1 Introduction
Many large oil companies and mining companies are based in the EU or the US, but operate via subsidiaries in the developing world. If such operations lead to environmental damage, the question arises of to what extent the subsidiary and the parent company can be held liable for the losses. As a starting point, a parent company and its subsidiary are regarded as two separate entities. This means that prima facie, the parent company cannot be held liable for the wrongful acts of the subsidiary. Consequently, suits for damages suffered by third parties must be brought against the subsidiary in the jurisdiction in which it is based, most often a country in the developing world. For several reasons, this may not be an attractive option for the third party. Consequently, until recently, suits for environmental damage caused in the developing world have, in practice, been more or less barred. However, recent developments in substantive law in Europe seem to have changed this, so that parent companies are now being sued in Europe for environmental damage caused by their subsidiaries in the developing world. Moreover, subsidiaries are also being sued in Europe. By focusing on three recent examples from Dutch law and UK law, this article examines the extent to which it is possible for European courts to dismiss such claims and the extent to which the substance of the case impacts on this.