A lawsuit brought by several Guatemalans for alleged damages suffered during a 2013 protest at the Escobal silver mine in San Rafael Las Flores has cleared a final hurdle and will now proceed to trial in British Columbia.
Tahoe Resources, a BC-based mining company, had sought to have the claim dismissed on the basis that Guatemala was the more appropriate forum for the trial. However, in January, the BC Court of Appeal ruled that the matter should remain before the BC courts. The Court of Appeal held that there was evidence of systemic corruption in the Guatemalan judiciary that detracted from a finding that Guatemala was the right forum. The Appeal Court ruling held, “there is some measurable risk that the appellants will encounter difficulty in receiving a fair trial against a powerful international company whose mining interests in Guatemala align with the political interests of the Guatemalan state.”
Last week, the Supreme Court of Canada declined to hear Tahoe’s appeal.
Trend is clear
As we have discussed on this blog previously here and here, this case is part of a broader trend of Canadian courts revealing a willingness to permit foreign claimants to pursue actions in Canada against Canadian companies for alleged human rights abuses related to overseas operations.
Canadian courts are prepared to expand their jurisdictional reach in light of commercial realities flowing from globalization and in response to perceptions of corporate impunity. This emerging trend in Canada is taking place against the backdrop of hardening and expanding international business and human rights standards and norms. As large civil claims for alleged overseas human rights violations find receptive courts in Canada, it is critical for Canadian multinational employers to take stock and commit to action. A failure to understand and act upon the emerging risks can have a significant negative impact on profitability and undermine a company’s social license to operate.
Canadian companies should take note that the Guatemalan plaintiffs have grounded their claim in new international labour and human rights norms established in the United Nations Guiding Principles on Business and Human Rights (UNGPs). At a high level, the UNGPs, which were unanimously endorsed by the UN Human Rights Council in 2011, hold that businesses have a duty to respect human rights by avoiding actions which infringe the human rights of others, while at the same time addressing adverse impacts in which they are involved. For a corporation to meet its responsibilities under the UNGPs, it must, at a minimum, have (a) a human rights policy; (b) a due diligence process to identify, prevent, mitigate, and account for how they address their human rights impacts; and (c) a remediation process for addressing adverse human rights impacts which they cause or contribute to.
Get ahead of the curve
While there is no “one size fits all” solution, active respect for core human rights, a comprehensive global assessment and heat map of direct and indirect risks, and effective due diligence processes are increasingly essential for large and small businesses alike in minimizing financial, legal, and brand/reputation risk. The necessary first step is a legal compliance analysis of current supply chain activities and operations, followed by the implementation of human rights policies and supplier codes of conduct, and swift action to investigate and remedy problem areas.