Transcript Human Rights and Corporate Liability

Human Rights
Violations by Corporations
Professor Cees van Dam
King’s College London
Utrecht University
[email protected]
Overview
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What are we talking about?
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What is the problem?
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What solutions are available?
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Criminal Law
Alien Tort Statute
National Tort Law
Ruggie Framework?
What are we talking about (I)?
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Probo Koala chartered by Trafigura, NL petroleum
trader
2006: PK waste shipment entrusted to Ivorian disposal
company ‘Tommy’
Waste dumped at open air sites near Abidjan, Ivory
Coast
16 people die, 100,000 seek medical help
Trafigura: no reason for suspecting Tommy to
improperly dispose of waste
Trafigura sued in group action before High Court in
London
Settlement reached in 2009 weeks before trial
What are we talking about (II)?
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2002: in US Khulumani Support Group sues corporations
complicit in human rights abuses during apartheid in SA
South African Government opposes lawsuit
2004: District Court grants motion to dismiss
2007: Appeals Court reverses District Court's dismissal
2008: no intervention Supreme Court because 4 of 9
justices have conflict of interest
First District Court Judge dies
April 2009: District Court narrows claims but allows
case to continue against Daimler, Ford, GM, and IBM
Sep 2009: SA Government withdraws opposition
What are we talking about (III)?
Variety of situations
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parent company for subsidiary
company for business ‘partner’
company for customer
company for supplier
What is the Problem (I)?
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TNCs replacing colonial powers
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Lack of global regulation
• trade has been globalised, justice not yet
• WTO: enforceable rights to freedom of trade
• WTO tries to have as many players on the field as
possible but doesn’t care about fairness of game
• profit maximisation and cost externalisation
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Universal Declaration of Human Rights 1948
• no enforcement mechanism
• regional enforceable conventions
• only obligations on states
What is the Problem (II)?
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Companies more powerful than states
• Shell turn over 3 times Nigeria GDP
• weak human rights enforcement by states
• investment treaties freezing national legislation
including human rights protection
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Filling the regulatory gap
• Criminal law
• Alien Tort Statute
• National Tort Law
Criminal law
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National crimes
• complicity in murder or manslaughter
International crimes
• genocide, crime against humanity, torture
• before national courts (regardless of place of
crime)
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individuals and companies
• before international courts (International
Criminal Court)
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only individuals
Low risk for companies
Alien Tort Statute (I)
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ATS (18th century):
• non-US citizens can sue in US courts
• for ‘violation of the law of nations’
• also if committed outside US
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2004 (Sosa) - Supreme Court
• ‘claims for violation of norms similar to 18th-century
paradigms; no environmental claims
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standard: ‘aiding and abetting’
• tailored assistance
• knowledge or intent?
Alien Tort Statute (II)
Pro:
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class actions
contingency fees
discovery procedure
amount of damages
Con:
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high liability threshold
limited scope (customary international law)
time consuming
National Tort Law (I)
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Forum (competent court)
• preference for western court
• parent company for subsidiary (Shell cases)
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Applicable national law
• often: law of country where damage is suffered
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Standard of care
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reasonably acting company
universal concept
know or ought to have known of HRV
authority of parent over subsidiary
National Tort Law (II)
Pro:
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regular liability threshold
regular scope
Con:
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no contingency fees - sometimes no win no fee
no general discovery
limited amount of damages
time consuming
Alien Tort Statute and
National Tort Law
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most cases in US based on ATS
• since 1993 over 40 cases such as Apartheid, Shell
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slowly growing number of cases in Europe
• UK: Connelly v RTZ (1997), Lubbe v Cape (2000),
Trafigura (2009)
• NL: Shell Oruma
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no globalisation of justice
regulatory gaps remain
Other developments
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Corporate Social Responsibility
• self regulation, codes of conduct
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corporate interests? profit maximisation?
• preventing reputational damage and litigation risks
• improving corporate image and attracting investors
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guidance by NGOs and international
organisations (OECD)
Ruggie framework
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United Nations initiative
Special Representative of the UN SecretaryGeneral (SRSG) on human rights and TNCs
Protect, respect and remedy
• state duty to protect
• corporate responsibility to respect
• access to remedies (judicial and non-judicial,
company grievance mechanisms)
Duty to Respect
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Respect what? Human Rights
• labour and non labour rights; no exceptions
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Respect how? By conducting due diligence
• how may activities affect human rights?
• address and avoid negative human rights impacts on
ongoing basis
• leadership essential for respect throughout company
Pro’s and Con’s Ruggie Framework
Pro:
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providing guidance
stimulating corporate community thinking
norm developing
relatively quick results with relatively modest efforts
revealing lack of level playing field
Con:
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not legally enforceable
not clear if/how due diligence is conducted at
individual company
Concluding remarks
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Ruggie FW no solution for serious human rights
violations
continuing need for corporate criminal and civil
liability
mix of binding regulation, criminal and civil
liability, soft law and self regulation
profit, people, planet
consumer (profit) or citizen (people, planet)?
www.business-humanrights.org
Professor Cees van Dam
King’s College London
Universiteit Utrecht
[email protected]
www.ceesvandam.info
What are we talking about (II)?
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Ogoni people in Nigeria campaign against
environmental damage caused by oil extraction
members of MOSOP (Movement for Survival of Ogoni
People) were illegally detained by Nigerian government
at unfair trial convicted of murder and executed; one
of them Ken Saro-Wiwa
members of MOSOP sued Royal Dutch Shell in US for
being complicit in human rights violations by Nigeria,
including torture and summary executions
2009: case set for trial but settlement reached for $
15.5 million
• compensation for plaintiffs
• trust to benefit Ogoni people
• legal costs
Due diligence and Standard of care
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Standard of care: reasonably acting company:
• factual and normative components
• shaped by opinions in society and corporate conduct
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reasonably acting company conducts due
diligence?
=> non binding rules (due diligence) may shape
binding standard of care
shaping, not determining
at individual level: no self binding
reducing reputational and litigation risks
risk of misleading investors and consumers