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I. INTRODUCTION A. The Need to Regulate Corporate Behavior at the International Level It is widely recognized that the activities of transnational corporations (TNCs) can have negative consequences amounting to international concern - serious environmental damage from polluting activities and gross negligence of human rights in developing countries being just two examples. Because of these negative consequences and because many states notoriously fail to control such corporations, regulating corporate behavior seems, intuitively, an obvious task of international law. Yet the examples of international regimes regulating TNC behavior remain relatively few, and the procedures for ensuring compliance with existing regulation are often weak. Despite a growing body of literature in the field, the potential role that international law can play and the merit of existing regulatory regimes remain poorly analyzed. While state behavior and the resolution of interstate disputes by necessity must be regulated by international law, the need to regulate corporate behavior internationally arises only when national legal regimes, for some reason, prove inadequate or when there is a desire to harmonize rules between national systems. Any activity of a given corporation will fall under the jurisdiction of one or more states, but national systems cannot always be trusted and may prove inadequate for a variety of reasons. First, the judiciary of the host state might be too weak to effectively control a powerful corporation.1 Where there is a weak or nonexisting judiciary, the corporation might join forces with powerful domestic nonstate actors exercising de facto control over the territory. Second, even if the host state has the necessary capacity, it might not wish to sanction the corporation as the host state might be corrupt or otherwise profit from or participate in the corporation's operations. Alternatively, in what is sometimes referred to as a race to the bottom, the state might want to retain an investor-friendly environment with little public interference and lax regulation and enforcement in order to attract foreign investors.2 Third, sanctioning extraterritorial corporate behavior might be a low-priority task in the home state. The negative consequences of the activity are typically felt abroad, while the home state might benefit economically from the activity and even be facilitating it.3 Fourth, even if the home state wants to interfere, interference might be difficult because the activity takes place in another state.4 Regulating corporations is inherently complex for any state, regardless of the state's relative power, because of distance and because the home state may not enforce investigative or other measures. Sometimes forum non conveniens findings prevent home states from seizing jurisdiction. Fifth, the home state might be reluctant to give its laws extraterritorial application due to the entailed risk of interstate friction.5 B. Do Corporations Have International Legal Personality? Some scholars suggest that international law cannot impose obligations on corporations because corporations do not possess international legal personality.6 Rather than depending on an a priori existence of a legal personality, however, any existence of rights and duties under international law implies that a holder of these rights and duties has international legal personality.7 Even though states are the sole source of authority and law in the international system, this does not lead to the conclusion that states are the only subjects of international law.8 International law-first and foremost, but not exclusively-regulates the rights and duties of states.9 Nevertheless, one cannot, for instance, deny the existence of certain rights and duties for individuals and international organizations. Conceptually, there is nothing preventing states from jointly regulating corporate behavior through international law, provided, of course, that the behavior falls within their respective jurisdictions at the outset. …
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