Human Rights in Business

Removal of Barriers to Access to Justice in the European Union

Juan José Álvarez Rubio, Katerina Yiannibas, Juan José Álvarez Rubio, Katerina Yiannibas

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351979146
• Edition: 1
• Topic: Law
• Subtopic: Financial Law
• Index: Law

The capacity to abuse, or in general affect the enjoyment of human, labour and environmental rights has risen with the increased social and economic power that multinational companies wield in the global economy. At the same time, it appears that it is difficult to regulate the activities of multinational companies in such a way that they conform to international human, labour and environmental rights standards. This has partially to do with the organization of companies into groups of separate legal persons, incorporated in different states, as well as with the complexity of the corporate supply chain. Absent a business and human rights treaty, a more coherent legal and policy approach is required.

Faced with the challenge of how to effectively access the right to remedy in the European Union for human rights abuses committed by EU companies in non-EU states, a diverse research consortium of academic and legal institutions was formed. The consortium, coordinated by the Globernance Institute for Democratic Governance, became the recipient of a 2013 Civil Justice Action Grant from the European Commission Directorate General for Justice. A mandate was thus issued for research, training and dissemination so as to bring visibility to the challenge posed and moreover, to provide some solutions for the removal of barriers to judicial and non-judicial remedy for victims of business-related human rights abuses in non-EU states. The project commenced in September 2014 and over the course of two years the consortium conducted research along four specific lines in parallel with various training sessions across EU Member States.

The research conducted focused primarily on judicial remedies, both jurisdictional barriers and applicable law barriers; non-judicial remedies, both to company-based grievance. The results of this research endeavour make up the content of this report whose aim is to provide a scholarly foundation for policy proposals by identifying specific challenges relevant to access to justice in the European Union and to provide recommendations on how to remove legal and practical barriers so as to provide access to remedy for victims of business-related human rights abuses in non-EU states.

1
Judicial remedies

The issue of jurisdiction

Daniel Augenstein and Nicola Jägers

1.1 Overview

This chapter addresses jurisdictional challenges that third-country victims of human rights abuses committed by EU-based ‘multinational’ companies (MNCs) face in seeking redress in EU Member State courts. In general terms, private international law allocates jurisdiction to courts on the basis of a nexus to the forum state. In the EU, this general rule finds an expression in the requirement that the defendant of a civil action must be domiciled in one of the EU Member States. This creates difficulties in cases of private litigation for human rights abuses committed by MNCs where parts of these companies are domiciled outside the EU. While from an economic point of view, MNCs operate as globally integrated entities, they appear in law as a multitude of separate legal companies with different ‘nationalities’. An important consequence of this legal sequestration is that victims of human rights abuses committed by EU-based MNCs outside the EU face significant obstacles in seeking redress in EU Member State courts, should they find no effective remedy in their home state. On the one hand, while EU Member State courts generally have jurisdiction over (parent) companies domiciled in the EU, it proves difficult to establish the liability of these companies in substantive law for human rights abuses committed by their subsidiaries and contractors in third countries. On the other hand, while third-country victims of human rights abuses often encounter difficulties in obtaining effective redress in their home countries, Member State courts will as a general rule decline jurisdiction in cases directly brought against these foreign subsidiaries and contractors in the EU.

In the second section, these challenges are addressed by way of examining the impact of the human right to access to justice and effective remedies on the allocation of jurisdiction in private international law. Against this background, the third section compares the allocation of jurisdiction under private international law in the European Union (Brussels I Regulation) and the United States. Particular reference is made to the US Alien Tort Claims Statute, until recently a preferred forum for victims seeking civil redress for human rights abuses committed by MNCs. The final section of the chapter analyses three avenues for establishing jurisdiction of EU Member State courts over human rights abuses committed by foreign companies in cases not covered by the Brussels I Regulation (‘residual jurisdiction’).

1.2 Impact of international human rights law on jurisdiction in private international law

1.2.1 Introduction

International human rights law can play an important role in private litigation for human rights abuses by MNCs. International human rights treaties impose obligations on states to prevent and redress corporate human rights abuses within their (human rights) jurisdiction. As public institutions of the state, civil courts adjudicating disputes between private parties are directly bound by these human rights obligations. This includes obligations to ensure victims’ access to justice and to effective civil remedies. The important role of the state in ensuring effective civil remedies for victims of corporate human rights abuses has been recognized in the United Nations Guiding Principles on Business and Human Rights (UNGPs):

States should take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing business-related human rights abuses, including considering ways to reduce legal, practical and other relevant barriers that could lead to a denial of access to remedy.¹

In particular, states should ‘ensure that they do not erect barriers to prevent legitimate cases from being brought before the courts in situations where judicial recourse is an essential part of accessing remedy or alternative sources of remedy are unavailable’. This also applies to transnational or cross-border litigations where ‘claimants face a denial of justice in a host State and cannot access home State courts regardless of the merits of the claim’.²

Against this background, the present section focuses on two issues: the obligations of EU Member States to protect human rights in private litigations against MNCs and the impact of these obligations on the allocation of jurisdiction in private international law. Substantively, the primary focus is on the European Convention on Human Rights (ECHR). All Member States of the EU are also contracting parties to the ECHR. While, until accession, the EU is not directly bound by the ECHR, the latter plays an important role in the interpretation of EU law including the EU’s own human rights instrument, the EU Charter of Fundamental Rights.

1.2.2 Human rights in private litigation

The relationship between human rights and private litigation can be approached from two different perspectives. The first perspective, germane to private lawyers, asks whether and to what extent civil litigation can be used to vindicate values and interests protected by human rights, such as physical integrity, privacy, or individual property. Here, the relationship between corporate perpetrators and victims of human rights abuses is regulated by private law, and the principal aim of litigation is the award of pecuniary damages. The second perspective, germane to public lawyers, asks what obligations international human rights law imposes on states to protect human rights in the relationship between private actors. Here, the emphasis is on state duties to prevent and redress corporate human rights abuses through domestic legislation, adjudication, and the proper administration of justice.

It is widely accepted that international human rights treaties impose (positive) obligations on states to protect human rights in the relationship between private actors, including obligations to ensure access to justice and effective civil remedies for human rights abuses committed by (‘multinational’) corporations. According to the UN Human Rights Committee, for example, a state’s human rights obligations ‘will only be fully discharged if individuals are protected by the state, not just against abuses of Covenant rights by its agents, but also against acts committed by private persons or entities that would impair the enjoyment of Covenant rights’. Inversely, a state may violate its international human rights obligations if it fails ‘to take appropriate measures or to exercise due diligence to prevent, punish or redress the harm caused by such acts by private persons or entities’.³ The ECHR imposes some obligations on EU Member States to secure in their domestic law the individual’s legal status, rights, and privileges necessary for an effective enjoyment of their human rights. These obligations also require states to ensure human rights protection in the relationship between companies and individuals, for example, in the employment context.

In Wilson, the applicants petitioned the European Court of Human Rights (ECtHR) on grounds of violations of Article 10 (freedom of expression) and Article 11 (freedom of assembly) because their employer companies had offered them financial incentives to renounce their rights to collective bargaining. The House of Lords (now the UK Supreme Court) did not find the actions of the companies in violation of domestic law. The ECtHR, by contrast, ruled that the state must uphold the rights of workers to use trade unions to represent them in negotiations with employers:

The Court observes at the outset that although the essential object of Article 11 is to protect the individual against arbitrary interference by public authorities with the exercise of the rights protected, there may in addition be positive obligations to secure the effective enjoyment of these rights. In the present case, the matters about which the applicants complain … did not involve direct intervention by the State. The responsibility of the United Kingdom would, however, be engaged if these matters resulted from a failure on its part to secure to the applicants under domestic law the rights set forth in Article 11 of the Convention … [The Court] considers that, by permitting employers to use financial incentives to induce employees to surrender important union rights, the respondent State has failed in its positive obligation to secure the enjoyment of the rights under Article 11 of the Convention. This failure amounted to a violation of Article 11, as regards both the applicant trade unions and the individual applicants.⁴

The ECHR also imposes obligations on EU Member States concerning the judicial process, law enforcement, and the proper administration of justice. The court’s case law suggests that states are duty-bound to investigate, punish and redress corporate human rights abuses when they occur. Where the legislative framework itself is deficient, states can be obliged to introduce new, or amend existing, legislation. Domestic courts are under an obligation to ensure access to justice and effective remedies when adjudicating private disputes between corporate perpetrators and victims of human rights abuses. The right to an effective remedy has both a procedural and a substantive dimension. A victim must have practical and meaningful access to a procedure that is capable of ending and repairing the effects of the violation. Once the violation is established, the victim must receive a relief sufficient to repair the harm.

In Steel and Morris, the ECtHR had to consider fair trial rights under Article 6 ECHR in defamation proceedings brought by an MNC against NGO campaigners in the UK. In its judgment, the court recalled that

[t]he Convention is intended to guarantee practical and effective rights. This is particularly so of the right of access to a court in view of the prominent place held in a democratic society by the right to a fair trial. It is central to the concept of fair trial, in civil as in criminal proceedings, that a litigant is not denied the opportunity to present his or her case effectively before the court and that he or she is able to enjoy equality of arms with the opposing side.⁵

Applying these principles to the case at hand, the ECtHR concluded that the applicants were denied the possibility to effective legal representation before the domestic court:

The disparity between the respective levels of legal assistance enjoyed by the applicants and [the company] was of such a degree that it could not have failed, in this exceptionally demanding case, to have given rise to unfairness … The lack of procedural fairness and equality therefore gave rise to a breach of Article 10 in the present case.⁶

1.2.3 International human rights law and jurisdiction in private international law

There are several ways in which private international law can accommodate concerns for human rights protection, including through the recognition of special grounds of jurisdiction such as forum necessitatis. The latter, which is discussed in more detail in section 1.4, raises a more general question as concerns the relationship between jurisdiction in private international law and the state’s human rights obligations in public international law. To the extent that international human rights treaties apply extraterritorially, states are duty-bound to ensure access to justice and effective civil remedies for third-country victims of corporate human rights abuses. To be able to enjoy the protection of their human rights in transnational tort litigations against MNCs, victims of corporate human rights abuses need to come within the human rights jurisdiction of the state concerned.

Jurisdiction in private international law determines the competence of state courts to hear private disputes involving a foreign element. In most general terms, the determining factor is whether there exists a sufficiently close nexus between the facts of the case and the forum state. In EU law, this nexus is established through the domicile of the defendant in an EU Member State. The allocation of jurisdiction in private international law serves a number of different purposes, such as protec...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Notes on contributors
• Acknowledgments
• Introduction
• 1 Judicial remedies: The issue of jurisdiction
• 2 Judicial remedies: The issue of applicable law
• 3 Non-judicial remedies: Company-based grievance mechanisms and international arbitration
• 4 Corporate responsibility to respect human rights vis-à-vis legal duty of care
• Conclusion
• Index