In October 2020, a notable lawsuit, against a Canadian-based mining company, was settled. While this settlement will bring closure on terms that are acceptable to the plaintiffs, it left unresolved some important legal issues. Among these are whether transnational corporations based in Canada can be held civilly liable for breaches of international law abroad. (For some, the settlement is to be celebrated, while for others it calls into question the propriety of confidential settlements.)
Nevsun Resources Ltd. v Araya
In 2014, three refugees from Eritrea filed a claim in British Columbia alleging that, while indefinitely conscripted into the Eritrean military, they were forced to work at a mine indirectly owned, in part, by Nevsun Resources. They argued that they were subject to what amounted to forced labour; slavery; cruel, inhuman or degrading treatment; and crimes against humanity contrary to customary international law.
Although the claim related to mining operations in Eritrea, it was filed in British Columbia because Nevsun was then a publicly-held corporation incorporated in British Columbia. (Nevsun was acquired in late 2019 by a Chinese mining firm.)
The allegations were summarized by the majority of the Supreme Court of Canada as follows (and I think are worthwhile to read in their entirety):
“For those conscripted to the Bisha mine, the tenure was indefinite. The workers say they were forced to provide labour in harsh and dangerous conditions for years and that, as a means of ensuring the obedience of conscripts at the mine, a variety of punishments were used. They say these punishments included ‘being ordered to roll in the hot sand while being beaten with sticks until losing consciousness’ and the ‘“helicopter” which consisted of tying the workers’ arms together at the elbows behind the back, and the feet together at the ankles, and being left in the hot sun for an hour’.
“The workers claim that those who became ill — a common occurrence at the mine — had their pay docked if they failed to return to work after five days. When not working, the Eritrean workers say they were confined to camps and not allowed to leave unless authorized to do so. Conscripts who left without permission or who failed to return from authorized leave faced severe punishment and the threat of retribution against their families. They say their wages were as low as US$30 per month.
“Gize Yebeyo Araya says he voluntarily enlisted in the National Service Program in 1997 but instead of being released after completing his 18 months of service, was forced to continue his military service and was deployed as a labourer to various sites, including the Bisha mine in February 2010. At the mine, he says he was required to work 6 days a week from 5:00 a.m. to 6:00 p.m., often outside in temperatures approaching 50 degrees Celsius. He escaped from Eritrea in 2011.
“Kesete Tekle Fshazion says he was conscripted in 2002 and remained under the control of the Eritrean military until he escaped from Eritrea in 2013. He says he was sent to the Bisha mine in 2008 where he worked from 6:00 a.m. to 6:00 p.m. six days a week and 6:00 a.m. to 2:00 p.m. on the seventh day.
“Mihretab Yemane Tekle says he was conscripted in 1994 and, after completing his 18 months of service, was deployed to several positions, mainly within the Eritrean military. He says he was transported to the Bisha mine in February 2010 where he worked 6 days a week from 6:00 a.m. to 6:00 p.m., often outside, uncovered, in temperatures approaching 50 degrees Celsius. He escaped Eritrea in 2011.”
Before the case went to trial, Nevsun sought to have, among other things, the customary international law claims struck from the pleadings. It argued that these claims had no reasonable likelihood of success because customary international law applies to states and not private actors like transnational corporations.
Nevsun was unsuccessful in its efforts to strike the pleadings at the British Columbia Supreme Court and it lost an appeal to the Court of Appeal for British Columbia. At the Supreme Court of Canada, the majority also disagreed with Nevsun in Nevsun Resources Ltd. v Araya. While the majority recognized that the customary international law claims against Nevsun were novel, it concluded that Nevsun had not shown that there was no reasonable prospect that these claims could be successful.
A Made in Canada Approach to International Law?
From an international law perspective, this decision was noteworthy because the majority of the Supreme Court of Canada suggested that it could be open to considering an arguably broad interpretation of international human rights law and rules of customary international law that protect individuals.
Writing for the majority, Justice Abella underscored in strong terms at the outset of the decision the importance of international human rights law and the role of courts in responding to human rights abuses:
“This appeal involves the application of modern international human rights law, the phoenix that rose from the ashes of World War II and declared global war on human rights abuses. Its mandate was to prevent breaches of internationally accepted norms. Those norms were not meant to be theoretical aspirations or legal luxuries, but moral imperatives and legal necessities. Conduct that undermined the norms was to be identified and addressed.
“The process of identifying and responsively addressing breaches of international human rights law involves a variety of actors. Among them are courts, which can be asked to determine and develop the law’s scope in a particular case. This is one of those cases.”
She also suggested that Canadian courts could be an appropriate forum for furthering the development of international law.
While international law is created by states, it may be interpreted and applied by domestic courts when it is invoked in domestic claims. These domestic court interpretations may subsequently prove influential if they are followed by other domestic courts or international tribunals. In this way, domestic decisions have the potential to affect the development of international law, even though they are not technically a primary source of international law.
Justice Abella was not only mindful of the possibility for domestic decisions to influence how international law is applied (recognizing the “important role” that domestic courts can play in the “ongoing development of international law”), but she firmly endorsed this role for the Supreme Court of Canada: “Understanding and embracing our role in implementing and advancing customary international law allows Canadian courts to meaningfully contribute… to the ‘choir’ of domestic court judgments around the world shaping the ‘substance of international law’.”
Can Canadian Corporations be Held Civilly Liable for Violating International Law?
As I’ve discussed before, customary international law is generally accepted as automatically forming part of Canadian law unless there is legislation to the contrary effect. In Nevsun, the Supreme Court of Canada confirmed this approach and found that since the prohibitions on forced labour; slavery; cruel, inhuman or degrading treatment; and crimes against humanity are part of customary international law (and likely rank as “peremptory” or jus cogens norms), these prohibitions exist as part of Canadian common law. By extension, since Canadian corporations are bound by Canadian law, this suggests that they could also be bound by customary international law—so long as it applies to their activities at issue (which could be an open question).
As noted above, Nevsun argued that it could not be held liable for violations of customary international law because customary international law applies to states and not to corporations. The majority disagreed, concluding that, “Nevsun’s position… misconceives modern international law.”
Here, the majority of the Court took an arguably progressive and expansive approach to international law. In its view, the protection and recognition of individuals under “modern” international law support the possibility that corporations could be bound by rules of customary international law that protect individuals: “international law has so fully expanded beyond its [state-centric] origins that there is no longer any tenable basis for restricting the application of customary international law to relations between states. The past 70 years have seen a proliferation of human rights law that transformed international law and made the individual an integral part of this legal domain.”
After surveying academic sources (which, from a methodological perspective, could be questioned since customary international law is supposed to be created by the practices of states), the majority concluded that, “it is not ‘plain and obvious’ that corporations today enjoy a blanket exclusion under customary international law from direct liability for violations of ‘obligatory, definable, and universal norms of international law.’” Justice Abella noted, however, that some rules of customary international law could have a “strictly interstate character” and it would need to be decided at trial whether the norms invoked in Nevsun (i.e., the prohibitions on forced labour; slavery; cruel, inhuman or degrading treatment; and crimes against humanity) apply to corporations.
In other words, the majority of the Court recognized the possibility that Nevsun could be held liable for violations of customary international law, but this would need to be determined after all of the arguments were heard at trial.
The Implications of Nevsun
Since Nevsun involved a preliminary examination of the plaintiffs’ claims, it remained to be seen whether Canadian courts would have recognized that corporations may be bound by customary international law—and, potentially by extension, certain aspects of international human rights law. The settlement of the claim against Nevsun leaves this matter unresolved. The Supreme Court of Canada’s decision has, however, potentially left Canadian courts more open to entertaining these types of claims, while the strong language used by the majority could help future litigants make their cases. (The settlement likely also helps achieve some measure of justice for the plaintiffs, who no longer face additional years of time consuming, uncertain, and emotionally draining litigation.)
Globally, there have been longstanding efforts to increase accountability for transnational corporations—including by seeking to have them respect international human rights in their operations—which have made “business and human rights” a leading issue in international law. In response to these efforts, Canada has taken some steps to increase oversight of transnational corporations. These efforts include establishing the Canadian Ombudsperson for Responsible Enterprise, which “receives and reviews claims of alleged human rights abuses arising from the operations of Canadian companies abroad in the mining, oil and gas, and garment sectors.” These efforts have, however, been criticized as not going far enough to be effective.
A potential obstacle to achieving accountability was the view that only states are formally bound by international human rights law obligations. If Canadian courts decide in future cases that customary international law applies to corporations, this could strengthen the arguments of human rights advocates that transnational corporations are bound to respect fundamental human rights and that individuals can bring claims when they allege their rights have been violated.
Since we do not have a decision to this effect, it is too early to say whether it would be sound from an international law perspective. For international lawyers seeking to have international law be a force for positive change, there is often a frustratingly wide gap between lex lata and lex fernda (i.e., the law as it is and the law as it ought to be) that can be traced to the historically state-centric nature of international law. If Canadian courts ultimately follow this path, they could one day be contributing to a further evolution in international law from a state-centric system that many human rights advocates and international law scholars have argued is a long overdue moral imperative.
Photo by lezumbalaberenjena on Flickr, CC BY-NC-ND 2.0
