Don't get left behind on human rights law

Summary: In August 2021 the US District Court for Puerto Rico approved a $25 million settlement in Puerto Rico’s favour as part of a lawsuit the Commonwealth filed more than a decade ago against ExxonMobil Corp. and Esso Standard Oil Co. claiming the companies contaminated the island’s groundwater. Environmental impacts on the ground are ultimately human rights issues.

Why this is important: Current developments in case law underline that businesses do have roles and responsibilities when it comes to respecting human rights. These roles and responsibilities derive from existing international norms. The obligation to Protect for States has over the past years been extended beyond the territory of a State once there is “effective” control over the individuals affected by State action/non-action. This means that extra-territorial obligations will become ever more important.

The big theme: Human rights issues are moving up the political and social agenda. And this goes a lot wider than most companies and investors will expect, covering supply chains, and the right to be protected from harm, and for culture and ways of life to be respected. And these rights increasingly have legal and financial teeth.

Summary of a story published in Forbes:

In August 2021 the US District Court for Puerto Rico approved a $25 million settlement in Puerto Rico’s favour as part of a lawsuit the Commonwealth filed more than a decade ago against ExxonMobil Corp. and Esso Standard Oil Co. claiming the companies contaminated the island’s groundwater. The order establishes that Puerto Rico will use the settlement to pay “to repair, restore, and replace injured or lost natural resources…or permanently protect the natural resources…or to investigate and remediate contamination in Puerto Rico, including surveillance, monitoring and treatment of the waters…or for paying oversight and administrative costs,” among other requirements.

This follows the June 2021 decision by a Massachusetts Court. They declined to dismiss a Massachusetts Investor and Consumer Protection Action Against Exxon. In two decisions, a Massachusetts Superior Court denied Exxon Mobil Corporation’s (Exxon’s) motions to dismiss an action brought by the Massachusetts Attorney General asserting that Exxon systematically and intentionally misled investors and consumers about climate change. In the first decision, the court declined to dismiss the action on personal jurisdiction grounds or for failure to state a claim. With respect to personal jurisdiction, the court found that the Commonwealth sufficiently alleged that its investor deception claim arose from Exxon’s contacts with Massachusetts.

Why this is important

In the past two weeks we have mentioned multiple different cases brought to court related to the impact on people of environmental damage. In two the Court reversed a previous decision of NOT hearing the case and in all the link to impact on societies is clear. The current developments in case law underlines that business enterprises of all sizes, sectors, operational contexts, ownerships, and structures, do have roles and responsibilities when it comes to respecting human rights.

These roles and responsibilities derive from existing international norms, in particular the nine core human rights conventions and the principles concerning fundamental rights set out in the International Labour Organization’s various conventions. The fact that enterprises are not direct duty bearers under international law does not absolve them of responsibility. It is by now well accepted that corporations should support, further and respect the protection of human rights and should make sure that they are not complicit in human rights abuses. This includes when that abuse is linked to issues which are at first glance environmental – such as the Puerto Rico case on pollute ground water – which is drinking water and irrigation for crops.

The obligation to Protect for States has over the past years been extended beyond the territory of a State once there is “effective” control over the individuals affected by State action/non-action. This means that substantive obligations of States to regulate and control the activities of corporations operating in more than one jurisdiction consist of the duties to prevent abuses through effective policies, legislation, regulations, and adjudication. In case of human rights violations as well as environmental damage both national, regional, and international monitoring bodies (courts and committees) have examined whether the State could reasonably be expected to act so as to prevent the infringement of the individual’s rights. This means that the State must act and adjudicate when corporations under its jurisdiction violates rights.

The European Court of Human Rights has ruled on a number of environment-related cases, applying concepts such as the right to life, free speech, and family life to a wide range of issues including pollution, man-made or natural disasters and access to environmental information. In countries with weak governance institutions, which always has a negative effect on human rights implementation, access to justice, especially to international complaints mechanisms by victims can be particularly difficult if not impossible, resulting in the lack of accountability. This was the argument of the plaintiffs in the case mentioned last week against BHP and one of the reasons for hearing the case in the UK.

The Massachusetts decision also shows an extra-territorial aspect – but from the other side of the coin, when they decide to go ahead against a company not domiciled in the Commonwealth – The Massachusetts long-arm statute, “sets out a list of specific instances in which a Massachusetts court may acquire personal jurisdiction over a non-resident defendant.” Tatro v. Manor Care, Inc., 416 Mass. 763, 767 (1994). The Commonwealth asserts specific jurisdiction under section (a), which extends “personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person’s … transacting any business” in Massachusetts. This is more common in most jurisdictions though – that actions taken by any individual on the territory under the control of the State will be adjudicated there.

There is no doubt that the extra-territoriality concept of “exercising effective control” as it has been developed for States over the past decades as well as using human rights norms as the basis for cases suing for damage and change on environmental issues is a new normal. This means that extra-territorial obligations will become ever more important (a subject we will keep coming back to in future blogs).

Please read: important legal stuff.