Key players in the field of corporate accountability are meeting with Canadian members of Parliament in Ottawa today to address the human rights issues associated with the overseas operations of multinational companies. The event, “Bringing Responsibility Home”, has been organised by two NGOs and is being co-hosted by Canadian MPs from across the political spectrum.
Of particular interest is the participation in this event of the French MP, Dominique Potier. Mr Potier has been the leading proponent of new due diligence legislation passed in France earlier this year. Under this legislation, which was passed two years after the Rana Plaza disaster in Bangladesh, large French companies have a duty to develop and publish due diligence plans on human rights and environmental risks in their global operations and supply chains. While such regulation falls short of imposing parent company liability for the human rights failings of their foreign subsidiaries, it represents an important step towards recognising that multinationals must take responsibility for the way their business is operated at a transnational level, as well as benefiting from the economic gains. It is to be hoped this step by France will pave the way for other countries in Europe to adopt similar legislation.
In Canada, where more than half the world’s mining companies are based, this issue is also ripe for consideration. A report by the Justice and Accountability Project published this year documented numerous alleged human rights abuses associated with Canadian mining projects overseas and was critical of the lack of monitoring and regulation by the Canadian Government relating to these incidents. Although there has been cross party commitment to better investigation of complaints relating to the overseas operations of Canadian extractive companies, as yet no legislative action has been taken.
Also participating at the event today is the Former Justice of the Supreme Court of Canada, Ian Binnie, who has previously criticised the use of the “corporate veil” by transnationals to extract profits but leave behind responsibilities1, and John Ruggie, former UN Special Representative for business and human rights.
It is encouraging to see that, in hosting such an event, Canadian politicians are showing willingness to explore international developments in the field of corporate accountability. As regards the situation here in the UK, unlike in many other jurisdictions, some legal redress against multinationals for the business activities of their subsidiaries has been possible due to the recognition by the courts that a duty of care in negligence can exist in such circumstances (Leigh Day has acted in most of these cases, notably the landmark decision in Chandler v Cape PLC ). However, establishing this duty can be difficult and a due diligence reporting obligation similar to the French legislation would create wider responsibilities relating to the oversight of overseas operations. Such a proposal is supported by the Joint Committee on Human Rights, whose report “Human Rights in Business” published earlier this year included the recommendation that “the Government bring forward legislative proposals to make reporting on due diligence for all other relevant human rights, not just the prohibition of modern slavery, compulsory for large businesses, with a monitoring mechanism and an enforcement procedure.”
It will be interesting to see how this develops, and whether there is the political appetite to turn these recommendations into concrete legislative proposals.