The International Corporate Accountability Roundtable is pleased to announce a new program of work, the "Parent Company Accountability Project."
One of the largest barriers to remedy for victims of human rights violations by business is the limitation of liability of parent companies for the actions of their subsidiaries.
Corporate groups organize as a network of distinct legal entities; parent companies exercise varying degrees of influence over their subsidiaries or other parts of a business enterprise. Structuring themselves in this way gives corporate groups access to tax and financial benefits, but it also allows them to avoid liability for the harmful and illegal actions of their subsidiaries.
Human rights litigators have pursued a range of theories, including piercing the corporate veil, agency theory, joint venture theory, enterprise theory, and others, to overcome limited liability of parent companies. These attempts have had marginal success.
The Parent Company Accountability Project (PCAP) will explore opportunities in United States law (both federal and state, where applicable), for holding parent corporations (or the entire enterprise) liable for actions for their subsidiaries and/or business partners. The Project will also offer specific recommendations and ways forward to address the barrier that limited liability of a parent corporation raises for victims of the subsidiary’s human rights violations. The Project will run from February through June 2015.
ICAR is currently collecting inputs to the Project in the form a questionnaire. Practitioners are invited to provide information to help identify situations where the doctrine of limited liability of a parent company has resulted in victims of business-related human rights abuses being unable to seek or obtain a civil remedy for their harm. Responses are requested by the close of business on Friday, February 13, 2015.