Parent Company Liability for Environmental Disaster Caused by Subsidiary Company

Abstract

Multinational companies operate in various jurisdictions via subsidiary companies incorporated in local jurisdictions. Generally, the subsidiary company is responsible for its own acts and/or omissions since the law is pellucid that only in exceptional cases will a parent company be held liable for the acts and/or omissions of its subsidiary company. Under these exceptional cases the parent company may be made liable for the acts and/or omissions of its subsidiary company through lifting of the corporate veil (derivative liability) or the imposition of direct liability for corporate negligence. This article examined the issue of the liability of a parent company for an environmental disaster caused by its subsidiary company by exploring derivative and direct parent liability.