by A. Simpson

Created on: April 22, 2008   Last Updated: April 30, 2008

"Clean up your own mess," a command that most of us learned as children, was long ago forgotten by many U.S. corporations, at facilities both in the States and abroad. Only as a result of the sweeping federal U.S. environmental legislation beginning in the 1970s, on the heels of the Love Canal disaster and the publication of Rachel Carson's Silent Spring, were U.S. companies mandated to take responsibility for years of unregulated practices and the environmental contamination that resulted. As a result of the increased costs of doing business in a regulated environment, many U.S. companies moved "next door" to make their mess, free to do so in nations without an environmental regulatory regime in place. Not surprisingly, most of these nations were developing ones, lacking the means or infrastructure to regulate these environmentally-detrimental practices and operations.

The solution may seem simple enough at first glance - regulate all activities carried out abroad by U.S. corporations based on the controlling law of their headquarters, applying the federal U.S. environmental laws extraterritorially against U.S. corporations. In other words, Congress should mandate, and the U.S. Courts should enforce, federal U.S. environmental laws requiring U.S. corporations to comply in their operations abroad. However, in reality, such a regulatory scheme would be extremely difficult, if not impossible, to police and enforce and would be cost-prohibitive. Even ignoring a general presumption by the U.S. Courts that, unless Congress explicitly dictates otherwise, general U.S. laws do not apply extraterritorially, a myriad of legal, political, and social differences among nations makes daunting the task of commanding U.S. standards to be practiced abroad by U.S. corporations.

The best solution may be a surprising one - a regulation of the U.S. corporations not through Congress or the U.S. Courts, but rather by the very companies themselves. As noted by environmental and regulatory scholar Michael Vandenbergh of Vanderbilt University Law School, many U.S. corporations are voluntarily choosing to comply, and even to exceed compliance, with U.S. environmental standards in their operations abroad. For instance, in an example of what Vandenbergh terms "The New Wal-Mart Effect," many U.S. corporations, through the voluntary adoption of standards more stringent than current U.S. laws and through private contracting with foreign corporations, are creating a private global governance

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