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Piercing the Veil’s Effect on Corporate Human Rights Violations & International Corporate Crime (Human Trafficking, Slavery, etc)


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  • Konov, Joshua Ioji / JK


Corporate limited liability laws (CLL) [the corporate veil (tCV)] is a major obstacle for implementation of UN and other covenants’ prevention and jurisprudence ex ante and ex post facto Corporate Human Rights Violations (CHRV) and International Corporate Crime (ICrC). I.d. aggregates the inability of States and International Bodies to farther establish unified e.g., Lex Non Scripta common law with adjudicative and prescriptive jurisdiction and to apply the Lex Scripta civil and criminal laws to reduce infringements of the human rights and impunity in cases of corporate violations and criminal acts. In this paper is argued that the change from Corporate Limited Liability (referred to as tCV) to Corporate Unlimited Liability (referred as PtCV) laws and thus criminalizing and adjudicating breaches of HR covenants and civil and criminal laws by corporate individuals, at prima facie should have a substantial preventative and sanctioning affect on reducing such CHRV and ICrC. I.d., the unambiguous correlation between CHRV and ICrC, (which in many occasions includes Human Trafficking, Slavery, Sex Trade, Child Labor, ext), which are accelerated by the 2001-2007 Recessions through expanding global poverty and inequality. Piercing the Corporate Veil (PtCV) and Enhancing Business & Contract Laws (eBCL) would raise the market security thus needed to establish fair market competition benefiting Small and Medium Enterprises and Investors, which have become major global employers: action that would have a general positive market effect. Id. Anyway with the current judicial practice, in most cases where there are grave personal injuries the court is willing to impute negligence to the parent company – especially where the subsidiary is thinly capitalized or appears to have been formed precisely to avoid liability. In contrast, courts are extremely reluctant to pierce the corporate veil in cases of purely pecuniary losses, namely where the creditors of a bankrupt corporation seek to reach the personal assets of the shareholders of the corporation. Eric Engle (2006). This is for the obvious reason that general financial liability of shareholders for all debts of a corporation would discourage investment in stocks with deleterious economic consequences. See, e.g. Krivo Indus. Supply Co. v. National Distillers & Chem. Corp., 483 F.2d 1098, 1102 (5th Cir. 1973)

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 35714.

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Date of creation: 30 Oct 2011
Date of revision:
Publication status: Forthcoming in 1.1(2012): pp. 1-29
Handle: RePEc:pra:mprapa:35714

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Keywords: business laws; limited liability; corporate contracts; economics; human trafficking; international crime; white collar crime;

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  1. Ayse İmrohoroĝlu & Antonio Merlo & Peter Rupert, 2006. "Understanding the determinants of crime," Journal of Economics and Finance, Springer, vol. 30(2), pages 270-284, June.
  2. Dreher, Axel & Schneider, Friedrich, 2006. "Corruption and the Shadow Economy: An Empirical Analysis," IZA Discussion Papers 1936, Institute for the Study of Labor (IZA).
  3. Konov, Joshua Ioji / JK, 2011. "2001 & 2007 Recessions prompted remaking of the international organizations," MPRA Paper 34588, University Library of Munich, Germany.
  4. Axel Dreher, 2002. "Does Globalization Affect Growth?," Development and Comp Systems 0210004, EconWPA, revised 04 Feb 2003.
  5. Thomas A. Garrett & Lesli S. Ott, 2008. "City business cycles and crime," Working Papers 2008-026, Federal Reserve Bank of St. Louis.
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Cited by:
  1. Konov, Joshua Ioji, 2012. "Market Economy under Rapid Globalization and Rising Productivity," MPRA Paper 48750, University Library of Munich, Germany.
  2. Konov, Joshua Ioji / JK, 2013. "Enhancing Markets (i.e. Economies) Transmissionability to Optimize Monetary Policies’ Effect," MPRA Paper 46950, University Library of Munich, Germany.


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