It is a pleasure to welcome Dr Evelyne Schmid as a guest poster on ‘Rights as Usual’. Evelyne is a lecturer at Bangor University and is writing a book on the overlap between socio-economic and cultural rights violations and international criminal law. This post is hers.
The Hague District Court recently issued a ruling on Shell’s operations in Nigeria. Mr. Akpan, a Nigerian farmer affected by oil spills, and Milieudefensie, a Dutch NGO, brought a number of civil proceedings against Royal Dutch Shell (RDS) and its Nigerian subsidiary Shell Petroleum Development Company of Nigeria (SPDC). In a class action, the plaintiffs alleged that Shell damaged the farmers’ lands and fishponds and interfered with the local population’s livelihoods. On 30 January 2013, the Hague District Court found that SPDC was liable to pay compensation for loss resulting from two specific oil spills from an abandoned wellhead. The Court found that SPDC failed to take appropriate preventative and remedial action against spills from pipelines and was liable for resulting damages.
At the same time, the Court dismissed many other claims. Based on the evidence, the Dutch Court concluded that it was at least plausible that the oil spills might have been caused by sabotage. Applying Nigerian tort law, the Court concluded that no general duty of care could be imposed on SPDC to prevent other parties from suffering damage as a result of the practices of third parties (i.e. the saboteurs). The Dutch Court also concluded that ‘parent companies like RDS in general have no obligation under Nigerian law to prevent their (sub-)subsidiaries such as SPDC from inflicting damage on others through their business operations’ (para. 4.26). There would have had to be exceptional grounds to impose a duty of care on the parent company domiciled in the Netherlands. Not finding any such exceptional grounds, the Court dismissed the claims against Royal Dutch Shell.
A lot of media attention (see for instance here or here) has focused on the outcome of the case and those claims that the Court dismissed. From a legal point of view, the Court’s reasoning is interesting for at least three other reasons:
Notwithstanding the ultimate outcome against the parent company, it is crucial to note that jurisdiction was upheld for both entities, the parent company (RDS) and the Nigerian subsidiary (SPDC). This is remarkable. After all, it was ‘solely’ a matter of Nigerian domestic tort law that that the plaintiffs didn’t succeed on the merits against RDS and no duty of care was imposed on the RDS. In other words, had Nigerian tort law been different on this point of law, the parent company would have been in more trouble.
To justify its groundbreaking stance on jurisdiction, the Hague District Court explained that it was ‘foreseeable’ for RDS and SPDC ‘that they might be summoned in the Netherlands in connection with the alleged liability for the oil spills’ (para. 4.5). This should be some food for thought for those home state policymakers who continue to believe that they have no reason to regulate the extraterritorial behaviour of companies registered in their jurisdiction. If it is foreseeable that Dutch domestic courts might establish jurisdiction over Dutch parent companies and their foreign subsidiaries, then surely other domestic courts might potentially do the same.
The Hague District Court’s explanations on the establishment of jurisdiction are especially relevant for member states of the European Union given that the Court discussed a ruling of the European Court of Justice (ECJ) and the Brussels Regulation on the allocation of jurisdiction. Painer (C-145/10) dealt with the event of a difference in the basis of claims initiated against various defendants. The ECJ in 2011 found that what matters is that the defendants ‘could foresee that they might be sued in the Member State where at least one of them was domiciled’ (Painer, para. 81). In light of this ruling and the Dutch Court’s stance in Akpan, the trend to summon parent companies of multinationals together with their foreign (sub-)subsidiaries in the country of the parent company may well continue and rely on a solid basis in European law.
2. Disclosure: Procedure is Substance
On a cautionary note, the case also illustrates the importance of the role of domestic law – both substantively and procedurally. It was a combination of the Dutch Code of Civil Procedure and Nigerian tort law which resulted in the outcome of the decision – not international law. This raises issues for many, if not most, domestic legal systems. In particular, restrictive procedural rules on disclosure of company-held documents can play a crucial role in hindering the success of civil proceedings against companies alleged of causing damages. In the present case, the plaintiffs state that they would have been able to support all of their claims if Shell had to disclose key documents with data on oil spills. Under the Dutch Code of Civil Procedure (Art. 21 and 22), it is difficult to obtain the disclosure of key company documents and claimants are generally obliged to adduce all facts. Similar rules exist in many other European jurisdictions. Procedure then easily becomes substance.
3. Beyond Local Interests
On a side note, another notable legal aspect of the judgment concerns the Hague District Court’s rebuttal of what seems an almost disingenuous argument by the corporate defendants. The defendants argued that the Dutch NGO had no standing to bring a class action in the case because the proceedings of the Nigerian farmer would ‘involve a purely local interest’.
The Court was quick to refute this challenge. The three judges maintained that ‘a number of Milieudefensie et al.’s claims clearly rise above the individual interest of (only) Akpan, because remediating the soil, cleaning up the fish ponds, purifying the water sources and preparing an adequate contingency plan for future responses to oil spills (…) will benefit not only Akpan but the rest of the community and the environment (…) as well’ (para. 4.12). This statement might well be useful for future human rights work or litigation in class actions and sends a strong signal that courts recognise the broader human rights dimensions of such cases.
At the end of the judgment, the Dutch Court also made somewhat disappointing comments about human rights law. In a single paragraph, the Court said that the Nigerian Shell subsidiary can’t have violated human rights law (approached exclusively under Nigerian domestic law) because the case deals with negligent omissions rather than active conduct (para. 4.56). The Court failed to provide any analysis of international human rights law to support this idea and the statement would raise many fundamental legal debates about human rights law and non-state actors not addressed in the judgment.
That said, Akpan v Royal Dutch Shell/Shell Nigeria is a highly significant case for future litigation and it is certainly worth staying tuned for the appeal. The English translation of the full text of the judgment is available here.
Dr Evelyne Schmid, Lecturer, Bangor University (UK).
My former employer, the Irish Centre for Human Rights (National University of Ireland, Galway), will hold its annual International Criminal Court (ICC) Summer School on 17-21 June 2013 and, just like last year, I will give a couple of lectures. The Summer School gives participants the opportunity to attend a series of intensive lectures over five days. The lectures are given by leading academics on the subject and by legal professionals working at the International Criminal Court. The Summer School is attended by legal professionals, academics, postgraduate students and NGO representatives.
Participants are provided with a detailed working knowledge of the establishment of the Court, its structure and operations, and the applicable law. Participants are also given the opportunity to network with the speakers throughout the week. Lectures also speak to related issues in international criminal law, including: genocide, war crimes, crimes against humanity, the crime of aggression, universal jurisdiction, immunities, the role of victims, and corporate liability.
Since corporations do not fall under the ICC’s jurisdiction (limited to individuals under Article 23 of the ICC Statute ), I will be lecturing on wider issues of “Corporate Liability for International Crimes“.
This year’s list of speakers:
Professor William Schabas- Irish Centre for Human Rights, School of Law, NUI Galway and School of Law, Middlesex University
Mr. Fabrizio Guariglia- Head of Appeals Division of the Office of the Prosecutor at the International Criminal Court
Dr. Mohamed M. El Zeidy- Legal Officer for Pre-Trial Chamber II at the International Criminal Court
Dr. Rod Rastan- Legal Adviser at the Office of the Prosecutor at the International Criminal Court
Professor Siobhan Mullally- Professor of Law, University College Cork
Professor Ray Murphy- Irish Centre for Human Rights, School of Law, NUI Galway
Dr. Noelle Higgins- Irish Centre for Human Rights, School of Law, NUI Galway
Dr. Nadia Bernaz- Senior Lecturer, School of Law, Middlesex University
Dr. Annyssa Bellal- Graduate Institute Geneva
Mr. John McManus- Counsel /Avocat, Crimes Against Humanity and War Crimes Section Canadian Department of Justice
Professor Megan A. Fairlie- Professor of Law, Florida International University
Follow them on Facebook.
Last night I had the chance to attend a lecture by Ingrid Gubbay, European Head of Human Rights and Environmental Law at Hausfeld & Co LLP, at the Institute of Advanced Legal Studies in London. She talked about the Khulumani litigation before US Courts. The Khulumani litigation is among the handful of cases brought under the US Alien Tort Statute against corporations (prominent manufacturers and banks) that have “done business” with rogue regimes, in this case the South African regime at the time of Apartheid.
In her dense lecture she highlighted some of the key difficulties associated with this type of cases from forum non conveniens to the act of state doctrine. She also criticized the “purpose test” established in the Presbyterian Church of Sudan v. Talisman Energy, Inc ruling, according to which a company is only liable for aiding and abetting violations of international law where it has provided substantial assistance with the specific aim of furthering the violation. In Talisman the application of this test led to the conclusion that by letting the Sudanese regime use their airstrips the company had not aided and abetted the international crimes of the regime because they did not share the intent of furthering the crimes. She instead favoured a looser test, known as the “knowledge” test, whereby aiding and abetting is established if the company knew or should have known about the violations, without necessarily aiming to furthering the crimes.
She also rejected the idea often put forward that the fact that international criminal tribunals have not extended their jurisdiction to corporations shows that corporate liability for international crimes does not exist under international law. As she rightly pointed out, international tribunals are the products of political compromise, whether they were created through a UN Security Council Resolution, as the International Criminal Tribunals for the Former Yugoslavia and for Rwanda, or through an international treaty, as the International Criminal Court. Their jurisdiction reflects their mode of creation. The fact that these institutions’ jurisdiction is limited to individual criminal liability and does not extent to corporate liability “says nothing about the existence or non existence of a norm”.
Talking specifically about the liability of the funders of international crimes, such as banks and other financial institutions, she recognised that “the legal theory about financing human rights violations is still in its early days.” Indeed, there are many unresolved questions in this area, including how to distinguish between “doing business” and “being complicit”, and whether the purpose for which the loan was granted should make a difference. It seems clear that simply “doing business” will not entail liability, as “international law does not impose liability for declining to boycott a pariah regime”. Moreover, as she emphasized, “aiding a criminal is not the same as aiding and abetting their crimes”. That said, we know that without funds international crimes cannot be committed. We also know that the law on the financing of terrorism is much more advanced than the law on the financing of international crimes, and that, as Ingrid pointed out, “the fear of a court case is a much more powerful incentive to change than a set of voluntary principles”. I certainly share her opinion that all this calls for changes in the law.
Incidentally I am currently looking into these issues in a chapter on “Establishing Liability for Financial Complicity in International Crimes” which will be part of the forthcoming book Making Sovereign Financing & Human Rights Work (Hart Publishing) co-edited by Juan Pablo Bohoslavsky and Jernej Letnar Černič .
The European International Studies Association will hold a Young Researchers Workshop on 17 September 2013 in Warsaw.
The title of the workshop is “The State Duty to Protect from Business-Related Human Rights Violations: Tracking the Emergence, Diffusion and Impact of an International Norm”. More information can be found here.
You can apply by sending a 300-word abstract to the Convenor, Andreas Graf (firstname.lastname@example.org), by 15 March 2013.