‘Un Somaro Piumato’--Rethinking the Scope and Nature of State Liability for Acts of their Commercial Instrumentalities: State Owned Enterprises and State-Owner Liability in the Post-Global

Abstract

Under what circumstances might a state be subject to liability for the conduct of its state owned enterprises (SOEs)? That question, always controversial but apparently settled by the end of the last century, has once again become important as the old conceptual categories for liability have become unsettled. It is now no longer clear that states may authoritatively claim immunity for themselves and for the non-commercial activities of the SOEs. This contribution examines the effect of substantial transformations in the legal environment of enterprise operation on the conceptual framework within which principles of immunity (and its waiver) was grounded. The legalization of responsible business conduct through disclosure and supply chain due diligence legislation, as well as the rise of human rights business torts based on production chain responsibility have upended the traditional conceptual framework of immunity and of the separation of the state from its economic organs. The governmentalization of economic activities and the extension of regulatory responsibilities of apex economic enterprises across their supply chains have produced a context in which private enterprises now assert sovereign authority even as states exercise private market power through their management and control of autonomous economic actors in markets. In this context Part 2 considers the challenge to the standard model of state owner liability for the conduct or activities of SOEs in the form of the new supply chain due diligence laws, and the Modern Slavery reporting provisions being enacted in Europe and Australia. Part 3 then considers the challenge to traditional models that may emerge from the development of human rights tort law. The contribution argues that the resulting context provides a basis for either for extending sovereign immunity to those regulatory responsibilities of all economic actors (irrespective of their public or private ownership) or of the reconception of sovereign regulation through legal compliance obligations as inherently commercial and thus not protected by principles of sovereign immunity when undertaken by SOEs. Further, the contribution suggests that this emerging conception of the role of economic actors produces a context in which the state can become its own legal subject, the state can simultaneously serve as the apex body corporate subject to regulatory obligations within its production chain and liable therefore to, and at the same time the sovereign authority that, enforces those obligations.