Corporate Participation in International Law: Some Historical Examples

It has probably become apparent by now that the idea that corporations are noncognizable under international law is one that irritates me to no end. There is, obviously, a great deal of unsettled law out there regarding exactly how liability for violations of international law accrues to non-state entities. But corporations have played a vital role in the development of international law for just about as long as “international law” can be said to have existed, and there is no historical basis for the idea that corporations cannot, as a matter of law, be a participant in or violator of international law.

At some point I will write some more on the subject, but for now, I want to at least throw some links up that give some historical examples. The Transnational Corporation in History: Lessons for Today? is a highly recommended starting point. It gives a good overview of how the legal character of corporations has developed, and how the private/public distinction has always been unclear, oftentimes deliberately so:

Corporations and states are commonly represented as having an oppositional relationship. Corporations represent the private; states represent the public. Corporations represent the efficient, the natural, and the spontaneous; states represent the inefficient and the contrived. The ascendancy of the corporation means the decline of the state. But these commonly held views are ahistorical and tend to ignore the complex relationships between states and corporations. Modern incorporation is simply a matter of fulfilling formal registration requirements. There are few surviving remnants of the old notion that incorporation is a privilege conferred by the state. This Article aims to redress the balance somewhat by telling aspects of the history of the corporate form that have been obscured by modern forms of incorporation and modern conceptions of the public and the private. In a modest way this Article intends to show just how recent the public/private paradigm actually is and how selectively such concepts have been applied.

Compared with the French trading companies generally, the English and Dutch companies were considered to be much more independent and able to operate at arms length from their respective governments. The agents of the Dutch and English companies were regarded as employees and servants of groups of merchants, rather than the subordinates of their governments. The British considered themselves traders first and territorial rulers second. Of course, the proper mix of the East India Company’s functions was contested, tended to be in the eye of the beholder, and changed dramatically over the period of the company’s existence.

And how questions over the status of corporation under international law are not new:

The British East India Company certainly took advantage of its ambiguous status—successfully emphasizing its sovereign powers when it wished to avoid contractual debts to local rulers, protesting to the Royal Navy that its status would be reduced in the eyes of the locals if it had to acknowledge the superiority of the British naval fleet, and all the time relying for its trading advantage on the might of British naval power and on the calculated and limited use of force. It charged merchants fees for safe passage and was able to do so as an exercise of its monopoly and sovereign powers. It was graphically and finally reminded of its subordinate status, however, when Queen Victoria took over from the company in 1858. The company had survived in various guises and with mixed public and private motives for 250 years.

But throughout the 18th and 19th centuries, corporations were assumed to be competent at conducting activities that, today, we generally believe only a true sovereign could do. Corporations could start wars, engage in diplomacy, claim new territories, and enter into international agreements. Treaties between corporations and state or state-like entities flourished during this time period, i.e., the treaty between the Dutch East India Company and the Ali Raja, the Treaty of Giyanti, and the Treaty of Allahabad. Some treaties, such as the treaty between the British East India Company and nascent Singapore, lead to the creation of what would eventually become modern day nation states.

Also worth checking out is this 1769 letter, An Enquiry Into the Rights of the East India Company of Making War and Peace and of Possessing Their Territorial Acquisitions Without the Participation or Inspection of the British Government, which gives a good example of how, even then, people were confused about how sovereign a corporation could be, when there was no “official” grant of sovereignty.

I am not trying to say that the role of corporations in international law is crystal clear — it is obviously not. But the idea that corporations are unrecognizable under international law, and that states can use the corporate form to immunize the profits its citizens have made from engaging in violations of international law, is an extremely modern one, and in its own way is a very radical idea.

-Susan

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2 thoughts on “Corporate Participation in International Law: Some Historical Examples

  1. Pingback: Note on… John Ruggie’s perception of corporate responsibility «

  2. Pingback: Note on… John Ruggie’s perception of corporate responsibility «

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