Organizational Governance

2021 a ‘Landmark’ for Corporate Human Rights Litigation

On day two of the UN Forum on Business and Human Rights, delegates discussed how environmental damage is being viewed as a human rights violation in a growing number of court cases around the world — and that the UN Guiding Principles may increasingly be criteria in court judgements.

By Richard Howitt | Published 2 years ago | About a 5 minute read

Image: Alberto Sanchez/Pixabay

This is the second of Richard Howitt’s daily updates for Sustainable Brands on the UN Forum on Business and Human Rights 2021. Read about day one.

The threat of legal action against corporations on human rights grounds is a recognition that judicial solutions must always be part of access to remedy for victims, but also risks businesses retrenching back into their law departments rather than going outwards into their supply chains.

An update on current legal cases is always part of the annual UN Forum on Business and Human Rights, but this year is being portrayed as a landmark for corporate human rights litigation.

In May, The Hague District Court ordered Royal Dutch Shell to drastically deepen its planned greenhouse gas emission cuts. Shell plans to appeal the judgment, but the ruling has sent a shockwave through business.

The finding itself is significant in the fight against climate change, but a lesser understood significance is that the claim was made on human rights grounds and directly cites the UN Guiding Principles on Business and Human Rights (UNGP).

A study from the Grantham Research Institute reports five further similar cases in the last year.

Mexican academic Humberto Cantú told the Forum that an upcoming study will show the UNGP referred to in multiple cases since 2016 across Mexico, Argentina, Colombia and Peru.

These cases forge a strong link for environmental damage to be viewed as a human rights violation. They also suggest that the ‘soft law’ of the UNGP may increasingly be referred to by courts in ‘hard law’ judgements.

Meanwhile, there has been an equal trend towards companies’ duty of care being used in court actions on human rights abuse.

in September, France’s Supreme Court, the Cour de Cassation, upheld the indictment of the French company, Lafarge, for complicity in crimes against humanity in Syria. The case is interesting in that the company was found to be an ‘accomplice,’ even though the prior ‘intention’ was not proven.

Sandra Codsart, Director of French law association Sherpa, told the Forum that two further French cases — action against the supermarket chain Casino for sourcing beef allegedly linked to deforestation in the Amazon, and a climate action against oil company Total — have both passed the hurdle of being confined to commercial courts and will now be tried in civil courts.

In March, the Federal Court of Australia upheld a lawsuit against oil company PTTEP, to pay compensation to Indonesian seaweed farmers whose livelihoods were affected by an oil spill. The case, however, had taken 12 years to reach a conclusion.

Yet, each of these cases is notable for allowing prosecutions in developed countries against parent companies in favour of victims in less developed countries overseas. The focus on France is also no coincidence, given the country’s early adoption of human rights due diligence law, the ‘devoir de vigilance.’

As proposals for mandatory due diligence advance in Europe and elsewhere globally, extra impetus already exists for companies to root out human rights abuses in their supply chains.

However, not all the trends are in one direction.

A US Supreme Court case brought by six Malian cocoa farm workers in the Côte D'Ivoire failed this year, on the basis that there was insufficient connection with the United States.

British human rights lawyer Richard Meeran told the Forum that there was now a ‘demise’ in the ability to bring third-country cases brought under the US’ Alien Tort Statute.

South African academic Thandeka Kathi also pointed to the increasing use of strategic lawsuits against public participation (SLAPPs), to silence criticism or protests against companies. The Business and Human Rights Resource Centre has recorded 355 such cases in the last six years.

For Kathi, this calls for “creative lawyery” — and building better networks between the small number of lawyers able to be active in these cases and local communities affected by them.

Karen Adams, from the Human Rights Law Centre in Melbourne, told the Forum that Australia has led the way in the development of litigation funders, citing the Grata Fund as an example of not-for-profit action to ensure potential claimants can pursue claims which they could not otherwise afford, and allowing public interest cases to be mounted.

Surya Deva, Chair of the UN Working Group on Business and Human Rights, questioned how far the large number of confidential settlements before cases ever come to court prevent precedent-setting, benefitting victims but not wider stakeholders or actions in other companies. However, evidence presented to the Forum suggest that these cases can still have a deterrent effect — with other companies wanting to avoid legal claims leading to complex, costly and potentially damaging cases on the same issues.

All of these cases remain dependent on the operation of independent and impartial justice systems, present in some but not all countries of the world.

“You can’t take cases against multinational companies based in China,” Meeran said. Adams suggested that cross-border cooperation allowing detailed research on supply chains could still make that a reality. Work has already begun to identify companies profiting from Uyghur forced labor.

The prospect of litigation will never be an easy one for companies.

The Office of the High Commissioner for Human Rights was said in the Forum to consider legal cases to be part of a ‘bouquet of remedies’ on business and human rights.

Today’s debate suggested the scent is becoming more distinct but will still divide delegates on whether it is more sweet — or more pungent.

Perhaps, both.

Richard Howitt

Richard Howitt is a strategic adviser on Corporate Responsibility and Sustainability, Business and Human Rights. He is also a Board member, lecturer at Audencia Business School and host of the Frank Bold ‘Frankly Speaking’ responsible business podcast. Richard was Member of the European Parliament responsible for the EU’s first rules on corporate sustainability reporting and subsequently Chief Executive Officer of the International Integrated Reporting Council.

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