Civil lawsuits against corporations could help prevent human rights abuses
Should corporations be held liable for their human rights violations that occur abroad? The short answer is yes. The long answer is a complex analysis of precedents and international law that looks at how other countries have successfully pushed their largest corporations to protect the most vulnerable populations across the globe.
Because of their size and scale of operation, multinational corporations wield phenomenal economic power, several ranking higher than many countries. When their subsidiaries commit human rights violations in countries with weak legal systems or inadequate human rights legislation, the victims are unable to obtain justice in their local courts.
And companies incorporated in countries where legal systems are robust are generally protected by rules preventing victims from bringing claims there.
To illustrate, in the U.S., the Alien Tort Statute permits an alien to bring a civil action in federal court for violation of international law or treaty of the United States, but requires the acts of the parent corporation to have a significant connection with the alleged violation committed abroad to establish jurisdiction.
The U.S. Supreme Court is now considering a case against Nestle USA and Cargill, in which six citizens of Mali claim that they were kidnapped as children, sold into slavery to cocoa plantations along the Ivory Coast, forced to work long hours with little food and without pay, and subjected to beatings and torture. In oral arguments last December their attorneys contended that these U.S.-based companies aided and abetted the human rights abuses as they continued to purchase the cocoa beans from these plantations even though they knew of the child slavery.
Under earlier cases, victims of human rights abuses committed abroad by subsidiaries of American corporations are generally denied access to remedies here. The Supreme Court held in a 2013 case that such a suit against a U.S. corporation must “touch and concern” the U.S. with “sufficient force to displace the presumption against extraterritoriality.” Previously, the Court had held that for the international law norm to be applied, it must meet the standard of being “specific, universal, and obligatory.”
In the present case, the companies claim that, as the injuries all allegedly occurred internationally, and the plaintiffs were injured by others abroad who were not directly affiliated with the companies, the suit should be dismissed. They also argue that the Court had ruled in 2018 that under Alien Tort Statute, foreign corporations could not be sued in U.S. courts and that domestic corporations should be treated alike.
Contrasted with the U.S. approach, several other countries, such as Australia, France, Switzerland, and the United Kingdom, have recently passed laws requiring corporations to identify actual and potential human rights violations by their companies and to develop prevention plans. Non-compliance may lead to legal liability and administrative penalties. These developments are undertaken to implement the 2011 United Nations Guiding Principles on Business and Human Rights. Under those guidelines, countries are duty-bound to protect against human rights abuses and are called upon to “set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations.”
The U.K. has passed the Modern Slavery Act, which requires that companies with over 36 million revenue must publish steps they are taking to ensure that human trafficking and slavery are not a part of their business or supply chain. In December 2018, Australia passed modern slavery legislation modeled after the U.K.’s Act.
France passed a law in March 2017 imposing a duty of care on companies to exercise vigilance to prevent violation of human rights and to allow remedies. Switzerland has proposed a similar law.
Under the U.N. Guidelines, corporations are responsible to protect human rights and to act “with due diligence to avoid infringing on the rights of others and to address adverse impacts with which they are involved.” They are to avoid causing or contributing to adverse human rights impacts through their own activities, to address such impacts when they occur, and seek “to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.” Corporations are required to have policies and processes in place that outline their commitment to human rights and a due diligence process that identifies, prevents, mitigates, and accounts for the corporation’s impact on human rights, and a process to provide remedies for any adverse impacts.
Equally important, there is a growing trend of nations’ courts recognizing corporate liability for human rights violations occurring abroad. In 2019, the U.K. Supreme Court permitted a lawsuit against a U.K. corporation and its subsidiary for causing toxic emissions from a mine in Zambia, reasoning that substantial justice may not be obtained in Zambian courts. A Dutch court in The Hague permitted a case against Dutch and U.K. parent companies and their Nigerian subsidiary by widows of activists executed in Nigeria, who alleged that they were accessories to the unlawful arrests, detentions, and execution of their husbands. One year ago, the Supreme Court of Canada held that Canadian corporations can be sued in civil actions for violations abroad of international human rights laws.
In view of the current trend of holding corporations liable for violations of human rights abroad, corporations are undertaking measures to prevent such violations, at long last. Although the U.S. is not yet on board, the Supreme Court’s allowing such liability in this case would be a promising first step.
Ved Nanda is a distinguished university professor and director of the Ved Nanda Center for International Law at the University of Denver Sturm College of Law. His column appears the last Sunday of each month and he welcomes comments at vnanda@law.du.edu.