JUDICIAL – SECTION II – II – SECTION – Extraterritorial Civil Liability Civil Extraterritorial PART I. PART / 191 FIDH – Guide on recourse mechanisms FIDH – Guide on recourse V Bhopal: an environmental industrial castrophe. A toxic cloud escaping from a chemical plant operated by a subsidiary of Union Carbide Company (USA) led to the death of more than 25 000 people. © CC-BY-SA-2.0. / Simone.lippi 192 / FIDH – International Federation for Human Rights JUDICIAL SECTION II JUDICIAL MECHANISMS – SECTION II – II – SECTION – PART I The Extraterritorial Civil Liability of Multinational Corporations for Human Rights Violations Extraterritorial Civil Liability Civil Extraterritorial PART I. PART Presently, it is most common and legally most tenable to seek to hold multina- tional corporations liable for civil damages through actions pursued at the national level, either in the corporation’s country of origin or in its host country. In countries where the parent companies of multinational corporations are based, a variety of systems have been used over time to prosecute multinationals for their abuses, despite the complexities of their structures and operations. This is an important development because the individuals affected by a multinational’s activities often have a low probability of obtaining redress in their own country, the host country of an investment. A lack of political will and insufficient legal capacity among local authorities (i.e., inadequate legislation, poor infrastructure, corruption, lack of legal aid, the politicisation of the judiciary), at times due to pressures intended to attract foreign investment, are common in this area. It is not uncommon for a multinational’s implementing local intermediaries (subsidi- aries, subcontractors or business partners) to be insolvent or uninsured. Because the parent company often perpetrates the alleged crime, or at least makes deci- sions that lead to the violation, evidence is often located in the multinational’s country of origin or domicile. Numerous obstacles continue to prevent victims from accessing justice, including issues associated with access to information, the costs of legal proceedings, and both substantive and procedural norms. In this study, we limit ourselves to the examination of three separate legal systems: those of the United States, Canada and the European Union.1 Beyond the practical 1 See also Oxford Pro Bono Publico, Obstacles to Justice and Redress for Victims of Corporate Human Rights Abuse - A Comparative Submission Prepared for Prof. John Ruggie, UN SG Special Representative on Business and Human Rights, 3 November 2008, www.law.ox.ac.uk/opbp. The report examines the legal systems of the following countries: Australia, The Democratic Republic of the Congo, The European Union, France, Germany, India, Malaysia, China, Russia, South Africa, The United Kingdom and The United States. For illustrative purposes, this chapter discusses several decisions by Canadian courts, without analysing specific legislation. FIDH – Guide on recourse mechanisms / 193 considerations related to the impossibility of conducting an exhaustive study, this limitation is based on three primary factors: 1 – The parent companies of multinational corporations are often located in the U.S., Canada and the EU; 2 – Over the past decade, the volume of legal proceedings brought by victims anxious to see the recognition of and compensation for their injuries has increased in countries where multinationals are domiciled, and 3 – More than those of other countries, these three legal systems have devel- oped specific procedures to hold legal persons liable for acts committed abroad. References to specific cases brought before foreign courts, however, are inserted occasionally in the text. NoTe Courts in other geographic areas have accepted cases against corporations in recent years, and it is anticipated that more cases will be filed against multinationals for human rights abuses in an increasing number of countries. For example, in June 2014, the Thai Supreme Administrative Court accepted a lawsuit filed by 37 Thai villagers against state-owned Electricity Generating Authority of Thailand (EGAT) and four other state bodies for signing of an agreement to purchase power from the Xayaburi Dam in neighbouring Laos, which poses a threat to the environment and food security.2 Villagers from Thai provinces near the Mekong had petitioned the Administrative Court in August 2012, alleging that the power purchase agreement is illegal both under the Thai Constitution and the 1995 Mekong Agreement, approved without an assessment of the project’s environmental and health impacts and without adequate consultations in Thailand.3 In February 2013, the Administrative Court denied jurisdiction to hear the case. Overruling the lower court decision, the Thai Supreme Administrative Court said it had jurisdiction to hear the lawsuit and ordered the five government bodies, against which the lawsuit was brought, to “undertake their duty under the Constitution, laws and resolutions of the [Thai] Government, through the notification and dissemination of appropriate information, adequate hearing and consultation and further environmental, health and social impact assessment for the Xayaburi Dam.”4 This is said to be the first case in Thailand to recognize the transboundary impacts of a project being built in a neighboring country, and the first to require a Thai state-owned company building a project overseas to comply with Thai laws.5 EGAT is supposed to buy 95 percent of the power from the Xayaburi dam under the agreement, and if the court finds the pur- chase agreement was approved illegally, it could cancel the agreement altogether. 2 Radio Free Asia, Thai Court Agrees to Hear Lawsuit over Controversial Xayaburi Dam in Laos, une 24, 2014, www.rfa.org. 3 Reuters, Thai court takes villagers' case against power firm, Laos dam, June 24, 2014. www.thanhnien- news.com. 4 Pianporn Deetes, International Rivers, “Justice for the Mekong – Thai Villagers Back at Court” (June 20, 2014), www.internationalrivers.org/blogs/259-0 5 Idem 194 / FIDH – International Federation for Human Rights JUDICIAL What are the current methods of seeking compensation through suing a multi- national corporation in a U.S., Canadian, or EU Member State’s civil court when the multinational violates the rights of its employees or the surrounding local community as part of its operations abroad? II – SECTION – Our inquiry looks to private international law as it relates to personal relationships with foreign components. Our situation is therefore subject to the internal regula- tions of each state. The application of private international law can be examined from two angles: Jurisdictional conflict Extraterritorial Civil Liability Civil Extraterritorial – International jurisdiction: In which courts will the matter be consid- I. PART ered? Which state will have jurisdiction? – Recognition and enforcement of foreign judgements: This point concerns the recognition and enforcement of foreign judgements issued by the forum court. It involves determining the binding effect and enforceability of a foreign authority’s legal decision. Because this guide focuses on ways to file suit against a multinational corporation for human rights violations, the recognition and enforcement of foreign judgements will not be discussed herein. Conflict of laws: What law will apply to the case at hand? The EU has issued several community regulations which standardize the rules governing conflicts of jurisdiction and law within the EU’s 28 different legal systems. These EU standards are compulsory and applicable in all Member States immediately upon publication. This study is devoted primarily to these commu- nity standards and their application in EU Member States.6 6 Note that there is one exception. The Rome II regulation does not apply to Denmark. FIDH – Guide on recourse mechanisms / 195 CHAPTER I Establishing the Jurisdiction of a US Court and Determining the Law Applicable to the Case * * * Under what conditions will a US court recognize jurisdiction? The primary instrument U.S. courts use to establish their jurisdiction for cases that fall within our inquiry is the Alien Tort Statute (ATS) of 1789.7 Z An overview of the Alien Tort Statute Enacted in 1789 and revived in 1980 for human rights cases and in the landmark case Filártiga v. Peña-Irala,8 the ATS has become the central basis for asserting jurisdiction in most tort cases brought in the U.S. against multinational corporations for human rights violations committed abroad. U.S. federal courts may hear civil cases: – Introduced by a foreigner, – Introduced by a victim of a serious violation of the “law of nations”, or customary inter- national law,9 – Which “touch and concern the territory of the United States” “with sufficient force” to displace the presumption against extraterritoriality,10 – In which the defendant is on U.S. soil when the suit is brought. In addition to the Alien Tort Statute, the Torture Victim Protection Act (TVPA) is another tool which allows U.S. courts to hear cases involving violations of international law committed against private persons. 7 The Alien Tort Statute is also known at the “Alien Tort Claims Act” or ATCA. We recommend reading the chapter on the United States in: Pro Bono Publico Oxford, op. cit., p. 303 and following. 8 Filártiga v. Peña-Irala, 630 F.2d 876 (2d Cir. 1980) 9 First Judiciary Act 1789 (ch. 20, §9(b)), as codified in 28 USC. § 1350: “The district courts