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...
Editor’s note: Abdurrahman is currently working for Doing Business
Right project at the Asser Institute as an intern. He received his LL.M.
International and European Law from Tilburg University and currently he is
a Research Master student at the same university.
The collapse of the Rana Plaza attracted public
attention from various parts of the world. As a result, the demand to ensure
that businesses do not contribute to or commit human rights violations,
particularly multinational enterprises (MNEs) which can easily engage in forum
shopping between states with lax regulations, started to make itself heard.
This increased public interest drove national governments to start addressing
this issue in an attempt to prevent MNEs from getting involved in human rights
abuses along their supply chains. In
this respect, to deal with the human rights abuses committed by MNEs in the
ready-made garment (RMG) sector and beyond, numerous transnational and national
initiatives have emerged in different forms since the Rana Plaza disaster.
These initiatives include agreements (e.g. the Bangladesh Accord on Fire and Building Safety) with binding
commitments, traditional voluntary CSR-based multi-stakeholder initiatives (e.g. the Alliance for Bangladesh Worker Safety), domestic legal (e.g. the UK Modern Slavery Act and the French law on the duty of vigilance), administrative measures (e.g. the reform of the Department of Inspections for
Factories and Establishments in Bangladesh for better factory and labour
inspections) or agreements
between governmental bodies, businesses and some other stakeholders (e.g. the German Partnership for Sustainable Textiles and the Dutch Agreement on Sustainable Garment and Textile).
These concerted efforts, to ensure responsible
business conduct show an extreme variety in terms of their scope, approaches
and parties involved. In particular, the
French law on the duty of vigilance and the Dutch agreement on sustainable
garment will be the focus on this blog since while the adoption of the former
was accelerated by the disaster, the latter was an indirect response to it. It
is crucial to scrutinise the implementation of these initiatives and whether or
not they positively transform the business-as-usual in the RMG sector. In this
blog, after brief explanations of the French and Dutch initiatives, some of the
concerns and problems, which may be encountered in their implementation
process, will be presented. 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...
Editor’s note: Daniel Iglesias Márquez is an external researcher in Business and Human
Rights at the Tarragona Centre for Environmental Law Studies. He holds a PhD from
the Rovira Virgili University in Tarragona (Spain). Other main fields of
interest include International Environmental Law, International Criminal Law
and European law.
The EU and its Member States have largely endorsed
the UN Guiding Principles on Business and Human
Rights (UNGPs)
in their Corporate Social Responsibility (CSR) strategy and
have committed to supporting their implementation.[i]
The UNGPs state that companies have a responsibility to respect human rights wherever
they operate. Companies are therefore expected to take proactive steps to ensure
that they do not cause or contribute to human rights abuses within their global
operations and to respond to human rights abuses when they do occur. This implies
establishing due diligence processes to identify, prevent, mitigate and record potential
and actual adverse human rights impacts.
Although the EU has not played a constructive role
at the Geneva negotiations for a UN Treaty
on business and human rights,[ii] some
modest developments in the right direction have been made at the EU level to foster a culture of ‘doing business
right’ among companies in certain industrial
sectors. Put differently, the EU has adopted regulations and directives that implement
the UNGPs.
Due diligence requirements are the most common way
of ensuring that business behavior meets social expectations. An example of this
is the new EU Conflict Minerals Regulation
(Regulation),[iii]
which requires EU companies to ensure the responsible sourcing of minerals and metals. This EU law has an extraterritorial reach since
due diligence requirements must be exercised by a company throughout its international
supply chain. However, the Regulation raises a number of challenges ahead that
may affect its purpose and implementation. More...
On Thursday
(2 November), the T.M.C. Asser Instituut hosted a roundtable on the role of financial
institutions in ensuring responsible business conduct and, in particular,
fostering respect for human rights. The discussion focused on the Dutch Banking Sector
Agreement on international responsible business conduct regarding human rights (DBSA or
Agreement), including details of its key features and the practicalities of its
implementation, alongside the theme of responsible banking more generally. 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
The Court of Appeal in London recently handed down its judgment in Dominic Liswaniso Lungowe and Ors. v Vedanta Resources Plc and Konkola Copper Mines Plc [2017] EWCA Civ 1528 (Lungowe v Vedanta) addressing issues of jurisdiction and parent company liability. The judgment runs contrary to the historical legal doctrine that English domiciled parent companies are protected from liability for their foreign subsidiaries’ actions. This decision clarifies the duty of care standard a parent company owes when operating via a subsidiary and opens the gates to other English domiciled companies and their subsidiaries being held accountable for any human rights abuses. More...
Editor’s note:
Wybe Th. Douma is senior researcher in EU law and international trade law at the
Asser Institute
Although the
placing of illegally harvested timber on the EU internal market is prohibited
already for over four years, the first court cases are appearing only now.
Judges in Sweden and The Netherlands have recently held that the due diligence
requirements of the EU Timber Regulation (EUTR) had not been met by two
importing companies. The companies should have ensured that the timber from Myanmar
and Cameroon was logged in compliance with the local legislation, should have
provided extensive evidence of this, especially where the countries in question
are prone to corruption and governance challenges, and should have adopted risk
mitigation measures. Moreover, another Dutch court recently ordered the Dutch
competent authorities to explain why they did not enforce the EUTR in cases
where due diligence requirements concerning timber imported from Brazil were
not met. In other EU member states, similar court decisions were adopted.[1]
The court
decisions show that the EUTR system, aimed at ‘doing business right’ in the
timber trade sector, is starting to take effect in practice. Could the ‘unilateral’
EUTR system form an example for other regimes that try to ensure that trade by
the EU with the rest of the world contributes to sustainable development and the
protection of human rights? And what role does the bilateral Voluntary
Partnership Agreement (VPA) on Forest Law Enforcement, Governance and Trade
(FLEGT) between the EU and Indonesia play in this respect? More...
The negative impact on human rights of what we wear is not always well-known
to the consumer. Our clothing consumption has increased over five times since
the Nineties. At the same time, the business model of certain fashion brands is too often dependent on widespread human
rights and labour rights violations to be profitable, cheap, and fast. The 2013
tragedy of Rana Plaza, where more than 1100 garment workers died, gives us just
a small hint of the true costs of our clothes and footwear. Efforts by
governments to tame the negative effects of transnational supply chains have
proven difficult due to the extreme delocalisation of production, and the difficulty to even be aware of
a company’s last tier of
suppliers in certain developing countries. More...