Source: http://rightsasusual.com/?paged=3
Timestamp: 2019-04-20 08:28:45+00:00

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This post is the second in the Jesner v Arab Bank special series on this blog. The first one is here.
It is a pleasure to welcome back Alessandra De Tommaso as a guest poster on ‘Rights as Usual’. Alessandra is a PhD candidate at Middlesex University School of Law in London. She works on the challenges arising from corporate criminal liability under international criminal law. This post is hers.
On 24 April 2018, the U.S. Supreme Court delivered its opinion in the case Jesner v Arab Bank, closing the door to future litigation against foreign corporations under the Alien Tort Statute (ATS). For those who believe in corporate accountability for human rights violations, this decision is a setback. But irrespective of one’s views, the decision is also incorrect. This post focuses on the Court’s misguided use of the practice of international criminal tribunals to exclude the possibility to sue (foreign) corporations under the ATS. It argues that international tribunals’ lack of authority to impose criminal liability on legal entities cannot be used as a reason to foreclose the civil liability of corporations at the domestic level.
Here the Court confuses the lack of a mean of enforcement at the international level with the absence of an international norm (see Dr. Nadia Bernaz’s post here). But leaving aside this misconception, the majority’s reasoning is erroneous from another perspective. The Court does not take into consideration that the international tribunals mentioned in the judgement have the authority to impose criminal liability only. Civil liability is not addressed in the statutes of any of these tribunals; neither was it discussed during the negotiations leading to their adoption. This point was correctly raised by Ambassador David J. Scheffer in his Brief as Amicus Curiae of 26 June 2017. Nonetheless, the Court assumed that the lack of an enforcing mechanism able to impose criminal liability on legal entities at the international level can affect the possibility of imposing civil liability at the domestic level. In doing so, the Court fails to distinguish between criminal liability under international criminal law, on one side, and civil liability under national law, on the other. A distinction that is particularly relevant in the context of corporate liability. Indeed, while corporate criminal liability is still a controversial legal concept and has yet to be recognised under international criminal law, the civil liability of companies is a general principle of law recognised worldwide. Yet the majority refuses to acknowledge such a fundamental distinction.
It is a pleasure to welcome Lucas Roorda as a guest poster on “Rights as Usual”. M. Roorda is a Ph.D. candidate at Utrecht University, in the Institute of International, Social and Economic Public Law. He specializes in extraterritorial jurisdiction over corporate human rights violations. This post is his.
These are busy days in English courts, insofar as foreign direct liability cases are concerned. Last year saw the London High Court decline jurisdiction in AAA v. Unilever on post-election violence in Kenya, while the Court of Appeals upheld the High Court’s interlocutory decision in Lungowe v. Vedanta on mining operations in Zambia. This February, on Valentine’s day no less, the Court of Appeals decided on the appeal against the interlocutory decision in Okpabi v. Shell. There seems to be little love lost between the applicants and the court: in a split decision (Sales LJ disagreeing) it upheld the High Court’s ruling that the applicants had no arguable claim against Shell, dismissing the appeal on all counts. This post examines the main tenets of the Okpabi appeals decision, how it compares against similar cases like Lungowe, and what that may mean for the future of foreign direct liability cases in English courts.
To recap, the Okpabi case concerned a complaint filed by Nigerian plaintiffs from the Ogale community against Royal Dutch Shell (RDS) and its Nigerian subsidiary SPDC. The plaintiffs alleged that faulty maintenance of pipelines had caused oil pollution in their communities. The argued that RDS had breached a common law duty of care pursuant to Caparo v. Dickman. To argue a duty of care on the basis of Caparo exists, the plaintiffs needed to argue (1) that is was foreseeable that the subsidiary’s activities may result in harm, (2) that the parent was in close proximity to its subsidiary, and that (3) it was reasonable and appropriate to impose such a duty. The proximity criterion has been further clarified in Chandler v. Cape. As discussed by Ekaterina Aristova in her excellent blog, this approach also makes it possible to assert jurisdiction over subsidiary SPDC as a “necessary and proper party” to the claim against the parent. It has been argued in a number of recent cases, including Lungowe and AAA, and mutatis mutandis in the Dutch case of Akpan en Stichting Milieudefensie v. Shell, discussed here on this blog.
RDS and SPDC both denied that the leakages were the result of lacking maintenance and disputed the English courts’ jurisdiction over the case, arguing that the case should take place in Nigeria. In particular, they argued that the claim against RDS had no prospect of succeeding, and was merely used as an empty vessel to “anchor” the claim against SPDC and bring it within the jurisdiction of English courts. In 2016, the High Court accepted the defendants’ motion to dismiss, holding that the claimants did not have a “good arguable case” against RDS; consequently, there was no viable claim to which SPDC could be a “necessary and proper party”, and the entire case was dismissed. I have discussed that decision in detail here. The main thrust of the High Court’s decision was that RDS as the ultimate holding company was too far removed from its subsidiary in Shell’s corporate structure, and was not “in the same business” as its subsidiary as required by Chandler.
On appeal, Lord Justice Simon writing for the Court of Appeals agreed with the conclusions of the High Court, albeit with a different argumentation. The parties had agreed that the principal issue was the proximity element of the Caparo test: if there was no “good arguable case” against RDS on this basis, the case would fall apart entirely. In contrast to the High Court, the Court of Appeals’ decision focused more on RDS’ operational control over SPDC, and its involvement in the activities of its subsidiaries. While Simon LJ did recognize the plaintiffs’ argument that RDS has a central role in designing, implementing and monitoring environmental and security policies of the entire group, he did not consider those general policies to be sufficient to establish a degree of control that would satisfy the proximity requirement under Caparo (para. 127). The appeal was thus rejected.
The Okpabi decision stands in sharp contrast to Lord Justice Jackson’s assessment of very similar arguments made in Lungowe v. Vedanta recently. Lungowe also concerned duties of care of parent companies (the case is cited in Okpabi para. 23). The main difference between these cases is that the Lungowe court saw much more active involvement of the parent company with its subsidiary than the Okpabi court did with respect to RDS and SPDC. Moreover, the Lungowe court tried to avoid an all-too-deep inquiry into the merits, warning against “mini-trials” in this preliminary phase of the proceedings (see Lungowe 2017, para. 86 citing Coulson J, and para. 90). Instead, it recognized that while the case might not be open-and-shut at this stage, evidence may become available at a later stage to support the claimants’ assertions.
The Okpabi appeals decision is disappointing for several reasons. First, assessing “proximity” according to the standards set by the Court of Appeals essentially rewards corporate groups whose parent companies do not get actively involved with their subsidiaries’ operations. Even when the parent is instrumental in creating operational standards across the entire group, that would not be sufficient for it to incur a duty of care; whereas more hands-on involvement would. This creates perverse incentives for parent companies not to improve the environmental, security and health and safety standards of specific subsidiaries, lest they are held liable when harm occurs later. It also punishes companies that do try to be more responsible. It is a strange movement in times when transnational corporations are encouraged to take due diligence with regard to the human rights and environmental risks of their operations.
Second, it could be argued that the Court of Appeals’ approach to the proximity standard requires the plaintiffs to have a “winnable” rather than an “arguable” case. Earlier cases required that the plaintiffs’ claim against the parent was more than hypothetical. Simon LJ’s examination of the claimants’ arguments in contrast seems to suggest that a virtual ‘smoking gun’ was necessary to make the claim arguable. That “smoking gun” could be a document that showed that RDS had indeed actively intervened in SPDC rather than documents showing its capacity to do so. It is questionable whether this is appropriate at the jurisdiction stage of the case, or if this inches close to the “mini-trials” the Lungowe court warned of.
Third, this early incursion into the merits puts plaintiffs at a serious disadvantage with regard to producing evidence. They cannot rely on disclosure rules in this phase of the proceedings, which is arguably instrumental for producing the specific evidence required to argue the type of direct involvement required by the Court’s high standard for proximity. Instead they must build their case on public documents, supplemented with more general expert witness statements. Those can however be easily dismissed as irrelevant to the specific case, as indeed happened in Okpabi. On the other hand, defendants do have all access to those relevant documents, which they can use to their benefit. The Okpabi court’s approach may thus lead to serious equality of arms issues.
A better approach in my view would be the one advocated by Lord Justice Sales in his separate opinion. This would “merely” require that the claimants demonstrate that their case was “more than speculative” (para. 136). The documents discussed by Simon LJ, demonstrating the general control of RDS over the group and its operations would be sufficient to satisfy that test. While they might not be sufficient to eventually win the case on the merits, they provided a substantive context that rendered the claim more than speculative. The evidence could be strengthened by later evidence following disclosure on the argument that RDS also exercised specific control sufficient to satisfy the proximity requirement (see e.g. paras. 161 and 171). Unfortunately, Sales LJ was not joined by the third judge Lord Chancellor Vos.
Perhaps the most important point, however, was made by Sales LJ in his conclusions (para. 172-xi). RDS sought to control certain activities and their accompanying risks for its own interests, which are not inconsequential in terms of financial gain. Now that these activities have resulted in significant harm to others, it seems strange not to address the actor that was in a prime position to prevent those harms. In that context, it seems hardly appropriate to be overly concerned with how bad it would be for the parent company to be under a duty of care for all its subsidiaries’ operations (see para. 206). As the claimants have opted to take the case to the UK Supreme Court, it can only be hoped that some of the deficiencies in the Okpabi appeals decision are remedied later. If Okpabi is adopted as the right approach for assessing a ‘good arguable case’ for a duty of care, the prospects for foreign direct liability cases in the United Kingdom may be in serious jeopardy.
The Business, Human Rights and the Environment Research Group at the University of Greenwich (BHRE), led by Dr Olga Martin-Ortega, and of which I am an associate member, answered the call for inputs on the Draft Guidelines on Human Rights and Environment, prepared by the UN Special Rapporteur on Human Rights and the Environment. Dr Martin-Ortega and myself were the main authors of the submission, with input from Dr. Opi Outhwaite and Dr. Daniel Aguirre.
We welcome the Draft Guidelines on Human Rights and the Environment (hereinafter Draft Guidelines) and highly regard the work of the UN Special Rapporteur on the issue of human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment. This submission aims to support this work and provide further insights to help ground it into current international law and policy developments. Our recommendations seek to frame the Draft Guidelines within the current developments regarding business and human rights, environmental rights, children’s rights and international criminal justice.
International human rights law and environmental law have advanced greatly, both substantively and procedurally, to protect the rights of those affected by environmental damage and guarantee the enjoyment of a safe, clean, healthy and sustainable environment. These advancements have both widened the scope of State obligations and increased the responsibilities of third parties, in particular corporations, towards human rights and the environment.
In this regard, we believe it is important that the Draft Guidelines further reflect these advancements and more decisively highlight the role of the private sector in harming human rights and the environment, and addressing such harms. The harmonisation of language is particularly important in order to consolidate increasing State human rights obligations and efforts to hold corporations accountable for the impact of their actions and business relations. This is why this submission recommends the Draft Guidelines include some of the terms and concepts which are today consolidated elements of the business and human rights scholarship and practice.
It is important that the Draft Guidelines builds on other international legal instruments which are today widely accepted by the international community, including States, Intergovernmental Organisations, NGOs and corporations themselves. These include the Convention on the Rights of the Child (1990); the Aarhus Convention on Access to Information, Public Participation and Decision-Making and Access to Justice in Environmental Matters (1998), the UN Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law (2005); UN Guiding Principles on Business and Human Rights (2011), OEDC Guidelines on Multinational Enterprises (2011), the UNICEF-Save the Children-Global Compact Children Rights and Business Principles (2012); the IFC Performance Standards on Environmental and Social Sustainability (2012); the World Bank Environmental and Social Safeguard Policies (2017) and the Policy Paper of the International Criminal Court Office of the Prosecutor on Case Selection and Prioritisation (2016), as well as the work of the UN Working Group on Business and Human Rights, and previous reports from the Special Rapporteur himself.
Most of the violations of human rights related to harm to the environment are directly connected with corporate activity. It is the private sector which produces the highest volume of pollution and harmful activity which has a direct impact on the full enjoyment of human rights. The State duty to protect human rights against third party action is long established in international human rights, and has been further consolidated since the publication of the UN Guiding Principles on Business and Human Rights and States National Action Plans to implement them. Considering this, we recommend that the Draft Guidelines includes a reference to the private sector, specifically corporations, in the General Obligations section, in order to reinforce this existing duty and harmonise language with current developments in international law.
It is widely accepted today that business have a responsibility, which is no longer exclusively a social expectation, to respect human rights and conduct themselves with due diligence in the development of their commercial activities and partnerships. Pillar II of the UN Guiding Principles on Business and Human Rights establishes the basic elements of this responsibility, which has been consolidated and further developed by other intergovernmental instruments, such as the OECD Guidelines on Multinational Enterprises, the EU Corporate Social Responsibility Strategy, National Action Plans on the implementation of the UN Guiding Principles on Business and Human Rights and prolific corporate statements and practice. Considering this, we recommend adding a fourth General Obligation establishing that every corporation has the responsibility to respect human rights from harm produced by environmental damage.
The right to remedy and its correlating State duty to provide access to justice are well established both in international human rights law and environmental law. The Aarhus Convention on Access to Information, Public Participation and Decision-Making and Access to Justice in Environmental Matters does so in relation to public decision-making and it is the core of Pillar III of the UN Guiding Principles on Business and Human Rights, obliging States to guarantee an effective remedy and corporations to participate in remediation efforts. State obligations to provide remedy and reparations for victims are further reinforced in the case of gross violations of human rights and serious violations of international humanitarian law, by UN Basic Principles and Guidelines on the Right to a Remedy and Reparation for Victims of Gross Violations of International Human Rights Law and Serious Violations of International Humanitarian Law. The Draft Guidelines should build on the work of the Special Rapporteur himself, who in 2013 extensively elaborated on the matter (A/HRC/28/61, 3 February 2015, p. 12 et seq.). As well established, victims’ lack of resources and the inequality of arms brought by it is one of the most prevalent obstacles to access to justice. We suggest the Draft Guidelines add a strong reference to Guideline 8 in the part on Procedural Obligations to States obligation to guarantee access to justice, by providing the adequate procedures, resources and support to victims of environmental and human rights harm.
As the Draft Guidelines highlight, children are particularly vulnerable to environmental harm. The Convention on the Rights of the Child recognizes the right of children to a healthy and safe environment, as one of the elements to ensuring the healthy development of each child. The UNICEF-Save the Children- Global Compact Principles on Business and Children establish specifically that “All business should…[r]espect and support children’s rights in relation to the environment and to land acquisition and use” (Principle 7). When developing the corporate responsibility to respect in relation to children’s rights the Principles elaborate respecting children’s rights in relationship to the environment as: “i. When planning and implementing environmental and resource-use strategies, ensure that business operations do not adversely affect children’s rights, including through damage to the environment or reducing access to natural resources; ii. Ensure the rights of children, their families and communities are addressed in contingency plans and remediation for environmental and health damage from business operations, including accidents”. Therefore, we suggest a reference to the duty of the State to regulate business to specifically respect children’s rights and remedy harm (in Guideline 14) as well as a direct reference to the corporate responsibility to respect children’s rights in relation to the environment and contribute to harm remediation (by adding a further Guideline).
During situations of armed conflict, violence in weak governance zones and mass and systematic abuses of human rights, States have a heightened duty to protect human rights. The UN Guiding Principles on Business and Human Rights further develop the obligations of States to engage with business to identify, prevent and mitigate the human rights-related risks of their activities and business relationships in these environments as well as provide adequate assistance to business enterprises to assess and address the heightened risks of abuses; deny access to public support and services for a business enterprise that is involved with gross human rights abuses and refuses to cooperate in addressing the situation; and ensure that their current policies, legislation, regulations and enforcement measures are effective in addressing the risk of business involvement in gross human rights abuses (UN GP 7). This applies too to violations resulting from environmental harm. As argued above, the duty of the State to provide remedy, access to justice and reparations to victims in these situations is well established in international human rights law. Furthermore, the ICC Prosecutor, in her recent Policy Paper on Case Selection and Prioritisation (on this, please see a short blog post here and a more detailed article here), has highlighted how in order to consider the cases which merit prioritisation “the impact of the crimes may be assessed in light of, inter alia, the increased vulnerability of victims, the terror subsequently instilled, or the social, economic and environmental damage inflicted on the affected communities” (para. 41). In this context, the Office of the Prosecutor will give particular consideration to prosecuting crimes under the Rome Statute (war crimes, crimes against humanity and genocide) that are committed among others by means of, or that result in, inter alia, the destruction of the environment (ibid). Following these considerations, we recommend that the Draft Guidelines contain a reference to persons who are vulnerable due to the context in which the violations take place including armed conflict, weak governance and mass and systematic violence (Guideline 13). The obligations which the State is subject to in this case should include ensuring that the normative framework criminalises the actions which amount to international crimes in international criminal law (Guideline 14).
· Reports from the UN Working Group on Business and Human Rights and the Special Rapporteur himself.
b. Including a reference to the private sector, specifically corporations, in the General Obligations section, in order to reinforce this existing duty and harmonise language with current developments in international law.
c. Adding a fourth General Obligation establishing that every corporation has the responsibility to respect human rights from harm produced by environmental damage.
d. Adding add a strong reference to Guideline 8, Procedural Obligations, to States obligation to guarantee access to justice, by providing the adequate procedures, resources and support to victims of environmental and human rights harm.
e. Inserting a reference in Guideline 14 to the State duty to regulate business to specifically respect children’s rights and remedy harm.
f. Adding a further Guideline (Guideline 16) which contains a direct reference to the corporate responsibility to respect children’s rights in relation to the environment and contribute to harm remediation.
g. Adding a reference to persons who are vulnerable due to the context in which the violations take place including armed conflict, weak governance and mass and systematic violence to Guideline 13.
h. Adding a reference to the obligations of States to ensuring that the normative framework criminalises the actions which amount to international crimes in international criminal law to Guideline 14.
We reiterate our support to the Draft Guidelines and our willingness to further ground them in international law developments for them to become an instrumental tool for the protection of human rights and the environment. We look forward to the final version of the Draft Guidelines.

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