Liability of Parent Companies for Human Rights Violations of Subsidiaries

Abstract:

The infringement of human rights by subsidiaries of multinational enterprises has become a thoroughly discussed topic. It is obvious that potential corporate liability under any regime gives incentives to group companies for structuring themselves in a way that, if ever agents who do not respect human right will be held responsible, the liability risks remain within the sphere of a foreign subsidiary. Looking from the perspective of the injured person, this strategy motivates to invoke veil-piercing, direct liability or forum-doctrines to tap the financial capability of the parent company. Following the UNGP the question arises what can be done to establish fair jurisdiction, suitable to hold negligent parent companies liable e.g. based on mandatory due diligence obligations in respect of the adherence to human rights.