accountability and transparency in relation to human rights_a critical perspective reflecting upon...

8/11/2019 Accountability and Transparency in Relation to Human Rights_A Critical Perspective Reflecting Upon Accounting, Corporate Responsibility and Ways Forward

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766 S. Gallhofer et al. / Critical Perspectives on Accounting 22 (2011) 765780

rights governance is a meaningful pursuit. Indeed, they actually in some ways promote the further and to some extenttransformed mobilisationof accounting in this context. We then elaborate accountings potential (focusing especiallyuponcorporate accounting) vis--vishumanrights. Developingour argument moreconcretelyandpositively, we thenreect, withconsideration to real world happenings and relevant illustration, upon the interface of accounting, various actors (State andnon-State, especially corporations) and human rights in the context of globalisation. And we reect upon ways forward. Thestructure of our paper is thus as follows: (i) a theoretical position on human rights vis--vis accountability, transparency andaccounting; (ii) a further delineation of how accountings may better serve human rights; (iii) reections, with considerationto real world happenings, on the interface of accounting, actors and rights in the context of globalisation; (iv) ways forward;(v) concluding comments.

2. A theoretical position on human rights in relation to accountability, transparency and accounting

In developing a position, we seek to understand context, to question and to better things. Questioning implies opennessandreexivity (and sensitivity to change) across alldimensions of theorising as praxis. It extends: to appreciation of context,including that of the theorist; to the questioning (here openness is willingness to re-interpret old questions and add new);and, to envisioning better worlds and strategies ( Held, 1980; Held and McGrew, 2000; Gallhofer and Haslam, 2003 ).

Todays human rights emerged out of the humanitarian catastrophes of World War II. In 1945, protecting individuals,minorities or the marginalized against the power of majorities, where that encroached on the existential human condition,was deemed crucial for future States ( Glendon, 2002; Van der Walt, forthcoming ). The UNs Universal Declaration of HumanRights , enforced in 1948 with the consent of 48 and abstention of 8 countries, was the rst international agreement to

promote a construct of international human rights. What were the agreements crucial elements? Firstly, the construct isbased on subjective rights (droits subjectifs) of individuals entitling them to certain fundamental life conditions under nocircumstances to be taken away. Secondly, these rights are claimable against a ruling majoritys decision-making if needed.Thirdly, they are taken to apply universally and as moral claims in countries whose laws do not embrace positive humanrights norms. Dworkin famously evoked an image from bridge to explain post-war understanding of human rights: it is asif the individual is given a trump card to invalidate results of the normal social decision-making process if threatening hisprotected sphere ( Taylor, 1986; Dworkin, 1990 ).2

This reasoning (rights creation protects the vulnerable where they live if State-protection fails) explains why rights wererediscovered as a promising tool to regulate globalisations unbound forces. For John Ruggie, 3 the human rights agenda triesto compensate for State failure vis--vis globalisation, the governance gaps :

The root cause of the business and human rights predicament today lies in the governance gaps created by global-ization between the scope and impact of economic forces and actors, and the capacity of societies to manage theiradverse consequences. These governance gaps provide the permissive environment for wrongful acts by companiesof all kinds without adequate sanctioning or reparation. How to narrow and ultimately bridge the gaps in relation tohuman rights is our fundamental challenge. ( Ruggie, 2008 , p. 3). 4

The ambitious and far reaching attempt to universally guarantee human rights to individuals has, however, been ques-tioned. A number of objections still challenge human rights discourses (see Kennedy, 2002 ). A key issue is the foundationor legitimisation of claims made in the name of human rights. If the very denition of human rights implies they areonly claimable against elected majorities and thus against normal forms of democratic decision-making, who is legitimatesovereign of those claims? Closely linked to this: which procedures ensure the legitimisation problem does not ultimatelylead to abuse or dilution of the language of human rights? This is pertinent given almost any moral claim can be expressedin this language, e.g. does the right to education have the same status as the right not to be tortured, as both are afrmedby the Universal Declaration ? At issue is how to distinguish (and legitimately) more and less relevant claims made in thelanguage of human rights. Not unrelated to the above is the challenge from theorising that problematises the very idea of progressing rights. Much inuenced by Heideggers critique of modernity, concerns are raised about contradictory and total-

itarian possibilities and dimensions in so-called emancipatory or progressive drives, including in grand universal narrativesof legitimation (see Lyotard, 1984; Kolb, 1986; Ross, 1988; Alvesson and Willmott, 1992; Doornbos, 1992; Norris, 1993;Ray, 1993; Squires, 1993 ; cf. Arendt, 1958; Bronner, 1994 ). For Lather (1991) , this problematisation suggests a break withuniversalising metanarratives (in favour of the particular and appreciation of realitys messiness) and the humanist viewof the subject as autonomous and stable ( Lyotard, 1984; Fraser and Nicholson, 1988; Garnham, 2000 ).

A related challenge stems from afrmations of diversity. For cultural relativists, human rights are Eurocentric, promotingWestern individualism and rights hardly compatible with more communitarian ways ( Tharoor, 2000, 2001; Brunkhorst,

2 To give an example: freedom of speech can be called a human right only once the individual is enabled to revoke a decision that inhibits his freedomof speech, although made by the democratic majority, in a court of law ( Dworkin, 1990; Van der Walt, forthcoming ).

3 Harvard Law Professor and UN Special Representative of the Secretary-General on Human Rights and Business.4 Besides Ruggies very inuential initiative, a number of NGOs and private initiatives have also put human rights high on the agenda of international

business regulation. To mention only some of them: Human Rights Watch; Amnesty International; The Global Reporting Initiative; The Business LeadersInitiative on Human Rights.


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2001; Hussein, 2000 ).5 They are not neutral but expand Western cultural imperialism. Worse, they will speak for others soas to ironically repress them ( Derrida, 1978a,b; Gore, 1993; Weeks, 1993; Biesta, 1995; Gallhofer et al., 1999, 2000 ; see alsoDouzinas, 2007 , in the context of seeking to rescue the emancipatory potential of human rights).

Another challenge to rights discourse, rst articulated by Bentham, was famously raised in the post-war constellationby German-Jewish philosopher Arendt (1949, 1951) . It concerns effective rights enforcement in political practice. How arerights reectinguniversalmoralstandards to be exercisedunlesslegislated in positiveenforceablelaw? 6 Arendts descriptionof international organizations failure to provide security to millions of refugees of national socialist Germany is surely the

most striking example of the uselessness of un-institutionalized human rights.In thehumanrights andbusinessagenda theconcernsare no less pertinent, given corporations socialrole andlegalstatus.Human rights emerged to protect (world-) citizens against their own States; they concern the Statecitizen relationship.As non-state actors, companies are traditionally not in this. Where lies their responsibility to respect and safeguard humanrights? The concerns must be answered convincingly if we are to show that human rights provides a promising remedyagainst globalisations social, environmental and political challenges. Below, we outline an idea of human rights respondingto the concerns raised including vis--vis the agenda with business.

A classic way to restrict human rights language to counter potential dilution of its force is to distinguish three rightscategories: negative liberties, rights to democratic participation and socio-economic rights. 7 If these are taken as equallyimportant for protecting the legal subjectivity of a personhood, it serves to identify among them fundamental or corerights. The latter have traditionally been articulated as negative liberties. Socio-economic rights have been relegated to therightsspectrums periphery, where dilution andabuse risk appeared high. In contrast to this, which is substantively based onthe distinction between negative liberty and positive entitlement rights, Amartya Sen has a new idea of core rights. For Sen,

human rights are those rights enabling people to act as free agents. As conditions for individual freedom are substantivelysocial, these rights cannot be reduced to negative individual liberties but must include capabilities relating to the individ-ualssocial existence (1993, 1999) . For Sen, human rightsprotect peoples capability to engage in allsocial practicescomingto guarantee the autonomous subsistence of an individuals life. Given that human autonomy is conditioned by biology andsociety, both determine core capabilities denitive of viable human rights ( Nussbaum, 2000 ; see also Nussbaum and Sen,1993 ). The capability approach thus relates the rights to empirical observation of realistic life chances, avoiding abstractspeculation or blanket assumptions engendering meaningless rights proliferation and concomitant dilution. Capabilitiesdenitive of core social rights in a context of extreme poverty differ from those dening rights in wealthy countries. And,the content of actionable rights depends on observable basic living conditions ( Sen, 1993 , p. 31). Likewise, if for differingreasons, Ruggie is against a predened list of rights for which companies are to be accountable:

. . . (B)usiness can affect virtually all internationally recognized rights. Therefore, any limited list will almost certainlymiss one or more rights that may turn out to be signicant in a particular instance, thereby providing misleadingguidance. At the same time as economic actors, companies have unique responsibilities. If those responsibilities areentangled with State obligations, it makes it difcult if not impossible to tell who is responsible for what in practice.Hence, this report pursues the more promising path of addressing specic responsibilities of companies in relation toall rights they may impact. ( Ruggie, 2008 , p. 4).

That is: the content of core rights cannot be xed. It is more fruitful to determine those rights in empirical context if, in doing so, distinguishing between more or less crucial rights in a given situation must not be neglected. The ability todistinguish in a meaningful situation-sensitive way, after all, characterises the capabilities approach. 8

5 Further, Tharoor (2000, 2001) h ighlights that, for some, human rights as a universal discourse serves as a kind of ag of convenience for other morequestionablepolitical agendas. For Tharoor(2000, 2001) , humanrights rhetoricmay cover for Western intervention in the developing world, an instrumentof Western neo-colonialism.

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Bentham famously rejected a natural rights tradition in Britain that went back at least to Locke (and that in Benthams time was embodied in the USconstitution) (e.g. Waldron, 1987 ): Natural rights is simple nonsense: natural and imprescriptible rights, rhetorical nonsense nonsense upon stilts . . . (Bentham, 2002 ) (another critique of natural rights comes from the pragmatist school, who maintain that notions of rights reect that society is basedat most on a temporary consensus, Brunkhorst, 2001 ). Several points may be made regarding Benthams view. Bentham was especially concerned toemphasisethe importance of backing up rightsby law: Right . . . is thechildof law: from real laws come real rights . . . from imaginary lawscome imaginaryrights (Bentham, 2002 ). Without legal backing, a key point is that Bentham would have seen rights as secured in practice, if at all, only by phenomenasuch as wealth, brute force and chance. Further, it is crucial to appreciate regarding the argument here that Bentham was indeed not opposed to the ideaof a right expressing a moral claim founded on the principle of utility ( Schoeld, 2003 ). And, again crucial for rescuing Bentham here, Benthams concernwith utility both linked rights to well-being but also did not imply that Bentham was unconcerned about the rights of every individual (see Gallhofer andHaslam, 2003 , a critiqueof Benthamthrougha criticaltheoreticallens). Benthams viewmay be seen to be pessimisticby some communication, advocacy,exposure and informed public disclosure may be inuential without depending on legislation ( Sen, 2004 ): consistent with a view of rights as principallyethical articulations rather than legal commands ( Sen, 2004 ).

7 In the 1949 Universal Declaration, Article 3-14 refers to negative liberties in terms of the right to life, liberty and security of the person, freedom fromtorture or slavery. Article 15-2 denes rights to democratic participation including the right to citizenship, property and religion. Article 22-9 refers tosocio-economic rights including the right to work, equal pay and access to health care.

8 Sens (2004) emphasis on the process-aspect of freedom may be read as a means of adjusting the implications of the capability-approach according to

overriding equity considerations. Sen (2004) , consistentwith a pragmatist view, also calls for open publicreasoning to distinguish between more relevantand less relevant claims.


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Questioning the very idea of progressing human rights risks a displacing of the potential of reason in a critique of and inan intervention to improve governance practices. It risks rendering little more possible than continual evasion or deferralof a political envisioning of social betterment, let alone effort to realise the vision ( Leonard, 1990 , p. 259; Critchley, 1997 ,p. 357). If usefully challenging, such questioning may be taken to problematic extremes, as when it is as if anything goesexcept the metanarrative, a position tending to the very dogma it would challenge ( Kellner, 1988; Alvesson and Willmott,1992; Nederveen Pieterse, 1992; Best, 1995; Zi zek, 2000a ). Avoiding metanarratives, for the particular, risks myopic failureto critique the social whole and may counter support for the oppressed ( Leonard, 1990; Alvesson and Willmott, 1992; Zi zek, 2001 ). We must appeal to values and a moral horizon at some point beyond scepticism, including valuing highly,pragmatically, politico-ethical solidarity, if we are to surpass values in effect irreconcilable to a basic critical theoreticalposition ( Hudson, 1989; Rorty, 1989; Alvesson and Willmott, 1992; Nederveen Pieterse, 1992; Harvey, 1993; Benhabib,1994 ). Thiscritiqueshould, however, caution against over-simplication anddogmain progressinghuman rights ,9 consistentwith cautious pragmatism resting on more modest epistemology and eschatology. Laclau (1990, 1996) and NederveenPieterse (1992) highlight the difculty of aligning a myriad of diverse interests (and identities and rationalities), which, forLaclau (1990, 1992) , are dynamic in social interaction. 10 This has a resonance for projects giving some emphasis to humanrights especially expansively and to dilemmas over human rights given resource constraints. 11

A pragmatic or open approach may be taken when human rights require denition vis--vis diversity. The late 1980smarked vociferous cultural relativism when cultural anthropologists, political leaders of emerging post-colonial countriesas well as Western postmodernists questioned universal claims of the rights discourse ( Van der Walt, 2006 ). Todays debatemoves beyond this relative-universal dichotomy. A universality respecting cultural differences is pursued respect fordifferenceitself is recognisedas a universalprinciple( Ayton-Schenker,1995;McNay, 1992;Calhoun,1995; Humphries,1997;Brown, 2000 ). The choice is not between universalism and particularism, but between different kinds of universalism. 12 ForWalzer (1994) and Rawls (1993) , different philosophical and religious traditions can reach similar conclusions about moralprinciples despite their diverse trajectories. Rawls invokes a notion of overlapping consensus on rights ensuing from inter-cultural dialogue. For Rawls, all cultures subscribe to some idea of human dignity equalling trans-cultural rights. Culturaldiversity itself does not impede these (cf. Rawls, 1971; Walzer, 1983; Gewirth, 1988; Renteln, 1990; Charlesworth et al.,1991; United Nations, 1994; Patman, 2000; Li, 2001; Meijer, 2001; Noor, 2001; Brysk, 2002; Donnelly, 2003; Magnarella,2003; Pillay, 2008 ). A cross-cultural perspective is afrmed by the Sudanese-American lawyer Abdullali Ahmed An-NaIm(1992) , whose work shows how core Islamic concepts reconcile to modern human rights through a re-interpretation of theQuran. 13

A universalism respecting difference is universality that is not uniformity, recognising valued particularities attendantupon different cultural phenomena. For Lister a differentiated universalism can reconcile the universalism...at the heart of citizenship with the demands of a politics of difference (1997, p. 28). Universalism respectful of difference aims to listen tothevoice of theother, combiningopenness to difference with solidarity ethics ( Fraser, 1986; Arrington,1990; Leonard, 1990;Arrington and Puxty, 1991; Young, 1993 ). Openness to particularities can inform new versions of universality ( Gallhofer andChew, 2000; Gallhofer et al., 2000 ).

How do these observations impact upon the role business plays in the human rights agenda? How can respect for suchrights be part of corporate responsibility in the globalised economy? Can transnational companies (TNCs), from a legalperspective, be held accountable at all for human rights breaches? These questions relate to scepticism regarding rights

9 Such critique, as well as questioning crude universalist bluntness, has problematised: over-simplifying perspectives on social phenomena as if unam-biguous ( Gallhofer and Haslam, 1991; Lather, 1991; Alvesson and Willmott, 1992; Prokhovnik, 1999; Gabardi, 2001 ); logics of necessity integral to somecritical thought; associated overly optimistic pretensions for rationality; notions of a single revolutionary act constituting the emancipated state resolvingall substantive issues of well-being (including human rights);notions of a privileged emancipatory agent - necessarily or capable of identifying with globalhuman interests with privileged insight; and, of some pertinence here, associated notions of pure knowledge that would render all transparent andradically breakrepressive power ( Laclau and Mouffe, 1985;Kolb, 1986;Aronowitz, 1988;Laclau, 1990, 1992;Leonard,1990; Alvesson and Willmott, 1992;Mouffe, 1993b; Biesta, 1995; Gabardi, 2001 ).

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This struggle to develop equivalential links involves a tension between more ideal and more pragmatic tendencies in praxis, including in relation tothe potential of a human rights discourse.11 Consistent with a continuum thinking, Laclau (2000a) refers to a protracted war of position tending to more global aims, with universality albeit its

pervasiveness per se an horizon (from a particular perspective) rather than mobilised as dogma. In relation to praxis in this respect, abandoning the ideaof a particular agent beingprivileged doesnot imply thatparticular agents irrelevance ( Derrida, 1978a,b; NederveenPieterse,1992 ; Gallhofer and Haslam,1995; Laclau, 2000b; Zi zek, 2000a,b ). Awareness of the challenges and openness to taking them seriously are integral to projects that would govern well,including in the name of human rights. The awareness may lead to greater effective radicality ( Squires, 1993 ). If practices of accountability, transparencyand accounting are to be legitimately mobilised for expansive notions of human rights, we should conceive of them on a continuum and move beyonda dichotomous thinking that sees them as necessarily good or bad ( Prokhovnik, 1999; Gallhofer and Haslam, 2003 ; see Alvesson and Willmott, 1992;Wertheim, 1992 ). Nederveen Pieterse (1992) calls for emancipatory and progressive direction that is more subtle, multiple and modest than the modernway of seeing. We would need to critically reect on the forces - interests, identities and rationalities - we are to be properly guided by and be cautious inintervening, asking if we may counter what we seek.

12 Referencehas evenlately beenmade to a communitarian universalism( Rasmussen, 1990;Mouffe, 1993a; Benhabib,1994; Butler, 2000;Laclau,2000b ),something that would have been seen as an irredeemable contradiction in earlier debates.

13 Hayden (2001) also notes that many traditional beliefs are similar to those found in modern human rights ideology (the Akan of West Africa aregiven as an illustration). While such trans-culturalism and reconciliation has been substantive in this area, the Islamic Cairo Declaration of Human Rights

(see, for instance, http://wwwl.umn.edu/humanrts/instree/cairodeclaration.html ), albeit alsocontaining muchin common withWestern declarations, wasproduced in response to the UN declaration and commentators nd its positions on religion and women controversial ( Kazemi, 2002; Smith, 2003 ).
http://wwwl.umn.edu/humanrts/instree/cairodeclaration.htmlhttp://wwwl.umn.edu/humanrts/instree/cairodeclaration.html


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enforceability.Firstly, there is no procedure for enforcing therights in international law. Only national lawformallyregulatescompanies. If there are some solid international agreements and elements of international law specically for companies,the norms thereby dened have to be implemented at State level. An example is the UN anti-corruption treaty. It laysdown international standards that are only enforceable by national laws. The same applies for international human rightsconventions and treaties. Their application and enforcement depends on national laws and procedures.

We now face a situation where most nations have incorporated human rights into their legislation. Yet, the paper lawdoes not prevent regular rights breaches. A well known case is child labour in India. If India has excellent rights law pro-hibiting child labour, NGOs and ethical investors often report child labour abuse there. 14 The issue, then, is failure to enforceprohibitions due to weak governance. When enforcement is non-existent or fails, mere existence of national rights law willnot sufce.

Another issue in the complex relation between human rights, TNCs and international law is horizontality. As noted,rightstraditionally concern theStatecitizen relation,emerging to protect citizens against their State on thevertical level andcompanies, on the horizontal (where private law subjects interact), are not included. Traditionally, only States can violatehuman rights directly. Yet, companies may have liability or responsibility for human rights. Ruggies (2008) f rameworkdenes differentiated but complementary responsibilities of States and businesses vis--vis human rights. This frame restson three core principles: the State duty to protect against human rights abuses by third parties, including business; thecorporate responsibility to respect human rights; and the need for more effective access to remedies (p. 4). It is sufcienthere to develop the difference between State and private company duties. For Ruggie (2008, p. 7) : States have a duty toprotect against human rights abuses by non-State actors, including by business, affecting persons within their territory or jurisdiction. Corporations, on the other hand, have a duty to respect human rights as dened in such soft law instrumentsas the Tripartite Declaration of Principles Concerning Multinational Enterprise and Social Policy and the OECD Guidelinesfor Multinational Enterprises (p. 8). Consensus exists among larger TNCs that companies are expected to obey the law, evenif it is not enforced, and to respect the principles of relevant international instruments where national law is absent. 15

The duty to respect rights means not to infringe on others rights or, simply, to do no harm. As business activities canaffect all internationallydenedrights, companiesshould have due diligence, a process whereby companies notonly ensurecompliance with national laws but also manage the risk of human rights harm with a view to avoiding it ( Ruggie, 2008 , p.8). Thus States and companies have different responsibilities in promoting and safeguarding human rights. 16 As specialisedeconomic organs of society, companies duties cannot simply mirror State duties.

Yet, for Ruggie, there is a case in which corporations human rights duty surpasses enforcement procedures nationallyand soft law and voluntary approaches internationally. At issue is the concept of complicity, one crucial for our purposes.When a companys activity is complicit in a State violating human rights, this can be subject to international criminal law. If companies involvement in a States rightsabusesmay be called indirect, thecomplicity makes thecompany liable: The legalmeaning of complicity hasbeen spelled outmost clearly in thearea of aidingand abetting international crimes, i.e. knowinglyproviding practical assistance or encouragement that has a substantial effect on the commission of a crime . . . companiesmay also incur non-criminal liability for complicity in human rights abuses ( Ruggie, 2008 , p. 20). The most striking casesof this new development are suits led under the Alien Tort Statute in the US. 17 This Statute, a one-sentence law enactedin 1789 authorizing foreign nationals to le US civil action against those violating the law of nations has of late been oftused to sue major TNCs for alleged complicity in crimes overseas, including torture and murder. Defendants need only havesome regular business contact with the US to be vulnerable. A prominent recent case forced Royal Dutch Shell to pay $15.5million to settle a claim that it was complicit in the Nigerian governments execution of activists protesting against ShellsNigerian oil production. Another series of big suits, so-called apartheid lawsuits, continue. Apartheid victims in South Africaaccuse several major TNCs of having aided and abetted rights violations by providing goods and services to the apartheidregime. Corporations may avoid similar risks by institutionalizing procedures of due diligence in corporate management,helping avoid complicity with State human rights violations.

In sum, businesseshumanrightsduty turnson three principles: 1. Thecontentof rightsis denedfrom empiricalevidenceand circumstances and not derivable from a xed list. 2. Dening rights claims is part of an intercultural dialogue aimedat overlapping consensus affording no party superior denitional powers. 3. International companies duty to promoteand respect human rights is legally under-dened. Proper effect is only given to this duty by continuing due-diligenceefforts to monitor and promote rights protection and record all abuses. This indicates a role for accountability, transparency

14 According to a BBC report of 2006, over 11 million children are forced to work in India. ( http://news.bbc.co.uk/1/hi/5059106.stm , also cf. the 2006International Labour Organisations report on child labour: http://www.ilo.org/public/english/standards/relm/ilc/ilc95/pdf/rep-i-b.pdf ).

15 International Organization of Employers, International Chamber of Commerce, Business and Industry Advisory Committee to the Organisation forEconomic Co-operation and Development (OECD), Business and Human Rights: The Role of Government in Weak Governance Zones, December 2006,paragraph 15, http://www.reports-and-materials.org , quoted in Ruggie (2008, p. 8) .

16 Clapham (2006) m akes several suggestions for how international law could be developed further here. He notes several examples of internationaltreaties, as the one on corruption, nancing terrorism and trafcking by organized criminal groups that show that international law treaties are indeedused to address the behaviour of legal entities such as corporations (p. 241). Much depends on the will of political bodies to take these approachesfurther towards human rights regulations forTNCs (see also Clapham and Jerbi,2001 ; c f. Sykes, 1984; InternationalCouncil on Human Rights Policy, 2001;

McBarnett et al., 2007; Kobrin, 2009 ).17 For more details see the Business and Human Rights Resource Centre: www.business-humanrights.org/SpecialRepPortal/Home .
http://news.bbc.co.uk/1/hi/5059106.stmhttp://www.ilo.org/public/english/standards/relm/ilc/ilc95/pdf/rep-i-b.pdfhttp://www.reports-and-materials.org/http://www.business-humanrights.org/SpecialRepPortal/Homehttp://www.business-humanrights.org/SpecialRepPortal/Homehttp://www.reports-and-materials.org/http://www.ilo.org/public/english/standards/relm/ilc/ilc95/pdf/rep-i-b.pdfhttp://news.bbc.co.uk/1/hi/5059106.stm


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and accountings, encompassing at the micro-organisational level conventional nancial and broader social responsibilityaccountings and their equivalents at the State and other levels ( subter ). In our world, in practice even what we may thinkof as core rights are breached. Perrys (1997) point that discrimination, conict, authoritarianism and impunity continueremains relevant. So, in tackling this more substantively, what role may accounting, accountability and transparency have?We turn to this below.

3. Elaboration on accountings potential vis-a-vis human rights: corporate responsibility and accounting

At rst glance, the concerns elaborated and our responsiveness to them do not imply a very positive accounting role.Many accountings may be held over simplied vis--vis various rights and how they relate. If any intervention in the nameof rights is questionable, surely there is a danger that an accounting intervention would be too blunt as well as crudelyuniversal. And if accountings have regulatory potential they often lack legal force. Yet, various accountings are alreadyplaying a positive role in relation to human rights. And a general point is that dimensions of the concerns raised, especiallyas arising in theoretical discourse, are a spur to praxis generally 18 and thus to intervention in and through accounting. If uncertain (and ignorant), we may gain a sense of a greater responsibility to act. If we appreciate that respecting difference isa universal principle, we may pursue a more meaningful universalism. Some dimensions of the concerns indicate the casefor legislative intervention.

Further, one may even suggest that accounting (including accountability and transparency), on critical reection, hasparticularly an enhanced positive role vis--vis the concerns. The theoretical reection suggests the relevance of analysingdetailed specicities of the social, consistentwiththe production of detailed accounts. 19 Laclauand Mouffe (1985) and Laclau(1990) arguethata going beyondtotalising perspectivesin relation toemancipationmay implicateunleashing positive forcesin terms of a radical democracy. 20 An emphasis upon radical democratic forces is a spur to accountability, transparency andaccounting including counter accounting (the challenging of ofcial/hegemonic accounts by unofcial/counter hegemonicaccounts, advocated by Bentham, e.g. the alternative accounts on corporations produced by Corporate Watch, see Gallhoferand Haslam, 2003; Gallhofer et al., 2006 ). Communication, information and accountability are key terms in a discourseof democracy ( Bronner, 1994; Gallhofer and Haslam, 2003 ). And responding to the challenge of aligning diverse interests,Laclau (2000a) suggests construction of languages , again indicating accountings. These modes of communication could bebuilt to provide that element of universality making possible the establishment of equivalential links between or hegemonicarticulations of various particular emancipatory interests and demands (a relative universalization) in context ( Laclau andMouffe, 1985; Laclau, 2000b ). These include languages of and aboutaccountability, transparency and accounting, resonatingwith Bronners (1994) promotion of accountability from a view explicitly aligned to the German critical theoretical per-spective (see Calhoun, 1995 ). The notion of emancipations plural, to which human rights, expansively, may be reconciled,stimulates development of emancipatory accountings. Thus, we are responsible to positively align accounting and humanrights, if vis--vis complexity, uncertainty, instability and contingency .21

There is at least a suggestion here that accounting has a legitimate role in the globalised context ( Gallhofer and Haslam,2006 ) in supporting concerns to protect andpromote human rights. How may accounting be better mobilised vis--vis theseconcerns? How may we hold States and non-State actors (e.g. corporations) liable or responsible for rights abuses? From acontextual and continuum perspective, several accountings including potentially emergent forms may better serve humanrights. Our main focus here is corporate accounting (various kinds, includingcounter accounting focused on thecorporation).Thequestion may rst be consideredin more detail: howshould onerenderthe corporation liableand accountable forhumanrights?

3.1. On the corporations responsibility in relation to human rights

If untilquite recently,for historical reasons,humanrightswere seen near exclusively in termsof State dutiesto individuals(Ratner, 2001 ),22 there have long been concerns about the power of the corporation as a non-State actor and its socialduties. NGOs evidence e.g. workers rights abuses internationally and advocate sanctions ( Meyer and Stefanova, 2001 ).The corporation has been labelled a kind of republic or State ( Gallhofer and Haslam, 1995 ). Globalisation has especiallyengendered and promoted a discourse clear in work of NGOs such as Publish What You Pay (PWYP) ( subter ) and Human

18 This is with thedissipation of thelogic of necessityand thenotionsof a privileged agentand pristine revolutionary knowledge. It is preciselythe declinein great myths that Laclau understands as leading to freer societies where human beings see themselves as agents of change of their own world ( Laclau,1990 , p. 216). People can directly assert the legitimacy on their own terms; social struggles can be seen as wars of interpretations in which the verymeaning of demands is discursively constructed through struggle. Laclau (1990) st resses the signicance of contingency and pragmatic values of solidarity.

19 Thisis anencouragement to focused social analysis, oraccount,of accounting in action.Detailed contextual analysisis further promotedby philosophicaldiscourse emphasising the case for paying attention to detail and reecting awareness of the dangers of an excessive and problematic dogmatism anduniversalism ( Gallhofer and Haslam, 2003 ).

20 For Nederveen Pieterse (1992) , democracy is a recurrent theme in the contemporary re-orientation of emancipatory thought.21 And this shouldbe in projects concerned to createas well as prevent something.One canproperlyconstruct a more positive visionor sketchof a future

society, if recognising it as such and acknowledging its instability ( Bronner, 1994; Gallhofer and Haslam, 2003 ).22

To some extent more recently, and prior to the very recent relative emphasis upon the corporation, duties have also been invested in individualsthemselves.


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Rights Watch (but also in UN Codes and State and EU developments 23 ). This concerns the relevance of investing businesscorporations albeit their structures differing from those of States and individuals and other non-State actors with duties(Clapham, 1993,2006;Weissbrodt,2000 ).24 The TNCs are the most notable case. On the one hand, they are seen to have greatpower in the global system transcending the power of the nation State and are more embedded in the host States economythan ever ( Strange, 1996; Held and McGrew, 2000; Gallhofer and Haslam, 2006 ). Corporations can shift activities to Stateswith fewer/less stringent human rights regulations. States face trade-offs vis--vis politico-economic interests. For instance,foreign investment, job creation and resource inow may involve severe compromise to other local interests but States

may in effect have to accept that. The situation is worsened if the locally powerful see wealth and turn to corruption. Somepositive benet of TNC investment may be dissipated and individual TNCs may have limited power against that ( Gallhoferand Haslam, 2006, 2007 ). Some States are very lax (even complicit in abuses) in return for foreign investment, doing littleto monitor corporate behaviour. The downside is in the compromises that local States make ( Ratner, 2001; Clapham, 2006 ).Concurrently, TNCs are coming more to be seen as and as seeing themselves as providers of social benets that States wouldhave earlier tried to provide ( Ratner, 2001 ). And the rise of concerns about business complicity in human rights abuses hasbeen increased by online reporting, facilitating public opinions mobilisation ( Gallhofer et al., 2006 ).

Tackling the issuesraisedvis--vis human rights as noted,no less pertinent for corporationsthan individuals indicatesthat accountings provide a verypromisingremedyagainst thesocial, environmental andpoliticalchallenges of globalisation.

For Ratner (2001) , a companys duties to at least protect human rights are a direct function of its capacity to harm humandignity. Further, these duties vary, ceteris paribus , as a function of the tendency of or in accordance with particular criteria.These duties increase as a function of a corporations ties to the State (and its agencies). Barring in respect of severe abuses(where corporate duties to individuals are deemed clear and immutable), the duties to individuals grow along with the

corporations associative ties to the individuals. Duties also depend on a balance between the rights at issue and businessinterests and business rights both of these reecting the character of a business corporation ( Ratner, 2001 ).25

3.2. On the role of accountings for the corporation

The moral force of corporations to act upon humans in ways that are rights-based contestable implicates the corporatenancial reporting now seen as conventional and other possible discourses and practices of accounting and accountability.What role, then, is and may be playedby thenancial accounting promoted by theInternational Accounting StandardsBoard(IASB) andsimilar accountings (perhaps State prescribed or quasi-law)? 26 What role is and may be played by other corporateaccountings (oraccounts or reportsof thecorporation), whether prescribedin law, takingthe form of quasi-lawor voluntarymanifestations (the word voluntary here in quotation marks as these disclosures may be inuenced by e.g. stakeholder pressures , Ratner, 2001; Gallhofer and Haslam, 2003 )? Such questions go beyond concerning conventional accounting, if they include that, to e.g. broader forms of corporate social responsibility accounting including counter accounting. How is

universality respectful of difference of relevance here?We may suggest initially that nancial accounting transparency, corporate and State level, is relevant, alongside otherforms of transparency (e.g. the States reporting of human rights violations and/or progress) ( Gallhofer and Haslam, 2007 ).27

The linkage of resources and human rights suggests a role for nancial transparency in placing pressure on State and non-State actors in the name of human rights. Appreciation that there are serious human rights problems that may be alleviatedthrough spending in States with vast amounts of natural resources (the African state of Angola may be a case in point asthere is signicant poverty and related problems but massive resources of oil) give rise to questions indicating a role fornancial accountings.

Government accounts, potentially, for instance, indicate resources devoted to tackling human rights issues, includingthose related to serious poverty (including monitoring child labour). If a State hasmany issues but does not spend even whatit can reasonably afford on relevant programmes to tackle the issues, that would tend to make visible the States (effective)

23

The work of the WTO, the IMF and the World Bank in promoting foreign investment has also engendered debate. The UN, IMF and World Bank havebeen concernedto suggest Codes for scal transparency and reducing corruption ( Ratner, 2001 , p. 482). Stateshave in effect recognised corporateduties inprescribing international labour law, environmental law, anti-corruption law and economic sanctions. The EU has directly placed duties on business (seeRatner, 2001 , p. 488).

24 Human Rights Watch (1999) accused a number of international oil companies in Nigeria of co-operating in the governments suppressing politicalopposition. Clapham (1993) delineatesfragmented centres of power, a phenomenon most evident in the context of globalisation. Various bodies, includingcorporations and quasi-ofcial bodies but also other associations, including NGOs, Trade Unions and political parties, may be understood to now have tobe included in that which constitutes the public sphere and repress or alienate individuals.

25 Within corporate structures, responsibility attribution has been deemed to depend on the degree of substantive control exercised by the corporationover the agents involved in the abuses, not easy to determine in practice ( Ratner, 2001 , pp. 5245). Also, Ratner (2001, p. 525) suggests that fault is not arequired element of responsibility in respect to corporate agents acting under corporate authority.

26 The IASBs IFRSs/IASs have come to substantively reect an Anglo-American perspective ( Gallhofer and Haslam, 2003 ); they may be thought of as akind of soft law ( Ratner, 2001 ).

27 We arenot taking a naive view on transparency here buta pragmatic one. Transparencyin practice may translate intothe worst kindof public relationswhitewashing. Alsoany disclosure (especiallywith thestampof professionalexpertise)might re-assureand displaceattention fromsomethingin signicantways. And some forced transparencies (and their auditing) may impact badly on potentially valuable trust. Yet, the absence of transparency is arguably

the worst case in this context; so long as there is awareness of the less than pristine potentials of transparency in practice, it can play a role that is morepositive than negative ( Gallhofer and Haslam, 2003 ).


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lack of concern about and complicity in peoples suffering. We may imagine some usages of State income or resources thatare better than others paying for food programmes may be better than paying for the property investments of a perhapscorrupt ofcial ( Gallhofer and Haslam, 2007 ). Such welfare economics choices cross over into human rights violations veryquickly where there is an expansive notion of human rights. If there is a failure to stop core rights abuses, their impact if made transparent may carry greater force. Choices vis--vis local conditions of abject poverty might clearly look negativeand create pressure.

Corporate nancial accounts could indicate the amounts that particular corporations pay to a State. 28 If the payment isrelatively large, thepressure on a State to account for itsusage would increase. If a payment wasrelatively small,the pressureon the corporation may increase as its small contribution to a State in (desperate) need may be highlighted. Concurrently, ashas been happening more often recently, where corporations have directly nanced programmes to tackle abuses this maybe disclosed through corporate accounts, potentially in reasonable and informative detail.

Where corporations operate in States where there are human rights abuses, including no effective addressing of seriouspoverty, this may be disclosed through an accounting, as may be the consequences of the withdrawal of the corporationsfrom the State in question. Corporate child labour abuse and other violations can be reported. This indicates the need for amore holistic accounting in this area, this being accounting, not constrained to the nancial, encompassing all dimensionsof corporate operations of social interest ( Gallhofer and Haslam, 2003 ). The reporting may inuence ethical investment,consumerism, trading and decision-making.

Where corporationseffectively violate human rightsor arecomplicit in their violation(perhaps in collusionwith the localState), some form of accounting may make this transparent. For instance, companies paying inappropriately low wages toworkers for work in unacceptable conditions may be reported upon. Details of labour costs could expose child labour abusesand detailed accounting could cast light on similar violations. Again this accounting may inuence ethical investment,consumerism, trading and decision-making (including by States and international institutions). 29

In principle, corporations may be required to report vis--vis the interests of local cultures. As we shall elaborate, therehave been abuses of local cultures amounting to human rights violations. A well regulated and audited reporting couldreect serious consideration of how a corporation impacts upon, including negatively and threateningly, local culture. Away forward would be to formally give a voice to local people so that the local context and the negative forces and dangersmay inform the modes of governance and accounting ( Gallhofer and Chew, 2000 ).

4. Accounting in action: illustrations of relevance in the context of globalisation

What happens in practice? The presence or absence of rights-serving accountings in practice, the degree of their under

realisation,partly reects outcomes of politicalstruggle in context. As already pointed out, accountings already serve varioushuman rights and we shall indicate ways in which accountings have been serving human rights better, although this area isunder researched. By exploring accounting in action we may better get insights for ways forward.

An expansive view of rights at the very least challenges current ways. In this regard, critical social analyses of actuallyexisting accountings indicate that accounting is not fully captured by any particular political group or hegemonic force. Thisis so whether the focus is on accountings reectingcampaignsfor greater corporate social responsibility (CSR) or on nancialaccountings that substantively do reect the hegemony of an Anglo-Saxon real world capitalistic order. The point here isthat actually existing accountings in general, while they will reect the hegemony of their context, are not fully capturedand can come to the service of diverse, conicting and relatively repressed interests in the (dynamic) context (see especiallyLehman and Tinker, 1987; Gallhofer and Haslam, 1991, 2003 ). Further, the consequences of accountings mobilisation inpractice, again whatever accounting considered, are ambiguous ( Gallhofer and Haslam, 2003 ). We should stress that thatthis is not to deny that substantive dimensions of the dominant types of accounting and dimensions of other types, moreoften than not or in most part in practice reect prevailing hegemonic forces. Thus, voluntary manifestations of apparent

corporate accountability (e.g. vis--vis socio-environmental responsibility) are often problematic public relations reectinghegemonic interests. Even counter accounting is not mobilised from an Archimedean point beyond the hegemonic forces of the socio-political order ( Gallhofer and Haslam, 2003; Gallhofer et al., 2006 ).

Below, we begin to explore more substantively the bringing of accounting into action in practice in ways that are at leastsuggestive of its role and potential vis--vis human rights, if also indicative of the challenges involved. We are concernedto learn about actual and potential functionings of accounting in this regard as well as insights into the character of varioustypes of accounting in practice. We are also concerned to gain insights into strategic intervention in and through accountingin context.

28 Currently they do not. Thus, we are ignorant, from the accounts, as to how much a TNC operating in Angola pays to the Angolan government. Thepayment may be in the form of taxes but also e.g. royalties, fees and licenses ( Gallhofer and Haslam, 2007 ).

29

The view that corporations have negative impacts on social well-being more generally has long been integralto critical perspectives on society, e.g. inMarx (Ratner, 2001 , p. 443).


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4.1. Reections on corporate social accounting and corporate social responsibility in practice

Ostensibly, campaigns for CSR, with attendant forms of corporate social accounting (CSA), may be geared to regulatingbusiness vis--vis human rights. This is clearer when a more expansive view on human rights is taken but has a relevanceconcerning core rightstoo. Indeed, analysis of themore expansive position or related relevant illustrations may shed light forthe focus upon core rights. Campaigns for CSR/CSA have indicated the limitations vis--vis corporate responsibility of a purefocus on prot (or, latterly, shareholder wealth) maximising and related legal compliance. CSR and related CSA (includingenvironmental accounting) may in principle help ll a governance gap by encouraging corporate management attitudesand practices conducive to human rights support and by re-enforcing the same through inter-linkages with potentiallyinuential ethical consumer and investment movements. 30

In practice, research suggests that CSR and CSA have played a more dubious role, being not at the service of human rightsbut of problematic and relatively powerful forces. Corporations have embraced various dimensions of CSR in strategiesof regulatory capture so as to displace or avoid alternative, tougher, regulations (see Compa and Hinchcliffe-Darricarrre,1995). Forms of CSA amount often to public relations of the more dubious kind: white- or green-washing (e.g. Gallhofer andHaslam, 2003 ).

Several TNCs, NGOs and representatives of the US and British government developed voluntary human rights principles,operationalised into codes ( Vogel, 2005 ). These are not far-reaching and voluntary, being found unenforceable. Businessinitiatives, unsurprisingly, are limited by the business case for a CSR beyond the conventionalgoals (in practice itself differ-ing between temporal and spatial contexts). The UNs Global Compact promotes and emphasises the business case ( UnitedNations, 2006 ).31 Vis--vis legislative and quasi-legislative regulation, corporations typically insist on minimal standards.Concurrently, however, they have an interest in standards that benchmark to limit the cost of excessive free-for-all com-petition over CSR. And indeed, they may refrain from lobbying over human rights issues, on the grounds that they shouldproperly be neutral, while lobbying strongly for business rights like intellectual property rights ( Banerjee, 2007 ).

Organisational models reecting ostensible attention to CSR typically align with a stakeholder approach to corporategovernance. This is in the sense that stakeholders, beyond the shareholders, are deemed to be owed duties of care andattention from corporate management, and to have rights to various accountings. This stakeholder approach, however, maybe problematised. There are various possible stakeholder approaches. In practice, more popular models tend to concentrateon powerful stakeholders. Indeed, some are little more than functional for the shareholder or agency models that the liter-ature often denotes mainstream, scarcely promoting overcoming the constraining boundary of the business case. Weaker,marginalised, stakeholders (e.g. children who may be being abused, indigenous people) are given less attention, receivingless adequate accountability information ( Banerjee, 2007 ).

If CSR/CSA has been relatively easily captured by forces not making human rights (whether expansively or narrowly) apriority concern (to some extent reecting competitive pressures), it is over simplication to reduce the argument to theseterms.Neither is it appreciative of thecontext to argue that CSRis fully captured by hegemonicforcesand simplybuttresses aproblematic socio-political order. There are cases of CSR/CSA in practice that do appear progressive and counter hegemonic.Although the inuence of the UNs Global Reporting Initiative has been more limited than might be desirable, it gives someexplicit attention to human rights in its provisions ( www.globalreporting.org ). Counter and related forms of accounting,which may be explicitly mobilised outwith the corporation to challenge ofcial disclosures, has had some impact. Thereare inuential NGOs and ethical investment and consumer movements that campaign for and employ various forms of CSA,including counter accounts. This has been an activity long on-going, indicating its value to campaigners. Organisations likeCorporate Watch see value in contrasting CSA disclosures, through counter accounting, with what organisations actually do(Gallhofer and Haslam, 2003; Gallhofer et al., 2006 ).

4.2. The case of the rights of indigenous peoples

Indigenous peoples are a good example of a marginalised group. Relatively recently, there has been increased awareness

and recognition of their rights. As we shall suggest more substantively, corporate regard for indigenous people has beenpoor and not kept up with the increased awareness of their plight in the broader culture.Whether one refers to the mainstream accounting basically aligned to the shareholder model or to the CSA acknowl-

edging and reecting different users and usages (and contents), these phenomena have far less than countered colonial andimperial practices that have been destructive to indigenous culture ( Gallhofer and Chew, 2000 ). For instance, Neu (2000) ,

30 There are, at the same time, issues where corporations depart from conventional economic goals to the extent such goals have a positive dimension.Distortions arising may in some cases outweigh benets. This underscores the case for proper regulation of the (global) context to corporate decisions.

31 Further, the WTO has in effect been countering strong regulation itself in deeming ethical consumerism, national environmental laws, social welfarenets and safety regulations unfair trade practices. US lawyers suggested that Nelson Mandela would still be in prison if the current trade rules had beenin place at the time of his release ( Hertzi, 2001; Banerjee, 2007 ). For the WTO, the business rights it promotes in practice outweigh the right to health orlife if this is modiable by strong local government (e.g. the US) ( Banerjee, 2007 ). Commentators for environmentalism, who might agree that wealthiercorporationsand nation statesshape international trade rules andpoint to theirneed to be responsible and usetheirpower wisely, may still putthe onus of

sustainable development upon the worlds poorer masses (see Shiva, 1991, 1993; Wilson, 1992; Hawken, 1995; Banerjee, 2007 , p. 107; cf. United Nations,2002 ).
http://www.globalreporting.org/http://www.globalreporting.org/


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focusing upon Canadas indigenous people, argues that accountings have helped to translate neo-colonial policies into prac-tice with the consequences of reproductive and cultural genocide and ecocide (see also the related negative impacts tracedin Neu, 1999 ). This is a striking example of how accountings may come to be strongly bound up in human rights violations.For Gibson (2000) , accounting practices, displacing social and cultural values by economic imperatives, played and stillplay an insidious role in the dispossession of the Australian aboriginal (see also Greer and Patel, 2000 ; cf. Gallhofer et al.,1999 ).

Corporate activity, as notable in resource extractions (e.g. Australian Institute of Aboriginal Studies, 1984; Gibson, 2000;Greer and Patel, 2000 ), has often impacted negatively (in terms of socio-cultural dislocation and ecological destruction) onlocal populations, especially the relatively weaker and more marginalised populace, such as the indigenous communities.And this has involved human rights violations. More generally, development policies have effectively protected businesscorporations rights but denied the rights of local farmers and indigenous cultures ( Watts, 1999; Abrahamsen and Williams,2005; Ong, 2005; Banerjee, 2007 ).

Again, if accounting has tended to accentuate the negative for indigenous and local peoples, a more hopeful and positiverole for accounting is possible. Several studies have elaborated how accountings, conventional ( subter ) and otherwise, maycome to serve local including indigenous peoples better (see Gallhofer et al., 1999, 2000; Gallhofer and Haslam, 2007 ). InAotearoa New Zealand, enhanced concern about indigenous culture has led to more actual and proposed reportings tendingto serveindigenouscultural interests.In Gallhoferet al.(2000) , the authors go further insuggesting thatindigenousprinciplesare consistent with a more holistic accounting that may better serve people generally beyond the local and indigenous.

4.3. A Financial accounting case

Ostensibly, conventional nancial accounting does little to directly serve human rights, aside from being substantively(if not perfectly) concerned to serve property rights. 32 It is often understood critically as substantively serving the interestsof global capitalistic forces blinkered on conventional wealth maximisation. 33 Y et, not only has CSR/CSA positive potential,so does mainstream accounting itself. Historically, Gallhofer and Haslam (1995) indicate that what we now think of asconventional accounting was once considered radical and avant garde , an encouragement to radical democratic and evenrevolutionary forces. For Stiglitz (e.g. 2002) , accounts, even if produced formally to at least broadly serve a particular interest,are the focus of conicts of interest and will come to be used for different purposes and interests and be seen in differentways ( Gallhofer and Haslam, 2003, 2007 ).34

Gallhofer and Haslam (2007) elaborate a case of conict over usage of conventionalaccounting that may be understood torelate to human rights. The following re-interprets the case in these terms. Pressures by campaigners to increase disclosure,including corporate nancial accounting disclosure, at the intersection of conventional accounting and an accounting of usein the campaign against poverty and related deprivations and abuses (e.g. child labour) have manifested in recent times.Again, the case more obviously illustrates a case of accounting vis--vis a more expansive understanding of human rights.But it at least indicates possibilities in relation to core rights and in some cases, it may be stressed, one is trying to tackleand eradicate abject poverty and related abuses such as child labour. PWYP has been a prominent NGO campaigner in thisrespect ( GallhoferandHaslam, 2007 ).35 As we have noted for such a case, if corporationswere required todisclose thevariousamounts they pay to governments, then pressure may be placed on them (e.g.it may be seen that their small payments to thelocalgovernments may be unreasonably small). Further, corporations could be required to disclose any involvement in childlabour abuse. Banerjee (2007, p. 102) f ears the nancial and business risks of violating human rights may be outweighed bythe benets of investment in corrupt regions. Disclosure may change this (if Banerjee himself is relatively pessimistic). 36

Focusing on corporate accounting, many TNCs follow international standards (the IASBs IFRSs/IASs). Why do these notrequire disclosure of the relevant information? A rst consideration of the IASBs policy documents appears to providethe answer. IASB policy suggests that serving shareholders perceived (conventional nancial/nancial theoretical) inter-ests and potential investors in nancial information in effect serves everyone elses needs ( Gallhofer and Haslam, 2007 ; cf.Humphreys and Loft, 2009 ). The shareholders and investors are broadly understood in terms of mainstream nance theory,

being interested in the returns and risks associated with corporate holdings and potential investments. Campaigners havepointed out, however, that the information they want disclosed would be very much consistent with and a derived impli-

32 Indirectly, if imperfectly, it may add to the size of available economic resources.33 The accounting is often understood to reect the demands of the shareholder model, including being thus portrayed by the policy makers, albeit that

it has never done this in terms of the purer capitalistic rhetoric of its advocates: it may serve the powerful nancial interests of a real world imperfectcontext and in practice reect that reality (see Tinker, 1985; Gallhofer and Haslam, 2007 ).

34 As an example (focused upon economic operations and outcomes), accounts that make visible prot-making may raise issues about the monopolisticnature of an organisation and about how the value added by a business is shared.

35 There havealso beengovernmentand supra-governmental initiatives notablythe UK government backed Extractive Industries TransparencyInitiative(EITI), which encourages TNCs to disclose the relevant information voluntarily and the G8s call for greater nancial accountability of States in this area.These initiatives call for voluntary action and have had little regulatory force, and there has been little co-operation from either companies or States(Gallhofer and Haslam, 2007 ).

36 If governmentswere requiredto disclosewhatthey didwith themoneythis mayalso pressurisegovernments. Banerjee(2007) arguesthatif government

misuse revenues generated by TNCs, the TNCs themselves are increasingly being deemed culpable for this (e.g. in terms of the allegations of complicity incorruption).


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cation of the IASBs policy and framework as stated. This is because disclosing the nancial ow to individual States froma TNC (and the same may be said for payments to children) is helpful in assessing the nancial riskiness of an ownershipstake in the TNC ( Murphy, 2004, 2005; PWYP, 2005a,b; Tax Justice Network, 2005 ).37 It is recognition of the power of regu-latory possibilities and ethical investment and consumerism. It is simply a question, from this perspective, of disaggregatingnancial information ( Gallhofer and Haslam, 2007 ).

Why then is such disaggregation not prescribed by the IASB? Analysis suggests the answer may be articulated with twobasic insights. Firstly, the economic reality of the IASBs context does not correspond to the pristine vision implicit in theirpolicy. 38 The economy is imperfect, suggesting limits on the information that might be disclosed. 39 Secondly, accountingdoes not stand outside of politics. The IASB, as an institution, needs to be accepted to survive. 40 That makes it subject tonancial, corporate and State hegemonic interests and even if the IASB were to want something disclosed it faces issues of realpolitik (Gallhofer and Haslam, 2007 ; cf. Humphreys and Loft, 2009 ).

In practice, what factors are crucial vis--vis, for instance, PWYP concerns? It is unlikely that economic costs are so crucial given the possibilities of online reporting ( Gallhofer et al., 2006 ) and that many TNCs already have the disaggregatedinformation for internal control purposes. Additional audit cost should be minimal ( Gallhofer and Haslam, 2007 ). Muchmore likely, the political is the substantive issue. Accounting is subject to conicting political pressures, whatever formit actually takes the point is appreciated by Stiglitz (2002) . This, however, in turn suggests the possibility of progressvis--vis concerns to better link, for instance, accounting to human rights issues if enough pressure can be put on theglobal institutions then the accounting issue may be tackled. Either the IASB might be changed and/or other bodies focusingon broader responsibility and accountability issues (such as the Institute of Social and Ethical Accountability, ISEA) wouldbecomemore inuential. As it is, the IASBsdialogue with other globalinstitutions hasbeen enhanced ( Gallhofer and Haslam,2007 ). Of course, in struggle and change the underlying issues would likely transform in advance of enhanced transparencyand accountability.

5. Ways forward

We have noted that one of the issues at least threatening human rights operationalisation is the way TNCs power maytranscendState powers. In this context, TNCs may be veryweaklyregulated includingvis--vis human rights. The cost of thissituation is regularly well illustrated by NGOs such as Tax Research , Tax Justice Network and The Association of Accountancyand Business Affairs .41 The economic cost is enormous, by their reported calculations. Further, the NGOs indicate how variousforms of corruption are rendered dangerously easier (exacerbating the problem). Not to understate this, concurrently therearedangers in theideaofa worldgovernmentor parliament, even if formallydemocratic.Engelslooked uponthe reservationsin terms of mankinds fear of itself, but the fears are not to be takenlightly. The possibility, even under a veil of democracy, of a new kind of global imperialism, or a yet further extension or enhancement of what we have now, is real enough. One aspect

of this is evident in those calls suggesting e.g. that Asia restrict its economic development because of global warming whenhistoricallythe West hasbrought about thebulk of theproblem: clearly embracingglobal justice in this context is going to bedifcult for the West, if a gradual and more holistic approach may still have merit. Optimistic (or realistic?) campaigners arepushing seriously for a world government or parliament. In the context of environmental crisis and globalisation that quitevisibly at least threatens to impact on global standards and safety nets, there is strong support for such an idea. A serious butavoidable environmental crisis must constitute a threat to even core human rights (see Held and McGrew, 2000; Gallhoferand Haslam, 2006 ). Without effective co-ordination of global activities (and indicators are not good), we may well cometo regret the absence of an effective world government. The latter appears some way off, however, and we have indicatedsubstantive problematic dimensions, so it is important to consider what else may work.

One alternative starting point is to arrive de facto at the more positive possibilities of the above scenario by developing abody of international law that would recognise business obligations to protect human rights. Clapham (2006) , f or instance,advocates such a way forward and stresses the case for UN governance of business in respect of human rights. The approachwith the clearest afnity to an enabling form of world governance is to try to get all States to substantively enact the

same legislation (or alternatively all the worlds courts might develop the law). The States would monitor corporations.This indicates a form of accounting (and auditing) and additional corporate disclosure (and auditing) might be one of thepossible additional sanctions. In practice, problems associated with this model include that different States currently place

37 Little attention hasbeen given in this area, whether by the IASB or the NGOcampaigners, to a principle of universalismthat is respectful of difference.But it is the case that rights frameworks in practice have tried to reect this principle and also that commentaries on accounting indicate the potentialityof such a principle (see Wippman, 1997; Gallhofer and Chew, 2000 ).

38 Indeed if this pristine version were reality there is a real question whether a standard setter such as the IASB would be required at all.39 For instance, disclosing information (and having it audited) has clear associated direct nancial costs in context that are not stressed in IASB policy

documents. Further, information disclosure on corporate activities can encouragecollusion and monopolistic/oligopolistic behaviourand restrict researchand development innovations. In a real world imperfect markets context, secrecy has a value ( Lipsey and Lancaster, 1957; Puxty and Laughlin, 1983;Gallhofer and Haslam, 2007 ).

40 The IASBs history and membership reects Anglo-American capitalistic hegemony. Like many NGOs, the IASB is not formally accountable to anyone

(Gallhofer and Haslam, 2007 ).41 All these NGOs have websites that are regularly updated, providing great material for other NGOs, interested citizens and students.


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differentdemands on corporations. States argueover theirinterpretationsof territoriality(responsibilityfor actswithin onesborders) and nationality principles (jurisdiction over a business incorporated in the nation State). Some States dread thecosts of acting, some may fear foreign policy repercussions. If one State tried to regulate corporate conduct vis--vis humanrights it might face protests by others who might term universal jurisdiction illegitimate ( Ratner, 2001 ). For Meyer andStefanova (2001) , one advance is imposing economic penalties on national governments. International treaty constructionhere promises bindingcodes of conduct. If the international institution thus founded is to prescribeandapply hard lawthenthe international community must agree upon its legitimacy and expertise and view it as being effective in law enforcement(McDougal and Reisman, 1981 ).

Corporations might also develop their own voluntary codes of conduct and many codes now exist. A substantialclaim here, which applies to much CSA (see Gallhofer and Haslam, 2003 ), is that such codes amount to problematic pub-lic relations exercises (e.g. Gallhofer and Haslam, 2003 ). Companies have been accused of taking the initiative to avoidstronger external regulation or uniform standards across all industries ( Compa and Hinchcliffe-Darricarrere, 1995 ). Theymay in some cases be serious responses to stakeholder pressure ( Gallhofer and Haslam, 2003 , acknowledge such a possi-bility vis--vis CSA). And sometimes they are collaborations with NGOs involving e.g. social labelling, if typically arounda limited range of human rights issues (typically forced labour, child labour, employment conditions and the right tounionise) ( Ratner, 2001 ). Many interested in the codes of conduct approach stress the need for transparency here andthe same debates exist in this area as in the CSA literature (see Gallhofer and Haslam, 2003 ). Some want independentmonitoring/auditing to enhance the transparency most codes do not have a monitoring provision ( US Department of Labour, 1998 ) while it is also acknowledged that the monitoring, ostensibly independent, may in practice be weakand subject to capture ( Avery, 1999; Greenhouse, 2000 ). Corporations also compete in the market place and this maydrive down capacity to act on issues beyond the nancial. A corporation taking a strong stance risks losing a Statesco-operation. 42

Some would give a big role to NGOs, not only in counter accounting but in responding to collaborative opportunities toscrutinise, promoting the adoption of more detailed norms and helping to monitor the codes ( Ratner, 2001; Gallhofer andHaslam, 2003 ). It is important that NGOs are themselves accountable in this context ( Unerman and ODwyer, 2006a,b ).

Soft international law parallels the voluntary codes and suffers from the same kinds of problems ( supra ). Ratner (2001)suggests that the ILO, OECD, UN and World Bank are all possible actors to initiate soft law but also points to issues withthem. It is important that corporations, governments, victim representatives and NGOs participate in prescribing and apply-inglaw. In this respect theILO does notinclude allthe potentialgroupsof rightholders in itsdeliberations.The OECD excludesdeveloping world States, which is highly problematic here. The UN appears suited to the part but only weak support forthe UN exists in the US. In 2005, the UN created an expert mandate on business and human rights but little substan-tive progress is recognised if on paper the potential is considerable ( Jerbi, 2009 ). The World Bank has begun to considerhuman rights in its decisions ( Bissell, 1997 ) but has a way to go to convince as a drafter of guidelines on corporate con-duct encompassing concern with human rights. The IASBs standards and those of the currently less inuential ISEA havesome features of soft law as international standards, albeit that particular States and the EU effectively make the IASBsstandards law-like especially for larger corporations. Bilateral understandings between e.g. the UN and IASB may emerge the PWYPs activities did ostensibly push the UN and the IASB to closer collaboration ( Gallhofer and Haslam, 2007 ). Assuggested, a new form of corporate accountability is needed in the context. Stock Exchanges have a role to play as theymay require standards, including of disclosure, for listing. Indeed, key Stock Exchanges (organised into an internationalbody) have required companies to follow the IASBs standards. Stock Exchanges still, however, compete with each othertoo. 43

None of these more pragmatic ways forward look especially promising. Ratner (2001) suggests that the UN and theWTO might set up a monitoring body to receive reports from State and non-State actors including from corporations. Stateaccounting or reporting would put these reports out so that they are on public record. A variant of this would set up Statebodies or agencies to impose sanctions. Alternatively, domestic enforcement and a system of investigations and sanctionscould be stressed. The law here offers a common language and a set of enforceable standards, constituting progress. At themargin, and in practice reecting realpolitik, such pragmatic ways forward may improve things.

Another variant ofa pragmaticway forward would take theform of a complaints body andmechanism aimingto empowerthe people. It would have an ofce in every country and might be funded by the UN. A team of researchers, administratorsand lawyers would accept complaints (a bit like a NGO) and feed information into a larger information network giving riseto reputational damage. Such a process could be supported by ethical consumer and investor activity. Accounting wouldbecome again more important and auditors would be given greater responsibility. 44

42 Thus, if a State may have little power against corporations in general (given a desire for the inward investment) they may have power in respect of particular corporations. This may be translated, however, into an interest in secrecy and corruption ( Gallhofer and Haslam, 2007 ).

43 As do accounting standard setters. The IASB has potential rivals for its role, notably the US Financial Accounting Standards Board (FASB), albeit thatcurrently the IASB and FASB are engaged in a convergence process. Campaigners forming part of the PWYP coalition have thus been involved in lobbyingvarious bodies, including Stock Exchanges and FASB ( Gallhofer and Haslam, 2007 ).

44

A similar initiative is found in the OECD guidelines for multinational enterprises, which provide for National Contact Points, ofcesresponsible for encouraging observance of and publicising the guidelines in a national context. A 2000 review enhanced a commit-


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6. Concluding comments

What we have aimed to do is to delineate key issues regarding linking accounting and human rights. We have suggestedthat accounting properly has a key role to play in this context. We have made reference to relevant illustrations. In exploringpractice, we have seen positive dimensions of accounting but have indicated the need for progress. This is important if accounting is to better serve the public interest, internationally and explicitly the professions commitment indeed it is soforthe IASB,whichhelpsunderscore itspotential ( GallhoferandHaslam, 2007 ). Inpursuing ways forward,we covered severalpossibilities. Some were more pragmatic than others but it wasdifcult to be veryoptimistic, especially if an expansive viewof (categories of) human rights is taken. Nevertheless, we have delineated some substantive ways forward that may behelpful in promoting the protection of human rights, more especially those that are properly termed core. 45 And we haveindicated how governance is required to operationalise human rights in practice, which is clearly to give accounting a role.We have pointed to a need for struggle towards better governance and holistic and counter accounting, making use of advances in communicative technology. We have indicated action that might steer things along a progressive channel. Wehope we encourage further research in this important area.

Acknowledgements

The paper was presented on the Accountability and Human Rights: Seminar Four of the ESRC Research Seminar Series,When worlds collide: Contested paradigms of CSR, 1 September 2009, and the authors acknowledge the constructivefeedback received. The authors also beneted from the helpful and encouraging comments of the editors and reviewers.

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