Corporate legal accountability & watchdogs’ role
Here, ‘legal accountability’ is a euphemism for liability, arguably the only time a business is driven to acknowledge—let alone accept—corporate irresponsibility
Corporate legal accountability. These three words collectively drive the business and human rights space. Here, “legal accountability” is a euphemism for liability, arguably the only time a business is driven to acknowledge—let alone accept—corporate irresponsibility. That’s how the principle of earnings-over-ethics really works for all the do-gooding that activists and human rights watchdogs do.
But it would be a more irresponsible world without watchdogs. Among the numerous organizations that track corporate legal accountability, my favourite is the Business and Human Rights Resource Centre, an unsentimental UK-based aggregator of global news and views, and a pioneer with its global case study tracker. It’s a go-to destination for the representatives of victims, lawyers—both human rights and corporate. It certainly should be so for business planners and executives who cost companies millions and, sometimes, billions of dollars in damage control, liability, lost business and image makeovers.
A scan of recent developments in this space is a horror-and-hope playlist of several dozen mini-dossiers of outright human rights complicity, and supply chain misdemeanours—outsourced human rights violations at their worst and human rights exposures at best. The centre’s latest bulletin seems all the more telling as it was closely followed by news in mid-August that Monsanto Co., the US-based agrochemicals major acquired in June by Germany’s Bayer AG, was fined $289 million by a San Francisco court. Monsanto’s decision to appeal after steadfastly denying a popular weed killer caused the plaintiff cancer will further lift the veil as the company deals with “over 4,000 similar cases” it faces in the US, mentions an advisory from the centre.
The US Supreme Court in May decided to hear a case against International Finance Corp., specifically whether it has immunity over its financing of Tata Power’s Mundra coal-fired plant. A plaint has been brought to the court on behalf of farming and fishing communities in the area by Gujarat’s coast who allege the project impacted the environment and their livelihoods. The case could easily spill over to snare other entities.
That watchdogs and activists are worth their weight was proven yet again when, also in May, the families of 209 victims of the Baldia Factory fire incident in Pakistan in September 2012 began to receive “long-term compensation from the factory’s main buyer, the German textiles discount store KiK”, noted the centre.
“The compensation plan is the result of a negotiation facilitated by the International Labour Organization.” The negotiations came about entirely on account of pressure by a coalition textile industry watchdogs, labour organizations and human rights activists. A similar grouping compelled compensation and change in safety practices in Bangladesh, which witnessed the Rana Plaza disaster in April 2013.
In February, a high court judge in the UK actually travelled to Sierra Leone to hear the testimony of victims—plaintiffs—who “allege complicity and direct involvement in assault, false imprisonment, rape and murder among others” by that country’s security forces to suppress protests on the site of behalf of the mining company Tonkolili Iron Ore Ltd, between 2010-12. The company pushed for the case to be quashed saying that UK courts had no jurisdiction over matters in Sierra Leone, besides of course denying charges of complicity—the latter tactic is routinely applied by businesses in India too, as this column has more than once noted, with specific examples.
In any case, it didn’t prevent the judge from claiming jurisdiction, saying Tonkolili was formerly a subsidiary of African Minerals, based in the UK (China’s Shandong Steel partnered African Minerals in the project). Watchdogs also tellingly noted that more than a hundred claims were settled; 41 claims are currently in court.
Meanwhile, a US court in June permitted a lawsuit, under the country’s Alien Tort Statute, that names Nestlé SA and Cargill Inc. for alleged use of child labour smuggled in from Mali to work cocoa plantations in Côte d’Ivoire—plantations the companies sourced cocoa from in the 1990s. Right or wrong, the past has a way of catching up. Businesses are daily being shown that indubitable truth.
This column focuses on conflict situations and the convergence of businesses and human rights and runs on Thursdays.