Business and Human Rights Symposium: Rejecting Jurisdiction to Avoid Imperialism– That Simple?

[Dr. Dalia Palombo  is a Senior Research Fellow at the Institute for Business Ethics, University of St. Gallen.]

Imperialism and Transnational Human Rights Litigation

How to hold multinationals to account for human rights abuses? This is a question that has tormented scholars, litigators and advocates. It is difficult to answer because the term “multinational” does not exist in law. From the legal perspective, a multinational is a conglomerate of separate legal entities. It is not a subject that could be held to account or owe obligations. Rather, a victim could file a complaint in one jurisdiction against one of the companies of a multinational alleging the abuses committed by the group. But which national court shall have jurisdiction to hear such transnational case? In the past decades, most of the litigation concentrated in a few developed home states of multinationals such as the US, the UK, the Netherlands, Canada, Germany, or France even if the human rights abuses were perpetrated in developing countries such as Eritrea, Nigeria, Bangladesh, India, Ecuador or Zambia. Some scholars applaud the effort to construct creative transnational tort and human rights litigation strategies. Others consider asserting jurisdiction over foreign cases as part of an imperialist approach which portrays, on the one hand, developing countries as unable to provide remedies to victims, and on the other, developed judicial systems as the saviours of the third world. Scholars coming from different schools of thought have argued for various versions of this critique. According to Jan Klabbers, foreign courts have no authority to decide transnational public law cases. Grietje Baars argued that transnational corporate accountability is a cosmetic change that reinforces, rather than attack, a system of structural inequalities. Others, such as Sara Seck and Penelope Simmons have defended transnational litigation while investigating and recognizing structural injustices.

Academic Debate: A Focus on the How

This debate is valuable to critically analyse the question of the “how”: how can we guarantee access to justice to victims of human rights abuses committed by multinationals? In this big picture perspective, it seems unreasonable that the most effective remedy a victim from Bangladesh could have for human rights abuses committed in Bangladesh would be to file a complaint in the US (See e.g. Abdur Rahaman v JC Penney Corporation, Inc, The Children’s Place and Wal-Mart Stores, Inc; Dutia Raam and Erol Abdurrahman, ‘Background Paper – Rana Plaza: Legal and Regulatory Responses’). The solution to the structural injustices and inequalities of globalisation cannot be to file complaints against companies in the Global North for abuses committed in the Global South. First, concentrating litigation in a few judicial systems creates a long list of problems, including litigation costs, forum shopping, and the incorrect application of foreign laws. Second, there are more fundamental questions. For example, whether litigation facing a claimant and a defendant can address structural inequalities that originate from the way the global economy works. Another critical issue is whether filing complaints in the Global North means perpetuating the underdevelopment of judicial systems in the Global South that become increasingly unwilling or unable to address the problems their population face. These critiques have the merit to point out the absence of a legal framework that could address the structural injustices of globalisation comprehensively.

Rejecting Jurisdiction

However, when these academic critiques reach domestic courts, they show their weaknesses. Judges are only able to decide whether to assert or reject jurisdiction over a concrete case. They are not in a position to address the inequalities of the global economy. Thus, by rejecting jurisdiction on a transnational case, courts risk protecting the interests of multinationals to the detriment of victims without remediating any of the structural injustices that academics have correctly identified. A significant example is provided below.

“In the Court’s view, to retain the litigation in this forum, as plaintiffs request, would be yet another example of imperialism, another situation in which an established sovereign inflicted its rules, its standards and values on a developing nation. This Court declines to play such a role. The Union of India is a world power in 1986, and its courts have the proven capacity to meet out fair and equal justice. To deprive the Indian judiciary of this opportunity to stand tall before the world and to pass judgment on behalf of its own people would be to revive a history of subservience and subjugation from which India has emerged. India and its people can and must vindicate their claims before the independent and legitimate judiciary created there since the Independence of 1947.” In Re Union Carbon Corp Gas Plant Disaster

This was one of the main arguments of Judge Keenan to rule out of the US District Court for the Southern District of New York’ jurisdiction the Bhopal litigation. This argument seemed to ignore that they were Indian victims who filed a claim against the Union Carbide Corporation, an American enterprise, for a chemical leak killing and injuring thousands of Indians; and the Government of India passed a law to represent Indian claimants in the litigation. Thus, how could anyone consider asserting jurisdiction over the Bhopal case as “another example of imperialism” when Indian citizens and the Government of India itself wilfully decided to file a complaint in US courts? Is not this rather an example of protectionism of US companies? This 1986 decision appears not distant from recent rulings (See e.g. Kiobel, Jesner).

This anti-imperialist rhetoric tends to either ignore or downplay that it is people from host states who file extraterritorial complaints in home states and that host states are typically either indifferent or actively supporting claimants. Instead, home states often support the companies incorporated within their territories operating abroad through several means. This includes signing investment and trade agreements aimed at protecting home states corporations from foreign laws and courts (See e.g. Sornarajah) or filing amicus curiae in support of home states’ corporations (See e.g. the Netherlands and UK amicus curiae in Kiobel). Therefore, to portray the rejection of jurisdiction over transnational cases as motivated by imperialist concerns is problematic. First, it patronizes victims from developing countries assuming they are not able to understand the “colonialist” character of their claims. Second, it pursues the interests of multinationals.

A Paradigm Shift: The Who rather than the How

Behind technical jurisdictional questions a political issue is hidden: should home state courts and laws choose to protect the interests of companies incorporated in their territories or of victims of human rights abuses committed in host states? This issue is becoming increasingly pressing for states, corporations and society, as evidenced by negotiations and debates on the adoption of international, supranational and national laws regulating multinationals’ human rights and environmental obligations. However, if a person wants to consider the imperialist angle of the debate, she should not only focus on the question of the “how”, but also on the “who”. Indeed, if she focuses on the “how”, having a US court ruling on a tort committed in Bangladesh could be considered as an unreasonable imposition of US laws and judicial authority on Bangladesh. However, if she looks at the “who”, it becomes clear that the claimants are Bangladeshi victims of human rights abuses, and the respondent is a US parent company. Asserting jurisdiction on such a case is in the interest of victims while rejecting it means protecting a US multinational. It is hard to argue that, to avoid imperialism, a US court should shield a US company from liability for human rights abuses committed against Bangladeshi citizens.

Against this background, in the past two years, courts have increasingly taken into account the “who” dimension. In the Vedanta case, UK courts asserted jurisdiction over a UK parent company for alleged torts committed by its subsidiary in Zambia.  One of the critical issues of the case was whether victims could obtain substantial justice in Zambia. Judge Coulson for the Queen’s Bench Division ruled that they could not, a decision affirmed by the Court of Appeal. On appeal to the Supreme Court, the Attorney General of Zambia filed an amicus curiae arguing that the Zambian legal system could provide access to justice to victims (Intervention, The Attorney General of the Republic of Zambia Lungowe v Vedanta, 2018). But the Supreme Court dismissed the appeal. The Supreme Court confirmed Vedanta by ruling in Okpabi that UK courts have jurisdiction over the parent company of the Shell group for extraterritorial torts allegedly committed in Nigeria by its subsidiary. In the Netherlands, the Court of Appeal at the Hague not only asserted jurisdiction on the Dutch parent company of the Shell group for transnational torts committed by one of its subsidiaries in Nigeria but also decided the case on its merits in the victims’ favour (See Akpan v Royal Dutch Shell Plc 2015; 2021). In Nevsun, the Canadian Supreme Court asserted jurisdiction over a case brought by Eritrean victims against a Canadian company for alleged breaches of customary international and tort law.

Thus, both the “how” and the “who” dimensions are fundamental to analysing the nuances and complexities of the debate on business and human rights. On the one hand, ignoring the interests at stake in court proceedings by focusing only on the “how” risks to attribute imperialist attitudes to victims who are, in the end, those suffering the most from the activities of multinationals. On the other, focusing only on the “who” is equally problematic because it portrays litigation as the panacea for business and human rights while putting aside the structural injustices and inequalities of the global economy.