Profit And Pain: Examining The Obstacles And Solutions In Company Law To Enhance Corporate Accountability

Abstract

The Ogale and the Bille communities located in Nigeria, have been subjected to repeated oil spills since 1989, and have lived with chronic oil pollution throughout their lives. As a result of the oil spills caused by a subsidiary of parent company Shell plc, the natural water sources cannot safely be used for drinking, fishing, agricultural, washing or recreational purposes. The Ogale and Bille communities demonstrate an important issue in company law is the protection of the health and environment of communities, particularly in developing countries, that have been exposed to harm caused by thinly capitalised corporations. Limited liability together with the principle of separate corporate personality create an obstacle in holding companies who have instructed their subsidiary’s conduct, accountable for harmful activities. This paper in particular aims to canvas whether the law currently protects these stakeholder interests and in what ways it can progress to address this fundamental concern in company law. It is argued that the effect of tort law, directors duties and market factors interact to promote stakeholder interests and encourage corporate accountability.