•
significant barrier to those seeking redress unless the subsidiary is under such close
operational control by the parent that it can be seen as its mere agent.
Limited Liability. Corporations established with limited liability are a feature of most
developed legal systems and reflect recognition of the need to promote entrepreneurial
activity by protecting the personal assets of investors and managers of businesses. The
inability to access personal assets may however impact adversely on the capacity to seek
redress for human rights violations by a corporation where the corporate entity has been
established with limited assets, particularly in the case of high risk or hazardous operations,
and where the group structure has been utilised to quarantine the resources of the parent
company. Similarly, limited liability shields the decision makers and effective owners from
the consequences of their decisions, and reduces the incentive to monitor its human rights
obligations.
In addition, a range of other barriers exist. These include:
•
No cause of action. In some cases, the legal system in a State may not yet recognise a
need to restrict certain conduct that infringes human rights. This is more likely to occur in
situations where the purported human rights violation arises under an international
instrument to which the State is not yet a party, or where competing policy considerations
militate against the provision of particular forms of relief.
•
Lack of Enforcement. Home and host states may be unwilling or unable to provide effective
enforcement of judgments against transnational corporations for a variety of reasons
including lack of capacity, as may arise in the absence of reciprocal enforcement regimes,
or for other reasons.
Who has ‘standing’ to bring a complaint. The concept of ‘standing’ refers to who can make a
complaint and seek redress. In general, standing requirements operate to restrict the class
of person who are able to seek redress for a particular violation. This avoids unlimited
liability and restricts frivolous and vexatious claimants. Such limitations may act to restrict
the capacity of interested persons or groups (such as human rights defenders and relevant
civil society organisations), from bringing actions since they will not, in general, be
considered to be directly affected by the offending conduct of a TNC. One possible option
is to broaden standing requirements to allow actions by human rights defenders and civil
society organisations with a defined mandate in this area.
•
•
Choice of legal regimes. Contractual agreements between TNCs and the State will
invariably establish the legal jurisdiction within which legal claims can be made. Dependent
on the relative power between the State and the TNC, the choice of legal jurisdiction, and
any limitations thereon, may seek to reduce the legal obligations of the TNC.
•
Legal Representation: A lack of legal representation, and the complexity of legal processes
and procedures often present a significant barrier to those affected by human rights
violations, many of whom may lack the resources or the capacity to pursue claims without
legal representation;
•
Costs. The potential for costs orders may act as a barrier to complainants pursuing human
rights violations by corporations. Other financial implications, such as the cost of legal
representation also present a significant impediment
What role do NHRIs have in ensuring that States regulate the
human rights activities of TNCs, and in educating and/or monitoring
corporations involved in human rights abuses?
In 2008, the Office of the High Commissioner for Human Rights circulated the results of a
survey entitled Business and Human Rights: A Survey of NHRI Practices (July 2008)
providing information on the mandate and capacities of NHRIs to manage corporate-related
grievances and issue. APF Members highlighted a range of functions that they considered
relevant to monitoring and addressing human rights violations by TNCs. These included:
conducting public inquiries and fact-finding missions; investigating individual and systemic
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