Editor's Note: Alexandru Rares Tofan recently graduated with an LLM in Transnational Law from King’s College London where he focused on international human rights law, transnational litigation and international law. He is currently an intern with the Doing Business Right project at the Asser Institute in The Hague. He previously worked as a research assistant at the Transnational Law Institute in London on several projects pertaining to human rights, labour law and transnational corporate conduct.

The Australian Human Rights Commission (AHRC) is charged with leading the promotion and protection of human rights in Australia and with ensuring that Australians have access to effective complaint and public inquiry processes on human rights matters (see the Australian Human Rights Commission Act No 125, hereinafter ‘the Act’). The AHRC was established in 1986 as the Human Rights and Equal Opportunity Commission but underwent a name change and several other amendments through the 2003 Australian Human Rights Commission Legislation Bill (see also the Explanatory Memorandum). The AHRC primarily exercises the functions conferred on it by four federal anti-discrimination acts, namely the Age Discrimination Act 2004, the Disability Discrimination Act 1992, the Racial Discrimination Act 1975, and the Sex Discrimination Act 1984 (see s.11). It is further empowered to act on the basis of several international human rights instruments such as the ICCPR (see here). Specifically, the AHRC advises the federal government on the compatibility of its legislation with human rights, promotes an understanding and acceptance of human rights in Australia, undertakes research and educational programmes, intervenes in court proceedings as an amicus, and it may handle complaints through its conciliatory process (see s.11 (1) (a)-(o)). Notably, the AHRC enjoys an open-ended mandate in that s.11 (1) (p) stipulates that it may undertake any action that is incidental or conducive to the performance of the functions contained in subparagraphs (a) to and including (o). The Commission is made up of one president and seven specialised commissioners (see s.8 (1)). Its headquarters are located in Sydney.

This article analyses two types of actions in order to assess the extent to which the AHRC has assumed its role in promoting access to remedy in business and human rights cases. According to the 2010 Edinburgh Declaration of the International Co-ordinating Committee of National Institutions for the Promotion and Protection of Human Rights (ICC), the participation of NHRIs in the remedial process may be either direct or indirect. As will be shown, the AHRC’s mandate to entertain complaints against companies is rather limited in terms of subject-matter jurisdiction. On the other hand, the Commission plays a prominent role in the promotion and operationalisation of the UNGPs in Australia.

As to direct participation to access to remedy, three types of complaints fall under the jurisdiction of the Commission’s complaints mechanism. Firstly, the AHRC may resolve complaints alleging unlawful discrimination, harassment and bullying in so far as they relate to one of the prohibited grounds of race, disability, age and sex (including gender identity, intersex status and sexual orientation). The second type of complaints that the Commission may entertain are those relating to discrimination in employment. The prohibited grounds on which such a complaint may be based include a person’s criminal record, trade union activity, political opinion, religion and social origin. Thirdly, the AHRC may resolve complaints arguing breaches of any human right but only to the extent that the alleged perpetrator is the Australian government or one of its agencies. It should be borne in mind however that the Commission is an administrative body and that it therefore does not have the capacity to make binding and enforceable judicial decisions. As the High Court ruled in the Brandy case, such a power would be unconstitutional and the Commission may therefore only act in a conciliatory capacity.

Once such a complaint is filed, the Commission begins a non-adversarial process of conciliation whereby it seeks to help the parties reach an agreeable outcome. The most common types of reparations include apologies, policy changes and pecuniary compensation. Out of 1,262 conciliation processes carried out in 2017-2018, 74% were successfully resolved according to both parties (see here at page 15). Nevertheless, if such an outcome cannot be reached, complaints may be taken further to the federal courts. This process exemplifies the Commission’s complementary role in providing remedy for human rights violations. Nonetheless, the AHRC’s complaints mechanism suffers from a narrow mandate in terms of business and human rights. It may only entertain complaints against companies in so far as these fall under the first or second category of complaints. Other alleged breaches of human rights against companies escape the Commission’s competences. The AHRC’s direct participation in providing access to remedy in business and human rights cases is therefore rather limited. While the conciliatory process fits the role envisioned for NHRIs under the UNGPs, the limitation of the mandate to allegations of discrimination curtails the AHRC’s potential as an alternative to instituting judicial proceedings.

On the other hand, the Commission’s indirect participation in promoting access to effective remedy is slightly more robust. The AHRC has elaborated a fully-fledged business and human rights agenda upon which it has based several activities meant to raise awareness and promote dialogue (see also here at page 23). For instance, the Commission convenes an annual business and human rights dialogue jointly with the Global Compact Network Australia that focuses on capacity-building by helping businesses operationalise the UNGPs. Access to remedy has been a central theme in these dialogues (see for instance the outcomes of the 2015 and 2016 dialogues). The AHRC has further endeavoured to help companies internalise the UNGPs by developing easy to understand factsheets on how to best integrate human rights in business policies and practices. Alongside working with businesses, the Commission has collaborated with the civil society with the purpose of finding a way to better operationalise the UNGPs in Australia. In 2016, the AHRC hosted a roundtable discussion with civil society representatives, which culminated in a joint statement. This tackled among others the upcoming National Action Plan of Australia and the measures this should include to ensure adequate access to remedy. On a regional level, the AHRC has participated in the Interregional Dialogue on Business and Human Rights, which was hosted by the ASEAN Intergovernmental Commission on Human Rights. As a part of this dialogue, the Australian Commission convened a roundtable discussion on the NHRI’s engagement with business and human rights issues under the framework of the UNGPs (see here at page 42).

In conclusion, while the Australian Human Rights Commission plays an important role in the promotion and implementation of the UNGPs in Australia, its role is considerably more prominent in terms of indirect rather than direct participation in providing access to remedy for business-related human rights harms.

Editor’s note: Imke B.L.H. van Gardingen (LLM Int. and EU labour law, MA Korean Studies) is a policy advisor on labour migration at the Dutch Federation of Trade Unions (FNV) and a researcher on DPRK overseas labour.

On November 8, 2018 a North Korean overseas worker who had worked in slave like conditions for a Polish shipyard, a supplier of a Dutch shipbuilding company, has filed a criminal complaint against the Dutch firm. The Dutch Penal Code, article 273f(6), includes a provision criminalizing the act of ‘profiting’ from labour exploitation, targeting not the direct perpetrators in the labour exploitation, but the ones profiting from this exploitation. This is a unique case that aims to hold the company at the top of the chain accountable for modern slavery in its supply chain. A chain that in the case of shipbuilding is rather short; the buyer subcontracts the core business of building the complete hull under detailed instructions cheaply abroad.

Research on DPRK workers in Poland
The case of the DPRK workers in two Polish shipyards was brought to light in two reports, published by the LeidenAsiaCentre (available online here and here), a research institute affiliated with Leiden University.[1] In this research we demonstrated how well documented the case of the exploitation of DPRK workers in Poland is. Due to EU-mandated minute record-keeping and frequent inspections by the labour inspectorate, a very precise picture was obtained of how the workers work, live, and are managed. How they are or are not paid and who their actual or paper employers were, as well as under what specific circumstances they work. In both reports it was established that the working conditions and the situation of DPRK workers amount to labour exploitation. What makes the EU case particularly interesting is that the rights of migrant workers in the EU are quite well protected, at least on paper. This offers interesting angles to explore concrete routes in the context of the EU legal arena.[2]

Explanation of the case
DPRK workers are recruited in North Korea to work overseas. The selection criteria range from being a loyal party member to being married and preferably having children to secure the risk of defection. Only shortly before departure do the workers receive information on the country they will go to; the travel is arranged for and mostly through North Korean embassies abroad. Upon arrival the workers hand in their passports and start working right away without ever receiving a working contract, having a bank account or obtaining knowledge on the working conditions and height of the salary. The workers are mostly employed by a DPRK company registered in Poland or a Polish-North Korean joint venture and detached to other companies, which is often illegal according to their working permits. As contractors, the DPRK companies of the joint ventures receive payment for the assignment. A fraction of that amount is paid to the workers. There is a wide gap between the formal monthly payment, of which the payslips with falsified signatures are included in the labour inspection report, and the payment the workers actually receive. The payment is irregular, sometimes once a month, but mostly not. Also the amount of the payment is variable, it can range from a few dollars to a few hundred dollars a month, minus arbitrary deductions for housing, but also party loyalty fees. The Labour Inspectorate has often reported hazardous working situations, and also documented one fatal accident where none of the required safety measures were met. Workers live in poor conditions; too cramped, moisty with fungus causing headaches, without proper washing facilities so workers had to wash on the working site. Excessive overwork is common as workers are presented as never having to take a rest and as being able to work continuously, day and night 7 days a week. And being DPRK citizens, they are not free to leave from the worksite, nor to anyplace else.

All in all, it is safe to conclude that the labour of DPRK workers in Poland can be labelled as ‘forced labour’, as is also confirmed by the Polish labour inspectorate in the documentaries ‘Cash for Kim’ and ‘Dollar Heroes’ (produced by the Why Foundation in a series called ‘Why Slavery’), the UN special rapporteur on DPRK and the US report  on human trafficking. The question then is who can be held accountable for violating the labour and human rights of DPRK workers and account for the profits made as a consequence of these violations.[3] The DPRK supplying the workers, the direct or indirect employers as the perpetrators, subsidiaries or business partners giving the orders and profiting from it, or all of them? The issue of liability can shift from fault based liability to strict liability, which could be justified by the fact that all the parties involved profited from –intolerable - slave labour.

Our first and second report on DPRK labour in Poland have shown that Polish Shipbuilding companies in Gdynia and in Szczecin work together closely with Dutch Shipbuilding partners on financing vessels, supplying parts, project management, technical know-how, security, obtaining quality certificates and sharing EU funding.[4] The cases offer sufficient proof of close partnership and cooperation. The key question is whether in the case of proved abuse and labour exploitation, the Dutch legal framework can be used to hold the partner companies accountable. If so, companies could also be held accountable for criminal offenses if the exploitation is deemed severe enough to fulfil the conditions enshrined in Article 273 of the Dutch Penal Code, and specifically Article 273f(6), criminalising ‘profiting from the exploitation of a person’. Prof. Ryngaert from Utrecht University believes it is a very real possibility. He states,

It is the territorial benefit which a corporation draws from exploitive practices, regardless of location, that serves as the jurisdictional linchpin. Accordingly, Article 273f(6) of the Dutch Penal Code creates opportunities to trigger Dutch jurisdiction over corporations linked to acts of exploitation somewhere down the supply chain, and ultimately hold them liable.[5]

In terms of liability he argues,

In general however, it can be stated that a corporation's liability will be engaged when it consciously accepted the risk that the goods it bought were produced in substandard conditions, including conditions of labour exploitation, even if the corporations did not intend such conditions to occur, and if the corporation did not have positive knowledge of the conditions

It is now up to the Dutch Prosecution Office whether they will take up the case and prosecute the suspected Dutch company for ‘profiting’ from labour exploitation. There will be legal counter-arguments raised, but other considerations will undoubtably also play a role. Such as the lack of capacity at the Dutch prosecution office that is severely understaffed, pressure from politicians and businesses who might prioritize short term economic interests. In any event, it will be an important and interesting case to follow. For the value of this case in particular, but  also for the window it might open for other cases in which workers are exploited to the benefit of the corporations sitting at the top of the chain.

A recent Dutch judgment from May 2018 is interesting in this respect, it involved the managing director of a Dutch large shipping company who was held liable for wrongdoings happening in –amongst other places- Bangladesh and who was sentenced to a fine of €50.000 and disqualified from his profession for a year.[6] Primarily, this case focussed on environmental offenses. The managing director violated ‘the stipulations of the European Regulation (EG) Nr. 1013/2006 of the European Parliament and the council of 14 June 2006 with regard to the transfer of waste materials (EWSR).’[7] But the following considerations are also included in the judgment and have played an important role in it:

Besides, the working conditions are appalling. The ships are manually scrapped by untrained labourers, who do not have the knowledge and expertise to recognize hazardous materials to take precautions and to follow procedures and who do not get sufficient protective clothing and auxiliary materials either. With such scrapping practices, several people are killed annually. Moreover, there is still child labour in the scrapping companies in Bangladesh.
The suspect has closed his eyes to this problem, of which certainly he as an executive director of a large shipping company must have been aware. With his considerations, he obviously only has had eyes for the commercial interest of the companies for which he was responsible.[8]

Furthermore, the judges concluded in their judgment:

‘[…] a fine in itself does not do justice to the severity of the facts. That is why a disqualification from his profession for the duration of one year will be imposed on the suspect. That also expresses the social importance that should be attached to an integer management. The suspect in particular, as CFO of a large company, who also bears final responsibility for the management, may be expected to take the additional social consequences of the performance of his tasks into consideration beside the business economic consequences of his decision, such as in this case the negative consequences for the environment and the health of the labourers in the shipbreaking yards. [9]

The suspect was therefore convicted of a ‘fine of €50,000,-, in default of full payment and full recovery to be replace by 285 days of detention’ and imposed ‘as an additional punishment on the suspect a disqualification of the right to practice the profession of (direct or indirect) executive director, supervisory board member, advisor or employee with a shipping company of any part thereof, such for the duration of 1 (one) year.’[10]

To conclude, the criminal complaint of the North Korean worker is potentially a ground-breaking complaint to enhance the accountability of Dutch corporations for labour exploitation occurring in their supply chains. The ball is now in the court of the prosecutor’s office, it’s up to them to decide whether they choose to let the corporations off the hook or to tackle the issue of slavery and forced labour in supply chains head-on by criminalising the irresponsible behaviour of certain corporations.

[1] Remco Breuker & Imke van Gardingen (eds.), North Korean Forced Labour in the EU, the Polish case: How the Supply of a Captive DPRK workforce fits our demand for cheap labour, Leiden: LeidenAsiaCentre, 2016; Remco Breuker & Imke van Gardingen (eds.), People for Profit; North Korean Forced Labour on a Global Scale, Leiden: LeidenAsiaCentre, 2018.

[2] The conclusions are substantiated in detail in a chapter forthcoming and to be published by Seoul National University.

[3] This question of accountability also raised and examined in more detail in the report, People for Profit, See Imke van Gardingen, ‘Accountability for DPRK Workers in the Value Chain: The Case of Partner Shipyard, a Polish Shipbuilder and its Dutch Partners’, p. 12-42

[4] The case study on Partner Shipyard and the possible legal routes, is extensively laid out in People for Profit, See Imke van Gardingen, ‘Accountability for DPRK Workers in the Value Chain: The Case of Partner Shipyard, a Polish Shipbuilder and its Dutch Partners’, p. 12-42

[5] See Cedric Ryngaert, ‘Domestic Criminal Accountability for Dutch Corporations Profiting from North Korean Forced Labour,’ in People for profit. p. 201

[6] Judgment of the court of Rotterdam, three-judge economic division for criminal matters, Court of Rotterdam, date of judgment: 15-03-2018, case number: 10/994550-15, p. 1 (translated version)

[7] Ibid., p. 2

[8] Ibid., p. 34

[9] Ibid., p. 35

[10] Ibid., p. 36-37