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Access to Legal Remedies for Victims of Corporate Human Rights Abuses in Third Countries

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Access to Legal Remedies for Victims of Corporate Human Rights Abuses in Third Countries STUDY Requested by the DROI committee Access to legal remedies for victims of corporate human rights abuses in third countries Policy Department for External Relations Directorate General for External Policies of the Union PE 603.475 - February 2019 EN DIRECTORATE-GENERAL FOR EXTERNAL POLICIES POLICY DEPARTMENT STUDY Access to legal remedies for victims of corporate human rights abuses in third countries ABSTRACT European-based multinational corporations can cause or be complicit in human rights abuses in third countries. Victims of corporate human rights abuses frequently face many hurdles when attempting to hold corporations to account in their own country. Against this backdrop, judicial mechanisms have increasingly been relied on to bring legal proceedings in the home States of the corporations. This study attempts to map out all relevant cases (35 in total) filed in Member States of the European Union on the basis of alleged corporate human rights abuses in third countries. It also provides an in-depth analysis of 12 cases and identifies various obstacles (legal, procedural and practical) faced by claimants in accessing legal remedy. On the basis of these findings, it makes a number of recommendations to the EU institutions in order to improve access to legal remedies in the EU for victims of human rights abuses by European based companies in third countries. EP/EXPO/B/DROI/FWC/2013-08/Lot4/07 EN February 2019 - PE 603.475 © European Union, 2019 Policy Department, Directorate-General for External Policies This paper was requested by the European Parliament's Sub-Committee on Human Rights English-language manuscript was completed on 01 February 2019. Printed in Belgium. Authors: Dr. Axel MARX, Leuven Centre for Global Governance Studies, University of Leuven, Belgium, Dr. Claire BRIGHT, European University Institute, Italy, Prof, Dr. Jan WOUTERS, Leuven Centre for Global Governance Studies, University of Leuven, Belgium, in collaboration with Ms. Nina PINEAU, Leuven Centre for Global Governance Studies, University of Leuven, Belgium and research assistance provided by Mr. Brecht LEIN, Leuven Centre for Global Governance Studies, University of Leuven, Belgium, Mr. Torbjörn SCHIEBE, University of Lund, Sweden, Ms. Johanna WAGNER, University of Lund, Sweden and Ms. Evelien WAUTERS, Leuven Centre for Global Governance Studies, University of Leuven, Belgium Official Responsible: Marika LERCH Editorial Assistant: Daniela ADORNA DIAZ Feedback of all kind is welcome. Please write to: [email protected]. To obtain copies, please send a request to: [email protected] This paper will be published on the European Parliament's online database, 'Think tank'. The content of this document is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the European Parliament. It is addressed to the Members and staff of the EP for their parliamentary work. Reproduction and translation for non-commercial purposes are authorised, provided the source is acknowledged and the European Parliament is given prior notice and sent a copy. ISBN: 978-92-846-4642-5 (pdf) ISBN: 978-92-846-4643-2 (paper) doi:10.2861/566720 (pdf) doi:10.2861/59434 (paper) Catalogue number: QA-04-19-224-EN-N (pdf) Catalogue number: QA-04-19-224-EN-C (paper) Access to legal remedies for victims of corporate human rights abuses in third countries Table of contents Executive Summary 5 1. Introduction 8 2. Methodology 9 3. Literature review 10 3.1. Introduction 10 3.2. Third Pillar of the United Nations Guiding Principles 11 3.3. Judicial mechanisms 11 3.4. Use of judicial mechanisms 13 3.5. Barriers to Access to Justice - Legal Remedies 14 3.5.1 Legal barriers that can prevent legitimate cases involving business-related human rights abuse from being addressed 14 3.5.2 Practical and procedural barriers to accessing judicial remedy 16 4. Case Mapping 18 4.1. Mapping of relevant cases of alleged human rights abuses of EU-based companies in third countries 18 4.2. Mapping of ‘specific instances’ (OECD/NCP) across EU MS 31 5. Case studies 34 5.1. EU Legal Background 34 5.1.1. Jurisdiction 34 5.1.2. Applicable Law 34 5.2. Member States Legal background 35 5.2.1. France 35 5.2.2. Germany 36 5.2.3. Italy 37 5.2.4. Netherlands 38 5.2.5. Sweden 39 5.2.6. United Kingdom 40 5.3. Case Studies 41 3 Policy Department, Directorate-General for External Policies 5.3.1. Amesys and Nexa 41 5.3.2. Boliden 46 5.3.3. Danzer 51 5.3.4. ENI 56 5.3.5. KiK 59 5.3.6. Lafarge 66 5.3.7. RWE 70 5.3.8. Shell 74 5.3.9. Trafigura 83 5.3.10. Vedanta 91 5.3.11. Vinci 96 5.3.12. Xstrata 99 5.4. Comparative summary table of the cases 102 6. Recommendations 107 6.1. Introduction 107 6.2. Recommendations for the internal policy of the EU 107 6.2.1 Strengthen due diligence requirements and promote the use of due diligence instruments 107 6.2.2 Strengthen jurisdiction over extraterritorial cases 110 6.2.3 Strengthen access to Member States law as applicable law 112 6.2.4 Recommendation Information Platform 115 6.3. Recommendations in relation to external policies of the EU 116 6.3.1 Building institutional judicial capacity in host states and strengthening the business and human rights dimension in EU support for Human Rights Defenders 116 6.3.2 Reforming trade policy to address human rights abuses of business 117 6.3.3 Promotion of international mechanisms and cooperation agreements 120 7. References 122 Annex 1: Positions taken by EU and other bodies on Access to Remedy 128 Annex 2: Legislation on Human Rights Due Diligence in Europe 132 4 Access to legal remedies for victims of corporate human rights abuses in third countries Executive Summary The use of judicial mechanisms to hold companies to account for human rights abuses in third countries is receiving increased attention. Several publications and reports have mapped out the different barriers victims (rights-holders) face in holding companies to account. This study aims to contribute to research on this topic by focusing on cases in which companies based in the European Union (EU) (EU companies) are accused of human rights abuses in third countries. The study provides in-depth analysis of several such cases with the objective of elucidating how existing opportunities and barriers to holding companies to account for human rights abuses play out in concrete cases brought to courts in the Member States of the EU (EU MS). These case studies detail the nature of the alleged human rights abuse, the relationship between the EU company and the abuse, and a brief history of the litigation, including the current status or outcome of the case. For each of the cases, we also attempted to identify the main constraining (barriers) and enabling (opportunities) factors for the claimants to access the courts and obtain a remedy. The study briefly reviews the literature on the main barriers to accessing legal remedies for corporate human rights abuses in third countries. This overview starts with an introduction to the third pillar of the United Nations Guiding Principles on Business and Human Rights (UNGPs) and an overview of the main barriers identified in the literature. The main positions of the different EU bodies and other relevant organisations are presented in Annex 1. The study then maps out all relevant cases in EU MS on human rights abuses by businesses in third countries (35 cases in total) in order to assess the distribution of cases across EU MS. For each research step, different data collection approaches were used. The mapping was based on screening specialized websites, existing mappings from other studies and consultation of academic experts via e-mail. On the basis of these sources, we drew up an inventory of existing cases and provided key information on the company involved, the EU MS in which the case took place, the nature of the abuse and the outcome. The mapping reveals that most cases involve major multinational corporations listed in the Fortune 500 non-US companies based in only a few EU MS, notably France, Germany, the Netherlands and the United Kingdom. In order to better understand this distribution, we also analyse the number of cases and their distribution in one of the main non-judicial mechanisms, namely the system of National Contact Points linked to the OECD Guidelines on Multinational Enterprises. This analysis shows a similar pattern. The mapping also reveals that: cases are brought to court on a range of human rights issues; there is little evolution over time; a wide range of sectors are involved with a slight overrepresentation of companies in natural resources extraction (mining, forestry and petroleum); and human rights abuses occur across many third countries (21 different countries in total). Finally, the mapping revealed that few cases lead to a decision finding the defendant company liable or an out-of-court settlement. Based on the mapping, we selected 12 cases brought before EU MS courts for further research. The case selection was based on several criteria. First, cases were chosen from different EU MS and in relation to different companies engaged in different economic sectors. Second, cases were selected involving different types of human rights abuses and environmental damages allegedly perpetrated either directly or indirectly (through complicity) by multinational companies or their business partners. Third, cases were selected which had already been under way for some time. Finally, cases with varying outcomes were included. The case studies are based on desk research and consultations with experts and lawyers involved.
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