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Doing Business Right – Monthly Report – February 2018 - By Catherine Dunmore

8. March 2018 Antoine Duval (0)

Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.

The Headlines

Okpabi v Royal Dutch Shell: Court of Appeal finds Shell not liable for Nigerian oil spills

On 14 February 2018, the Court of Appeal in London handed down its Approved Judgment in Okpabi and others v Royal Dutch Shell Plc and another [2018] EWCA Civ 191. The claimants are 40,000 Nigerian farmers and fisherman from the Ogale and Bille communities in the Niger Delta who allege they have suffered from decades of pollution from pipelines belonging to Shell Nigeria, a subsidiary of the British-Dutch multinational oil and gas company Shell. Indeed, in 2011 the United Nations Environmental Programme published an Environmental Assessment of Ogoniland which reported serious contamination of agricultural land and waterways in the community as well as its groundwater at rates 1,000 times higher than permitted under Nigerian law, exposing Ogale’s inhabitants to serious health risks. Meanwhile the Bille community suffered the largest loss of mangrove habitat in the history of oil spills at 13,200 hectares. In its split decision, the Court of Appeal upheld the High Court ruling that it lacks jurisdiction as London headquartered parent company Shell could not be liable for any oil pollution in the Niger Delta caused by its wholly autonomous subsidiary. The villagers now plan to seek permission to take the case to the Supreme Court, with King Okpabi of the Ogale Community stating “We have lost our environment, our farmland and our dignity because of Shell’s operations in our community. The English Courts are our only hope because we cannot get justice in Nigeria. So let this be a landmark case, we will go all the way to the Supreme Court”.

Philippines Commission on Human Rights holding overseas hearings for oil majors

The Republic of the Philippines Commission on Human Rights is set to confront oil majors over their climate change impact through hearings in Manila, New York and London. The hearings are in response to a petition lodged in 2015 which seeks to hold forty-seven companies accountable for Philippine communities suffering from extreme weather. Human Rights Commissioner Roberto Cadiz explained that holding hearings overseas will make the process inclusive, affording all carbon companies the best chance to confront the impact of their businesses. To date, half of the companies, whose products generated around a fifth of historic greenhouse gas emissions, have not responded to the Commission. Those which have responded, questioned the Commission’s jurisdiction or argued that it was for governments and not private companies to tackle climate change. Several international law experts have also filed amicus curiae briefs in support of the petition which back the Commission’s mandate to investigate private companies over harm experienced by Filipinos. The hearings are due to commence in Manila in March 2018, with the overseas sessions following later in the year. The Commission cannot directly impose penalties on any of the respondents; however, it could recommend ways that the companies might alleviate their future operations’ human rights impact.

Tomasella v Nestlé: Consumers sue Nestlé for child labour chocolate

On 12 February 2018, consumer Danell Tomasella filed a Class Action Complaint in Case No. 1:18-cv-10269 in the Massachusetts federal court. The lawsuit against Swiss food and beverage conglomerate Nestlé USA Inc. alleges that the company regularly imports cocoa beans from suppliers in the Ivory Coast and engages in deceptive marketing by hiding that this chocolate supply chain utilises child and slave labour. The plaintiffs claim that in violation of Massachusetts Consumer Protection Law, Nestlé does not disclose its Ivory Coast suppliers’ reliance on the worst forms of child labour which is of material interest to American consumers. They state that “Nestlé has not required its suppliers to remedy this human tragedy” and that it instead continues to be unjustly enriched by the profits from chocolate sales. The allegations highlight that much of the world’s chocolate is “quite literally brought to us by the backbreaking labor of children, in many cases under conditions of slavery”. Nestlé has responded that such consumer class actions “are not the way to solve such a serious and complex issue as forced child labor”, rather “class action lawyers are targeting the very organizations trying to fight forced labor”.

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Doing Business Right Blog | Doing Business Right – Monthly Report – January 2018 - By Catherine Dunmore

Doing Business Right Blog

T.M.C. Asser Instituut

Doing Business Right – Monthly Report – January 2018 - By Catherine Dunmore

5. February 2018 Antoine Duval (0)

Editor's Note: Catherine Dunmore is an experienced international lawyer who practised international arbitration for multinational law firms in London and Paris. She recently received her LL.M. from the University of Toronto and her main fields of interest include international criminal law and human rights. Since October 2017, she is part of the team of the Doing Business Right project at the Asser Institute.

Introduction

This report compiles all relevant news, events and materials on Doing Business Right based on the daily coverage provided on our twitter feed @DoinBizRight. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.


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The Headlines

Landmark High Court case against UK mining company over alleged Sierra Leone worker abuse

On 29 January 2018, a landmark six week hearing began at the High Court in London in a case brought by 142 claimants from Sierra Leone against Tonkolili Iron Ore, a subsidiary of the UK based African Minerals. The case involves allegations of worker abuse in 2010 and 2012 at the Tonkolili Iron Ore Mine in Sierra Leone, including complicity in rape, assault, false imprisonment and the police murder of a protestor complaining over pay and conditions. Human Rights Watch previously reported how the government and African Minerals forcibly relocated hundreds of families from verdant slopes to a flat, arid area, thereby removing their ability to cultivate crops and engage in income generating activities. The claimants’ lawyers, Leigh Day, stated that the case “demonstrates that those companies headquartered in the UK that operate abroad in rural and isolated environments can be held to account when their operations face serious allegations of human rights abuses”. Tonkolili Iron Ore denies responsibility for the incidents against workers and villagers and claims full responsibility lies with the Sierra Leone police. Unusually, the trial will see the judge, Mr Justice Turner, travelling to Freetown for two weeks so that evidence can be taken from witnesses in person, after some witnesses were unable to obtain visas for the United Kingdom.

West Kalimantan villagers file complaint against the Roundtable on Sustainable Palm Oil

On 23 January 2018, a complaint was filed with the Organization for Economic Cooperation and Development’s national contact point in Switzerland by an Indonesian community rights group against the Roundtable on Sustainable Palm Oil for its failure to address complaints made by residents of two West Kalimantan villages. The indigenous Dayak community in Kerunang and Entapang villages had previously filed an urgent complaint with the RSPO accusing one of its members, Malaysian palm oil giant Sime Darby, of stealing their tribal land through its subsidiary Mitra Austral Sejahtera. They allege that Mitra Austral Sejahtera breached the RSPO Principles and Criteria for the Production of Sustainable Palm Oil relating to commitment to transparency, compliance with applicable laws and regulations and responsible consideration of employees, and of individuals and communities affected by growers and mills. It is alleged that the RSPO failed to respond to the request for the return of tribal lands and accordingly failed to meet its obligations under the OECD Guidelines for Multinational Enterprises. Sime Darby has stated that the land dispute has been discussed at the RSPO's annual meetings since 2012, and that it looks “forward to the cooperation of the communities towards ensuring that the eventual return of their land is socially, environmentally and economically viable”.

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Doing Business Right Blog | Tackling Worker Exploitation by ‘Gangmasters’ in the UK and Australia - Part 1: An Overview of Labour Hire Licensing Laws in the UK and Australia – By Katharine Booth

Doing Business Right Blog

T.M.C. Asser Instituut

Tackling Worker Exploitation by ‘Gangmasters’ in the UK and Australia - Part 1: An Overview of Labour Hire Licensing Laws in the UK and Australia – By Katharine Booth

26. May 2020 Antoine Duval (0)

Editor’s note: Katharine Booth holds a LLM, Advanced Programme in European and International Human Rights Law from Leiden University, Netherlands and a LLB and BA from the University of New South Wales, Australia. She is currently working at the Asser Institute in The Hague. She previously worked as a lawyer and for a Supreme Court Justice in Australia.

 

This series of blog posts focuses on the regulation of so-called ‘gangmasters’ in the UK and Australia. A ‘gangmaster’ is an old English term for a person (an individual or business) who organises or supplies a worker to do work for another person.[1] Gangmasters have been described as ‘middlemen’ or ‘brokers’ between a worker and a business that needs temporary, and often seasonal, labour. In other countries, including Australia, gangmasters are commonly referred to as labour hire providers or labour market intermediaries.

In recent years, legislation has been implemented in the UK and three Australian States (Queensland, Victoria and South Australia) requiring gangmasters to be licensed. According to Judy Fudge and Kendra Strauss, central to these licensing schemes is the protection of vulnerable workers from forced and unfree labour and exploitation:

“[E]vidence suggests that ‘sweating’ at the bottom end of the labour market (increasingly populated by migrant workers, both documented and undocumented, in many countries) often involves labour intermediaries who exploit the ways in which processes of racialization and the construction of new categories of social difference, instigated by immigration regimes, render some workers extremely vulnerable—including to forced and unfree labour.”

As noted by Kendra Strauss, migrant workers are especially vulnerable to exploitation as they often migrate from less developed economies, have a precarious migrant status, and are employed in poorly-paid positions. They often lack English language skills and have little knowledge of their legal entitlements and pathways for accessing remedies which, according to an Oxfam GB report, makes it unlikely that they will report abuse or exploitation, for fear of losing their jobs. Moreover, as Sayomi Ariyawansa explains, the three-tiered or tripartite arrangement between the worker, gangmaster and host business means that there is no direct contractual relationship between the worker and host business and little oversight of the legal arrangements between the worker and gangmaster. This makes it easy for unscrupulous gangmasters to slip through legal cracks, but also for businesses to unknowingly enter into arrangements with gangmasters that do not comply with the law.

This series of blog posts explores the connection between the regulation of gangmasters and the enactment of modern slavery legislation, namely legislation calling on companies to report on modern slavery and other labour and human rights abuses in their corporate supply chains. It is divided into four main parts. Part 1 of this series explores two main issues. (1) The circumstances that led to the enactment of gangmaster licensing schemes in the UK and Australia, and the laws’ provisions relating to the licensing of workers. (2) The limitations of these laws, particularly the inability of licensing schemes to hold liable companies that enter into business arrangements with gangmasters, as well as companies higher in the supply chain. Part 2 explores reform of these laws in the UK and Australia in view of the relatively recent modern slavery legislation implemented in both countries.

 

Flashpoints Lead to Legislative Change

The enactment of both the UK and Australian gangmasters legislation followed flashpoints of heightened public awareness of extreme exploitation of migrant labour. In the UK, 23 undocumented Chinese migrants working as cockle pickers were drowned by a rising tide in Morecombe Bay, Lancashire, in February 2004. The victims had been smuggled by Chinese gangmasters into the UK, where they had been housed in overcrowded and inadequate accommodation and paid a pittance for working often long hours in dangerous conditions. The impact of the Morecambe Bay cockling disaster, as it came to be known, was profound, with calls for more to be done to tackle gangmasters operating in the UK who were putting the health and safety of often vulnerable migrant workers at risk.

Five months after the Morecambe Bay cockling disaster, the Gangmasters (Licensing) Act was enacted and, in April 2015, the Gangmasters Licensing Authority (GLA) was established. The Act empowered the GLA to regulate the licensing of gangmasters involved in the supply or use of workers in connection with the agriculture, horticulture, food processing, shellfish gathering and forestry sectors. To hold a licence, gangmasters are required to comply with the Gangmasters (Licensing Conditions) Rules 2009. Gangmasters must, for example, enter into written employment agreements with workers and take reasonable, practicable steps to ensure that workers are aware of their legal rights and obligations, and they must not withhold or threaten to withhold payments to workers. The GLA, therefore, aimed to regulate the exploitative activities of gangmasters in specific industries through the introduction of a national licensing scheme.

Investigations handled by the GLA led to the revocation of licenses and, in extreme cases of exploitation, civil claims against gangmasters. In a recent High Court judgment on the Gangmasters (Licensing) Act, the claimants, Lithuanian nationals employed to catch farm chickens, successfully alleged that they were employed in an exploitative manner. A GLA investigation revealed that the parties had never signed an employment contract and the claimants had no knowledge of their legal rights and entitlements. They worked for extremely long periods with insufficient breaks, were paid considerably less than the statutory minimum, and not paid amounts owed to them, including holiday and overtime pay. Further, their pay was subject to unlawful deductions for so-called employment fees, as well as charges for inadequate accommodation in excess of the statutory maximum. The claimants were threatened and intimidated by a Lithuanian middleman if they complained about the conditions of their employment. In this case, the High Court granted summary judgment in favour of the claimants on all grounds.

The passage of the Australian gangmaster licensing legislation followed media reports in May 2015 that revealed rampant exploitation of migrant labour in Australian-grown fresh produce stocked by major supermarket chains. Subsequently, three Australian States (Queensland, Victoria and South Australia) enacted legislation to regulate the licensing of labour hire service providers.  For a detailed analysis of the Australians laws, see Anthony Forsyth’s article ‘Regulating Australia’s ‘gangmasters’ through labour hire licensing’. The Queensland Government, for instance, introduced the Labour Hire Licensing Act 2017 following a parliamentary inquiry into the practices of the industry. The final report of that inquiry contained evidence of serious mistreatment and exploitation of workers in Queensland, particularly in the low-paid horticulture, meat processing and cleaning industries, committed especially against migrant workers. Similarly, in September 2015, an inquiry conducted by the Victorian Government reported that many temporary migrant and student visa holders, often young backpackers from Asian countries, were being subjected to exploitation in the labour market, particularly in the horticulture and food services sectors. For more information about labour hire in the Australian horticultural industry, read Sayomi Ariyawansa’s article. The impetus for the passage of the UK and Australian laws was, therefore, closely connected to the protection of migrant workers from exploitation and other labour and human rights violations.

The provisions of all of the Australian laws are broadly similar to the Gangmasters (Licensing) Act. All provide for a State-wide licensing scheme for labour hire providers. One key difference, however, between the Australian laws and the UK Act (as originally enacted) is that the scope of the former is unlimited. That is, in Queensland, Victoria and South Australia, all labour hire providers must be licensed, regardless of the industry in which they operate.

 

Limitations of the Licensing Laws  

The enactment of the UK and Australian laws has not been without criticism. In the UK, the remit of the GLA was restricted to the five sectors specified in the Gangmasters (Licensing) Act. Temporary workers engaged in other sectors, including the construction, hospitality and social care sectors that engage large numbers of migrant workers in the UK, were excluded from the GLA’s operations. Unlike the Gangmasters (Licensing) Act, the Australian laws do not limit the scope of their application and therefore apply to all sectors. However, the effectiveness of the Australian laws is limited in that they are enacted by State Governments rather than the Federal Government. This means that there is no uniform, Australia-wide labour hire licensing scheme to address worker exploitation, but rather a patchwork of State-based legislation.

Moreover, both the UK Act (as originally enacted) and the Australian laws provide only for the establishment of a labour hire licensing scheme and compliance with that scheme. The reach of the licensing authorities is generally restricted to the passive regulation of licences and contraventions of the relevant rules that are connected to alleged offences by gangmasters.

Further, the scope of liability under the laws is limited, as both the UK and Australian laws regulate only relationships between workers, gangmasters and labour users. This means that companies further up the supply chain, such as major retailers, cannot be held liable for, for example, entering into a contractual relationship with a labour user that engaged an unlicensed gangmaster. By way of example, the recent UK case concerning exploited Lithuanian chicken-catchers resulted in claims against the individual gangmasters only – not the businesses that engaged those gangmasters and sold the eggs hand-picked by the workers to consumers. This is because the UK and Australian laws only regulate the tripartite arrangement between the worker, gangmaster and host business – and the latter is unlikely to be the major corporation or retailer that sells the final product to the consumer. They do not oblige the retailer, for example, to conduct human rights due diligence (HRDD) to ensure that workers are being treated according to the law. In relation to the Australian horticultural industry, Sayomi Ariyawansa has suggested that workers’ entitlements could be best assured by licensing legislation requiring retailers to conduct ‘targeted transparency’ or a form of HRDD:

“Retailers should be required to prepare and publicly disclose a statement which addresses its due diligence processes in relation to ensuring its suppliers comply with the licensing scheme. Further, where a retailer has failed to take all reasonable steps to ensure compliance, the authority responsible for the enforcement of the GLA model may issue a guidance to the retailer, and may publish this guidance in a way it considers appropriate.”

Such due diligence would reflect the growing recognition of human rights abuses in corporate supply chains.

This blog post has explored the context in which the UK and Australian labour hire licensing laws were enacted, as well as some limitations of these laws. Part 2 delves into the subsequent reform of the UK law and the effect of the enactment of modern slavery laws in both the UK and Australia.

[1] See Anthony Forsyth, ‘Regulating Australia’s ‘gangmasters’ through labour hire licensing’ (2019) 47 Federal Law Review 3, 469-493; Nicola Verdon, ‘The employment of women and children in agriculture: A reassessment of agricultural gangs in nineteenth-century Norfolk’ (2001) 49(1) The Agricultural History Review 1, 41-55. For an overview of the history of gangmasters in the UK and at the international level: Kendra Strauss, ‘Unfree labour and the regulation of temporary agency work in the UK’, in Judy Fudge and Kendra Strauss (eds), Temporary work, agencies and unfree labour (2013, Routledge) 164-183. 

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Doing Business Right Blog | The EU Parliament’s proposal for a Regulation on Forest and Ecosystem Risk Commodities - Tackling global deforestation though due diligence - By Enrico Partiti

Doing Business Right Blog

T.M.C. Asser Instituut

The EU Parliament’s proposal for a Regulation on Forest and Ecosystem Risk Commodities - Tackling global deforestation though due diligence - By Enrico Partiti

20. October 2020 Antoine Duval (0)

Editor's note: Enrico Partiti is Assistant Professor of Transnational Regulation and Governance at Tilburg University and Associate Fellow at the Asser Institute. His expertise centres on European and international economic law, sustainability and supply chain regulation. In particular, he studies how private standard-setters and corporations regulate globally sustainability and human rights 


Upcoming Event: Fighting global deforestation through due diligence: towards an EU regulation on forest and ecosystem risk commodities? - 4 November 2020 - 16:00 (CET) - Register Here!


The recent vote in the Environment, Public Health and Food Safety (ENVI) Committee of the European Parliament on binding legislation to stop EU-driven global deforestation is a watershed moment in the global fight against deforestation, ecosystem conversion and associated human rights violations. The ENVI Committee report, that will soon be voted by the plenary, requests the Commission (as provided in Art. 225 TFEU) to table a legislative proposal for a measure disciplining the placing on the EU market of products associated to forest and ecosystem conversion and degradation, as well as violations of indigenous communities’ human rights. The Parliament’s initiative takes place in a policy context increasingly concerned with deforestation, in the framework of a Commission Communication on stepping up EU action to protect and restore the world’s forests which left a door open for legislative intervention. 

The proposed measure would aim to severe the economic link between demand of agricultural commodities, especially by large consumers markets, and negative environmental impacts - including on climate change. Beef, soy and palm oil alone are responsible for 80% of tropical deforestation, and consequent CO2 emissions. In 2014, EU demand was responsible for 41% of global imports of beef, 25% of palm oil and 15% of soy, as well as large shares of other commodities at high risk for forests and ecosystems such as such as maize (30%), cocoa (80%), coffee (60%), and rubber (25%). Protecting just forests is not sufficient, as it risks to displace conversion to other non-forests ecosystems such as the Brazilian cerrado. In light of their negative impact on both forests and other natural ecosystems, such commodities have been labeled as forest and ecosystem risks commodities (FERCs).

The Parliament motion lays down a rather detailed overview of a WTO law compliant measure that the Commission shall propose and that builds upon the previous EU experience in regulating placing on the EU market of agricultural products such as timber and biofuel crops. However, it goes beyond establishing a requirement of legality of product origin such as under the EU Timber Regulation. Instead, it would require that only FERCs and derived products that do not originate from land obtained via the conversion of natural forests or other natural ecosystems, do not originate from natural forests and natural ecosystems undergoing degradation, and are not produced in, or linked to, violations of human rights can be placed on the EU market. The obligation would apply to economic operators placing on the market commodities and derived products regardless of their EU or non-EU origin. This obligation of result would be operationalised through an obligation of conduct for economic operators placing covered products on the EU market, i.e. they would have to exercise due diligence in line with the human rights due diligence process laid down in the United Nations Guiding Principles on Business and Human Rights (UNGPs). A 2018 feasibility study indicated that mandatory due diligence centred on deforestation criteria would generate the highest impact among all possible regulatory and non-regulatory options.

The alignment of due diligence with the UNGPs represents a notable improvement from the requirements in the EUTR that are limited to performing a risk assessment in view to gather information about timber origin and assessing and mitigating risks of non-compliance. The proposed measure would instead include all relevant steps in human rights due diligence including involvement of affected stakeholders at all relevant moments in the definition and implementation of due diligence, reporting to the public and to enforcement authorities, ensure remediation and establish grievance mechanisms to improve accountability and access to remedy. The proposal in its current draft also contains strict enforcement and sanction provisions building on the national enforcement structure currently in place under the EUTR. As under the EUTR, enforcement will thus be determined by the practices of enforcement authorities at the Member State level. Civil society monitoring would be strengthened as individuals, NGOs and undertakings are given the possibility to challenge non-compliance before national judicial and administrative authorities. Sanctions for non-compliance would include fines, seizure of products, suspension of authorisation to place products on the internal market, exclusion from public procurement and criminal penalties for individuals. The proposal would also establish civil liability and, interestingly, it clarifies a vexed question about the relation between due diligence and liability. It notes that, while operators remain jointly and severally liable for human rights and environmental harm which they caused or contributed to, for harm to which they are directly linked, proper exercise of due diligence would lead to a discharge of liability. As the Regulation would also apply to ecosystem conversion taking place in the EU, a potential tension with the system of liability under the Environmental Liability Directive may arise.

Due diligence will have to focus on specific environmental and social criteria. This measure can therefore be seen as a sector-specific or risk-specific add-up to a future across-the-board human rights due diligence Directive. Notably, the environmental and social criteria against which due diligence is performed go beyond legality of land conversion, testifying to the awareness of the impossibility to arrest ecosystem destruction where countries willingly relax the enforcement of land-use regulations to favour agribusiness. A zero gross deforestation approach is adopted that allows placing on the EU market only FERCs and derived products that originate from areas that have not lost their status as forests and natural ecosystems, under the definitions that will be set forth in the measure, at a designated cut-off date. In addition, covered commodities shall not be harvested, extracted or produced from land obtained or used in violation of human rights and especially indigenous communities traditional land-use rights, free prior and informed consent and access to water. The operationalisation of due diligence obligations would require economic operators to map the entire value chain in question, and acquire information about the status of land of origin, including possible presence of formal and customary right, as well as human rights violations. Operators should ensure full traceability and, where needed, segregation to ensure that only compliant products are traded.

Extending due diligence responsibility to conversion clarifies the close link between human rights violations and ecosystem conversion. Apart from the clear connection between ecosystem conversion and degradation on the one hand, and human rights violations especially suffered by indigenous communities on the other, considerable human rights impacts originate from environmental harm. It is also well established that climate change, to which deforestation and ecosystem conversion greatly contribute, detrimentally affects the enjoyment of various internationally recognised human right. The proposal is also in line with various soft law instruments linking together social and environmental harm in the context of agricultural production, such as the OECD/FAO Guidance on Responsible Agriculture Supply Chains - that includes various social and environmental impacts including deforestation and conversion as part of the expected risk assessment that companies should undertake. Also one of the most high-profile voluntary pledges entered into by the industry together with other stakeholders, the UN New York Declaration on Forests, establishes a clear link between conversion of forests and ecosystems and human rights violations.

The proposal suggested by the European Parliament represents a strong starting point for a legislative process on a regulatory measure disciplining the placing on the EU market of products associated with forest and ecosystem conversion and degradation, as well as human rights violations. The clarification of the environmental component of human rights due diligence is particularly relevant not just as it makes clear what are the expected boundaries of human rights due diligence. It also puts pressure on companies to design, both individually and collectively, effective means to ensure that their supply chains are not associated to detrimental impact, and forces them to step up their so far voluntary and limited efforts towards deforestation-free value chains.

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