Doing Business Right Blog

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.

The national human rights institution of the Netherlands is the College voor de Rechten van de Mens (i.e. ‘the Netherlands Institute for Human Rights’). It was established on 1 October 2012 with the entering into force of the Netherlands Institute for Human Rights Act of 24 November 2011 as supplemented by the Explanatory Memorandum (EP). It is an independent public body whose mission is to promote, monitor and protect human rights in practice, policy and legislation (see NIHR Act s.1 (3)). For these purposes, it enjoys a wide competence that spans the full breadth of human rights whether stemming from national or international legislation (see EP at page 7). The Institute’s duties include conducting investigations, reporting and making recommendations, advising, providing information, encouraging research, pressing for the observance of internationally recognised human rights, and assessing any complaints alleging violations that it may have received (see NIHR Act s.3). The types of complaints it may entertain are nevertheless rather limited – the Institute may only investigate claims alleging discrimination or unequal treatment (see NIHR Act s.10 (1)).

This article analyses two types of actions in order to assess the extent to which the Institute has assumed its role in promoting access to remedy in business and human rights cases. According to the 2010 Edinburgh Declaration of the International Co-ordinating Committee of National Institutions for the Promotion and Protection of Human Rights (ICC), the participation of NHRIs in the remedial process may be either direct or indirect. As will be shown, the Dutch NHRI is envisioned as an institution that leans more on indirect rather than direct participation in providing access to remedy.

In terms of direct participation, the complaints procedure of the Netherlands Institute for Human Rights has a rather narrow scope. Section 10 of the Act stipulates that the Institute may conduct investigations into allegations of violations in so far as they relate to discrimination or unequal treatment under the Equal Treatment Act, the Equal Treatment (Men and Women) Act or Article 646, Book 7 of the Dutch Civil Code. Although the complaint may be submitted against any type of Dutch-based company (see S. 10 (2) (a)–(e)), the limited subject matter jurisdiction prevents the Institute from being a one-stop shop for business-related human rights abuses. This is especially true for transnational corporate misconduct, which normally entails cross-cutting/intersectional human rights abuses. In the same vein, the Institute may only bring a legal action before the courts if this claim relates to discrimination under the aforementioned legislation (see S.13). The Memorandum attached to the Act explains that ‘[…] [g]iven the legal protection already available in the Netherlands and the possibility of lodging a complaint with an ombudsman the government sees no good reason to give the Institute its own jurisdiction to hear legal actions in the broad field of human rights […]’ and that ‘[…] [i]n response to a complaint, the National Ombudsman may investigate whether or not the state has acted properly […] To prevent overlapping it is therefore undesirable for this responsibility to be given to the Institute […]’. The National Ombudsman may nevertheless only exercise authority over public bodies (see Article 1a). In turn, this means that complaints lodged against private actors arguing violations of human rights other than discrimination escape both the Institute and the National Ombudsman. While it is true that the general legal protection available in the Netherlands would apply in those cases, the role of the NHRI as a complementary grievance mechanism is in this way restricted. Under the UNGPs, NHRIs are supposed to offer an alternative to instituting legal proceedings. The rationale behind this is that bringing a legal action may involve many obstacles for the victim such as prohibitive costs, imbalance of expertise between parties, lack of standing for foreign nationals, and protracted duration. Conversely, an NHRI complaints mechanism is perceived as more accessible, expeditious and culturally-appropriate.[1] The limited subject matter jurisdiction of the Institute in handling complaints may therefore be seen as impeding its full direct participation in providing access to remedy.

As to indirect participation, one of the main tasks of the Institute is to promote and monitor human rights (see S.3). The Institute has a rather robust presence in the area of business and human rights in the Netherlands and performs an important role in promoting human rights in this policy area. For instance, the Institute drew up a comprehensive response to the National Action Plan on Business and Human Rights put forward by the Dutch government in December 2013. This response entailed an in-depth examination of the plan’s compatibility with the UNGPs as well as advice and recommendations for its improvement. Notably, it included a rights-based approach in that it looked at the issue of access to remedy from the victims’ perspectives. The Netherlands Institute for Human Rights further advised the government on the proposed law on child labour in supply chains, the human rights implications of the new model bilateral investment treaty, and it partook in the discussions regarding the national sector covenants (e.g. the Agreement on Sustainable Garments and Textile). It further participates in the annual UN Forum on Business and Human Rights alongside other stakeholders. Furthermore, the cross-cutting nature of business-related human rights abuses means that they permeate the Institute’s work in other policy areas. For instance, the Institute’s work on the right to housing implies the usage of the UNGPs as a framework to ascertain the human rights responsibilities of housing corporations. In the same vein, one of the four themes from the Institute’s Strategy Plan for 2016-2019 is discrimination and stereotyping in the labour market. This necessarily involves an assessment of the human rights obligations of corporations. The Institute has therefore assumed a firm standing in terms of indirect participation in the implementation of the UNGPs. It promotes education, monitors human rights implementation, undertakes capacity-building exercises, advises and issues recommendations. Nevertheless, one cannot help but notice the absence of business and human rights from the Institute’s Strategic Plan for 2016-2019.

To conclude, the Netherlands Institute for Human Rights seems to have only partially assumed the role envisioned for it under the UNGPs as a national human rights institution. On the one hand, it did establish itself as a focal point for expertise on human rights issues in the Netherlands and has taken important steps to promote and advise on issues of business and human rights. On the other hand, a broader mandate would conform more to the second leg of the Paris Principles and to the spirit and aim of the Third Pillar of the UNGPs – the protection of human rights by receiving, investigating and resolving complaints.

[1]           UN Human Rights Council, ‘Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises – Protect, Respect and Remedy: A Framework for Business and Human Rights’ (7 April 2008) A/HRC/8/5 at page 25.

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 and a contributor to the Doing Business Right project of the Asser Institute. 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.

Introduction

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

The Headlines

German court rejects KiK lawsuit

On 10 January 2019, a regional court in Dortmund, Germany rejected a lawsuit brought by four affected Pakistanis that related to the death of 262 people and injury of 32 people at a Pakistani textile factory in 2012. The factory was a key supplier to German clothing company, KiK. The case was rejected on the basis that the statute of limitations had expired, despite computer simulation evidence demonstrating that inadequate safety measures were in place at the factory at the time, including no stairs and emergency exits, as well as a lack of fire extinguishers and fire alarms. It was argued that KiK ‘knew or should have known about the structural details if, as they claim, their representatives visited the factory several times’. Read more here and here.

Canadian Supreme Court hears Nevsun appeal

On 23 January 2019, the Canadian Supreme Court heard evidence involving a lawsuit involving Nevsun Resources, a Canadian mining company, which is accused of being complicit in using forced labour by one if its sub-contractors at the Bisha mine in Eritrea. The case was initially brought in 2014 by four Eritrean miners.

In 2016, the British Colombian Supreme Court rejected Nevsun’s motion to dismiss the lawsuit, which was upheld by the British Colombian Court of Appeal in 2017. In 2018, the Canadian Supreme Court allowed Nevsun to appeal the decision of the British Colombian Court of Appeal with the trial being heard earlier this year. The Canadian Supreme Court will need to decide, inter alia, whether it has jurisdiction to hear cases involving alleged breaches of customary international law by a Canadian business involving its actions in a foreign country. Read more here.

Canada introduces bill regulating forced labour and child labour within businesses

On 13 December 2018 a private members bill was introduced in Canada titled ‘C-423 – An Act respecting the fight against certain forms of modern slavery through the imposition of certain measures and amending the Customs Tariff’ (the Bill) to regulate forced labour and child labour in businesses. The Bill requires certain entities[1] to provide the Minister with an annual modern slavery report that sets out the steps it has taken to ‘prevent and reduce the risk that forced labour or child labour is used at any step of the manufacture, production, growing, extraction or processing of goods in Canada or elsewhere by the entity or of goods imported into Canada by the entity.’ Other criteria that must be included in the report includes the entity’s policies in relation to forced labour and child labour and the training provided to employees on these areas. The Bill carries penalties for non-compliance; namely, the relevant entity may be liable of an offence punishable on summary conviction and liable to a fine of up to $250,000.

UK releases report with recommendations to improve transparency in supply chains provision of Modern Slavery Act

The Independent Review of the UK Modern Slavery Act recently released an interim report. The report notes that the UK Government’s current approach to eradicating modern slavery in supply chains through the transparency in supply chains provision ‘while a step forward, is not sufficient’. Among other things, the report recommends that the UK Government should take the following action to improve its approach to addressing modern slavery in supply chains:

• Establish an internal list of companies in scope of the transparency in supply chains provision and check with companies whether they are covered by the legislation.
• Amend the option reporting criteria against which businesses may report, so that they are mandatory criteria against which businesses must report.
• Set up a central government-run repository to which companies are required to upload their statements and that is easily accessible to the public, free of charge.
• Empower the Independent Anti-Slavery Commissioner to monitor compliance and report annually.
• Strengthen the Modern Slavery Act’s approach to tackling non-compliance with the reporting requirement, adopting a gradual approach. For example, initial warnings, fines (as a percentage of turnover), court summons and directors’ disqualification.
• Introduce sanctions gradually over the next few years so as to give businesses time to adapt to changes in the legislative requirements.
• Set up or assign an enforcement body to impose sanctions on non-compliant companies.

 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.

Human rights require meaningful enforcement mechanisms. This idea stands at the foundation of the United Nations’ approach to handling corporate human rights abuses.[1] An individual that has suffered a human rights harm must freely enjoy access to justice in order to seek the reparation of that harm. The third pillar of the UN Guiding Principles on Business and Human Rights (UNGPs) focuses exclusively on this need to secure access to effective remedy for victims. The remedial process described therein comprises both the procedural aspects of obtaining a remedy for an adverse human rights impact and the substantive outcome of those procedures. This process demands the involvement of all actors including governments, corporations and civil society.

The commentary to Principle 27 of the UNGPs notes the particularly important role that national human rights institutions (NHRI) play in providing access to effective remedy. In his 2008 Report, the UN Special Representative on Business and Human Rights referred to them as the ‘lynchpins’ of his framework’s entire system of grievance mechanisms. The reasons justifying this optimistic outlook are not difficult to uncover. NHRIs are state-based but independent institutions that have a constitutional or legislative mandate to protect and promote human rights.[2] They are focal points of expertise on human rights and they enjoy a presumption of neutrality and objectivity. Their unique positioning at the crossroads between governments, corporations and civil society further enables them to behave as crucial links between these actors. In terms of providing access to remedy, the 2010 Edinburgh Declaration envisions the participation of NHRIs as either direct or indirect. Direct participation refers to the handling of complaints relating to business and human rights cases. An NHRI may for instance assume the role of an investigator, mediator or conciliator. Indirect participation on the other hand refers to promoting education, monitoring, capacity-building, advising and issuing recommendations inter alia. In this sense, the NHRI becomes a centre for expertise on human rights and a hub for the exchange of information. The question nevertheless remains if and to what degree NHRIs have in practice assumed this role in the context of business and human rights.

This five-part series looks at the extent to which the the Access to Remedy Pillar of the UNGPs has been fulfilled through the daily practice of the Dutch, South African, Romanian, Australian and Indian NHRIs. Ultimately, this series hopes to unravel whether the chosen NHRIs have assumed the role envisioned for them under the Principles and the differing ways in which they may have done so.

[1] Jonathan Drimmer and Lisa J Laplante, ‘The Third Pillar: Remedies, Reparations, and the Ruggie Principles’ in Jena Martin and Karen E Bravo (eds), The Business and Human Rights Landscape: Moving Forward, Looking Back (CUP 2016) 318 and op. cit. 12.

[2] UNDP and UN OHCHR, UNDP-OHCHR Toolkit for Collaboration with National Human Rights Institutions (2010) 2.

Introduction

One of the most important pillars of investment protection under international law is the understanding that a foreign investor investing in a host state should be treated ‘fairly and equitably.’ The importance of this notion is supported by the inclusion of the fair and equitable treatment (FET) standard in most of the International Investment Agreements (IIAs), as well as its invocation in the vast majority of investment disputes. However, the concern has been expressed frequently that a broad interpretation of this usually openly formulated provision has an adverse impact on the host state’s ‘right to regulate’ in the public interest. These concerns have been voiced particularly as a result of FET claims in which investors have challenged a variety of state decisions in publicly sensitive areas, e.g. renewable energy, waste management, public health issues, and access to water. In this regard, tribunals have often been criticised for attaching insufficient weight in their assessment of the FET standard to a host state’s right to regulate and its duty to fulfil its obligations under other international treaties, such as human rights and environmental treaties.More...

Slavery has long been banished by law in Europe (since 1863 in The Netherlands), but it has not disappeared from the face of this earth, nor apparently from the territory of the European Union. Thus, a recent report by the Leiden Asia Centre (under the coordination of Prof. Remco Breuker and Imke van Gardingen) showed how workers from North Korea were brought to Poland in order to work in slavery-like conditions for the shipbuilding industry there. In coordination with the researchers, a team of journalists shot the documentary Dollar Heroes on North Korean workers around the globe which will be shown at the end of the event. It will be preceded by a panel discussion on the legal accountability of a Dutch shipbuilding firm which ordered and controlled the construction of ships in the polish shipyards where North-Korean workers were active. Indeed, in November 2018, a North-Korean worker lodged a criminal complaint with the Dutch prosecutor’s office against the Dutch firm. This case raises important questions on the potential criminal liability of corporations for instances of slavery inside their transnational supply chains.

Programme
15:00 - 16:30 – Panel discussion on the criminal liability of Dutch shipbuilders for the exploitation of North Korean workers in Polish Shipyards:

•        Imke van Gardingen (FNV)
•        Barbara van Straaten (Prakken d’Oliveira)
•        Prof. Cedric Ryngaert (Utrecht University)
•        Prof. Remco Breuker (Leiden University)
•        Antoine Duval (Asser Institute) - Moderator

16:30 – 18:00 – Showing of Dollar Heroes followed by a Q&A with Sebastian Weis (Vice) and Prof. Remco Breuker (Leiden University)

Please register HERE!

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 and a contributor to the Doing Business Right project of the Asser Institute. 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.

The introduction of the UK, Australian and NSW Modern Slavery Acts are part of the international trend towards greater regulation and transparency of modern slavery in corporate supply chains and operations. For example, Canada has recently introduced a modern slavery bill and Brazil introduced a ‘dirty list’ to name and shame companies that engage in slave labour back in 2004. This last blog of a series of articles dedicated to the global modern slavery developments focuses on the modern slavery developments in jurisdictions other than the UK and Australia. 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 and a contributor to the Doing Business Right project of the Asser Institute. 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.

Soon after the introduction of the UK Modern Slavery Act (UK Act) in 2015, discussions about establishing similar legislation in Australia commenced. In February 2017, the Attorney-General asked the Joint Standing Committee on Foreign Affairs, Defence and Trade (Committee) to commence an inquiry into establishing a Modern Slavery Act in Australia. The terms of reference of the inquiry included, inter alia, considering the ‘prevalence of modern slavery in the domestic and global supply chains of companies, businesses and organisations operating in Australia’ and whether a Modern Slavery Act comparable to the UK Act should be introduced in Australia. The Committee released an interim report in August 2017 and then a final report in December 2017 – both reports supported the idea of developing a Modern Slavery Act in Australia and set out the Committee’s recommendations with respect to the parameters of a corporate reporting requirement. In the meantime, the Australian Government also published a consultation paper and regulation impact statement outlining its proposed reporting requirement for an Australian Modern Slavery Act.

In June this year, the first draft of the Modern Slavery Bill 2018 (Cth) (the Federal Bill) was introduced into the Australian Parliament. It set out a reporting requirement for large Australian entities to submit a statement on risks of modern slavery in their operations and supply chains. The Explanatory Memorandum to the Federal Bill stated that it supports ‘large businesses to identify and address modern slavery risks and to develop and maintain responsible and transparent supply chains. It will drive a ‘race to the top’ as reporting entities compete for market funding and investor and consumer support.’ On 29 November 2018 the Federal Bill passed both houses of the Australian Parliament incorporating amendments made by the Upper House of Parliament. The amendments resulted in the inclusion of a provision giving the Minister power to request explanations from entities that fail to comply with the reporting requirement (discussed in further detail below) and gives the Minister the power to cause an annual report to be prepared providing an overview of compliance by entities and identifying best practice modern slavery reporting. 

This second blog of a series of articles dedicated to the global modern slavery developments provides an overview of the main elements of the Federal Bill and how it compares to the UK Act. It also discusses the Modern Slavery Act 2018 (NSW) (NSW Act), which was introduced by New South Wales (NSW), a State in Australia. The introduction of NSW Act was relatively unexpected given the movement at the Federal level to introduce national legislation addressing modern slavery in the corporate context. Therefore, this blog will discuss the NSW Act’s interplay with the Federal Bill. It will be followed by a final piece on the modern slavery developments in other jurisdictions in the corporate context. 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 and an intern with the Doing Business Right project. 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.

Introduction

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

The Headlines

CHRB

On 12 November 2018, the Corporate Human Rights Benchmark released the results of its 2018 ranking of 101 companies operating in the apparel, agricultural products and extractives industries. The results show that implementation of the UN Guiding Principles on Business and Human Rights in these sectors is still weak (following the 2017 results) with the average overall score for 2018 being 27% (an increase of 9 percentage points from last year), demonstrating a lack of respect for human rights. The Report identifies that due diligence is a key weakness of the companies that were reviewed, with 40% of companies scoring no points with respect to the due diligence indicator. Other issues identified were the lack of a strong commitment to ensuring that there are ‘living wages’ paid to those working in company operations and supply chains and the failure to meet expectations with respect to preventing child labour in supply chains. Read the 2018 Key Findings Report here.

Australian MSA passes both houses of Parliament

On 29 November 2018, the Modern Slavery Bill 2018 (Cth) passed both houses of the Australian Parliament. Once enacted, the Act will require Australian entities and entities carrying on a business in Australia that have a consolidated revenue of at least $100 million to prepare a Modern Slavery Statement covering mandatory criteria. Criteria that such entities will have to report on include the risks of modern slavery practices in their operations and supply chains and the actions they take to assess and address those risks, including due diligence and remediation processes. It is likely that the Act will come into effect on 1 January 2019 and accordingly the first Modern Slavery Statements will be due by 1 January 2021. 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 and a contributor to the Doing Business Right project of the Asser Institute. 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.

Over the past couple of years, there has been an international trend towards greater regulation and transparency with respect to modern slavery in corporate supply chains as reports of gross human rights violations in corporate supply chains have entered the public spotlight. For example, over the past couple of years there has been extensive media attention in relation to the use of slaves trafficked from Cambodia, Laos, Bangladesh and Myanmar to work on Thai fishing boats to catch fish to be sold around the globe, with the boats considered to be ‘floating labor camps’. As a result of events such as this, there has been increased pressure on businesses to take steps to address modern slavery in their supply chains through processes such as through conducting risk assessments and due diligence.

As the Ethical Trading Initiative notes, key risks facing companies in their supply chains include the use of migrant workers; the use of child labour; recruitment fees and debt bondage; the use of agency workers and temporary labour; working hours and wages; and the use of subcontractors. In 2016 the Global Slavery Index reported that 40.3 million people are living in modern slavery across 167 countries, and in 2014 the ILO estimated that forced labour in the private economy generates US$150 billion in illegal profits per year.

In March 2015, the UK Government passed the UK Modern Slavery Act 2015 (the Act), game-changing legislation that targets, inter alia, slavery and trafficking in corporate supply chains. The UK Government also published guidance explaining how businesses should comply with the Act.

This first blog of a series of articles dedicated to the global modern slavery developments provides an overview of the main elements of the Act and how businesses have responded to it. It will be followed by a review of the proposed Australian MSA, and a final piece on the developments in other jurisdictions that are considering introducing legislation regulating modern slavery in the corporate context. More...

Editor’s note: Imke B.L.H. van Gardingen (LLM Int. and EU labour law, MA Korean Studies) is a policy advisor on labour migration at the Dutch Federation of Trade Unions (FNV) and a researcher on DPRK overseas labour.

On November 8, 2018 a North Korean overseas worker who had worked in slave like conditions for a Polish shipyard, a supplier of a Dutch shipbuilding company, has filed a criminal complaint against the Dutch firm. The Dutch Penal Code, article 273f(6), includes a provision criminalizing the act of ‘profiting’ from labour exploitation, targeting not the direct perpetrators in the labour exploitation, but the ones profiting from this exploitation. This is a unique case that aims to hold the company at the top of the chain accountable for modern slavery in its supply chain. A chain that in the case of shipbuilding is rather short; the buyer subcontracts the core business of building the complete hull under detailed instructions cheaply abroad. More...