The duty of care of parent companies: a tool for establishing a transnational environmental civil liability

Mathilde Hautereau Boutonnet

doi:10.5102/rdi.v16i1.6067

Abstract

The duty of vigilance of parent companies in respect of the environmental damage caused by the activities of their subsidiaries abroad occupies an increasingly important place in various rights. While the legislator came to recognize this duty in French law, the judge offers him a place in Common Law and the companies themselves recognize it in the transnational order. However, this article aims to show how, in complement and interaction, under the action of the legislator, the judge and the addressees of the duty, the bringing into play of the responsibility of the parent companies in a transnational dispute could be facilitated. The duty of care could become an important tool of environmental responsibility.

Highlights

Our contribution aims to show how the duty of vigilance1, or duty of care, of companies that exists in various domestic legal orders, enshrined in legislation or case law, and in the transnational order in the form of “soft law”, could lead, if breached and in the context of a transnational dispute, to the establishment of an environmental civil liability for parent companies and thereby contribute to improving environmental protection
Transnational environmental disputes are complex2. This is due, on the one hand, to the relocation of business operations that allows large corporations to carry out their business via subsidiaries based overseas and, on the other hand, to the globalisation of environmental threats, namely the fact that a threat created by a company located in one country A can result in harmful consequences for victims domiciled in another country B. While the former is perfectly exemplified by the Shell decision, where Nigerian citizens and a Dutch NGO sought compensation, before a Dutch court, from the Shell parent company domiciled in the Netherlands and from its Nigerian subsidiary for the environmental harm caused by oil spills in the Niger Delta3, the RWE case currently pending before a German court, brought by a Peruvian farmer against German corporation RWE regarding climate damage allegedly caused by the activities of this energy giant domiciled on German soil, is emblematic of the latter4
The extraterritorial reach of the duty of care of companies should enable the courts, subject to certain conditions imposed by the various applicable laws, to find parent companies liable for the harm caused on foreign land by the activities of their subsidiaries

Summary

Mathilde Hautereau Boutonnet

Anderson Fonseca Machado (organizador), Letícia Braga Carvalho Kataoka (organizadora), Ana Terra Teles de Meneses, André Leão, Andrea Luísa de Oliveira, Edilson Enedino das Chagas, Henrique Haruki Arake Cavalcante, Mariana Rezende Maranhão da Costa, Rafael Freitas Machado, Vitor Levi, Wilson Sampaio Sahade Filho

Introduction

In the event of environmental damage caused by the