When Liability Falls, The Veil Prevails: Environmental Offences And The Corporate Veil
- IJLLR Journal
- Jul 19
- 1 min read
Snehal Silvera, O.P. Jindal Global University
ABSTRACT
Innocent lives are lost and communities devasted due to hazardous environmental practices of corporations. This trend is recurrent in developing nations where multinational organisations set up their subsidiary companies. These parent corporations often structure themselves to avoid liability, engaging in acts through their subsidiaries that violate the environmental norms and overlook international and domestic safety procedures. When harm is caused, they are shielded by the doctrine of corporate veil. This veil allows parent companies to escape liability, thereby saving themselves from paying equitable compensation to victims. This leaves the victims in developing nations helpless. They suffer from chronic health hazards, often lose their homes, and are left with little to no compensation. Indian law lacks clear statutory provisions to address this issue, and the guidelines laid by the courts are vague and ineffective. This calls for an urgent need to reform the jurisprudence on corporate veil in India. The paper critically analyses the precedent originating from Salomon v. Salomon and examines its development through landmark cases such as Adams v. Cape Industries, and Union Carbide Corporation v. Union of India. Drawing on the UK’s evolving jurisprudence and the theory of ‘Extending the Veil’, the paper advocates for a more robust and effective framework for attributing liability to parent companies. A timely reform in the law will help prevent environmental atrocities committed by multinational corporations and ensure just compensation for victims of environmental harm.
