When access to judicial remedies is flouted

An elevator brings thirty miners of the Mopani Copper Mines (MCM) in Kitwa, Zambia to their workplace approximately one mile below ground. Swiss commodity giant Glencore holds the majority of the MCM shares. The mine employs some 20'000 workers.
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Those whose rights are trampled on by a multinational should be able to successfully seek compensation. A new study shows how difficult this is for victims in the South when the multinational is headquartered in the North.

Thousands of people are witnessing their environment being polluted day after day, their health being jeopardized, and their human, labour and trade union rights trampled underfoot. The responsibility for this often lies with multinational companies, some of which are headquartered in Switzerland. Although the UN provides for victims to be able to sue for their rights and obtain redress (1), the implementation of these rights and principles is coming up short throughout the world. Many countries lack independent and functioning legal systems, the authorities are corrupt and/or accomplices of the multinationals. What remedies could be available to affected communities in the Democratic Republic of the Congo for example, for taking action against water pollution by Glencore? What is more, those who defend themselves risk persecution.

Major legal loopholes

If the victims of human rights violations cannot get justice locally, they should be able to bring actions in the countries where the parent companies are headquartered. The possibilities in this regard in North America, the EU and Switzerland were the subject of a study by the International Corporate Accountability Roundtable (ICAR) and the European Coalition for Corporate Justice (ECCJ), which work closely with the Swiss Campaign for Corporate Justice.

The experts reach a clear conclusion: «States have, in general, failed to fulfil their duty to protect human rights by ensuring that victims have access to effective remedies, including judicial remedies, particularly for human rights abuses that occur abroad (extraterritorially) at the hands of businesses». And they confirm what the Federal Council stated in its response to Socialist Party Councillor of State Anne Seydoux-Christe's interpellation: «There are no mandatory legal provisions that guarantee access to Swiss justice when there are lacunae in the judicial system abroad».

For a long time now only the USA has offered the possibility – through its Alien Tort Claims Act (ATCA) – to file suits over human rights violations by multinationals. The law allows anyone (irrespective of nationality) to invoke US justice if international law is violated anywhere in the world. Over 200 suits have been filed against companies since 1980. The conclusion of Kiobel vs. Royal Dutch Petroleum (2013) could change that, however. The Supreme Court has drastically restricted the applicability of ATCA to cases outside the United States. The effect of this decision remains unclear.

No accountability on the part of parent companies

Victims of human rights violations in the South generally run into a whole series of legal and practical hurdles. The major ones are:

  1. «Forum non conveniens». This allows courts to dismiss cases on the pretext that the suit should be filed in the place where the law was violated. On this basis, the US Justice system refused to entertain complaints against Union Carbide following the 1984 Bhopal disaster. This provision exists neither in the EU nor in Switzerland. The EU even expressly stipulates that civil claims over extraterritorial incidents against companies headquartered in the EU must be accepted. Accordingly, a British court has accepted the suit brought against Trafigura. The commodity multinational was accused of involvement in the dumping of toxic waste in Côte d'Ivoire.
  2. The corporate veil, the legal separation of parent and subsidiary into two different entities. This limitation of liability is the norm in most legal systems; it is waived only in very exceptional cases. It is virtually impossible to lift the corporate veil in Switzerland. Although Glencore has control over its subsidiary in the Congo and also rakes in the profits generated there, the parent company cannot be held liable for the actions of its subsidiary. There is leeway in some countries, however. In the Netherlands the judicial system can admit cases when there is a sufficiently close relationship between the claim against the parent company and that against its subsidiary abroad. Hence, in 2013 a civil court condemned Shell Nigeria for damage to the environment resulting from inadequate protection of pipelines.
  3. Impediments to action and court costs. As in Switzerland, the burden of proof is on the plaintiff and can be extremely heavy. This is particularly true when a court cannot force a company to make important documents available. Court costs are often exorbitant, and it is extremely difficult for plaintiffs from the South to obtain State aid in that connection. Whereas the Dutch Government financially supported the Nigerian farmers in their suit against Shell, the Swiss authorities left the widow of murdered Colombian trade unionist Luciano Romero in the lurch with her lawsuit against Nestlé (2012).
  4. Collective redress mechanisms. These are common in the United States and allowed in some European countries, more specifically in the United Kingdom. There is growing acceptance in the EU of NGOs filing suits on behalf of victims, as did Friends of the Earth Netherlands against Shell in Nigeria, for example. The situation is different in the United States, where third parties must be directly affected by violations of the law. In Switzerland, there is neither the possibility of suing on behalf of third parties nor of filing a collective action suits. The law is currently being revised in this latter regard, however.
  5. Reluctance on the part of the authorities. One obvious example of this is the action brought in the Romero case. In 15 months the judicial authorities did nothing apart from transferring the dossier from the Canton of Zug to Vaud, with the requirement to the plaintiffs, nota bene, that the documents be translated into French. Finally, it was decided simply not to admit the lawsuit. «It is shocking that the Swiss judicial system is unwilling to pursue well-founded allegations against companies», says Wolfgang Kaleck, Secretary-General of the European Center for Constitutional and Human Rights (ECCHR). An appeal is pending before the Federal Supreme Court of Switzerland.

Improvements are needed in all these respects. In their numerous recommendations, ICAR and ECCJ conclude that States must enact more and better rules, on the one hand at the statutory level, on the other, through clear political decisions designed to improve access to legal remedies. The fact is that headway will only be made in the fight against impunity for companies that violate human rights when States hosting their headquarters assume their responsibility.

(1) UN Covenant on Civil and Political Rights (ICCPR, Article 2) and the UN Guiding Principles on Business and Human Rights