Avoiding Legal Accountability through Human Rights Due Diligence
As global companies’ size and geographical reach has increased, so too has their capacity to affect human rights. Consequently, legislative initiatives governing business impacts on human rights and the environment are increasing. Every year, additional due diligence obligations, mandatory human rights reporting, and other regulatory instruments are enacted in countries around the world. This regulatory landscape creates criminal, administrative and civil liability for companies’ human rights impacts, while ensuring rightsholders have access to justice when violations occur.
Recent precedents of business and human rights litigation
There has been an uptick in human rights lawsuits in recent years, in which plaintiffs have accused corporates of failing to prevent wrongdoing by their foreign subsidiaries and partners across the globe. Around 80% of these cases have been brought by workers and affected communities, with the remaining lawsuits filed by other stakeholders such as consumers, shareholders and human rights defenders. Environmental damage is also increasingly falling within the jurisdiction of human rights legislation. A recent study by the Business and Human Rights Resource Centre showed that nearly half of human rights and environmental cases were brought against oil and gas extractives companies. Agricultural, food and technology companies have also faced a series of lawsuits over alleged human rights abuses.
Some notable examples of cases brought under human rights legislation are outlined below:
In 2014, three Eritreans filed a civil lawsuit against a Canadian mining company, alleging it was complicit in the use of forced labour, slavery and torture by its subcontractor in an Eritrean mine. The British Columbia Court of Appeal ruled in November 2017 that the case could proceed, marking the first time that permission was granted for a mass tort claim for modern slavery in Canada. In October 2020, the parties reached an undisclosed settlement.
In 2016, 11 Syrian employees of a French cement company filed a criminal complaint over alleged abuses committed by its Syrian subsidiary. They accused the company of paying EUR 13 million to several armed groups, including ISIS, to keep its local operations running during the Syrian Civil War. In May 2022, the Investigative Chamber of the Paris Court of Appeals ultimately found the company guilty of complicity in crimes against humanity.
In November 2018, more than 200,000 victims of a mining dam disaster in Brazil filed a case in the UK against an Anglo-Australian mining company, one of the parent companies of the local subsidiary that owned and operated the dam. The claimants sought GBP 5 billion in compensation. In June 2022, the English Court of Appeal allowed the lawsuit to proceed in that jurisdiction.
In March 2021, 11 indigenous groups and several environmental organisations sued a French supermarket chain for its alleged role in the deforestation of the Amazon, seeking EUR 3.1 million in damages. They claimed the company’s cattle operations in Brazil and Colombia violated the French Due Diligence Law, which requires companies to identify, prevent, and mitigate risks relating to human rights and environmental damages across their global operations. The case is currently ongoing.
The importance of human rights due diligence
As the above examples illustrate, companies that fail to address the potential negative human rights impacts of their operations can face serious consequences. Human rights due diligence is becoming a matter of legal compliance and courts are increasingly referring to voluntary frameworks in judgments. With the EU, UK and several other countries implementing mandatory human rights and environmental due diligence regulatory frameworks in the near future, the legislative playing field is fast changing and dynamic. A well-designed human rights and environmental risk management programme can help companies minimise any negative impacts linked to their activities. Moreover, businesses that take steps to align their programmes with the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises will find themselves well placed to comply with the expanding international legal framework surrounding human rights.