Doing Business Right Blog

 Editor’s note: Maisie Biggs recently graduated with a MSc in Global Crime, Justice and Security from the University of Edinburgh and holds a LLB from University College London. She is currently an intern with the Doing Business Right project at the Asser Institute in The Hague. She previously worked for International Justice Mission in South Asia and the Centre for Research on Multinational Corporations (SOMO) in Amsterdam.

“No one who comes to these courts asking for justice should come in vain. The right to come here is not confined to Englishmen. It extends to any friendly foreigner. He can seek the aid of our courts if he desires to do so. You may call this ‘forum shopping’ if you please, but if the forum is England, it is a good place to shop in both for the quality of the goods and the speed of service.”

Lord Denning in The Atlantic Star [1973] 1 QB 364 (CA) 381–2

The United Kingdom Supreme Court today has handed down Vedanta Resources PLC and another (Appellants) v Lungowe and others (Respondents) [2019] UKSC 20, a significant judgement concerning parent company liability and the determination of jurisdiction for these claims. Practically, it now means for the first time a UK company will face trial and potentially accountability in their home jurisdiction for environmental harms associated with operations of foreign subsidiaries. 

This is a closely-watched jurisdiction case concerning a UK parent company’s liability arising out of the actions of its foreign subsidiary. The claimants are 1826 Zambian citizens from the Chingola region of the Copperbelt Province. This group action is against UK-domiciled Vedanta Resources PLC and its subsidiary KCM, a second defendant which is incorporated in Zambia. The original claims concern discharges from the KCM-owned Nchanga mine since 2005 which have allegedly caused pollution and environmental damage leading to personal injury, damage to property and loss of income, amenity and enjoyment of land. 

Following the initiation of this claim, in 2015 Vedanta and KCM challenged the jurisdiction of the English courts, however Coulson J dismissed their applications. The Court of Appeal then upheld the dismissal of those applications, so the defendants appealed to the Supreme Court. (See our previous blog on the case here).

The Supreme Court today denied the appeal by Vedanta Resources and KCM, and allowed the claim to proceed to merits in England. The Court made it clear the real risk that the claimants would not obtain access to substantial justice in Zambia was the deciding factor in the case. The Court denied there was an abuse of EU law by the claimants using Vedanta as a jurisdictional hook to sue both the parent company and subsidiary in England, and the claimants succeeded in demonstrating there was a “real triable issue”, nonetheless Zambia was held to be the “proper place” for the case. However, because the Court supported the finding of the first instance judge regarding the risks faced by claimants in accessing substantial justice in Zambia, the appeal was denied, and the case can proceed in England. 

This is a significant judgement, as it now means for the first time a UK company will face trial and potentially accountability in their home jurisdiction for environmental harms associated with operations of foreign subsidiaries. Lord Briggs delivered the judgement on four major issues: the potential for abuse of EU law; whether there was a real triable issue against Vedanta; whether England is the proper place for these proceedings; and whether there was a real risk that substantial justice would not be obtainable in that foreign jurisdiction. 

Why is this significant? For those following this case, and the appeals of Okpabi & Ors v Royal Dutch Shell Plc & Anor (Rev 1) [2018] EWCA Civ 191 and AAA & Ors v Unilever Plc & Anor [2018] EWCA Civ 1532 in the English courts, there are two major findings in this judgement that will likely impact future cases concerning parent company liability. Firstly, the reasoning behind the finding of a “real triable issue” between a foreign claimant and UK parent company, and secondly the primacy the Supreme Court placed on the significance of access to justice as a jurisdictional hook for claims in England. More...

Editor's note: Alexandru Rares Tofan recently graduated with an LLM in Transnational Law from King’s College London where he focused on international human rights law, transnational litigation and international law. He is currently an intern with the Doing Business Right project at the Asser Institute in The Hague. He previously worked as a research assistant at the Transnational Law Institute in London on several projects pertaining to human rights, labour law and transnational corporate conduct.

Introduction

In 2014, three Eritrean refugees commenced a representative action in British Columbia against the transnational mining company ‘Nevsun Resources’, pleading both private law torts and violations of customary international law. They alleged that they were subjected to forced labour, slavery, torture, and crimes against humanity while working at an Eritrean gold mine jointly owned by Nevsun (60%) and by the Eritrean State (40%). The representative action was brought on behalf of over a thousand people who had been drafted into the Eritrean National Service Programme (NSP) and subsequently forced to work at the Bisha Mine. The NSP is a governmental apparatus of indefinite and mandatory conscription that is fraught with allegations of forced labour and other human rights abuses. It was established under the authoritarian regime of President Isaias Afwerki who has been ruling Eritrea ever since the country gained independence from Ethiopia in 1993. As Nevsun is incorporated under the laws of British Columbia, the plaintiffs sought relief in the courts of the Canadian province. Notwithstanding the defendant’s attempts to have the proceeding stayed or dismissed, the action was allowed to go through both by the Supreme Court of British Columbia (BCSC) and the Court of Appeals (BCCA). On 14 June 2018, the Supreme Court of Canada granted Nevsun leave to appeal with a tentative hearing date set on 23 January 2019.

This proceeding raises complex issues of transnational law. The plaintiffs are seeking redress in a jurisdiction that is neither the locus delicti nor their country of nationality. Rather, the claimants argue that peremptory norms of customary international law create a private law cause of action and a right to recover damages under Canadian law. In point of fact, the plaintiffs have called attention to several delicate questions. Firstly, can claims of damages arising out of the alleged breach of jus cogens norms form the basis of a civil proceeding? And are corporations bound by these international law norms for that matter? The case is further layered by the involvement of the State of Eritrea. Since Nevsun is argued to be derivatively liable, a finding of guilt on its part would mean that the Canadian courts would be judging the acts of another state. This engages the act of state doctrine, which demands judicial abstention from adjudication of matters touching upon the conduct of foreign states.

Nevsun filed four interlocutory applications seeking to have the claim stayed, dismissed or struck out. This article traces the development of this case through the first three objections to jurisdiction raised by Nevsun and dismissed by the provincial courts: forum non conveniens, the act of state doctrine and the lack of corporate liability under customary international law.  A fourth application argued that the plaintiffs’ claims are not appropriately brought as a representative action (i.e. class action). This application was granted by the Supreme Court of British Columbia and was not appealed by the plaintiffs.[1]

More...

Editor’s note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of European and International Human Rights Law at Leiden University in the Netherlands. Prior to commencing the LLM, she worked as a business and human rights solicitor in Australia where she specialised in promoting business respect for human rights through engagement with policy, law and practice.

Since the release of the first draft of the BHR Treaty (from herein referred to as the ‘treaty’), a range of views have been exchanged by commentators in the field in relation to the content of the treaty (a number of them are available on a dedicated page of the Business and Human Rights Resource Centre’s website). While many have stated that the treaty is a step in the right direction to imposing liability on businesses for human rights violations, there are a number of critiques of the first draft, which commentators hope will be rectified in the next version.

This second blog of a series of articles dedicated to the proposed BHR Treaty provides a review of the key critiques of the treaty. It will be followed by a final blog outlining some recommendations for the working group’s upcoming negotiations between 15 to 19 October 2018 in Geneva. More...

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight and on various websites. You are invited to complete this compilation via the comments section below. Feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

Shell-Eni Bribery Case: On 5 March, the corporate bribery trial against oil companies Shell and Eni was postponed to 14 May by a court in Milan, Italy.  The charges against the companies are bribery and corruption in the 2011 purchase of a Nigerian offshore oilfield, one of the most valuable oilfields in Africa. Although both firms denied the charges, the corruption watchdog Global Witness claimed that hundreds of millions of dollars had been paid to Nigeria’s former president and his former oil minister as pocket bribes. Global Witness calls the case one of the biggest corruption scandals in the history of the oil sector. The trial in the Milan court is expected to last 12-18 months.

Jesner v. Arab Bank: On 24 April, in a 5-4 vote, the US Supreme Court ruled in the Jesner v. Arab Bank case that foreign corporations cannot be brought before US courts under the Alien Tort Statute (ATS). Between 2004 and 2010, thousands of foreign nationals sued Arab Bank under the ATS, claiming that the Bank’s officials allowed money transfers through the New York branch of the Bank to Hamas who committed violent acts in Israel and Occupied Palestinian Territories. The Supreme Court held that foreign corporations cannot be sued under the ATS. Furthermore, the Court claimed that international law today does not recognize “a specific, universal, and obligatory norm of corporate [tort] liability”, which is a prerequisite to bringing a lawsuit under the ATS. In the Court’s lead opinion, Justice Kennedy stated that "Courts are not well suited to make the required policy judgments that are implicated by corporate liability in cases like this one.” In her dissenting opinion joined by three other justices, Justice Sotomayor claimed that the decision "absolves corporations from responsibility under the ATS for conscience-shocking behavior."

Fifth Anniversary of Rana Plaza: April 24th also marked the fifth anniversary of the deadly collapse of Rana Plaza in Dhaka, Bangladesh. Rana Plaza was a five-story commercial building which housed several garment factories employing around 5000 people. The global outcry after the disaster which claimed at least 1134 lives led to numerous initiatives to change business-as-usual in the garment and textile supply chains in Bangladesh and beyond. Despite these initiatives which employed various approaches to the issue of worker safety in the supply chains, it is widely acknowledged that there is still a long way to go to create a safe working environment for workers in the garment and textile supply chains. On 12 April, the Asser Institute hosted a one-day conference on Rana Plaza to take stock of the regulatory and policy initiatives aimed at improving workers’ safety in the garment supply chain (You will find our background paper here).

 Okpabi v. Royal Dutch Shell - Episode. 3? On 27 April, more than 40 UK and international human rights, development and environment NGOs, later supported by academics from different states, urged the UK Supreme Court to allow two Nigerian fishing communities to appeal against the Okpabi v Royal Dutch Shell ruling of the Court of Appeal in February which denied responsibility for UK-based Royal Dutch Shell for the pipeline spills, dating back as far as 1989, which affected approximately 40000 Nigerian farmers and fishermen. The NGOs claimed that the Court of Appeal’s decision erred in many ways as it seriously restricts parent company liability and limits the options available to victims of corporate human rights violations seeking remedy in the UK.More...

The headline of the New York Times on 24 April summed it up: ‘Supreme Court Bars Human Rights Suits Against Foreign Corporations’. The Jesner decision, released earlier that day by the U.S. Supreme Court, triggered a tremor of indignation in the human rights movement given the immunity it conferred to foreign corporations violating human rights against suits under the Alien Tort Statute, and led to a flood of legal and academic commentaries online. This panel discussion, organised with the support of the Netherlands Network of Human Rights Research, will address various aspects of the judgment. Its aim is to better understand the road travelled by American courts leading up to the decision with regard to the application of the Alien Tort Statute to corporations, to compare the decision with the position taken in other jurisdictions, and to discuss the ruling's potential broader impact on the direction taken by the business and human rights movement.

Where: T.M.C. Asser Instituut in The Hague

When: Thursday 24 May at 2:30 pm

Speakers:

• Phillip Paiement (Tilburg University) - The Jesner case and the ATS: An American perspective

• Lucas Roorda (Utrecht University) - A comparative perspective on Jesner and corporate liability for human rights violations

• Nadia Bernaz (Wageningen University) - Lessons for the business and human rights movement after Jesner

• Antoine Duval (Asser Institute) - Moderator

Register here!

The collapse of the Rana Plaza building on 24 April 2013 in Bangladesh left at least 1,134 people dead and over 2,500 others wounded, while survivors and the families of the dead continue to suffer trauma in the aftermath of the disaster. This first blog of our special series assesses the extent to which litigation and particular "soft" mechanisms have secured justice and compensation for victims and brought the relevant actors – whether global brands or individuals – to account for their alleged culpability for the collapse. To do this, it firstly examines the avenues that have been taken to hold corporations legally accountable in their home jurisdictions for their putative contributions to the collapse on the one hand, and individuals (particularly local actors) legally accountable before the courts in Bangladesh on the other. It then considers the effects of softer mechanisms aimed at compensating victims and their dependants. More...

Five years ago, the Rana Plaza building collapsed, taking with it at least 1134 innocent lives and injuring more than 2000 others. This industrial tragedy of incomparable scale constitutes a milestone in the business and human rights discussion. There will always be a 'before' and an 'after' Rana Plaza. Its aftershock triggered potentially seismic changes in the regulation of transnational corporations, such as the much-discussed French law on the ‘devoir de vigilance’. It is, therefore, essential to scrutinize with great care the aftermath of the tragedy: the innovations it triggered in the transnational regulation of the garment supply chain, the different processes initiated to compensate the victims, and in general the various hard and soft, private and public, legal and non-legal initiatives stemming from the urge to tackle a fundamental injustice. Thus, in the days to come we will feature a series of blogs on Rana Plaza and its consequences prepared by our outstanding interns: Raam Dutia and Abdurrahman Erol.More...

Editor’s note: You will find attached to this blog the background paper to the event Five Years Later: Rana Plaza and the Pursuit of a Responsible Garment Supply Chain hosted by the Asser Institute in The Hague on 12 April. 

Background paper: executive summary

Raam Dutia & Abdurrahman Erol (Asser Institute)

The collapse of the Rana Plaza building on 24 April 2013 in Savar, Bangladesh, left at least 1,134 people dead and over 2,500 others wounded, while survivors and the families of the dead continue to suffer trauma in the aftermath of the disaster. The tragedy triggered a wave of compassion and widespread feelings of guilt throughout the world as consumers, policy makers and some of the most well-known companies in Europe and North America were confronted with the mistreatment and abject danger that distant workers face in service of a cheaper wardrobe.

Partly in order to assuage this guilt, a number of public and private regulatory initiatives and legal responses have been instituted at the national, international and transnational levels. These legal and regulatory responses have variously aimed to provide compensation and redress to victims as well as to improve the working conditions of garment workers in Bangladesh. Mapping and reviewing how these responses operate in practice is essential to assessing whether they have been successful in remedying (at least partially) the shortcomings that led to the deaths of so many and the injury and loss suffered by scores more.

This briefing paper outlines and provides some critical reflections on the steps taken to provide redress and remedy for the harm suffered by the victims of the catastrophe and on the regulatory mechanisms introduced to prevent its recurrence. It broadly traces the structure of the panels of the event. 

In line with Panel 1 (Seeking Justice, Locating Responsibility), the paper begins by focusing on litigation that has been conducted to secure justice and compensation for the victims, as well as to bring the relevant actors to account for their alleged culpability for the collapse. To this end, the paper examines the avenues that have been taken to hold corporations legally accountable in their home jurisdictions for their putative contributions to the collapse on the one hand, and individuals (particularly local actors) legally accountable before the courts in Bangladesh on the other; it then considers softer mechanisms aimed at compensating victims and their dependants. 

In keeping with Panel 2 (Never again! Multi-level regulation of the garment supply chain after Rana Plaza: Transnational Responses), the paper then considers the transnational (public and private) regulatory responses following the tragedy, enacted by stakeholders including NGOs, industry associations, trade unions and governments and largely connected to issues surrounding labour standards and health and safety.

Finally, in line with Panel 3 (Never again! Multi-level regulation of the garment supply chain after Rana Plaza: National Responses), the paper looks at numerous (soft and hard) regulatory developments at the national level in response to the Rana Plaza collapse. It charts the legislative response by the government of Bangladesh to attempt to shore up safety, working conditions and labour rights in garment factories. It also focuses on legislative and other arrangements instituted by certain national governments in the EU, and how these arrangements relate to the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines on Multinational Enterprises.

Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

Okpabi v Royal Dutch Shell: Court of Appeal finds Shell not liable for Nigerian oil spills

On 14 February 2018, the Court of Appeal in London handed down its Approved Judgment in Okpabi and others v Royal Dutch Shell Plc and another [2018] EWCA Civ 191. The claimants are 40,000 Nigerian farmers and fisherman from the Ogale and Bille communities in the Niger Delta who allege they have suffered from decades of pollution from pipelines belonging to Shell Nigeria, a subsidiary of the British-Dutch multinational oil and gas company Shell. Indeed, in 2011 the United Nations Environmental Programme published an Environmental Assessment of Ogoniland which reported serious contamination of agricultural land and waterways in the community as well as its groundwater at rates 1,000 times higher than permitted under Nigerian law, exposing Ogale’s inhabitants to serious health risks. Meanwhile the Bille community suffered the largest loss of mangrove habitat in the history of oil spills at 13,200 hectares. In its split decision, the Court of Appeal upheld the High Court ruling that it lacks jurisdiction as London headquartered parent company Shell could not be liable for any oil pollution in the Niger Delta caused by its wholly autonomous subsidiary. The villagers now plan to seek permission to take the case to the Supreme Court, with King Okpabi of the Ogale Community stating “We have lost our environment, our farmland and our dignity because of Shell’s operations in our community. The English Courts are our only hope because we cannot get justice in Nigeria. So let this be a landmark case, we will go all the way to the Supreme Court”.

Philippines Commission on Human Rights holding overseas hearings for oil majors

The Republic of the Philippines Commission on Human Rights is set to confront oil majors over their climate change impact through hearings in Manila, New York and London. The hearings are in response to a petition lodged in 2015 which seeks to hold forty-seven companies accountable for Philippine communities suffering from extreme weather. Human Rights Commissioner Roberto Cadiz explained that holding hearings overseas will make the process inclusive, affording all carbon companies the best chance to confront the impact of their businesses. To date, half of the companies, whose products generated around a fifth of historic greenhouse gas emissions, have not responded to the Commission. Those which have responded, questioned the Commission’s jurisdiction or argued that it was for governments and not private companies to tackle climate change. Several international law experts have also filed amicus curiae briefs in support of the petition which back the Commission’s mandate to investigate private companies over harm experienced by Filipinos. The hearings are due to commence in Manila in March 2018, with the overseas sessions following later in the year. The Commission cannot directly impose penalties on any of the respondents; however, it could recommend ways that the companies might alleviate their future operations’ human rights impact.

Tomasella v Nestlé: Consumers sue Nestlé for child labour chocolate

On 12 February 2018, consumer Danell Tomasella filed a Class Action Complaint in Case No. 1:18-cv-10269 in the Massachusetts federal court. The lawsuit against Swiss food and beverage conglomerate Nestlé USA Inc. alleges that the company regularly imports cocoa beans from suppliers in the Ivory Coast and engages in deceptive marketing by hiding that this chocolate supply chain utilises child and slave labour. The plaintiffs claim that in violation of Massachusetts Consumer Protection Law, Nestlé does not disclose its Ivory Coast suppliers’ reliance on the worst forms of child labour which is of material interest to American consumers. They state that “Nestlé has not required its suppliers to remedy this human tragedy” and that it instead continues to be unjustly enriched by the profits from chocolate sales. The allegations highlight that much of the world’s chocolate is “quite literally brought to us by the backbreaking labor of children, in many cases under conditions of slavery”. Nestlé has responded that such consumer class actions “are not the way to solve such a serious and complex issue as forced child labor”, rather “class action lawyers are targeting the very organizations trying to fight forced labor”. More...

Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

We are looking for a new intern! More information here.

The Headlines

Landmark High Court case against UK mining company over alleged Sierra Leone worker abuse

On 29 January 2018, a landmark six week hearing began at the High Court in London in a case brought by 142 claimants from Sierra Leone against Tonkolili Iron Ore, a subsidiary of the UK based African Minerals. The case involves allegations of worker abuse in 2010 and 2012 at the Tonkolili Iron Ore Mine in Sierra Leone, including complicity in rape, assault, false imprisonment and the police murder of a protestor complaining over pay and conditions. Human Rights Watch previously reported how the government and African Minerals forcibly relocated hundreds of families from verdant slopes to a flat, arid area, thereby removing their ability to cultivate crops and engage in income generating activities. The claimants’ lawyers, Leigh Day, stated that the case “demonstrates that those companies headquartered in the UK that operate abroad in rural and isolated environments can be held to account when their operations face serious allegations of human rights abuses”. Tonkolili Iron Ore denies responsibility for the incidents against workers and villagers and claims full responsibility lies with the Sierra Leone police. Unusually, the trial will see the judge, Mr Justice Turner, travelling to Freetown for two weeks so that evidence can be taken from witnesses in person, after some witnesses were unable to obtain visas for the United Kingdom.

West Kalimantan villagers file complaint against the Roundtable on Sustainable Palm Oil

On 23 January 2018, a complaint was filed with the Organization for Economic Cooperation and Development’s national contact point in Switzerland by an Indonesian community rights group against the Roundtable on Sustainable Palm Oil for its failure to address complaints made by residents of two West Kalimantan villages. The indigenous Dayak community in Kerunang and Entapang villages had previously filed an urgent complaint with the RSPO accusing one of its members, Malaysian palm oil giant Sime Darby, of stealing their tribal land through its subsidiary Mitra Austral Sejahtera. They allege that Mitra Austral Sejahtera breached the RSPO Principles and Criteria for the Production of Sustainable Palm Oil relating to commitment to transparency, compliance with applicable laws and regulations and responsible consideration of employees, and of individuals and communities affected by growers and mills. It is alleged that the RSPO failed to respond to the request for the return of tribal lands and accordingly failed to meet its obligations under the OECD Guidelines for Multinational Enterprises. Sime Darby has stated that the land dispute has been discussed at the RSPO's annual meetings since 2012, and that it looks “forward to the cooperation of the communities towards ensuring that the eventual return of their land is socially, environmentally and economically viable”. More...