This brief, the second in a series of four, puts forward three foundational principles that explain the difficulties in regulating multinational enterprises. This has implications on whether more or less coercive strategies could be pursued to ensure responsible business conduct.
The task of regulating lead firms should remain mindful of fundamental considerations of corporate law (legal separation of entities), international law (national sovereignty) and human rights law (leverage for rightholders). To succeed, regulation should be designed in a way that minimizes the frictions with these three principles.
In many situations the task is to conceive policy mixes adapted to the mobility of global value chains and thus deliver a regulatory regime able to account for and navigate a course around foundational principles specific to the transnational business and human rights area.