Board Memember´s Liability for Corporate Human Rights Violations based on Norwegian Company Act § 17-1
Is it a moral or a legal obligation to respect human rights when operating abroad and under complex corporate structures? How do we decide on which obligations are legally encorceable? These questions are asked by Ph.D student Line Gjerstad Tjelflaaat. Tjelflaat is part of the research group on administrative law.
Global value chains will on the one side give rise to development and wealth in countries where transnational companies (TNC) are established. On the other hand, TNCs can be complicit in a wide range of gross human rights violations in relation to their operations. Complex corporate structures and diversity in national legislation in countries where TNCs operate are two major barriers for victims of corporate human right violations when seeking access to justice.
Today no one is questioning that corporates have an obligation to respect human rights also when operating abroad, and when operating through complex corporate structures. This is part of companies “social license to operate” and also applies to the board members and other leaders of the company. These responsibilities are anchored in different soft law instruments and policy documents from national government and international organizations. But is this a moral or legal obligation? How do we decide on which obligations are legally enforceable? These are questions I will explore through my project.
There are different approaches to improve the human rights situations in global value chains. National tort law is one of the possible instruments for holding transnational corporations and their leaders legally to account for their involvement in human right abuses. Such lawsuits have been filed in western courts over the last decades and some of them have proven successful.
The aim of this thesis is to consider whether and to what extend Norwegian Company Act § 17-1 authorizes board members’ liability for corporate human rights violations. The main focus will be on employee’s conditions when working in subsidiaries or in the supply chain of a Norwegian Private Company.
The resent development in western courts give rise to the discussion of how “old” principles of tort law ca be used on new territory like on the corporate human rights area.
Board members liability based on Norwegian Company Act § 17-1 only authorizes liability for wrongdoings that are connected to the Boards role in the company. This rises the question of whether and to what extend board members owe a duty of care towards victims of corporate related human rights abuses. Focusing on labor rights and prohibition of slavery, child labor and inhuman treatment the main question is therefore whether and to what extend board members in Norwegian companies have a legal obligation to secure a healthy and safe working environment for employees within the corporate structure. In analyzing this question, it is of particular interest to examine whether and to what extend the board members are protected by the corporate veil in these cases.
In most cases of corporate human rights violations, the board member will have an indirect affiliation to the violated person(s). This project will do an in- depth analysis of the tort of negligence with special focus on omissions and complicity as possible legal grounds regarding the board members individual liability for human rights violations.