The legal liability of Dutch parent companies for subsidiaries’
involvement in violations of fundamental, internationally recognised
rights
Castermans, A.G.; Weide, J.A. van der
Citation
Castermans, A. G., & Weide, J. A. van der. (2010). The legal liability of Dutch parent
companies for subsidiaries’ involvement in violations of fundamental, internationally
recognised rights. Leiden: Eigen beheer. Retrieved from https://hdl.handle.net/1887/15699
Version: Not Applicable (or Unknown)
License: Leiden University Non-exclusive license
Downloaded from: https://hdl.handle.net/1887/15699
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The legal liability of Dutch parent companies
for subsidiaries’ involvement in violations of
fundamental, internationally recognised rights
Professor A.G. Castermans
Dr J.A. van der Weide
Leiden, 15 December 2009
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Contents
Summary
Authors
1 Introduction
2 Responsibility under Dutch law
2.1 Criteria to be satisfied by a Dutch company in the Netherlands
2.2 Criminal offences and sentences
2.3 Compliance and compensation under civil law
Injunctions prohibiting or ordering certain acts
Compensation
Duty of care
2.4 The role of ‘corporate social responsibility’ and codes of conduct
Codes of conduct
Corporate social responsibility
Policy guidelines
Influence
2.5 Obligations to customers
2.6 Obligations to third parties
2.7 Conclusion
3 Responsibility of a parent company
3.1 Introduction
3.2 Parent company’s own unlawful act
3.3 Failure of supervision
3.4 The role of corporate social responsibility and codes of conduct
3.5 Conclusion
4 Operating abroad
4.1 Introduction
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4.2 International jurisdiction of the Dutch courts
The Dutch parent company before the Dutch courts?
A foreign subsidiary before the Dutch courts?
4.3 Applicable law
Involvement of a foreign subsidiary in violations
Failure of supervision by a Dutch parent company
Correction mechanisms
4.4 The Alien Tort Claims Act and international relations
4.5 Conclusion
5 Litigation
5.1 Obstacles?
5.2 Collective actions
5.3 Mass damages claims
5.4 Evidence
Burden of proof
Witnesses and experts
Special procedure in cases of doubt about corporate policy
5.5 Costs of civil proceedings
5.6 Conclusion
6 Summary
Annexes:
Invitation to tender of 30 July 2009
Terms of reference
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Summary
This report describes the questions a Dutch civil court will ask in assessing the liability of
a Dutch legal person for involvement in the violation of fundamental, internationally
recognised rights. It focuses more specifically on the liability of a Dutch legal person for
subsidiaries operating abroad.
Background
The report was commissioned by the Minister for Foreign Trade and is intended to serve
as a basis for debate on:
* the conclusions of a study to be commissioned by the European Commission into
the legal framework on human rights and the environment, applicable to
European enterprises operating outside the EU;
* the operationalisation of the framework put forward by Professor John Ruggie,
Special Representative of the Secretary-General on the issue of human rights
and transnational corporations and other business enterprises.
For this reason, we have tried to adopt an accessible style and to avoid a technical
description of statutory provisions, case law and dogmatics under Dutch law and that of
neighbouring countries. The report deals solely with legal issues. Non-legal alternatives
such as access to the National Contact Points for the OECD Guidelines for Multinational
Enterprises are not discussed.
The report is partly based on specific legislation, such as certain offences defined in the
criminal law, the competence of the civil courts and the applicable private law. In some
cases, it elaborates on openly formulated statutory provisions.
There are no national or international examples of legislation providing for explicit liability
applicable to legal persons for the harmful effects of the actions of their foreign
subsidiaries or suppliers. Nor are there many court rulings on this issue. In the
Netherlands the first three cases in this field are now pending, so we have to wait and
see whether the Dutch courts consider themselves competent to hear these claims. The
report is therefore largely based on the authors’ own assessment of the situation, based