social Responsibility (CSR) is a compulsory course in the Master Globalisation and Law program for both specialisations, Human Rights and Corporate and Commercial Law. The basic idea of the CSR concept is that companies are a vital part of society and that they have both the power and the responsibility to behave in a way that satisfies not only shareholders, but also other constituencies such as employees, suppliers, customers, the community and the environment. Various views do exist with respect to the relation markets governments. In the neoliberal approach of the eighties and nineties of the last century markets not only are characterized by the fundamental freedom for individuals or companies to own property and embark on a business venture of their choice and that any restraint by society to this freedom to protect public or individual interests should take the form of legislation to be imposed by society. This neoliberal view also holds that markets should be allowed to organize as much as possible themselves and governments should step back, the idea being that markets will be able to achieve the optimal efficiency needed to let society prosper from their creative innovation capabilities. Government interference should be limited as much as possible since it will hamper these capabilities to the detriment of society at large. The corporate scandals at the beginning of this century and the financial crisis, however, cast ample and serious doubt on this view and the prevailing current opinion is that public regulation is much more needed. More fundamentally, the question should be addressed, whether the starting point of fundamental freedom as such is a real valid one and business not only has the licence but also the mandate from society to act in a responsible way to the advantage of a wider group of stakeholders than its shareholders. The many definitions of CSR in use by both regulators and business (organizations), almost invariably emphasize its claimed voluntary nature. Therefore, the relation between CSR - a concept of multidisciplinary study like corporate governance - and law became a topic for exploration and study by lawyers only recently. The ensuing discourse has concentrated on preliminary basic questions: is CSR totally voluntary in nature indeed and therefore not relevant in principle in legal education or does it or should it also cover mandatory aspects of regulation? This is an ongoing debate and will be addressed in the course whereby, in line with current views among academics and practitioners, it will be argued that CSR is a subject with an increasing legal significance. This is why the Faculty of Law has decided to adopt CSR in its curriculum. The relevance of the so-called voluntary or mandatory debate can be illustrated by the recent change in policy by the EU Commission. Its definition of CSR read since 2001: a concept whereby companies integrate social and environmental concerns in their business and their interactions with their stakeholders on a voluntary basis. (Commission of the European Communities, Green Paper: Promoting a European framework for Corporate Social Responsibility, COM (2001) 366 final, Brussels, 18-7-2001). In its Communication of 25 October 2011 on its CSR Strategy 2011-2014, however, the EU Commission changed this definition as follows: the responsibilities of enterprises for their impacts on society, thereby emphasizing the multifaceted character of the responsibilities, which may include semi-legal and legal responsibilities, not only of companies but of all forms of business enterprises.

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Moreover the majority of CSR definitions refer to social and environmental concerns. This substantive scope of CSR is commonly referred to as the Triple P1 scope: People, Planet and Profit should be in balance in business policy and operational management. After addressing the conceptual foundations of CSR from a legal perspective, the course will offer a view on CSR as an increasingly important element of corporate strategy and operational management, and from this broader view will explore and analyze the legal and management aspects on the one hand relevant for lawyers in corporations, in private practice, in government and in NGOs and on the other hand for regulators including those responsible for designing regulation and/or policies. First, however, it is useful to provide an overarching characterization of the CSR debate. The positive and negative impacts that business had on society generated public, political, and academic debate. While it was clear that business sought a profit from providing goods and services in response to societys demands, it was much less obvious what constraints should be put on its activities and who should impose them. Was all profit legitimate? Was all profit legitimate, provided that the company stayed within the law? What was a fair distribution of the wealth business created between shareholders, employees, and wider society? Should companies give part of their wealth back to the communities within which they operate? Could markets be relied upon to set a fair price, whether for labor, products, or natural resources? Could governments reliably decide what was in the public interest?2 These questions go to the heart of CSR and they illustrate that, next to aspects of management theory, economic and social policy, they should be also approached from the perspective of law and regulation. This course and the chosen methodology will give a panoramic overview of this new approach to business responsibility. As mentioned above, the topic is related to many important issues. In this course we will focus on issues in the internal and external corporate environment. We will explore them from legal and non-legal perspectives in order to provide an understanding how they (should) impact corporate strategy and decision-making. As mentioned above corporate strategy approaches of CSR are mostly oriented towards a Triple P (People, Planet, Profit) perspective. Traditionally Profit has been the driving force for companies and company policy. Increasingly, the Profit dimension receives attention also on the ways and means profit is realized, such as ethical business conduct and fair competition. Over the years, however, increasing attention can be observed for the interests of all those involved in the company and directly affected by its operations (People) and also for environmental sustainability of the companies activities and the finality of natural resources (Planet). Thus the companys circle of stakeholders expands considerably. Therefore special attention will be given, within the area of CSR in a legal and corporate governance context, to the position of these stakeholders directly or indirectly in the interests of the company as a whole. The course will offer insights into the international and, in a comparative manner, national approaches and developments in CSR, both in the Triple P-sectoral and in the general legal and corporate governance context.

The Triple P principle is based on the term Triple Bottom Line coined by John Elkington in the nineties of the twentieth century in his book Cannibals with Forks: the triple bottom line of 21st century business (Elkington, 1998). 2 (Blowfield-Murray, 2011, p. 7).

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b.

Course Objectives

The purposes of the course are to: Offer the students an introduction to the theoretical foundations of CSR; Raise awareness of various CSR-related concepts, frameworks, terms, policies and documents; acquaint students with the legal and regulatory perspectives to further stimulate, develop, guide and regulate CSR; Identify CSR-dilemmas in the corporate community and analyze the opportunities of and threats to multinational corporations and their board(members); and Encourage students to sharpen their research and problem-solving skills.

Based on a general understanding of the concept of CSR, its relevance in business strategy and operation both in a normative and in an operational sense, the course will endeavor to enable students to advise future clients in business, government and NGOs on such practical legal questions as: What are the sources and forms of CSR norms in the Triple P and general law and regulation scope? What are the possible legal consequences of adopting, implementing and reporting on CSR policies and codes of conduct (so-called individual self-regulation)? What are the legal consequences of adhering to general or industry specific business principles and codes of conduct such as the UN Global Compact (so-called collective selfregulation)? What is the possible legal effect of soft-law instruments such as the OECD Guidelines for Multinationals and their compliance mechanism for corporate policy and conduct? Will transparency on voluntary CSR aspirations give rise to legal exposure, if the company will not (be able to) meet these aspirations and on what basis (e.g. contractual liability, corporate liability such as fiduciary duty or duty of care, tort liability based on duty of care or negligence)? Will universal or international CSR norms play a role in the application of open norms by the national courts of their national contractual, corporate, tort or criminal laws? May parent companies be held responsible/liable for actions by their (foreign) subsidiaries and/or business partners pursuant to legal concepts such as piercing the corporate veil, vicarious liability or direct liability based on identification of parent and subsidiary and on the basis of what substantive law (home or host country)? Will there be exposure from acts by business partners or contractors based on sphere of influence in the supply chain? What are the possibilities for collective redress or mass claims by allegedly harmed third parties? Will companies be criminally responsible either or not together with their directors, officers and managers? Are there areas of CSR where effectiveness of compliance with the relevant CSR norms by business may be achieved or improved through regulation and, if so, by what ways and means of regulation (selfregulation, soft law, hard law), so-called constructive legal assessment?

These questions are increasingly relevant and important for corporations and businesses operating in a globalisation context and lawyers will need to have a general understanding of the issues and their legal aspects in order to advise their clients, be it corporations, regulators or allegedly harmed parties or representative organizations. Also management policies to prevent or mitigate exposure, such as risk management, due diligence and compliance, stakeholder engagement, and conflict management are important from a legal perspective. It will be clear,

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that the subject CSR offers a very rich set of legal perspectives and substantive legal fields, many of which will be addressed in the course. c. Anticipated Learning Outcomes

At the end of this course, students should be able to: d. Explain the concept of corporate social responsibility and its relation to corporate governance; Discuss why companies should be ethical and understand the relations of and differences between ethical and legal behaviour; Understand the critical arguments for and against corporate social responsibility; Explain how corporate social responsibility is practiced by companies; Discuss how a company can assess the legal impact of corporate social responsibility and its strategies; Understand the importance of and ways to organize stakeholder engagement. Course Materials

Course readings will consist of chapters from books, academic essays and articles from academic journals and materials from a mix of internet sites. You are expected to read assignments from the course text and other listed materials by the date they are due. You are expected to discuss the readings in class with the group, instructor or guest lecturer. There is one prescribed textbook and there are four recommended textbooks for this course. A law textbook has been chosen, which systematically approaches the major relevant legal aspects of CSR. Each lecture and tutorial group will focus on one of these legal aspects, assisted by the pre-reading by the students of the relevant materials from the legal textbook as indicated for the lectures. In addition a general introductory book, which provides the broader context of CSR as a multidisciplinary concept and enables the students to obtain a helicopter view of the subject, and three legal textbooks are recommended for further reading to inform the students of specific aspects which may also serve as basis for preparing the assignments. The literature lists for each week will specify the required reading and for those who take a special interest in one or more of the topics to be covered selected reading from both the general introductory textbook and the additional legal textbooks. The prescribed textbook is: Doreen McBarnet, Aurora Voiculescu and Tom Campbell (eds), The New Corporate Accountability. Corporate Social Responsibility and the Law, Cambridge University Press, 2009 (McBarnet). The recommended textbooks are: Michael Blowfield and Alan Murray, Corporate Responsibility, A Critical Introduction Oxford University Press, 2011 (Blowfield Murray), with a link to an online research centre (http://www.oxfordtextbooks.co.uk/orc/blowfied_murray/), offering a range of additional learning resources; Michael Kerr, Richard Landa and Chip Pitts (eds), Corporate Social Responsibility. A Legal Analysis , Lexis Nexis Canada, 2009 (Pitts); Brian Horrigan, Corporate Social Responsibility in the 21st Century, Edward Elgar, Cheltenham UK, 2011 (Horrigan)

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Peter T. Muchlinski, Multinationals and the Law, 2nd edition, Oxford University Press, 2007 (Muchlinski). There is a limited number of copies of these books available in the University Library. Prescribed, recommended and supplementary readings are either easily accessible electronically or to be found in the University Library. If a hyperlink to an article in an electronic journal doesnt work or isnt available, try the eLibrary or Catalogues of the University Library. Additional required course materials and recommended readings will be listed on EleUM. e. Methods of Instruction

Each week there will be a plenary lecture on a particular aspect of CSR followed by a smallgroup tutorial session devoted to the topic of the week and the assignment. Attendance at the lectures and tutorial meetings is compulsory and students are expected to carefully prepare themselves. Active class participation is strongly encouraged. For each meeting, all individual students could be called upon to provide an outline of the relevant subject matter and/or lead the discussion.

f.

Course requirements

This course book contains assignments designed to develop and test your research capabilities, knowledge incorporation, learning curve as well as your writing skills. Next to the CSR topic of the week dealt with in the plenary lecture of that week, these assignments and exercises will be discussed in the small-group tutorial meetings. For each tutorial meeting students must prepare a paper of a maximum of two typed pages. The papers should be carefully researched and well structured. They should be submitted by midnight the day before the plenary lecture in the relevant week. The procedure for submitting your assignments is as follows. On the opening page of EleUM under the heading My Courses click on Corporate Social Responsibility. Click on Assignments. Click on View/Complete of the relevant week. Use your browser to upload your assignment. Please note that an automatic plagiarism check is carried out on your assignments. Plagiarism means presenting someone elses work as your own and is a serious offence, which will be treated in the same manner as examination cheating. Late submission of written work will not be accepted unless you have been previously granted an extension. Except in cases of incapacity, this must be sought at least 48 hours before the due time. All written work must be typed and accord with established academic conventions regarding attribution and referencing. NB: You must complete your first assignment before the plenary lecture in the second week. Please note that there will be no tutorial group meeting in the first week of the course. Instead the course will open with a plenary meeting where a documentary will be shown and discussed, prior to the first lecture, on February 8, from 18.00 - 21.00 hours in the Statenzaal. All students are expected to prepare the cases and to actively participate in the class discussion. Students are expected to behave in a respectful manner toward their peers, course instructor, and invited guests. This includes turning off cell phones.

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h.

Exam, Grading and assessment

The written exam, which will be held on April 2, 2012, will consist of essay questions. The exam will be based on the topics presented and discussed at the plenary lectures (including the slides shown), the tutorials and the assignments, as well as on the relevant materials (legal and semi-legal frameworks and policy documents) and the required literature mentioned in the coursebook. You may use non-annotated copies of Guidelines and Codes (eg OECD Guidelines for Multinationals, the UN Global Compact and the G3 part of the Global Reporting Initiative) discussed in this course and to specified on EleUM. Your final grade for the course is determined as follows. Students that have satisfactorily and on time completed five of the six weekly assignments are eligible for a credit of one point of the maximum final grade of 10. For this purpose one of their at random chosen assignments will be reviewed and if found satisfactory will be awarded the credit (10%) and the written exam may earn the remainder (90%). If you dont meet this requirement your maximum grade for the course will therefore be 9. Please note This course book is best used on-line on EleUM because it enables you to directly access the relevant documents and articles on the Internet.

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i.

Tentative course outline: 8 February 2011 2 April 2011

Course outline subject to change; please consult EleUM or My UM for final program and locations Week 1 Meeting 08-02-2012 18.00-21.00 Lecture 1 09-02-2012 11.00-13.00

DOCUMENTARY and discussion Required registration Prof. A.J.A.J. Eijsbouts and Prof. S. C. De Hoo Lecture and group debate General and legal introduction: The origins and foundational concepts of CSR; The CSR regulatory Mix, a panoramic course overview and anatomy of CSR

Week 2 Lecture 2 16-02-2012 11.00-13.00

Prof. A.J.A.J. Eijsbouts and Prof. M. Peeters

Lecture and group debate The People aspects (ia the OECD Guidelines for Transnational Corporations 2000/2011 and the UN Protect, Respect and Remedy Framework 2008) and the Planet aspects (the international environmental regulatory frameworks) Lecture and group debate; Accountability and transparency: the Global Reporting Initiative and the development of integral reporting Lecture and group debate Corporate law and governance: shareholders and stakeholders; conflict and dialogue Lecture and group debate Legal and non-legal remedies in a national and international context

Week 3 Lecture 3 01-03-2021 11.00-13.00 Week 4 Lecture 4 08-03-2011 11.00-13.00 Week 5 Lecture 5 15-03-2011 11.00-13.00

Prof. A.J.A.J. Eijsbouts, possible guest speaker

Prof. A.J.A.J. Eijsbouts, possible guest speaker

Prof. M. Kamminga; Prof. A.J.A.J. Eijsbouts

Week 6 Prof S.C. de Hoo; Prof. A.J.A.J. Lecture 6 Eijsbouts 22-03-2011 11.00-13.00 Week 7 Prof S.C. de Hoo, Prof. A.J.A.J. Lecture 7 Eijsbouts 28-03-2011 Week 8 Examination ALL STUDENTS 02-04-2012 Holidays Week of February 20

Lecture and group debate CSR as a management tool; policy, embedding, monitoring and contractualization of the supply chain Lecture and group debate The drivers of CSR and the business case; wrap up

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j.

Other course information

Course coordinator (visiting by appointment only): Prof. Mr A.J.A.J. (Jan) Eijsbouts B. van Tuyll-laan 10 3707 CW Zeist Tel.: + 31(0)30 6922815 E-mail: eijsbouts.j@inter.nl.net The Planning Group consists of Prof. Jan Eijsbouts, Prof. Sybren de Hoo and Prof. Menno Kamminga. Prof. Jan Eijsbouts and Mr Remy Jorritsma will be the tutors. All course correspondence (exercises, questions, etc) must be emailed to the course coordinator (a.eijsbouts@maastrichtuniversity.nl) through the student.maastrichtuniversity email account only. When you send an email message to the coordinator for any reason it is imperative that you put the course title (CSR), ID number and last name in the subject line of every email (i.e. SR_i047373_Janssen). The planning group hopes you will enjoy this course and we would highly appreciate all your remarks, suggestions and comments. Therefore, please do not hesitate to suggest corrections and/or improvements. Happy studying!

Jan Eijsbouts Maastricht, 9 January 2012

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Week 1 - An introduction to CSR, origins and concept from the lawyers perspective
The first lecture will offer an introduction to the origins and concept of CSR, its role and function in business and provide a helicopter view on the relevant legal aspects to be addressed during the course. Thus, the following topics will be addressed: What is CSR all about? The Triple P (People, Planet and Profit) balancing act as the preferred conceptualization of CSR (Some examples: Shell in Nigeria, BP in the Mexican Gulf, Nike and their supply chain, the financial crisis); Voluntary or mandatory? A futile debate: the third way or a CSR regulation mix theory: regulation ranging from uncodified norms to hard law; CSR, two definitions: the normative angle (licence to operate) and the operational angle; CSR as strategic management tool and operational process; CSR and corporate governance, their anatomy in the business context.

The basic contention is, that CSR as a concept has two dimensions, the normative dimension and the operational or management dimension, or an ends and a means dimension. The normative CSR dimension, or the set of conditions to comply with the Licence to operate, explains the object or content of the responsibility (the end) and the operational dimension explains the means by which this end will be realized. This distinction is also referred to in the literature as the Corporate Social Responsibility versus the Corporate Social Responsiveness or Performance. The voluntary-mandatory debate is skewing this double dimension; it relates solely to the means domain: what is more effective, voluntary or mandatory? In examining this question, an analysis must be made, whether and if so what type of regulation (selfregulation, soft law, hard law) if any, is most effective to regulate the specific CSR issue to be addressed. In this respect it is submitted that regulation has its limits and that overregulation is counterproductive. The overriding aim is the search for the suitable standard of regulation for each relevant CSR aspect. This is also the approach of the recent EU Commission Communication on its CSR Strategy 2011-2014, in which the Commission renewed its CSR definition as follows: the responsibilities of enterprises for their impacts on society. In order to describe these responsibilities more specifically, we take Archie Carrolls definition (1979) as basis: The social responsibility of business encompasses the economic, legal, ethical and discretionary (later referred to as philanthropic) expectations that society has of organizations at a given point in time. For practical purposes we break this definition down into two working definitions based on the Triple P concept: In the normative sense CSR is the responsibility of corporations to meet the legitimate expectations of society to conduct its businesses in ways that produce economic, social and ecological benefits to all its stakeholders and society at large (also reflecting the licence to operate). In the operational sense CSR is the structured and systematic approach in which corporations are embedding all aspects of the CSR norms in their daily operations at all levels, monitor compliance and results and report to all its stakeholders and society at large. As the closing topic of this first lecture, the anatomy of Corporate Governance and CSR will be explored.

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Relevant materials: EU Commission Communication: CSR Strategy 2011-2014, 25 October 2011. Required reading McBarnet, Chapter 1, Corporate Social Responsibility beyond law, through law, for law: the new corporate accountability; D. McBarnet (p. 9-56) O. De Schutter, Corporate Social Responsibility European Style, European Law Journal, Vol. 14, No. 2, March 2008, pp. 203236. Recommended reading Blowfield-Murray, Chapter 1, The meaning and origins of corporate responsibility (p. 7-38) Further reading Pitts, Chapter 1, What is corporate social responsibility (p.5-31) and Chapter 3, The conceptual foundations of corporate social responsibility (p. 53-85) McBarnet, Chapter 18, The normative grounding of corporate social responsibility: a human rights approach; T. Campbell (p, 529-564) Lebano, The concept of corporate social responsibility, a philosophical approach, ISS Working paper no 508 <http://repub.eur.nl/resource/pub_21243/index.html>

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Week 2 People and Planet; legal and semi-legal frameworks

As we have seen, the regulatory landscape of CSR can be viewed from various angles: the Triple P substantive regulation and the different types of norm-setting: societal expectations and norms, self-regulation (individual and collective), soft law and hard law in its distinct forms (civil, administrative and criminal). This lecture will deal with norm-setting with reference to the substantive sources in the People and Planet scope, and different types of CSR instruments as examples. A closer look at the regulatory mix for a start; Triple P scope, specific regulation; UN: UDHR, the Human Rights and ILO Conventions, the UN Draft Norms 2003; The UN Protect, Respect and Remedy Framework 2008 and the Guiding Principles 2011 (Ruggie); OECD Guidelines for Multinationals 2000 Selfregulation: UN Global Compact, Sectoral initiatives, Codes of conduct Environmental aspects

Prof. Marjan Peeters will discuss the Planet aspects: the international frameworks relating to natural resources and protection of the environment. Relevant materials: OECD Guidelines for TNCs 2011 (PDF file on OECD Guidelines for Multinational Enterprises) The UN Guiding principles 2011 for the 2008 Framework (http://www.srsgconsultation.org); for reference you may consult the UN Protect, Respect and Remedy Framework 2008 (Download PDF file here) The UN Global Compact, an initiative that facilitates a network of UN agencies, business, labour, NGOs and governments to promote companies to adhere to ten principles in the areas of human rights, labour, environment, and anti-corruption. Required reading 1. Plenary session: John H. Knox, The Ruggie Rules: Applying Human Rights Law to Corporations, in RUGGIE'S MANDATE, Radu Mares, ed., Forthcoming Wake Forest Univ. Legal Studies Paper No. 1916664, FDF file on http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1916664 McBarnet, Chapter 16, Corporate environmental responsibility: law and the limits of voluntarism, N. Gunningham (p. 476-500) 2. Tutorials: UK NCP Afrimex. Final Statement (Word file on www.bis.gov.uk/files/file47555.doc) L. Cat Backer, Rights and Accountability in Development, (Raid) v DAS AIR and Global Witness v Afrimex, Small steps towards an autonomous transnational legal system for the regulation of multinational corporations. (Download from SSRN here) Recommended reading Blowfield Murray, Chapter 3, Globalisation and international development (p 71-96)

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Further reading McBarnet, The Norms are dead! Long live the Norms! The politics behind the UN Human Rights Norms for Corporations; D. Kinley, J. Nolan and N. Zerial (p.459-475) McBarnet, Chapter 7, Meta-regulation: legal accountability for corporate social responsibility; C. Parker (p. 207-240) R. McCorquodale, Corporate Social Responsibility and International Human Rights Law, Journal of Business Ethics (p.12 pages), DOI 10.1007/s10551-009-0269-5 Some other international initiatives (just for background information, reading not required) United Nations World Commission on Environment and Development (UNWCED), Our Common Future (The Brundtland Report), Oxford: Oxford University Press 1987. Full text of the Report of the World Commission on Environment and Development in easy-to-read format. The United Nations Commission on Sustainable Development (CSD) was established by the UN General Assembly in Rio (December 1992) to ensure effective follow-up of United Nations Conference on Environment and Development (UNCED), also known as the Earth Summit (which, as a result of the Brundtland report, had been convened by the UN General Assembly). The Rio Declaration on Environment and Development and the principles for the sustainable management of forests. See also The Earth Charter: an authoritative synthesis of values, principles, and aspirations that are widely shared by growing numbers of people, in all regions of the world. The Global Sullivan Principles of Social Responsibility is a code of conduct to encourage participating companies and organizations working toward the common goals of human rights, social justice and economic opportunity. The Equator Principles: An industry approach for financial institutions in determining, assessing and managing environmental & social risk in project financing. The World Business Council for Sustainable Development (WBCSD) is a coalition of 175 international companies united by a shared commitment to sustainable development via the three pillars of economic growth, ecological balance and social progress. Their members are drawn from more than 35 countries and 20 major industrial sectors. Weekly assignment Discuss the following questions and aspects: 1. Describe the procedure applied by the National Contact Point in the Afrimex case. Discuss the pros and cons in terms of effectiveness and due process. 2. How does Ruggie characterize his Corporate Responsibility to Respect Human Rights in normative terms and how would you classify this responsibility within the CSR regulatory framework (societal expectations, international resolutions, soft law, binding obligations) against the background of the Afrimex case? What is the regulatory effect of the adoption of the Ruggie Framework and principles in the 2011 version of the OECD Guidelines?

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Week 3 - Accountability and Transparency

This week we shall address the concept of accountability and focus on the first line of accountability, transparency, both in its voluntary and its mandatory forms. The following aspects will be discussed: Accountability, its various meanings; Voluntary initiatives, self-regulation, corporate governance codes; Global Reporting Initiative; Mandatory initiatives, EU Financial Reporting Modernization Directive 2003, its implementation and follow up; Legal implications of voluntary initiatives (safeguards against liability for unrealized ambitions; the concept of safe harbor under US Securities laws), Kasky vs Nike, liability for misleading advertising.

Relevant materials: EU Directive 2003/51/EC of 18 June 2003 on the annual and consolidated accounts of certain types of companies, banks and other financial institutions and insurance undertakings (the socalled Financial Reporting Modernization Directive) (http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32003L0051:en:NOT), implemented in NL by art 2:391, cl.1 Dutch Civil Code; clarified by RJ 400 (2009) GRI: GR3, 2006 The Global Reporting Initiatives (GRI) Reporting Framework provides guidance on how organizations can disclose their sustainability performance. The G3 reporting guidelines (G3) are the foundation of the Framework. Required reading 1. Plenary session: McBarnet, Disclosure Law and the market for corporate social responsibility; K. Campbell and D. Vick (nrs I and II, p. 241-259) McBarnet, Corporate codes of conduct: moral or legal obligation?; C. Glinski (p. 119-147) 2. Tutorials: Kasky Nike case M. Sutton, Between a Rock and a Judicial Hard Place: Corporate Social Responsibility Reporting and Potential Legal Liability Under Kasky v. Nike (2004) 72 UMKC Law Review 1159. (background on case and links to legal documents). Recommended reading Pitts, Chapter 7, Transparency (p. 241-284) Blowfield Murray, Chapter 7, Social accounting (p. 188-203) Weekly assignment Answer and discuss the following questions and issues: 1. What mandatory CSR reporting requirements do exist in your jurisdiction, for which companies and how is consistency and supervision/enforcement being pursued? 2. What legal risks exist for companies in your jurisdiction in voluntary accepting and practicing CSR principles and codes in their operations and reporting on them.

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Week 4 - Shareholders and Stakeholders, CSR and governance, conflict and dialogue
This week will focus on the fiduciary duty and duty of care as potential disciplining mechanisms in a corporate law context. To what extent are company boards and managers mandated or allowed to take the interest of other stakeholders than shareholders into account in exercising their duties? What are the best practices in stakeholder engagement, dialogue and prevention and resolution of conflicts? The following aspects will be discussed: Corporate law and Governance approaches to CSR; Shareholders and stakeholders theories, values vs risk management; Hard law and soft law approaches: Comply vs Comply or explain; Convergence trends: s. 172 UK Companies Act 2006, US State Constituency Statutes; Ruggies Corporate Law project; Stakeholder dialogue.

Relevant materials: Principle II.1 and best practice provisions II.1.1 II.1.8 and Principle III.1 and best practice provision III.1.6 [Corporate Governance Committee], 2009. http://www.commissiecorporategovernance.nl/page/downloads/DEC_2008_UK_Code_DEF__u k_.pdf. For more information: please look at the website of the Monitoring Commissie Corporate Governance Code. Ruggies Corporate Law Tools Project 2010; this project was organised by the Ruggie team to explore whether and to what extent corporate and securities laws in 40 jurisdictions (may) assist in assuring the corporate responsibility to respect human rights (http://www.businesshumanrights.org/Links/Repository/1001537; where also the 40 country reports are available) Required reading 1. Plenary session: McBarnet, The board as a path toward corporate social responsibility; L. Mitchell (p. 279-306)

2. Tutorials Sustainable development and the need for sustainable oriented corporate law and regulation S.C. de Hoo & M. Olaerts Recommended Reading McBarnet, The new corporate law: corporate social responsibility and employees interests, S. Bottomley and A. Forsyth (p. 307-335) Blowfield Murray, Chapter 6, Stakeholders, standards, and regional variations (p. 158-181) and Chapter 8, The place of corporate responsibility in the corporate governance framework (p. 209228) J.J.A. Hamers, C.A. Schwarz en B.T.M. Steins Bisschop, 'Corporate Social Responsibility; Trends in the Netherlands and Europe in: Jan Jonker/Jacqueline Cramer (eds.), Making a Difference. The Dutch National Research Program on Corporate Social Responsibility, Den Haag 2005: Ministerie van Economische Zaken (Pubnr: 05Ol12), p. 169-188. Pitts, Chapter 6, Stakeholder engagement (p. 159-240

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Weekly assignment Please provide a summary description of the difference between shareholder and stakeholder models in corporate law. Moreover discuss whether and if so how CSR norms are incorporated or reflected in the company and/or securities laws and/or corporate governance regulations of your jurisdiction. If relevant you may make use of the country report of your country of Ruggies Corporate Law Tools project (see the second item under recommended reading). If your country is not covered by the project, or if the report of your country has not yet been published, you may discuss the country report of The Netherlands.

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Week 5 - Legal remedies: voluntarism and beyond

This week focuses on the legal remedies available to victims of corporate abuse to claim (punitive) damages, including the possibility to obtain damages from parent companies for harm caused by their foreign subsidiaries. Can companies get away with the argument that they were fully complying with local legal requirements? Or do they have obligations that go beyond this? What are the legal obstacles that must be overcome by the claimants? The following aspects will be touched upon inter alia: Forum non conveniens, piercing the corporate veil, multinational enterprise liability; US Alien Tort Claims Act (ATCA) 1789, a panacea?; Applicability of international criminal law to corporations; Extraterritoriality Conflict management, ADR and mediation.

Required reading 1. Plenary session: McBarnet, Corporate accountability through creative enforcement: human rights, the Alien Tort Claims Act and the limits of legal impunity, D. McBarnet and P. Schmidt (p. 148-176) Rees, Caroline. 2010. Mediation in Business-Related Human Rights Disputes: Objections, Opportunities and Challenges Corporate Social Responsibility Initiative Working Paper No. 56. Cambridge, MA: John F. Kennedy School of Government, Harvard University. 2. Tutorials: M. Weschka, Human Rights and Multinational Enterprises: How Can Multinational Enterprises Be Held Responsible for Human Rights Violations Committed Abroad? 66 Heidelberg Journal of International Law (2006) 625-661 Recommended reading C.I. Keitner, Kiobel v. Royal Dutch Petroleum. McBarnet, Corporate social responsibility and international law: the case of human rights and multinational enterprises; P. Muchlinski (p.431-459) McBarnet, Changing paradigms of corporate criminal responsibility: lessons for corporate social responsibility; A. Voiculescu (p. 399-430) Muchlinski, Multinationals and the Law 2007, Chapter 8 Group liability and directors duties (p. 307-335) R. Shamir, "Between Self-regulation and the Alien Torts Claim Act: On the Contested Concept of Corporate Social Responsibility", 38 Law and Society Review 635. Weekly assignment The Legal Portal of the Business & Human Rights Resource Centre contains profiles of lawsuits in which companies have been accused of environmental and human rights abuses. Which of these lawsuits have been successful so far? Analyze one of these successful cases (no NCP cases) and discuss what were the legal hurdles for the plaintiffs and how these were overcome.

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Week 6 CSR as a management tool with a legal touch; policy, embedding, monitoring and contractualization of the supply chain
This week will be devoted to the adoption and embedding of CSR policies by corporations in their management and operations and the relevant managerial frameworks (Prof. Sybren de Hoo). The focus will thereupon be on these aspects through a legal lens in order that students will be able to relate corporate policy in this domain with the relevant legal concepts and notions, such as fiduciary duty, duty of care and sphere of influence (Prof. Jan Eijsbouts). The following subjects will be reviewed: Strategy and Policy; Organization and embedding (ISO 26000); Compliance, monitoring and enforcement; Supply chain management and due diligence, contractualization of human rights.

Relevant material: ISO 26000, a voluntary standard for embedding CSR practices in the companys operations (http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/social_responsibi lity/sr_discovering_iso26000.htm; http://www.lsd.lt/typo_new/fileadmin/Failai/N172_ISO_DIS_26000__E_.pdf) Required reading 1. Plenary session: S.C. de Hoo, In pursuit of corporate sustainability. Past cracking perceptions and creating codes. Inaugural lecture Maastricht, 2011 (available as PDF on http://www.maastrichtuniversity.nl/web/Main1/Pers/OratiesEnRedes2011.htm J. Sherman and A. Lehr, Human Rights Due Diligence: is it too risky? CSR Journal January 2010 (p. 6-12) 2. Tutorial: McBarnet, Corporate Social responsibility through contractual control? Global supply chains and other-regulation, D. Mc Barnet and Marina Kurkchiyan (p. 59-92) Recommended reading Blowfield Murray, Chapter 4, How corporate social responsibility is managed (p. 100-128) Further reading J. Sherman and C. Pitts, Human Rights Corporate Accountability Guide: from Law to Norms to Values (Business Leaders Initiative on Human Rights, December 2008) How to do business with respect for human rights. A guidance tool for companies (Business and human rights initiative, Global Compact Network, Netherlands, 2010 (a PDF version can be downloaded from www.gcnetherlands.nl) S. Zadek, The path to corporate responsibility at Nike, Harvard Business Review 82(12), 2004 (p. 125-132)

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Weekly Assignment: Read the CSR policy of DSM as profiled on their website and in their most recent annual report. Which general and special frameworks are they using as basis for their CSR policy (substantive norms and disclosure/transparency) and prepare a brief memo, in which you: provide an assessment of their disclosure policy and reports based on the GRI-3 Guidelines; indicate whether these reports are issued separately from or integrated with the financial reports; describe, how is their supply chain responsibility is organized.

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Week 7 - The Drivers of CSR and the business case.

This week we will explore the moral and legal foundations, motives and business rationale for business to implement CSR strategies with reference to the topics studied and discussed in the previous weeks, also with a view to a recap for the purpose of the exam Analysis shows that systematic practice of CSR has a positive effect on business results on the longer term and therefore benefits also the shareholders. Investors are increasingly aware thereof and base their investment decisions thereon. In more practical terms, the perception and reality of an organization's performance on social responsibility can influence, among other things: competitive advantage, reputation, ability to attract and retain workers or members, customers, clients or users, maintenance of employees' morale, commitment and productivity, view of investors, owners, donors, sponsors and the financial community, relationship with companies, governments, the media, suppliers, peers, customers and the community in which it operates. The following aspects will be reviewed: The licence to operate; The corporate governance link: risk and values based management; Compliance and the US Federal Sentencing Guidelines; The business case for CSR; CSR as main innovation driver; Recap of the main topics dealt with in the course with a view to the exam preparation.

Relevant material: The US Federal Sentencing Guidelines, Compliance Program Requirements (http://www.ussc.gov/Guidelines/2010_guidelines/Manual_HTML/8b2_1.htm) Required reading 1. Plenary lecture A.J.A.J. Eijsbouts, Corporate responsibility, beyond voluntarism. Regulatory options to reinforce the licence to operate. Inaugural Lecture Maastricht 2011 (http://www.maastrichtuniversity.nl/web/Main1/Pers/OratiesEnRedes2011.htm) 2.Tutorial M.E. Porter & M.R. Kramer, Creating shared value. How to reinvent capitalism and unleash a wave of innovation and growth, Harvard Business Review January-February 2011. Recommended reading Pitts, Chapter 2, The Drivers of CSR (p. 33-52) F.Reinhardt, R.N. Stavins, R.H. Vietor, Corporate Social Responsibility through an Economic Lens, Corporate Social Responsibility Initiative, Working Paper No 43, John F. Kennedy School of Government, Harvard University, 2008. R. Nidumolu, C.K. Prahalad and M.R. Rangaswami, Why Sustainability is now the key driver of innovation, Harvard Business Review, September 2009 (p 57-64)

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The Economist, The good company. A survey of corporate social responsibility, 22 January 2005, Vol. 374 Issue 8410, p.11-18; http://www.economist.com/node/3555212 The Economist, A survey of corporate social responsibility, 17 January 2008; http://www.economist.com/node/10490985. In these surveys The Economist switches from a rather critical opinion on CSR to a positive opinion of CSR. The Economist is also available through the eLibrary of the University Library.

Weekly assignment You are legal counsel at a multinational oil company with global operations and the Board of Management has decided in principle to adopt a CSR policy, including a code of conduct and a supply chain management system to be published on the companys website, to prepare for the issue of a CSR report and to join the UN Global Compact. The CEO has informed you about this plan and, based on the general characterization in the business world of CSR as being voluntary (beyond the law), stated he feels comfortable, that there is no need to involve the legal department in the plan. You have reacted, that there are legal or semi-legal aspects involved and promised to send him a two page memo on the principal legal aspects to be taken into account. Prepare this memo in which you address the relevant legal and (self-)regulatory frameworks, including corporate law and corporate governance, and identify the main legal and regulatory CSR aspects (both in terms of values and legal risk management, focusing on reputation, legal and ethical compliance and civil and criminal legal exposure) to be taken into account. Please keep in mind the executive summary purpose of this memo, so no legalese but concise and plain English and see also p. 4 of the course book for possible aspects.

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