Munich Personal RePEc Archive

Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc)

Konov, Joshua Ioji / JK (2011): Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc). Forthcoming in: Scribd.com , Vol. 1, No. 1 (4 January 2012): pp. 1-29.

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Corporate limited liability laws (CLL) [the corporate veil (tCV)] is a major obstacle for implementation of UN and other covenants’ prevention and jurisprudence ex ante and ex post facto Corporate Human Rights Violations (CHRV) and International Corporate Crime (ICrC). I.d. aggregates the inability of States and International Bodies to farther establish unified e.g., Lex Non Scripta common law with adjudicative and prescriptive jurisdiction and to apply the Lex Scripta civil and criminal laws to reduce infringements of the human rights and impunity in cases of corporate violations and criminal acts.

In this paper is argued that the change from Corporate Limited Liability (referred to as tCV) to Corporate Unlimited Liability (referred as PtCV) laws and thus criminalizing and adjudicating breaches of HR covenants and civil and criminal laws by corporate individuals, at prima facie should have a substantial preventative and sanctioning affect on reducing such CHRV and ICrC. I.d., the unambiguous correlation between CHRV and ICrC, (which in many occasions includes Human Trafficking, Slavery, Sex Trade, Child Labor, ext), which are accelerated by the 2001-2007 Recessions through expanding global poverty and inequality. Piercing the Corporate Veil (PtCV) and Enhancing Business & Contract Laws (eBCL) would raise the market security thus needed to establish fair market competition benefiting Small and Medium Enterprises and Investors, which have become major global employers: action that would have a general positive market effect. Id. Anyway with the current judicial practice, in most cases where there are grave personal injuries the court is willing to impute negligence to the parent company – especially where the subsidiary is thinly capitalized or appears to have been formed precisely to avoid liability. In contrast, courts are extremely reluctant to pierce the corporate veil in cases of purely pecuniary losses, namely where the creditors of a bankrupt corporation seek to reach the personal assets of the shareholders of the corporation. Eric Engle (2006). This is for the obvious reason that general financial liability of shareholders for all debts of a corporation would discourage investment in stocks with deleterious economic consequences. See, e.g. Krivo Indus. Supply Co. v. National Distillers & Chem. Corp., 483 F.2d 1098, 1102 (5th Cir. 1973)

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