A Study On Legal Regulation Of Multinational Corporations’ Environmental Responsibility Through The Lens Of Corporate Social Responsibility

Environmental issues are borderless because of the public nature of environmental resources. The fast-growing economic globalization deepens the cross-border feature of the environmental issues. The law under a single jurisdiction cannot effectively regulate and tackle transbounrdary environmental issues. Global environmental governance must rely on the collaboration among the States. However, the States failed to collaborate well for various reasons other than environmental factors. As a result, despite the burgeoning multilateral environmental agreements(MEAs), the deteriorating global ecological and environmental situation continues due to the poor enforcement of the MEAs.Based on the “Pollution Heaven Hypothesis” and “Pollution Halo Hypothesis”, this paper analyses that MNCs are the trouble-maker of global environmental issues, while they can act as the trouble shooters if appropriately regulated. In context of lacking collaboration among the States, we may want to consider MNCs’ shouldering more responsibility as an unusual tool to solve the global environmental dilemma.The paper reviews the evlovement of corporate social responsibility(CSR). Facing the social problems exposed by the laissez faire of capitalism, the academia and entrprenuers came to realize that the business should not completely act on the principle of shareholder primacy but should take into account the interest of all stakeholders. As an evolving concept, CSR has been offering solutions to the emerging social problems. Originally focusing on labor protection, CSR has extended its reach to environmental protection.MNCs exercise colossal economic and technology power, which places MNCs in a dominant position in dealing with all stakeholders and even the government of the host countries. The paper anatomizes the necessity of MNCs’ undertaking CSR from an angle of substantive justice. Followed by a suammry of MNCs’ CSR performance, the paper analyzes the feasibility of MNCs’ voluntary undertaking environmental responsibility higher than mandatory standards in the host countries, from an angle of social license.The paper combs systematically the existing international legal regime that regulates MNCs’ responsibility. In international law, although most MEAs ultimately affect MNCs’ business operation significantly or even some MEAs ultimately defer to MNCs’ performance, the MNCs in their role of non-state actors are deprived of chances to participate in the negotiation and implementation of the MEAs. Consequently, the legislature of an MEA becomes procrastinated and the MEAs enforcement encounters resistance from MNCs. Other environmentally-related international trade and investment treaties in essence pivot to free trade and investment, which discourages MNCs to take CSR voluntarily. In national law, the domestic law in host countries and home countries cannot effectively regulate MNCs’ operation in the host countries. The home country law cannot go beyond its jurisdiction to govern MNCs’ activities in the host countries. The host countries generally lack a will and capacity to regulate MNCs, struggling in a balance of enconomy development and environmental protection. In stark contrast, some international organizations and MNCs have formulated a certain MNCs self-discipline rules, which effectively promote MNCs to perform CSR. These bottom-up rules can be upgraded to international customary law with a broader dissemination and application.MNCs are commonly seen as wrongdoers in transboundary environment harms. Compared with the traditional lawsuits or arbitration between the States, private litigations against wrongdoers directly can provide the injured with a more effective remedy. The paper analyzes the major elements in the lawsuit such as standing, forum and choice of law with a view to provide the injured with a timely and adequate remedy.It is advisable to take incentive and pressure mechanism concurrently to guide MNCs to shoulder environmental responsibility on CSR principle. One the one side, it is time to grant MNCs a “quasi” subject status in international environmental law, with a view to encourage MNCs to participate in MEAs formulation and implementation more proactively. On the other, host countries and home countries should improve rules on CSR enforcement and on private lawsuit in transboudanry environmental harm.