Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

Okpabi v Royal Dutch Shell: Court of Appeal finds Shell not liable for Nigerian oil spills

On 14 February 2018, the Court of Appeal in London handed down its Approved Judgment in Okpabi and others v Royal Dutch Shell Plc and another [2018] EWCA Civ 191. The claimants are 40,000 Nigerian farmers and fisherman from the Ogale and Bille communities in the Niger Delta who allege they have suffered from decades of pollution from pipelines belonging to Shell Nigeria, a subsidiary of the British-Dutch multinational oil and gas company Shell. Indeed, in 2011 the United Nations Environmental Programme published an Environmental Assessment of Ogoniland which reported serious contamination of agricultural land and waterways in the community as well as its groundwater at rates 1,000 times higher than permitted under Nigerian law, exposing Ogale’s inhabitants to serious health risks. Meanwhile the Bille community suffered the largest loss of mangrove habitat in the history of oil spills at 13,200 hectares. In its split decision, the Court of Appeal upheld the High Court ruling that it lacks jurisdiction as London headquartered parent company Shell could not be liable for any oil pollution in the Niger Delta caused by its wholly autonomous subsidiary. The villagers now plan to seek permission to take the case to the Supreme Court, with King Okpabi of the Ogale Community stating “We have lost our environment, our farmland and our dignity because of Shell’s operations in our community. The English Courts are our only hope because we cannot get justice in Nigeria. So let this be a landmark case, we will go all the way to the Supreme Court”.

Philippines Commission on Human Rights holding overseas hearings for oil majors

The Republic of the Philippines Commission on Human Rights is set to confront oil majors over their climate change impact through hearings in Manila, New York and London. The hearings are in response to a petition lodged in 2015 which seeks to hold forty-seven companies accountable for Philippine communities suffering from extreme weather. Human Rights Commissioner Roberto Cadiz explained that holding hearings overseas will make the process inclusive, affording all carbon companies the best chance to confront the impact of their businesses. To date, half of the companies, whose products generated around a fifth of historic greenhouse gas emissions, have not responded to the Commission. Those which have responded, questioned the Commission’s jurisdiction or argued that it was for governments and not private companies to tackle climate change. Several international law experts have also filed amicus curiae briefs in support of the petition which back the Commission’s mandate to investigate private companies over harm experienced by Filipinos. The hearings are due to commence in Manila in March 2018, with the overseas sessions following later in the year. The Commission cannot directly impose penalties on any of the respondents; however, it could recommend ways that the companies might alleviate their future operations’ human rights impact.

Tomasella v Nestlé: Consumers sue Nestlé for child labour chocolate

On 12 February 2018, consumer Danell Tomasella filed a Class Action Complaint in Case No. 1:18-cv-10269 in the Massachusetts federal court. The lawsuit against Swiss food and beverage conglomerate Nestlé USA Inc. alleges that the company regularly imports cocoa beans from suppliers in the Ivory Coast and engages in deceptive marketing by hiding that this chocolate supply chain utilises child and slave labour. The plaintiffs claim that in violation of Massachusetts Consumer Protection Law, Nestlé does not disclose its Ivory Coast suppliers’ reliance on the worst forms of child labour which is of material interest to American consumers. They state that “Nestlé has not required its suppliers to remedy this human tragedy” and that it instead continues to be unjustly enriched by the profits from chocolate sales. The allegations highlight that much of the world’s chocolate is “quite literally brought to us by the backbreaking labor of children, in many cases under conditions of slavery”. Nestlé has responded that such consumer class actions “are not the way to solve such a serious and complex issue as forced child labor”, rather “class action lawyers are targeting the very organizations trying to fight forced labor”.

Company Reports and Press Releases

• Maersk - Sustainability Highlights 2017

International and Government Consultations, Reports and Guidance

• Dutch NCP - Publication Initial Assessment specific instance UNI Global Union vs VEON

• International Labour Organization - Fair play without human rights violations
• Organisation for Economic Co-operation and Development - Alignment assessment of industry initiatives for due diligence in the garment and footwear sector
• Overheid - Vernieuwd Beleid Buitenlandse Handel en Ontwikkelingssamenwerking
• United Nations High Commissioner for Human Rights - Database of all business enterprises involved in the activities detailed in paragraph 96 of the report of the independent international fact-finding mission to investigate the implications of the Israeli settlements on the civil, political, economic, social and cultural rights of the Palestinian people throughout the Occupied Palestinian Territory, including East Jerusalem
• UN Working Group on Business and Human Rights - Scaling up initiatives to protect human rights defenders: Consultation summary note (30 November, 2017)

NGO and Law Firm Reports, Papers and Investigations

• Dutch Agreement on Sustainable Garments and Textile - Cooperating to tackle problems in the garment and textile sector

In court

• Al Shimari v CACI - Memorandum Opinion
• Bennett Jones LLP - Mining Company Asks Supreme Court to Hear Its Challenge to Allegations of Human Rights Abuses in Eritrea
• Center for Constitutional Rights - Private Corporation May be Sued for Role in Abu Ghraib Torture, Judge Rules
• CORE Coalition - UK Court of Appeal rules Royal Dutch Shell not liable for Nigeria oil spills
• Fortify Rights (Thailand) - Thailand: Defamation trial against exploited Myanmar farm workers resumes ahead of UNWG on business & human rights visit
• John Ogilvie, Damian Grave and James Allsop - Court of Appeal confirms English Court lacks jurisdiction over claims against UK domiciled parent company in relation to acts of subsidiary abroad
• Leigh Day - Nigerian villagers vow to take Shell to the UK Supreme Court
• Megan Darby - Greenpeace appeals Norway Arctic oil drilling case
• Nina de Vries - UK Mining Firm Accused of Rights Abuses in Sierra Leone
• Okpabi and others v Royal Dutch Shell Plc and another - Approved Judgment
• Tina Bellon - Lawsuit alleges child labor used for Nestle chocolate products

In the news

Accountability

• Frédéric Cazenave - Les associations, nouvelles bêtes noires des entreprises

Environment

• Megan Darby - Oil majors to face London, New York hearings over Philippines climate impact

Israeli Settlements

• Jamey Keaten - The U.N. Human Rights Office Has Identified 206 Companies Linked to Israeli Settlements

Labour

• Spiegel Online - Prozess gegen Textildiscounter: Trägt KiK die Verantwortung für 260 Tote?
• VINCI - No further action in the SHERPA case

Mining and Minerals

• Pratima Desai and Tom Daly - London Metal Exchange aims to ban metal sourced with child labour

United Nations

• Frédéric Burnand - How the UN pushed to make business more responsible

Speeches, Videos and Interviews

• Michel Capron - Réformer la définition de l’objet social de l’entreprise dans le code civil, c’est toucher au coeur même du système

Academic Materials

• Antoine Duval and Enrico Partiti - The UN Guiding Principles on Business and Human Rights in (National) Action: The Dutch Agreement on Sustainable Garment and Textile
• Daniel Augenstein, Mark Dawson and Pierre Thielbörger - The UNGPs in the European Union: The Open Coordination of Business and Human Rights?
• Estefania Amer - The Penalization of Non-Communicating UN Global Compact’s Companies by Investors and Its Implications for This Initiative’s Effectiveness
• Jernej Letnar Cernic and Nicolás Carrillo-Santarelli - The Future of Business and Human Rights
• Larry Catá Backer - Regulating the Multinational Enterprise as Entity, as a Network of Links and as a Process of Production
• Nicolas Bueno - The Swiss Popular Initiative on Responsible Business: From Responsibility to Liability
• Olga Martin-Ortega - Public Procurement as a Tool for the Protection and Promotion of Human Rights: a Study of Collaboration, Due Diligence and Leverage in the Electronics Industry

Blogs

Asser Institute Doing Business Right Blog

• Catherine Dunmore - Doing Business Right – Monthly Report – January 2018
• Morshed Mannan and Raam Dutia - Transnational legal development and the platform economy - Part 1: Uber’s foray into transnational regulation

Others

• Claudia Müller-Hoff and Carolijn Terwindt - “Anyone can make claims” – Is the KiK case proof of access to remedy against corporate human rights violations?
• Emily Dwyer - Canada is moving towards effective corporate oversight with new human rights watchdog
• Enrico Partiti - Ensuring trustworthiness of private regulators for sustainability
• Julianne Hughes-Jennett and Peter Hood - Update on the responsibility to respect human rights and parent company liability
• Mark Taylor - Regulate First. Ask Questions Later.
• Natasha White - Mining companies cannot run afoul of US sanctions against Dan Gertler for corrupt oil & mining deals in Dem. Rep. of Congo
• Samentha Goethals and Emre Eren Korkmaz - Examining human rights protections for Syrian refugees in Turkish garment supply chains

Editor's note: Mercedes is a recent graduate of the LL.B. dual-degree programme English and German Law, which is taught jointly by University College London (UCL) and the University of Cologne. She will sit the German state exam in early 2022. Alongside her studies, she is working as student research assistant at the Institute for International and Foreign Private Law in Cologne. Since September 2020, she joined the Asser Institute as a research intern for the Doing Business Right project

On 27 November 2020, the T.M.C Asser Institute hosted an online roundtable discussion on the German Supply Chain Law (Lieferkettengesetz). The full recording of the event can be seen here:

The three panelists, Cornelia Heydenreich from Germanwatch, Miriam Saage-Maaß from the ECCHR and Christopher Patz from the ECCJ reflected on the political framework surrounding the debate, current drafts, and Germany’s role in the European discussion on binding due diligence legislation.

I. The pathway to a Lieferkettengesetz 

As Heydenreich pointed out, civil society’s role in the struggle for a Lieferkettengesetz can barely be overstated. When in 2011, the UNGPs were passed, Germany was in no rush to implement binding due diligence legislation. Instead, the German legislators waited for their European counterparts to come forward with an action plan. It was in 2013 when a new – more left-leaning – government first voiced the idea that a national action plan should be drawn up. In 2015, consultations began. The consultation process was a dialogue, the drafting process itself was not. Even though the monitoring methodology fell short of civil society’s expectations, the result of the monitoring process was shocking nonetheless: Only 13-17% of companies complied with the National Action Plan. 

It became clear that the government needed to implement binding due diligence regulation. It also became clear that the drafting process would have to begin as soon as possible for a law to be passed before the general election in September 2021. 

II. Current drafts

Saage-Maaß turned to the different proposals for a Lieferkettengesetz: The government’s position paper from the Ministry of Development and the Ministry of Labour as well as civil society’s model law. Contrary to what the government currently envisages, Saage-Maaß emphasized the need to include small or medium-sized companies that operate in high-risk areas. 

The role of private international law must not be neglected. The question turns on whether or not the whole of the Lieferkettengesetz will be an overriding mandatory provision, or merely the due diligence obligation itself. 

Civil society organizations are particularly critical of so-called “safe harbor” provisions. These safe harbor provisions allow companies to be exempted from liability if they are part of certain multi-stakeholder initiatives (MSIs). All panelists agree, however, that as of today, no MSI meets the standards set out by the OECD. In its report, the Institute for Multi-Stakeholder Initiative Integrity (MSI Integrity) comes to the same conclusion: “MSIs are not effective tools for holding corporations accountable for abuses, protecting rights holders against human rights violations, or providing survivors and victims with access to remedy.” 

For an overview of other aspects of the legislative proposals, such as the burden of proof, please see the foregoing blog series “Corporate (Ir)responsibility Made in Germany”. 

III. EU-wide discussion

In April 2020, European Commissioner for Justice, Didier Reynders, announced that the Commission commits to legislation on mandatory due diligence. Patz emphasizes the positive impact Germany’s Council Presidency, beginning July 2020, has had on the endeavor. Germany’s Council Presidency stands out because of its strong affirmative call for a supply chain law and for reforms of directors’ duties. At the beginning of December, the Council published its Conclusion on Human Rights and Decent Work in Global Supply Chains, where it calls on the European Commission to launch an EU Action Plan by 2021 (n. 45) and to table a proposal for an EU legal framework on corporate due diligence (n. 46). According to Patz, this constitutes a strong political signal. This strong call is reinforced by three Committees, the Human Rights Committee, Development Committee, and the Legal Affairs Committee, that also spoke out in favor of civil liability. 

Another strong political signal was sent by the EU Fundamental Rights Agency, which in its report “Business and Human Rights – Access to Remedy” called for significant changes pertaining to the reversal of the burden of proof, class actions and procedural mechanisms in order to facilitate access to justice for those affected. 

The work of German MEP Anna Cavazzini (Greens) should be highlighted, too. In the European Parliament she pushed for an additional enforcement mechanism in the form of trade restrictions. Products that benefitted from human rights abuses along the supply chain should not have access to the European single market. In order for the trade restrictions to be lifted, remediation ought to be paid. This initiative counters criticism from civil society that points out that due diligence laws often have the effect of targeting whole sectors of one particular economy. Adopting additional trade restrictions allows for a much more targeted approach. 

In her report on an anti-deforestation legal framework, Delara Burkhardt(S&D) also advocated for civil liability. Companies that exercise control over companies should be held liable, even where it was not directly them, but the other company that committed an unlawful act. In order for this liability mechanism to be effective, Burkhardt advocates for a presumption in favor of control. This helps to balance the information deficit litigants suffer because they do not have access to internal corporate documentation. 

IV. Conclusion 

At the beginning of the roundtable discussion, Duval pointed out that Germany’s stance on any binding due diligence regulation will be decisive. Germany’s role in the EU-wide discussion can hardly be overstated. Germany amounts to 30% of all EU exports, and to 20% of all imports. Factoring in France’s loi de vigilance, both countries together could put enough pressure on the European legislators to push for an EU-wide mandatory due diligence regulation. 

Germany is as close as it has ever been to adopting a Lieferkettengesetz. Yet, the process has come to a halt. The government position paper should have been discussed in the Cabinet at the end of last year for the law to be adopted in 2021. All ministers have to agree, afterwards the proposition will go to Parliament. Heydenreich said that the law will have to be adopted in May, or June the latest; Parliamentary session ends in July. 

At least Germany’s involvement in the EU-wide debate looks promising. Germany’s Council Presidency as well as individual German MEPs have had a tremendous impact on the adoption of an EU-wide due diligence regulation.

Five years ago, the Rana Plaza building collapsed, taking with it at least 1134 innocent lives and injuring more than 2000 others. This industrial tragedy of incomparable scale constitutes a milestone in the business and human rights discussion. There will always be a 'before' and an 'after' Rana Plaza. Its aftershock triggered potentially seismic changes in the regulation of transnational corporations, such as the much-discussed French law on the ‘devoir de vigilance’. It is, therefore, essential to scrutinize with great care the aftermath of the tragedy: the innovations it triggered in the transnational regulation of the garment supply chain, the different processes initiated to compensate the victims, and in general the various hard and soft, private and public, legal and non-legal initiatives stemming from the urge to tackle a fundamental injustice. Thus, in the days to come we will feature a series of blogs on Rana Plaza and its consequences prepared by our outstanding interns: Raam Dutia and Abdurrahman Erol.

The Doing Business Right research team aimed to contribute to this necessary appraisal by organising on 12 April (with the support of the Bangladeshi embassy in The Netherlands) a day of discussions on Rana Plaza with a wide range of participants coming from different geographical and professional horizons (you can find our background paper for the discussions here and the programme of the day here). We divided the discussion into three broad themes. The first was dedicated to the victims: the injured and the families of those who died. Who are they to turn to in order to find justice? How can they locate legal (and/or moral) responsibility? When global brands are pressuring their Bangladeshi suppliers to keep prices down and satisfy their customers, who is responsible if garment factories in Bangladesh do not invest sufficiently to keep their factories from collapsing? The Bangladeshi government, the Mr. Ranas of this world, the profit-seeking brands, the conflict-ridden auditors, or the consumer in pursuit of ever-cheaper clothing? Those were the difficult questions we have struggled with and will continue struggling with in the years to come. As will be comprehensively shown in Raam’s first blog, victims of Rana Plaza have been rather unsuccessful in locating anyone (besides Mr. Rana himself) liable to start compensating the immense losses they have suffered. Western courts have simply refused to hold western brands (or auditors) accountable for the collapse. Nor have Bangladeshi courts yet proven able to provide justice to the victims. While international solidarity (maybe based on a feeling of moral responsibility) in the form of the Rana Plaza Arrangement, has offered some financial compensation to the victims, this is a far cry from a full-fledged legal responsibility recognized in court. Rana Plaza reminds us that in our world of organised irresponsibility, as the late Ulrich Beck would call it, law (and private international law in particular) can be used to immunise global brands and final consumers from the externalities they cause far from home.

The second panel of the conference tackled the transnational responses borne of the need to ensure that such a tragedy never again recurs. While nobody was willing to acknowledge their own responsibility for the Rana Plaza collapse, everybody was ready to accept that never again should such a tragedy take place. However, disagreements quickly emerged as to how to ensure this. Three different, at times competing, initiatives were introduced. They were set up in very different fashions. One, the Bangladesh Accord, is a multi-stakeholder collaboration involving NGOs, Brands, and Unions. The other, the Alliance for Bangladesh Worker Safety, is corporation-led, and primarily controlled by North-American brands. Finally, the National Tripartite Plan of Action on Fire Safety and Structural Integrity in the Garment Sector of Bangladesh is a government-led initiative supported by the ILO and foreign states. Altogether, these initiatives have led to quantifiable improvements of the security of workers in garment factories in Bangladesh (see the recent reports here and here). In his blog, Abdurrahman derives some comparative lessons from their parallel operations and raises some pointed critiques with regard to their institutional structures and long-term effects. In any event, they constitute an interesting new type of transnational administrative legal construct, raising many questions in terms of their legitimacy, effectiveness, and durability.

Finally, our last panel touched upon the national responses to the tragedy in Bangladesh as well as in Europe. What has changed in the way France and the Netherlands regulate corporations doing business in Bangladesh? What has changed in the way Bangladesh regulates its economically vital ready-made garment sector? Even in a globalizing world, states still have a decisive influence on the companies they bring to life (through their corporate law) or let operate in their territory. On the one hand, the French Loi relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre reminds us that a state can impose certain hard/legal responsibilities on local companies doing business abroad, such as in this case the obligation to produce a due diligence plan to deal with human rights risks. In theory, noncompliance with the law could lead to civil liability for the damages caused by a specific human rights violation. On the other, the Dutch Agreement Agreement on Sustainable Garment and Textile offers another (perhaps competing) alternative for national governments to drive corporations active on local markets to engage in (mildly) binding human rights due diligence with regard to their supply chain (on the detailed functioning of the Agreement see our paper here). Both solutions are country specific and their practical effects highly context-dependent. It is not yet clear whether they will dramatically improve the fates of Bangladeshi workers. Nonetheless, they need to be thoroughly scrutinized for their actual effects (or the lack thereof). In any case, they are part and parcel of the legacy of Rana Plaza. 

I will end this blog on a personal note. In a way, the days after the Rana Plaza collapse brought me back a decade earlier to the state of shock triggered by 9/11. This was a truly global tragedy. I had a similar feeling of powerlessness in front of dusty images of suffering. A similar tireless search for survivors was going on, with similar walls of pictures of missing persons. And yet, it was radically different. The towers of the World Trade Center were hit by two planes before collapsing; Rana Plaza simply collapsed. The tragedy could not be blamed on terrorists. It was the result of greed, of cold economical cost-cutting. By Mr. Rana, the factory owner, by the multiple brands whose logos and tags were littering the ruins of Rana Plaza, and at the end of the chain by myself as a consumer of those brands. I believe this painful feeling of distant complicity (made immediately visible) was shared widely across the globe and fuelled much of the initiatives that were put in place in the aftermath of the tragedy. I think it rightly tells us that the responsibility to ensure that we never again face a Rana Plaza lies not only there, in Bangladesh, but also here in the boardrooms of our favourite brands as well as in our very own shopping carts. It is this feeling that drives the Doing Business Right project.