Editor’s note: Daniela Heerdt is a PhD candidate at Tilburg Law School in the Netherlands. Her PhD research deals with the establishment of responsibility and accountability for adverse human rights impacts of mega-sporting events, with a focus on FIFA World Cups and Olympic Games. She recently published an article in the International Sports Law Journal that discusses to what extent the revised bidding and hosting regulations by FIFA, the IOC and UEFA strengthen access to remedy for mega-sporting events-related human rights violations.

The 21^st FIFA World Cup is currently underway. Billions of people around the world follow the matches with much enthusiasm and support. For the time being, it almost seems forgotten that in the final weeks leading up to the events, critical reports on human rights issues related to the event piled up. This blog explains why addressing these issues has to start well in advance of the first ball being kicked and cannot end when the final match has been played.

The Warm-up: Preparing for the Game

Even though the recently published update by FIFA’s Human Rights Advisory Board compliments FIFA on its increased efforts for tackling human rights issues related to this year’s World Cup, it is no secret that thousands of workers were exposed to severe human rights violations while working on World Cup construction sites in Russia.[1] Human rights groups such as Human Rights Watch (HRW) extensively reported on the structural exploitation that workers were facing, including unsafe working conditions leading to numerous injuries and the death of 17 workers, forced illegal work due to lack of employment contracts, and cases of non-payment or serious delays in payment of wages.  Those workers that dared to file a complaint were threatened with retaliation and non-payment of wages.[2] Furthermore, journalists and human rights advocates that tried to report on these cases have been intimidated, denied entry into the country, or even arrested while carrying out their investigations.

Blaming the occurrence of these human rights violations on Russia being this year’s World Cup’s host would ignore the fact that these violations are recurring in the context of mega-sporting events (MSEs) like the Summer or Winter Olympic Games or the World Cup. To a certain extent, these events heighten pre-existing human rights risk in the host country and thereby increase the likelihood for violations to occur. Thus, numerous stories of exploitation of migrant workers have been documented in relation to the construction works for the 2022 World Cup in Qatar. Furthermore, worker’s rights are not the only rights that are at risk during the delivery of MSEs. Other common types of human rights abuses associated with hosting MSEs are cases of forced displacement, infringements of participatory rights, and infringements of freedom of expression and the right to protest.[3] Shortly before and during these events, reports on incidents of excessive use of force by local police and private security forces, as well as arbitrary arrest and criminalization of homeless people and street children are also commonplace.[4]

The First Half: Establishing Responsibility

The key challenge in addressing these cases is to identify the actor and actions responsible for these harmful outcomes. However, MSEs like the FIFA World Cup are jointly organized and staged by a mix of public, private, national, and international actors. International sports bodies, like FIFA or the International Olympic Committee (IOC), set the terms and conditions under which these events can be hosted. Host countries agree to these conditions by submitting government guarantees and declarations and by adopting special event-related legislation. Furthermore, local and regional authorities issue permits and give orders to enable and facilitate event-related operations. The local organizing committees are responsible for living up to the conditions set by the sports bodies and for hiring the necessary contractors. These range from local to international firms, from city planners and logistic experts, to food suppliers and construction firms.[5] Further companies that profit from the MSE-business are international broadcasting firms and recruitment agencies. The financing of these events is secured through national and international corporate sponsors, such as McDonald’s and Budweiser for this year’s FIFA World Cup.[6]

The intuitive thing to do from a human rights perspective would be to call upon the responsibility of Russia as the host country to address these abuses, since states are not only responsible for respecting, protecting and fulfilling human rights but also for preventing third parties from abusing human rights on their territory. However, this would ignore the real issue at stake: the fact that MSE-related human rights abuses are the result of complex collaboration between multiple actors involved in delivering these events. In the case of exploitation of workers on World Cup construction sites in Russia, construction companies contribute by imposing abusive employment conditions; recruitment agencies by recruiting the workers under false promises; the state by failing to protect the workers and potentially even facilitating certain practices through its event-related policies; FIFA by requiring a certain number and standard of stadiums for the event; and finally also the sponsors by providing the necessary finances.

This rather simplified identification of the various contributing actors only presents a broad indication of how they contribute to these violations and share responsibility. The problem is that the entanglement of actors and their operations creates highly complex governance structures. In order to identify those actors responsible for the violations, victims first have to untangle these structures and retrace the chain of decisions taken, permits issued, orders given, and actions taken. Even if that succeeds, the key challenges are to identify which of the contributing acts would give rise to legal responsibility and to establish responsibility for those actors that have no direct obligations under international human rights law.

The Second Half:  Establishing Accountability

The entanglement of actors and their contributions does not only impede the identification of the responsible actors but also the identification of adequate accountability mechanisms. The business and human rights field knows a broad spectrum of mechanisms ranging from judicial to non-judicial, and from state-based to operational level mechanisms. Up to this point, the few attempts to hold certain actors accountable for MSE-related human rights violations either have been unsuccessful or only addressed a fraction of the actors or types of violations involved. For example, FIFA’s responsibility for World Cup-related human rights abuses has been the subject of a court case in Switzerland and two specific instances dealt with by the Swiss National Contact Point (NCP). The court in Zürich dismissed the case with unusual speed on mainly practical grounds (a more detailed discussion of the judgement can be found here).[7] The mediation procedure at the Swiss NCP led to the creation of a monitoring system for decent work and safety in the workplace for migrant construction workers in Qatar[8], but their living standards and the abuses of recruitment agencies were not addressed.

What these attempts highlight is that the main shortcomings of available mechanisms amount to a lack of access to these mechanisms for affected groups and individuals and a lack of human rights receptivity of existing mechanisms. In light of these shortcomings, new mechanisms are currently being developed and existing mechanisms are being tested in the MSE and human rights context. Just in time for the start of the World Cup, FIFA launched its new complaint mechanism for human rights defenders, which provides human rights defenders and media representatives with an avenue for complaints for situations “in which they consider that their rights have been unduly restricted when conducting work in relation to FIFA’s activities”.[9] Via an online platform, human rights defenders, journalists and other media representatives can submit a complaint and FIFA commits to ensure that it will apply an “appropriate follow-up processes” to it.[10] FIFA itself is supposed to assess these complaints and seek cooperation with third parties that are involved in the matter and relevant institutions that can support the complainant.[11] With regard to testing existing mechanisms, the possibilities for using arbitration as means to address MSE-related human rights issues opened up with the revised bidding and hosting regulations of FIFA and the IOC. Both entail provisions for human rights protection and arbitration clauses, referring to the Court of Arbitration for Sports, for challenging the performance of the host-city or -country under any of the provisions.

The Overtime: The Winner Takes its Share

One way of interpreting these recent efforts of international sports bodies to increase awareness and respect for human rights protection in connection with their events is to argue that they are increasingly becoming aware of their share of responsibility and accountability. Indeed, the increased awareness of adverse human rights impacts of MSEs triggered a number of initiatives that aim at raising human rights standards in the MSE business. In 2016, the MSE platform for human rights has been created, which is a multi-stakeholder coalition consisting of international and intergovernmental organisations, governments, sports governing bodies, athletes, unions, sponsors, broadcasters, and civil society groups, who are committed to take joint action to protect human rights throughout the MSE lifecycle. Recently, this multi-stakeholder initiative created the Centre for Sport and Human Rights, which is an independent center that connects stakeholders and affected groups to share knowledge, build capacity, and strengthen accountability for adverse human rights impacts of sports more generally. Concrete event-related examples of initiatives exist as well. In the run-up to this year’s World Cup, FIFA, Russian authorities and representatives of trade unions took a joint effort to set up a monitoring program for labour conditions on World Cup construction sites. Similar processes led to the establishment of a worker welfare monitoring system for workers on World Cup construction sites in Qatar.

Nevertheless, significant challenges remain in relation to concrete cases of MSE-related human rights abuses and it is important that these efforts do not fade after the final match has been played. MSE-related human rights violations do not automatically stop when the event is over. In some cases, for instance cases of forced evictions, violations continue as long as victims have not been compensated adequately. These challenges do not make it a hopeless endeavour, but they highlight that more work and change is needed before responsibility for MSE-related human rights violations can be established. Especially, most of the developments and efforts of sports governing bodies are rather recent and only apply to events that will take place in the future. Hence, it remains to be seen whether the revised bidding regulations can ensure that future World Cups will have a more positive human rights legacy and eventually avoid adverse human rights impacts altogether.

[1] Business & Human Rights Resource Centre, ‘Russia 2018 FIFA World Cup’ <https://business-humanrights.org/en/russia-2018-fifa-world-cup> accessed 14 February 2018.

[2] ibid 27.

[3] Megan Corrarino, ‘“Law Exclusion Zones”: Mega-Events as Sites of Procedural and Substantive Human Rights Violations’ (2014) 17 Yale Human Rights and Development Law Journal 180.

[4] Lucy Amis and John Morrison, ‘Mega-Sporting Events and Human Rights—A Time for More Teamwork?’ (2017) 2 Business and Human Rights Journal 135, 137.

[5] For a more elaborate overview of actors, see Amis and Morrison (n 5) at 136.

[6] Fédération Internationale de Football Association, ‘2018 FIFA World Cup Russia^TM - FIFA Partners’ (FIFA.com, 2017)< http://www.fifa.com/worldcup/organisation/partners/index.html> accessed 15 February 2018.

[7] FNV, Bangladeshi Free Trade Union Congress, BWI & Nadim Shariful Alam v FIFA Handelsgericht Kanton Zürich (3 January 2017).

[8] Specific Instance regarding the Fédération Internationale de Football Association (FIFA) submitted by the Building and Wood Workers’ International (BWI) - Final Statement Swiss National Contact Point (2 May 2017).

[9] FIFA, ‘FIFA Statement on Human Rights Defenders and Media Representatives’ (2018) 4, para 14< https://resources.fifa.com/image/upload/ejf1ecdku14lm2v9zc03.pdf> accessed 12 June 2018.

[10] ibid.

[11] ibid 5, para 15.

Editor’s note: Shamistha Selvaratnam is a LLM Candidate of the Advanced Masters of European and International Human Rights Law at Leiden University in the Netherlands. Prior to commencing the LLM, she worked as a business and human rights solicitor in Australia where she specialised in promoting business respect for human rights through engagement with policy, law and practice.

Introduction

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

The Headlines

Chevron Corporation and Texaco Petroleum Company v The Republic of Ecuador

On 30 August 2018 an international tribunal administered by the Permanent Court of Arbitration in The Hague issued an award in favour of Chevron Corporation and Texaco Petroleum Company, holding that the Republic of Ecuador had violated its obligations under international treaties, investment agreements and international law. The tribunal found that a $9.5 billion judgment handed down by Ecuador’s Supreme Court in the Lago Agrio case was procured through fraud, bribery and corruption. It also found that the Republic of Ecuador had already released the claims that formed the basis of the judgment years before. The tribunal concluded that the fraudulent Ecuadorian judgment is “not final, enforceable, or conclusive under Ecuadorian and international law” and therefore cannot be enforced within or outside of Ecuador and that it “violates international public policy and natural justice”.

Draft Optional Protocol to Business and Human Rights Treaty

On 4 September 2018 the Permanent Mission of Ecuador to the UN and other International Organizations in Geneva presented the ‘Draft Optional Protocol To The Legally Binding Instrument To Regulate, In International Human Rights Law, The Activities Of Transnational Corporations And Other Business Enterprises’ (Optional Protocol). The Optional Protocol focuses on ensuring State Parties to the Optional Protocol establish mechanisms that provide access to remedy for victims of human rights violations in the context of business activities of a transnational character. It also provides individuals and group with the ability to make communications to the Committee of experts.

International and Government Consultations, Reports and Guidance

•  European Union Agency for Fundamental Rights – Protecting migrant workers from exploitation in the EU: boosting workplace inspections

• Australian Department of Home Affairs – Modern Slavery Bill passes House of Representatives
• Joint statement from the Governments of Australia, Canada, New Zealand, United Kingdom and the United States – Principles to guide Government action to combat human trafficking in global supply chains

NGO and Law Firm Reports, Papers and Investigations 

• Global Compact Network Australia – The Global Compact Network Australia (GCNA) Supports The Modern Slavery Bill (2018) In An Open Letter To The Prime Minister
• Business & Human Rights Resource Centre – Corporate Legal Accountability Quarterly Bulletin - Issue 28, September 2018
• Business for Social Responsibility –
• Why a Rights-Based Approach?
• Beyond the Technology Industry
• Implementing Human Rights Due Diligence
• International Service for Human Rights and Business & Human Rights Resource Centre – Shared Space Under Pressure: Business Support for Civil Freedoms and Human Rights Defenders – Guidance for Companies

In Court

• Adriaan Alsema – Colombia charges 13 former Chiquita executives over hundreds of murders
• Eugene Kung – Canadian federal and provincial governments have treated Indigenous consultation and rights as a burden, always seeking to do the least possible
• Lorna Knowles – Miners to launch new class actions against labour hire firms WorkPac, Programmed, HAYS and One Key
• Thomson Reuters – Guatemala court confirms suspension of Tahoe mining licenses
• Max Abelson – JPMorgan Will Pay $24 Million to End Lawsuit From Black Advisers

In the News

• Finnwatch – Civil society and companies call Finland to adopt mandatory HRDD legislation
• Ben Chapman – Shell and Eni face one of the biggest corruption cases in corporate history over $1.3bn Nigerian oil field
• Jennifer Thompson – Investors ignore human rights at their peril
• Anchal Vohra – Is Qatar failing to deliver on its World Cup promises?
• Pieter Stockmans – This is a war for land, Romania is the battlefield
• Michael Posner – Why Gap Should Rethink Its Business In Myanmar
• Marina Lopes – The hidden suffering behind the Brazilian coffee that jump-starts American mornings
• Anita Ramasastry, Michel Forst, David R. Boyd and Victoria Tauli-Corpuz – The deadly price of fighting for human and environmental rights
• Institute for Human Rights and Business – Progress since the Introduction of the UK Modern Slavery Act 

Speeches, Videos and Interviews

• Asian Youth Partnership on Business and Human Rights Lecture Series

Academic Materials

• Philip Schleifer – Varieties of multi-stakeholder governance: selecting legitimation strategies in transnational sustainability politics
• Business and Human Rights Journal (Volume 3, Issue 2 – July 2018)
• Sara L. Seck – Transnational Labour Law and the Environment: Beyond the Bounded Autonomous Worker
• Zobaida Khan – Transnational Labour Governance: A Critical Review of Proposals for Linkage through the Lens of the Rana Plaza Collapse in Bangladesh
• Daniel Augenstein – Torture as Tort? Transnational Tort Litigation for Corporate-Related Human Rights Violations and the Human Right to a Remedy 

Blogs           

Asser Institute Doing Business Right Blog

• Shamistha Selvaratnam – The Proposed Binding Business and Human Rights Treaty: Reactions to the Draft
• Shamistha Selvaratnam – The Proposed Binding Business and Human Rights Treaty: Introducing the Draft

Others

• Diane Desierto – From the Indigenous Peoples’ Environmental Catastrophe in the Amazon to the Investors’ Dispute on Denial of Justice: The Chevron v. Ecuador August 2018 PCA Arbitral Award and the Dearth of International Environmental Remedies for Private Victims

• Gabriela Quijano – Okpabi v Royal Dutch Shell: An opportunity to honour international standards or another instance of corporate impunity?
• Claire Tixeire – Can the Lafarge case be a game changer? French multinational company indicted for international crimes in Syria
• Larry Catá Backer – Making Sausages?: Preliminary Thoughts on the "Zero-Draft," the first official draft of the legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other business enterprises
• Nicolás Carrillo-Santarelli – Some Observations and Opinions on the “Zero” Version of the Draft Treaty on Business and Human Rights (Part I) and Some Observations and Opinions on the “Zero” Version of the Draft Treaty on Business and Human Rights (Part II)
• William Meade – Recent decisions in the UK on parent company liability cases show the need for law reform
• Dalia Palombo – Two Critical Issues in the UK Business and Human Rights Litigation

Call for Papers and Abstracts

•  Call for papers for the European Institute for Advanced Studies in Management’s 5th Workshop of Business Ethics (due 1 December 2018)

• Call for abstracts from scholars for the Global Business and Human Rights research workshop (due 10 October 2018)
• Call for abstracts from PhD students and young post-doctorate researchers for the University of St. Gallen’s Business and Human Rights Young Researchers Summit (due 1 November 2018)

Upcoming Events

• 30 October 2018 – SDGs and Initiatives for Sustainable Global Value Chains, European Economic and Social Committee – Brussels
• 6 November 2018 – How to Conduct a Human Rights Impact Assessment?, Enact Sustainable Strategies AB – Stockholm
• 13 November 2018 – 2018 Australian Dialogue on Business and Human Rights, Global Compact Network of Australia – Sydney
• 26-28 November 2018 – Business respect for human rights – building on what works, UN Forum on Business and Human Rights – Geneva
• 28 January-1 February – Doing Business Right Winter Academy - The UN Guiding Principles on Business and Human Rights: From theory to practice – Asser Institute, The Hague

The collapse of the Rana Plaza building on 24 April 2013 in Bangladesh left at least 1,134 people dead and over 2,500 others wounded, while survivors and the families of the dead continue to suffer trauma in the aftermath of the disaster. This first blog of our special series assesses the extent to which litigation and particular "soft" mechanisms have secured justice and compensation for victims and brought the relevant actors – whether global brands or individuals – to account for their alleged culpability for the collapse. To do this, it firstly examines the avenues that have been taken to hold corporations legally accountable in their home jurisdictions for their putative contributions to the collapse on the one hand, and individuals (particularly local actors) legally accountable before the courts in Bangladesh on the other. It then considers the effects of softer mechanisms aimed at compensating victims and their dependants.

1.     Tortious actions and home state liability for global brands

It is difficult to view the tortious actions that have been filed to bring the multinational companies sourcing garments from the factories located in the Rana Plaza building (whether directly or through intermediaries) to account in their home states without a deep sense of disappointment. Two of the most salient cases, brought in the US and Canada, arguably demonstrate foreign courts’ reluctance to hold multinational companies liable for tortious wrongs committed overseas, the ostensible rigidity of the applicable tort law to the detriment of victims of the collapse, and the total lack of legal consequence of CSR-based ethical sourcing policies/codes of conduct. These cases are considered in turn.[1]

a.     US

In May 2016, the Delaware Superior Court in Abdur Rahaman v. JC Penney Corporation, Inc., The Children's Place and Wal-Mart Stores, Inc.^[2] granted a motion to dismiss claims of negligence and wrongful death brought in a putative class action, rejecting efforts to bring litigation to the home jurisdiction of the relevant brands.^[3] The plaintiffs comprised the personal representative and husband of a worker killed in the collapse and another worker who was injured. The defendants, J.C. Penney Corporation, The Children's Place and Wal-Mart Stores, argued that the claims should be dismissed as they were filed after the expiration of the one-year statute of limitations period under Bangladeshi law and because the plaintiffs failed to allege the existence of a duty of care owed to them. 

Applying Delaware's choice of law rules, the Delaware Superior Court rejected the application of US law and found that Bangladeshi law – and its statute of limitations – should apply, thus barring the suit. As per these rules, the Superior Court considered the facts of the case in accordance with the established "most significant relationship" test.^[4] According to this test, the injury occurred in Bangladesh, the conduct causing injury occurred in Bangladesh, and the relationship between the parties was centred in Bangladesh – and thus Bangladeshi law (and its limitation rules) should apply.^[5] Accordingly, the Superior Court concluded that Bangladesh's Limitation Act 1908, dictating limitation periods for suits filed in Bangladesh, was applicable.^[6] On a "plain reading" of the statute, the relevant limitation periods under the act (for negligence and wrongful death, respectively) were each one year and, given that they were both filed two years after the collapse, the claims were time-barred.^[7]

The Superior Court also explored issues surrounding the establishment of the duty of care (which both parties agreed was governed by Delaware law) in respect of the negligence and wrongful death claims. The Superior Court agreed with Wal-Mart, J.C. Penney and The Children's Place that no duty of care was owed to workers downstream in their supply chain.  Here, the Superior Court rejected the notion that the defendants owed any duty of care to the plaintiffs under Delaware law. The plaintiffs were unable to demonstrate:

(i)             the existence of a "special relationship" ordinarily required to establish a duty of care under Delaware law or, excepting this, the operation of the "peculiar risk" doctrine (viz. a special risk particular to the work to be done), particularly given the lack of a direct employment relationship;^[8]

(ii)           an exception to the general rule protecting general contractors from liability for independent contractors' employees;^[9] or

(iii)          illegal conduct sanctioned, for example, by way of its sourcing agreements with factories.^[10]

No less crucially (and as shall be revisited below in respect of the Das v. George Weston decision), it was not the case under Delaware law that a duty of care could be created by way of an ethical sourcing statement; even if the defendant brands knew or should have known of unsafe working conditions, such a finding could not give rise to a legal duty of care where none already existed.^[11]

Accordingly, the Superior Court did not regard the plaintiffs as having alleged a prima facie case for negligence and wrongful death.^[12]

b.     Canada 

The Ontario Superior Court delivered its judgment in Das v. George Weston Limited,^[13] dealing with the responsibility of Canadian retailers for the factory collapse, in July 2017. In it, Justice Perell dismissed the $2 billion class action against the Loblaws group of companies and social auditing company Bureau Veritas. The named plaintiffs, three of whom were among those injured and one whose two sons and daughter-in-law died in the collapse, claimed that Loblaws' adoption of its corporate social responsibility (CSR) standards created a duty to protect workers involved in manufacturing products within its supply chain from structural and safety issues. Justice Perell dismissed the motion to certify the proceedings as a class action, finding that no duty of care could be said to exist under Bangladeshi law (which he concluded was the applicable law governing the action under the choice of law rules) or, in case it applied, Ontario law. In the event, no reasonable cause of action could be said to exist and, given the lack of any viable claims, the court was not able to certify the class.

The plaintiffs' main argument in tort was that, knowing of the notoriously dangerous conditions of workplaces in Bangladesh, Loblaws voluntarily took responsibility for ensuring the buildings in which vulnerable employees were producing its garments were "safe and structurally sound".^[14] Here, Justice Perell affirmed a "real and substantial connection" to Ontario (given presumptive connecting factors including that the defendants are resident and carry out business in Ontario).[15] Secondly, Justice Perell assessed whether Ontario or Bangladesh law should apply. In doing so, he noted the relevance of the location of the activity causing the harm – the lex loci – in determining the applicable law, and concluded that the harm occurred and the plaintiffs reside in Bangladesh and that a finding to the contrary would create an artificial link to Ontario.[16] Justice Perell also dismissed the plaintiffs' alternative argument that an exception to the lex loci rule should apply in such a way that Ontario should take jurisdiction.[17] Thirdly, Justice Perell considered that it was plain and obvious that the lawsuit cannot succeed under Bangladeshi law (the substance of foreign law being a "factual" question to be determined on the basis of expert evidence and source legal materials); no duty of care had been established between a purchaser of goods and workers employed by an independent subcontractor in Bangladesh, and there was no reason to believe that Loblaws would be found to owe such a duty under Bangladeshi tort law.[18] Finally, Justice Perell concluded that the action could not succeed under Ontario law (in the event that it applies). It would fail the relevant legal test to establish a duty of care requiring foreseeability, sufficient proximity, and the absence of overriding policy considerations, thus negating any prima facie duty.^[19]

In a similar vein to Abdur Rahaman v. JC Penney et al., this ruling demonstrates the apparent stringency of the application of the duty of care test at the motion to dismiss stage, as well as the ultimate vacuity and legal inconsequentiality of CSR standards and corporate codes of conduct adopted by global brands. Indeed, in respect of the latter, Justice Perell reasons that policy considerations augured against the recognition of a legal duty of Canadian corporations over workers of suppliers in other countries; such a duty would, Justice Perell argues, deter companies like Loblaws from taking any steps to help workers and effectively punish them for doing such good deeds as instituting CSR policies.[20] David Doorey is rightly sceptical, asking how a company that did little more than "adopt a piece of paper listing standards" could be regarded as carrying out a good deed. While a company can claim to do good deeds, it may well do the opposite in practice.[21] As such, Doorey concludes that there was no real requirement for any meaningful action to protect workers under CSR: "perhaps Justice Perell’s reference to Loblaws’ ‘good deeds’ simply reaffirms how very little we should expect from corporate social responsibility."[22] Other commentators broadly agree, with Agarwal, Beaulne and Schiff, for instance, noting that CSR policies aimed at improving labour standards in offshore factories may not in themselves be enough to bridge the proximity gap between Western brands and workers further down the supply chain (though they leave open the question of whether a more broadly formulated CSR policy would have satisfied the proximity element).[23] Similarly, Lam and Henderson, surmise that tort law has its "limits" in addressing such harms, even as business becomes more globalised.[24]

Taking the two judgments discussed together, it is not difficult to recognise the challenges for class action litigants bringing claims of this type. The rigour with which their claims will be scrutinised and the law applied at an early stage is clear. Agarwal et al. warn of judges' inclinations to conduct detailed appraisals of statements of claim, checking for material facts and whether asserted clauses of action have been artificially characterised to survive preliminary scrutiny.[25] In order to hold multinational companies responsible in their home jurisdictions for practices within their supply chain abroad, it is crucial that plaintiffs demonstrate a meaningful connection between the matter and the relevant country, and consider which laws can be proved through expert evidence. Indeed, these questions concern the very functioning and role of private international law and, as such, it is imperative in transnational disputes like this to assemble an international team of lawyers that is quickly able to anticipate and deal with questions surrounding applicable law and time constraints.

2.     Select case law developments in Bangladesh[26]

Certain legal actions have been instituted in Bangladesh aiming to bring individuals to account for domestic criminal and labour law violations in particular.[27] These actions principally concern local actors including building and factory owners and their affiliates and are wholly distinct from the attempts discussed above to hold multinational companies prioritising low costs to account in their home states (and which, in a sense, attempt to tackle systemic/root causes of injustice).

As regards criminal prosecutions, a case alleging construction code violations and illegally adding floors to the building was launched in April 2013 and has been filed against 18 people,^[28] including Rana Plaza owner Sohel Rana. Following the last hearing held in March 2016, the case was accepted for trial at the Chief Judicial Magistrate Court in Dhaka.^[29] Separate murder charges were accepted against 41 people including Sohel Rana, seven owners of the factories operating in the building, and twelve government officials responsible for safety and inspections.^[30] 35 of those charged have since appeared before court and pleaded not guilty.^[31] Precise trial dates are difficult to identify and the extent to which these cases have progressed at court is unclear. The first successful criminal prosecution relating to the collapse occurred in August 2017, when Sohel Rana was sentenced to three years imprisonment and fined BDT 50,000 for not submitting his wealth statement to the Bangladesh Anti-Corruption Commission (ACC) in a corruption case before Special Judge Court-6 in Dhaka.^[32] Another Dhaka court has framed charges in a separate graft case filed by the ACC against Rana, his parents and seven others.^[33] The ACC alleges that Rana had built the Rana Plaza building with illegally acquired money.^[34] 

Separate Labour Court actions were filed in 2013 against Sohel Rana, the factory owners and other responsible persons before the Labour Court for infringements relating to the failure to give notice of an accident and contravention of law leading to death/grievous harm/harm. Only Rana has been held in prison in connection with these actions, with the remainder either on bail or having failed to surrender to court.^[35]

Two public interest litigation cases were filed in April 2013 before the High Court. The first case was meant to establish which government departments were accountable for failings leading to the collapse. The High Court ruled that a Committee should be established to propose compensation criteria for those affected and their families, and, in September 2014, the Committee submitted its recommendation to the High Court that BDT 1,451,000 (EUR 18,400) should be provided as compensation to the family of each dead and missing worker and a further payment of BDT 500,000 (EUR 5,600) should be made as a payment for pain and suffering.[36] Yet, given the lack of any allocation of responsibility by the court for failings and the trivial amounts distributed, it is understandable that prominent Bangladeshi lawyer Sara Hossain regards these "legal" remedies as inadequate and ineffective.[37]

The second case included a request that the assets of the owners of the building and five factories should be frozen.[38] The Bangladesh Bank issued a circular to all banks shortly thereafter to restrict the withdrawal or transfer of monies of the six named owners and the High Court has since rejected the release of funds from Sohel Rana's bank account, though no decision has been made by the court on the utilisation of the frozen assets or the distribution of compensation.[39]

3.     Soft mechanisms

The relative failure of avenues taken through the national courts to hold corporations legally accountable in their home jurisdictions and individuals (particularly local actors) legally accountable in Bangladesh should be contrasted with the effects of softer initiatives aimed at compensating victims and their dependants.

a.     Rana Plaza Arrangement and Donors Trust Fund 

In November 2013, a number of major stakeholders set up the Rana Plaza Arrangement (Arrangement),[40] an independent process set up to establish a credible, transparent and independent system for delivering support to the victims of Rana Plaza, their families and dependants in line with standards enshrined in ILO Convention No 121 (Employment Injury Benefits Convention 1964).[41] Its twin objectives were to: (i) deliver compensation to workers who suffered injury and family members dependent on the income of those killed (as well as access to medical care for victims in need); and (ii) develop guidelines to verify the value and validity of each claim and by providing for individual awards[42] (a demarcation of any kind of responsibility for the collapse lay outside this ambit). Its support from all major stakeholders – including government, manufacturer and employer associations, civil society and global brands – was unprecedented.[43] A representative of the Clean Clothes Campaign at T.M.C. Asser Instituut's recent event, "Five Years Later: Rana Plaza & the Pursuit of a Responsible Garment Supply Chain", remarked on the Arrangement's uniting effects and ability to get every actor to agree on every single parameter in order to address immediate needs, while also meeting the aim of serving as a prototype for other compensation arrangements.

In January 2014, the Rana Plaza Donors Trust Fund was established to finance the Arrangement. The donors of the Trust Fund ranged from global retailers, textile companies to trade unions and NGOs, with Primark providing almost half of the US $30 million estimated amount required to cover the cost of the claims (revised down from US $40 million).[44] Yet it was only in June 2015, a full two years after the collapse, that the target amount was reached and the disbursement of compensation payments to the victims completed.[45]

b.     OECD National Contact Points

The Organisation for Economic Co-operation and Development's ("OECD") creation of National Contact Points ("NCPs"), tasked with furthering the "effectiveness" of the OECD Guidelines for Multinational Enterprises ("OECD Guidelines")[46] – a multilaterally endorsed code of business conduct promoted by participating governments on multinational corporations operating in or from their territory – has ostensibly provided a framework for dealing with abuses committed in the garment supply chain in Bangladesh. Adhering states of the OECD Guidelines are each required to set up an NCP, which provides the institutional framework through which stakeholders can bring allegations of breaches of the OECD Guidelines by corporations, including in relation to respect for human rights.[47] Under this "specific instance" procedure, the relevant NCP is able to use its good offices to consult and mediate between the relevant corporation and the complainant party[48] (and has on occasion determined that respondent companies have acted inconsistently with the OECD Guidelines).

Following the Rana Plaza collapse, a number of complaints have been filed to NCPs in respect of business operations in the Bangladeshi garment sector. A complaint concerning a fire in the Tazreen Fashion factory was submitted to the German NCP by a member of the German Bundestag in May 2013. In the complaint, KiK Textilien, C&A and Karl Rieker were accused of commissioning the production of goods at the factory despite inadequate fire safety measures in place, of failing to eliminate negative impacts on the safety of works, and of failing to carry out due diligence to eliminate the impacts of their activities on the health and safety of workers – all in contravention of certain provisions of the human rights chapter of the OECD Guidelines. C&A’s case was later forwarded to the Brazilian NCP since the subsidiary of the company that had business relationships with the Tazreen factory was registered in Brazil. The German NCP considered that the part of the complaint relating to alleged breaches of duties of care with respect to safety measures deserved further consideration and invited the remaining parties for mediation talks; the parties eventually agreed on a settlement, and the NCP noted efforts taken by the parties since 2012 instituting various measures such as the reduction in the number of supplier factories, the establishment of long-term supplier relations with the remaining suppliers, and close supervision of and assistance for supplier factories provided by staff based locally, as well as the signing of the Accord on Fire and Building Safety in Bangladesh. Separately in respect of the C&A complaint, the Brazilian NCP concluded by recognising the success of fire safety measures instituted by C&A but recommended the company continue to promote human rights and decent work conditions in line with the OECD Guidelines and noted that the company failed to respond to complaints regarding C&A's business relationships and supply structures.

The first complaint involving Rana Plaza was submitted by Clean Clothes Campaign Denmark and Active Consumers to the Danish NCP in December 2014, in which it was claimed that PWT Group, a Danish MNE which sourced from a garment factory in Rana Plaza, failed to carry out due diligence in relation to its supplier, New Wave Style. In October 2016, the Danish NCP determined that the PWT Group did not work with due diligence processes to such an extent as to comply with the OECD Guidelines and had failed to require New Wave Style to protect employees' human and labour rights, including by taking measures to ensure health and safety in the workplace. The NCP concluded its Final Statement with recommendations to PWT Group regarding the exercise of due diligence and the adoption of CSR policies in accordance with the OECD Guidelines. In its Follow-up Statement in January 2018, the Danish NCP confirmed that PWT had complied with its recommendations, noting that the company had made changes to its management systems to implement recommendations from the OECD Guidelines concerning due diligence, revised its CSR policy, and engaged in systematically implementing its Code of Conduct among suppliers. It also acknowledged efforts within the company to integrate CSR policies into its organisation; its efforts publicise information concerning access to complain; its cooperation with external stakeholders/networks concerning responsible business conduct; and its work to improve CSR communication.

The most recent complaint concerning the Rana Plaza collapse was filed before the German NCP in May 2016. In their submission, the European Center for Constitutional and Human Rights, victims of the collapse, humanitarian relief and development organisations, and trade unions claimed that TÜV Rheinland, a German social auditing company, and TÜV Rheinland India Pvt. Ltd., its Indian subsidiary, did not comply with minimum professional auditing standards and, in their social audit report, failed to identify major non-compliances with the relevant social auditing standards/code of conduct at a factory in the Rana Plaza complex. These shortcomings concerned the failure to reveal, among other issues such as building structure/safety, serious human rights violations including the presence of child labour, discrimination against women, the absence of trade unions, and forced overtime. The complainants viewed the audit report as the reason why companies did not take effective measures against these abuses, thus contributing to the violation of workers' human rights in contravention of the OECD Guidelines. The complainants are still awaiting an initial assessment from the German NCP.

4.     Conclusions

It is tempting to end with some bromide about the relative success of softer measures in providing victims with a measure of justice and accountability for the collapse. But the truth is that neither of the softer mechanisms discussed have resolutely done so. Though of course welcome insofar as payments have begun to be disbursed to victims who have endured so much, the sums paid under the Rana Plaza Donors Trust were very delayed (being disbursed over two years after the event at an amount significantly lower than originally estimated) and the Arrangement does not demarcate responsibility. Indeed, this was not its intention and care must be taken not to undermine the value of the industry-wide action taken to provide (even token) payments to those affected. But with retailer Primark itself determining the amount of and disbursing much of its payments directly, and with the lack of transparency/disclosure regarding the actual amounts that other retailers contributed, can the amounts distributed in connection with the Arrangement be considered reparative or compensatory? Sara Hossain of Bangladesh and Legal Aid Services Trust was right to say at our recent Rana Plaza event that these awards, which do not apportion any measure of responsibility for the collapse, are not compensatory in the legal sense (or even particularly adequate). The OECD NCP process perhaps shows more promise in terms of imputing responsibility to multinational companies for their role in garment industry abuses in Bangladesh, and mediation appears to be a way of getting retailers and auditors to engage with commitments under the OECD Guidelines. But NCP findings are of course not binding and they have no sanctioning power; indeed, it is telling that in one of the cases discussed, retailer C&A simply ignored (with no apparent consequence) complaints regarding its business relationships and supply chain practices.

Meanwhile, efforts to prosecute and hold actors to account in Bangladesh continue; justice and remediation remain out of reach locally. As these processes trundle on, there is no escaping the inability of hard legal avenues to hold global brands and retailers accountable in their home states. Courts have been thoroughgoing in their application of the law and, perhaps understandably in view of these laws, reluctant to hold multinational companies liable for tortious wrongs committed overseas as a result. They have also made clear the lack of legal consequence attached to ethical sourcing policies/codes of conduct; their vacuity serves to remind us how little we should expect from CSR-based standards and the need to go beyond them if we are to secure justice and accountability for the benefit of victims, as echoed by Nayla Ajaltouni of Collectif éthique sur l’étiquette at our recent event.  As it stands, it cannot sensibly be concluded that the legal and soft avenues pursued have dispensed any meaningful sense of justice, compensation or responsibility for the collapse, particularly as they have not brought the relevant garment industry actors – whether global or local – to account.

[1] The following list of cases is partial and that other actions have been filed elsewhere. See, for example, Abdur Rahaman v. JC Penney Corp., Inc. et al., Civ. Action 15-cv-619 (D.D.C. April 23, 2015) filed before the US District Court for the District of Columbia.

[2] Abdur Rahaman v. JC Penney Corporation, Inc., The Children's Place and Wal-Mart Stores, Inc., CA No. N15C-07-174 (Super. Ct. Del.).

[3] Larry Catá Backer, "Are Supply Chains Transnational Legal Orders? What We Can Learn from the Rana Plaza Factory Building Collapse" (2016) 1(11) UC Irvine Journal of International, Transnational, and Comparative Law 11, 36.

[4] Abdur Rahaman (n 2) 8.

[5] Abdur Rahaman (n 2) 13; for a more detailed overview of the court’s reasoning with respect to the “most significant relationship” test, see: Raam Dutia and Abdurrahman Erol, “Five Years Later: Rana Plaza and the Pursuit of a Responsible Garment Supply Chain – Background Paper” Asser Institute (April 2018), 5.

[6] Abdur Rahaman (n 2) 13; moreover, according to Delaware law, where the limitation period for the relevant cause of action under the law of a different state/country is shorter than under Delaware law, or vice versa, an action cannot be brought in a Delaware court after the expiration of the shorter period (14-15).

[7] Abdur Rahaman (n 2) 18-19.

[8] Abdur Rahaman (n 2) 21-23.

[9] ibid. 24.

[10] ibid. 25-26.

[11] ibid. 25.

[12] ibid. 26-27; for a more detailed overview of the court’s reasoning with respect to the duty of care, see Dutia and Erol (n 5) 5-8.

[13] Das v. George Weston Limited 2017 ONSC 4129.

[14] ibid. [121].

[15] ibid. [164].

[16] ibid. [236]-[237], [248], [262].

[17] ibid. [238], [278] ff.

[18] See generally ibid. [404]-[500]).

[19] ibid. [505].

[20] ibid. [525], [536].

[21] David Doorey, "Vacuousness of CSR on Display in Loblaws’ Victory in Rana Plaza Class Action Lawsuit" (2017) Law of Work Blog; for helpful background to the case, see Doorey's flowchart of the legal issues involved.

[22] ibid.

[23] Ranjan K. Agarwal, Gannon G. Beaulne and Ethan Z. Schiff, "Corporate Social Responsibility and the Rana Plaza Class Action" Bennet Jones (2017).

[24] Jessica Lam and Nicole Henderson, "Who Is My Neighbour? Ontario Court Rejects a Duty of Care to Employees of Foreign Suppliers" (2017).

[25] Agarwal et al. (n 23).

[26] For a more detailed appraisal of the case law in this section, see Dutia and Erol (n 5) 10-13.

[27] Note that gaining access to recent information regarding the status of some of these actions has proved tricky.

[28] Al Jazeera and Agencies, "Rana Plaza court case postponed in Bangladesh" Al Jazeera (23 August 2016); Clean Clothes Campaign, Rana Plaza 3 Years On: Compensation, Justice, Workers' Safety (April 2016), 9; "Rana Plaza victims demand justice, compensation" The Daily Star (Dhaka, 24 April 2016); "Rana Plaza owner, 17 others indicted" The Daily Star (Dhaka, 15 June 2016).

[29] Clean Clothes Campaign, Rana Plaza 3 Years On: Compensation, Justice, Workers' Safety (n 28), 9.

[30] Clean Clothes Campaign, Rana Plaza 3 Years On: Compensation, Justice, Workers' Safety (n 28), 10; "Court accepts Rana Plaza murder charge sheet" The Daily Star (Dhaka, 21 December 2015); "Rana Plaza: 24 murder suspects abscond before trial" Agence France-Presse (Dhaka, 21 December 2015).

[31] "Rana Plaza collapse: 38 charged with murder over garment factory disaster" Reuters (Dhaka, 18 July 2016).

[32] "Rana Plaza owner jailed for graft" The Daily Star (Dhaka, 30 August 2017).

[33] Md Sanaul Islam Tipu, "Rana Plaza collapse: Order on charge framing against Sohel Rana, others May 8" Dhaka Tribune (Dhaka, 19 April 2017); Md Sanaul Islam Tipu, "Verdict against Sohel Rana in ACC case on Aug 29" Dhaka Tribune (Dhaka, 19 April 2017).

[34] Md Sanaul Islam Tipu, "Verdict against Sohel Rana in ACC case on Aug 29" Dhaka Tribune (Dhaka, 19 April 2017).

[35] Clean Clothes Campaign, Rana Plaza 3 Years On: Compensation, Justice, Workers' Safety (n 28) 10.

[36] ibid. 8.

[37] As mentioned at T.M.C. Asser Instituut's recent event, "Five Years Later: Rana Plaza & the Pursuit of a Responsible Garment Supply Chain".

[38] ibid.

[39] ibid. 8 (as at April 2016).

[40] Understanding for a Practical Arrangement on Payments to the Victims of the Rana Plaza Accident and their Families and Dependents for their Losses (Rana Plaza Arrangement) (adopted 20 November 2013).

[41] See https://ranaplaza-arrangement.org/mou

[42] ibid.

[43] OECD Watch and the Trade Union Advisory Committee to the OECD (TUAC), "Compensating the Victims of Rana Plaza: What Role for the OECD and the National Contact Points?" (June 2014), 1.

[44] Refayet Ullah Mirdha, "Final Compensation to Rana Plaza victims soon" The Daily Star (Dhaka, 11 June 2015).

[45] ibid.

[46] OECD, OECD Guidelines for Multinational Enterprises (OECD Publishing 2011), 68.

[47] ibid. 31.

[48] ibid. 72-73.

Editor’s note: Abdurrahman is currently working for Doing Business Right project at the Asser Institute as an intern. He received his LL.M. International and European Law from Tilburg University and currently he is a Research Master student at the same university.

1. Introduction

The 2011 update of the OECD Guidelines for Multinational Enterprises (hereinafter ‘Guidelines’-for some introductory information, see here) introduced various changes to the 2000 text of the Guidelines, including a whole new chapter on human rights in line with the UN Guiding Principles on Business and Human Rights. National Contact Points (NCPs) - non-binding, state-based, non-judicial grievance mechanisms established by the adhering states - have since then concluded approximately 60 cases submitted under the newly-introduced human rights chapter.

If an NCP believes that the issues raised in a submission merit further consideration, it accepts the complaint, prepares an initial assessment report and offers its good offices to the parties of the complaint.[1] Parties may reject the offer, accept the offer but fail to reach an agreement in the mediation or, if everything goes well, reach an agreement. In any of these scenarios, the NCP concludes the specific instance with a final assessment report.[2] Between the initial and final assessment reports, however, NCPs are not required to communicate details of the ongoing mediations to the public. Nor do they have to provide any specific details about the agreement of the parties, if at all, along with or after the final report.^[3]

NCPs aim to promote the effectiveness of the Guidelines, to handle enquiries and to use a complaint procedure (so-called specific instance procedure) to facilitate settlements of disputes that may arise in case of non-compliance with the Guidelines by enterprises. Although to provide effective remedies to victims of business-related human rights abuses is not explicitly included among their aims, NCPs have the potential to serve as a forum to which victims can turn to obtain effective remedies.[4] They can receive complaints alleging the violation of internationally recognized human rights and offer mediation to the parties of the complaint to find a solution on which both parties agree upon.

In more than 20 out of these approximately 60 cases concluded, parties to the dispute reached a settlement through a mediation procedure facilitated by the NCP. These cases are considered ‘successful’ or ‘positive’ by the OECD.[5] But can these really be considered as such? Do the NCPs function as an effective grievance mechanism which provides access to remedies to victims of business-related human rights abuses in the cases they have settled? Or were these cases found successful only because the NCPs dealing with them claim so, regardless of the actual remedies provided? In this blog, I will elaborate on the concept of ‘success’ as used by the OECD and how the cloudy nature of the procedure raises questions about the successful conclusion of the cases and of the role of NCPs in this regard.

2. Transparency of the Procedure

Transparency provisions regarding the complaint procedure before an NCP can be found in the Procedural Guidance of the OECD Guidelines. The importance of transparency as a general principle in establishing the accountability of an NCP is stressed, but in relation to finding a balance with confidentiality.^[6] This balance is considered important in ensuring the effectiveness of NCPs, as well as gaining the trust of the parties to the dispute. In particular, sensitive business information, identities of individuals participating in the procedures and proceedings related to the implementation of the Guidelines will normally remain confidential, while only the final results of the procedure will be shared with the public.^[7] Similar emphasis on striking a balance between confidentiality and transparency can also be found in some of the NCPs’ own procedural guidance (see for example here and here).

In reality, different NCPs have a very different understanding of transparency and it is difficult to assess whether they comply with the Guidelines’ transparency requirements and strike a fair balance between transparency and confidentiality. Take the US NCP for example. According to its procedural rules, the principle is confidentiality - that is, the communications of the parties either with each other or with the NCP should remain completely confidential. Without the consent of the other party, no party may disclose any communication or information provided during the proceedings. The failure to comply can result in the termination of the mediation. Moreover, the US NCP often does not publish statements concerning the pending complaints.^[8] Some NCPs, such as the Korean NCP,^[9] do not even inform the parties about their final decisions and the conclusion of their case.

This sacrifice of transparency for the sake of confidentiality in the proceedings comes with its drawbacks. It prevents outsiders, namely other stakeholders who are not party to the dispute, from expressing an informed critique of the NCPs and their effectiveness. As an important consequence of confidentiality at the NCPs, the causal link drawn by some OECD staff[10] between the work of the NCPs and the final agreements between parties becomes quite difficult to scrutinize and open to questions. Relying on three short case studies linked to disputes handled by different NCPs, I will argue that the claimed effectiveness of NCPs would gain credibility if they were acting in a more transparent fashion.  

3. Transparency is essential because …

a.     …what an NCP considers successful is not always so

In June 2013, a complaint was submitted to the Brazilian NCP concerning the activities of a subsidiary of Kinross, a Canadian Mining Company, and its alleged detrimental impacts on the environment which caused harm to lives and houses of people living around one of the company’s gold mines. The NCP invited parties to mediation and, in late 2016, the parties reached an agreement. In the final report of the Brazilian NCP, the details of the agreement between the parties were not shared publicly. Yet, it is known that Kinross committed to compensate the damages done to houses despite the lack of proven causal link between its operations and the damages, and the NCP recommended that Kinross exercise due diligence in order to assess the impacts of its operations in the future.[11] This outcome is unique in that it is one of the few NCP cases in which a company compensated past damages. However, a report published by two NGOs in 2017 cast some doubt on this "success story". In spite of the Brazilian NCP’s recommendation to exercise due diligence, the report claimed that an ensuing expansion project of the company displaced hundreds of residents of traditional communities^[12] and that adverse environmental impact of the mine continued.^[13]

Although the settlement was considered successful,^[14] evidence shows that this conclusion might be premature considering the company again faces similar allegations to those raised initially. Compensation for material damages and satisfaction of victims by ceasing the actions that caused human rights abuses are two types of remedies for human rights violations under international law.^[15] These remedies, namely compensation of house damages and satisfaction in the form of conducting due diligence to prevent future violations, were also expected to be provided according to the final report of the NCP on the Kinross case.[16] Nevertheless, in the Kinross case, past violations which led to the initial intervention of the NCP were allegedly repeated. Therefore, in that case, the original settlement can hardly be considered as an effective remedy as it failed to prevent Kinross from committing similar violations again. Hence, it is fair to claim that the settlement did not change the situation on the ground for the victims and that the work of the NCP was probably not as successful as claimed.

The only public document that can be reached through the OECD’s website is the final statement of the NCP concluding the case. However, this document provides neither a detailed account of the proceedings nor of the agreement reached by the parties. Because the details of the agreement are unknown, the outcome of the case is hard to evaluate. It is only after the publication of an NGO report and its disclosure of some information related to the agreement that it has become easier to assess the success of the case. Access to information regarding settlements brokered by the NCPs is of great importance to determine their effectiveness as well as to hold multinational enterprises (MNEs) accountable for their commitments.

b.     …it will help increase public pressure on companies

In October 2013, World Wildlife Fund (WWF) filed a complaint to the UK NCP claiming that the activities of SOCO, a British oil and gas exploration company, in a part of the Virunga National Park in the Democratic Republic of Congo (DRC), a world heritage site, cause environmental degradations and threatens the life of local communities. In February 2014, the NCP invited both parties to mediation and, in June 2014, parties reached an agreement before the NCP. According to the settlement, SOCO agreed to halt its operations and to resume drilling within the park only if UNESCO and the DRC government confirmed that to do so would not impede on its world heritage status.^[17] Moreover, SOCO committed not to conduct any operation in any other world heritage site in the future and to align its due diligence assessments with international standards and best practices in the industry. It was the first time a company agreed to cease its operations after a procedure before an NCP.

At first glance, this settlement may be viewed as an impressive success of the NCP. However, there were also some other external factors which contributed decisively to this outcome. First of all, WWF initiated an advertisement campaign which increased the publicity of the case substantially. As part of the campaign, shareholders of SOCO were prompted to rethink their investments, some influential individuals were prodded into action and an award-winning documentary on the issue was released. Furthermore, some officials of the EU and British government expressed their concerns and opposition about the operations of SOCO in Virunga. Lastly, hundreds of thousands of people around the world participated in the global campaign and signed a petition asking SOCO to abandon its plans in the DRC.

The increased public scrutiny of the complaint and the efforts of WWF put considerable pressure on SOCO and forced it to make statements regarding the case to justify its operations while not allowing it to keep the complaint out of the public eye. This case is illustrative of the potential impact of publicity on the outcome of a case pending before an NCP. The impact of public scrutiny on the management decisions of a company nudging it towards the mediation table is also visible in other cases. In one case, highlighted by OECD Watch in its latest report, company representatives admitted the public attention’s power to push them towards constructive engagement at the NCPs.[18]  The study also emphasized, based on a number of NCP cases, the detrimental impacts of the strict confidentiality requirements of the NCPs on the mediations.[19] This tells us that external factors, such as the public interest raised by a particular case, might contribute at least as much as the NCPs internal work to the successful resolution of a complaint. Moreover, it is likely that greater transparency from the part of the NCPs would generate greater public awareness and scrutiny and ease the organization of worldwide public campaigns, such as the one put together by WWF. Such publicity at (and around) the NCPs might very well be a key component of their effectiveness as a state-based non-judicial grievance mechanism. 

c.     …it will ease the assessment of the link between the work of an NCP and the settlement of a case

As we have seen in the previous section, mediations before the NCPs are not isolated from external influences. There may well be some external factors that actively contribute to a settlement. These external factors may include, among others, regulatory or legislative concerns, NGO activism or shareholder pressure. This external influence might render it difficult to draw a direct causal link between the work of an NCP and the settlement of a case. On top of that, the lack of transparency of the mediations exacerbates this difficulty by hiding many details concerning the proceedings and how, and whether, the NCP contributed to the settlement. Below, I discuss three settled cases in which external factors exerted significant pressure on companies during the mediation process at an NCP pushing them towards agreeing to a settlement.

In May 2013, the German NCP received a complaint by a German MP about three German MNEs which sourced from the burned-down Tazreen Fashion garment factory in Bangladesh, alleging that the MNEs did not comply with the OECD Guidelines when sourcing from this factory. The NCP accepted the complaint for further consideration and led mediation talks between the parties which culminated in a settlement. With the settlement, the companies agreed on the importance of workers’ rights and safety in their supply chains and committed to taking some measures to improve the fire and building safety standards of their suppliers in Bangladesh. However, the filing of the complaint and the NCP procedure coincided with the aftermath of the Rana Plaza disaster and the ensuing global outcry. Since the Rana Plaza collapse, Bangladesh has been targeted by many international and local initiatives to improve the working conditions of workers and protect labor rights. In this context, it is not straightforward to attribute the changes in the behavior of the aforementioned German companies to the non-binding German NCP procedure and the settlement of the complaint.

In March 2015, a case was submitted to the Dutch NCP concerning a Dutch pharmaceutical company, Mylan N.V., selling medicines that were used in the execution of death penalties in the US. After concluding that the case merited further discussion, the NCP facilitated mediation between the parties to the complaint. In April 2016, the complaint was settled. Accordingly, Mylan promised to enhance its due diligence and took active steps to prevent the use of its products in lethal injections in the US prisons. However, after the submission of the complaint, Mylan’s activities were also questioned in the Dutch Parliament and the responsibility of Mylan to prevent its products from being used in serious human rights violations was highlighted.[20] More importantly, some shareholders voiced their concerns about the controversial use of its products. Additionally, a pension fund announced that it sold all its shares in Mylan and would not invest in the company anymore.[21] Here again, it is not easy to disentangle what or who led Mylan to change its policies. In any case, the pressure applied by other actors was certainly not irrelevant to the final outcome of the case before the NCP.

Finally, in October 2012, an indigenous community in Sweden filed a complaint with the Swedish and Norwegian NCPs, claiming that Statkraft, a Norwegian MNE, violated their indigenous rights by planning to build a wind power plant on their herding ground. Both NCPs accepted the complaint with Norway taking the lead. Although various informal and official mediation meetings were held, the parties could not reach an agreement. The Norwegian NCP concluded the case in June 2014 and both NCPs issued their final statement in February 2016. However, a few months later, the parties of the complaint announced that they reached an agreement on their own, in order to reduce the detrimental impacts of the wind farm on the indigenous community. In this case, although the settlement was hailed as a success by the NCPs and the OECD,^[22] the extent to which the NCPs contributed to the settlement is uncertain considering that it took place outside the process before the NCPs.

All these settlements share a commonality. In each case, there were some significant external factors which probably affected the outcome of the case and contributed to the settlement. Consequently, these other factors question the existence of a direct link between the NCP procedure and the conclusion of a settlement, and lead to some doubts about the capacity of the NCPs to provoke on their own the successful resolution of the disputes. Indeed, if a conjunction of external factors, such as shareholder involvement, public outrage or political intervention, is necessary for a case to be successfully settled at an NCP, then it is less the NCP process as much its general context that matters. Such a conclusion would lend some support the existing skepticism regarding the capacity of the NCPs to provide an effective remedy by themselves.^[23]  In any case, more transparency during the proceedings would make it easier to measure the real impact of the NCPs on the final outcome.

4. Conclusion

In conclusion, the NCPs should not fear an increase in transparency. Indeed, it is in their best interest to showcase the concrete impact of their work in specific cases. Firstly, publicity will arouse the interest of other actors, such as shareholders, politicians and the public. These actors can have a determining influence on the positive resolution of complaints before the NCPs. They can put pressure on companies, while the NCPs are deprived of strong bargaining power. Secondly, more transparency is key to a better assessment of the work of the NCPs. The current level of secrecy raises reasonable doubts regarding the NCPs' capacity to trigger the successful settlement of complaints. Greater publicity is essential to support the OECD’s claim that NCPs provide an effective remedy for the victims of human rights violations. This is supported by OECD Watch which considered recently “imbalanced or unduly restrictive policies on transparency and confidentiality” one of the primary reasons for the failure of NCPs to provide an effective remedy.[24] Moreover, it would lead to productive critical engagement with the NCPs' strategies in leading the parties towards a specific settlement and heighten their public accountability.  

Transparency does not entail the dissemination of every piece of information related to NCP proceedings. Indeed, companies should not be obliged to reveal unrelated/important trade secrets (and victims as well as witnesses should be able to stay anonymous for security reasons). However, it is unlikely that many of the pieces of information that may be revealed during NCP mediations will be of this kind. In any event, the following documents should be systematically published:

• Complainant positions on the dispute (with names redacted if necessary to protect the victims or whistleblowers from potential retaliation)
• Company positions on the dispute (with confidential trade secrets redacted)
• NCPs proposition of settlement
• Complainant and company positions on a potential settlement
• Final settlement

The OECD Guidelines and the specific instance procedure are potentially promising avenues to deal with business-related human rights violations. The procedure has some advantages like having lower formal requirements than the submission of a judicial case and bringing companies and victims around a table to assist them to solve the issue outside of judicial proceedings. Nevertheless, as argued by John Ruggie himself there is still a long way to go to increase the effectiveness of the NCPs and to ensure that they provide effective remedies for complainants.^[25] Significantly increasing the transparency of the NCP specific instance procedure is key to ensuring the full compliance of MNEs (and adhering states) with the Guidelines and with the spirit and letter of the UNGPs.

[1] OECD, OECD Guidelines for Multinational Enterprises (OECD Publishing, 2011) 72,84.

[2] ibid, 73,85.

[3] ibid.

[4] OECD, Implementing the OECD Guidelines for Multinational Enterprises: The National Contact Points from 2000 to 2015 (OECD Publishing, 2016) 30; UN Human Rights Council, ‘Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises’ (2008) UN Doc A/HRC/8/5 para.98.

[5] See for some ‘successful’ and ‘positive’ cases: US NCP, Specific Instance between the International Union of Food, Agriculture, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF) and Starwood Hotels & Resorts Worldwide for conduct in the Maldives and Ethiopia (2016) <https://www.state.gov/e/eb/oecd/usncp/specificinstance/finalstatements/257110.htm>  accessed 03 May 2018; UK NCP, Complaint by ADHRB against Formula One Group companies (2015) <http://mneguidelines.oecd.org/database/instances/uk0042.htm>  accessed 03 May 2018; Norwegian NCP, Mediated Outcome between The Association for International Water Studies (FIVAS) and Norconsult AS (2015) <http://nettsteder.regjeringen.no/ansvarlignaringsliv-en/files/2015/11/150622-Final-Statement-FIVAS-and-Norconsult-FINAL.pdf> accessed 03 May 2018.

[6] OECD (n 1) 79.

[7] ibid 85.

[8] Evaristus Oshionebo, ‘The OECD Guidelines for Multinational Enterprises as Mechanisms for Sustainable Development of Natural Resources: Real Solutions or Window Dressing’ (2013) 17 (2) Lewis & Clark L. Rev. 545, 580.

[9] OECD Watch, Remedy Remains Rare (2015) 37.

[10] Roel Nieuwenkamp, ‘Outcomes from OECD National Contact Point cases: More remedy than you may think!’ (Cambridge Core Blog, 2017) <http://blog.journals.cambridge.org/2017/11/10/outcomes-from-oecd-national-contact-point-cases-more-remedy-than-you-may-think/>  accessed 03 May 2018.

[11] Brazilian NCP, Final Report-KINROSS Gold Corporation vs. Association of Neighborhoods of Paracatu (2016) <http://mneguidelines.oecd.org/database/instances/br0020.htm> accessed 03 May 2018.

[12] Above Ground and Justiça Global, Swept Aside: An Investigation into Human Rights Abuse at Kinross Gold’s Morro do Ouro Mine (2017) 11.

[13] ibid 29.

[14] Nieuwenkamp (n 10).

[15] UNGA Res 60/147 (16 December 2005) UN Doc A/RES/60/147.

[16] Brazilian NCP (n 11).

[17] Joint Statement by SOCO International PLC (‘SOCO’) and WWF (2014).

[18] OECD Watch, The State of Remedy under the OECD Guidelines (2018) 12.

[19] ibid 11-12.

[20] Dutch NCP, Final Statement on Bart Stapert, attorney vs. Mylan (2016) 3.

[21] ibid.

[22] Nieuwenkamp (n 10).

[23] See for examples of questioning of the NCPs: OECD Watch (n 9); Oshinebo (n 8); Scott Robinson, ‘International Obligations, State Responsibility and Judicial Review under the OECD Guidelines for Multinational Enterprises Regime’ (2014) 30 Utrecht J. Int'l & Eur. L. 68, 79; Bernadette Maheandiran, ‘Calling for Clarity: How Uncertainty Undermines the Legitimacy of the Dispute Resolution System under the OECD Guidelines for Multinational Enterprises’ (2015) 20 Harv. Negot. L. Rev. 205, 243.

[24] OECD Watch (n 18) 7.

[25] John Gerard Ruggie and Tamaryn Nelson, ‘Human Rights and the OECD Guidelines for Multinational Enterprises: Normative Innovations and Implementations Challenges’ (2015) 22 Brown J. World Aff. 99, 121.