Commentary: Recent decisions in the UK on parent company liability cases show the need for law reform

Author: William Meade, CORE Coalition, Published on: 7 September 2018

...At present...there is no statutory regime in the UK for dealing with alleged violations of human rights by corporate actors...In three parent company liability cases heard before the UK Court of Appeal – Lungowe v. Vedanta, Okpabi v. Shell, and AAA v. Unilever – companies have argued that their UK headquarters are a separate legal entity with insufficient control over their subsidiary to be held liable for the harm...Parliament must respond by reforming the law to clarify parent companies’ responsibilities and liabilities for human rights abuses.  Here are four reasons why:

1. Victims face insurmountable barriers to justice in their home country.
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2.     Information vital to proving the claim is under lock and key with the companies.

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3.     The UK government and UK multinationals have signed up to international standards on responsible business conduct.

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4.     There is a clear trend towards embedding the corporate responsibility to protect human rights into law.

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Properly formulated, a mandatory requirement in the UK would benefit business as well as victims.  Parliament should pass legislation enshrining the developing international standards on business and human rights to shift the burden of proof for victims; create less focus on a need to prove ‘control’ thereby mitigating against risk of parent companies distancing themselves from subsidiaries; and enable victims of environmental and human rights abuse to access justice.

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Related companies: Shell Unilever Vedanta Resources