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18 Sep 2018

Business & Human Rights Resource Centre

Corporate Legal Accountability Bulletin - Issue 28, September 2018

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Welcome to our Corporate Legal Accountability Quarterly Bulletin -- highlighting a specific topic each quarter, as well as key developments in corporate legal accountability. The Corporate Legal Accountability hub on our website provides objective, concise information about lawsuits against companies in which human rights abuses are alleged.

Quarterly Highlight: Taking stock: Parent company liability for extraterritorial abuse

...Multinational corporations (MNCs)...play a dominant role in the global economy.  Business activities of such corporations are known to cause a range of adverse human rights and environmental impacts, in particular in countries in which the subsidiaries operate (host states).  The communities and individuals affected by these activities invariably struggle to hold MNCs accountable and to obtain redress for the harm suffered.  However, as recent caselaw continues to show, doing so is no easy task, and plaintiffs face a series of legal and practical barriers when attempting to obtain remedy...

Lack of due process, judicial independence and weak law enforcement may significantly limit access to legal remedy for victims of business-related human rights abuse when they bring claims against the subsidiaries in the country where the harm occurred (host states).  In view of these limitations, victims often find themselves forced to seek justice in a foreign court, typically where the parent company is incorporated...Targeting the parent company along with its overseas subsidiaries can offer certain advantages to the victims of corporate abuse...However, convincing a foreign court to admit jurisdiction over a case alleging an abuse suffered abroad may be a challenging task for the plaintiffs...

Efforts to hold parent companies accountable in home states continue to be a tremendous challenge for victims of corporate abuse.  In the absence of clear rules, establishing liability of the parent company for the human rights abuses committed by their subsidiaries will continue to depend on the circumstances of the case...