Session organized by the UN Working Group on Business and Human Rights and OHCHR
Webcast of the session:Meeting linkMeeting number: 848 528 134
Password: xUFKhDFj
BackgroundPrinciple 26 of the UNGPs provides that States should consider “ways to reduce legal, practical and other relevant barriers that could lead to a denial of access to remedy.” The way in which legal responsibility is attributed among members of a corporate group under domestic laws often operates as a legal barrier to corporate accountability for human rights abuses. In particular, courts’ approach to the doctrine of separate corporate personality has made it extremely difficult for plaintiffs to take legal action against parent companies in appropriate cases for human rights abuses connected with the activities of their subsidiaries.
In its final report to the Human Rights Council at the conclusion of phase 1 of the OHCHR Accountability and Remedy Project, the UN High Commissioner for Human Rights called upon States to improve the effectiveness of State-based judicial mechanisms to strengthen corporate accountability and access to remedy in cases of business-related human rights abuses, including by “developing policies and legal reforms that respond more effectively to the practicalities of organization and management of business enterprises and which take into account the particular challenges arising from complex global supply chains.”
The tension between separate corporate personality and corporate accountability objectives, and the legislative reforms that may be needed to deal with it, have thus far gone largely unaddressed in National Action Plans on Business and Human Rights. On the other hand, there have been some recent court decisions which could pave the way for more civil litigation against parent companies in the future. In April 2019, the UK Supreme Court in Vedanta Resources Plc v Lungowe confirmed that in certain circumstances a parent company may owe a duty of care towards those affected by its subsidiaries’ operations. A few weeks later, a Dutch court in a case against Royal Dutch Shell Plc ruled that it has jurisdiction to consider whether Royal Dutch Shell was complicit in the Nigerian government’s execution of the “Ogoni Nine” in 1995.
There have been similar attempts to hold parent companies accountable in other countries such as Canada (Hudbay Minerals, Tahoe Resources) and Thailand (Mitr Phol). Legal proceedings have also been initiated in France under the Duty of Vigilance Law and for misleading advertising against Samsung.
In a different but related context, in March 2019, the US Supreme Court in Jam v IFC ruled that the International Finance Corporation, an arm of the World Bank Group, does not enjoy absolute immunity from suits related to its financing of projects.
ObjectivesThis session aims to:
- Analyse critically the opportunities and challenges arising from recent court decisions brought against parent companies;
- Discuss the lessons for States in terms of legal and policy reforms that they should introduce in terms of Principle 26 of the UNGPs;
- Explore how States could make use of the guidance from ARP I in strengthening access to effective remedy in the context of corporate groups; and
- Examine how mandatory human rights due diligence initiatives and the proposed legally binding international instrument could strengthen corporate accountability, including of parent companies in appropriate cases, for business-related human rights abuses.
FormatThe session will involve a moderated discussion with panelists comprising lawyers and CSOs related to selected cases concerning corporate accountability of parent companies. There will be opportunities for people to participate in discussion from the floor.
