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Transnational Business, Human Rights, and Civil Litigation? in Europe?

Marta Requejo Isidro
Lecturer on Private International Law. Santiago de Compostela
Marta Requejo Isidro

Marta Requejo Isidro

Civil liability claims are a possible (albeit indirect) way to compel transnational corporations to respect human rights in their activities outside their home State. So far, this road has been explored almost exclusively in the U.S. under the highly discussed ATS, starting with the Doe v. Unocal affair initiated in 1997; whether it will remain open or not in the near future depends on the worldwide expected decision of the SC regarding Kiobel v. Royal Dutch Petroleum Co.1

Unlike the U.S., Europe has seldom been the scenario of civil litigation for violations of human rights. However, with the chances to sue in the U.S. seriously threatened, the fact of victims of harmful behavior turning to the old continent, directing their claims for the damage caused by subsidiaries against the parent companies headquartered in Europe, would not come as a surprise. But, what reasonable expectations, in terms of access to justice, may they harbor?

To be true, pessimism is likely to be the correct answer. Potential claimants, usually residents and nationals of third countries, will find from the very outset difficulties for which the laws of the European countries lack adequate solution. The shortcomings of existing Community instruments relating to procedural prerequisites have been reported over and over again. Regulation (EC) no. 44/01 of December 22, 2000, the document of civil cooperation in Europe par excellence designed to facilitate cross-border disputes, plays but a very limited role in the context under survey: it only addresses the issue of international jurisdiction, offering solutions that hardly meet the needs of this kind of litigation. From this point of view the upcoming revision of the Regulation introduces no real changes2.

The situation does not improve once the difficulties of admissibility of the claim have been surmounted. The answers to the substantive issues raised by the plaintiffs will largely depend on the rules concerning liability. The case being a cross-border one, the applicable law must be determined through the conflict rule in force in the forum. In EU member States this is Regulation no. 864/07, in force since 2009 and erga omnes. According to the Regulation, in the absence of choice of law by the parties (art. 14), and common habitual residence of the parties (Article 4.2), the conflict rule leads to the law of the place where the harmful event occurred (Art. 4.1), therefore to the third (host) State. Too often this law will be unfavorable to the victims, due to lack of attention to human rights violations by local authorities: either by negligence, either by the desire to keep a legal offer attractive for new investors or for companies already existing in the territory. True, refusal to apply this law in a particular case is still possible through the public policy exception (art. 26): but this is a quite narrow door.

Actually, even before these technical issues arise other obstacles, related to a commonly poor economic condition of the victims, emerge and put into question the suitability of the European arena as a place for civil litigation in defense of human rights. Suffice to consider that only rarely will an individual have the means to engage in a procedure and hold it until its end; but the procedural devices that could ease this flaw (collective actions for multiple victims occurrences, generous legal aid provisions – i.e., not limited to EU citizens or legal residents-, legal standing for institutions charged with the defense of legality - such as our Ministerio Fiscal-, a culture of pro bono work, the waiver of court fees ...) do not exist, or lack sufficient development, or are not designed for these specific cases in European systems. This fact is not surprising if we consider the different views bear on either side of the Atlantic on the value of litigation: in the U.S. civil claims are used for social criticism and are powerful engines of change; Europeans tend to avoid judicial confrontation. Also worth recalling is the different role assigned here and there to civil liability: compensation in Europe, prevention and deterrence in the U.S.

Does any European Union action targeting accountability of European based companies focus on improving access to courts for victims of human rights violations? In theory, yes: the concern for corporate social responsibility in Europe, which started with the century, has been fuelled by J. Ruggie' works, from 2008 on. In this regard, an outstanding action of the Commission was a call for tender made in 2009, which resulted in the University of Edinburgh Study of the Legal Framework on Human Rights and the Environment Applicable to European Enterprises Operating outside the European Union (2010). A second initiative conducted under the European Union's Program for Employment and Social Solidarity -PROGRESS (2007-2013)-, ended with the publication in 2011 of the study Responsible Supply Chain Management Potential Success Factors and Challenges for Addressing Prevailing Human Rights and Other CSR Issues in Supply Chains of EU-Based Companies. The Commission recently issued a communication entitled A Renewed EU Strategy 2011-14 for Corporate SocialResponsibility3, and stated therein its intention to take both studies into account in future CSR proposals. Unfortunately, whatever those proposals may be, none will arrive in time to be reflected in the new draft of Regulation (EC) no. 44/01, and therefore in one of the European basic documents of international jurisdiction in civil matters.

1. * This contribution is a result of a research funded by the Xunta de Galicia, Consellerías de Educación e Ordenación Universitaria (Ayuda para la consolidación y estructuración de unidades de investigación competitivas del Sistema Universitario de Galicia, Grupo de Investigación De Conflicto Legum), y de Economía e Industria (Proyecto ref. INCITE09PXIB202096PR), the Ministerio de Ciencia e Innovación (Proyecto ref. DER2010-17048, sub JURI) and the ERDF. Funding has also been granted from the Ministerio de Educación (Programa Nacional de Movilidad de Recursos Humanos del Plan Nacional de I-D+i 2008-2011).
621 F.3d 111 (2d Cir. 2010) (Back)
2. COM (2010) 748 final, Art. 6. (Back)
3. COM(2011) 681 final ,25.10.2011. (Back)