The Zambian villagers allege that their land and livelihood has been destroyed by the pollution from the Nchanga Copper Mine owned by Vedanta Resources PLC through their subsidiary KCM, going into the Mushishima river.
This judgment paves the way for other companies to see themselves held liable in the UK High Court alongside their foreign subsidiaries, including those in the developing world, over allegations of human rights abuses and injuries to workers and local communities.
In 2015 the villagers took their legal action against Vedanta and KCM to the High Court and in Mr Justice Coulson’s judgment, handed down on 27 May 2016, he agreed that the Claimants had a legal right to bring their claim against the UK company, Vedanta Resources Plc, through the courts in the UK.
Mr Justice Coulson found that the claims against KCM had a real prospect of success in part because: “there have been, as a matter of record, discharges of toxic effluent from the mine into the relevant waterways” (paragraph 99(b)) and because “there is no attempt, in the evidence served on behalf of KCM, to challenge the underlying basis of the claimants’ claim against KCM” (paragraph 99(d)).
Vedanta and KCM took the High Court judgment to the Court of Appeal in July 2017 arguing that Mr Justice Coulson had erred in his application of the law and that he reached incorrect conclusions on access to justice in Zambia.
In today’s judgment from the Court of Appeal Lord Justice Simon upholding the original High Court judgment and dismissing the appeals, stated:
“In summary, I have concluded that there are no proper grounds for re-opening the Judge’s decision. The appellants have not persuaded me that the Judge misdirected himself on the law, nor that he failed to take into account what mattered or that he took into account what did not matter. [Para 136]
The judgment also sought to clarify the duty of care a parent company owes when operating via a subsidiary, Lord Justice Simon stated:
“It seems to me that certain propositions can be derived from these cases which may be material to the question of whether a duty is owed by a parent company to those affected by the operations of a subsidiary. (1) The starting point is the three-part test of foreseeability, proximity and reasonableness. (2) A duty may be owed by a parent company to the employee of a subsidiary, or a party directly affected by the operations of that subsidiary, in certain circumstances. (3) Those circumstances may arise where the parent company (a) has taken direct responsibility for devising a material health and safety policy the adequacy of which is the subject of the claim, or (b) controls the operations which give rise to the claim.” [Para 83]
Lord Justice Simon also made it clear in the judgment that it could not be said that the Claimants were only suing Vedanta to bring them into this jurisdiction. [Para 96]
Lord Justice Simon further confirmed that the Defendants’ assertion that “there no reported cases in which a parent company had been held to owe a duty of care to a person affected by the operation of a subsidiary” does not “render such a claim unarguable” [para 88]
Mr Raphael Karima, Community Secretary of Hippo Pool and one of the Claimants, said:
“We have been waiting for over two years since our claims were taken to the English court for the courts to finally decide that they will hear our claims and all the while we have been suffering with the effects of the pollution with no other option for justice.
“Vedanta have shown no interest in helping the people and have only wanted to stop the English courts from hearing our claims as they know that the English courts will be fair to us. We now hope they will listen to us seriously and stop polluting our communities. We are looking forward to a just process and are grateful to our lawyers for their hard work”
Martyn Day from law firm Leigh Day, who is representing the claimants said:
“This is a very important step forward in our clients’ fight for justice. Our clients allege that they continue to suffer from the toxic waste being discharged regularly from this massive open cast mine and we now hope, in light of this clear judgment by the Court of Appeal, that the Defendants will listen to our clients’ concerns and seek to resolve them.”
The villagers are from some of the poorest communities in Zambia, one of the poorest countries in the world. They live in one or two room mud-hut structures with a makeshift thatch roof living subsistence based livelihood wholly reliant on the land.
The villagers allege they have suffered serious personal injury, damage to their property and livelihood as a result of numerous and ongoing toxic effluent discharges from the Defendants’ copper mining operations around which they live.
Vedanta is one of the largest mining companies in the world with an asset base of almost US$40 billion spread across the world.
KCM, its Zambian subsidiary, is the largest copper mining company in Africa and Zambia’s largest private sector employer with around 16,000 employees. It operates a number of mines in Zambia including the Nchanga Copper Mine, which is the world’s second largest open case copper mine.