On the concept of social responsibility of business and the regulation of parent companies’ liability.

Pustovar Diana

Keywords: social responsibility, corporate entity, control, human rights, protection, adverse impact, tort, compensation.

Download PDF
Журнал. 2-й випуск. Облкадинка

Abstract

The article identifies various areas of violations of human rights and freedoms by industrial companies, which require an adequate response from the legislator. The experience of French and German law in protecting human rights and freedoms from the adverse impact of economic activity may be useful. This also applies to the liability of a parent company for the actions of its subsidiaries, given the existence of control over the activities of the latter, and the adoption of decisions that indicate the level of influence they exert.

Despite the fact that economic freedoms are currently prioritized over social interests, social responsibility of business is becoming increasingly important. The article focuses on the issues of determining the type, amount of liability and assessment of violations identified in the course of analyzing the case law in disputes on social responsibility of business in the presence of a negative impact on human rights and freedoms.

The author analyzes the tort liability of legal entities for human rights violations, noting that it is characterized by pecuniary compensation. In the absence of actual damages, the tort liability of companies loses its meaning. The case law of the European Court of Human Rights and Ukrainian court practice does not provide for compensation for the mere fact of interference or the mere existence of a negative impact on human rights and freedoms by a business entity. This makes it necessary to find other approaches to respond to the negative consequences of companies’ activities. The problem is exacerbated by the fact that damage to human rights and freedoms is difficult to measure and evaluate: determining the equivalent value of a violation of the right to privacy, personal information, loss of comfort, etc.

On the contrary, the practice of English courts is to award compensation to the claimants whose rights and freedoms have been violated, which distinguishes them from the tort liability of companies.

References

Cases
Case law of European Court of Human Rights

3. Urteil des gerichtshofs (Erste Kammer), 24. Juni 2021, Europдische Kommission Kцnigreich gegen Kцnigreich Spanien, [Judgment of the Court of Justice (First Chamber), June 24, 2021, European Commission Kingdom v. Kingdom of Spain] No. C-559/19. URL: https://curia.europa.eu/juris/document/document.jsf?text=& docid=243362&pageIndex=0&doclang=DE&mode=req&dir=&occ=first&part=1 [in German].

4. The Act of the Supreme Court of the UK of February 12, 2021, Case of Okpabi and others (Appellants) v Royal Dutch Shell Plc and another (Respondents), No. UKSC 2018/0068. URL: https://www.supremecourt.uk/cases/uksc-2018–0068.html [in English].

5. The Act of the Court of Appeal of the UK, 2012, Case of Chandler v Cape plc,No. EWCA Civ 525. URL: https://www.bailii.org/ew/cases/EWCA/Civ/2012/525.html [in English].

6. The Act of the High Court of the UK, 1998, Case of Connelly A. P.) v. R. T. ZCorporation Plc and Others, No. UKHL 30. URL: https://publications.parliament.uk/pa/ld199798/ldjudgmt/jd970724/con01.htm [in English].

7. The Act of the High Court of Justice of April 27, 2010, Case of Abdillaahi Muusev Secretary of State for the Home Department No. EWCA Civ 453 / A2/2009/1703. URL: https://www.refworld.org/jurisprudence/caselaw/gbrcaciv/2010/en/76632 [in English].

8. The Act of the High Court of the UK, 2001, Case of Judgments – Kuddus (AP) v. Chief Constable of Leicestershire Constabulary No. UKHL 29. URL: https:// publications.parliament.uk/pa/ld200001/ldjudgmt/jd010607/kuddus-1.htm [in English].

9. The Act of the High Court of the UK, August 10, 2011, Case Infinis Plc Infinis (Re-Gen) Ltd, R (on the application of) v Gas & Electricity Markets Authority & Anor, No. EWHC 1873. URL: https://www.casemine.com/judgement/ uk/5a8ff77160d03e7f57eac7ac [in English].

10. The Act of the High Court, May 21, 2015, Case of Gulati v MGN Ltd No. EWHC 1482. URL: https://www.casemine.com/judgement/ uk/5a8ff82e60d03e7f57ebc33a (In English)

11. The Act of the Court of Appeal of The UK, 2010, Case of Imerman v Tchenguiz and others No. EWCA Civ 908. URL: https://www.ucpi.org.uk/wp-content/ uploads/2018/03/Imerman-v-Tchenguiz-2010-EWCA-Civ-908–2011-Fam.–116. pdf [in English].

12. The Act of the Court of Appeal of the UK, January 29, 2009, Case of Dobson & Ors v Thames Water Utilities Ltd and Anor No. EWCA Civ 28. URL: https:// www.casemine.com/judgement/uk/5a8ff6fa60d03e7f57ea52c5 (In English)

13. The Act of the New South Wales Supreme Court, August 2003, Case of Presland v Hunter Area Health Service No. NSWSC 754. URL: https://www.tandfonline.com/ doi/abs/10.1375/pplt.13.1.49 [in English].

14. The Act of the High Court of Justice, 2002, Case of Ms B v An NHS Hospital Trust No. EWHC 429. URL: https://www.bailii.org/ew/cases/EWHC/ Fam/2002/429.html (In English)

15. The Act of the Supreme Court of New Zealand Wilding, Mariya Ann Taylor and Robert Roper v Attorney-General No. SC 23/2022. URL: https:// www.courtsofnz.govt.nz/assets/cases/Submissions/2022/Hearing-date-5-October- 2022-Appellant-submissions-A-G. PDF [in English].

16. The Act of the Court of Appeal of New Zealand, 2000, Case of Dunlea v Attorney-General No. NZCA 84. URL: https://books.google.com.ua/ books/about/Dunlea_V_Attorney_General_2000_NZCA_84_2. html?id=LeSqtAEACAAJ&redir_esc=y [in English].

17. The Act of the European Court of Human Rights, October 26, 2000, Case of Kudła v. Poland, No. 30210/96. URL: https://hudoc.echr.coe.int/fre#{%22itemid%22:[% 22001–58920%22]} [in English].

18. The Act of the Court of King’s Bench, 1703, Case of Ashby v White No. 92 ER 126. URL: https://vlex.co.uk/vid/ashby-v-white-and-806348317 [in English].

19. The Act of The High Court, September 2, 2010, Case of YA(F) v A Local Authority & Others No. EWHC 2770. URL: https://www.casemine.com/judgement/ uk/ 650f310900e90f460783c1aa [in English].

20. The Act of the European Court of Human Rights, July 07, 2011, Case of Al-Jedda v. the United Kingdom, Application No. 27021/08. URL:https://hudoc.echr.coe.int/ fre# {%22itemid%22:[%22001–105612%22]} [in English].

Bibliography Authored books

  1. Robert Grabosch, Christian Scheper: Die menschenrechtliche Sorgfalts- pflicht vonUnternehmen, Politische und rechtliche Gestaltungsansдtze [The human rights due diligence of companies, Political and legal approaches.] Friedrichebert Stiftung, September 2015. URL: https://www.researchgate.net/profile/Robert_Grabosch/ publication/282944055 _Die_menschenrechtliche_Sorgfaltspflicht_von_ Unternehmen/links/5623988508ae93a5c92cac9d.pdf (дата звернення 01.05.2024). (In German).
  2. Omaima Abdel-Meged: Wie das Lieferkettensorgfaltspflichtengesetz zu Krisenprдventionszwecken eingesetzt werden kann. Zitiervorschlag, [Omaima Abdel-Meged: How the Supply Chain Due Diligence Act can be used for crisis prevention purposes. Suggested citation, Februaryу] Februarу 2024. URL: https:// lrz.legal/de/lrz/wie-das-lieferkettensorgfaltspflichtengesetz-zu- krisenpraeventionszwecken-eingesetzt-werden-kann (дата звернення 01.05.2024). (In German)
  3. OIchim:JustSatisfactionundertheEuropeanConventiononHumanRights.Cambridge University Press, 2015. URL: https://assets.cambridge.org/97811070/72367/ frontmatter /9781107072367_frontmatter.pdf (accessed:14.05.2024.). [in English].

Аrticle online

24. S Cossart, J Chaplier, and T Beau de Lomenie: The French Law on Duty of Care: A Historic Step Towards Making Globalization Work for All. Business & Human Rights Journal, 15 Jun 2017. URL:https://www.business-humanrights.org/en/latest-news/the-french-law-on-duty-of-care-a-historic-step-towards-making-globalization-work-for-all/ [in English].

26. Dr. Christian Steiner, LL.M., Burgwedel: Das deutsche Lieferkettensorgfaltspflichtengesetz – Ein Ьberblick Besteht ein Handlungsbedarf fьr Banken? [The German Supply Chain Due Diligence Act – An Overview Is there a need for action for banks?] FCH Compliancе 14.07.2022. URL: https://www.fch-gruppe.de/ Beitrag/21755/das-deutsche-lieferkettensorgfaltspflichtengesetz –-ein-ueberblick- (In German)

27. William O. Douglas & Carrol M. Shanks: Insulation from Liability through Subsidiary Corporations. Yale Law Journal, Vol. 39, Issue 2, December 1929. URL: https:// openyls. law. yale. edu/bitstream/handle/20.500.13051/2487/Insulation_from_Liability_ Through_Subsidiary_Corporations__with_Carrol_M. _Shanks_. pdf?sequence=2 [in English].

28. Nicolas Bueno, Claire Bright: Implementing Human Rights Due Diligence through Corporate Civil Liability. International and Comparative Law Quarterly 69(4), September, 2020. URL: https://www.researchgate.net/publication/344167719_ Implementing_Human_ Rights_Due_Diligence_through_Corporate_Civil_ Liability [in English].

29. Peter Cane: Mens Rea in Tort Law. Oxford Journal of Legal Studies, 2000. URL: https://philpapers.org/rec/PETMRI [in English].

30. David Shiers, Anthony Lavers, Miles Keeping: Indikatoren fьr den Einfluss von Umweltfaktoren auf das britische Baurecht: Entwicklungen im neuen Jahrtausend. Baurecht und Baumanagement, [Indicators of the impact of environmental factors on UK construction law: developments in the new millennium. Construction law and management] Band 25, 2007, Ausgabe 7. URL: https://www.tandfonline.com/ doi/abs/ 10.1080/01446190601145278 [in English].

31. J. Steele: Damages in Tort and Under the Human Rights Act: Remedial or Functional Separation. The Cambridge Law Journal, 2008. URL: https://www.jstor.org/ stable/25166445 [in English].

32. D. Pearce, Roger Halson: Damages for Breach of Contract: Compensation, Restitution and Vindication. Oxford Journal of Legal Studies, March 20, 2008. URL: https:// academic.oup.com/ojls/article-abstract/28/1/73/1558994?redirectedFrom= fulltext&login =false [in English].

Websites

33. Handelsblatt Warum Nestlй so unbeliebt ist, 2019. Handelsblatt: website. URL: https://www.handelsblatt.com/unternehmen/handel-konsumgueter/ lebensmittelkonzern-warum-nestle-so-unbeliebt-ist/26287122.html (accessed: 01.05.2024) [in English].

34. Will Nestlй die Wasservorkommen privatisieren? Jeder Mensch hat ein Recht auf Wasser. Nestlй: website. URL: https://www.nestle.de/frag-nestle/film-wem-gehoert- das-wasser-suedafrika (accessed: 01.05.2024) [in English].

35. Von Hans-Christian RцЯler: Doсana-Nationalpark trocknet aus. FAZ, 25.06.2021. [By Hans-Christian RцЯler: Doсana National Park is drying up. FAZ, 25.06.2021.] URL: https://www.faz.net/aktuell/gesellschaft/tiere/coto-de-do-ana-spanien-schuetzt- nationalpark-zu-wenig-17407749.html (accessed: 25.06.2024) (In German)

36. UNEP: Environmental Assessment of Ogoniland, 2011. URL: https://www.unep.org/ explore-topics/disasters-conflicts/where-we-work/nigeria /environmental- assessment-ogoniland-report (accessed:01.05.2024.) [in English].

37. Zu dem Gesetzentwurf der Bundesregierung– Drucksachen 19/28649, 19/2959 2. [On the Federal Government’s draft bill – Printed papers 19/28649, 19/29592. of the Committee on Labor and Social Affairs (11th Committee)] Des Ausschusses fьr Arbeit und Soziales (11. Ausschuss), 09.06.2021. URL: https:// dserver.bundestag.de/btd/19/305/1930505.pdf (accessed:01.05.2024.) (In German).