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Corporate Legal Accountability Quarterly Bulletin - Issue 21, September 2016

Welcome to our Corporate Legal Accountability Quarterly Bulletin -- highlighting a specific topic each quarter, as well as key developments in corporate legal accountability.  The Corporate Legal Accountability hub on our website provides objective, concise information about lawsuits against companies in which human rights abuses are alleged .
This bulletin and previous issues are available in English, ChineseFrench, GermanRussian and Spanish.

Quarterly Highlight: Holding companies accountable for modern slavery

Modern slavery has burst into the spotlight with revelations of brutal forced labour in fishing supply chains in Asia, and appalling restrictions on workers’ freedoms in the Persian Gulf, particularly in the construction sector.  New laws, such as the UK Modern Slavery Act and the California Transparency in Supply Chains Act, seek to improve transparency in companies’ supply chains.  They are disclosure requirements, and do not include penalties or other accountability mechanisms for companies that do profit from forced labour.  Still, many advocates in this space see them as a vital initial legal requirement for transparency.  Early successes by plaintiffs in a few cases, and other cases that are pending, are a strong signal to companies that there is increasing liability risk of failing to exercise due diligence on modern slavery issues in their supply chains. 

To increase victims’ access to justice, organizations such as Freedom Fund and the Human Trafficking Pro Bono Legal Center, which provides assistance to victims, have highlighted the need to use strategic litigation to hold companies accountable for modern slavery.  On-going cases, such as the lawsuit in Canada against Nevsun regarding forced labour in Eritrea and the case in US court against KBR and Daoud & Partners over human trafficking in Iraq, have shown the potential of strategic litigation.  In the case of Signal International, Indian workers who had been trafficked to work in USA obtained a judgment against the company, which ultimately cost the company USD 20 million.  Its bankruptcy soon afterward, together with media attention, put other companies on notice of the high risks of involvement in human trafficking and forced labour.

In May, the Business & Human Rights Resource Centre and the University of Notre Dame organised an event on Strategic Litigation on Modern Slavery in Global Value Chains.  Professor Roger Alford (University of Notre Dame) stressed that reframing allegations of human rights abuse into domestic tort claims could be a useful avenue for advocates, citing dozens of pending cases including some against restaurants and other businesses.  For instance, a victim of trafficking or forced labour can sue for false imprisonment.  In the UK, the High Court issued a verdict against a British company for human trafficking for the first time in June this year, holding  DJ Houghton Chicken Catching Services liable for trafficking and severe labour exploitation of Lithuanian migrants.

At the same time, the dismissals of some innovative claims (class action lawsuits against Costco and against Nestlé for instance) using information from their disclosures under the California transparency law illustrate major gaps in remedies to modern slavery victims.  On the other hand, this approach is controversial among many of those fighting forced labour, because it penalises defendant companies for their disclosure.  If other companies that make much more limited disclosures do not face litigation, all companies have a disincentive to fully report.
Scholars and advocates also urge stronger international mechanisms to hold companies accountable for forced labour.  Dr. James Cockayne’s December 2015 report urged states to “[clarify] for business its potential exposure to criminal liability for involvement with slavery offences…identify evidence of corporate involvement in slavery,…[and] work with business to ensure those affected are able to access effective remedies, including criminal prosecution.” 

In the Gulf region, none of the options mentioned above are available.  NGOs have highlighted the lack of accountability of construction companies.  In most cases, it exists for a worker’s death where the family will receive compensation, but not for other types of abuse such as modern slavery.  A solution can then be to seek remedy abroad.  In March 2015, the NGO Sherpa filed a complaint in France against the construction firm Vinci and its Qatari subsidiary over alleged use of forced labour on their construction sites for the 2022 World Cup in Qatar.  The company denied the allegations, and a French judicial investigation is on-going.

Finally, there have been a few initiatives to challenge modern slavery in courts at the local level where it occurs.  For example, Freedom Fund is working with international anti-slavery advocates and the Mauritanian NGO SOS-Esclaves to end impunity for modern slavery there.

The lack of remedies available in many regions including the Gulf, and the lack of enforceability mechanisms under laws such as the Modern Slavery Act raise a crucial question: what are the possibilities for victims of modern slavery to access remedy, and what can advocates do to help them obtain justice?
Legal developments

New case profiles

Lawsuit against Costco (re slave labour in Thailand): In August 2015, a consumer filed a class action lawsuit against Costco and its Thai seafood supplier, CP Foods, in California court alleging that Costco knew that there were victims of trafficking in Thailand in its supply chain, but did not disclose this to consumers, violating California consumer protection laws.  In January 2016, the case was dismissed as the plaintiff was unable to prove that the prawns she had purchased were from Thailand.  However, if the attorneys find another consumer/plaintiff who purchased the affected prawns from these suppliers, the case can continue.

Lawsuit against DJ Houghton (re trafficked Lithuanian migrants): In December 2014, six Lithuanian nationals commenced a civil lawsuit in the UK against the company DJ Houghton Chicken Catching Services.  The claimants were trafficked to the UK in 2008 to catch birds on chicken farms.  Upon arrival in the UK, they claim they were subjected to severe labour exploitation and that they were threatened and abused by supervisors.  On 10 June 2016, a London High Court judge found the company liable for labour exploitation and ordered it to pay compensation for the unpaid wages. The remaining issues in the case, including claims in respect of personal injuries, harassment and conspiracy, will continue to trial.
Lawsuit against Nestlé (re forced labour in Thai fishing industry)
In August 2015, consumers filed a class action against Nestlé in California, alleging that Nestlé had violated consumer protection laws by failing to disclose that ingredients in its cat food products may have been sourced using forced labour.  In December 2015, the court dismissed the lawsuit, and found that under the California Transparency in Supply Chains Act a company only has to disclose the efforts it is making to prevent forced labour, but is not obligated to disclose the actual risk of forced labour in its supply chain.  The plaintiffs have appealed the decision.

Updates to existing case profiles

Apartheid reparations lawsuits (re So. Africa): On 20 June, the US Supreme Court rejected the plaintiffs’ appeal, of a lower court decision holding that the plaintiffs had failed to show a sufficiently close connection between IBM and Ford’s actions in the US and human rights abuses by the apartheid government.

Gold miner silicosis litigation (re So. Africa): On 24 June, the South African High Court rejected the companies’ appeal seeking to overturn the lower court’s approval of a class action.

Lawsuit by banana companies against Davao City (re aerial spraying in Philippines)In August, the Philippines Supreme Court ruled that the Davao City ordinance banning aerial spraying of pesticides was unconstitutional.

Lawsuit against Eternit (re asbestos exposure in Italy): On 21 July, the Italian Constitutional Court ruled that the former CEO, Stephan Schmidheiny, could not be tried for deaths that have already been the subject of other proceedings.

Lawsuit against International Finance Corporation (re financing of coal-fired plant in India): In August, affected communities and farmers filed an appeal arguing that, under recent US Supreme Court decisions, the IFC is not entitled to absolute immunity and should be subject to suit for damage caused by the power plant.

Lawsuit against Nestlé, Cargill, Archer Daniels Midland (re child labour in Côte d'Ivoire)In July, the plaintiffs submitted an amended complaint to show the connection their claims have to the US.

Lawsuits against Texaco/Chevron (re oil pollution in Ecuador): In July, Ecuador paid Chevron USD 112 million in compensation as required under an international arbitration tribunal ruling. 
In August, a US court of appeals agreed with the lower court’s ruling that the Ecuadorian community cannot collect the USD 9.5 billion Ecuadorian judgement on the basis that judgement was obtained by corrupt means.  The lawyers for the Ecuadorian plaintiffs are examining further appeal options.

Lawsuit against Union Carbide/Dow (re water pollution following Bhopal disaster)In July, the victims asked a US court to reconsider its 24 May decision, which ruled that their lawsuit against Union Carbide may not proceed.

Lawsuit against Villaggio Mall (re fatal fire, Qatar)In June, Qatar’s general prosecutor appealed the April verdict that ruled that none of the defendants will face jail time.  The case will return to the court of appeals in late 2016.

Lawsuit against Vedanta Resources (re water contamination in Zambia)In June, the companies said they will appeal the English court’s May decision to allow the lawsuit to proceed, by challenging its jurisdiction.
New blog post
Lack of legal advocacy & poor legal framework contribute to weak corporate accountability in Germany, Philipp Wesche, German Institute for International and Security Affairs, 4 Jul 2016

If you are interested in contributing to a guest post on corporate legal accountability, please contact us. 
Other news


Harvard Law Journal launches online symposium on intl. jurisdiction for corporate atrocity crimes
The removal of barriers to access to remedy for corporate related Human Rights abuses, Human Rights in Business (8 Sep, Brussels)

Reports, articles & guides
Human rights in European business. A practical handbook for civil society organisations and human rights defenders, Antoni Pigrau Solé, Maria Álvarez Torné, Antonio Cardesa-Salzmann, Maria Font I Mas, Daniel Iglesias Márquez & Jordi Jaria I Manzano, Sep 2016

Holding UK companies to account in the English courts for harming people in other countries, CORE & London Mining Network, 17 Aug 2016 

The New Corporate Playbook, Or What To Do When Environmentalists Stand In Your Way, Katie Redford, EarthRights International, 29 Jun 2016

Climate Justice: The international momentum towards climate litigation, Keely Boom, Julie-Anne Richards & Stephen Leonard, Climate Justice Programme, Jun 2016

IBA Practical Guide on Business and Human Rights for Business Lawyers, Intl. Bar Association, 28 May 2016

From Business & Human Rights Resource Centre
Business & Human Rights Resource Centre will undertake a mission to Indonesia focusing on corporate legal accountability issues, including legal recourse for victims of transboundary haze caused by oil palm plantations and other large-scale slash-and-burn agriculture, as well as labour rights and other domestic issues in Indonesia.

In August, we launched our Community Action Platform (available in English & French). It aims to empower communities and the organizations that work with them on corporate human rights impacts with peer-learning and other tools & resources.  The documentation and other tools included on the platform can be a vital resource to develop evidence for litigation.
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