Northwestern Journal of International Law & Business (forthcoming)
Multinational enterprises (MNEs) are subject to a variety of U.S. laws that require public disclosure of their global activities, including adverse social and environmental impacts. In this article, Professor Stephen Park examines the recent emergence of mandatory disclosure requirements under U.S. federal securities law that require MNEs to disclose certain social impacts in order to address geographically-defined and/or issue-specific public policy objectives, collectively referred to as “targeted social transparency” (or “TST”). Compared to other social transparency laws, TST regimes target a set of intertwined social risks specific to an individual country, region, or industry.
This article analyzes two emergent TST regimes: the “conflict minerals” provisions in the Dodd-Frank Act, which require companies to disclose their use of minerals whose mining is associated with human rights abuses in the Democratic Republic of Congo; and enhanced disclosure requirements mandated by the Iran Threat Reduction and Syria Human Rights Act on companies that engage in commercial activities associated with the Iranian government’s repression of human rights. The narrow scope and relatively high regulatory requirements of these TST regimes draw attention to a question that is largely missing from public debate on international business and corporate social responsibility (CSR), specifically, “How does social transparency address the needs of MNEs and other business entities operating in the global economy?”
To address this question, Professor Park presents the concept of constructive discourse, which draws on the insights of constructivist theory, reflexive law, and the experiences of MNEs with CSR-inspired voluntary reporting schemes. Starting with the premise that MNEs will be increasingly subject to TST requirements, constructive discourse helps MNEs identify ways that they might benefit from TST regimes, specifically by helping catalyze internally-driven changes in corporate behavior to the mutual benefit of MNEs and stakeholders; and also by showing how MNEs can use TST for strategic purposes.