International Human Rights Litigation Coming Home with Help From the Canadian Senate and the U.S. SEC
In the past, U.S. and Canadian courts have not been receptive to litigation of human rights issues solely related to plaintiffs who are neither citizens of nor located in either country. These courts believed that what happened in a place such as the Democratic Republic of the Congo should stay in the Democratic Republic of the Congo. As a result, the fear of litigation in a home country legal system did not impact U.S. and Canadian companies’ behavior in international projects or international supply chains.
That is potentially no longer the case. Now, companies in the U.S. and Canada need to consider whether there are alternative dispute mechanisms that might lead to resolutions of international human rights issues without the need to spend years in costly litigation in the U.S. and Canada. This is particularly true given the corresponding legal risks and reputational damages that type of litigation can cause.
First, the Canadian Supreme Court opened the doors to international human rights litigation in the Canadian legal system when it decided the Nevsun case earlier this year. In that decision, the Canadian Supreme Court determined that Canadian common law incorporates international standards and norms in the field of international human rights. The case was remanded back to the trial court and was settled just a few weeks ago. Now, the Canadian Senate is considering a Modern Slavery Act similar to the U.K. law that will require many companies that operate in Canada, including many U.S. companies, to report on international human rights issues in their supply chains and international operations.
Meanwhile, in the U.S., a case is pending in federal court in Washington D.C. that was brought under the Trafficking Victims Protection Reauthorization Act (“TVPRA”), 18 U.S.C. § 1595 et seq., against several U.S.-based companies that rely upon the supply of cobalt from the Democratic Republic of the Congo. The plaintiffs are children who claim to have worked in cobalt mines in the Congo. A motion to dismiss has been filed by the defendants and briefing is ongoing.
Also, the SEC announced its new environmental, social and governance (“ESG”) reporting recommendations today, December 1, 2020. These recommendations may require disclosures by U.S.-based public companies similar to those required by modern slavery laws. At the same time, the U.S. will have a new administration that may well look to guidance on these issues from the U.K., Australia and Canada and could drive the adoption of a modern slavery act in the U.S.
All of this means the search for better dispute resolution mechanisms has a greater urgency. This search will be the topic of a virtual panel session on December 10, 2020. The panel includes lead counsel in the U.S. TVPRA case, Canadian counsel to discuss the impact of the Nevsun case, the Chair of the United Nations Working Group on Business and Human Rights, and counsel from the U.K. and India.
Now is the time to consider these issues before the litigation of international human rights issues in local courts becomes an issue for many U.S. and Canadian companies.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.