Constructive Engagement or Illegal Investment?

Abstract

This thesis examines the role of transnational corporations in preventing human rights abuse and conflict, along with the limits to proactive strategies and engagement with host governments. It concludes by applying these principles in a case study: the oil and gas industry in Burma. The issue is approached both practically and theoretically from economic, legal and political approaches. In some cases it is possible for companies to avoid or mitigate risks by adopting proactive strategies that might included training and community development programs. A firm that recognizes these issues and adopts a socially responsible strategy may justify their presence in a given country based on the overall effect it has, despite some negative consequences, such as financing a corrupt regime. Furthermore, it can be assumed in many cases that a firm that withdraws will quickly be replaced by another firm, which may be less sensitive to these concerns. Based on these grounds, a company might argue that their presence in a country where the government does not respect human rights represents constructive engagement with the host country's regime. While this line of reasoning is certainly valid, and while this strategy is feasible in some cases, there are certain boundaries that firms should not cross. Firstly, any...