Written by Milos Barutciski, Andrew D. Little and Josh Scheinert
Nevsun Resources, a British Columbia mining company, has asked the Supreme Court to hear its appeal from a recent B.C. ruling that would send the human rights claims of a group of Eritrean plaintiffs towards trial.
The plaintiffs allege that the company was complicit in torture, slavery, forced labour, and other human rights abuses at its Bisha mine in Eritrea. The company strongly denies liability for the claims. This is the latest instance of foreign litigants seizing on a fast-evolving area of law that seeks to hold transnational businesses liable for abuses of human rights committed abroad.
In late November 2017, the B.C. Court of Appeal issued lengthy reasons that allowed the plaintiffs to proceed toward trial of their claim in the British Columbia courts. The company has just filed an application for permission to appeal to the Supreme Court of Canada.
Emerging “Transnational” Legal Principles
Araya v. Nevsun Resources Ltd., 2017 BCCA 401 [Nevsun]1 is one of several Canadian lawsuits grounded on the emerging area of “transnational” law. Transnational law concerns the legal standards that apply to events or conduct that transcend international borders. In some cases, transnational law seeks to leverage public international law principles, or “norms”, to establish liability in one state’s courts flowing from violations of public international law (such as human rights abuses) that occur in another state.
In Nevsun, for example, the Eritrean plaintiffs seek remedies against Canadian defendants, in Canadian courts, for alleged human rights violations that occurred in Eritrea. Repugnant practices such as torture and slavery are illegal under public international law and under treaties to which Eritrea and Canada are both parties.
The plaintiffs allege that the company was complicit in the illegal conduct committed by the Eritrean government or its entities. The issue of a Canadian courts' jurisdiction to sit in judgment on another state’s actions was debated at length in the B.C. courts.
The B.C. Court of Appeal Decision
The plaintiffs’ claim arose out of allegations of torture, slavery, forced labour, and other human rights violations at Nevsun’s Bisha mine in Eritrea. The plaintiffs allege that the acts were committed by the military, corporations controlled by the military and the Eritrea’s ruling (and only) political party, with whom Nevsun partnered to build the mine.
After filing its defence, Nevsun brought preliminary motions, arguing that the claims should be heard in Eritrea rather than in B.C., that the claims were in substance against the state of Eritrea and should not be determined in Canada, and that the claims based on public international law were not grounded on a cause of action recognized in Canada.
The plaintiffs advanced two separate legal bases for their claims: private law torts and breaches of public international law. Both relied on evolving norms of acceptable business and human rights conduct. The plaintiffs advanced the tort of negligence for Nevsun’s failure to abide by any “standards of corporate social responsibility”. The claim under public international law was more novel and alleged that Canadian common law incorporates the customary international law prohibitions against torture, slavery and similar conduct, breach of which would give rise to a claim for money damages.
Nevsun challenged the plaintiffs' claim on a number of grounds, which were dismissed by the judge at first instance. The Court of Appeal had to decide if the judge erred on three main issues.
1. Inappropriate Forum to Hear the Case
First, the Court of Appeal upheld the judge’s finding that the case could proceed in B.C., despite several practical challenges—including the location of plaintiffs and evidence in Africa, poor telecommunications and internet in Eritrea, and language barriers. Critically, the judge concluded there was a “real risk” that the plaintiffs would not receive a fair trial in Eritrea. This reason proved persuasive to the Court of Appeal, which favoured “the jurisdiction in which the plaintiffs can assert their claims in a fair and impartial proceeding, over a jurisdiction in which justice seems unlikely to be done.”
2. The “Act of State” Doctrine
The Court of Appeal next considered the “act of state” doctrine. The issue was whether the judge should have declined jurisdiction because the claim required Canadian courts to determine liability for acts of the government of Eritrea, a sovereign state.
The Court’s reasons, authored by Madam Justice Newbury, carefully trace the evolution of the doctrine. The court paid specific attention to decisions in the UK courts in which questions of human rights abuses militated against the application of the doctrine. Justice Newbury noted that the “act of state” doctrine pre-dated the advent of modern human rights protections, suggesting that modern-day commitments to human rights must also be given weight in the canon of international law. This point was highlighted by the House of Lords in the 2000 Pinochet decision where Lord Millett observed that it would be antithetical for international law to create a crime like torture, the prohibition of which is a peremptory norm of international law, but at the same time to provide immunity to perpetrators through the “act of state” doctrine.
The Court of Appeal dismissed the “act of state” arguments, principally because the plaintiffs' claim was based on Nevsun’s alleged actions, rather than the acts of the Eritrean government. Even if the “act of state” doctrine were engaged, the plaintiffs alleged that Nevsun was complicit in illegal acts under domestic and international law. The B.C. courts would not have to sit in judgment of acts of the Eritrean state, as the acts in question were unquestionably illegal under Eritrean law.
3. Breaches of Customary International Law
The Court of Appeal concluded that Canadian courts had not yet decided whether or not a claim could be advanced for violations of customary international law. Acknowledging the evolutionary state of the law, the court even suggested that if this question went before the Supreme Court of Canada, “guidance can be provided as to ‘where we are’.”
Recognizing the uncertainty in the domestic law and the “significant legal obstacles” the plaintiffs faced, the Court of Appeal reasoned that the plaintiffs’ claim might further develop the law. Despite the novelty of the claim, the Court of Appeal refused to dismiss it, thereby keeping the door open for a first civil remedy for a breach of customary international law in Canadian courts.
The decision in Nevsun is one of at least three “transnational” proceedings heading towards trial in Canadian courts after surviving initial legal challenges to the claims. In a fourth case, an Ontario court dismissed a proposed class action based on events abroad (see the comment here).
With each decision it becomes clearer that Canadian courts will not perfunctorily dismiss claims of alleged human rights abuses abroad by Canadian corporations. Canadian courts are proving increasingly prepared to adapt Canadian law to address new circumstances arising from emerging public international law principles.
1 2017 BCCA 401, per Newbury JA, Justices Willcock and Dickson concurring.