Legal ruling paves way for Canadian firms to be pursued for overseas human rights breaches as Norway’s Ethics Council prioritises working conditions

Human rights continue to edge up ESG agenda with developments on both sides of the Atlantic

Canada-based mining company Nevsun Resources has lost a court battle to dismiss allegations of human rights abuses at an African mine, in what is being hailed “a landmark ruling” by the Supreme Court of Canada, which has allowed the country’s first ever modern slavery claim from multiple accusers to go to trial.

In a case that began in 2014, three men claim they worked at a Nevsun mine in Eritrea against their will, and were subject to “violent, cruel, inhuman and degrading treatment”. They are pursuing legal action against the company in Canada, alleging torture, slavery, forced labour and crimes against humanity.

“Central to the case are allegations that Nevsun engaged Eritrean state-run contractors and the Eritrean military to build the mine’s facilities and that the companies and military deployed forced labour under abhorrent conditions,” explained the two law firms bringing the action, Camp Fiorante Matthews Mogerman LLP and Siskinds LLP.

According to documents filed in court, Nevsun had prior knowledge and understanding of the likelihood that its business relationships would involve the use of conscripted labour.

Nevsun has tried to have the case dismissed three times, arguing that a trial in Canada would constitute an impermissible intrusion on Eritrea’s sovereignty, and suggesting that the case would be better heard in Eritrea. But Canada’s Supreme Court rejected the argument last week, in a move the prosecution says “recognised for the first time that a Canadian corporation may be held legally responsible for violations of international law that protect human rights”.

Speaking for the Court, Madam Justice Rosalie Abella, concluded: “This appeal involves the application of modern international human rights law, the phoenix that rose from the ashes in World War II and declared global war on human rights abuses. Its mandate was to prevent breaches of internally accepted norms. Those norms were not meant to be theoretical aspirations or legal luxuries, but moral imperatives and legal necessities. Conduct that undermined the norms was to be identified and addressed.”

Amnesty International said the ruling was an “historic decision… because it clarifies that Canadian companies can be held accountable in Canada when implicated in human rights violations overseas”.

“In the past, some court cases involving the human rights conduct of Canadian companies overseas have not been heard in Canada because companies have successfully argued that the cases should be tried in countries where the alleged abuse took place. Yet this is highly problematic where a fair trial is not guaranteed in the host country, due to a lack of judicial independence and other violations of international human rights norms.”

Nevsun was delisted from the Toronto Stock Exchange and the New York Stock Exchange last year, following a C$1.86bn buy-out by China’s Zijin Mining Group.

In 2017, the British Columbia Court of Appeal permitted another case to proceed against a Canadian mining company, Tahoe Resources, over the shooting of protesters outside one of its mines in Guatemala. A similar case is currently proceeding in Ontario against Hudbay Minerals. Canada is home to more than 50 mining companies, so the implications of these legal decisions are significant for corporate and investors.  

Norway’s $1trn sovereign wealth fund looks set to be more responsive to human rights

Elsewhere, in Europe, the Norwegian Council of Ethics is also pushing the human rights agenda for corporates. In its comprehensive annual report published this week in English, the body – which advises the $1trn Norwegian Government Pension Fund Global on the companies it should monitor or exclude on ESG grounds – outlined its thinking on a number of topics, including biodiversity, corruption and severe environmental violations.

On human rights, it said it had created a new strategy for the next three years, which it had drawn up in collaboration with UN bodies, trade unions and NGOs.

“The Council decided to give priority to several issues in the coming years,” it explained, saying it will continue working on labour rights, including forced labour, poor working conditions and hazardous work. Last year, it recommended that the Norwegian wealth fund axe security company G4S from its investment portfolio, saying “the bulk” of its staff in Qatar and the UAE were migrant workers and conditions often bordered on forced labour.

In 2020, the Council said it would undertake studies of working conditions in “several Gulf states”, as well as focusing on Malaysia and other countries and industries liable to employ high levels of migrant workers.

“The Council will also take a closer look at sectors where there is a risk of child labour, and will assess certain supply chains.”

“Other issues that the Council will work on include indigenous people’s rights and forced relocation. Indigenous peoples possess some special rights relating to land, and can be particularly vulnerable to abuse, for example in connection with construction projects.”

It will also “take greater account” of the UN Guiding Principles for Business and Human Rights, it said.