Closing the Gaps: Strengthening Extraterritorial Corporate Accountability under the UN Guiding Principles

The UN Guiding Principles on Business and Human Rights (UNGP) constitute a key international framework outlining the duties of states and the responsibilities of corporations to protect, respect, and remedy human rights violations linked to business operations. In an era of globalisation and increasingly complex transnational corporate activities, ensuring accountability for human rights abuses committed across borders remains a pressing challenge. This paper critically examines the UNGP’s weak stance on extraterritorial obligations, particularly as reflected in Guiding Principle 2, which permits but does not mandate states to regulate corporate conduct abroad. The analysis argues that this permissive approach undermines the UNGP’s objectives, especially in contexts where host states are fragile, corrupt, or conflict-affected. The discussion explores the political, legal, and economic factors behind this limitation, including state capacity constraints, corporate resistance to regulation, governance challenges, and sovereignty concerns. By tracing the historical evolution of extraterritorial obligations, assessing the legal basis of the UNGP, and contrasting mandatory versus voluntary frameworks, the paper proposes recommendations for strengthening regulatory mechanisms to ensure greater corporate accountability for human rights impacts beyond national borders.