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S. Pohjonen: Law and Business successful contracting, corporate social responsibility and legal thinking. JFT (Tidskrift utgiven av Juridiska Freningen i Finland) 3-4/2009, 470-484.

Soile Pohjonen

LAW AND BUSINESS

Successful business contracting, corporate social responsibility and legal thinking

1. Introduction

In the present article, legal thinking is seen on the one hand from the viewpoint of business deals, and on the other from the viewpoint of a good life for people. How does contract law as it is today impact business contracting? Is it beneficial for business in the real world? How does legal thinking promote responsibility and especially corporate social responsibility? Does law efficiently protect societies from the harm caused by business?

2. Why do we have contract law and how is it viewed at the moment?

The first question in the title, Why do we have contract law?, could be answered in many different ways depending on the viewpoint and the contract type. This article deals with the business-to-business contract type. Law has its own traditional viewpoints, including ideas of justice; modern law as the law of the state; and the law, judicial system, and jurisprudence as separated from society and the social sciences, and so forth. Even if law is not so often seen as the law of society1 it is self-evidently considered also useful for various social functions. That contracts can be trusted, i.e. even enforced if needed, has been seen as important for business.2 Contract law3 has recently been widely deliberated on by European academics. The Principles of European Contract Law (PECL) was published in 2000.4 In 2008 The Study Group on an European Civil Code and the Research Group on Existing EC Private Law (the so-called Acquis
In his doctoral thesis Jussi Syrjnen, Oikeudellisen ratkaisun perusteista, (On foundations of legal decision, Helsinki: Suomalainen lakimiesyhdistys 2008), 146-148, talks about the law of society. He does not see law as the law of the state but as law of society and emphasizes the role of law as a social actor. 2 In practice, the enforcement of national court decisions is not very efficient on the international level but the enforcement of arbitration awards is. 3 The main interest has been in consumer law, not in business-to-business contracts. 4 Principles of European Contract Law (PECL), prepared by The Commission on European Contract law, ed. Ole Lando - Hugh Beale (The Hague: Kluwer Law International 2000).
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2 Group) presented the academic Draft of a Common Frame of Reference (DCFR)5, containing principles, definitions, and model rules of European Private Law. These intend to provide legal foundation and inspiration for EU and national legislation as well as for the courts. It was hoped that the PECL would be adopted by parties and form a modern Lex Mercatoria. It was also pointed out that the DCFR should reflect the underlying values in individual jurisdictions, balancing them when there are differences. The draft is intended to promote increasing understanding of each others legal systems and collective deliberation on private law in Europe.

This cooperation would offer ample opportunity for a wider perspective: to ponder what would be needed for successful business contracting, to ask the following questions. What are the needs of the society and the needs of the business? How have the different legal systems succeeded from this viewpoint? Have some systems been more successful than others when viewed in terms of certain aspects? What is there to learn from each other? And perhaps most important of all: what are the consequences of legal thinking an sich in real life? Are these influences the desired ones, generally and in particular situations? How should legal thinking be developed to meet real-life needs?

3. Business contracting and contract law

Business deals are nowadays often realized within large international networks which are challenging to manage. Business contracting is agreeing upon the cooperation, its scope, duties, responsibilities, and working methods. Ideal contracting is a search for a dynamic balance between binding rules and flexibility. Mastering this is a central contracting skill. Skills do not consist of the strict interpreting of norms and rules or the applying of models, methods, and theories, nor of the persistent reaching for precise goals. All of these may provide a basis and a framework for skills, but skills themselves are more a balancing act in a particular context. Contracting parties, for example, must, on the one hand be able to identify situations in which written documentation is needed for clarity or evidence, and on the other, situations where documenting means mainly extra work and bureaucracy. 6 For future disagreements a richer documentation is often helpful to indicate to what extent the parties have intended to either
Principles, Definitions and Model Rules of European Private law, Draft Common Frame of Reference (DCFR), eds. Christian von Bar - Eric Clive - Hans Schulte-Nlke - Hugh Beale - John Herre - Jrme Huet - Peter Schlectriem - Matthias Storme - Stephen Swann - Paul Varul - Anna Veneziano - Fryderyk Zoll, (Munich: sellier. European law publishers 2008). 6 Soile Pohjonen and Kerttuli Visuri, Proactive Approach in Project Management and Contracting in Helena Haapio (ed.), A Proactive Approach to Contracting and Law (Turku: International Association for Contract and Commercial Management and Turku University of Applied Sciences 2008), 75-95.
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3 adhere to or deviate from the contract text or other commitments. From the legal point of view a documentation of the underlying reasoning helps to clarify the liability of each party. In the practice of a contracting process, clarifications are made in meeting minutes, for example. These documents seldom contain motivations, rival suggestions, or notices of which of the parties supported or dissented from the respective decisions.

Contracting skills in a corporation do not only consist of human capabilities that are promoted with proper training but flourish or wither in particular surroundings. 7 Even if individual capabilities are important, they can only be fully utilized in properly planned and executed operational chains. The main challenge from the viewpoint of the organizations is the planning of the contracting process and the working environment. If contracting skills are based on structures, working methods, knowledge received from professional education, and experience etc., the skills themselves usually include an ability to strike a balance skillfully in a particular situation in order to reach the desired goal. Contracting skills can be seen from two perspectives: systems as enablers and skills in being able to find a dynamic balance between seemingly contradictory ends when operating in the systems.

Contracting forms a whole where the legal part is not separate from the operation itself. For example, liabilities and damages are closely connected to work definitions and timetables as well as planning of available resources. Careless contracts may give the other party unintended opportunities to demand damages. Unbalanced contracts appear unfair. Contracts may contain much legalese which is not even possible to realize in the business reality. Good contracts should not contain anything which is not really necessary, as has been emphasized in the lean contracting approach.

Contracting is often seen purely from the perspective of contract negotiation, forgetting the importance of implementation and contract management. The people who implement contracts have rarely negotiated them. Contracting processes should make contract management clear and easy for employees. Employees need proper information and education as well as contracting toolkits, containing model documents, offers, orders, descriptions, contracts, IT programs, and so forth.8 The process should be viewed from kick-off to closure, and in terms of planning change management and documentation policy. In the increasing service-based economy, performance
It has been pointed out that the main method of quality development still often is to increase proficiency of individual employees, i.e., to tackle particular reasons. The basic idea of quality thinking, i.e., the development of operational chains, has still not been fully understood. 8 Pohjonen and Visuri 2008.
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4 is largely created by the actions of service providers in the field, in collaboration with the customers employees. The service product is thus created by supporting structures, education, motivation, and instructions.

Disciplines focus on their own particular interest areas and views. Lawyers are trained to internalize the starting points of legal logic. As practitioners they learn to view things through the lenses of their tasks. Networked contracting processes typically include people representing various disciplines and professions. If the parties do not thoroughly discuss the idea of the contract - what they seek from the cooperation, what their goal is, and what their working methods are - the result can be misunderstanding and dissatisfaction. It is difficult to work towards a common goal if in reality two or several separate and conflicting goals exist. Ones own starting points are often so deeply internalized that their difference compared with others is not always recognized. False assumptions are thus easily made on the basis of ones own preunderstandings.

The starting point of the DCFR is legal thinking, pondering the similarities and differences in European legal systems. A contract is defined to give rise to a binding legal relationship and to be a juridical act (Book II 1:101). In business, a contract should be part of a contracting process, agreeing upon the business deal in a business relationship. If parties consider a contract as a juridical act (as they often do) legal aspects are separated from the most important part: the business deal, clarifying its goals, and the obligations and rights of the parties. Legal risks are connected to business risks. Lawyers alone cannot fathom them and their significance without good knowledge of the business itself and cooperation with the professionals who know the substance of the business and the circumstances where it operates. When preventing legal risks becomes too important, an unreasonable amount of time is used to formulate the wordings to prevent the other party from taking advantage of careless expressions. When this formulating is found to be beneficial only in terms of possible future legal disputes or for negotiations in their shadow contracts feel like a dull waste of time from the business perspective.

3.1. Law and contracting as a process

The PECL points out that two of its principles may conflict, namely pacta sunt servanda (agreements must be observed) and rebus sic stantibus (undertakings are based on the premise

5 that circumstances remain as they are) 9. Normally pacta sunt servanda is the paramount principle but if performance of the contract becomes excessively onerous because of a change of circumstances the parties are obliged to enter into negotiations to adapt or end the contract on certain conditions (article 6:111).

From the legal point of view, ideal contracts have been viewed as final. Even if changes are a common and natural part of collaboration, in contract law they are seen as exceptions. On the other hand, contractual preparation for changes is sometimes seen as an impossible task (e.g. the term dynamic contracts has been used for leaving intentional gaps) without much consideration for the consequences. These attitudes prevent changes from being adequately and proactively prepared for. When contracts are seen as processes of dialogue and learning, changes and their management are a natural part of the process. In practice, parties may not want to raise potential problems or discuss certain issues, or they may want to leave parts of the contract text unclear to leave room for interpretations beneficial for themselves, or let some issues remain unsettled for the time being instead of looking for a bad compromise, which may even be based on false assumptions or facts available at the time the decision was made.10 Sometimes the weaker party may feel that it is unable to negotiate a balanced enough contract, so contracts with gaps seem to serve its interests.

Current contract law is based not on the idea of furthering cooperation but rather on ensuring the enforcement of binding contracts by deciding legal disputes. This leads to a logic according to which it is wise to make contracts that are final, binding, and enforceable. According to this logic, formal requirements for change are defined in a tight and formal manner instead of developing change management systems. In practice, when a contract is implemented and changes occur, this may lead to unnecessary disputes. If the people implementing the contract neglect a form requirement, this may provide a reason to the other party to contest the contract.11 When the main emphasis is on the legal significance in a possible dispute, the contracting parties must focus most of their attention on matters which are of secondary importance from the viewpoint of the business deal. The predictability of a legal dispute is promoted instead of the predictability of the business outcome. If the parties instead agree to solve their problems in negotiations or through mediation, the process of discovering and creating their shared will can
PECL 2000, xxxvii. Pohjonen and Visuri 2008. 11 Ritva Sipil, Vastuutilanteiden ja suunnitelmamuutosten hallinta (Liability and change management) in Helena Haapio et.al. (ed.), Sopimusten ja hiritilanteiden hallinta rakennusprojekteissa (Contract and disturbance management in construction projects, Helsinki: Tietosanoma 2005), 49-84.
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6 continue. The law would, thus, as it is today, seem to force or tempt the parties to aim for formal perfection and for holding on to their rights instead of successful business cooperation, which should be their main interest.

The structures of a process need to enable sensitivity to the needs of change. The processes of change are often slow and gradual. 12 The ideal of a final contract does not develop responsiveness to the warnings or new innovations towards which weak signals may point.13 The precondition for recognizing weak signals is an atmosphere which encourages noticing and admitting unpleasant news as well as ones own mistakes in order to be able to make necessary changes early enough. It is an atmosphere of a learning organization. Such an atmosphere is not created with the legal logic of searching for parties liable for mistakes. A plan which has been followed exactly as designed would seem as a failure from the point of view of functional phenomenology14. In this case the working process would not have been open and reflective, adaptive to circumstances, and giving the work itself space to find its own way.

Phenomenological philosophy has been viewed as an open process, as a dialogue, as asking and wondering. Defining and interpreting are more prevalent attitudes in theoretical thinking. Wondering is connected to enabling providing space for individual becoming. When philosophy is seen more as wondering, it admits the limits of rationality. An attitude of wonder enables listening. A need exists for processes which have as their goal to create and clarify the will of the parties, and ex ante rather than ex post. To view systems as continually-developing processes of understanding increases both the reactive and proactive ability as well as sensitivity of the system. The system becomes more self-reflexive. Law and contracting would thus be seen as responsible actors in a particular social reality, which reflects the kind of reality it furthers.

3.2. Whose will?

Contract law is largely based on the ideal of the freedom to express free will. Drafters of the CFR have listed the core aims of European private law. First on the list is justice, and second is freedom. In its model rules the draft aims at reaching a just and fair solution for the situation in question. The DCFR is mainly concerned with corrective justice. If, for instance, the parties to a
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Peter M. Senge, The Fifth Discipline, The Art of Practice of The Learning Organization (London: Random House 1999/1990), 21-23, 27-54. 13 On weak signals in contracting, see Pohjonen and Visuri 2008. 14 Jaana Parviainen, Meduusan liike, Mobiiliajan tiedonmuodostuksen filosofiaa, (The movement of Medusa, Philosophy of knowledge creation in the mobile time, Helsinki: Gaudeamus 2006), 50.

7 contract are fully informed and in an equal bargaining position when concluding it, the content of their agreement can be presumed to be in their interest and thus just.15 The model rules are intended to promote economic welfare and reflect what the parties might have agreed upon in terms of efficient solutions.

Referring to justice and autonomy/freedom as the goals of law itself, the liberal concept of free will presupposes human autonomy, for will is viewed as being free if it is not hindered. The legal interest concerning freedom of will is usually in protecting people from being forced, manipulated or exploited. Will has often been seen as something that already exists and should not be broken. This understanding assumes that the contracting parties are able to realize their free and conscious will through the freedom of a contract. Each individual is supposed to know and be conscious of her own will.

Nevertheless, the will of a human being is a complicated internal and organizational process. How free and conscious can the will be if one is not conscious of ones mental and emotional hooks, of the effects of ones past, adopted understandings, and so forth? To take autonomy as the aim, rather than as the basis of contracts, requires assurance that expressions of the will do reflect real understanding. Even the contracts of equal parties in good collaborative relationships do not often reflect the real will of the parties. Sometimes the parties have quite a vague idea of what they want. Sometimes they understand the deal differently, and sometimes they fail to understand legal language correctly. Business partners may not realize how the legal system fills the gaps in contracts. They may be unintentionally legally bound to or released from obligations.

In hermeneutics, the importance of being conscious of our pre-understandings and the prestructures of our mind, which influence our interpretations, has been highlighted. Self-reflection is a way to decrease the inevitable subjectivity of the human mind. In efforts to understand others, interpretation should be avoided. Active listening emphasizes paying full attention, asking further questions and attempting to understand instead of interpreting and supposing what others mean. Our suppositions could be called tacit ignorance.16 When we label others and their thinking according to our existing categories, we no longer listen to them; we hear them
DCFR 2008, 14. Helena Haapio has created the term tacit ignorance, as a concept opposite to tacit knowledge, to describe knowledge that people wrongly imagine to be correct, H. H., Jik jotain sopimatta? Kaukoviisautta kaupankyntiin ja oikeudellisten ongelmien torjuntaan (Was something left out of the contract? Foresight for business dealings and the prevention of legal problems) in Soile Pohjonen (ed.), Ennakoiva sopiminen, Liiketoimien suunnittelu, toteuttaminen ja riskien hallinta (Proactive Contracting, Planning, Implementing and Managing Risk in Business Transactions, Helsinki: WSOY 2002), 3-82, 9.
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8 according to some particular logic. People, statements, and texts are interpreted in law according to legal logic. Concept systems usually require consistency, which is foreign to an inconsistent world. The Proactive Contracting approach (more in the next chapter) highlights the target that the common goal be understood in a somewhat similar way among the contracting parties and that the employees involved in the implementation of the business deal be aware of what is expected of them and why.

3.3. Proactive contracting

In Proactive Contracting, 17 contracting is considered a cross-professional process to enable success ex ante. It seeks to enable the parties to reach their business goals by developing proper undertandings, structures, rules, procedures, and tools. Proactive Contracting also aims at identifying possible sources of disagreements and problems by bringing them out into the open before they cause damage. It looks at contracting from the perspective of contracts as well as the whole contracting system of an organization and the implementation of the agreements by different employees. Further, it understands contracting as an essential part of business management and strategic planning. The orientation of Proactive Contracting is to the future, whereas the traditional focus of juridical research on contracting has been on the past, related mainly to legal disputes. If it has looked forward, the traditional legal view has focused on minimizing legal risks. Contract law is mostly about dealing with contract failures.

Proactive Law belongs to approaches born out of real-life needs to balance the prevailing legal logic. It belongs to legal approaches which emphasize the many-sided, varied, and interactive nature of human reality. In Proactive Law, the emphasis is on achieving the desired goal in particular circumstances where legal expertise works in collaboration with other types of expertise involved. The approach specifically called Proactive Law emerged in Finland and has since developed into what is now known as the Nordic School of Proactive Law18 and is currently in the process of expanding into a European network. Its source was Proactive Contracting in the business-to-business context. It has been developed in interdisciplinary thinking together cooperation between researchers and experts in contracting practice.

See more e.g. Helena Haapio (ed.), A Proactive Approach to Contracting and Law (mentioned above in the footnote 6). While Proactive Law has received much inspiration from Preventive Law, see Louis Brown, Manual of Preventive Law (New York: Prentice-Hall, Inc. 1950) the latter favors the lawyers viewpoint, i.e., the prevention of legal risks and problems. In Proactive Law, the emphasis is more on achieving the desired goal. 18 Peter Wahlgren and Cecilia Magnusson Sjberg (eds.), A Proactive Approach, vol. 49 (Stockholm: Scandinavian Studies in Law, Stockholm Institute for Scandinavian Law 2006).

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9 Knowledge of the reality concerned, in this case business activity, has been an essential foundation of this approach.

Proactivity differs from reactivity in that it emphasizes consideration of how one can create the preconditions for achieving goals oneself in a manner that does not contribute to unnecessary problems. Therefore it is not about simply reacting to something that has happened or is happening. Rather, it is about self-reflection and responsibility. Since court decisions have constituted the core interest in legal thinking, the most common future-oriented element in legal discussions has been the anticipation of those decisions. Proactive Contracting in practice could be characterized as the viewpoint of a corporate lawyer who has learned to understand the ways in which other professionals think, and to collaborate in the search for common goals, i.e., enabling success by providing one of the necessary elements, legal know-how, in collaboration with other kinds of know-how.

The European Economic and Social Committee (EESC) has given an opinion on the proactive law approach.19 The EESC urges a paradigm shift: giving up the centuries-old reactive approach to law and adopting of a proactive approach. It is time to focus on how the law is used and operates in everyday life and how it is received in the community it seeks to regulate (page 1). The EESC points out that Proactive Law is about enabling and empowering and that the Community legal system is by its very nature the type of system where the proactive approach should be adopted. As EU law is specifically target-oriented, it would seem natural that a factual reaching of the targets would be taken seriously. In the EESC opinion it is believed that it would be beneficial if EU law and its makers would shift their focus from inside the legal system to outward, to the users of the law: to society, citizens and businesses that the legal system is intended to serve (page 2). At the end of the opinion, research projects and wide dialogue are wished for.

4. The responsibility of legal thinking

Moral and legal discussions on responsibility have traditionally been ex post oriented. Causality chains and questions involving what was deemed ones duties and what one was free to choose, have constituted prevailing grounds for accountability, or guilt. Nowadays, the ex ante view

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European Economic and Social Committee (EESC), Opinion on The proactive law approach: a further step towards better regulation at EU level (own-initiative opinion), INT/415 CESE 1905/2008 EN/o, http://www.eesc.europa.eu.

10 point has become increasingly relevant with regard to proactive responsibility for de facto future consequences. Proactive responsibility represents the ethic of care. The idea is not to decide the premises for ex post accountability, but to ponder ex ante what de facto will follow. To be able to assess de facto consequences, familiarity with the reality in question is needed. Responsible contracting includes responsibility for the success of the deal as well as for social welfare. The topic of responsibility is a good example of the effects of gender in theoretical thinking. Research seems to indicate that in our culture men are more bound to see responsibility as legal accountability while women tend to emphasize proactive responsibility for de facto consequences in the real world. 20

Target-oriented welfare state legislation should enable the actual realization of rights. This kind of realization requires many-sided social activities in which legal aspects are, as always, only one thread of the texture. In regulation theory the focus is on regulation in general, so that in principle, legislation is only one guiding measure among others21. In the end, target-orientation is actually not connected to welfare state legislation or guiding principles only, as ultimately all law should promote a good life and the common good. From a proactive and target-oriented perspective, legal responsibility seems to promote the evading of responsibility and increasing future risks. When sanctions follow from particular deeds and defaults, covering up these is promoted instead of mapping risks and developing processes. The success of business deals is in the interest of all parties. If failures can be reported and learned from, the processes can be developed towards success. If failures are hidden and denied, the risks increase. Scott Veitch22 points out how laws focus on rights and obligations gives it the image of an organizer of responsibility. Contract law as the definer of how obligations are created appears as one of societys key modes of asserting and defining responsibilities. In his book Law and Irresponsibility, he shows how legal institutions are instead involved in organizing irresponsibility. Laws normative claim to correctness even when its effects were unjust, the enforceability of legal standards, and laws priority in normative social hierarchies establish the ability of law to organize both responsibility and irresponsibility. Law normalizes the production of suffering and operates to fragment responsibilities through its modes of categorization. Veitch
Carol Gilligan, In a Different Voice (Harvard University Press 1982) and Ahokas, Marja, Passini, Stefano ja Pirttil-Backman, Anna-Maija, Muuttuuko vai eriytyyk ksitys vastuusta? (Does the understanding of responsibility change or differentiate?) in Pirttil-Backman Ahokas - Liisa Myyry - Susanna Lhteenoja (ed.), Arvot moraali ja yhteiskunta (Values moral and society, Helsinki: Gaudeamus 2005), 115-144. 21 See e.g. Christine Parker - Colin Scott C Nicola Lacey John Braitwaite (eds.), Regulating Law (Oxford University Press 2004). 22 Scott Veitch, Law and Irresponsibility, On the legitimation of human suffering, (Oxon: Routledge-Cavendish 2007), 2-3, 26, 44, 48.
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11 refers to Zygmund Bauman, saying that The more rational is the organisation of action, the easier it is to cause suffering. When the judge is only applying the law, responsibility for role is segregated from responsibility for consequences. From the viewpoint of institutions which celebrate rationality, productivity, accountability, measurement, responsibility, and wealth, the experience of extensive suffering appears as an excess, as irrational, as contradictory; however, it is not: the suffering is caused by the same characteristics.

4.1. Corporate social responsibility

Larger scale actions causing great harm are not so readily measured as breaches of law as are smaller scale actions which produce less harm. 23 Responsibility for great harm such as environmental pollution is fragmented and disappeared so that often no-one is considered responsible. Non-responsibility is decisively achieved when the harms are legal. Business is an increasingly powerful force in our global society. Its impact can cause great harm directly and indirectly in various ways, as well as great benefit. The responsibility of corporations is also easily fragmented and disappeared. Responsibility is connected to influence. The general opinion is that governments should have the main responsibility for human rights so that even if companies are considered responsible for their impact there are limits to both their responsibility and their right to influence.24 Disagreements concern the role of legislation versus that of selfregulation in corporate social responsibility.

In the recent report of the Special representative of the Secretary-General on the issue of human rights and transnational corporations and other enterprises, John Ruggie25 seeks to provide more effective protection to individuals and communities against corporate-related human rights harm. The report presents a principles-based conceptual and policy framework which comprises three core principles: the State duty to protect against human rights abuses by third parties, including business; the corporate responsibility to respect human rights; and the need for more effective access to remedies. Ruggie points out the governance gaps (created by globalization) between business activities and the capacity of societies. The gaps provide a permissive environment for
Veitch 2007, 117, 142-143. Besides using their influence in a positive way there is also the opposite possibility. Some companies are, for example, known to have used their influence on governments to prevent legislation promoting human rights, and might also want legislation that benefits them but also violates human rights. 25 Human Rights Council, Promotion and Protection of all Human Rights, Civil, Political, Economic, Social and Cultural Rights, including the Right to Development, Protect, Respect and Remedy: a Framework for Business and Human Rights, report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other enterprises, John Ruggie, A/HRC/8/5, 7 April 2008, http://www.businesshumanrights.org/Documents/RuggieHRC2008. The report is based on extensive research and consultations.
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12 wrongful acts without adequate sanctioning or reparation. Ruggie emphasizes the need to know the division of responsibility in practice between states, businesses, and civil societies, in order for them to act coherently. His research indicates that the business and human rights agenda of governments is segregated from other policy domains concerning business. Ruggie warns that the passivity of governments increases reputational and other risks to business.

Access to formal judicial systems is often difficult in human rights violations by company impacts, in addition to non-judicial mechanisms being underdeveloped. The impact of business in various situations is not easy to fathom so that fostering a corporate culture respectful of human rights is a demanding task. The responsibility of companies is not merely a passive doing no harm but should also entail positive proactive steps.26 The realization of human rights policies requires their integration throughout the company consistently in all corporate activities. Human rights as well as contracts should be seen as strategic tools. In practice, adequate information, practical and operational solutions, models, experimental programs, and the sharing of best practices would be needed.27 It is essential to take seriously the usefulness of the tools planned. If the tools do not realize the goals desired the effect they have may even be counteractive. To take one example: in human rights procedures, reporting is a popular method; skill is demanded in order to know how and when the reporting is actually beneficial and when it is mainly extra work, bureaucracy or window dressing. Merja Pentikinen28 points out that the existing legal framework is not able to accept the challenges raised by international business. Governments should ensure that markets function for people and that business can realize its goals within regulated frameworks. Corporate responsibility should be proactive and preventive. It is realistic to admit that there is often a tension between human rights and profit seeking. Thus the more there is reason to offer business help and specific guidelines on how to fulfill its social responsibility. Companies rarely have systems in place to enable them to know if they in fact are respecting human rights in particular situations and how they could make sure that they do.

In his report Ruggie has divided the chapter The corporate responsibility to respect into the subchapters Respecting rights, Due diligence, Sphere of influence and Complicity. 27 The above-mentioned report by John Ruggie and the book by Merja Pentikinen mentioned below both contain information on practical solutions. 28 Merja Pentikinen, Yritystoiminta ja ihmisoikeudet (Business and human rights, Helsinki: The Erik Castrn Research Reports 26/2009, University of Helsinki 2009), 108-129. For this book she has interviewed representatives of Finnish corporations about corporate responsibility. The book includes comprehensive information on conventions, declarations and guidelines concerning corporate social responsibility and human rights.

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13 Pentikinen discusses how business is often considered as separate from politics. The harm done by the separateness of different spheres, their discussions, logic, and terminology, becomes apparent in the attempts to tackle many-sided social problems and to reach goals like protection of corporate-related human rights. Pure business would be seen as an activity dedicated merely to its own task and logic, like pure law. These pure entities limit their responsibility to defined areas and leave the actual responsibility to politics. The need for multidisciplinary and multiprofessional dialogue including dialogue between academia and the business world has been emphasized in order for different actors to function coherently. Ruggie informs that every stakeholder group, despite their differences, has expressed the urgent need for a common framework of understanding, a foundation on which thinking and action can build in a cumulative fashion.29

In the DCFR the protection of human rights and invalidation of contracts harmful to third persons and society in general, as well as the obligation to cooperate, have been mentioned. 30 To take these aims seriously, concrete procedures should be developed. Pentikinen points out the weak role of the EU in framing corporate social responsibility. EU activities have remained on a very general level. The time for a wide and deep European dialogue on the relation between business and society (including law) and for the development of concrete plans to realize the goals would seem to be ripe.

5. Law for people and their activities

What would a peoples law be like, law which takes into consideration people as social and human actors from the viewpoint of societies and people instead of from that of legal decision making? It could be legal thinking whose creators are somewhat conscious of the grounds of their logic; it could be law whose logic and structures help to reach the goals intended in real life. It would educate lawyers who are able to work with people. In law which is developed for the use of people, understanding of the function of the human mind, feelings, and behavior as well as our living conditions would be emphasized. Interest in the human mind is increasing in many disciplines, and in law an approach called Cognitive Legal Science has emerged. 31 Selfreflection in legal theory should include pondering its own consequences, as well as the starting
Presentation of Report to United Nations Human Rights Council, Professor John G. Ruggie, Special Representative of the Secretary-General for Business and Human Rights, Geneva, 3 June 2008, 2. 30 DCFR 2008, 17-18. 31 See Steven L. Winter, A Clearing in a Forest, Law, Life and Mind, (University of Chicago Press 2001) and The Brooklyn Law Review 2002. The Brooklyn Law School Center for the Study of Law, Language, and Cognition was founded in 1999.
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14 points and metaphors it is based on. The purpose of theories should be to increase understanding of legal thinking, its pre-understandings and its influence; it should not be for them to become self-supporting intrinsic values.

The question of how human minds in fact work is, amazingly enough, of quite recent interest in research, even in psychology. Timo Latomaa32 has pointed out that even if a central part of the work of a psychologist is based on understanding the client/patient, the basis for and the logic of understanding are not taught to the psychology student. The Therapeutic Jurisprudence33 approach seeks to point out emotional hindrances to the realization of legal plans and to prevent psycholegal soft spots. The work of a lawyer is very much human relations work, which is hardly taken into consideration in legal education. 34 A lawyer should be able to understand the needs and messages of a client or a cooperation partner in order to use her legal expertise for the desired purpose.

Legal language and its ideal of clarity are based largely on the understanding that words and concepts are containers whose contents are transferred more or less unaltered. Nevertheless, it has been argued that human thought processes are largely metaphorical, and that our conceptual system is mostly metaphorically structured.35 This has not been admitted to any great extent in our scientific traditions, where concepts have often been understood as conscious, literal, and disembodied. When metaphors are understood as our way of having a reality, the question will not be what they mean but how they work. A metaphor is not asked to validate a rule of logic; the question, rather, is what logic and reality it constitutes and enables36. Behind legal thinking still looms the MACHINE metaphor. The old ideal of a judge as a decision machine clearly represented this metaphor. But the metaphor also enables coherent systems based on their own rationality, untouched by the surrounding world. It does not, though, enable the idea of law as an open process.

Timo Latomaa, Ymmrtv psykologia: psykologia rekonstruktiivisena tieteen (The understanding psychology: psychology as a reconstructive science) in Juha Perttula - Timo Latomaa (eds) Kokemuksen tutkimus (Research of experience, Helsinki: Dialogia 2005), 17-88, 19. 33 See, e.g. Dennis P. Stolle David B. Wexler Bruce J. Winick (eds.), Practicing Therapeutic Jurisprudence, Law as a Helping Profession (Carolina Academic Press 2000). 34 Soile Pohjonen and Sari Lindblom-Ylnne, Challenges for Teaching Interaction Skills for Law Students, The Law Teacher, vol. 36, (2002). 35 George Lakoff and Mark Johnson, Metaphors we live by (Chicago and London: The University of Chicago Press 2003). The conduit metaphor originates from Michael Reddy. 36 Winter 2001, 58, 65-66.

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15 The PROCESS metaphor would produce thinking and reality where law is seen as an interactive open process developed for people. This kind of process would continuously search for a dynamic balance between defined stability and free flow, rationality and irrationality, theoretical knowledge and skills. These viewpoints have been emphasized in legal discussions,37 but is the PROCESS metaphor really internalized? If it were, it should begin to be distinguished in the structures and logic of law such as contract law and legal responsibility. The increasing number of networked, long-term partnerships with no clear-cut beginnings or ends, emphasize the need for process-natured managing as well as large social problems that need to be addressed by responsible actors.

If law is seen as made for people, the starting point is the lives of people in their varying contexts. From this viewpoint, life is not strictly divided into independent sections such as law, business, politics and civil society. Instead, all these spheres have their interacting roles in the play. If success and a good life are desired in the real world, organizational systems must enable purposeful action in practice, and the kind of tools which in fact realize the goals desired need to be developed. 38 Multidisciplinary thinking together is needed between system creators and professionals in practice and between theory and skills. Law cannot fulfill its social tasks in a responsible way if it is seen as separated from social reality. As in contracting, the stages of the process (negotiations, implementation, dispute resolution) need to be considered coherently on the social level as well. The corresponding process of social institutions (legislation, administration, court decisions) should be observed as a coherent social process. In legal discussions, the separation of these spheres has usually been emphasized instead of seeing them as stages of a target-oriented process, which, illustratively enough, has no name.

To be able to develop systems which on one hand benefit business (contracting) and on the other enable a good life for people (responsibility), legal thinking needs to be rethought. Both of these aspects bring forth the need for broad dialogue and thinking together, instead of remaining in an isolated legal bubble. And vice versa, legal aspects need to be understood in order to have successful contracting and social planning. To be able to reach goals in real-world real-life circumstances and real-life people must be taken as the staring point. At the moment, contract law does not de facto seem to promote good business cooperation, and the legal attitude to responsibility does not de facto seem to promote responsible behavior.
Thomas Wilhelmsson, in whose honor this compilation is written is one example. One example of an increasing interest in legal tools is legal visualizing. See for example Colette Brunschwieg, Visualisierung von Rechtsnormen (Zrich: Schulthess 2001). Christa Tobler and Jacques Beglinger, Essential EC Law in Charts (Budapest: HVG-ORAC Lap-s Knyvkiad Kft. 2007) offers an example of visualizing EC law.
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