The Norwegian Transparency Act 2021 – An important step towards human rights responsibilities for corporations - By Nora Kenan

Editor’s note: Nora Kenan has been an intern at the Asser Institute for the past five months and is about to complete her LL.B. in International & European Law at The Hague University of Applied Sciences. Upon graduating, she will proceed with a Master’s in human rights at the University of Utrecht.

 

The Norwegian Transparency Act [1](‘Åpenhetsloven’), also known as the ‘Act on Business Transparency and Work with Fundamental Human Rights and Decent Work’ was proposed in April 2021. Now, two months later, the Act has officially been adopted by the Norwegian government and represents yet another mandatory due diligence initiative which has been trending across various jurisdiction in the recent years. The Act will require all large and medium-size corporations in Norway to disclose the measures taken to ensure the respect for human rights throughout their entire supply chain.

Various Norwegian organizations have been campaigning for years in favor of such a law. The official preparations began in 2017, when the Parliament (‘Regjeringen’) requested the Government (‘Stortinget’) to explore the possibility of introducing a law that would oblige companies to inform consumers about the steps that they take to follow up on various human rights responsibilities. The Government appointed a law firm as well as a group of experts, the Ethics Information Committee, to conduct thorough research on the matter, and to investigate whether there were any other legal obligations standing in the way of a proposal of this kind, such as for example EEA-obligations or bilateral/multilateral agreements. As a result of this research, it was concluded that there was indeed room for imposing human rights obligations on corporations. Shortly after, the Ethics Information Committee published a report in which they proposed the introduction of a due diligence legislation – more specifically, the Transparency Act. The Act consists of fifteen paragraphs (§)[2], and each paragraph has a commentary which further describes how it should be interpreted and applied.[3]

The objective of the law is essentially to promote corporate respect of human rights and decent working conditions in the production of goods and provision of services, as well as to ensure public access to information on the steps taken by corporations to safeguard these goals (§1). By making this information public, individuals and stakeholders in general are given the chance to directly question the activities of a company. More...

Artificial Intelligence and Human Rights Due Diligence - Part 2: Subjecting AI to the HRDD Process - By Samuel Brobby

Editor's note: Samuel Brobby graduated from Maastricht University's Globalisation and Law LLM specialising in Human Rights in September 2020. A special interest in HRDD carries his research through various topics such as: the intersection between AI and HRDD, the French Devoir de Vigilance or mHRDD at the EU level. Since April 2021 he has joined the Asser Institute as a research intern for the Doing Business Right project.

I am not convinced that inherently evil technology exists, rather, bad business models perpetuate and accentuate existing problems. AI is no exception to this phenomenon and diligent discussion is required to ensure that the negative impacts of artificial intelligence are meticulously scrutinised. In the end, transparency, responsibility and accountability must be ensured around technology that has the power to be an important tool for Human Rights and to provide support for development across every sector of society.  Given that this very same technology, if used irresponsibly, has the power to compound and accelerate the very issues we would like it to help solve, it is the intention of this blog to raise further questions and continue to provide discussion surrounding AI and responsibility. In the first part of this publication, I discussed how AI has the potential to contribute to HRDD by being technologically integrated into the process. However, before AI will even be considered as a possible tool to aid in the HRDD process, it will play a large part in making businesses more profitable. It will also be used by civil society, States and State-backed institutions in the pursuit of their respective goals.

AI and its declinations are, and will, continue to be deployed in a number of sectors including, marketing, healthcare, social media, recruitment, armed conflicts and many more. Thus, given that AI has the potential for contributing negatively to Human Rights and the environment, it is important to discuss the risks and potential legal challenges surrounding AI and responsibility. Identifying these is crucial to the goal of taming AI in an attempt to mitigate some of the potential negative impacts it may have on Human Rights. The pervasive nature of this technology along with the particular place AI developers hold in supply chains warrants some attention. As such, this section aims at analysing the HRDD obligations of AI developing businesses. To do so, we will illustrate some of the Human Rights (and environmental) risks linked to the creation of these AI agents before looking at the manner through which ex ante responsibility through HRDD can be applied to AI developing businesses in the creation and commercialisation of AI algorithms. More...

Artificial Intelligence and Human Rights Due Diligence – Part 1. Integrating AI into the HRDD process - By Samuel Brobby

Editor's note: Samuel Brobby graduated from Maastricht University's Globalisation and Law LLM specialising in Human Rights in September 2020. A special interest in HRDD carries his research through various topics such as: the intersection between AI and HRDD, the French Devoir de Vigilance or mHRDD at the EU level. Since April 2021 he has joined the Asser Institute as a research intern for the Doing Business Right project.


The recent surge in developments and debate surrounding Artificial Intelligence (AI) have been business centric, naturally so. The conversation has long been centred on the possible gains “digitally conscious” companies can recoup from their sizeable investments in the various forms this technology can take. The ink continues to flow as numerous articles are released daily; debating between the ultimate power of artificial intelligence (and topical subsets like machine learning) on the one hand, versus the comparatively more philistinish views regarding what these technologies can offer on the other. Our objective here is not to pick a side on the AI debate. Rather, we would like to explore the Business & Human Rights implications of the development of AI and, in particular its intersection with the human rights due diligence (HRDD) processes enshrined in the UN Guiding Principles on Business and Human Rights and subsequent declinations. How compatible is AI with HRDD obligations? Where does AI fit into the HRDD process? Can AI be used as a tool to further HRDD obligations? Can the HRDD process, in return, have an effect on the elaboration and progress of AI and its use in transnational business? And, to which extent will the roll out of AI be affected by HRDD obligations? These are all questions we hope to tackle in this blog.

In short, it seems two distinct shifts are occurring, rather opportunely, in close time frames. The impending mass adoption of AI in transnational business will have strong consequences for the state of Human Rights. This adoption is not only substantiated by an uptick of AI in business, but also in policy documents produced or endorsed by leading institutions such as the ILO or the OECD for instance. Inversely, we must consider that HRDD obligations elaborated by the BHR community will also have strong implications for the development and roll out of AI. These two transformations will interact increasingly as their positions are consolidated. It is these interactions that we wish to analyse in the two parts of this article. Namely, the emergence of Artificial intelligence as a tool to shape and further HRDD obligations (1) and the emergence of HRDD as a process to shape the development of AI (2). More...


Corporate (Ir)Responsibility Made in Germany - Part III: The Referentenentwurf: A Compromise à la Merkel - By Mercedes Hering

Editor’s Note: Mercedes is a recent graduate of the LL.B. dual-degree programme English and German Law, which is taught jointly by University College London (UCL) and the University of Cologne. She will sit the German state exam in early 2022. In September 2020, she joined the Asser Institute as a research intern for the Doing Business Right project.

 

I. What happened so far

It took Ministers Heil (Labour, SPD), Müller (Development, CSU) and Altmaier (Economy, CDU) 18 months to agree on a draft for the Lieferkettengesetz (Supply Chain Law) to be presented soon to the German Bundestag for legislative debates. For an overview of the different proposals put forward by the Ministries and NGOs, and political discussion surrounding them, please check my previous blogs, which you can find here and here. You can also watch the panel discussion on the Lieferkettengesetz that we organized in November 2020 with Cornelia Heydenreich (Germanwatch), Miriam Saage-Maaß (European Centre for Constitutional and Human Rights), and Christopher Patz (European Coalition for Corporate Justice).

On 15 February 2021 the government’s “final” draft was published – the so-called “Referentenentwurf”. This initial agreement was met with relief from all parties involved, as it was preceded by a long-lasting deadlock. At first, Minister for Economic Affairs, Peter Altmaier, blocked Cabinet meetings so that the government position paper (“Eckpunkteplan”) published by Ministers Heil and Müller could not be discussed. Afterwards, Altmaier again blocked a compromise proposal brought forward by Müller and Heil in Cabinet. The matter went up to the “Koalitionsausschuss”, the committee that negotiates if members of the coalition parties cannot reach an agreement. This committee failed to come to an agreement. The issue of civil liability and the scope of application were the most controversial points. Thereafter, the matter reached the “Chefetage”, Angela Merkel. She sat down with the three ministers involved and Olaf Scholz, Vice-Chancellor and Minister for Finance (SPD), and tried to mediate between the different positions. The group met twice before, eventually, an agreement was reached resulting in the Referentenentwurf of 15 February 2021. The agreement did not last for long. Peter Altmaier withdrew (again) his support for the draft just after it had been circulated.

On 28 March 2021, another “final” draft was published. Those two drafts differ in subtle but impactful aspects. This blog post was originally based on the first draft; its text has been amended to integrate the changes introduced in the second draft. The second Referentenentwurf is the one signed off by Cabinet on 3 March 2021. In this blog, I will first summarize the main points of the draft(s), and afterwards review the various critical points raised against it.More...


The unequal impact of COVID-19 in the global apparel industry - Part. II: Strategies of rebalancing – By Mercedes Hering

Editor’s note: Mercedes is a recent graduate of the LL.B. dual-degree programme English and German Law, which is taught jointly by University College London (UCL) and the University of Cologne. She will sit the German state exam in early 2022. In September 2020 she joined the Asser Institute as a research intern for the Doing Business Right project.


My previous blog post depicted how economic asymmetry of power translates into imbalanced contractual relationships. At the moment, supply chain contracts ensure that value is extracted while precarity is outsourced. In other words, supply chains can be described as ‘global poverty chains’. In this blog post, I will present and assess four potential way to alleviate this asymmetry and to better protect the right of the poorest garment workers in the context of the Covid-19 the pandemic. More...


The unequal impact of COVID-19 in the global apparel industry - Part I: The contractual roots - By Mercedes Hering

Editor’s note: Mercedes is a recent graduate of the LL.B. dual-degree programme English and German Law, which is taught jointly by University College London (UCL) and the University of Cologne. She will sit the German state exam in early 2022. In September 2020 she joined the Asser Institute as a research intern for the Doing Business Right project.

 

The Covid-19 pandemic is straining global supply chains and exposes the inequality that underlies them. As many countries entered lockdowns, the economy was brought to a rapid halt. This caused demand for apparel goods to plummet. Global apparel brands, in turn, have begun to disengage from business relationships with their suppliers. Lead firms cancelled or even breached their contracts with suppliers (often relying on force majeure or hardship), suspended, amended or postponed orders already made. This practice had a devastating effect on suppliers.

This situation again shows that the contractual structure of global supply chains is tilted towards (often) European or North American lead firms. In this blog, I will first outline the power imbalance embedded in global supply chain contracts. Secondly, I will outline how order cancellations impact suppliers and their workers. In Part II, I will go through four approaches to mitigate the distress of suppliers and their workers and to allow the parties to reach solutions which take into account their seemingly antagonistic interests. More...

Corporate (ir)responsability made in Germany – Event report - By Mercedes Hering

Editor's note: Mercedes is a recent graduate of the LL.B. dual-degree programme English and German Law, which is taught jointly by University College London (UCL) and the University of Cologne. She will sit the German state exam in early 2022. Alongside her studies, she is working as student research assistant at the Institute for International and Foreign Private Law in Cologne. Since September 2020, she joined the Asser Institute as a research intern for the Doing Business Right project

On 27 November 2020, the T.M.C Asser Institute hosted an online roundtable discussion on the German Supply Chain Law (Lieferkettengesetz). The full recording of the event can be seen here:

The three panelists, Cornelia Heydenreich from Germanwatch, Miriam Saage-Maaß from the ECCHR and Christopher Patz from the ECCJ reflected on the political framework surrounding the debate, current drafts, and Germany’s role in the European discussion on binding due diligence legislation.

I. The pathway to a Lieferkettengesetz 

As Heydenreich pointed out, civil society’s role in the struggle for a Lieferkettengesetz can barely be overstated. When in 2011, the UNGPs were passed, Germany was in no rush to implement binding due diligence legislation. Instead, the German legislators waited for their European counterparts to come forward with an action plan. It was in 2013 when a new – more left-leaning – government first voiced the idea that a national action plan should be drawn up. In 2015, consultations began. The consultation process was a dialogue, the drafting process itself was not. Even though the monitoring methodology fell short of civil society’s expectations, the result of the monitoring process was shocking nonetheless: Only 13-17% of companies complied with the National Action Plan. 

It became clear that the government needed to implement binding due diligence regulation. It also became clear that the drafting process would have to begin as soon as possible for a law to be passed before the general election in September 2021. 

II. Current drafts

Saage-Maaß turned to the different proposals for a Lieferkettengesetz: The government’s position paper from the Ministry of Development and the Ministry of Labour as well as civil society’s model law. Contrary to what the government currently envisages, Saage-Maaß emphasized the need to include small or medium-sized companies that operate in high-risk areas. 

The role of private international law must not be neglected. The question turns on whether or not the whole of the Lieferkettengesetz will be an overriding mandatory provision, or merely the due diligence obligation itself. 

Civil society organizations are particularly critical of so-called “safe harbor” provisions. These safe harbor provisions allow companies to be exempted from liability if they are part of certain multi-stakeholder initiatives (MSIs). All panelists agree, however, that as of today, no MSI meets the standards set out by the OECD. In its report, the Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) comes to the same conclusion: “MSIs are not effective tools for holding corporations accountable for abuses, protecting rights holders against human rights violations, or providing survivors and victims with access to remedy.” 

For an overview of other aspects of the legislative proposals, such as the burden of proof, please see the foregoing blog series “Corporate (Ir)responsibility Made in Germany”

III. EU-wide discussion

In April 2020, European Commissioner for Justice, Didier Reynders, announced that the Commission commits to legislation on mandatory due diligence. Patz emphasizes the positive impact Germany’s Council Presidency, beginning July 2020, has had on the endeavor. Germany’s Council Presidency stands out because of its strong affirmative call for a supply chain law and for reforms of directors’ duties. At the beginning of December, the Council published its Conclusion on Human Rights and Decent Work in Global Supply Chains, where it calls on the European Commission to launch an EU Action Plan by 2021 (n. 45) and to table a proposal for an EU legal framework on corporate due diligence (n. 46). According to Patz, this constitutes a strong political signal. This strong call is reinforced by three Committees, the Human Rights CommitteeDevelopment Committee, and the Legal Affairs Committee, that also spoke out in favor of civil liability. 

Another strong political signal was sent by the EU Fundamental Rights Agency, which in its report “Business and Human Rights – Access to Remedy” called for significant changes pertaining to the reversal of the burden of proof, class actions and procedural mechanisms in order to facilitate access to justice for those affected. 

The work of German MEP Anna Cavazzini (Greens) should be highlighted, too. In the European Parliament she pushed for an additional enforcement mechanism in the form of trade restrictions. Products that benefitted from human rights abuses along the supply chain should not have access to the European single market. In order for the trade restrictions to be lifted, remediation ought to be paid. This initiative counters criticism from civil society that points out that due diligence laws often have the effect of targeting whole sectors of one particular economy. Adopting additional trade restrictions allows for a much more targeted approach. 

In her report on an anti-deforestation legal framework, Delara Burkhardt(S&D) also advocated for civil liability. Companies that exercise control over companies should be held liable, even where it was not directly them, but the other company that committed an unlawful act. In order for this liability mechanism to be effective, Burkhardt advocates for a presumption in favor of control. This helps to balance the information deficit litigants suffer because they do not have access to internal corporate documentation. 

IV. Conclusion 

At the beginning of the roundtable discussion, Duval pointed out that Germany’s stance on any binding due diligence regulation will be decisive. Germany’s role in the EU-wide discussion can hardly be overstated. Germany amounts to 30% of all EU exports, and to 20% of all imports. Factoring in France’s loi de vigilance, both countries together could put enough pressure on the European legislators to push for an EU-wide mandatory due diligence regulation. 

Germany is as close as it has ever been to adopting a Lieferkettengesetz. Yet, the process has come to a halt. The government position paper should have been discussed in the Cabinet at the end of last year for the law to be adopted in 2021. All ministers have to agree, afterwards the proposition will go to Parliament. Heydenreich said that the law will have to be adopted in May, or June the latest; Parliamentary session ends in July. 

At least Germany’s involvement in the EU-wide debate looks promising. Germany’s Council Presidency as well as individual German MEPs have had a tremendous impact on the adoption of an EU-wide due diligence regulation.

New Event! Corporate (ir)responsibility made in Germany - 27 November - 3pm (CET)

On 27 November, we will host a digital discussion on Germany’s approach to corporate (ir)responsibility for human rights violations and environmental harms in the supply chains of German businesses. This event aims to analyse the evolution of the business and human rights policy discussion in Germany and its influence on the wider European debates on mandatory human rights due diligence EU legislation. Germany is the EU’s economic powerhouse and a trading giant, hence its position on the (ir)responsibility of corporations for human rights risks and harms throughout their supply chains has major consequences for the EU and beyond.

Background

Currently, Germany is debating the adoption of a supply chain law or Lieferkettengesetz. This would mark the end of a long political and legal struggle, which started in 2016, when the German government adopted its National Action Plan (NAP) 2016-2020. Germany’s NAP, like many others, counted on voluntary commitments from businesses to implement human rights and environmental due diligence throughout their supply chains. Unlike other NAP’s, the German one also included a monitoring process, which tracked the progress businesses made during that four-year period.

The final report, which was published in September, showed that only roughly 13-17% of German businesses implemented the voluntary due diligence measures encouraged in the NAP. On the basis of these rather disappointing results, as required by the coalition agreement between the two governing parties, a draft for a Lieferkettengesetz should have been presented to the Cabinet this autumn. However, the Ministry for Economic Affairs and Energy, backed by business lobby groups, strongly opposes any form of civil liability for human rights violations committed within supply chains and managed until now to delay the process.

Our discussion aims to review these developments and highlight the key drivers behind the (slow) movement towards a Lieferkettengesetz. Weaving political insights with legal know-how, our speakers will provide a comprehensive overview (in English) on Germany’s positioning in the business and human rights discussion and its potential influence on the future trajectory of a European legislation.

Speakers:

Moderator:


To register for this event, please click here. You will receive a link before the start of the event.


For enquiries, contact conferencemanager@asser.nl


Winter academy: Due diligence as a master key to responsible business conduct

On 25-29 January 2021, The Asser Institute’s ‘Doing business right’ project is organising an online winter academy on ‘Doing business right: Due diligence as a master key to responsible business conduct’.

This academy brings together students, academics and professionals from around the world and provides a deep dive into the due diligence process as a strategy to achieve responsible business conduct.

Learn more and register here. 

Call for Papers - Delocalised Justice: The transnationalisation of corporate accountability for human rights violations originating in Africa - Deadline 15 January 2021

More than twenty years ago nine local activists from the Ogoni region of Nigeria were executed by the then military dictatorship. The story of the Ogoni Nine does not stop in Nigeria; the tale of the nine men, the many lives lost, and the environmental degradation linked to the extraction of oil in the region by Shell has quite literally travelled the world. What is often commonly referred to as the Kiobel case—after the application lodged by Esther Kiobel, the widow of Dr. Barinem Kiobel—originated in Nigeria, has been heard by courts in the USA, and is currently before Dutch courts. The Kiobel case, as well as a flurry of other cases (e.g. the Bralima case before the Dutch NCP, the Nevsun case before the Canadian courts, the Vedanta case before the UK courts, or the Total case before the French courts, among others), embodies the flight of corporate accountability cases out of their original African contexts.

This transnational quest for an effective remedy by those who’s human and/or environmental rights have been violated is understandable, but it also raises serious questions about the consequences of the delocalisation of access to remedies in such cases. This conference aims to provide a forum for critical discussions of the justifications for, and consequences of, using various delocalised ‘sites of justice’ for human and environmental rights violations associated with ‘doing business’ in Africa. The aim is not to focus on Kiobel or Nigeria in particular, although contributions on this case are welcome, but to generally engage in a critical examination of cases that ‘migrate’ between different sites of justice, and the associated benefits and drawbacks of the displacement of corporate accountability out of African courts to courts or non-judicial mechanisms (such as OECD National Contact Points) based in the so-called Global North. In doing so, we strongly encourage applicants to consider a variety of (critical) theoretical perspectives in the analysis of this phenomenon.

In this collaboration between Asser Institute’s Doing Business Right project and AfronomicsLaw, we welcome contributions from scholars working on African international law, African perspectives of international/transnational law, as well as scholars working on business and human rights more generally. The aim is to bring a plurality of voices into conversation with each other, and to generate original (and critical) engagements with the operation of transnational justice in the business and human rights space. With important developments taking place at the international level, such as the drafting of a binding Treaty on Business and Human Rights, the preparation of European legislation on mandatory human rights due diligence, as well as the emergence of the African Continental Free Trade Area (AfCFTA), which is set to foster business across African borders, such discussions are not only timely, they are also necessary.


Deadlines and requirements:

In order to increase engagement from a broader range of actors from the continent, the conference will be bilingual, English and French. The conference presentations and outputs will also be accepted in either language (2,000 word blog post as part of a special symposium on AfronomicsLaw, as well as a full-length paper for a special issue with a journal (journal tbd)).


Overview of deadlines:

  • Deadline for abstract submission: 15 January 2021
  • Draft papers due: 1 March 2021
  • Digital conference: 24-26 March 2021
  • Final contribution to blog symposium on AfronomicsLaw: 30 April 2021
  • Final papers due for special issue with journal: 1 July 2021


Please submit abstracts in English or French (250 words) accompanied by a short CV (max. 5 pages) to m.plagis@asser.nl by 23:59 CET on 15 January 2021.

Kiobel in The Hague – Holding Shell Accountable in Dutch Courts - Event Report - By Mercedes Hering

Editor's note: Mercedes is a recent graduate of the LL.B. dual-degree programme English and German Law, which is taught jointly by University College London (UCL) and the University of Cologne. She will sit the German state exam in early 2022. Alongside her studies, she is working as student research assistant at the Institute for International and Foreign Private Law in Cologne. Since September 2020, she joined the Asser Institute as a research intern for the Doing Business Right project


On 25 September 2020, the final hearings in the Kiobel case took place before the Dutch District Court in The Hague. This case dates back to 25 years ago; and the claimants embarked on a judicial journey that led them from the US to the Netherlands. On 16 October 2020, the TMC Asser Institute hosted an online roundtable discussion to present and discuss the arguments raised before the Dutch court. The three panelists, Tara Van Ho from Essex University, Tom de Boer from Prakken d’Oliveira, and Lucas Roorda from Utrecht University each provided their stance on the case and analyzed the past, the present and the main issues of the proceedings.

Depending on the outcome of the case, Kiobel could pave the way for further business human rights litigation in Europe. It raises questions ranging from jurisdiction, applicable law, parent company liability and fee arrangements to state sovereignty and the responsibility of former colonial states vis à vis countries that emerged from colonial rule. Below you will find the highlights of our discussion, you can also watch the full video on the Asser Institute’s YouTube channel.More...


Doing Business Right Blog | The Ilva Case – Part 2: The Transnational Recourse Against a Disaster Foretold - By Sara Martinetto

The Ilva Case – Part 2: The Transnational Recourse Against a Disaster Foretold - By Sara Martinetto

Editor's note: Sara Martinetto is a research intern at the T.M.C. Asser Institute. She has recently completed her LLM in Public International Law at the University of Amsterdam. She holds interests in Migration Law, Criminal Law, Human Rights and European Law, with a special focus on their transnational dimension.

Having explained the Italian legal trajectory of the Ilva case, this second post focuses on the transnational reach of the case. Two main actors have played (or play) a crucial role: the European Union (especially the EU Commission) and the European Court of Human Rights (ECtHR). Both have tackled the Ilva case from different perspectives, depending on their competences. The Commission even dealt with the case from two distinctive viewpoints, as it started infringement proceedings related environmental protection state and aid.


The European Union and the Ilva case

As previously discussed in Part I, the EU has a prominent role in determining the environmental policy of the Member States: in particular, the EU issued a number of Directives, which provide for a general legal framework with regard to industrial pollution. Yet, Taranto’s disaster has also attracted special attention from the EU institutions. Specifically, the Commission has opened several infringement procedures against Italy in the matter. The measures undertaken at the EU level can be divided in two categories: measures on environmental protection, and measures regarding state aid. 

Infringement of EU environmental law

The first infringement procedure opened by the European Commission relating to the Ilva steel plant dates back to 2008. The Commission submitted that Italy did not fulfil its obligations under the Integrated Pollution Prevention and Control (IPPC) Directive,[1] by failing to bring the old permits awarded to the Ilva plant in compliance with the new norms. The Commission referred the issue to the CJEU, which found a violation of Art. 5(1) of the Directive.[2]

Simultaneously to the first provisory measures in the ‘Environment for sale’ trial, the European Parliament adopted a Resolution, which called on both the Italian authorities and the EU institutions to tackle the situation in Taranto. In turn, the EU Commission opened another infringement procedure in 2013. According to the related press release, Italy was deemed again in violation of the IPPC Directive (which would then be replaced by the Industrial Emissions Directive (IED) from January 2014) and the Environmental Liability Directive (ELD) prescribing the ‘polluters pay’ principle. The Commission recalled the extensive evidence of pollution caused by Ilva, and submitted that IPPC permits should be issued only if plants comply with the specific requirements set out in the Directive. Moreover, it reminded that the ELD provides for strict liability in case of environmental damage: once a causal link is established between the activity and the damage, there is no need to prove fault. For these reasons, the Italian authorities had to take steps to bring the Ilva plant in compliance with EU law and adapt national legislation in order to provide redress for ongoing violations. After a second letter of formal notice in 2014, the Commission issued a reasoned opinion pursuant to Art. 258 TFEU, stating that violation of the IED and ELD Directives have not ceased. However, the CJEU has still not been seized on the matter.

Infringement of State aid rules

As previously stated, Ilva has been a State-owned enterprise for more than thirty years and it has always been considered part of Italian strategic national interests: for this reason, the financing of the plant with public funds has been a long standing problem, and it has become even more so with the latest temporary receivership.[3]

In 2016, the Commission opened an infringement procedure for State aid against Italy, which has allegedly granted Ilva around 2 billion € for the rehabilitation of the plant. This contributions are not only the result of direct funding, but also of a law granting loans to Ilva a priority status in case of bankruptcy, including over debt to public entities; a law allowing Ilva access to funds seized during ongoing criminal proceedings against Ilva's shareholders and former management before those proceedings have established who owns these funds; and the favourable settlement of a long standing dispute between State-owned Fintecna and Ilva.[4] The procedure was then extended to cover the new 300 million € subvention provided in Law Decree 191/2015.

In this regard, Commissioner Vestager has recognised the delicate state of the steel plant, and the urgent need to proceed with the depollution of the area. Theoretically, the State can provide funding to accelerate such process, but the funds must be reimbursed by Ilva, pursuant to the ‘polluters pay’ principle.

The procedures are still on-going. Indeed, there is no easy solution to both claims raised by the Commission, especially if the main goal of the Italian Government is to keep the plant open. Albeit the Government must implement EU Directives into national law, the issuing of the IPPC permit (AIA) partly depends on the margin of appreciation entrusted to administrative authorities. Such a margin is likely to be exploited to its full extent in order to avoid the shutdown of the factory. Furthermore, public financing seems necessary to proceed with the clean-up of the area. However, it is hard to see how this amount could be then reimbursed in the short run, since the plant was only recently sold to Am Investco Italy, a joint venture of Marcegaglia Group and ArcelorMittal. The new owner is planning to invest more than one billion euros tp depollute the area, in conformity with the new AIA, but it is likely to require some time. In the meantime, the multiple Government interventions have put Ilva in a privileged position.

 

The Ilva case at the European Court of Human Rights

The previous sections have shown the multiple conflicts caused by the Ilva case among institutions at different levels. However, the victims of the Ilva plant have not been able, up to now, to actually get redress or to see a significant improvement of their living conditions. That is what drew citizens to file recourse to the ECtHR, in an attempt to hold Italy responsible for the Ilva case.

A first application was filed by Ms Smaltini in 2009, who died of leukaemia during the proceeding. The applicant submitted there was a causal link between her disease and the Ilva emissions and hence Italy violated Art. 2 ECHR (right to life). However, the Court declared the case inadmissible because manifestly ill-founded. In its decision,[5] the ECtHR noted that the applicant had previously initiated a proceeding in domestic courts, which was then discontinued due to lack of evidence regarding the link between the polluting activities and her illness. In fact, the evidentiary report carried out by Italian authorities showed that the percentage of people affected from leukaemia in Taranto was not higher than in other areas. Therefore, the Court held that the applicant had access to a fair process, which was carried out in the light of the scientific data available at the time of the complaint. Thus, Ms Smaltini failed to prove Italian authorities breached the procedural aspects of her right to life, thus rendering the case inadmissible. Ms Smaltini failed to argue, more generally, that the State did not fulfil its positive obligation in ensuring her right to life, and limited her complaint to the determination of the causal link between her disease and Ilva’s activities.  The Court ruling was strongly criticised by many commentators,[6] who were unconvinced by its decision to limit its reasoning to the legal claims raised by the complainant. Indeed, in Guerra v. Italy,[7] the ECtHR stated that it is not bound by what the applicant asks, but that it can amend the legal characterisation given by the parties pursuant to the principle ‘iura novit curia’ (‘the Court knows the law’). Thus, theoretically, the Court could have rephrased the legal arguments brought by the applicant and applied its previous jurisprudence under Art. 2 and 8 ECHR vis-à-vis environmental matters.

Building on the legacy of this ruling, two other applications were filed to the ECtHR, and are now being examined jointly before the Court. The first recourse was filed in 2013 by a group of 52 applicants, represented by Sandro Maggio, and promoted by the Committee “Legamjonici”, a non-profit association dealing with environmental issues in Taranto. The second one was filed in 2015, and involves 130 citizens of Taranto, who are represented by the Roman law firm Saccucci & Partners. Due to the extreme importance and urgency of the case, the Court has decided – on 4th February 2016 – to prioritize the case, pursuant to Art. 41 of the Rules of the Court. On 27th April 2016, the Court found the case non-manifestly inadmissible and accepted to rule on the merit. However, the Italian Government has asked for multiple delays, lengthening the procedure. A final ruling is expected in 2017.

The aim of such applications is not only to obtain compensation for the victims but to compel Italy to create a legal framework to be applied in case of environmental disasters. The main legal argument of the complainants is that Italy has not put in place a normative and administrative structure capable to prevent and address the great damage generated by the Ilva plant. In order to do this, they submit the violation of Art. 2 (right to life), Art. 8 (right to family and private life), and Art. 13 ECHR (right to an effective remedy).

The claims under Art. 2 and 8 are supported by a great body of ECtHR jurisprudence in environmental cases: since the ECHR does not include an autonomous provision on the right to a healthy environment, the Court has progressively expanded its interpretation of these Articles to address claims connected to environmental damage. In this proceeding, Art. 2 came into play at a later stage: firstly, the Court focuses on including the right to a healthy environment into the right to private and family life under Art. 8 ECHR. The first case in this regard is Lopez Ostra v. Spain (1994), in which the Court found that the Spanish Government did not succeed in striking a fair balance between the rights of the applicant under Art. 8 and the economic well-being of the country (§58).

As far as Art. 2 is concerned, Öneryildiz v. Turkey (2004) should be regarded as the landmark case. Drawing from Osman v. United Kingdom (1998) (§115-116), the ECtHR held that Art. 2 entails “a primary duty on the State to put in place a legislative and administrative framework designed to provide effective deterrence against threats to the right to life” (§89). Moreover, the Court took up its previous jurisprudential distinction[8] between the substantial and procedural limbs of Art. 2: the State has not only the positive duty to safeguards lives within their jurisdiction, but also to set up a framework which would guarantee the prevention and punishment of violations (§91). This is where Art. 2 gets intertwined with Art. 13 ECHR, the right to an effective remedy. Indeed, in the Ilva case, the victims are still awaiting a final judgement and have not received any kind of compensation. Moreover, the judicial measures aimed at stopping production were seriously impaired by the Government.

Therefore, the ECtHR has in place the legal means to require Italy both to provide compensation for victims and to reform its national law, as well as further clarify the extent of State obligations with regard to environmental disasters caused by private actors incorporated in their territory.

 

Conclusions: Between national impotence and transnational redress

The more one dives into the Ilva case, the more worrisome the picture gets. Many actors have continuously tried to address a tragedy that has been dragging along for more than fifty years. However, the opposing interests in play have driven institutions to step on each other’s feet, to adopt measures in response of narrow concerns, and to the detriment of others. These conflicting instances are reflected in the infringement procedures initiated by the Commission. Ultimately, the European Court of Human Rights is called now to give victims an answer which is not likely to be granted at the national level. In particular, an ECtHR ruling could respond to different needs: it could grant relief to the victims; it could force the State to put in place an adequate normative framework to tackle this crisis; it could further elaborate on the State obligations related to environmental harm caused by private actors. There are great expectations upon non-national actors to break an impasse which national authorities seem incapable, or unwilling, to solve. While the Ilva case showcases the incapacity of Italian authorities to tackle an environmental matter of life and death, transnational legal interventions are an external disruption hopefully capable to drive change. To this extent, the additional level of protection offered by EU and ECHR rules can be of invaluable assistance to the victims of Ilva. In the meantime, the ‘Environment for sale’ trial will continue to try to determine the criminal responsibility of a network of public and private actors who contributed to harm Taranto and its citizens. 


[1] The Directive established that all industries presenting an environmental risk should be granted a permit by public authorities in order to produce. Such permit is conditional on the compliance with Best Available Techniques (BATs).

[2] Art. 5(1) obliges Member States to review all the permits previously issued in the light of the new requirements. In particular, the Court held that a mere revision of previous permit aimed at correcting only manifest violation of the new Directive could not be considered sufficient to fulfil the obligations therein prescribed (§36). CJEU, C-50/10, Commission v. Italy, 31 March 2011

[3] See the Commissions proceedings related to the financing of ILVA by IRI in 1993

[4] EU Commission, Press Release, State aid: Commission opens in-depth investigation into Italian support for steel producer Ilva in Taranto, Italy, 20 January 2016

[5] ECtHR, Smaltini v. Italy, 16 April 2015

[6] A. Mascia, Nel Caso Smaltini C. Italia La Corte Europea Dei Diritti Dell’uomo Ha Ritenuto Che Le Emissioni Provenienti Dallo Stabilimento Ilva Di Taranto Non Siano State La Causa Dell’insorgenza Della Malattia Mortale Contratta Dalla Ricorrente, 4 May 2015; M. Alagna, Smaltini C. Italia: Irricevibilità Del Ricorso O Rigidità Del Giudice?, in Ordine Internazionale e diritti umani, 2015

[7] ECtHR, Guerra v. Italy, 19 February 1998 (§44)

[8] Among others, see McCann v. United Kingdom, 25 September 1995

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