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1 Oct 2008

Joseph Kiarie Mwaura, Human Rights Program at Harvard Law School

[PDF] Corporate Human Rights Norms and the Clog of Limited Liability Within Corporate Groups: Towards an International Convention

Corporations conduct their business activities through a variety of business structures including, among others, wholly owned subsidiaries, partially owned subsidiaries, and affiliate corporations. In the event that a parent corporation controls the subsidiary or affiliate corporations, it may easily influence them to pursue profits through activities that violate human rights. In such cases, the parent corporation may still avoid liability because entity law deems the two corporations to be separate entities. This paper assesses the extent to which entity law undermines the protection of human rights and explores reform measures that states could adopt in order to fulfill their international human rights law obligations...The paper calls for the adoption of an international convention that would oblige states to replace principles of entity law with those of enterprise law in order to cover extraterritorial liability.