Modern multinational enterprises (MNEs) operate through complex global supply chains that often conceal labor abuses, environmental damage, and other systemic harms. Traditional legal tools were designed for discrete wrongs by single entities and cannot adequately address these diffuse, structural problems. Recent high-profile litigation against parent companies for supply chain human rights violations has exposed this gap: courts applying traditional doctrines have struggled to hold MNEs accountable when harm occurs overseas. This paper compares how Germany and China have responded to this challenge through legal innovation. Germany adopted the Supply Chain Due Diligence Act (LkSG), which shifts parent company liability from subjective intent to the objective breach of statutory due diligence obligations. China, through the 2023 Company Law's horizontal piercing provision and the emerging corporate interest orientation theory, shifts liability from subjective abuse of control to the objective status of benefit attribution. Although the two jurisdictions follow different institutional paths both demonstrate a convergent objective turn in liability logic. This convergence offers complementary insights: Germany's model emphasizes prevention through ex ante obligations, while China's model focuses on remediation through ex post interest tracing, together providing a richer framework for global MNE accountability.
Research Article
Open Access