Establishing Liability for Multinational Oil Companies in Parent/Subsidiary Relationships
A number of significant legal challenges impede the attribution of liability to parent corporations for the overseas operations of their subsidiaries. The multinational reach of these entities’ activities raise questions as to which forum is appropriate to hear the case, under which state’s jurisdiction an action may be brought and as to which state’s domestic law should be applied. The elaborate corporate structures exhibited by many multinational corporations (MNCs), which often incorporate holding companies, joint ventures and external contractors, serve to complicate matters still further. The recent case of Akpan & Anor v Royal Dutch Shell plc & Anor dealt with these issues in an environmental context. The case formed part of a class action suit brought by Milieudefensie (Friends of the Earth Netherlands), a Dutch non-governmental organisation (NGO) promoting environmental protection, and four Nigerian farmers. The farmers had all experienced damage to their farmlands and fishing ponds resulting from numerous oil spills across three proximate regions between 2004 and 2007. Akpan, the only successful applicant, is a farmer and fisherman residing in the village of Ikot Ada Udo, Nigeria. Throughout the course of the action, all four Nigerian applicants were supported by Milieudefensie, which itself attempted to bring claims against both the parent company and its wholly owned subsidiary as a third party.
The New EU Rules on Non-Financial Reporting: Potential Impacts on Access to Remedy?
This article addresses an important but not directly visible development arising from a new EU Directive introducing mandatory human rights reporting for certain large companies domiciled in the EU. The new Directive requires parent companies to report on human rights issues on a consolidated basis, which will oblige the parent to disclose inter alia the impacts of its subsidiaries, the group policy pursued on these issues and group-level due diligence measures undertaken to prevent, mitigate and remedy adverse impact. This article explores these new requirements’ potential to improve access to remedy for victims of human rights violations linked to a company’s overseas subsidiaries who sue the parent company in its EU home state for the parent’s part in the human rights violation. The focus is on cases brought by victims against parent companies under English law and on analysing the potential effects of these reforms on the obstacles to access to remedy in such cases created by the doctrine of corporate veil and the standard of duty of care. This article argues that by requiring parent companies to report on these matters, the Directive could be mandating companies to acquire knowledge of and involvement in the business of their subsidiaries and show this in their annual reports, which may result in them assuming a duty of care to employees (and others) affected by the actions of their subsidiaries.
Oil Spill Compensation Claims in Nigeria: Principles, Guidelines and Criteria
In recent times, compensation arising from oil spills has assumed a significant role in the Nigerian oil industry. The significance stems from the fact that, with petroleum operations spillage is inevitable. Oil spills have various effects on the health of the populace as well as the economic and scenic value of the environment. Thus there is the need to minimise the effect of the occurrence of oil spill. One way of achieving this objective is through compensation. The essence of compensation is to make amends for the loss suffered by the victims. In making these amends, the loss experienced by the victim must be recompensed otherwise the compensation cannot be said to be adequate or equivalent to the compulsory sacrifice. Victims of oil spill have claimed that the compensation paid to them is unreasonable and cannot be said to be recompense for their loss. Oil companies on the other hand claim that the compensation paid to the victims is adequate and that they operate within the parameter approved by the Inspectorate Division of the Nigerian National Petroleum Corporation or the State Ministry of Lands. Apart from this, many claims made by the communities are not honoured by the oil companies on the grounds that they are spurious and speculative. Even when the claims are genuine the oil companies may not pay if the spillage occurred as a result of acts of sabotage.