Abstract Victims of corporate-related human rights abuses, particularly those occurring abroad in developing countries, for various reasons want to hold parent companies liable in their home states for adverse human rights impacts caused by their subsidiary companies. However, the principle of limited liability, a corporate law principle recognized in almost all states, does not allow victims to automatically hold parent companies liable for abuses committed by their subsidiaries. Accordingly, with a view to circumvent the principle of limited liability, victims have long been relying on common law duty of care to bring action against parent companies in common law jurisdictions. Similarly, mandatory human rights due diligence (HRDD) laws recently adopted in different jurisdictions was hoped to offer another avenue for victims to hold parent companies liable for abuses committed by their subsidiaries. However, the article argues that neither common law duty of care nor mandatory HRDD laws currently provide effective legal pathway for victims seeking to hold parent companies liable for abuses committed by their subsidiary companies.
Wubeshet Tiruneh (Fri,) studied this question.