Changes in transnational labor and commercial law

Head: Dr. Florian Rödl

The overall project of the junior research group was divided into three sub-projects and a framework project.

About the sub-projects: The individual sub-projects of the junior research group have investigated phenomena of transnational and international legal development in which central social conflicts over the legal constitution of transnational labor and economic relations are inscribed:

– the current intensification of the protection of foreign investments under international law,
– the efforts to legally bind transnational corporations to human rights guarantees, in particular under international labor law,
– the constant expansion of a transnational trade law understood as an autonomous legal system.

These phenomena have been analyzed on the one hand in the light of democratic legal and constitutional theory and on the other in the light of theories of international political economy.

Rhea Hoffmann’s project examined current developments in international investment protection law. The starting point is the current legitimacy crisis of the institution of investor-state proceedings, which is particularly evident in the area of so-called indirect expropriations. Legitimacy problems result mainly from the institutional design of the investor-state system, the inconsistency of arbitral awards and the scope of arbitral tribunal requirements for state and thus always also potentially democratic self-determination. The project focused on approaches within the system and examined them critically with regard to the question of whether they can be used to solve the legitimacy problems of international investment protection. The study focused on the function of investment protection law in the context of asymmetrical globalization, the need for democratic legitimacy of the procedure and the problem of a “fair” balance between the sovereignty of states and investor interests.
The study concludes that international investment protection law essentially fulfils the function of shifting the constitutional compromises on the scope of property that are characteristic of the modern state in favour of business owners and at the expense of statutory restrictions. In contrast, legitimate investment protection would have to be limited to the procedural safeguarding of state law enforcement.
The work thus contrasts with the prevailing consensus on investment protection law, in which the current excesses are at best to be contained by propagating arbitration as an international constitutional function. This may create more scope for democratic politics, but it does nothing to change the socially partisan function of investment protection. It would be worthwhile highlighting this contrast in greater detail on the basis of pending disputes (such as Vattenfall v. Federal Republic of Germany) and the ongoing negotiations on investment protection in the context of a transatlantic free trade area.

The most important publications of the sub-project include
Hofmann, Rhea Tamara (2019): Divergence and transformation. Constitutional analysis of property protection in the democratic property constitution and the investment protection regime , Baden-Baden: Nomos.
Hofmann, Rhea Tamara (2013): “Universalism or enforcement of particular interests? Eigentum zwischen Menschenrecht, Investitionsschutz und demokratischem Eigentumskompromiss”, in: Juridikum 3/2013, 361-373.
Hofmann, Rhea Tamara (2013): “Rezension zu: Stephan W. Schill, International Investment Law and Comparative Public Law, Oxford”, in: Herrmann, Christoph; Krajewski, Markus; Terhechte, Jörg Philipp (eds.), European Yearbook on International Economic Law 4, 583ff.
Hofmann, Rhea Tamara (2012): “Staatsschuldenkrisen im Euro-Raum und die Austeritätsprogramme von IWF und EU”, in: Kritische Justiz 45 (2012), 2-17 (with Markus Krajewski).

The starting point of Sofia Massoud’s project is the widely perceived problem of human rights violations by transnational corporations. The subject of the work was the question of the possibility of legally binding corporations to human rights standards, with a focus on the human rights guarantees of international labor law. To this end, the project dealt with existing approaches to the direct responsibility of corporations under international law and alternative approaches of voluntary self-commitment, as well as with the approach of strengthening extraterritorial state protection obligations and the approach of civil liability; in addition, justification models and enforcement possibilities were examined and deficits identified. In addition, the framework of the global economic order was critically examined, which forms the often unthematized framework of the current discourse on “business and human rights”. In conclusion, the question of whether the human rights discourse also functions as a legitimization of the existing (economic) order was discussed.

The study came to the conclusion that the approach of civil liability, enforced de lege ferenda in the company’s home country – changes in procedural and corporate law would be necessary – would be entirely suitable for effectively countering serious human rights violations. The approach of articulating extraterritorial duties to protect also does not appear hopeless. The lack of implementation of these approaches can be traced back to the structure of the global economic order, according to which the states called upon to act benefit from the extensive lack of sanctions for corporate human rights violations. Against this backdrop, the enormous public activity on the topic of “companies and human rights” appears to be primarily a distraction and integration maneuver.

With regard to the current state of research, the main point of the project is to oblige the contributions to the current debate on the human rights obligations of companies to address both the legal and political conditions of the respective proposals. It would therefore be a promising continuation of the project to meticulously examine the almost innumerable voices in favor of binding companies to human rights under international law in terms of the legal and political prospects for their implementation. After all, there is a suspicion that this is generally a blind spot, which is the very condition for the astonishing proliferation of contributions.

The most important publications of the sub-project include
Massoud, Sofia (2018): Human rights violations in the context of economic activities of transnational corporations, Berlin: Springer.
Massoud, Sofia (2013): “Unternehmen und Menschenrechte” – überzeugende progressiven Ansätze mit begrenzter Reichweite im Kontext der Weltwirtschaftsordnung, in: Ralph Nikol /Thomas Bernhard/Nina Schniederjahn (eds.), Transnationale Unternehmen und Nichtregierungsorganisationen im Völkerrecht, 37-68.
Massoud, Sofia (2013): “Die Guiding Principles on Business and Human Rights – eine absehbar begrenzte UN-Agenda”, in: Kritische Justiz 46(1), 7-17.
Massoud, Sofia/Rödl, Florian (2011): “Waiting for the “Follow-Up”? – Guiding Principles for the Implementation of the United Nations ‘Protect, Respect and Remedy’ Framework”, Global Labor Column(http://www.global-labour-university.org/fileadmin/GLU_Column/papers/no_63_Roedl_Massoud.pdf).

Alexander Wagner’s project was dedicated to the problem of the legitimation of transnational normative orders in the context of the “lex mercatoria”. A critical evaluation of the genesis of autonomous transnational normative orders was carried out on the basis of a reconstruction of enlightened democratic and (private) legal theoretical positions and with reference to international political economy. Three legitimation strategies of transnational norm orders are brought into the focus of criticism. Firstly, it was shown that transnational normative orders do not meet (even the most minimal) formal-democratic requirements for the creation of law. Secondly, the thesis was refuted that transnational normative orders do not require democratic justification because only the respective contracting parties are affected by them. Finally, the concept of private autonomy, which is central to the legitimization of transnational normative orders, was critically reconstructed. The central thesis developed through these steps is that the existing approaches to the legitimization of autonomous transnational trade law must remain deficient from the perspective of both democratic theory and private law theory.

About the framework project: Overall, the three sub-projects each examined phenomena of transnational law that result from structural problems of the fragmentation of global law into nation-state legal systems. The idea of constitutionalization beyond the state provides a fundamental answer to these problems. The junior research group’s framework project dealt with this alternative. It dealt with different forms of constitutionalization beyond the state, both on a global and European level. The constitutional consolidation of the EU is seen by some observers as a promising blueprint for the constitutionalization of international law, which should be characterized by a resilient protection of fundamental rights, a democratic basis and, ultimately, a genuine capacity to manage global problems. In contrast to this idea of constitutionalization, which in any case is always unspokenly oriented towards the form of the constitutional state, the idea of a conflict-of-law constitution was developed programmatically, which would allow for a “democratic juridification without nationalization”. Essential problems of a constitutionalization beyond the state oriented towards the constitutional form were examined on the basis of the constitution of the European Union. The focus of the analyses was on the potentials of a democratic and social constitution of the Union, with a focus on collective labor relations as the backbone of a welfare state constitution.

For the European Union, it can ultimately be stated that the welfare state constitution of the individual member states is obviously so complex and compact that a reproduction of a welfare state constitution at European level can be ruled out in the long term. This structure is reflected in the so-called democratic deficit of the Union. This raises the question of an orientation of constitutionalization processes that would no longer be based on the constitutional blueprint, without at the same time abandoning the idea of democratic juridification. In this sense, the theory of supranational constitutional law, in which the idea of a universal conflict of laws must play an essential role, continues to be a desideratum of post-national constitutional theory.

The most important publications of the framework project include
Rödl, Florian (2015): Justice among free equals. A normative reconstruction of tort, property and contract , Baden-Baden: Nomos.
Rödl, Florian (2011): “Demokratische Verrechtlichung statt Verstaatlichung: Kollisionsrecht statt Globalstaat”, in: Oliver Eberl (ed.), Transnationalization of popular sovereignty. Radical democracy beyond and on this side of the state , 271-294.
Rödl, Florian (2013): “Zum Begriff demokratischer und sozialer Union”, in: Jürgen Bast/Florian Rödl (eds.), Wohlfahrtsstaatlichkeit und soziale Demokratie in der Europäischen Union, Europarecht-Beiheft 1/2013, 179-204.
Rödl, Florian (2014): “Die dialektische Entwicklung des Sozialen im Prozess der europäischen Integration: Die Dimension der kollektiven Arbeitsbeziehungen”, in: U. Becker/St. Leibfried/P. Masuch/W. Spellbrink (eds.), Social Law and Social Policy: Foundations and Challenges of the German Welfare State. 60 years of the Federal Social Court Berlin: Erich Schmidt Verlag.