by Francesca Hernandez

Created on: April 22, 2008

In recent years, the power and influence of American corporations with multinational branches has become difficult to ignore. There are many reasons for a corporation to expand its operations to an overseas location, including tax breaks and cheap labor. But an increasingly compelling incentive for operating overseas is that of the lax regulatory policies that the developing world is known for. As calls for reductions in greenhouse gas emissions and further "greening" of business become deafening in the developed world, foreign nations become the refuge for polluting industries.

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Developing nations are at a major disadvantage when it comes to environmental policy. Foreign multinationals represent opportunities for jobs, growth, and development, and less developed nations are reluctant to impose restrictions that will jeopardize their chances of hosting such corporations. This suits corporations, who are notoriously resistant to any type of development or regulation that compromises their competitive advantage.

But what happens when those lax standards backfire, when incidents occur that threaten the health and well-being of people in proximity to the operations? The question of liability, while seemingly straightforward, is in reality a complex and multidimensional thing. On one hand, it seems logical to blame the corporation for engaging in practices that endanger the safety of humans and the environment, but on the other hand, it seems reasonable to distribute some of that blame to the government of the state that has allowed such weak policy to govern corporate practices.

Corporate liability in these far-flung places is a very tricky subject. Although legal liability may exist theoretically, it can usually be shrugged off with impunity because the victims of environmentally hazardous practices rarely have the means of enforcing their rights in local courts. Furthermore, the corporation has the power to ignore the rulings of local courts by hiding behind the corporate veil or by utilizing the protection offered by separate limited liability. Clearly, there must be some corporate responsibility towards the victims of the environmental consequences of overseas operations.

Ultimately, the beneficiary of an American company operating overseas is America. The profits are taxed by the federal government, and contribute to the GDP. This would indicate that there is some ethical responsibility on the behalf of a US corporation to assume a role that promotes the

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