Interpretation is provided into SpanishSession led by the UN Working Group on Business and Human Rights Brief description
In many cases of business-related human rights abuses, it becomes necessary for affected individuals and communities to seek remedies against a parent company for abuses by its subsidiaries. However, the current legal principles governing the allocation of responsibility among companies of a corporate group do not generally allow victims to hold a parent company accountable even in legitimate cases. This is one of the well-documented barriers faced by victims in seeking access to effective remedies. The Commentary to Principle 26 also acknowledges that the “way in which legal responsibility is attributed among members of a corporate group under domestic criminal and civil laws facilitates the avoidance of appropriate accountability”.
In recent years, courts in certain jurisdictions like the United Kingdom and Canada have ruled that in certain circumstances a parent company may owe a direct duty of care towards employees of its subsidiaries or communities affected by its subsidiaries. How useful could this tortious principle be in making parent companies accountable in the full range of business-related human rights abuses cases? Or are other reforms – including of corporate laws – needed to ensure a fair allocation of responsibility among companies of a corporate group? Principle 3(b) of the UNGPs, for example, provides that states should ensure that “laws and policies governing the creation and ongoing operation of business enterprises, such as corporate law, do not constrain but enable business respect for human rights”.
Session objectives
This session aims to: (i) inquire rationales behind the divide between the “legal separation” among companies of a group and the “economic unity”; (ii) assess the potential and limits of the direct duty of care principle in holding parent companies accountable for human rights related to their subsidiaries; and (iii) explore other law-cum-policy reform options that could assist victims in seeking effective remedies against parent companies in appropriate cases.
Discussion questions
To achieve the above objectives, the following illustrative questions will guide the discussion:
- Should companies of a group be allowed to operate as “one” and “separate” at the same time?
- What lessons can businesses and affected communities learn from cases concerning the direct duty of care decided so far in the UK and Canada? Are there similar precedents in other jurisdictions?
- What are the limitations of the current direct duty of care test developed by courts? What challenges lawyers face in establishing such a duty of care on the part of parent companies?
- Apart from tort law, could we learn any lessons from rules concerning attribution of liability within corporate groups under other laws such as tax law, competition law, terrorism law and cyber law?
- Would mandatory human rights due diligence help in establishing the direct duty of care and in turn holding a parent company accountable for human rights abuses related to its subsidiaries?
- What legal or policy reforms could encourage parent companies to identify, prevent and mitigate human rights risks associated with the operations of their subsidiaries?
Format of the session
This session will be organised as an interview-style discussion with panellists. After an initial round of questions posed to the panellists by the moderator, participants will be invited to ask questions or make general comments about the session theme.
