In 2011 the UN guiding principles (GP)1 were endorsed by the Human Rights Council. Among the three guiding pillars was the responsibility of states to provide access to an effective remedy for those affected by business-related human rights abuses. The activities of business enterprises affect people daily. Human rights abuses committed by such entities can be widespread in nature and impact a large proportion of people2. Despite the significant increase in the reach and influence of businesses in the last 30 years, the ability to access a remedy for business related human rights abuses has not evolved in the same way3, it appears that many multinational corporations have been functioning with minimal legal constraint4, thus creating a ‘protection gap’ and disabling states from fulfilling their duty to protect5. As a result, the OHCHR recognized a need to develop the domestic laws relating to remedies and accountability for corporate human rights abuses6. Thus, in 2013 Jennifer Zerk was commissioned to discover the reasons for the present inadequate standard of protection7. This then enabled her to present recommendations for methods or policies that could be implemented to advance the protection of corporate human rights abuses.
The report is lengthy but insightful; it introduces a number of case studies from various jurisdictions gathered as empirical evidence. Using the case studies Zerk compares and analyses current methods and their effectiveness of providing remedies. Throughout the report Zerk discusses and identifies two main barriers to remedies; firstly a lack of access to justice at domestic level and secondly, differences in domestic systems in the way that remedial systems are used in practice8. In the final chapter Zerk suggests three recommendations that she believes would help break down the barriers and create a ‘fairer and more effective system of domestic law’. Part 1 suggests clarification of certain principle and policy considerations. Part 2 proposed a technical procedure which would create a dialogue between states to identify ‘best state practice’ which could then be implemented in other
1Guiding Principles on Business and Human Rights ‘Implementing the protect, respect and remedy framework’
2 The Third Pillar: Access to Judicial Remedies for Human Rights Violations by Transnational Business December 2013 Professor Gwynne Skinner Professor Robert McCorquodale Professor Olivier De Schutter with Case Studies by Andie Lambe pg1
3 UN Guiding Principles, Guiding Principles 26.
Corporate liability for gross human rights abuses – Towards a fairer and more effective system of domestic law remedies Dr Jennifer Zerk page 87
4 (L) International Company and Commercial Law Review 2016: Corporate personality, human rights and multinational corporations Dr Chrispas Nyombi Dr Andreas Yiannaros Dr Rhidian Lewis pg234
5 n3 above Zerk page 59
6http://www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx
7 Corporate liability for gross human rights abuses – Towards a fairer and more effective system of domestic law remedies: Dr Jennifer Zerk 2014
8 n7 above page 7
jurisdictions. Finally, Zerk proposes an investigation into criminal law systems which could provide an alternative route to remedy9. The recommendations have been well received by all stakeholders which inspires confidence in the hope that they can be incorporated and victims will receive better access to remedies. However, the report in itself was not received without significant criticism of several concepts outlined, the scope of the study and the methodology.
This essay endeavours to understand the most significant barriers to remedy that are hindering the current protection afforded to victims of corporate human rights abuses, with a focus on Zerk’s findings on extraterritorial practice. The criticisms will then be considered, they question the validity of Zerk’s comments based on methodology and scope. Nevertheless, the essay maintains the value of the Zerk Report as a significant and required step in the advancement of protection for corporate human rights abuses.
Lack of access to domestic remedial systems
Within the opening paragraphs of the report Zerk writes ‘the present system of domestic law remedies is patchy, unpredictable, often ineffective and fragile.’10 Ineffective remedies are a cause for concern; with no mechanism for accountability corporations are unlikely to expend time and money complying with HR obligations, thus no protection is advanced. The first identified reason for ineffectiveness is a lack of access to domestic remedial systems11. Zerk suggests four categories of barriers to access, legal, practical, procedural and financial12. The identified barriers are numerous. They include the complexity of corporate structures and personality making it difficult to identify the entity in violation13, a lack of legal aid meaning with the high cost of HR litigation many claimants cannot afford proceedings14, the existence of the ‘loser pays’ rule although note that in the UK one can purchase insurance to prevent such happenings15, and finally victim concerns about corruption and lack of impartiality of courts16. However, one of the most significant barriers is the access to a remedy in the state of domicile, this has caused an upsurge in extraterritorial litigation. If local redress presents a barrier, claimants often look elsewhere, often to the home state of the company in violation or of the parent company17. However, establishing jurisdiction in their preferred judicial system can prove challenging and a significant delay18. Moreover, the costs and complexities in doing as such provide an additional hurdle. Critically, this does not seem ‘fair’ for the most frequently affected are
9 n7 above pages 105-123
10 n7 above page 6
11http://www.ohchr.org/EN/Issues/Business/Pages/OHCHRstudyondomesticlawremedies.aspx
12 n7 above page64
13 n7 above page65
14 n7 page79
15 ibid
16 n7 above page83
17 n7 above page68
18 ibid
those amongst us who cannot bear the burden of the additional costs, despite being forced to by inadequacies of their domestic remedies.
The data in figure1 showing the frequency of states selecting foreign jurisdiction suggests large scale pessimism on behalf of victims in their states domestic law to provide them with justice19. This is perhaps understandable as the state permitted the violation in the first instance, although figures may be distorted due to a focus on extraterritorial cases20. However, it is suggested that the pessimism is due to a lack of resources and expertise, thus when victims outsource their litigation the barriers increase as resources and expertise have no opportunity to develop. Barriers then worsen and become entrenched in the domestic law remedy systems21. This scenario causes a severe lack of capacity building and is exacerbated by grossly impacting those living amongst the most vulnerable populations to corporate HR abuses, for example Sudan, Argentina and Iraq22. If states do not provide their residents with effective access to remedy then how can they possibly be complying with their state duty to protect?23 Despite the extraterritorial alternative, it is not just that certain states are held less accountable. As entities expand the need for domestic remedial attention is becoming incrementally important. Whilst extraterritorial remedies appear as an alternative for barriers erected at the domestic level, there is concern that extraterritorial litigation will become limited, further lessening the protection and remedies against violations.
At present the majority of extraterritorial litigation takes place in the USA24 because they have more flexible rules willing to disregard state sovereignty through the Alien Tort Statute25. This allows the courts to have jurisdiction over an alien for a tort in violation of the law of nations26. Thus, it provides an option for struggling victims to establish jurisdiction elsewhere. However, the recent case of Kiobel v Shell27 suggests the ability of a defendant to initiate such claims may become limited due to the creation of a ‘presumption against extraterritoriality unless it touches and concerns the US with sufficient force to rebut the presumption’28. This is an obvious limitation on the access to a remedy, of the 40
19 n7 above page93 figure 1
20 Business and Human Rights: Enhancing Accountability and Access to Remedy An OHCHR initiative to contribute to a fairer and more effective system of domestic law remedies, in particular in cases of gross human rights abuses page8 – University of Utah’s S.J Quinney College of Law Center for Global Justice and the Centre for International Law and Policy at New England Law, Boston, Commentary on the OHCHR’s Study on Domestic Law Remedies: Corporate Liability for Gross Human Rights Abuses page18
21 n7 above page88
22 n19 above figure 1
23 Guiding Principles on Business and Human Rights ‘Implementing the protect, respect and remedy framework’ page 8
24 n7 above page89
25 28 U.S. Code § 1350
26 n7 above page 89 – Davis, J. (2008) Justice Across Borders: The Struggle for Human Rights in U.S. Courts. Available at:https://0www.cambridgeorg.lib.exeter.ac.uk/core/books/justice-across borders/235AAFB5825498D50ABFAA4315848186. pg37-39
27 Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013)
28 n7 above page89
proceedings Zerk reviewed, over 20 were commenced under the ATS procedure.29 Limitation on this creates additional legal hurdles and in combination with barriers already in place at domestic level the need to recognise and act on the issues is more critical than ever if we are to maintain and improve protection. The limitations may drive victims to resort to tort based claims in other jurisdictions.30
Varying domestic practices
The barrier to access is thus also interlinked with the second identified by Zerk, the differing legal standards of jurisdictions. With regard to extraterritorial applications, the differing standards create legal uncertainty. Legal uncertainty consequently creates a barrier as victims are less willing to take a risk, will find it harder to secure counsel willing to represent them, and harder to find a jurisdiction in which they can bring their claim. Often unevenness in levels of protection mean home states are unwilling to accept the case, or the victim simply does not want to bring it there, for they allowed the violation to happen in the first place.31 Therefore, it is evident the second barrier is a problem in its own right, but is inter-linked with the first. In some cases different domestic practices create an extra obstacle when initiating foreign proceedings, whilst simultaneously acting to encourage such extraterritorial proceedings as an alternative to domestic ones. Zerk has identified extraterritorial remedies as one of the main reasons the third pillar of the GP has thus far failed to be effective32. It is imperative that states look to the recommendations of Zerk to overcome the highlighted points on extraterritorial activity.
Criticisms
Stakeholder feedback casts skepticism on the validity and usefulness of Zerk’s arguments, particularly in relation to extraterritorial activity. Methodologically many stakeholders did not believe the case studies were truly representative.33 The International Organisation of Employers suggests that there was over-emphasis on extraterritorial cases and not enough depth to investigation into local action.34 The consequence being that local access to remedies are overlooked and not understood, thus they are not improved despite being the best point of access to remedy for those most vulnerable.35 Owing to supposed ease of access, arguably domestic practices need the most attention for states to fulfil their duty to protect and provide a fairer and more effective system of remedies. The IOE notes the comment of Zerk36 that locals must be pessimistic of local action and thus opt for extraterritorial remedies.37 This assumption has been made on the basis of 40 cases based on multinational
29 ibid
30 ibid
31 n7 above page99
32 n7 above pages64-103
33 n20 above page11
34 ibid – IOE comments on the OHCHR study on “Corporate liability for gross human rights abuses. Towards a fairer and more effective systems of domestic law remedies”
35 United States institute of Peace – http://www.usip.org/guiding-principles-stabilization-and-reconstruction-the-web-version/7-rule-law/access-justice
36IOE comments on the OHCHR study on “Corporate liability for gross human rights abuses. Towards a fairer and more effective systems of domestic law remedies”
37 ibid page1
corporations,38 without reference to cases operating at domestic level. It is suggested further analysis would reveal it was not a ‘barrier’ which caused the failure, but perhaps it was the normal functioning of the local systems that do not want to concern themselves in the political nature of a multinational violation39. In this respect Zerk’s analysis was too general and assumptive, and placed too much emphasis on the availability of extraterritorial jurisdiction. This would be contrary to her aim to achieve a ‘fairer’ system, for it seems biased towards extraterritorial remedies. Instead, the law requires a focus on capacity building at the local level. The current inadequacies mean it needs developing, it appears at present to be having detrimental effects on the ability to afford protection . However, one notes that Zerk appeared to place equal concern and emphasis on extraterritorial and local jurisdiction40, supported by the author in the publication of the feedback41. Thus, whilst accepted the cases were biased for focusing on multinational violations and the suggestion of many scenarios whereby victims have to resort to extraterritorial remedies, Zerk did not neglect the importance of the domestic systems and the detrimental effect extraterritorial jurisdiction was having on it.
Conclusion
Thus to conclude, despite the methodological and biased criticism, given the resources Zerk had, one argues the report made significant headway towards fairer and more effective domestic systems. The essay highlights the link between extraterritorial remedies and the barrier to access. It appears that current domestic remedies lack expertise and resources and have consequently become unprogressive and are consequently barring effective access to remedy. Whilst the cases analysed were not representative of small companies which would be more suited to the domestic level, it cannot be disputed that the issues raised are nonetheless valid and acting upon them would be a good catalyst towards breaking down barriers that could eventually achieve a fairer and more effective domestic law system. A step in this direction is certainly necessary as Kiobel v Shell indicates that access to extraterritorial remedies may soon become limited, highlighting the need to focus equally on extraterritorial and local remedies, with emphasis on the need to develop local remedies to maintain and improve access to remedies. Variations between jurisdictions have additionally proven to be a barrier also linked with a lack of access, especially when it comes to selecting which jurisdiction to bring the claim in. Failure of states to conform with their duty to protect thus far, owing to different standards and allowing violations does not inspire confidence in victims and encourages them to seek alternative remedies elsewhere. The use of extraterritorial remedies has exacerbated this, further emphasising the need for fairer and more effective domestic remedies. Despite criticism, the report has been momentous in bringing the specific issues to our attention and hopefully it achieves its purpose in improving protection and accountability of corporate human rights abuses.