Corporate & Human Rights Legal Theory: Cross-Border M&A Due Diligence and Human Rights Obligations in Emerging Markets

Abstract Cross-border merger and acquisition due diligence prices financial and legal exposure through representations, warranties, indemnities, and conditions precedent. Human rights exposure typically attaches to a rightsholder with no claim against the transaction at all, and the standard due diligence taxonomy (financial, legal, tax, regulatory, operational) has no category built to record it. This Article argues that the gap is structural, and that the EU’s Corporate Sustainability Due Diligence Directive converts it, for an expanding set of acquirers and targets, from a reputational shortfall into a compliance failure with legal consequence. The argument grounds the corporate responsibility to respect human rights in the UN Guiding Principles’ “Protect, Respect and Remedy” architecture and in the critique that voluntary corporate social responsibility cannot substitute for legal obligation where host-state institutions are weak. It maps the standard M&A due diligence protocol against that architecture to show where human rights risk falls outside it, and uses recent English, Canadian, French, and Dutch parent-liability decisions to show that risk missed at signing can still crystallise into legal exposure years later. It then works out, clause by clause, how a human rights representation, a material-adverse-effect trigger, an indemnity, and a post-closing covenant could close that gap, using mechanics already standard for every other category of transactional risk, before testing the argument against the emerging-market transactions where the gap is widest. The Article’s contribution is to show that the separation between corporate and human rights law in M&A practice is no longer a matter of choice for the acquirers and targets mandatory due diligence law now reaches, and to set out what reconfiguring that practice requires. Table of Contents I. Introduction II. The Theoretical Framework: From CSR to the UNGPs and Beyond III. The M&A Due Diligence Protocol: What It Covers and What It Misses IV. Comparative Corporate Governance and the Emerging Market Interface V. Mandatory Due Diligence and the M&A Lifecycle VI. Parent Company Liability and the “Travel” of Human Rights Risk VII. Contractual Mechanisms: Reps, Warranties, Indemnities, and Human Rights VIII. Emerging Markets as the Stress Test IX. Conclusion: Reconfiguring the Due Diligence Protocol