State duty to protect

1. State duty to protect Pillar 1

2. Host/home states The extraterritoriality debate • Territorial state (host state – GP1) • Extraterritorial issues (home state to act) • GP 2 • GP 7 for conflict zones and gross abuses

3. Home state GP 2: ‘States should set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations.’ ‘At present States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a recognized jurisdictional basis. Within these parameters some human rights treaty bodies recommend that home States take steps to prevent abuse abroad by business enterprises within their jurisdiction.’ GP 2 Commentary • ‘domestic measures with extraterritorial implications’ (-> target parent company with transparency laws and soft law, and contract requirements (state involved through ‘state-business nexus’) • ‘direct extraterritorial legislation and enforcement’ (-> criminal law)

4. Various capacities of states The State as • Regulator/Policymaker (GP 3) • Economic actor (GPs 4-6) (‘state-business nexus’) • Owner: State owned enterprises (SOEs) (GP 4) • Credit/guarantees provider: export credit agencies, investment insurance & guarantee agencies (GP 4) • Privatization: public services are privatized (GP 5) • Buyer: public procurement(GP 6) • ‘Complex’ actor (GP 8-10) (‘policy coherence’) • Within the state apparatus: Ministries, agencies and gov institutions, at national/local level (GP 8) - >‘vertical & horizontal domestic policy coherence • In international negotiations (trade, investment) - > maintain ‘domestic policy space’ (GP 9) • As member of business IGOs -> not abdicate HR obligations (GP 10) • Advisor in complex situations (conflict zones) (GP 7)

5. Ensuring policy coherence Need for ‘vertical and horizontal domestic policy coherence’ • Vertical policy coherence – policies & laws to actually implement IHRL obligations. • Horizontal policy coherence – ‘supporting and equipping departments and agencies, at both the national and subnational levels, that shape business practices – including those responsible for corporate law and securities regulation, investment, export credit and insurance, trade and labour – to be informed of and act in a manner compatible with the Governments’ human rights obligations.’ GP 8 Commentary

6. Access to remedies

7. Remediation in the UNGPs Pillar 2: Remediation as part of RtR (GP 22) – 2 functions • Actual impacts are made good for rightholders • Information produced by grievance mechanisms feeds into the HR DD processes to make it more effective (identify impacts) Pillar 3: Access to remedy - State-based and non-state based remedial mechanisms • State-based • Judicial • Non-judicial 2. Non-State-based • Grievance mechanisms in individual companies • Complaint mechanisms in industry or multistakeholder schemes

8. Remediation (Pillar 2) P 22. Where business enterprises identify that they have caused or contributed to adverse impacts, they should provide for or cooperate in their remediation through legitimate processes.

9. Non- judicial remedies

10. Effectiveness criteria for non-judicial grievance mechanisms P 31. In order to ensure their effectiveness, non-judicial grievance mechanisms, both State-based and non-State-based, should be: (a) Legitimate (enabling trust, fair processes) (b) Accessible (being known, facilitating access to marginalized/vulnerable stakeholders (c) Predictable (clear procedure, timeframe, outcomes available, monitoring of implementation) (d) Equitable (access to information, expertise) (e) Transparent (parties informed about its progress) (f) Rights-compatible (international human rights) (g) A source of continuous learning (to improve the mechanism and prevent future grievances and harms)

11. National Contact Points (NCP) OECD Guidelines for Multinational Enterprises (1976/2011) Structures of NCPs • 21 NCPs are single government departments; • 7 NCPs are multiple government departments; • 9 NCPs are tripartite; • 2 NCPs are quadripartite. (2008, numbers slightly changed for 2014)

12. NCPs’ functions and roles Functions • Investigate complaints (-> mediation/conciliation) • regular meetings with business and civil society • consult on an informal basis • advise committees/permanent bodies Roles • forward looking - promote the Guidelines • backward, compliance-oriented – deal with specific instances of non-compliance

13. National Human Rights Institutions Mandate of NHRIs: two main responsibilities • human rights promotion, including creating a national culture of human rights where tolerance, equality and mutual respect thrive (2) human rights protection, including helping to identify and investigate human rights abuses. Paris Principles (1991) Business And Human Rights - A Guidebook For National Human Rights Institutions, International Coordinating Committee, 2013

14. Judicial remedies • Law of negligence • Alien Tort Claims Act

15. Law of negligence • Tort law – • Delictual liability -

16. Law of negligence (common law) Liability in negligence law if • Duty of care– and its breach(by not meeting the standard of the 'reasonable person‘) • Causality • Harm (damage) Duty of care exists if • Foreseeability (risk of damage should be foreseeable) • Proximity (between claimant and defendant) • Fairness ‘The three-stage test in … Caparo Industries plc v Dickman [1990] 2 AC 605 for determining whether a situation gives rise to a duty of care. The three ingredients are that the damage should be foreseeable, "that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of "proximity" or "neighbourhood" and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other."’ (Chandler v Cape, 2013)

17. Law of negligence (common law) UK’s tort of negligence: “take care not to injure your neighbours”: “You must take reasonable care to avoid acts or omissions which you can reasonablyforesee would be likely to injure your neighbour … (persons so closely and directly affected by my act that I ought reasonably to have them in contemplation...)”

18. Law of negligence (civil law) French civil code: “every act whatever ... which causes damage to another obliges him by whose fault the damage occurred to repair it.” (Art. 1382 civil code)

19. UK transnational litigation • Thor - mercury poisoning of workers in South Africa (1999) • Cape PLC – asbestos-related disease of miners in South Africa (2000) • Rio Tinto - throat cancer of worker in uranium mine in Namibia (1996)

20. Lubbe v Cape plc (UK) • 7500 South African claimants • Issue: asbestos poisoning of miners • Claim: parent company controlled operations of subsidiary and had knowledge of risks -> duty of care to take steps to prevent exposure to dust • 2001: settlement of 21 mil pounds (not respected) • 2003: new settlement of 10.5 mil pounds settlement

21. Ngcobo v Thor Chemicals (UK) • negligent design, transfer, set-up, operation, supervision and monitoring of intrinsically hazardous process • negligent acts and omissions (i.e. failure to take steps to protect the South African workers against the foreseeable risk of mercury poisoning).

22. Thor case (UK) The judge on first day: ‘What are these South African claimants doing in my court?’ Thor was the first successful ‘forum non conveniens’ in a UK court. Thor to pay £1.5 million in damages Jock McCulloch, ‘Beating the odds’, Review of African Political Economy, 2005

23. Key issue “The key issue raised is whether an MNC parent company owes a legal duty of care to those injured by its overseas operations” Richard Meeran(plaintiffs’ attorney)

24. Obstacles to transnational litigation Obstacles to holding parent company liable (see also GP 26) • Limited liability principle (hard to prove own fault of parent company as causing the harm) • Foreign policy implications (both host and home governments may object) (see ATCA) • Principle that the loser of a case pays both their own and the winner’s costs (in Europe) • Cases are expensive andrequire special legal expertise due to complexity Unintended consequences of transnational litigation: • Disincentive for companies to be transparent on CSR (Kasky v Nike litigation in California) • Litigation may act as a barrier to investment in countries with poor human rights records

25. Alien Tort Claims Act (ATCA) United States (1789)

26. Alien Tort Claims Act (ATCA) ‘The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.’

27. ATCA cases Approximativekly 50 corporations sued so far (2007) • Coca-Cola, • Exxon-Mobil, • Gap, • Levis Strauss, • Nike, • Pfizer, • Rio Tinto, • Shell, • Siemens, • Del Monte, • Dole, • BHP, Chevron, • Unocal

28. Then… Offences against the law of nations (18th century) 1. Piracy 2. Infringements of the rights of ambassadors 3. Violation of safe conducts

29. ... Now ATCA - a short list • genocide, • extra-judicial killing, • torture, • war crimes, • slavery, • extreme arbitrary detention

30. What human rights under ATCA? “Actionable violations of international law must be of a norm that is specific, universal, and obligatory”. In re Estate of Marcos Human Rights Litigation (1994) ‘We are persuaded that federal courts should not recognize private claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms familiar when §1350 was enacted.’ Sosa v. Alvarez (2004)

31. Sosa v. Alvarez (2004) ’judicial power should be exercised on the understanding that the door is still ajar subject to vigilant doorkeeping, and thus open to a narrow class of international norms today.’

32. ATCA landmarks • 1980 Filartiga v. Pena-Irala (torture committed by police in Paraguay) • 1995Kadic v. Karadzic (genocide and war crimes) (egregious human rights violations committed by private actors) • 2002 Doe v. Unocal Corp (companyaiding and abetting murder, rape, forced labour) • 2004 Sosa v. Alvarez-Machain (scope of ATCA) • 2013 Kiobel v. Shell (extraterritorial application of US law (ATCA))

33. Filartiga v. Pena-Irala (1980) intentional torture committed under the guise of official authority violates customary international norms of human rights, irrespective of the nationality of the parties.

34. Kadic v. Karadzic (1995) exceptionally egregious human rights violations, including genocide, war crimes, and slave trading, are exempt from the state action requirement regardless of whether the violation was committed by private or state actors.

35. Doe v. Unocal Corp (2002) The court allowed the case to go to trial and for the plaintiff to prove that Unocal aided and abetted murder, rape, and forced labor committed by the Burmese government and militia

36. Unocal case (1996-2005) Plaintiffs alleged that Unocal knew or reasonably should have known that the military, whom Unocal had contracted to provide security for the building of the pipeline, would engage in such practices -> complicity

37. Doe v. Unocal Corp (2002) ‘Unocal knew that the military had a record of committing human rights abuses; that the Project hired the military to provide security for the Project, a military that forced villagers to work and entire villages to relocate for the benefit of the Project; that the military, while forcing villagers to work and relocate, committed numerous acts of violence; and that Unocal knew or should have known that the military did commit, was committing, and would continue to commit these tortious acts.’ (Federal District Court)

38. Complicity - Unocal case ‘Aiding and abetting’ the perpetuators: ‘a certain level of participation and knowledge’, that is, “knowing practical assistance or encouragement that has a substantial effect on the perpetration of the crime”

39. Elements of complicty • Conduct (actusreus): accomplice must contribute in a material (‘direct and substantial’) way • Knowledge (mens rea): element of intent and/or knowledge (must have intended or have been reckless as to its commission) • Effect:substantialeffect points to causality

40. Mens rea (in Unocal case, 2002)… ‘knowledge’ Ninth Circuit Court of Appeals (Unocal) applied theFurundzijastandard on mens rea: “it is not necessary for the accomplice to share the mens reaof the perpetrator, in the sense of positive intention to commit the crime.” If the accused “is awarethat one of a number of crimes will probably be committed, and one of those crimes is in fact committed, he has intended to facilitate the commission of that crime, and is guilty as an aider and abettor.”

41. … and mens rea (in Talisman case, 2009) ‘intent’ Second Circuit court: plaintiff proves that defendant acted with the purpose of facilitating the crime; a defendant's mere knowledge that its conduct has or will facilitate such wrongdoing is insufficient. Presbyterian Church of Sudan v. Talisman Energy (2009)

42. End of Unocal case • Case was settled on the eve of the scheduled en banc rehearing (2004) • Unknown amount – details of settlement not disclosed

43. Wiwa v. Shell (2009) Aiding and abetting and conspiracy of Royal Dutch Shell and its Nigerian affiliate with Nigerian government and security forces Aim: to detain, torture, and execute members of the Ogoni activists Settlement of $15.5 -> compensate the plaintiffs, establish a trust for the benefit of Ogonis and cover legal costs (2009)

44. Kiobel v. Shell (2013) Shell’s legal strategy: to challenge the very applicability of ATCA to 1 – HR abuses committed abroad, 2 – to companies, and to 3 – accomplices. Main Questions in the case: • Does ATCA, which refers to international law (law of nations), apply to companies (artificial persons), or to natural persons only? • Does ATCA applies to HR abuses committed abroad, in other jurisdictions (or only within the US and high seas)? • Can ACTA find an accomplice (aiding and abetting) in a crime liable or only the principal offender?

45. Ruggie’s comments to Shell’s legal strategy ‘But what would the corporate responsibility to respect human rights involve in a case like Kiobel? … Should the corporate responsibility to respect human rights remain entirely divorced from litigation strategy and tactics, particularly where the company has choices about the grounds on which to defend itself? … Would the commitment to socially responsible conduct include an obligation by the company to instruct its attorneys to avoid such far-reaching consequences where that is possible? And what about the responsibilities of the company’s legal representatives? Would they encompass laying out for their client the entire range of risks entailed by the litigation strategy and tactics, including concern for their client’s commitments, reputation, and the collateral damage to a wide range of third parties? I don’t know what the correct answers to these questions are, but because the stakes are so high Kiobel may be the ideal case for starting the conversation. What I do know is that if, on top of the many other reputational and legal challenges it has faced over the years, Shell also ends up being held responsible for so radically constricting the ATS, its road back to the corporate social responsibility fold will be long and hard.’ (Ruggie, 2012)

46. Kiobel v. Shell (2013) Court’s decision • presumption against extraterritorial application of ATCA • This was the answer to the question posed by the Court: ‘Whether and under what circumstances the Alien Tort Statute, 28 U.S.C. § 1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.’ • Follow-up: uncertain at this stage but much more difficult to seek justice in the US when HR are infringed outside the US and not by US companies.

47. Corporate liability & state sovereignty South African government: case interferes with the policy embodied by its Truth and Reconciliation Commission, which “deliberately avoided a ‘victors’ justice’ approach to the crimes of apartheid and chose instead one based on confession and absolution, informed by the principles of reconciliation, reconstruction, reparation and goodwill.” South African Apartheid Litigation (2002)

48. Why litigate in the US • Contingency fee representation • Many public interest lawyers in US • Defendants bear their own costs • Higher damages • Plaintiff-friendly discovery rules Jennifer A. Zerk, Multinationals and corporate social responsibility, 2006

49. Complicity in Ruggie’s reports (1) Ruggie: ‘Respecting’ human rights includes avoiding complicity Responsibility for third parties’ misconduct: ‘Complicity refers to indirect involvement by companies in human rights abuses - where the actual harm is committed by another party, including governments and non-State actors.’ Concept has legal and non-legal pedigrees (has become an important benchmark for social actors) (2008)

50. Complicity outside Ruggie’s work (2) Accomplice (aider and abettor) knowingly provides practical assistance or encouragement that has a substantial effecton the commission of a crime. (US Alien Tort Claims Act, int. criminal law) ‘A company is complicit in human rights abuses if it authorises, tolerates, or knowingly ignores human rights abuses committed by an entity associated with it, or if the company knowingly provides practical assistance or encouragement that has a substantial effect on the perpetration of human rights abuse.’(Global Compact)