We recently discussed the rising number of claims against Canadian companies for alleged human rights violations in their overseas operations or supply chains. In that article we described the ongoing class action lawsuit against Loblaws and Joe Fresh launched by Bangladeshi garment workers in response to the 2013 Rana Plaza collapse in Dhaka, Bangladesh. Click here for a link to the article.
We also commented on a general increase in litigation against Canadian multinational corporations, including the current case against Toronto-based, Hudbay Minerals Inc., which was brought by a group of indigenous Guatemalan Mayans for human rights violations related to a mining venture.
The reputational risks associated with these cases are serious, particularly in the age of online media and investor activism. On April 3, 2016, The New York Times published a front-page article on the Hudbay Minerals Inc. case entitled, ‘Outcry Echoes Up to Canada’.
In brief, in 2010, the plaintiff Guatemalan villagers filed a negligence claim against Hudbay Minerals and its subsidiaries in the Ontario Superior Court of Justice. While the case is complex, the thrust of the claim is that certain of Hudbay Minerals’ predecessor corporations allowed human rights violations to occur during land relocation efforts (including sexual assault, battery, and wrongful death) in the course of developing a mining project in Guatemala. An Ontario court held the plaintiffs had properly pleaded their negligence case against Hudbay Minerals and its co-defendants. Choc v. Hudbay Minerals Inc., 2013 ONSC 1414.
While the allegations in the Hudbay Minerals case have not been proven in court, the case is yet another stark reminder of the importance of implementing risk-based global human rights compliance systems, rooted in the UN Guiding Principles, for corporations operating in multiple jurisdictions – particularly those in the developing world where there is lax or non-existent labour and criminal law enforcement (or, in many instances, a dearth of rule of law-based institutions).
We will continue to monitor developments in this case and other similar litigation against Canadian multinational corporations.