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What's legal? What's right?

Bridging corporate social responsibility and the law brings new perspectives to business law

September 22, 2014

What's legal? What's right?
Sara Seck, associate professor with the Faculty of Law at Western University, teaches her students about the impact of Corporate Social Responsibility as it relates to the practice of business law.

When an eight-storey garment factory in Bangladesh collapsed in April 2013, more than 1,100 workers died in the rubble. As news of the tragedy unfolded, survivors talked publicly about poor working conditions, dismal wages and unsafe buildings. Their stories shifted public and media attention to the clothing distributors, such as Loblaw’s Joe Fresh, which had signed contracts with overseas factories to produce their apparel.

For Associate Professor Sara Seck, the incident highlights the tension between “black letter law” and the social obligation of corporations – the difference between only doing what’s legal and doing what’s right.

“While many would argue that Loblaw is not legally liable for the consequences of the building collapse or the factory owner’s actions,” says Seck, associate professor at the Faculty of Law, “there’s a growing societal expectation that businesses will adhere to international standards through their supply chains, respecting the safety and human rights of workers.”

As for Loblaw, it pledged compensation for victims and committed to inspections of Bangladeshi garment factories. It also joined an industry coalition to advocate for improved building safety.

“The Loblaw case study is just one example that illustrates the link between corporate social responsibility (CSR) and business law,” says Seck. Traditionally, business law was solely concerned about the legal side of mergers and acquisitions, trade and finance. However, as a result of the UN’s Guiding Principles on Business and Human Rights in 2011, corporate leaders have a responsibility to develop and follow appropriate human rights policies.

“Up until 10 years ago, business lawyers advised clients what they were legally obligated to do or not do,” adds Seck. “But now, lawyers are increasingly realizing the importance of giving legal advice that is sensitive to the social context of corporate operations, and that failing to do so has both financial and reputational costs for clients, as well as grave implications for those whose rights are violated.”

Yet, as a new and evolving presence within business law, CSR and its expectations raise many unanswered questions for lawyers and their clients. “It’s an area of law that is moving so quickly that there’s a need to keep up with developments with ongoing research and analysis of its impact on legal education and practice,” adds Seck.

With its strong reputation for business law in Canada and campaign goal to develop new programs that educate well rounded graduates, Western’s law school is well positioned to lead the training of students in CSR and the law. “We are leveraging our business law expertise into a broader range of legal training and ethics, making our students better able to address the issues that may arise in their career,” says Iain Scott, dean of the Faculty. “Providing them with perspectives on corporate responsibility will draw on many ethical, moral and social questions, and train them to more broadly see what is the right thing to do.”

That kind of legal training enables students to grapple with business and human rights law. “In my CSR classes, students have rigorous and vibrant debates about the obligations of lawyers and a company’s social license to operate,” says Seck. “These conversations highlight the many shades of grey that affect corporate decision-making.”

This article appeared in the Fall 2014 edition of Impact Western
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