University:
University College London
Course:
LAWS0002 | Property Law I
Academic year:

2024
Views:

452

Pages:

4
Author:

Namira A.

Re-Interpreting Corporate Doctrines In The Global North For Climate Equity In The Global South? UCL Current Legal Problems Annual Lecture Series, 5th November 2023 Professor Lisa Benjamin, Assistant Professor, Lewis & Clark Law School Overview 1. Transnational companies in the global South + climate change; 2. Separate legal personality and limited liability (and their inadequacy for tort victims); 3. Recent cases from Chandler v Cape Industries (2012) establish parent compan duties; 4. A case for reform? Company Law And Climate Justice?  Company law in the context of environmental, climate and social justice?  While major focus on shareholder wealth maximization, companies require a social license to operate. The Global South Norman Girvan 'Corporate Imperialism' - Establish political and economic dominance in global South; - Power and control over governments and labor; - Industries bauxite, oil and gas, minerals; - Power was institutionalized through TNCS. Concerns Raised In 1990s 1. Mismatch between power and reach of multinational companies and transnational governance; 2. Legal systems predominantly national; Transnational Governance Lacking - Multinationals use subsidiary companies in different countries; - Very few transnational obligations (UNGPs on Business and Human Rights); - Companies treat GHG emissions as negative externalities; - Internalized usually only on voluntary basis. Traditional Equity-Based Group 1. Parent Plc a. Sub 1 1) Sub 3 2) Sub 4 b. Sub 2 1) Sub 5 Profits from group actions = UP Liability = DOWN Multiple Equity-Binds In Global South  Oil and gas and extractive companies long and often exploitative histories in region;  Also emit huge amounts of GHGs;  Communities in global South often climate-vulnerable;  Often impoverished communities - lack of climate resilient; 2 Core Corporate Principles 1. Separate legal personality; 2. Limited liability 'Corporate Shield' Corporate shiled will protect shareholders from liability for debts of company; - Long-time policy in corporate law: - Joint Stock Companies Act 1844 (unlimited liability of shareholders); - Limited Liability Act 1855 (some opposition). Significant benefits.... 1. Low to no monitoring costs of managers; 2. Shares become fungible; 3. Economic prosperity; 4. Investors can diversify; 5. Capital market liquidity; Corporate benefits as well.... 1. Asset-partitioning; 2. Liability-shielding. Some Drawbacks As Well.... - Benefits only really applicable when shareholders are individuals; - Limited liability shifts risks to creditors; - 'Voluntary' contract creditors in theory can measure risk and cater for it:  Insurance;  Security;  Raise price;  Decide not to deal. Does Not Apply To Tort Creditors - 'Involuntary' creditors; Have no ability to protect themselves in advance; - Where based in developing countries additional issues:  Undercapitalized subsidiary;  Access to justice issues. Limited Liability Not Appropriate In All Circumstances 1. Not economically efficient in case of tort creditors; and 2. Lead to moral hazard - disincentive to take care. Only pierced periodically by courts.... for only most reprehensible corporate behaviors.