Advocating for parent company accountability
Corporations are often composed of a tangled web of distinct legal entities with parent companies exercise varying degrees of control over their subsidiaries or other parts of a business enterprise. By structuring themselves in this way, corporations gain significant economic benefits, such as reduced taxes, and are often able to avoid liability for the harmful and illegal actions of their subsidiaries.
One of the main barriers to remedy for victims of business-related human rights violations is the limitation of liability of parent companies for the actions of their subsidiaries, suppliers, and contractors. In November 2015, ICAR published a Report by Professor Gwynne Skinner that traces the historical development of corporations and the limited liability of shareholders in the United States, and describes how the doctrine has resulted in a lack of remedy for human rights victims of transnational business. The Report then lays out arguments for why a change to the doctrine is necessary; discusses the developments in France and Switzerland to address the issue; and surveys human rights litigators’ current approaches to holding parent corporations accountable. The Report concludes by making legislative recommendations to overcome the limitations of these approaches.
The Report can be accessed here.