Jurisdictional Fragmentation and Corporate Impunity in Transnational Human Rights Litigation

In 1996, Nigerian villagers in Ogoniland filed a lawsuit in the Southern District of New York against Royal Dutch Shell, alleging complicity in torture, extrajudicial killings, and environmental devastation caused by decades of oil extraction in the Niger Delta. Their claim was one of the first major attempts to hold a transnational corporation accountable for human rights violations committed abroad. Although the case, Wiwa v. Royal Dutch Shell (2009), resulted in a settlement between the two parties, it also showed that while these corporations have huge power and resources that can impact communities worldwide, there are still no binding international legal mechanisms that hold them accountable for their human rights violations and environmental harms. [1]

Because of this situation, domestic courts in jurisdictions such as the United States and the United Kingdom have attempted to find a solution through duty-of-care claims—negligence claims focused on whether a parent corporation is failing to act with reasonable care under a broad category of civil wrongs. [2] However, these efforts continue to be inconsistent and insufficient due to fragmentation across jurisdictions, allowing these corporations to exploit jurisdictional and structural loopholes to evade responsibility. These altogether bring about a system of accountability that depends on geography, judicial willingness and power, and the political atmosphere of the respective countries, rather than one streamlined international regulatory system. As a result, even when serious human rights abuses occur, corporations can often avoid or delay liability simply by operating in multiple legal systems that do not align with each other. That is, this fragmentation itself can be utilized and abused by these corporations as a tool of corporate impunity.

Historically, international law emerged to regulate the behavior of individual states. Thus, inherently, international law was never intended to oversee private and multinational corporations. In response to this vacuum and the increasing interconnectedness of the global economy, new soft law mechanisms swiftly materialized, such as the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights (UNGPs), to encourage corporate responsibility. [3, 4] For example, the OECD Guidelines provide the voluntary standards for responsible business conduct by covering areas such as labor rights, environmental protection, supply-chain management, and relying on national contact points to handle complaints. Likewise, UNGPs adopted the framework “Protect, Respect, and Remedy” in order to encourage UN member states to safeguard human rights, corporations to respect these rights, and victims to have access to remedies in cases of violations. Yet, to this day, out of 193 UN member states, only 31 have officially published a National Action Plan on these UNGPs. Many have yet to fully commit, largely because the UNGPs are non-binding and rely solely on voluntary compliance and reputational incentives. [4]

This legal gap made it increasingly difficult for affected communities, like those in Ogoniland and the mining regions of Zambia, to seek justice in the domestic courts of these corporations’ home states, and sometimes even abroad. In doing so, many victims over the years have turned to national jurisdictions as substitutes for absent international enforcement mechanisms, especially when the violation in question occurs in a third-party country. [5] However, as more cases enter domestic courts, the absence of an international mechanism makes this reliance increasingly problematic. These fragmented and self-governing systems often lead to inconsistent and unpredictable results, depending on the domestic jurisdiction and its legal traditions, statutory tools, and judicial processes.

As one of the most well-known cases of domestic courts acting as de facto enforcers of corporate accountability, Wiwa v. Royal Dutch Shell (2009) featured the use of the Alien Tort Statute (ATS)—a 1789 US law allowing foreign nationals to sue for violations of international law within the US jurisdiction—to hold Shell accountable for its role in ongoing human rights abuses in Ogoniland, Nigeria. [6] This case later ended in a $15.5 million settlement, and the judges found that allegations such as torture, extrajudicial killing, and crimes against humanity were norms under international law, so a corporation could be sued in the US for participating in such violations abroad. The court’s willingness to allow the claims to proceed signaled to other courts that powerful transnational corporations like Shell could be held accountable and face legal liability for their misconduct overseas.

Yet, just a few years later, the US Supreme Court’s decision in a similar case called Kiobel v. Royal Dutch Petroleum Co. (2013) took a different approach and instead significantly restricted the Alien Tort Statute’s extraterritorial reach by ruling that claims must “touch and concern” the United States with sufficient force. [7] This decision subsequently closed the door for most foreign plaintiffs seeking justice in the US courts following the success of Wiwa v. Royal Dutch Shell (2009) just years earlier. That is, this decision revealed how fragile and inconsistent domestic judicial proceedings can be for corporate accountability. The Wiwa court allowed Alien Tort Statute claims to proceed by accepting that the alleged abuses violated universally recognized international norms, but the Kiobel court ruled that this was no longer sufficient unless the case had a clear connection to a US territory.

In contrast to these developments in the US, the United Kingdom has taken a more expansive approach concerning these corporations. For example, in Vedanta Resources PLC v. Lungowe (UKSC 2019), the UK Supreme Court allowed Zambian villagers to sue Vedanta, a UK-based mining corporation, for environmental harm and subsequently human rights violations committed by its subsidiary in Zambia. [8] Two years later, in Okpabi v. Royal Dutch Shell (UKSC 2021), the UK Supreme Court held that parent companies can owe a duty of care to individuals affected by their subsidiaries’ overseas operations if the parent company in question has enough control over, and oversight of, those operations. [9] These cases from the United States and the United Kingdom together demonstrate how domestic courts can shape quasi-international norms of corporate accountability regarding transnational corporations and the massive power they hold. UK courts have been increasingly working to answer the questions traditionally left to international law, such as cross-border responsibility and the limits of corporate separateness. Still, since each country has its own political norms and legal processes, this judicial progress continues to be uneven across borders—some domestic courts expand liability across borders and legitimize it by reinforcing corporate duties, while others restrict liability to territorial limits and open more ways for these corporations to avoid legal responsibility. 

Yet, even as more courts begin to recognize corporate responsibility, transnational corporations continue to develop sophisticated strategies to evade liability. Under the doctrine of forum non conveniens,  companies have at times argued that foreign jurisdictions are more appropriate for litigation, thereby exploiting weaker judicial systems and more procedural barriers [10]. In Limbu & Ors v. Dyson Technology Ltd & Ors (2023 EWHC 22592 (KB)), the English High Court declined jurisdiction over claims brought by migrant workers alleging forced labor in Dyson’s Malaysian supply chain by stating that Malaysia was the “centre of gravity” of the dispute. [11] 

Similarly, under the principle of corporate separateness, which allows parent companies to evade responsibility for harm caused by their subsidiaries, the lower UK court dismissed the case Municipio de Mariana v. BHP Group (2022 EWCA). [12, 13] In this case, over 200,000 Brazilian claimants sought to sue the Anglo-Australian mining company in England for the 2015 Samarco Dam collapse in Brazil, until the UK Court of Appeal ultimately allowed the case to proceed. [14] The initial dismissal and subsequent approval of this case were the result of the complex structure of the multinational corporations, which, most of the time, divide their operations across dozens of jurisdictions, making it difficult to prove who is responsible and to what extent. The Court of Appeal was willing to look beyond formal corporate structures and consider whether victims actually have a realistic path to justice in the jurisdictions where harm occurred. At the same time, though, this case revealed that outcomes depend heavily on judicial interpretation and willingness, access to foreign courts, and the legal domestic mechanisms in place to challenge these transnational corporations’ attempts to evade accountability.

Still, recognizing these systemic gaps, policymakers have started to push for more uniform legal standards in the international system. In the European Union, policymakers have sought to impose legally binding obligations on large corporations to identify, prevent, and remedy human rights and environmental abuses in their operations and supply chains. Thus, they introduced a new law termed the Corporate Sustainability Due Diligence Directive that went into effect on July 25, 2024 [15]. This directive was built on the success of earlier national initiatives within the EU jurisdiction, such as France’s Duty of Vigilance Law (2017), which required large French companies to implement due diligence plans addressing human rights and environmental risks. [16] One can thus observe how these laws show a gradual shift from voluntary “soft law” mechanisms, like the UNGPs, to more enforceable “hard law” mechanisms that are having increasingly more power over jurisdictional power. 

While these developments are currently most advanced in the EU, similar progress has been happening in the United Kingdom and the United States. In the UK, parliamentary committees and civil society groups have been calling for a mandatory human rights and environmental due diligence law, but no binding legislation has been passed yet. [17] In the US, however, these debates are more focused on sector-specific regulations, such as supply-chain transparency laws addressing forced labor, rather than a comprehensive due diligence framework. [18] Although this progress differs from country to country, we can still observe this trend of a gradual global shift away from “soft law” mechanisms like the UNGPs toward stronger and more enforceable “hard law” models.

From the oilfields of Ogoniland to the mines of Zambia, affected communities have increasingly turned to domestic jurisdictions to seek justice for harms committed by transnational corporations. As the global economy becomes larger and more interconnected, the gap between corporate influence and corporate accountability continues to widen. While courts in places like the United Kingdom have taken important steps toward expanding corporate accountability, persistent jurisdictional and structural loopholes continue to allow corporations to evade responsibility or delay taking responsibility and paying for the damages. In this regard, efforts like the EU’s Corporate Sustainability Due Diligence Directive and France’s Duty of Vigilance Law aim to bridge this gap, but they remain regionally restricted, highlighting the need for a truly international solution. The future of transnational corporate accountability depends on unifying fragmented domestic litigation systems, protecting human rights, and ensuring that justice is neither confined by borders nor blocked by large corporations.

Edited by Yusuf Arifin and Claire Thornhill

[1] EarthRights International, “Wiwa v. Royal Dutch Shell,” https://earthrights.org/case/wiwa-v-royal-dutch-shell/.

[2] New York City Bar Association, “Duty of Care,” https://www.nycbar.org/get-legal-help/article/personal-injury-and-accidents/duty-care/.

[3] Organisation for Economic Co-operation and Development, OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (Paris: OECD Publishing, 2023), https://www.oecd.org/en/publications/2023/06/oecd-guidelines-for-multinational-enterprises-on-responsible-business-conduct_a0b49990.html.

[4] United Nations Office of the High Commissioner for Human Rights, Guiding Principles on Business and Human Rights (New York and Geneva: United Nations, 2011), https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf.

[5] International Center for Transitional Justice, Universal Jurisdiction: A Primer (New York: ICTJ, 2011), https://www.ictj.org/sites/default/files/ICTJ_Report_Universal_Jurisdiction.pdf.

[6] Congressional Research Service, “The Alien Tort Statute: A Primer,” R44947, 2017, https://www.congress.gov/crs-product/R44947.

[7] Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108 (2013), case summary at Oyez, https://www.oyez.org/cases/2011/10-1491.

[8] Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents) [2019] UKSC 3, https://www.supremecourt.uk/cases/uksc-2017-0185.

[9] White & Case LLP, “Okpabi v. Royal Dutch Shell plc: UK Supreme Court Allows Nigerian Citizens to Proceed,” February 2021, https://www.whitecase.com/insight-alert/okpabi-v-royal-dutch-shell-plc-uk-supreme-court-allows-nigerian-citizens.

[10] Cornell Law School Legal Information Institute, “Forum Non Conveniens,” https://www.law.cornell.edu/wex/forum_non_conveniens.

[11] Limbu and Others v. Dyson Technology Ltd., [2023] EWHC (KB), judgment, October 19, 2023, https://www.judiciary.uk/wp-content/uploads/2023/10/Limbu-and-others-v-Dyson-Technology-19.10.23.pdf.

[12] Mariana Pargendler, “Corporate Law and Globalization,” Harvard Business Law Review 14, no. 1 (2024): 1–42, https://journals.law.harvard.edu/hblr/wp-content/uploads/sites/87/2024/04/01_HLB_14_1_Mariana-Pargendler_Online.pdf.

[13] Municipio de Mariana and Others v. BHP Group (UK) Ltd., judgment, 2025, https://www.judiciary.uk/wp-content/uploads/2025/11/Municipio-de-Mariana-v-BHP-Group.pdf.

[14] Samarco, “The Collapse,” https://www.samarco.com/collapse/?lang=en.

[15] European Commission, “Corporate Sustainability Due Diligence,” https://commission.europa.eu/business-economy-euro/doing-business-eu/sustainability-due-diligence-responsible-business/corporate-sustainability-due-diligence_en.

[16] Business & Human Rights Resource Centre, “France’s Duty of Vigilance Law,” https://www.business-humanrights.org/en/big-issues/corporate-legal-accountability/frances-duty-of-vigilance-law/.

[17] Business & Human Rights Resource Centre, “UK Civil Society Campaign for a New Law on Corporate Human Rights Abuses,” https://www.business-humanrights.org/en/latest-news/uk-civil-society-campaign-for-a-new-law-on-corporate-human-rights-abuses/.

[18] Chambers and Partners, “Business and Human Rights 2025: USA – Trends and Developments,” https://practiceguides.chambers.com/practice-guides/business-human-rights-2025/usa/trends-and-developments.