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Remembering Prof. John Ruggie

Prof. John Ruggie has passed. Those in the business and human rights world who knew him well have already published beautiful tributes. Mine will be less about the man and more about his work. I only briefly met him in person in 2013 when he came to London for a book signing event.

After that we were in contact by email every few years, most recently this summer. I invited him to review a book for the Business and Human Rights Journal and he kindly accepted within hours.

I didn’t know him personally and yet his death is hitting hard.

I got into business and human rights in 2010. I was four years post-PhD having worked mostly on the death penalty and International Criminal Law. I was fortunate to have a permanent academic job. And yet I was profoundly unhappy in my professional life. I was only making half-baked contributions. My teaching load was insane and I only occasionally connected with students about anything. It all felt pointless.

My then boss, the wonderful Joshua Castellino (“what would Joshua do?” I still ask myself every time I need to make a difficult decision), had the idea of creating a programme about human rights and business. I can’t remember how it happened but all of a sudden I was spending most of my time setting up the programme, writing accreditation documents and pushing them all through validation. For three years I led our pioneering Master’s programme in human rights and business. This got me invited to New York, to the first meeting of what would become the Teaching Business and Human Rights Forum, led by two visionaries: Joanne Bauer and Anthony Ewing.

For a few years, I was out of my depth. I had zero publication in the area. But I had the enthusiasm and at the time, given my privileged position, it was enough.

In 2011, the UN Human Rights Council adopted the UNGPs, John Ruggie’s central contribution as UN Secretary-General’s Special Representative. The UNGPs focused academic discussion and advocacy efforts. Business and Human Rights went from catchy phrase to academic field. My field.

While working in business and human rights I have found my purpose, my true professional family, my crew, my… network as I stupidly write in cover letters.

I owe John Ruggie some of the most solid and trusting relationships of my life. Without those, I don’t even know if I could do my job, let alone enjoy it the way I do most of the time. I am grateful beyond words for his work and vision.


Mining permits in Roraima and the state duty to protect under the UNGPs : a business and human rights case before the Brazilian Supreme Court

Photo: WWF

It is a pleasure to welcome Danielle Anne Pamplona (@DaniAPamplona) to Rights as Usual. She is a Professor of Law and Head of the Human Rights Clinic at Pontifícia Universidade Católica do Paraná (PUCPR) in Brazil. She is also the Vice President of the Global Business and Human Rights Scholars Association, and Vice Director of the Latin American Academy for Human Rights and Business. This post is hers.

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Introduction

In a case regarding mining licenses laws in the northern state of Roraima, the Federal Supreme Court (STF) of Brazil has the opportunity to address – for the first time – the duty of the state to protect human rights and the environment in the context of business and human rights (BHR). The case (ADI 6672) shall determine if gold mining permits granted without Environmental Impact Assessments (EIA) are in accordance with the Brazilian Federal Constitution and the American Convention on Human Rights.

Since 8 February 2021, the state of Roraima has loosened its environmental regulations to foster mining projects. Among the different measures adopted, the law has removed the prohibition of using mercury in mining operations, contravening the Minamata Convention, which is an international treaty designed to protect the health and environment from the adverse effects of mercury. Brazil has been a party to this treaty since 2017. Although there is no date for the STF to release a merits judgement, in February 2021 the Court adopted a precautionary measure, indefinitely suspending the application of the new law.

The case has been litigated as a breach of the rights to a healthy environment, to health, physical integrity and life. However, interveners could have stressed the serious implications this case has for the field of BHR in Brazil. The Human Rights Clinic at Pontifícia Universidade Católica do Paraná (PUCPR), which I lead, has partnered with the Human Rights and Environmental Law Clinic of the State University of Amazonas (UEA), led by Profa. Silvia Loureiro; the Laboratory of Molecular Pharmacology of the Federal University of Pará (UFPA), led by Prof. Maria Elena Crespo López and the Centre for Comparative Legal Cultures, Internationalisation of Law and Justice Systems (CCULTIS), led by Prof. Jânia Saldanha, to prepare an amicus curiae brief.

We were challenged to articulate the BHR implications of this case and to use the UN Guiding Principles on Business and Human Rights (UNGPs) to shed light on the content of the State duty to protect human rights. This post summarizes the importance of understanding this legal discussion from the perspective of BHR, presents and analyzes our contribution to the amicus curiae brief and reflects on the State’s responsibility to protect human and environmental rights.

Gold mining and the use of mercury

Gold exports are a fundamental activity for the Brazilian economy. In 2020 Brazilian gold exports grew 36% compared to 2019: from US$3.6 billion to almost US$5 billion, with a volume growth of almost 8%, from 92 tonnes to 99 tonnes in 2020. Gold export, to Canada alone, grew 148% with respect to 2019. Gold mining, especially on a small scale, uses mercury. Liquid at room temperature, mercury does not decompose. Instead, it is transformed to adapt to the environment: air, water or land. When heated, its gaseous form remains in the atmosphere until it falls with the rain and then contaminates the land and water outside gold mining areas. Because of the nature of this element, 81% of fish collected, among the most consumed by the local population in northern states, are contaminated by mercury. The Amazonian population presents very high levels of mercury in the body, and even people living far from the mining centres are contaminated. Although mercury has been banned in several countries, the February 2021 statute adopted by the state of Roraima authorizes the use of mercury for gold extraction against scientific evidence.

One of the main problems is that this statute miscategorizes beneficiaries. In principle, the law is meant to help prospectors (garimpeiros). Historically, prospectors are small-scale, traditional miners who extract gold located in the riverbanks. Mining laws are lenient towards them as they work in harsh conditions to provide a subsistence to them and their families. However, this artisan view of gold mining in the Amazon forest is no longer accurate.

Gold mining involves a variety of highly mechanized extraction techniques, where production is structured in such a way that it configures the entrepreneurial activity itself. Rafts, suction dredges, loaders, crawler tractors and hydraulic excavators are examples of the machinery used for gold extraction. These are complex procedures that require specialized machinery and techniques that have severe human and environmental impacts.

Yet, the aforementioned statute extends protections intended for small-scale miners to the large businesses who use these techniques. This is a clear distortion of federal laws to the benefit of corporations. The statute facilitates the exploitation of gold at low cost at the expense of socio-environmental rights.

The duty to protect, taking all measures possible and fostering coherence

As readers of this blog know, the UNGPs clarify that States have a duty to protect rights vis-à-vis business activities. In addition to the UNGPs, the Special Rapporteur for Economic, Social, Cultural and Environmental Rights of the Inter-American Commission states that the right to sustainable development is centred on the well-being and rights of people and communities and not on economic statistics.

The State has a duty of diligence and must ensure that its measures do not allow human rights violations. In the Kalinã and Lokono People vs. Suriname, the Inter-American Court of Human Rights (IACtHR) used the UNGPs to reinstate that States have the responsibility to protect human rights against violations committed in their territory and/or jurisdiction by businesses. The Inter-American Commission on Human Rights takes the same view. In the Inter-American Human Rights System, to determine the responsibility of the State, it is sufficient to show the lack of due diligence to avoid such breach or by failing to punish those responsible. This has been the understanding of the IACtHR since its first case.

The UNGPs establish that the State has the duty to indicate to companies what conduct it expects of them. This responsibility lies within the Brazilian State as a whole, and at this moment, it is in the STF’s hands. Can the STF guarantee that Brazil complies with its international commitments and constitutional duties? In our view, the statute breaches the right to health of people immediately around the mines and those far away but who suffer the effects of mercury contamination, all in the name of economic development. The Brazilian Constitution expressly states that economic development should not happen at the expense of human dignity and the protection of the environment.

The UNGPs also establish the need for political coherence between the organs of government and between the different levels of administrative and political organization – especially in a federal State. In this case, Brazil assumed an international commitment to the protection of human rights and cannot allow the executive or legislative branch of a member state to take a decision to the contrary, following Article 28 of the American Convention Federal Clause. In this sense, the Special Rapporteur for Economic, Social, Cultural and Environmental Rights of the Inter-American Commission has stated that the State’s duty of prevention “requires the corresponding authorities to adopt appropriate measures to prevent the real risks against human rights arising from the activities of companies”. Among these authorities are the National Congress and the Judiciary.

Final comments

This case enables the judiciary to comply with the State duty to protect human rights by ensuring that the local legislature indicates to companies the conduct they should adopt, which is to not use mercury for gold extraction. It is, without a doubt, a great opportunity for the judiciary to frame mining regulation as a BHR issue, opening up the possibility of defining the content of the Brazilian State’s duty to protect health and environmental rights from corporate abuses.


The German Football Federation’s Human Rights Policy – A First of its Kind

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It is a pleasure welcome back Dr Daniela Heerdt (@DanielaHeerdt) to Rights as Usual. Dr Heerdt recently defended her PhD on responsibilities for human rights abuses at mega-sporting events. She has a background in public international law and human rights law. Next to being a researcher and teacher at Tilburg University, she works as independent consultant on sport and human rights for the Centre for Sport and Human Rights among others. This post is hers.

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On the 23rd of April 2021,the German football federation “Deutscher Fußball-Bund” (DFB) published its human rights policy. This is a significant step, first because the DFB is the first national football federation to take this step. It is also in line with a number of recommendations made by John Ruggie in its report on FIFA’s human rights responsibilities regarding how FIFA’s efforts should translate to its member associations. Moreover, the German federation is a well-respected and -resourced football federation that can set an example for other national football federations to follow.

This blog post summarizes and analyses the key elements of the newly adopted policy, compares it to FIFA’s human rights policy, and reflects on how DFB’s statement on the Qatar World Cup, which accompanied the publication of the policy, aligns with DFB’s human rights commitments. Some conclusions are drawn to evaluate the policy more broadly in the context of current developments in sport and human rights and on lessons to be learned for other football federations that want to follow suit.

Policy Statement

The adoption of a human rights policy presents an important step in DFB’s ongoing efforts to embed human rights. This journey started in 2017, when the DFB was bidding for the UEFA EURO 2024. In 2019, the DFB adopted a statutory commitment to respect all internationally recognized human rights. These steps are reiterated in the introductory part of the policy, which also reflects more broadly on DFB’s societal impact and football’s potential to contribute positively to societal development.

The policy serves as a guide for implementing the statutory human rights commitment and rests on the DFB’s acceptance of a duty of care. It explicitly refers to a number of human rights instruments, namely the UNGPs, the International Bill of Human Rights, and the fundamental conventions of the International Labour Organization. In addition, it mentions Germany’s National Action Plan on business and human rights (NAP) as a source of interpretation for what this duty of care and respecting human rights mean (p.4).

After a brief statement in which the DFB condemns any kind of human rights abuse, in particular mentioning violent, discriminatory, or inhuman behaviour, and any harm to a child’s welfare or other vulnerable groups, the policy provides a comprehensive overview of the actors it applies to. This includes all organs, officials, employees, and all companies in which the DFB holds the majority of the shares. Furthermore, it extends to DFB’s business relationships and events organized by the Federation, as well as its member organizations.

Human Rights Due Diligence

The policy defines steps on how to implement the duty of care, which follows closely the due diligence process outlined in the UNGPs and Germany’s NAP (p.5). In total, 10 steps are identified: impact assessment (2.1), risk analysis (2.2), risk mitigation (2.3), influence on third parties (2.4), collaboration, dialogue and effectiveness check (2.5), existing and new structures (2.6), grievance mechanisms, remedy and compensation (2.7), dissemination (2.8), international level (2.9), reporting and learning (2.10). The level of details provided under each step differs. As examples for sources of potential and actual negative human rights impacts, it merely lists activities on and off the pitch and activities related to staging tournaments, inadequate working conditions for DFB’s employees, or DFB’s supply chains. This broad overview is followed by a reference to the annex, which gets more concrete on what the relevant human rights issues are (P.10-13).

Other human rights due diligence steps identified in the policy provide more detail, such as the measures that can be taken to mitigate risks, how to collaborate with relevant partners on implementing the policy, and how to use existing structures to advance the policy, such as using the independent Ethics Commission. However, the statement on grievance mechanisms leaves open the important question of whether the DFB creates its own grievance mechanism or adopts an existing mechanism for cases of negative human rights impacts related to DFB’s operations. In case it does set up its own mechanism, the policy guarantees that stakeholder engagement will take place. Finally, it is remarkable that grassroots level football is explicitly included in the considerations, and that regular reporting is planned within the framework of DFB’s sustainability reports.

Compared to FIFA’s Human Rights Policy

At first glance, the DFB’s human rights policy looks rather similar to the FIFA’s human rights policy adopted in 2017. It follows a similar structure, by first making a general commitment and then explaining the approach. Furthermore, both are clearly linked to the UNGPs and based on a human rights due diligence process. However, the DFB divides this into ten steps, which arguably makes it more thorough than FIFA’s four pillars that follow more closely the four-step structure of human rights due diligence as stipulated in the UNGPs. Another difference is that DFB’s human rights policy is less explicit on what potential and actual human rights risks are when compared to FIFA’s policy. While FIFA lists “salient risks” under its commitment, the DFB refers to concrete examples only in the annex to the policy. There, the potential and actual human rights risks are categorized under discrimination and racism, violence and health risks, risks related to integrity, corruption, or doping, and labour rights risks.

Arguably, the way these risks are addressed in the DFB’s policy appears rather broad and general, and lacks embedding in human rights language and standards. Furthermore, some obvious risks are overlooked, such as human rights risks related to recruitment practices for workers on tournament construction sites. With the upcoming World Cup in Qatar in 2022, this can be considered a significant omission. The fact that DFB’s position on Qatar, which was released together with the policy, does not address this issue either makes it look like a conscious choice. In fact, while the position refers to DFB’s human rights commitments, it does not mention concrete human rights risks related to the Qatar World Cup, nor does it link the risks mentioned in the policy’s annex to the situation in Qatar. Instead, the power of sport to bring about positive change is paramount in the statement. While being clear on their position that a boycott is not a solution, the DFB is less clear on how it contributes to positive changes in Qatar beyond relying on the approach of experts. Given the recent human rights efforts that DFB undertook, it is somewhat surprising that this position is not linked more directly to its human rights policy and statutory commitment to respect human rights.

Lessons to Be Learned

On the one hand, adopting a human rights policy is an important step towards ensuring a world of football, and sports more generally, that fully respects human rights. That the DFB took this step supports the sport and human rights movement, which developed in the past decade. This movement is carried forward by civil society organizations that raise awareness on human rights issues connected to sports and supported by a number of actors within the sport ecosystem, including sponsors and broadcasters. It arguably rests on the understanding that ensuring a harm-free and human rights-compliant sport is a shared responsibility among all the different actors involved, as I have argued in my PhD thesis.

The most important lesson for other football federations should be that it is possible for an organization like a national football federation to adopt such a policy. The DFB shows awareness of useful existing structures and how they need to be reformed to embed human rights into daily practices and policies. Hence, it is not necessary to re-invent the wheel. Furthermore, it is not a lonely journey, and external partners can help. The extensive reference to other organizations and actors, and the way this policy has been shaped demonstrates that the DFB engaged in proper stakeholder consultation. As a result they know that they do not have to do this on their own, but can rely on the support of and collaboration with others.

On the other hand, the policy could have been more directly embedded in human rights standards, by including references to specific provisions in international human rights instruments. In particular, it misses the opportunity to acknowledge the issue of women’s rights abuses related to football, and in particular the issue of gender discrimination in football, which Ruggie identified as “endemic human rights challenge” and “deep-seated pattern” in the world of association football. Furthermore, while being clear on who this policy applies to within the DFB’s organization, it remains rather vague on how the policy will be implemented internally. Therefore, it remains to be seen what effects this policy will have in practice.

In conclusion, the adoption of this policy constitutes an important development for the sports and human rights field. While there is always room for improvement, the fact that the DFB came this far is applaudable. Hopefully DFB’s effort will inspire other football federations.

 


Implementing the UNGPs in Eastern Europe: Is Ukraine the Example to Follow?

 

Kharkiv ForumIt is my pleasure to welcome Dr Olena Uvarova to Rights as Usual (@BHRinUkraine). Dr Uvarova is Associate Professor of law, Head of the International Lab on Business and Human Rights (BHR) at Yaroslav Mudriy National Law University in Ukraine. She is the author of the National Baseline Assessment on BHR in Ukraine. In 2017-2020, she coordinated the panel discussions on BHR in Eastern Europe during the Kharkiv Legal Forum. She is the co-founder of the Central and Eastern Europe BHR Association, and a member of the Global BHR Scholars Association. This post is hers.

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In Eastern European countries, the level of UNGPs implementation remains extremely low. Among non-EU members, only Georgia adopted a business and human rights (BHR) chapter, in 2018. It is not a stand-alone National Action Plan (NAP). Rather, it is incorporated within its broader human rights NAP (https://globalnaps.org/country/georgia/). While three years later experts remain skeptical about Georgia’s progress, the very existence of this chapter shows that BHR issues are on the public agenda in Georgia.

This month (March 2021), Ukraine repeated the experience of Georgia: a  BHR Chapter was adopted as part of the National Human Rights Strategy (https://www.president.gov.ua/documents/1192021-37537).

Pre-BHR period in Ukraine

In December 2014, the Ukrainian translation of the UNGPs was presented by the Ministry of foreign affairs of Ukraine. After that, it looked like the document was forgotten by everyone: no public mention, no statement, no action followed both from the state, business or civil society. This can be explained by the fact that the country had other vital concerns. After the revolutionary events of 2013-2014 and the start of the armed conflict in the East of Ukraine, priorities shifted significantly. But this explanation only partially holds. One can also argue that in situations of instability and high risks to human rights, the state obligation to protect and the corporate responsibility to respect human rights actually become more relevant.

In 2017, during the first Kharkiv Legal Forum, a BHR discussion was conducted. This academic event was open to all interested stakeholders, but no state organ, and no business participated. However, during the second Kharkiv Forum in 2018, a Panel discussion on BHR in Ukraine brought together representatives from the Ministry of Justice (MoJ), the Ombudsperson’s Secretariat, the OECD National Contact Point, and the Governmental Commissioner for Gender Equality (http://bhr.in.ua/business-and-human-rights-implementing-ungps-in-ukraine/).

This is my own subjective opinion, which I understand might be perceived as biased, but I believe it is highly important for Ukrainian decision-makers to hear what international organizations and experts in this area have to say. It is crucial to take into account the experience of others, including Western European countries. This is not to say that such experience and opinions are to be received uncritically. However, it is clear that at the second Forum in 2018 the opening greetings from a UN Working group on business and human rights member (Anita Ramasastry), the expert opinion from the Danish Institute for Human Rights (Dirk Hoffmann), and the presentations of the Polish (Beata Faracik), Czech Republic (Jitka Brodska and Alla Tymofeeva) and Lithuanian (Lyra Jakulevičienė) experiences played a decisive role.

In January 2019, the MoJ initiated implementation of the UNGPs in Ukraine (https://minjust.gov.ua/m/informatsiya-schodo-rezultativ-provedennya-natsionalnogo-otsinyuvannya-bazovih-pokaznikiv-u-sferi-biznesu-ta-prav-lyudini-v-ukraini).

UNGPs implementation: initial steps

At the beginning of 2019, the National baseline assessment (NBA) on BHR in Ukraine was initiated by the MoJ. It was conducted by Yaroslav Mudryi National Law University (I was the author with the expert support of my colleagues) in cooperation with the Danish Institute for Human Rights (https://minjust.gov.ua/files/general/2019/07/10/20190710170813-19.pdf).

The NBA was published and presented in June 2019. The idea of the MoJ was that it should serve as a basis and starting point for developing a stand alone NAP on BHR. But after early parliamentary elections in July 2019, the government was dissolved and a new one was formed. Until March 2020, the fate of the BHR NAP remained extremely unclear. In March 2020, the new MoJ’s team announced that an updated National Human Rights Strategy would be developed. It called experts and CSOs to make proposals on how the Strategy should be updated. One of the proposals that was supported by the Ombudsperson’s office and a number of CSOs was to have the BHR chapter.

After several virtual open discussions, the draft was prepared. The MoJ was open to accepting and processing as many proposals, remarks and comments as possible. As a result, in November 2020, the updated National Human Rights Strategy that includes the BHR chapter was ready to be approved and signed by the President of Ukraine. Thus, the whole process of working on the text took about 8 months. Too fast? Maybe.

Then there were 4 months of waiting. Nobody knew exactly when the President would sign the Strategy, or if he would sign it at all. The expectation was compounded by the fact that the New Economic Strategy of Ukraine initiated by the President of Ukraine and presented in January 2021 provides for a ban of any new requirements and restrictions for business. These are red flags. “Business deregulation and removal of any barriers for doing business” are called as key priorities. The Economic Strategy does not contain any reference to human rights.

On March 24, the National Human Rights Strategy was signed. It does include a BHR Chapter. However, a feeling of policy incoherence lingers on.

What’s next?

The National Human Rights Strategy is a very broad document. The BHR chapter (2 pages) names only:

-        General strategic goals: business operations should be based on a human rights approach; effective remedies should be guaranteed for victims of business violations); and

-        Key tasks, namely to implement the UNGPs; to strengthen the capacity of public authorities and local governments to implement the UNGPs in Ukraine; to raise awareness of business entities and their associations, trade unions and other civil society institutions on the UNGPs; to promote the renewal of corporate policies (in particular on labor relations, environmental protection, corporate social responsibility, personal data protection, consumer protection, anticorruption, combating trafficking in human beings, etc.) to ensure compliance with the UNGPs and other international human rights instruments; to provide access to judicial and non-judicial remedies.

Now the Ukrainian government should adopt an action plan for the implementation of the National human rights strategy (the draft of the Plan was developed simultaneously with the Strategy in the same manner). An action plan is more detailed – it names specific actions to be taken, responsible actors and timelines.

Lessons learned

So, I hope that the case of Ukraine will be an example to follow for those countries from the region that initiate the UNGPs implementation. We need more countries to adopt NAPs on BHR. But in this process, the lessons already learned by Ukraine should be taken into account:

  1. Be persistent. Someone (from civil society, academia, business) has to be very persistent in their intentions. It is pointless to wait for the government to take the initiative.
  2. Appeal to experiences of other countries, to the opinions of international organizations, to the expectations of partner states and investors. Unfortunately, often these arguments are more effective for decision-makers than society’s expectations. But this can be used as an advantage.
  3. Implementation’s processes can occur too quickly, to the detriment of the standards of inclusiveness and the depth of the analysis of the problems. This haste is one of the consequences of political instability. Changing the composition of the government can put any initiated process on a long pause.
  4. Be prepared to see some policy incoherence. The concept of business and human rights is considered mostly as a significant obstacle to economic development. Therefore, the main questions to be answered are: will the UNGPs implementation lead to a slowdown in economic development? Will it create additional barriers to business?

Lowering the bar (in a good way): the UK Supreme Court Decision in Okpabi v. Shell

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It is a pleasure to welcome back Dr Lucas Roorda as a guest poster on “Rights as Usual”. Dr Roorda (@LRoordaLaw)  is an Assistant Professor and postdoctoral researcher at Utrecht University. This post is his.

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Parent companies incurring common law duties of care to foreign claimants have gone from a distant hypothetical to a very real possibility. Two weeks ago, the Dutch Court of Appeal was the first court to hold on the merits that RDS, the parent company of the Shell group, incurred a duty of care to farmers in the Niger Delta. Now the UK Supreme Court (UKSC) has ruled in the case of Okpabi v. Shell that it is at least arguable that RDS had a duty of care towards the inhabitants of the Ogale and Bille communities, confirming its decision in Vedanta v. Lungowe, and allowing their case to proceed in English courts. In this blog I discuss the UKSC’s decision and its implications, and compare it to the Dutch Court of Appeals decision.

The background

I have discussed Okpabi case here and here, so I’ll refer to those blog posts for more detailed discussions of the facts and the lower courts’ decisions. The claims concern significant oil pollution in the Niger Delta, allegedly caused by Shell’s negligence in maintaining pipelines and other oil infrastructure – broadly similar to the Milieudefensie case in the Netherlands, discussed here. Also similar to that case is that the claims were jointly filed against Shell’s Nigerian subsidiary SPDC, and Anglo-Dutch parent company RDS. The defendants disputed the jurisdiction of English courts, arguing that the Nigerian claimants had no ‘arguable case’ against RDS, to which SPDC could then be a ‘necessary and proper party’. The defendants argued that the claimants’ claim that RDS had incurred a duty of care, pursuant to Caparo v. Dickman and Chandler v. Cape, had no prospect of succeeding, and was filed only as an anchor for the court to assert jurisdiction over subsidiary SPDC. Both the High Court and the Court of Appeal sided with the defendants. They held that the Nigerian claimants had insufficiently demonstrated that RDS could have incurred a duty of care and dismissed the case.

The decision of the UK Supreme Court

The UKSC has now reversed the Appeal decision, holding that the claim against RDS contains a sufficiently ‘triable issue’ and remitting the case to the High Court. In a unanimous decision delivered by Lord Hamblen, the Court first reiterates its holding in Vedanta v. Lungowe of last year that parental duties of care are not a distinct category of negligence liability, but instead are to be determined by ordinary principles of tort law (para. 25; see also para. 141-143). Thus, such duties are not governed by the stringent threefold test of Caparo v. Dickman (requiring foreseeable harm; proximity between the parties; and imposing liability is ‘fair, just and reasonable’) but rather by the broader guidance of Vedanta (note that the Dutch Court of Appeal also got this wrong, relying primarily on Caparo). The Court emphasizes that this guidance does not itself create new, distinct categories of liability but should be read as non-limitative and indicatory of the range of circumstances under which a duty of care can arise.

The bulk of the judgment concerns the Court’s assessment of the way the Court of Appeal assessed the level of control allegedly exercised by RDS. The Court had already noted in Vedanta that it would be inappropriate for courts to engage in ‘mini-trials’ in response to a challenge to jurisdiction over a foreign defendant. In Okpabi however, not only did the Court of Appeal fail to determine that the High Court’s ‘findings’ in fact constituted a mini-trial (paras. 110-111), but in reviewing those findings it engaged in a mini-trial of its own (para. 112). The Court of Appeal made several (inappropriate) determinations regarding the witness statements, factual evidence and documentation presented before concluding that no viable argument could be made that RDS had sufficient control over SPDC and incurred a duty of care.

On the documentary evidence specifically, the UKSC is highly critical of the Court of Appeal’s approach. The Court of Appeal had been wrong to scrutinize the documentary evidence to this degree, before the appellants had access to internal company documents through disclosure (paras 128-129). In fact, the UKSC notes, such documents are crucial to demonstrate operational control over a subsidiary (para. 134), and the appellants had even provided some they obtained through third parties (including audit reports submitted in the Dutch case). Rather than dismissing the case, the Court of Appeals should have concluded that the well-argued existence of such documents was sufficient to let the claimants move on to disclosure, and to be able to further substantiate their claims. Already for that reason, the Court overturns the Court of Appeal’s decision.

The Court further reiterates that the Caparo test was the inappropriate test for determining whether RDS could incur a duty of care. It also notes that the Court of Appeal focused too much of the issue of ‘control’ over the subsidiary and its entire operations; instead, a duty of care could result from various ways in which a parent company is involved in the management of the harmful activities (para. 147). This could be through active intervention, but equally as a result of flawed group-wide policies, or even when a parent company holds itself out to third parties to exercise control over its subsidiaries, but then failed to do so. With that in mind, the Court concludes that the appellants had indeed raised a ‘real issue to be tried’ as to whether RDS incurred a duty of care.

Analysis: the only reasonable outcome

From my perspective, this seems to be the only reasonable outcome. As I noted in my blog on that decision, the Court of Appeals had set the evidentiary bar for an arguable case that a duty of care existed so high that one could better speak of the claimants requiring a ‘winnable’ case; both with regard to the stringent test for a duty of care, and with regard to the evidence required to even present an arguable case. The Supreme Court now lowers the bar to a much more attainable level, preventing lengthy ‘mini-trials’ that drain time and resources of the parties as well as the courts seized, and providing victims with easier access to internal company documents. As noted by Ekaterina Aristova and Carlos Lopez in their excellent blog on the Okpabi judgment, the Court thereby takes an approach more in line with international jurisprudence: claimants can rely on publicly available documents to raise a legitimate issue on the level of control a parent company could exercise, and substantiate whether that indeed occurred in this case after disclosure. This is also the approach suggested by Sales LJ in his dissenting judgment, which I advocated for in my blog, and which is now explicitly endorsed by the Supreme Court (para. 155).

Whilst these holdings could already have a significant impact on future litigation, it is the Court’s confirmation of Vedanta regarding the circumstances under which a parent company can have a duty of care that is likely to spark more litigation. Most litigation of this type revolved around the Caparo test, modified by Chandler v. Cape regarding proximity – including, as noted, erroneously by the Dutch Court of Appeals in Milieudefensie v. Shell. Quite predictably, such litigation has yielded few results for claimants. The Court now confirms that a much broader range of circumstances and activities can create a duty of care, which makes it both easier to argue and adaptable to circumstances of different cases. Moreover, there is no principled reason to assume that a company purporting to exercise oversight over foreign contractors, and being in a position to do so in practice, could not also incur a duty of care with regard to harmful activities by that contractor, even if there is no formal control or ownership. It is regrettable that this holding came only after the Dutch Court of Appeals decision, which still relied on the Caparo test, despite the court referring to Vedanta as well.

Jurisdiction questions remain

We should be mindful of the limitations of this holding. The decision explicitly mentions that after remitting, other jurisdictional issues may still have to be dealt with by the High Court as they were not part of these proceedings. Amongst other issues, this includes Shell’s objections to an English court asserting jurisdiction over its Nigerian subsidiary SPDC. On this issue, Vedanta may actually aid the defendants more than the claimants. As I discussed here and here, the Supreme Court ruled that the risk of irreconcilable decisions no longer automatically means that cases against foreign co-defendants need to be litigated together with the main defendant (stating that it is no longer a ‘trump card’). In Vedanta, the risk of not getting substantive justice in Zambia however meant that the case had to continue in English courts.

This application of the forum non conveniens test may lead to a different outcome in Okpabi. Jurisdictionally, the situation is similar to Vedanta: the claimants themselves create the risk of parallel proceedings and irreconcilable judgments by electing to bring their case in English courts, whereas they could have litigated against both defendants in Nigerian courts. The claimants will thus have to show that no substantive justice is possible in Nigerian courts, which Shell disputes; in that respect, it can point to a number of recent decisions by Nigerian courts in favour of local communities and against Shell, to argue that prospects for the litigants there are much better than they would have been in Zambia for the Vedanta litigants. There would be a profound irony in this argumentation: not only has Shell repeatedly ignored rulings of Nigerian courts, but it also recently instituted investor-state arbitration proceedings against Nigeria, on the grounds that recent proceedings against the company had been unfairly conducted. So in essence, Shell’s argument is that Nigerian courts are good enough to litigate complex pollution cases, up until the point where the company loses.

Conclusion

Last month’s decision in the Milieudefensie case and the Supreme Court’s decision in Okpabi constitute major steps in ensuring that duties of care on parent companies can be plausibly argued before home state courts. Both the more realistic level of scrutiny a court should apply to such claims and the broadened scope of actions that can lead to a duty of care may mean that future claims arguing parent company liability become much more viable. Of course, the jurisdiction question still hangs over such cases, especially since the UK is no longer subject to the Brussels-I Regulation and forum non conveniens can be applied to claims against UK-domiciled parent companies.


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