Commentary: Rethinking parent companies’ liability for their subsidiaries’ human rights abuses abroad

Author: Gwynne Skinner, Willamette University College of Law, on CLS Blue Sky Blog (USA), Published on: 15 February 2016

"Rethinking Limited Liability of Parent Corporations for their Subsidiaries' Extraterritorial Violations of Human Rights Law", 10 Feb 2016

In order to ensure that victims of business-related human rights and gross environmental abuses in countries that host transnational business (host countries) are able to have the ability to seek and obtaining a remedy for their harm, courts should ignore the separate legal personality of parent corporations operating in countries with weak or corrupt judicial systems where the victims cannot otherwise obtain a remedy against the subsidiary, allowing corporate parents to be held liable for such harm. In such situations, the corporate parents are the entities that can best, and normatively should, remedy the victims' harm, even if they do not "control" the subsidiary or are directly responsible for the harm. This is because the parent corporations inure great financial benefits through the operation of such subsidiaries often at the expense of nonconsenting, third-parties by externalizing the risks and harms. Moreover, the corporate parents are well aware of human rights risks in these countries, and of the difficulties victims will have in obtaining a remedy if they are harmed...[Refers to Shell lawsuit (re Nigeria - Kiobel & Wiwa)]

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