Litigation and Smart Contracts as new legal tools in debate for CSR

A workshop on Corporate Social Responsibility (CSR) : New Legal Tools, Litigation and Smart Contracts was organised on April 18 at HEC Paris with members of the Law & Tax Department and the S&O Center.  

PROJECT DESIGN 

Shahd Hammouri (University of Manchester) presented the intermediary results of the research project “Comparative Assessment of CSR Regulation in the Oil and Gas Industry”, and Manuel Gomez (Florida International University) delivered a talk on the CSR-Related Litigation Landscape in the United States. Camille Hansmaennel and Nevyn Fournel (HEC LLM students) presented the results of the ACT project “Can Smart Contracts Make Corporate Social Responsibility Smart?”

During the morning session, Shahd Hammouri and Arnaud van Waeyenberge (Chair) discussed with Isabelle Cadet, Delphine Dogot, Rodolphe Durand, Romain Laufer, Afshin Mehrpouya, David Restrepo Amariles, Manuel Gomez and other attendees, the findings of the first phase of the “Struggle for CSR project”. Primarily, this interdisciplinary project questions the different factors that affect corporate CSR decision making in the oil and gas industry, engaging legal and managerial discourses on the topic.

The first phase of the project was a comparative assessment of the tools used to incentivize responsible corporate behaviour across five major jurisdictions. The second phase of the project aims to assess internal regulation of major corporations in the oil and gas industry with regard to CSR considerations as well as the corporation’s overall CSR performance.

REGULATING THE OIL AND GAS INDUSTRY

Participants discussed the main findings of the first phase of the project, covering two major themes: the trends that the comparative analysis implies with relation to regulating the rights of stakeholders who are influential to the CSR agenda. As such, inquiring into whether the results support the claim that the empowerment of certain stakeholders such as employee or institutional shareholders in the corporation can implicitly pave the way for better CSR agendas in the oil and gas industry.

Secondly, the participants discussed the efficiency of combinations of corporate incentivizing tools legislated in different jurisdictions and outlined in the research, noting trends where some jurisdictions focus on ‘the risk of litigation’ for incentivizing corporations, while others are more reliant on obligatory reporting requirements, and others on voluntary incentives administered by the government. Lastly, the participants compared elements from the second phase of the project to those of the first.

SMART CONTRACTS AS A LIMITED LEGAL TOOL

During the afternoon session, Manuel Gomez presented several leading cases decided by U.S. courts during the last few years in connection with corporate social responsibility (CSR). Particular attention was given to the distinguishing features of CSR litigation vis-à-vis other types of cases. The presentation also addressed the main challenges faced by parties involved in CSR-related litigation and what role, if any, new technologies can play in this field.

During the second talk of the afternoon session, Camille Hansmaennel and Nevyn Fournel presented the results of a case study on the use of smart contracts in CSR. This case study was developed as part of the ACT Project conducted jointly with the Cyberjustice Laboratory of the University of Montreal. The presentation aimed at narrowing the gap between legal and technological perspectives on smart contracts by analyzing their regulation in multiple jurisdictions and exploring their application in supply chains, i.e. from conclusion of the contract to delivery of the product to the end consumer.

The results show that there is no convergence in the legal regimes applicable to the qualification of smart contracts. It also acknowledges certain limitations to the legal regulation of smart contracts, such as the diversity of existing smart contracts, the legal vacuum concerning self-execution, and the lack of a common vocabulary between legal and IT communities.