Corporate Human Rights Responsibility in Illiberal Regimes: The Example of the Ukrainian Refugee Crisis in Hungary

Abstract

Following the first-ever rule of law conditionality procedure in September 2022, a resolution was adopted by the European Parliament which declared that Hungary could no longer be considered a full democracy, as it had turned into a ‘hybrid regime of electoral autocracy’. Against this background, this article explains the business and human rights (BHR) gap in Hungary and presents its consequences for the Ukrainian refugee crisis. We first provide a general overview of the role of business in the development and consolidation of the Orbán regime over the past 13 years, highlighting how businesses are both agents and victims of legal and political developments. The paper distinguishes four types of ‘business’: multinational and foreign companies that are direct beneficiaries of the regime; local companies that are direct beneficiaries of the regime; multinational companies that are targets of restrictive and repressive populist rhetoric and economic policies; and the ‘rest’, the remainder that try to avoid becoming targets of oligarchic takeovers. The article also documents how the state and other stakeholders are failing to meet their commitments under the United Nations Guiding Principles on Business and Human Rights (UNGPs). The next part of the article assesses how companies are responding to the refugee crisis caused by the war in Ukraine, Hungary’s neighbour. If the government does not adopt Pillar I and Pillar III of the UNGPs, what room for manoeuvre do companies have? The focus here is on how companies, domestic and foreign, multinational enterprises (MNEs) and small and medium enterprises (SMEs), engage in humanitarian (and human rights) crisis management.