Clarifying Standards for Exclusion of Companies from Publicly Administered Investment Funds : Understanding the Scope of Complicity in Human Rights Violations by Companies

Abstract

Complicity can be viewed from the perspective of criminal liability, civil liability (tort), or ethical responsibility. In law, the conditions under which complicity in human rights violations by companies, or corporate complicity, can exist are not entirely clear. Corporate complicity in human rights violations poses a particular problem for ethical investment funds, as one of their primary functions is to avoid investment in companies complicit in violations of fundamental human rights. As there are no internationally accepted standards for assessing what constitutes corporate complicity in human rights abuses, this leaves ethical funds in a position to apply their own criteria for evaluating the scope of corporate complicity. States attempting to disassociate themselves with companies complicit in breaches of human rights norms are however, in a unique position; they are in a way developing new state practise in assessing what constitutes corporate complicity in severe human rights violations. This thesis sets out to answer two main questions; (1) What is current state practise in assessing complicity in human rights violations for the purpose of ethical investment, or more accurately, ethical disinvestment, and (2) How can human rights law, criminal law and its jurisprudence contribute to understanding the concept complicity in human rights violations in the context of exclusion of companies from ethical investment funds? This paper first presents and explains the legal context of complicity by discussing relevant international and domestic case law, as well as legal concepts and theories of complicity which could be useful for clarifying the term complicity for funds taking ethical considerations. Next, the results of a survey of seventeen state investment funds and their human rights considerations is presented, followed by a case study applying complicity standards from the perspective of one state-administered investment fund: the Norwegian Government Pension Fund. A specific incident of a company involved in human rights violations has been chosen to demonstrate how criteria developed by this fund, as well as concepts form legal theories and jurisprudence, can be applied in order to determine the scope of complicity for the purpose of ethical disinvestment.