Rights as Usual

It is a pleasure to welcome Marie Davoise  as a guest poster on “Rights as Usual”. Marie Davoise is an English-qualified solicitor specialising in international criminal law and business and human rights, with experience in private practice and at the International Criminal Court. She tweets about international law and human rights at @micawberist. This post is hers.

***********************************************************************

On 20 August 2019, the International Law Commission (“ILC”) published an advance copy of its 2019 Report to the UN General Assembly. The report contains texts and commentaries on various topics of international law. It will also be of interest to business and human rights (“BHR”) enthusiasts for its inclusion of BHR-related Draft Principles on Protection of the Environment in Relation to Armed Conflict.

Draft Principle 10 discusses the concept of corporate due diligence. It recommends that States take appropriate measures to ensure that corporations operating in or from their territories exercise due diligence with respect to the protection of the environment, including in relation to human health, in areas of armed conflict or in post-conflict situations. The due diligence described at Draft Principle 10 is identical in content to the “human rights due diligence” as understood in the UN Guiding Principles on Business and Human Rights. Draft Principle 11 invites States to take appropriate measures to ensure corporate liability for environmental harm caused by companies operating in or from the State’s territory.

Although not binding, the Draft Principles reflect and consolidate a growing set of norms which can be used to tackle environment-related corporate wrongs in the context of armed conflict. Three features of this set of norms are made clear in the ILC report: the variety and fluidity of existing frameworks; the expansion of parent company liability in various jurisdictions; and the added layer of complexity when seeking to hold companies accountable for harm occurring in armed conflict.

A Cautious, Flexible Approach to Due Diligence and Corporate Liability

Both draft principles generated extensive comments in the plenary session, with some ILC members expressing concerns over the legal and political reach of the text under discussion. The original wording of Draft Principle 11, for example, was changed from requiring that States take “necessary measures” to requiring them to take “appropriate… measures aimed at ensuring” business accountability (see here). This is reflected in the latest report, which acknowledges that the measures taken at the national level may differ from one country to another, and may not always consist of legislative measures. The report also specifies that Draft Principle 10 “does not reflect a generally binding legal obligation and has been phrased accordingly as a recommendation.”

This flexibility does not merely reflect a reluctance to go too far, too fast – it is also a reflection of the BHR “galaxy of norms”, which takes many forms, and operates in fluid ways on various jurisdictional and geographical levels. The wide network of normative frameworks is evident throughout the report, which describes a broad range of initiatives, from the most well-known (e.g. the UN Guiding Principles and OECD Guidelines) to the industry-specific or niche (e.g. the Chinese Due Diligence Guidelines for Responsible Mineral Supply Chains or the Lusaka Protocol of the International Conference on the Great Lakes Regions).

Parent Company Liability: a Central Concept in the Search for Accountability

Another noteworthy feature of the report is its discussion of parent company liability. Draft Principle 11 invites States to take measures aimed at ensuring that businesses can be held liable for harm caused by their subsidiaries acting under their de facto control. To illustrate the importance of this concept, the report points to one of the most important BHR cases of 2019: Vedanta v Lungowe, which Lucas Roorda reviewed on this blog. The case concerned the possible liability of the British multinational group Vedanta Resources for the release of toxic substances to a watercourse in Zambia by its subsidiary. The United Kingdom Supreme Court found that “[e]verything depends on the extent to which, and the way in which, the parent availed itself of the opportunity to take over, intervene in, control, supervise or advise the management of the relevant operations (including land use) of the subsidiary.”

This is in line with the growing body of transnational tort cases on parent company liability, in which courts are increasingly willing to consider the existence of a duty of care owed by parent companies for certain actions of their subsidiaries. Recent high-profile cases in the United Kingdom include Unilever, in which the Court of Appeal set out certain scenarios in which such duty of care could arise (e.g. if the parent company has in substance taken over the management of the subsidiary’s relevant activity) and Okpabi, which is following a trajectory similar to Vedanta and for which the Supreme Court granted the claimants leave to appeal on 24 July 2019. Canadian cases include Choc v Hudbay Minerals, Garcia v Tahoe Resources and Araya v Nevsun Resources, in which various courts looked at the responsibility of mining companies for actions of their subsidiaries in Guatemala and Eritrea. Similar discussions are being held in the context of claims against Shell before the Dutch courts (the Eric Dooh litigation regarding spills in the Niger Delta, and the Kiobel litigation regarding the execution of the ‘Ogoni Nine’). As is clear from the ILC report’s discussion of the importance of de facto control, the BHR galaxy is witnessing a convergence of legal systems which could ultimately lead to a more expansive application of parent company liability.

BHR in the Context of Armed Conflict

Finally, it’s worth remembering that the Draft Principles seek to address environmental harm in a specific context, i.e. armed conflict. This adds a layer of complexity to the search for corporate compliance and accountability. This is acknowledged in UN Guiding Principle 7, which recognises that some of the worst human rights abuses involving business occur in armed conflict situations “where the human rights regime cannot be expected to function as intended.” This heightened risk, and the resulting expanded web of liability for businesses, is also reflected in the commentary to UN Guiding Principle 23.

Armed conflict can therefore turn the national jurisdiction in which the environmental harm occurs into what Skinner refers to as a “high-risk host country”, i.e. one that has a weak, ineffective, or corrupt judicial system. This is where the notion of parent company liability could improve access to remedy for victims of harm by multinational businesses, especially as courts have shown sympathy for forum necessitatis arguments (which allows domestic courts to assert jurisdiction when there is no other forum available in which the plaintiffs could pursue their claim). The lack of available justice in Zambia was a key factor in Vedanta. Similarly, in Araya v Nevsun the Court of Appeal for British Columbia endorsed the first instance judge’s finding that it would be difficult for the claimants to have a fair trial in Eritrea, particularly “if they chose to commence legal proceedings in which they make the most unpatriotic allegations against the State and its military, and call into question the actions of a commercial enterprise which is the primary economic generator in one of the poorest countries in the world.”

The ILC report itself acknowledges that the collapse of State and local institutions “is a common consequence of armed conflict and one that often casts a long shadow in the aftermath of conflict, undermining law enforcement and the protection of rights as well as the integrity of justice.”

Conclusion

The legal conversation is increasingly concerned with both corporate accountability and the protection of the environment. On 23 July 2019, in response to the publication of the ILC Draft Principles, a group of scientists published an open letter in Nature, calling for a Fifth Geneva Convention that would make environmental damage a war crime. On 25-27 November 2019, the United Nations is due to hold its annual Forum on Business and Human Rights. Topics for discussion will include, inter alia, “Lessons from other relevant fields, such as environmental protection” and “Building sustainable peace and reconstruction in countries emerging from conflict and fragility and address corporate crimes”. Draft Principles 10 and 11 have clearly captured the legal zeitgeist.

The ILC report draws on various existing frameworks and legal principles to offer avenues to address wrongs situated at the intersection of three circles: business, the environment, and armed conflict. It draws attention to this Venn diagram rather than seeking to reinvent the wheel. It reflects existing conceptual tools rather than creating new ones. In that sense, the Draft Principles do not add a new ‘star’ to the BHR galaxy, but rather offer a helpful telescope to examine the existing firmament. They also represent a chance to galvanise discussions of protection of the environment in armed conflict when negotiating binding instruments, such as the draft business and human rights treaty, for which the latest round of negotiations is due to take place on 14-18 October 2019.