Doing business right? Private actors and the international legality of economic activities in occupied territories

In recent years the question of the lawfulness of economic activities in occupied territories has emerged as a matter of significant debate in international law. A number of non-governmental organizations and scholars maintain that international law prohibits economic relations with occupying states and this extends to territories under their control. Still, the legal framework governing the lawfulness of such relations remains unclear. In light of this, the present contribution aims to explore the lawfulness, under international law, of economic dealings by third party private actors in territories under prolonged occupation. It is argued that, since corporations are not direct holders of international law obligations, the duties of non-recognition and non-assistance do not extend to their activities. Similarly, it is shown that the development of a law of individual criminal responsibility in international law has not yet been accompanied by a regime of corporate criminal responsibility, thereby affirming the absence of any formal international normative dimension of transnational corporate activity. In the light of the inadequacy of traditional legal instruments to regulate corporate activity in occupied territories, the article finally turns to one of the main soft-law instruments governing such activity, namely the 2011 UN Guiding Principles on Business and Human Rights (UNGPs). The article provides some concrete examples of how the UNGPs have been successful in dissuading companies from carrying out economic activities in the occupied Palestinian territories and in the occupied Western Sahara. The main argument advanced here is that, in the absence of a hard regulatory framework governing corporate activities, soft-law instruments, such as the UNGPs, show great potential in bringing about a change of corporate conduct towards occupied territories. More fundamentally, this practice will hopefully lead to the adoption of a hard instrument on the topic.