New Developments in Corporate Liability for Human Rights Abuses Committed AbroadAraya v. Nevsun Resources Ltd., 2017 BCCA 401 (CanLII)
This past week, the British Columbia Court of Appeal rendered its decision in Nevsun Resources Ltd., 2017 BCCA 401. It is of interest for what it says about corporate liability for violations of customary international law, state immunity, and forum non conveniens.
Nevsun Resources Ltd. has been accused of complicity in the Eritrean military’s use of forced labour, slavery, and torture at its Bisha mine near Asmara, Eritrea. It is currently the subject of class proceedings in British Columbia.
The plaintiffs advance two causes of action. First, they allege a number of private law torts including conversion, battery, unlawful confinement, unlawful conspiracy, and negligence in failing to adhere to “standards of corporate social responsibility”. Second, the plaintiffs allege breaches of certain peremptory norms of international law.
The defendants motioned to dismiss the plaintiffs’ claim at a preliminary stage. In their view, 1) British Columbia is poorly placed to hear this dispute and ought to decline jurisdiction in favour of the courts of Eritrea; 2) the “Act of State” doctrine bars the plaintiffs’ claim, since a Canadian court could not decide Nevsun’s liability without improperly judging the lawfulness of Eritrea’s actions; and 3) corporations cannot be found liable for breaches of customary international law.
The defendant’s arguments were dismissed at first instance, and then again on appeal.
Forum Non Conveniens
While the British Columbia Supreme Court undoubtedly had jurisdiction over the dispute, Nevsun argued that a lengthy trial in B.C. would be impracticable. There were possibly hundreds of Eritrean witnesses, most of whom only speak Tigrinya. Most of the relevant documents are located in Eritrea. Having witnesses travel to and from Vancouver would be both time-consuming and expensive, and communication between Canada and Eritrea via telephone or video-conferencing would be unreliable.
Moreover, Eritrea remains the most closely connected forum to the dispute, and its law would likely govern.
All of this said, the first instance judge – and later the Court of Appeal – refused to decline jurisdiction. In their view, there was a “real risk” that the Eritrean government would interfere in the dispute, and that the plaintiffs might feel “real consequences” if they attempted to return to Eritrea and pursue their claim.
In short, the Court accepted that:
- The plaintiffs – who had left Eritrea – would be considered traitors if they ever returned;
- Witnesses would likely not come forward to testify in Eritrea out of fear of being intimidated, arrested, or beaten;
- Judges do not enjoy any form of tenure and are subject to summary dismissal by the Ministry of Justice; and
- The executive branch of government has been known to interfere in controversial cases.
There was also a risk that any judicial process might be hijacked by Eritrea’s “Special Court”. While this Special Court was originally founded to hear corruption cases, it has taken it upon itself to reverse decisions rendered in the ordinary civil courts. This same Special Court is staffed by members of the Ministry of Defense – including high-ranking military officers –, holds its trials in private, and does not allow parties to be represented by lawyers.
Faced with the “stark choice” of choosing between the significant inconveniences of proceeding in B.C. on the one hand, and the possibility of there not being any real or legitimate trial on the other, the Court of Appeal judged that jurisdiction should not be declined.
Act of State Doctrine
Nevsun also argued that its liability could not be determined without also judging the legality of Eritrea’s conduct, running afoul of the rule that “the courts of one state cannot sit in judgment on the sovereign acts of another”.
This argument was likewise rejected. In the Court’s view, the plaintiffs do not seek to impugn official government actions, but only seek to be compensated for wrongs that are not contemplated in any official government policy or in legislation. More fundamentally, the Court judged that respect for another sovereign state is not a compelling enough reason to decline to condemn forced labour and slavery, these being repugnant to both peremptory norms of international law and to fundamental domestic values.
Violations of customary international law
Finally, the Court also recognized – if only tepidly, and as a matter of principle – that a breach of customary international law could anchor a private law claim against a corporation.
Nevsun argued that corporations are not recognized as actors under international law, and that there is no existing international legal framework governing the activities of a multinational corporation. Indeed, courts in both the United Kingdom and in Canada have so far “declined to recognize a private cause of action for breaches of jus cogens such as the prohibition against torture”.
The Court, however, took note of the emergence of “transnational law”, a body of international norms that may apply to individuals and to corporations alike. Sure enough, in her opening paragraph, Newbury J.A. cited the following passage from the judgment of Lloyd-Jones L.J. in Belhaj v. Straw,  EWCA Civ 1394, aff’d  UKSC 3, at para. 115:
[A] fundamental change has occurred within public international law. The traditional view of public international law as a system of law merely regulating the conduct of states among themselves on the international plane has long been discarded. In its place has emerged a system which includes the regulation of human rights by international law, a system of which individuals are rightly considered to be subjects.
This being a preliminary motion to strike, the Court did not have to settle this debate definitively. Nevertheless, Newbury J.A. concluded her reasons by suggesting that this was an idea whose time had come:
 There is no doubt that in pursuing claims under CIL, the plaintiffs face significant legal obstacles, including states’ legitimate concerns about comity and equality and the role of the judiciary as opposed to that of the legislature. It is not necessarily the case, however, that the recognition of a CIL norm against torture as the basis for some type of private law remedy in this instance would bring the entire system of international law crashing down. As I have emphasized, no state is a party to this proceeding; Eritrea is fully protected by state immunity; and the prohibition against torture is, as the majority stated in Kazemi, “universally accepted.” If, as the Court suggested, the development of the law in this area should be gradual, it may be that an incremental first step would be appropriate in this instance.
 At the end of the day, I do not believe it can be said the plaintiffs’ claims are “bound to fail”. We have seen that international law is “in flux” and that transnational law, which regulates “actions or events that transcend national frontiers” is developing, especially in connection with human rights violations that are not effectively addressed by traditional “international mechanisms”: see Raponi at 374. Other jurisdictions have been willing to hold corporate actors accountable for violations of jus cogens […]. In all the circumstances, I am not persuaded the chambers judge erred in ruling that this action, including the claims based on CIL, should proceed in British Columbia as pleaded.
 The factors considered as a part of this analysis are from what I can tell identical to the factors considered under art. 3135 of the Civil Code of Quebec. See Club Resorts Ltd. v. Van Breda, 2012 SCC 17, at paras. 108-109.
 It was common ground that Nevsun was “ordinarily resident” in the province, and that the courts of B.C. therefore had jurisdiction over the dispute. See sections 3 and 7 of the Court Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28, and their equivalents in this province, article 3148 of the Civil Code of Quebec.
 See Judgment, paras. 37 and 47.
 R. v. Bow Street Metropolitan Stipendiary Magistrate and Others, ex parte Pinochet Ugarte (No. 3)  1 A.C. 147 (H.L.), per Lord Millett.
 See Judgment, at paras. 166-172.
 See Judgment, at para. 182.