Over the course of the past several decades, an increasing number of civil cases have been brought before European and North American courts against transnational corporations for their role in the commission of grave human rights violations, the majority occurring in the global south.1 This trend illustrates the push to hold powerful actors engaged in international business accountable when they play a role in the commission of mass atrocities and serious human rights abuses.
In many such cases, at least one of the defendants is a company domiciled in the global north, even though the actual violations are committed by their subsidiaries or other entities within their network acting in another country. Despite the remote geographical connection between the site of the harm and the defendant, the rising prevalence of transnational human rights tort cases against these powerful actors supports the belief that transnational corporations must consider the broader consequences of the conduct and how their business activities impact human rights abroad.
In the context of transnational human rights torts, it is arguably desirable to pursue legal action against the most powerful player involved, which typically means the parent company or an entity closer to the end of a supply chain. These entities tend to have deeper pockets and tend to be located in jurisdictions in which judgment enforcement is more likely. Furthermore, they tend to be more stable compared to subsidiary entities or partners, which may be at risk of being dissolved, especially if facing legal action. Finally, a compelling argument can be made that despite their distance to the locus of the human rights violations, mighty transnational corporations have enormous influence over the behavior of their subsidiaries and networks, including the ability to demand that their affiliates conduct themselves in line with the protection of human rights.
Equally, an argument can be made that transnational human rights torts cases should be brought in the home jurisdiction of the powerful entity, rather than the jurisdiction of the place of the harm. Host states to the harm may be insecure or weak, and their judicial systems are often not well-equipped to handle transnational human rights tort cases, whether because corruption, the lack of sufficient resources to handle complex litigation, or because the available laws are not adequate.2
Regardless of the desirability to try transnational human rights torts cases in the country of the most powerful (parent) entity, the courts there must actually have personal jurisdiction over that defendant, and a connection must be established between that powerful entity and the harm. When an actor is directly involved in human rights violations abroad, then a case can easily be brought in their home jurisdiction.3 For example, the Recast of Brussels I Regulations dictate that EU members must exercise jurisdiction over cases brought in the defendant’s domicile, and US personal jurisdiction rules allows a court to exercise jurisdiction over a corporate defendant in a state in which the defendant is “at home”,4 regardless of the place of the actual harm.
As corporate structures become more tenuous, so does the possibility of trying the case in the desired forum. More traditional transnational corporate organizations typical of extractive or chemical industries are often structured as parent companies and wholly-owned subsidiaries, and in these cases certain legal mechanisms exist that facilitate bringing a case against a parent company in a global-north court for torts committed abroad by its subsidiary. These mechanisms include, inter alia, piercing the corporate veil or alter-ego liability, vicarious liability over agents, enterprise liability, or even a finding that the parent company exercised control over the subsidiary or undertook certain performance in lieu of the subsidiary.5
However, as relationships between powerful (parent) companies and their counter-parts abroad become more tenuous, either through complex corporate structuring or through purely contractual relationships between legally separate entities acting along a common supply chain, the ability to successfully bring cases in the powerful entities’ home jurisdiction becomes increasingly unlikely.6 While on the one hand this lacuna in liability is justified by the fact that corporations should not be held liable for actions by legally separate entities outside their sphere of control, the actual influence and resources of transnational corporations mean that they are in the best position to enforce human rights by demanding that their partners comply with certain standards if they wish to continue to conduct business. Furthermore, in an increasingly connected world they are often privy to knowledge of the political, economic, and human rights conditions in the host states that potentially increase the risk that their business activities might contribute to or facilitate human rights abuses. This is particularly true in industries that exhibit these looser structures, including garment and IT sectors, which may be highly susceptible to experiencing serious human rights abuses such as slave and child labor or the mining of conflict metals.
As the debate on business and human rights progresses, the notion that the scope of liability should capture these powerful actors despite their tenuous legal relationships to the harm is becoming increasingly more popular. This trend is reflected, for example, in the emerging push for human rights due diligence legislation, which would legally mandate companies to monitor and enforce human rights compliance along their subsidiaries and supply chains and hold them accountable for failure to do so.7 But despite the trends, the actual legal mechanisms to enforce responsibility along more tenuous corporate networks are currently still lacking, and it remains to be seen whether increased attention to liability for powerful international actors ultimately translates into an expansion of liability and the ability to bring transnational human rights tort cases against powerful parent companies before courts of the global north.
- I prefer to use the terms “global south” and “global north” instead of more problematic terms such “developed” and “undeveloped” nations, but these terms are not strictly geographical. See generally https://qz.com/685626/the-world-bank-is-eliminating-the-term-developing-country-from-its-data-vocabulary/.
- Notwithstanding the fact that choice of law issues may arise regardless of the jurisdiction where the claim is brought.
- It is worth noting, although not discussed here, that even if personal jurisdiction can be established, some jurisdictions, including the US and the UK to some extent, will permit transnational cases on forum non conveniens grounds.
- Recast of Brussels I Regulation; US, Goodyear Dunlop Tires, S.A. v. Brown, 564 U.S. 915 (2011).
- See e.g. UK, Chandler v. Cape Plc.,  EWCA Civ 525; US, Bauman v. DaimlerChrysler Corp., 579 F.3d 1088 (9th Cir. 2009).
- See Ugljesa Grusic, “International Environmental Litigation in EU Courts: A Regulatory Perspective”, Yearbook of European Law, Volume 35, Issue 1, 1 December 2016, pp. 180–228; US, Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1258 (11th Cir. 2009).
- Jindan-Karena Mann, “Human Rights Due Diligence: Turning ideals into law”, https://rethinkingslic.org/blog/tort-law/39-human-rights-due-diligence-turning-ideals-into-law.