Extraterritorial Jurisdiction: Lessons for the Business and Human Rights Sphere from Six Regulatory Areas

This study is intended to assist the Special Representative of the UN SecretaryGeneral on Business and Human Rights (“SRSG”) as he works to operationalize the UN “Protect, Respect and Remedy” Framework, and particularly as he develops guidance on the state duty to protect against corporate-related abuse. It does so by exploring extraterritoriality in six different regulatory areas: anti-corruption, securities, antitrust, criminal law, civil cases generally and the environment. The study examines the legal frameworks through which states attempt to influence private actors and conduct abroad, and associated legal and practical challenges, in order to draw some lessons for the business and human rights (B&HR) sphere. In doing so, it adopts the distinction made by the SRSG between the use of domestic measures with extraterritorial implications and the exercise of direct extraterritorial jurisdiction over private actors or activities abroad.

The SRSG has suggested that the different ways that states may seek to influence private foreign actors and conduct may be arranged in the form of a matrix. This matrix has two rows, based on the distinction noted above between domestic measures with extraterritorial implications and direct extraterritorial jurisdiction. And it has three columns – public policies, regulation, and enforcement actions. Their combination yields six cells, each offering a range of options. This matrix shows that extraterritoriality is not a binary matter. Instead, it encompasses a wide range of possible regulatory actions. And, as the SRSG has noted, not all of these are equally likely to trigger objections in all circumstances.

States’ use of direct extraterritorial jurisdiction is often controversial. This is because of the political and legal importance of territorial sovereignty: the idea that each state should be able to regulate activities within its own territory in accordance with its own policies and priorities. However, globalization has posed challenges to the effectiveness of this territorially-based system. Increasingly, governments recognise that, in some areas, effective regulation of activities within their territories demands some degree of control over private activities beyond their borders. Moreover, globalizing factors – such as international trade and travel, foreign investment, and modern communications technologies – have all greatly increased the potential for overlapping jurisdictional claims