International law constraints on the jurisdiction of states have always posed difficulties for the regulation of multinationals. As discussed in chapter 2, international law is concerned fundamentally with relations between states. Multinationals are not traditional subjects of international law, and the extent to which international law now imposes obligations directly upon them is still controversial. This focus on states as the primary subjects of international law has led more than one commentator to doubt whether international law, as presently constructed, is properly equipped to deal with the challenges posed by international business. As multinationals span national boundaries, no one state has rights and obligations in respect of them. For these reasons, multinationals are often said to ‘fall through the cracks’ of the international regulatory system.

The aim of this chapter is to examine in more detail the concept of jurisdiction, as it applies to the social and environmental regulation of multinationals. As will be seen, different branches of law approach jurisdictional problems differently depending on whether the law is called upon to enforce public law or private law rights and obligations. Both are dominated by notions of ‘territoriality’. However, public international law (generally referred to in this book simply as ‘international law’), which governs the geographical scope of state power, tends to view jurisdiction in spatial terms, whereas in private international law jurisdiction is generally justified in terms of ‘connecting factors’ between the particular dispute and the ‘forum state’.