Extraterritorial jurisdiction is the situation when a state extends its legal power beyond its territorial boundaries. Examples include where a state maintains jurisdiction over its citizens when they are overseas, and where certain criminal offences can be prosecuted in a state regardless of where they were committed (e.g. piracy and child sex offences). Extraterritorial jurisdiction and its application is one of the most debated issues in the area of human rights generally, and within the area of business and human rights.
The UN Guiding Principles recognise the principle of extraterritorial jurisdiction. Specifically, Commentary to UN Guiding Principle 2 states that:
“At present States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a recognized jurisdictional basis. Within these parameters some human rights treaty bodies recommend that home States take steps to prevent abuse abroad by business enterprises within their jurisdiction.
There are strong policy reasons for home States to set out clearly the expectation that businesses respect human rights abroad, especially where the State itself is involved in or supports those businesses. The reasons include ensuring predictability for business enterprises by providing coherent and consistent messages, and preserving the State’s own reputation.+ Read more
States have adopted a range of approaches in this regard. Some are domestic measures with extraterritorial implications. Examples include requirements on “parent” companies to report on the global operations of the entire enterprise; multilateral soft-law instruments such as the Guidelines for Multinational Enterprises of the Organisation for Economic Co-operation and Development; and performance standards required by institutions that support overseas investments. Other approaches amount to direct extraterritorial legislation and enforcement. This includes criminal regimes that allow for prosecutions based on the nationality of the perpetrator no matter where the offence occurs. Various factors may contribute to the perceived and actual reasonableness of States’ actions, for example whether they are grounded in multilateral agreement.”
As such, the commentary to Guiding Principle 2 draws a distinction between two types of extraterritoriality:
- Domestic measures with extraterritorial implications: For example, requirements on ‘parent’ companies to report on operations globally (i.e. including on the activities of their subsidiaries), or the contractual applicability of standards of international finance institutions; and
- Direct extraterritorial legislation: For example, criminal laws that allow for prosecution based on the nationality of the perpetrator regardless of where the offence occurs.
Some commentators have criticised the position articulated in the UNGPs for insufficiently reflecting the duty of a “home” state to a transnational corporation (TNC) to protect against abuses occurring on the territory of a “host” state. The notion that states have extraterritorial human rights obligations is also one basis upon which calls are made for an international treaty on business and human rights to be developed.
A number of human rights treaty bodies have also recommended that home states take steps to prevent abuse abroad by business enterprises within their jurisdiction. For example, the Committee on Economic Social and Cultural Rights (CESCR) stated in General Comment No 24 on State Obligations under ICESCR in the Context of Business Activities that “States Parties are required to take the necessary steps to prevent human rights violations abroad by corporations domiciled in their territory and/or jurisdiction (whether they are incorporated under their laws, or have their statutory seat, central administration or principal place of business on the national territory), without infringing the sovereignty or diminishing the obligations of the host States under the Covenant”.
General Comment No 24 further states that “the extraterritorial obligation to protect requires States Parties to take steps to prevent and redress infringements of Covenant rights that occur outside their territories due to the activities of business entities over which they can exercise control, especially in cases where the remedies available to victims before the domestic courts of the State where the harm occurs are unavailable or ineffective”.
The Committee on the Elimination of Racial Discrimination has also urged states to take appropriate measures to prevent adverse impacts on the rights of indigenous peoples from corporations registered in their state. For example, it has recommended that Canada “take appropriate legislative measures to prevent transnational corporations registered in Canada from carrying out activities that negatively impact on the enjoyment of rights of indigenous peoples in territories outside Canada, and hold them accountable.”
To influence the behaviour of private actors abroad without the direct use of extraterritorial jurisdiction, States can make use of import or export controls or require “parent” companies to report or exercise due diligence on the global operations of the entire enterprise. For example, The UK Modern Slavery Act 2015 obligates all large businesses, globally, who operate in the UK market, to provide an annual, board-approved, publicly available statement that describes what they are doing to eliminate modern slavery in their operations and supply chains. States can make use of the multilateral soft-law instruments, such as the OECD Guidelines for Multinational Enterprises, and performance standards required by institutions that support overseas investments. They can also adopt direct extraterritorial legislation and enforcement, to prosecute perpetrators, irrespective of where the offence occurs.
- Committee on Economic, Social and Cultural Rights: ‘General Comment No. 24 (2017) on State obligations under the International Covenant on Economic, Social and Cultural Rights in the context of business activities’, 10 August 2017, E/C.12/GC/24.
- Committee on Economic, Social and Cultural Rights: ‘Statement on the obligations of States parties regarding the corporate sector and economic, social and cultural rights’, 12 July 2011, E/C.12/2011/1.
- Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises: ‘Business and Human Rights: Towards operationalizing the “protect, respect and remedy” framework’, 22 April, 2009, A/HRC/11/13, at para. 15.
- Special Representative’s 2007 report to UN Human Rights Council:
- Addendum 1: State responsibilities to regulate and adjudicate corporate activities under the United Nations core human rights treaties: an overview of treaty body commentaries
- Addendum 2: Corporate responsibility under international law and issues in extraterritorial regulation: summary of legal workshops.
- Maastricht Principles on Extraterritorial Obligations of States in the area of Economic, Social and Cultural Rights, 29 February 2012.
- C. M. O’Brien, ‘The Home State Duty to Regulate the Human Rights Impacts of TNCs Abroad: A case of extraterritorial overreach?’, DIHR Matters of Concern Human Rights Research Papers No.2016/04.
- O. De Schutter: Towards a New Treaty on Business and Human Rights, Business and Human Rights Journal, 1 (2015), 41–67.
- M. Langford et al (eds.), Global Justice, State Duties. The Extraterritorial Scope of Economic, Social, and Cultural Rights in International Law (2014, CUP).
- N. Jägers, K. Jesse & J. Verschuuren, J.: The future of corporate liability for extraterritorial human rights abuses: The Dutch case against Shell. American Journal of International Law, 2014(1), 36-41
- D. Augenstein and D. Kinley, ‘When human rights ‘responsibilities’ become ‘duties’: the extraterritorial obligations of states that bind corporations’, Ch. 11 in S. Deva and D. Bilchitz (eds.), Human Rights Obligations of Business (2013, CUP) 271-294.
- J.A. Zerk, 2010: “Extraterritorial jurisdiction: lessons for the business and human rights sphere from six regulatory areas.” Corporate Social Responsibility Initiative Working Paper No. 59. Cambridge, MA: John F. Kennedy School of Government, Harvard University.
- D. Augenstein and others, Study of the Legal Framework on Human Rights and the Environement Applicable to European Enterprises Operating Outside the European Union, Study for the European Commission, The University of Edinburgh, 2010.
- R. McCorquodale and P. Simons, ‘Responsibility Beyond Borders: State Responsibility for Extraterritorial Violations by Corporations of International Human Rights Law’ (2007) 70: 4 Modern Law Review 598.
- O. De Schutter: “Extraterritorial Jurisdiction as a tool for improving the Human Rights Accountability of Transnational Corporations” [PDF], Catholic Univ. of Louvain & College of Europe, Dec 2006.
- “Seminar of Legal Experts: Extraterritorial legislation as a tool to improve corporate accountability – Summary report” [PDF], Brussels, 3-4 Nov 2006.
- Business and Human Rights Resource Centre: Extraterritorial Jurisdiction website
- Anthony J. Colangelo: What is Extraterritorial Jurisdiction, Cornell Law Review, Vol 99:1303 2014