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Will Corporate Social Responsibility fill the liability gap Created by Multinational Corporate Structures ? Professor Irene Lynch Fannon, School of Law University College Cork, 2015 @ireneucc#EnvLaw2015

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State Actors and Corporate Actors The TNC [or MNC] today is one of the largest actors in the environmental field, but international law still remains focused on state liability, and although many developed nations now have extensive environmental protection in place through statutory tort regimes, corporate actors are able to employ a number of strategies to elude effective oversight when they operate transnationally. Claire Bright-Staath and Benedict Wray: Corporations and Social Environmental Justice http://ssrn.com/abstract=2207317

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The State and The Corporation-Different approaches in the EU- incentives and international leadership. COM(2013) 92 final COM(2013) 92 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIALCOMMITTEE AND THE COMMITTEE OF THE REGIONS A DECENT LIFE FOR ALL: Ending poverty and giving the world a sustainable future. COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIALCOMMITTEE AND THE COMMITTEE OF THE REGIONS A DECENT LIFE FOR ALL: Ending poverty and giving the world a sustainable future.

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In the EU-direct regulation addressed to member states. DIRECTIVE 2013/30/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 12 June 2013 on safety of offshore oil and gas operations and amending Directive 2004/35/EC-EU only. DIRECTIVE 2013/30/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 12 June 2013 on safety of offshore oil and gas operations and amending Directive 2004/35/EC-EU only. To be in force by July 19, 2015. To be in force by July 19, 2015.

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MNCs and TNCs Why multinational corporations and transnational corporations create domestic overseas subsidiaries. Why multinational corporations and transnational corporations create domestic overseas subsidiaries. Cheap labour, no or little taxes and no rules/ no enforcement). Cheap labour, no or little taxes and no rules/ no enforcement). Enclave Economies and FDI. Enclave Economies and FDI. Aguiire, Daniel: Multinational Corporations and the Realisation of Economic, Social and Cultural RightsMultinational Corporations and the Realisation of Economic, Social and Cultural Rights Fall, 200435 Cal. W. Int'l L.J. 53 Corporate Liability for Economic, Social and Cultural Rights Revisited: The Failure of International Cooperation Fall, 2011 California Western International Law Journal 42 Cal. W. Int'l L.J. 123 Amao, Olufemi: Corporate Social Responsibility, Human Rights and the Law. (Routledge 2010). Kevin P. Gallagher and Lyuba Zarsky, The Enclave Economy. Foreign Investment and Sustainable Development in Mexicos Silicon Valley, The MIT Press (2007) ISBN 978-0-262-57242-2 214 Mabey, Nick and McNally, Richard: Foreign Direct Investment and the Environment- From Pollution Havens to Sustainable Development. OECD 1999.

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The corporate actor-the missing piece. The transition to sustainability requires policy changes that often go against immediate economic incentives for higher resource exploitation and pollution. Institutional responses will always lag behind economic pressures, especially in highly competitive global markets. As the source of many of these economic pressures, developed countries have a responsibility to: reduce unsustainable consumption levels; provide resources to support environmental governance in developing countries; and to ensure their companies operate responsibly abroad. The transition to sustainability requires policy changes that often go against immediate economic incentives for higher resource exploitation and pollution. Institutional responses will always lag behind economic pressures, especially in highly competitive global markets. As the source of many of these economic pressures, developed countries have a responsibility to: reduce unsustainable consumption levels; provide resources to support environmental governance in developing countries; and to ensure their companies operate responsibly abroad. OECD: FDI and the Environment (1999) p. 4 OECD: FDI and the Environment (1999) p. 4

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MNCs, TNCs and the effects of jurisdiction Tax issues very much to the fore in Ireland. Tax issues very much to the fore in Ireland. Ongoing concerns regarding sweat shop labour in countries such as Pakistan and Bangladesh. Ongoing concerns regarding sweat shop labour in countries such as Pakistan and Bangladesh. Human rights abuses (often connected in this context to environmental issues). Human rights abuses (often connected in this context to environmental issues). Environmental degradation in countries such as Nigeria and Ghana. Environmental degradation in countries such as Nigeria and Ghana. Question of liability key. Choice of Law and Choice of Forum issues. Question of liability key. Choice of Law and Choice of Forum issues. Monks, Robert: The New Global Investors ( Capstone 2000). Monks, Robert: The New Global Investors ( Capstone 2000). P. T. Muchlinksi, Multinational Enterprises and the Law. (OUP 2007). P. T. Muchlinksi, Multinational Enterprises and the Law. (OUP 2007). C. M. J. Ryngaert, Jurisdiction in international law. (OUP 2008). C. M. J. Ryngaert, Jurisdiction in international law. (OUP 2008).

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Parents and subsidiaries the corporate veil and the liability gap. The corporate veil- a simple, ancient and lethal doctrine. The corporate veil- a simple, ancient and lethal doctrine. In an international tort case piercing the veil enables the imputation of liability to the parent company for the acts of its subsidiary it remains in practice an almost impossible barrier to surmount..* In an international tort case piercing the veil enables the imputation of liability to the parent company for the acts of its subsidiary it remains in practice an almost impossible barrier to surmount..* *Bright and Wray p. 21 where the authors refer to J. H. MATHESON, The Modern Law of Corporate Groups: An Empirical Study of Piercing the Corporate Veil in the Parent-Subsidiary Context, (2008) 87 N. Carolina L. R. 1091 *Bright and Wray p. 21 where the authors refer to J. H. MATHESON, The Modern Law of Corporate Groups: An Empirical Study of Piercing the Corporate Veil in the Parent-Subsidiary Context, (2008) 87 N. Carolina L. R. 1091 P. I. BLUMBERG, Accountability of Multinational Corporations: The Barriers Presented by Concepts of the Corporate Juridical Entity (2004) 24 Hastings Int & Comp. LR 297 at 300 P. I. BLUMBERG, Accountability of Multinational Corporations: The Barriers Presented by Concepts of the Corporate Juridical Entity (2004) 24 Hastings Int & Comp. LR 297 at 300

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Filling the gap- exceptions and fine distinctions. English law English law Adams v Cape Industries [1990] Ch. 433 Prest v Petrodale [2013 ] UKSC 34 EU Law EU Law Brussels 1 Regulation 44/2001/EC Dutch Law Dutch Law Dutch Environmental Defense Organisation v Shell UK [2013] The Alien Torts Act The Alien Torts Act Filrtiga v Pena-Irala. 630 F.2d 876 (2d Cir. 1980) Doe I v Unocal, 395 F.3d 932 (9th Cir. 2002), holding that a private party, such as Unocal could be sued under the ATCA. Kiobel v Royal Dutch Petroleum Co. 2010 U.S.App. LEXIS 19382 (2d. Cir. 2010) Doe et al v Exxon Mobil Corporation et al (D.C Cir. 2011) No. 09-7125.

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The political reality. Political problems with the state-corporate nexus and public- private nexus. Political problems with the state-corporate nexus and public- private nexus. Understanding the corporate actor. The trouble with corporate law theory and its politicisation. Understanding the corporate actor. The trouble with corporate law theory and its politicisation. Sjafjell B : Internalizing Externalities in EU Law: Why Neither Corporate Governance nor Corporate Social Responsibility Provides the Answers George Washington International Law Review, Vol. 40, No. 4, pp 977-1024 Sjafjell B : Internalizing Externalities in EU Law: Why Neither Corporate Governance nor Corporate Social Responsibility Provides the Answers George Washington International Law Review, Vol. 40, No. 4, pp 977-1024 Stout L: The Shareholder Value Myth (Barrett-Koehler Publishers, San Francisco 2012) Stout L: The Shareholder Value Myth (Barrett-Koehler Publishers, San Francisco 2012) Myers C: C Meyer, Firm Commitment, Why the Corporation has failed us and how to restore trust in it, (Oxford University Press, Oxford, 2013) Myers C: C Meyer, Firm Commitment, Why the Corporation has failed us and how to restore trust in it, (Oxford University Press, Oxford, 2013) RJ Gilson and R Kraakman, Market Efficiency after the Financial Crisis: Its Still a Matter of Information Costs, Stanford Law School Working Paper Series No. 458 and Columbia Law School Center for Law and Economic Studies Working Paper Series No. 470. http:// ssrn.com/abstract=2396608. RJ Gilson and R Kraakman, Market Efficiency after the Financial Crisis: Its Still a Matter of Information Costs, Stanford Law School Working Paper Series No. 458 and Columbia Law School Center for Law and Economic Studies Working Paper Series No. 470. http:// ssrn.com/abstract=2396608. Cheffin B: (2015) Seattle Law Review Cheffin B: (2015) Seattle Law Review Lynch Fannon: From Genius to Quackery (forthcoming) Lynch Fannon: From Genius to Quackery (forthcoming)

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CSR- The good and the bad. The bad- it is the best option which corporate law theory can offer at this point, until we change how theory supports more proactive law making. The bad- it can be hi-jacked* by those who prefer a self-regulatory approach but who resist regulation. The good- it is possible to persuade management to act responsively and responsibly. This is good for business, good for the environment and good for subsequent generations. *Lynch Fannon, I: The Corporate Social Responsibility Movement and Laws Empire: Is There a Conflict? 2007 NILQ 1

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A new horizon- getting from here to there. Understanding corporate (not state) power. Understanding corporate (not state) power. Changing the theory which influences the corporate legal framework. Changing the theory which influences the corporate legal framework. Allow shareholders and management to understand the importance of the issue and to act. Allow shareholders and management to understand the importance of the issue and to act. Allow home states to impose liability on parents for actions of subsidiaries. Allow home states to impose liability on parents for actions of subsidiaries. By Beate Sjfjell: Internalizing Externalities in EU Law: Why Neither Corporate Governance nor Corporate Social Responsibility Provides the Answers George Washington International Law Review, Vol. 40, No. 4, pp 977-1024. Sustainable Companies (OUP, 2014). By Beate Sjfjell: Internalizing Externalities in EU Law: Why Neither Corporate Governance nor Corporate Social Responsibility Provides the Answers George Washington International Law Review, Vol. 40, No. 4, pp 977-1024. Sustainable Companies (OUP, 2014). Marc T. Moore: Corporate Governance in the Shadow of the State (Hart, 2013). Marc T. Moore: Corporate Governance in the Shadow of the State (Hart, 2013).