Source: Jurist

Nevsun Resources Ltd. V. Araya Requires Rethinking Alternate Frameworks for Accountability of TNC’s

The recent judgment of the Supreme Court of Canada in Nevsun Resources Ltd. v. Araya, allowed for a claim to be filed against a Canadian company for human rights violations and breaches of customary international law (CIL) abroad. The legal development realized corporate liability for human rights violations, which is necessary given that human rights law has traditionally been confined to analyzing the infringement of rights by state actors. However, with incidents such as the Bhopal Gas Tragedy in India, the collapse of Rana Plaza in Bangladesh, and the Fukushima nuclear power plant explosions in Japan, there is need now, more than ever, to hold corporations accountable.

The Case Before the Court

Three Eritrean workers, and former employees of Nevsun Resources Ltd., claimed that they were conscripted through Eritrea’s military service into a forced labor regime where they were required to work at a mine in Eritrea owned by the Canadian company (headquartered in Vancouver). Over the course of their work in the mines, the workers claimed that they were subjected to violent, cruel, inhuman and degrading treatment. The claim was brought by these workers for damages in lieu of violation of domestic torts, as well as for breaches of certain CIL norms. Nevsun sought to dismiss the claims arguing that Eritrea was a more appropriate forum to litigate, and that the claims of breaches of CIL were liable to be struck down because there was no reasonable likelihood of success.

Ultimately, the Supreme Court of Canada in 2020 ruled that there was no bar to the workers’ claims being heard. The Court reasoned that Canada automatically incorporated CIL into domestic law via the doctrine of adoption. Which meant that prohibitions on forced labor, slavery, and cruel, inhuman or degrading treatment — which form part of CIL, are a part of Canadian jurisprudence. On the basis of this, the Court recognized that it may well develop a civil remedy in domestic law for corporate violations of the CIL norms adopted in Canadian jurisprudence.

Need for Alternative Frameworks for Corporate Accountability at the Domestic Level

The Canadian Supreme Court shed light on a necessary factor in terms of realizing corporate human rights violations in the era of globalization — namely, the necessity to find concrete solutions in the domestic realm. However, there have been several instances where rights are yet to be vindicated. Some of them are massive instances of corporate violations of human rights in the Global South. In the case of Rana Plaza, the courts operated in a legal vacuum, and people still fight for the right to be heard before Canadian courts. Similarly, despite numerous years having passed after the Bhopal Gas Tragedy in India, several individuals are yet to receive compensation and there are numerous birth defects to this day in Bhopal.

Other tools within national legal frameworks may be beneficial at the grassroots level to combat human rights violations by corporate actors. One such way is by expanding the notion of ‘stakeholders’ in domestic corporate law. India, for instance, incorporated Section 166(2) to the Companies Act, 2013, which thrust upon the director of a company, a duty towards the community and the environment, at large. This imposes an actionable duty on the directors of a company to undertake development strategy with pluralistic stakeholders and their specific considerations in mind.

Another avenue, given the complexity of supply-chains, is via the forum of consumer protection laws which demands greater transparency in the business process. Samsung’s indictment in France for worker exploitation and health hazards was seen as a success to combat human rights’ violations through consumer litigation. The indictment was for misleading advertisement (a criminal offence in France) and allowed for compensation to the workers. Similarly, in Germany, a consumer protection agency won a lawsuit against Lidl concerning the working conditions in Bangladesh.

With structures like this within states which are often the situs for exploitation, developing robust systems of accountability via corporate law and consumer protection law provides better tools to engage with such jurisdictionally complex cases and to pierce the ‘corporate veil’ as opposed to solely relying on international law and its tenets.

Mahima Balaji is a student at O.P Jindal Global University with interests in public policy, human rights law, and international law.

Background: The Bhopal disaster was a gas leak incident on the night of 2–3 December 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal, Madhya Pradesh, India. It is considered to be the world’s worst industrial disaster. Over 500,000 people were exposed to methyl isocyanate (MIC) gas. The highly toxic substance made its way into and around the small towns located near the plant.

Estimates vary on the death toll. A government affidavit in 2006 stated that the leak caused 558,125 injuries, including 38,478 temporary partial injuries and approximately 3,900 severely and permanently disabling injuries. Others estimate that 8,000 died within two weeks, and another 8,000 or more have since died from gas-related diseases. Union Carbide refused to accept responsibility for the disaster.