Promoting Environmental Governance in India’s Industrialization through Extraterritorial Corporate Regulation: A Case Study

Enhancing the environmental governance of multinational corporations is a major challenge in today’s global economy. Various global corporate governance initiatives thus promote procedural justice and due diligence. Among those, the OECD Guidelines stand out for providing an extraterritorial grievance mechanism. However, when a transnational social movement uses this mechanism to challenge the environmental policies of a corporation in a given country, one wonders how the proceedings alter environmental governance on the field. This paper analyzes the impact of this mechanism by looking at a case where a coalition of French and Indian NGOs challenged the investment of a French multinational corporation in India. Drawing upon extensive field research in India and in France, we argue that the mechanism promotes procedural justice but faces structural hurdles which undermine its effectiveness: it cannot enhance environmental governance and sustainable development at the regional level in a context of state-led industrial and infrastructure development.