On The Liability Of Multinational Corporation For Environmental Tort

Environmental tort comes out of the industrialization movement in modern times. Human's excessive exploitation of natural resources beyond the self-balancing ca-pacity of environment causes serious damage to the ecosystem, which ultimately endangers mankind itself in its survival and development. The complex nature of environmental tort has brought profound changes to the traditional legal system. A series of legal terms or concepts get redefined or refined, such as the principle of imputation, burden of proof , etc. And the advancing of economic globalization produces a new angle of view for the research on environmental tort. As an important part of globalization multinational corporations also play an important role in the global environmental tort by their productive activity. While the unique nature of a multinational corporation for lack of legal personality has brought up lots of problems in environmental tort, such as the burden of liability, jurisdiction and choice of law. And this effort of this paper is focusing on these problems , that is the distribution of environmental liability within the corporation group and relevant private international law issues on this problem.This paper consists of five parts, with about 30000 words. And its main points is put out as follows.The first part gives a general picture of the multinational corporation and the concerning environment problems. As one of the main motivators of globalization, multinational corporations play a very important role in international trade and investment field, such as exploring world market, improving market efficiency and optimizing the allocation of resources in world dimension, which do have promoted the world economy development, but also have caused serious environment problems. As strict environment policies and law systems have been erected in most developed countries where there are the most multinational corporations in the world, multinational corporations have to face a more than higher environment cost. In order to evade the disbenefits caused by the rising environment cost, industry shift to developing countries and waste trade with developing countries have been taken as a main way of pollution transfer. As a result, the environment pollution burden is taken by the developing countries and undeveloped countries as well as their citizens, while most of the profits is taken away by the multinational corporations. This unfair situation has aroused extensive concentration, and the claim for more responsibilities from the multinational corporations forms a strong trend. Then how to realize the responsibility or liability of the multinational corporations? One important approach is to reinforce the liability for environment tort. Thus the common goal of environment protection and sustainable development could be closer. But how to realize the liability of multinational corporations for environment tort still constitute a general problem on which unified recognition and practices have not been achieved. The reason of the problem lies in the unique nature of a multinational corporation which concludes both domestic and international quality and this has caused challenges to the traditional law system.The second part makes a detailed discuss about the allocation of the of liability burden for the environmental tort. Environmental tort generally originates from industrial activities. And the consequences of an environmental tort under scale industrial production is far beyond that of a traditional individual tort, which is always beyond the affordability of the tortfeasor. The socialization of environmental tort has turned the concentration of modern tort law to indemnity for loss instead of punishment against the tortfeasor. And the spreading or distribution of loss has become guiding principles in some special tort area such as environmental tort. A multinational corporation has a naturally good foundation for loss sharing. On the one hand, the numerous entities that constitute a multinational corporation have accumulated ample financial resources for indemnity. On the other hand, the benefit sharing mechanism among the member entities makes it reasonable for them to share the loss. However, the loss of legal personality of a multinational corporation makes it difficult for the sharing of loss. Under the traditional corporate law system a multinational corporation is divided into a number of independent corporations subject to different law systems, the multinational corporation as a whole has not been recognized by any law whatever domestic or international ,or in other words doesn't have an independent legal status. This inconsistency between the law and economic practices produces a chance for the multinational corporation to easily get round the law by making use of the independent legal status of the subsidiaries. The basic quality of a multinational corporation lies in its uniform operation strategy enforced in all branches or subsidiaries, which constitutes its competitive advantage. So when the interest of a subsidiary conflicts with that of the whole, the former's interest is likely to be ignored or abandoned as a reasonable or necessary price for the interest of the whole. This results in injustice situation to the creditors of the subsidiary, especially to the involuntary creditors out of environmental tort. The detrimental consequences of environmental tort is usually enormous, which is generally beyond the ability of a subsidiary, while the limited liability principle prevented the parent corporation from being accused. Then breaking through the obstacles from the law becomes necessary, which have been supported by the practices of some cases in which the parent corporation was made to take joint or several liability for the environmental tort occurred in a host country. Although this practice has not been recognized by law or even adopted as common practice. But it at least provides a kind of reference and possible approach for the fair resolution of environmental tort caused by a multinational corporation.The third part is trying to talk about the theme from the angle of private international law which touches upon the jurisdiction and law choice issue. Jurisdiction is a primary possible issue in any international case. But as to multinational corporation environmental tort, situation becomes complicated. As discussed before, a multinational corporation is subject to different systems of law and is under the control of no single country. So when an environmental tort caused by a multinational corporation occurs, to ascertain the jurisdiction becomes a difficult job. According to the law in common, court where the tort occurs obviously has the jurisdiction. And in most cases, the choice of jurisdiction means the choice of law. However, the law of the host country normally is poor and provides only a low level of protection to environment and its citizens. Moreover, even if the domestic court finally delivers a judgement on the victims' side, the judgement faces the problem of being recognized and enforced, of which the difficulty would not be less than a litigation. But if the suit is instituted in the court of the parent country, it may be rejected on the defendant's deraignment of "forum non-convenience". This is because the parent country would not benefit from the suit and naturally lack motivation for the jurisdiction. So the "forum non-convenience" principle is always adopted as an excuse for turning down the jurisdiction claim, which erects an obstacle in front of the environment tort case instituted abroad. And the resolution of this problem has been brought up to private international law study.The final settlement of a multinational corporation's environmental tort case still relies on the allocation of rights and obligations through the application of specific substantive law or international uniform substantive law. Now that there is no international uniform substantive law or unique conflict law on multinational corporation environmental tort. Then the choice of specific substantive law depends on the conflicts law which is usually the court law. Apparently the substantive law of the parent country is more favorable to the victims. But the possible applicable substantive law includes both the law of the host country where the tort occurs and the law of the parent country where the parent corporation bases. And how to prove the latter one is the most proper or significant law still stays a question. The "protecting the victims" principle have been erected in some countries' conflicts law and adopted in some tort cases, which reflects such a kind of trend as pursuing material justice in international cases. But it has not been accepted as a common rule because of its too much flexibility for interpretation or definition. Thus the application of "protecting the victims" principle needs still needs to be perfected.The forth part reflects on the relevant legislation situation in our country and extends some suggestion on modification. There is an actual vacancy in the legislation of our country concerning multinational corporation environmental tort. As a developing country, we are still assuming the part of victims in multionational corporation environmental torts. And the victims of a multinational corporation environmental tort would not be able to get enough relief for lack of legal support from the existing legal system. This is also detrimental to the sustainable development of our economy and environment in the long run. Thus, the feasible way now is to modify the existing legal system and provide effective support to the victims of a multinational corporation environmental tort. But from long-term considerations, the most effective approach must lie in the construction of an integrated system for the internalization of environmental costs, through which the goal for the protection of environment can be achieved.The final part is the conclusion part which ends the discuss and summarizes the main idea of this paper. The settlement of multinational environmental torts needs international cooperation. But the key to the problem lies in the developing country itself. Only by the modification of environment law system and the promotion of environment awareness, can this problem be resolved.