State duty to protect
Pillar 1
Host/home states
The extraterritoriality debate
• Territorial state (host state – GP1)
• Extraterritorial issues (home state to act)
o GP 2
o GP 7 for conflict zones and gross abuses
Home state
GP 2: ‘States should set out clearly the expectation that all business
enterprises domiciled in their territory and/or jurisdiction respect human
rights throughout their operations.’
‘At present States are not generally required under international human
rights law to regulate the extraterritorial activities of businesses domiciled
in their territory and/or jurisdiction.
Nor are they generally prohibited from doing so, provided there is a
recognized jurisdictional basis.
Within these parameters some human rights treaty bodies
recommend that home States take steps to prevent abuse abroad by
business enterprises within their jurisdiction.’ GP 2 Commentary
• ‘domestic measures with extraterritorial implications’ (-> target parent
company with transparency laws and soft law, and contract
requirements (state involved through ‘state-business nexus’)
• ‘direct extraterritorial legislation and enforcement’ (-> criminal law)
Various capacities of states
The State as
• Regulator/Policymaker (GP 3)
• Economic actor (GPs 4-6) (‘state-business nexus’)
o Owner: State owned enterprises (SOEs) (GP 4)
o Credit/guarantees provider: export credit agencies, investment
insurance & guarantee agencies (GP 4)
o Privatization: public services are privatized (GP 5)
o Buyer: public procurement (GP 6)
• ‘Complex’ actor (GP 8-10) (‘policy coherence’)
o Within the state apparatus: Ministries, agencies and gov institutions, at
national/local level (GP 8) - > ‘vertical & horizontal domestic policy coherence
o In international negotiations (trade, investment) - > maintain ‘domestic
policy space’ (GP 9)
o As member of business IGOs -> not abdicate HR obligations (GP 10)
• Advisor in complex situations (conflict zones) (GP 7)
Ensuring policy coherence
Need for ‘vertical and horizontal domestic policy coherence’
• Vertical policy coherence – policies & laws to actually
implement IHRL obligations.
• Horizontal policy coherence – ‘supporting and equipping
departments and agencies, at both the national and
subnational levels, that shape business practices – including
those responsible for corporate law and securities regulation,
investment, export credit and insurance, trade and labour – to
be informed of and act in a manner compatible with the
Governments’ human rights obligations.’
GP 8 Commentary
Access to remedies
Remediation in the UNGPs
Pillar 2: Remediation as part of RtR (GP 22) – 2 functions
• Actual impacts are made good for rightholders
• Information produced by grievance mechanisms feeds into the
HR DD processes to make it more effective (identify impacts)
Pillar 3: Access to remedy - State-based and non-state based
remedial mechanisms
1. State-based
– Judicial
– Non-judicial
2. Non-State-based
– Grievance mechanisms in individual companies
– Complaint mechanisms in industry or multistakeholder schemes
Remediation (Pillar 2)
P 22. Where business enterprises identify
that they have caused or contributed to
adverse impacts, they should provide for or
cooperate in their remediation through
legitimate processes.
Non- judicial remedies
Effectiveness criteria for non-judicial grievance
mechanisms
P 31. In order to ensure their effectiveness, non-judicial grievance
mechanisms, both State-based and non-State-based, should be:
(a) Legitimate (enabling trust, fair processes)
(b) Accessible (being known, facilitating access to
marginalized/vulnerable stakeholders
(c) Predictable (clear procedure, timeframe, outcomes available,
monitoring of implementation)
(d) Equitable (access to information, expertise)
(e) Transparent (parties informed about its progress)
(f) Rights-compatible (international human rights)
(g) A source of continuous learning (to improve the mechanism and
prevent future grievances and harms)
National Contact Points (NCP)
OECD Guidelines for Multinational Enterprises
(1976/2011)
Structures of NCPs
• 21 NCPs are single government departments;
• 7 NCPs are multiple government departments;
• 9 NCPs are tripartite;
• 2 NCPs are quadripartite.
(2008, numbers slightly changed for 2014)
NCPs’ functions and roles
Functions
• Investigate complaints (-> mediation/conciliation)
• regular meetings with business and civil society
• consult on an informal basis
• advise committees/permanent bodies
Roles
• forward looking - promote the Guidelines
• backward, compliance-oriented – deal with specific instances
of non-compliance
National Human Rights Institutions
Mandate of NHRIs: two main responsibilities
(1) human rights promotion, including creating a
national culture of human rights where
tolerance, equality and mutual respect thrive
(2) human rights protection, including helping to
identify and investigate human rights abuses.
Paris Principles (1991)
Business And Human Rights - A Guidebook For National Human Rights
Institutions, International Coordinating Committee, 2013
Judicial remedies
• Law of negligence
• Alien Tort Claims Act
Law of negligence
- Tort law –
- Delictual liability -
Law of negligence (common law)
Liability in negligence law if
1. Duty of care – and its breach (by not meeting the standard of the 'reasonable person‘)
2. Causality
3. Harm (damage)
Duty of care exists if
1. Foreseeability (risk of damage should be foreseeable)
2. Proximity (between claimant and defendant)
3. Fairness
‘The three-stage test in … Caparo Industries plc v Dickman [1990] 2 AC 605 for
determining whether a situation gives rise to a duty of care. The three ingredients
are that the damage should be foreseeable, "that there should exist between the
party owing the duty and the party to whom it is owed a relationship characterised
by the law as one of "proximity" or "neighbourhood" and that the situation should
be one in which the court considers it fair, just and reasonable that the law should
impose a duty of a given scope upon the one party for the benefit of the other."’
(Chandler v Cape, 2013)
Law of negligence (common law)
UK’s tort of negligence: “take care not to injure
your neighbours”:
“You must take reasonable care to avoid acts or
omissions which you can reasonably foresee
would be likely to injure your neighbour …
(persons so closely and directly affected by my
act that I ought reasonably to have them in
contemplation...)”
Law of negligence (civil law)
French civil code:
“every act whatever ... which causes damage to
another obliges him by whose fault the damage
occurred to repair it.”
(Art. 1382 civil code)
UK transnational litigation
• Thor - mercury poisoning of
workers in South Africa (1999)
• Cape PLC – asbestos-related
disease of miners in South Africa
(2000)
• Rio Tinto - throat cancer of worker
in uranium mine in Namibia (1996)
Lubbe v Cape plc (UK)
• 7500 South African claimants
• Issue: asbestos poisoning of miners
• Claim: parent company controlled operations of
subsidiary and had knowledge of risks -> duty of
care to take steps to prevent exposure to dust
• 2001: settlement of 21 mil pounds (not
respected)
• 2003: new settlement of 10.5 mil pounds
settlement
Ngcobo v Thor Chemicals (UK)
• negligent design, transfer, set-up, operation,
supervision and monitoring of intrinsically
hazardous process
• negligent acts and omissions (i.e. failure to take
steps to protect the South African workers
against the foreseeable risk of mercury
poisoning).
Thor case (UK)
The judge on first day: ‘What are these South African
claimants doing in my court?’
Thor was the first successful ‘forum non conveniens’ in
a UK court.
Thor to pay £1.5 million in damages
Jock McCulloch, ‘Beating the odds’, Review of African Political Economy, 2005
Key issue
“The key issue raised is whether an
MNC parent company owes a legal
duty of care to those injured by its
overseas operations”
Richard Meeran (plaintiffs’ attorney)
Obstacles to transnational litigation
Obstacles to holding parent company liable (see also GP 26)
• Limited liability principle (hard to prove own fault of parent
company as causing the harm)
• Foreign policy implications (both host and home governments may
object) (see ATCA)
• Principle that the loser of a case pays both their own and the
winner’s costs (in Europe)
• Cases are expensive and require special legal expertise due to
complexity
Unintended consequences of transnational litigation:
• Disincentive for companies to be transparent on CSR (Kasky v Nike
litigation in California)
• Litigation may act as a barrier to investment in countries with poor
human rights records
Alien Tort Claims Act (ATCA)
United States (1789)
Alien Tort Claims Act (ATCA)
‘The district courts shall have original
jurisdiction of any civil action by an alien
for a tort only, committed in violation of
the law of nations or a treaty of the
United States.’
ATCA cases
Approximativekly 50 corporations sued so far (2007)
• Coca-Cola,
• Exxon-Mobil,
• Gap,
• Levis Strauss,
• Nike,
• Pfizer,
• Rio Tinto,
• Shell,
• Siemens,
• Del Monte,
• Dole,
• BHP, Chevron,
• Unocal
Then…
Offences against the law of nations
(18th century)
1. Piracy
2. Infringements of the rights of
ambassadors
3. Violation of safe conducts
... Now
ATCA - a short list
• genocide,
• extra-judicial killing,
• torture,
• war crimes,
• slavery,
• extreme arbitrary detention
What human rights under ATCA?
“Actionable violations of international law must be of a
norm that is specific, universal, and obligatory”. In re
Estate of Marcos Human Rights Litigation (1994)
‘We are persuaded that federal courts should not
recognize private claims under federal common law
for violations of any international law norm with less
definite content and acceptance among civilized
nations than the historical paradigms familiar when
§1350 was enacted.’ Sosa v. Alvarez (2004)
Sosa v. Alvarez (2004)
’judicial power should be exercised on the
understanding that the door is still ajar
subject to vigilant doorkeeping, and thus
open to a narrow class of international
norms today.’
ATCA landmarks
• 1980 Filartiga v. Pena-Irala (torture committed by
police in Paraguay)
• 1995 Kadic v. Karadzic (genocide and war crimes)
(egregious human rights violations committed by
private actors)
• 2002 Doe v. Unocal Corp (company aiding and
abetting murder, rape, forced labour)
• 2004 Sosa v. Alvarez-Machain (scope of ATCA)
• 2013 Kiobel v. Shell (extraterritorial application
of US law (ATCA))
Filartiga v. Pena-Irala (1980)
intentional torture committed under the guise of
official authority violates customary international
norms of human rights, irrespective of the nationality
of the parties.
Kadic v. Karadzic (1995)
exceptionally egregious human rights violations, including
genocide, war crimes, and slave trading, are exempt from the
state action requirement regardless of whether the violation
was committed by private or state actors.
Doe v. Unocal Corp (2002)
The court allowed the case to go to trial and for the plaintiff to prove that
Unocal aided and abetted murder, rape, and forced labor committed by
the Burmese government and militia
Unocal case (1996-2005)
Plaintiffs alleged that Unocal knew or
reasonably should have known that the
military, whom Unocal had contracted to
provide security for the building of the
pipeline, would engage in such practices ->
complicity
Doe v. Unocal Corp (2002)
‘Unocal knew that the military had a record of
committing human rights abuses; that the Project
hired the military to provide security for the Project, a
military that forced villagers to work and entire
villages to relocate for the benefit of the Project; that
the military, while forcing villagers to work and
relocate, committed numerous acts of violence; and
that Unocal knew or should have known that the
military did commit, was committing, and would
continue to commit these tortious acts.’
(Federal District Court)
Complicity - Unocal case
‘Aiding and abetting’ the perpetuators:
‘a certain level of participation and knowledge’,
that is, “knowing practical assistance or
encouragement that has a substantial effect on
the perpetration of the crime”
Elements of complicty
• Conduct (actus reus): accomplice must
contribute in a material (‘direct and substantial’)
way
• Knowledge (mens rea): element of intent
and/or knowledge (must have intended or have
been reckless as to its commission)
• Effect: substantial effect points to causality
Mens rea (in Unocal case, 2002)…
‘knowledge’
Ninth Circuit Court of Appeals (Unocal) applied the
Furundzija standard on mens rea:
“it is not necessary for the accomplice to share
the mens rea of the perpetrator, in the sense
of positive intention to commit the crime.” If
the accused “is aware that one of a number of
crimes will probably be committed, and one of
those crimes is in fact committed, he has
intended to facilitate the commission of that
crime, and is guilty as an aider and abettor.”
… and mens rea (in Talisman case, 2009)
‘intent’
Second Circuit court: plaintiff proves that
defendant acted with the purpose of
facilitating the crime; a defendant's mere
knowledge that its conduct has or will
facilitate such wrongdoing is insufficient.
Presbyterian Church of Sudan v. Talisman Energy (2009)
End of Unocal case
• Case was settled on the eve of the scheduled
en banc rehearing (2004)
• Unknown amount – details of settlement not
disclosed
Wiwa v. Shell (2009)
Aiding and abetting and conspiracy of Royal Dutch Shell and its
Nigerian affiliate with Nigerian government and security
forces
Aim: to detain, torture, and execute members of the Ogoni
activists
Settlement of $15.5 -> compensate the plaintiffs, establish a
trust for the benefit of Ogonis and cover legal costs (2009)
Kiobel v. Shell (2013)
Shell’s legal strategy: to challenge the very applicability of ATCA to 1 – HR abuses
committed abroad, 2 – to companies, and to 3 – accomplices.
Main Questions in the case:
• Does ATCA, which refers to international law (law of
nations), apply to companies (artificial persons), or to
natural persons only?
• Does ATCA applies to HR abuses committed abroad, in
other jurisdictions (or only within the US and high seas)?
• Can ACTA find an accomplice (aiding and abetting) in a
crime liable or only the principal offender?
Ruggie’s comments to Shell’s legal
strategy
‘But what would the corporate responsibility to respect human rights involve in a
case like Kiobel? … Should the corporate responsibility to respect human rights remain
entirely divorced from litigation strategy and tactics, particularly where the company has
choices about the grounds on which to defend itself? …
Would the commitment to socially responsible conduct include an obligation by the
company to instruct its attorneys to avoid such far-reaching consequences where that is
possible?
And what about the responsibilities of the company’s legal representatives? Would
they encompass laying out for their client the entire range of risks entailed by the litigation
strategy and tactics, including concern for their client’s commitments, reputation, and the
collateral damage to a wide range of third parties?
I don’t know what the correct answers to these questions are, but because the
stakes are so high Kiobel may be the ideal case for starting the conversation.
What I do know is that if, on top of the many other reputational and legal challenges
it has faced over the years, Shell also ends up being held responsible for so radically
constricting the ATS, its road back to the corporate social responsibility fold will be long and
hard.’ (Ruggie, 2012)
Kiobel v. Shell (2013)
Court’s decision
• presumption against extraterritorial application of ATCA
• This was the answer to the question posed by the Court:
‘Whether and under what circumstances the Alien Tort
Statute, 28 U.S.C. § 1350, allows courts to recognize a
cause of action for violations of the law of nations
occurring within the territory of a sovereign other than
the United States.’
• Follow-up: uncertain at this stage but much more
difficult to seek justice in the US when HR are infringed
outside the US and not by US companies.
Corporate liability & state sovereignty
South African government: case interferes with the
policy embodied by its Truth and Reconciliation
Commission, which “deliberately avoided a ‘victors’
justice’ approach to the crimes of apartheid and
chose instead one based on confession and
absolution, informed by the principles of
reconciliation, reconstruction, reparation and
goodwill.”
South African Apartheid Litigation (2002)
Why litigate in the US
•
•
•
•
•
Contingency fee representation
Many public interest lawyers in US
Defendants bear their own costs
Higher damages
Plaintiff-friendly discovery rules
Jennifer A. Zerk, Multinationals and corporate social responsibility, 2006
Complicity in Ruggie’s reports (1)
Ruggie: ‘Respecting’ human rights includes avoiding
complicity
Responsibility for third parties’ misconduct: ‘Complicity
refers to indirect involvement by companies in
human rights abuses - where the actual harm is
committed by another party, including governments
and non-State actors.’
Concept has legal and non-legal pedigrees (has become
an important benchmark for social actors) (2008)
Complicity outside Ruggie’s work (2)
Accomplice (aider and abettor) knowingly provides practical
assistance or encouragement that has a substantial effect
on the commission of a crime. (US Alien Tort Claims Act, int.
criminal law)
‘A company is complicit in human rights abuses if it
authorises, tolerates, or knowingly ignores human rights
abuses committed by an entity associated with it, or if
the company knowingly provides practical assistance or
encouragement that has a substantial effect on the
perpetration of human rights abuse.’ (Global Compact)
Complicity in early CSR writings (3)
Categorization in CSR literature
1. Direct complicity
2. Indirect (beneficial) complicity
3. Silent complicity
(Clapham and Jerbi, Categories of Corporate Complicity in Human
Rights Abuses (2001); also used by Global Compact and ISO26000)