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Brief on Corporations and Human Rights in the Asia

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Brief on Corporations and Human Rights in the Asia BRIEF ON CORPORATIONS AND HUMAN RIGHTS IN THE ASIA-PACIFIC REGION Prepared for Professor John Ruggie United Nations Special Representative of the Secretary General for Business and Human Rights AUGUST 2006 Please Note: Allens Arthur Robinson (AAR) has prepared this Brief on Corporations and Human Rights in the Asia-Pacific Region for the exclusive use of the United Nations Special Representative of the Secretary General for Business and Human Rights (UNSRSG). This brief is not intended to constitute any form of legal advice or recommendation otherwise than in accordance with the instructions provided to AAR by the UNSRSG. As a result, this brief should not be relied on by any person other than the UNSRSG and AAR has no liability whatsoever to any party who acts (or decides not to act) in reliance on this brief in any way. For further information regarding the content of this brief please contact: Craig Phillips – Partner Rachel Nicolson – lawyer [email protected] [email protected] Tel +61 3 9613 8951 Tel +61 3 9613 8300 Page 1 TABLE OF CONTENTS A. Executive Summary 8 A.1 Structure of Main Findings 8 A.2 Overview 8 A.3 Identifying and Clarifying Legal Standards of Corporate Responsibility and Accountability with Regard to Human Rights 8 (a) Constitutional Human Rights 9 (b) Human Rights Standards in Other Domestic Law 9 (c) International Human Rights Law 10 A.4 The Role of States in Relation to Corporations and Human Rights 11 (a) Overview 11 (b) The Role of Parliament and the Executive 11 (c) Role of the Judiciary 12 (d) The role of the Police and Prosecuting Agencies 12 (e) Role of Other Institutions 12 A.5 Implications for Corporations of the Concepts of 'Complicity' and 'Sphere of Influence' 12 (a) Criminal Liability and Complicity 12 (b) Criminal Provisions with Extraterritorial Reach 13 (c) Civil Liability and Sphere of Influence 13 (d) Sphere of Influence and Extraterritoriality 14 (e) Published Business Practice Standards 14 B. BACKGROUND 15 C. KEY AREAS OF BRIEF – OVERVIEW 16 C.1 Introduction 16 C.2 Overview of Legal System of Jurisdiction 16 C.3 Human Rights Law Obligations of Corporations in Jurisdiction Reviewed 16 C.4 Criminal Liability of Corporations in Each Jurisdiction Reviewed 17 C.5 Civil liability of Corporations in Each Jurisdiction Reviewed 17 C.6 Relevant Findings/Decisions of Judiciary in Connection with Corporate Activity 17 (a) Relevant Findings/Decisions of Judiciary 17 (b) Corporate Human Rights Principles Established by Domestic Courts 17 C.7 Human Rights Related Investigations/Prosecutions of Corporations 18 C.8 If and How "Complicity" and "Sphere of Influence" are Understood in Each Jurisdiction 18 (a) Complicity 18 (b) Sphere of Influence 18 C.9 Extraterritorial Application of Domestic Laws to TNCs 19 C.10 Financial Incentives for Corporate Human Rights Compliance 19 C.11 Legal Liability Arising from Published Business Practice Standards 20 C.12 Domestic Jurisdiction by Foreign Courts 20 C.13 Other Key Areas Identified During Research and Drafting of the Brief 20 D. JURISDICTIONS IN THE ASIA-PACIFIC REGION REVIEWED 20 Page 2 E. AUSTRALIA 22 E.1 Executive Summary 22 E.2 Overview of the Legal System of Australia 22 (a) Australia – Background 22 (b) Law of Australia 23 (c) Judiciary 23 E.3 Human Rights Law Obligations of Corporations in Australia 24 (a) Human Rights in the Constitution and Statutory Bills of Rights at State/Territory Level 24 (b) Human Rights in Other Domestic Law 25 E.4 Criminal Liability of Corporations in Australia 28 (a) Application of Australia's Criminal Code to Corporations 28 (b) The Potential Extension of Liability for Genocide, War Crimes and Crimes Against Humanity to Corporations 29 (c) Corporate Criminal Liability Outside the Criminal Code 29 E.5 Civil Liability of Corporations in Australia 30 E.6 Relevant Findings/Decisions of Judiciary in Connection with Corporate Activity 31 (a) TNCs in Australia 31 (b) Overview of Litigation and Judicial Decisions 31 E.7 Human Rights Related Investigations of Corporations in Australia 35 E.8 If and how 'Complicity' and 'Sphere of Influence' are Understood in Domestic Courts 36 (a) Sphere of Influence 36 (b) Complicity 36 E.9 Extraterritorial Application of Domestic Laws to TNCs 37 (a) Legal Limits on the Application of Human Rights Standards/Laws to Corporations 37 (b) Corporate Code of Conduct Bill (2000) (Cth) 38 (c) The TPA 38 (d) Bribery of Foreign Public Officials 39 (e) Slavery 40 E.10 Potential Financial Incentives for Corporate Human Rights Compliance 40 E.11 Legal Liability Arising from Published Business Practice Standards 41 E.12 Consideration of Australian Jurisdiction by Other Relevant Jurisdictions 42 F. INDIA 43 F.1 Executive Summary 43 F.2 Overview of the Legal System of India 43 (a) India – Background 43 (b) Law of India 44 (c) The Judiciary 45 F.3 Human Rights Law Obligations of Corporations in India 46 (a) Human Rights in the Constitution 46 (b) Human Rights in Other Domestic Law 51 (c) Constitutional and Legislative Rights in the Context of Corporate Activity 54 (d) International Human Rights Law 54 F.4 Criminal Liability of Corporations in India 56 (a) Application of Penal Code to corporations 56 Page 3 (b) Other Forms of Corporate Criminal Liability 57 F.5 Civil Liability of Corporations in India 59 F.6 Judicial Findings in Connection with Corporate Activity 60 (a) Overview of Judicial Decisions 60 F.7 Decisions in Relation to Pollution of the Environment 63 (a) "Polluter Pays" Principle 63 (b) "Precautionary" Principle 64 (c) Orders Against Corporations 64 (d) Principles to be Derived From the Litigation 66 F.8 Human Rights Related Investigations/Prosecutions of Corporations 67 F.9 If and How 'Complicity' and 'Sphere of Influence' Are Understood in Domestic Courts 69 (a) Complicity 69 (b) Sphere of influence 69 F.10 Extraterritorial Application of Relevant Domestic Laws to TNCs 69 F.11 Potential Financial Incentives for Corporate Human Rights Compliance 69 F.12 Published Business Practice Standards 70 F.13 Consideration of Indian Jurisdiction by Other Relevant Jurisdictions 70 G. INDONESIA 72 G.1 Executive Summary 72 G.2 Overview of Legal System of Indonesia 72 (a) Indonesia – Background 72 (b) Law of Indonesia 72 (c) The Judiciary 74 (d) The Human Rights Court 75 G.3 Human Rights Law Obligations of Corporations in Indonesia 76 (a) Human Rights in the Constitution 76 (b) Human Rights in Other Domestic Law 78 (c) Impact of International Human Rights Law in Indonesia 81 G.4 Criminal Liability of Corporations in Indonesia 82 G.5 Civil Liability of Corporations in Indonesia 82 G.6 Human Rights Findings of Domestic Courts with Regard to TNCs 83 (a) TNCs in Indonesia 83 (b) Judicial Consideration of Constitutional Human Rights, the Human Rights Law, and International Human Rights Law in Connection with Corporate Activity 83 G.7 Human Rights Related Investigations and Prosecutions in Indonesia 83 (a) Newmont 83 (b) Monsanto 84 G.8 If and How "Complicity" and "Sphere of Influence" Are Understood in Domestic Courts 85 (a) Complicity 85 (b) Sphere of influence 86 G.9 Extraterritorial Application of Domestic Laws to TNCs 87 G.10 Potential Financial Incentives for Corporate Human Rights Compliance 87 G.11 Legal Liability Arising from Published Business Practice Standards 87 G.12 Consideration of the Indonesian Jurisdiction by Other Relevant Jurisdictions 88 Page 4 (a) Freeport 88 (b) Exxon 89 H. MYANMAR 91 H.1 Executive Summary 91 H.2 Overview of Legal system of Myanmar 91 (a) Myanmar- Background 91 (b) Law of Myanmar 93 (c) Judiciary 94 H.3 Human Rights Law Obligations of Corporations in Myanmar 95 (a) Human Rights in the Constitution 95 (b) International Human Rights Law in Myanmar 96 (c) Human Rights in Other Domestic law 97 H.4 Criminal Liability of Corporations in Myanmar 99 (a) Application of Myanmar's Penal Code to corporations 99 (b) Corporate Criminal Liability outside the Penal Code 100 H.5 Civil Liability of Corporations in Myanmar 100 H.6 Relevant Findings/Decisions of Judiciary in Connection with Corporate Activity 100 (a) Overview of Litigation and Judicial Decisions 100 (b) Principles that May be Derived from that Litigation 100 H.7 Human Rights Related Investigations/Prosecutions of Corporations in Myanmar 100 H.8 If and How "Complicity" and "Sphere of Influence" are Understood in Domestic Courts 101 (a) Complicity 101 (b) Sphere of Influence 101 H.9 Extraterritorial Application of Relevant Domestic Laws to TNCs 101 H.10 Potential Financial Incentives for Corporate Human Rights Compliance 102 H.11 Legal Liability Arising from Published Business Standards 102 H.12 Consideration of Myanmar's jurisdiction by other relevant jurisdictions 102 I. NEW ZEALAND 104 I.1 Executive Summary 104 I.2 Overview of legal system of New Zealand 104 (a) New Zealand – Background 104 (b) Law of New Zealand 105 (c) Judiciary 105 I.3 Human Rights Law Obligations of Corporations in New Zealand 106 (a) Human Rights in the Constitution and Statutory Bills of Rights 106 (b) Human Rights in Other Domestic Law 108 (c) International Human Rights Law 111 I.4 Criminal Liability of Corporations in New Zealand 114 (a) Application of New Zealand's Crimes Act to corporations 114 (b) Corporate Criminal Liability Outside the Crimes Act 114 I.5 Civil Liability of Corporations in New Zealand 117 (a) Vicarious Liability 118 I.6 Relevant Findings/Decisions of Judiciary in Connection with Corporate Activity 119 (a) Overview of Litigation and Judicial Decisions 119 (b) Principles That May Be Derived From That Litigation 119 Page 5 I.7 Human Rights Related Investigations/Prosecutions of Corporations in New Zealand 120 I.8 If and How 'Complicity' and 'Sphere of Influence' Are Understood in Domestic Courts 121 (a) Complicity 121 (b) Sphere of Influence 121 I.9 Extraterritorial Application of Domestic Laws to TNCs 122 (a) Crimes Act 122 (b) Bribery of Foreign Public Officials 122 (c) Commerce Act and Fair Trading Act 122 I.10 Potential Financial Incentives for Corporate Human Rights Compliance 122 I.11 Legal Liability Arising from Published Business Practice Standards 123 I.12 Consideration of New Zealand Jurisdiction by Other Relevant Jurisdictions 124 J.
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