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Nevsun Resources Ltd v Araya
Supreme Court of Canada
Supreme Court of Canada
Hearing: January 23, 2019
Judgment: February 28, 2020
Full case nameNevsun Resources Ltd v Gize Yebeyo Araya, Kesete Tekle Fshazion and Mihretab Yemane Tekle
Citations2020 SCC 5
Docket No.37919 [1]
Prior historyJudgment for Araya et al in the British Columbia Court of Appeal, 2017 BCCA 401
Judgment for Araya et al in the Supreme Court of British Columbia, 2016 BCSC 1856
RulingAppeal dismissed
Holding
Court membership
Chief JusticeRichard Wagner
Puisne JusticesRosalie Abella, Michael Moldaver, Andromache Karakatsanis, Clément Gascon, Suzanne Côté, Russell Brown, Malcolm Rowe, Sheilah Martin
Reasons given
MajorityAbella J, joined by Wagner CJ and Karakatsanis, Gascon, and Martin JJ
DissentBrown and Rowe JJ
DissentCôté J, joined by Moldaver J

Nevsun Resources Ltd v Araya, 2020 SCC 5 is a landmark[2] case in which the Supreme Court of Canada held, in a 5–4 decision, that a private corporation may be liable under Canadian law for breaches of customary international law committed in other countries.[3]

The case concerned human rights violations allegedly committed against workers at an Eritrean mine majority-owned by Nevsun Resources, a Canadian firm. The Supreme Court held that the alleged victims' case against Nevsun could proceed in the courts of British Columbia.[4] It also established that the act of state doctrine is not recognized in Canadian law.[5]

Background

Mining and human rights

Mining is a significant part of the Canadian economy: approximately 75 percent of the world's mining companies are headquartered in Canada, and 60 percent are listed on the Toronto Stock Exchange.[6][7] International expansion of the domestic mining industry has been championed by the Canadian government, and one scholar describes Canadian mining operations as having "developed an extensive and indeed dominant global presence."[8] Canadian mining investment abroad has been particularly significant in Latin America and African countries.[9]

Researchers have documented a significant number of human rights violations associated with the operations of Canadian-domiciled mining firms abroad.[10][11][9] Victims of alleged abuses have attempted to challenge these violations in Canada through litigation and administrative means since at least the mid-1990s.[12]

Before the Supreme Court's decision in Nevsun, Canadian firms had been described as operating with "effective impunity" with respect to human rights abuses abroad.[13] In other words, if neither Canadian courts, the courts of the country in which the violation occurred, nor international human rights mechanisms are able to provide victims of human rights abuses with redress, the perpetrators of the violation and the companies who employ them would be able to evade legal accountability.[13]

Legislation and policy developments

The Standing Committee on Foreign Affairs and International Trade of the House of Commons noted such concerns in a June 2005 report.[14] A 2008 report by Oxford's Pro Bono Publico project echoed these observations.[15][16]

The House of Commons report noted that, although Canadian law did not categorically bar claims by alleged victims of human rights abuses abroad, Canadian courts would likely decline to exercise jurisdiction over such claims according to the forum non conveniens doctrine.[17] In Canada, forum non conveniens permits a domestic court to stay an action when it determines that a court in another jurisdiction is "clearly" the more appropriate forum in which to hear the case.[18][19] Thus, in the mining context, an action in a Canadian court would likely be stayed in favour of the courts of the country in which the alleged abuse occurred.

The Martin government failed to implement the House of Commons report's recommendations with respect to domestic law, although it and subsequent governments did advocate for John Ruggie's efforts to enhance corporate responsibility for human rights as Special Representative of the Secretary-General.[20] Subsequent domestic efforts including Bill C-300, which would have created a mechanism to revoke federal funding from companies whose conduct did not conform to human rights and environmental best practices, were defeated.[21][22]

In March 2009, by Order in Council, the federal government implemented a policy document titled "Building the Canadian Advantage," which created certain mechanisms to enhance the corporate social responsibility of Canadian firms operating abroad. However, it did not require companies to comply with human rights guidelines.[23][24][25]

In January 2018, the federal government created the Office of the Canadian Ombudsperson for Responsible Enterprise, a successor to Office of the Extractive Sector Corporate Social Responsibility Counsellor (created by the same Order in Council as that which implemented "Building the Canadian Advantage"). The Ombudsperson is empowered to investigate alleged human rights violations involving Canadian firms operating outside Canada.[26]

International commitments and obligations

Canada is a member of the International Labor Organization, which condemns forced labour pursuant to the Declaration on Fundamental Principles and Rights at Work. It is also party to several treaties that outlaw forced labour and related human rights violations, including slavery and human trafficking.[27]

Decision

Facts

The Bisha Mine in Eritrea, where the Nevsun plaintiffs worked.

Nevsun Resources Ltd (Nevsun)—later acquired by Zijin Mining—was a mining firm incorporated under British Columbia law and headquartered in Vancouver, British Columbia. It held a 60 percent stake in Bisha Mining Share Company (BMSC). BMSC was the operating company of Bisha Mine, located in Eritrea.[28][29] As the majority owner of BMSC, Nevsun was the parent company of BMSC and BMSC was Nevsun's subsidiary.[30][31]

Several former labourers at the Bisha Mine came to Canada as refugees. In November 2014, they brought a class action against Nevsun in the Supreme Court of British Columbia claiming damages in tort and for breach of customary international law.[3][32][33] The action was the first Canadian lawsuit alleging violations of customary international law to reach the trial stage.[34]

In their complaint, the labourers alleged that they and other members of the proposed class had been subjected to various human rights violations, including "the use of forced labour; torture; slavery; cruel, inhuman or degrading treatment; and crimes against humanity"[35] while working at the mine from 2008 to 2012.[3][36] The workers alleged that they had been engaged by sub-contractors of the mine's operating company under a policy of military conscription in Eritrea known as the National Service Program.[37] In addition to requiring military service, the Program also requires conscripts to work on certain infrastructure projects.[3][38][39]

Abuses similar to those alleged by the Nevsun plaintiffs have been independently reported by human rights groups including Human Rights Watch.[40][41][42] The United Nations has alleged that significant human rights violations have occurred in Eritrea since 1991.[42]

Procedural history

At trial, Nevsun brought a motion to strike the labourers' claim. It made three arguments.

First, it argued that Eritrea was the more appropriate forum to hear the claim, based on the doctrine of forum non conveniens.[43]

Alternatively, it argued that the act of state doctrine—a doctrine of subject-matter jurisdiction similar to state immunity that has been adopted in a number of common law countries—prevented the trial court from considering the plaintiffs' claim.[2][44][45] In the words of one legal scholar, the act of state doctrine "extends deference to the executive branch in the conduct of foreign affairs by discouraging, if not outright precluding, courts from adjudicating the legitimacy of a foreign act."[46] Thus, Nevsun submitted, the government of Eritrea—and not Nevsun—was ultimately responsible for the acts giving rise to the plaintiffs' claims.[2]

Finally, Nevsun argued that the relevant provisions of customary international law could not apply to corporations.[47]

The trial court rejected all three arguments.[48] In particular, it held that the act of state doctrine—although, in the trial court's view, it was part of Canadian common law—was not engaged in the case.[3] However, the trial court did refuse to certify the class action, meaning that the plaintiffs could only proceed with the suit on their own behalf.[34] On appeal by Nevsun on the other issues, the Court of Appeal largely agreed with the trial court[3] in a unanimous opinion.[49]

Reasons of the Court

Nevsun further appealed to the Supreme Court of Canada. The Supreme Court granted Nevsun leave to appeal on June 14, 2018[50] and heard oral argument on January 23, 2019.[51] Nevsun appealed only on the act of state doctrine and customary international law issues, and not the forum non conveniens point.[52]

The court divided on both issues. Seven of nine judges held that the act of state doctrine was not part of Canadian law. Five held that the plaintiffs' claims based on customary international law could proceed.[45] Thus, the case was remanded back to the Supreme Court of British Columbia to proceed to trial.[53]

Majority

Justice Rosalie Abella, the senior puisne justice of the Supreme Court of Canada, wrote the majority opinion in Nevsun.

Justice Rosalie Abella held for the majority that the claims could proceed.[4] She held that the act of state doctrine is unknown to Canadian law. Rather, Canadian courts treat the two issues covered by the doctrine—namely, judicial restraint on foreign law matters and the conflict of laws—separately.[3][54]

Justice Abella further held that the plaintiffs' claims based on customary international law could, in principle, ground a private law cause of action in Canadian courts, for several reasons. First, the claims were based on legal principles against forced labour that constitute jus cogens—broadly recognized principles of customary international law. Second, Canadian domestic law incorporates international law, via the common law doctrine of adoption,[55] unless the relevant international law norm has been abrogated by statute.[56] And third, customary international law can bind corporations, and not states alone.[2]

However, as the case went to the Supreme Court on a preliminary procedural matter, Justice Abella did not determine whether the Nevsun plaintiffs had in fact established Nevsun's liability for the human rights abuses they had allegedly suffered. She determined only that the case could proceed to trial.[57]

In a passage quoted by several commentators,[2][3] Justice Abella began her opinion as follows:

This appeal involves the application of modern international human rights law, the phoenix that rose from the ashes of World War II and declared global war on human rights abuses. Its mandate was to prevent breaches of internationally accepted norms. Those norms were not meant to be theoretical aspirations or legal luxuries, but moral imperatives and legal necessities. Conduct that undermined the norms was to be identified and addressed.[58]

In conclusion, Justice Abella wrote that:

Customary international law is part of Canadian law. Nevsun is a company bound by Canadian law. It is not “plain and obvious”[a] to me that the Eritrean workers’ claims against Nevsun based on breaches of customary international law cannot succeed. Those claims should therefore be allowed to proceed.[53]

Dissents

Two dissents were filed in the case, one by Justices Russell Brown and Malcolm Rowe and one by Justices Suzanne Côté and Michael Moldaver.

Justices Brown and Rowe dissented only on the customary international law issue,[59] arguing that corporations cannot be held liable in a civil suit for alleged breaches of international legal norms[3] and that the appropriate remedies for breaches of such norms should be provided for by statute, not the common law.[32]

Justices Côté and Moldaver dissented on both issues.[60] While they generally agreed with the analysis of Justices Brown and Rowe with respect to the customary international law issue, they would have held that the act of state doctrine did bar to the plaintiffs' claims.[3]

All the dissenters critiqued what they saw as the majority's disregard for precedent in recognizing a civil cause of action for breach of international law.[61] They noted that "[the majority] cites no cases where a corporation has been held civilly liable for breaches of customary international law anywhere in the world, and we do not know of any."[62]

Commentary

William S. Dodge, a professor at UC Davis School of Law, noted that Nevsun represents part of a "trend" in which countries around the world, including the United Kingdom and the Netherlands, have opened the door to holding corporations liable in their domestic courts for violations of international law.[55]

Lawyers at Norton Rose Fulbright opined that "[t]he majority judgment … sends a strong signal to the Canadian business community that consideration for human rights norms in all of their activities, whether at home or abroad, must form an integral part of their legal and business planning."[45]

Rachel Howie, a partner at Dentons, writing before Nevsun was decided, observed that the plaintiffs' claims in the case were "unlike any claim previously determined in Canada," in that they concerned the acts in a foreign country of a corporation—a private entity—and not a state.[38]

See also

Notes

Explanatory notes

  1. ^ Here, Justice Abella refers to the test for when a pleading may be struck out. The Supreme Court has held that pleadings may be struck only when it is "plain and obvious" that they have "no reasonable prospect of success." See Nevsun SCC at para 64, citing R v Imperial Tobacco Canada Ltd, 2011 SCC 42 at para 17 and Odhavji Estate v Woodhouse, 2003 SCC 69 at paras 14–15.

References

  1. ^ SCC Case Information - Docket 37919 Supreme Court of Canada
  2. ^ a b c d e Cura, Kimberly A. F.; Damstra, Jacob R. W. (March 3, 2020). "Canadian Corporations May be Held Liable for Breaches of Public International Law". Lerners LLP. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  3. ^ a b c d e f g h i j Beedell, Jeff; Tamrat, Wudassie (March 12, 2020). "Supreme Court of Canada Case in Depth: Nevsun Resources Ltd. v. Araya, 2020 SCC 5". Gowling WLG. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  4. ^ a b Nevsun SCC at para 132.
  5. ^ Nevsun SCC at para 59.
  6. ^ Block, Niko (March 3, 2017). "Toronto's buried history: the dark story of how mining built a city". The Guardian. Retrieved June 21, 2020.{{cite news}}: CS1 maint: url-status (link)
  7. ^ Lauzon 2018, pp. 146–47.
  8. ^ Butler 2015, p. 8.
  9. ^ a b Lauzon 2018, p. 146.
  10. ^ Imai, Shin; Gardner, Leah; Weinberger, Sarah (December 5, 2017). "The 'Canada Brand': Violence and Canadian Mining Companies in Latin America". Osgoode Legal Studies Research Paper No. 17/2017. SSRN 2886584, doi:10.2139/ssrn.2886584
  11. ^ Butler 2015, p. 13.
  12. ^ Seck 2011, pp. 64–66.
  13. ^ a b Coumans 2010, pp. 32–33.
  14. ^ Seck 2011, pp. 51, 56.
  15. ^ Webber, Grégoire C. N. (November 3, 2008). "Canada". Obstacles to Justice and Redress for Victims of Corporate Human Rights Abuse. Oxford Pro Bono Publico. p. 35. The state of Canadian law with respect to corporate social responsibility, and extraterritorial corporate social responsibility in particular, is generally recognised to be insufficient. Few options are available to non-nationals seeking to pursue Canadian corporations in Canada for wrongs committed abroad, excepting general principles of private international law. The instances of extraterritorial criminal responsibility are narrowly provided for, and are clouded with doubt as to whether they apply to corporate activity. As a result, Canadian corporations have been forced to defend their actions before American courts in actions having no connection with the United States.
  16. ^ Coumans 2010, p. 32.
  17. ^ Seck 2011, pp. 58–59.
  18. ^ Club Resorts Ltd v Van Breda, 2012 SCC 17 at para 108.
  19. ^ Kennedy, Gerald J. (2018). "Jurisdiction Motions and Access to Justice: An Ontario Tale". Osgoode Hall Law Journal. 55 (1): 84. 2018 CanLIIDocs 10747 – via CanLII.
  20. ^ Seck 2011, pp. 52–53, 57.
  21. ^ Dagenais, Pierre (December 1, 2010). "Canadian mining industry wins with Bill C-300's defeat". Canadian Mining Journal. Retrieved June 21, 2020.
  22. ^ Janda 2010, pp. 97, 100–01.
  23. ^ Order in Council PC No. 2009-442 (March 23, 2009).
  24. ^ Janda 2010, p. 101.
  25. ^ Seck 2011, p. 77.
  26. ^ Lauzon 2018, p. 153.
  27. ^ Lauzon 2018, pp. 149–51.
  28. ^ Nevsun SCC at para 7.
  29. ^ Campion, John A. (March 21, 2020). "Canada: Case Study: Nevsun Resources Ltd. v. Araya, 2020 SCC 5" (PDF). Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  30. ^ Hall, Matthew; Wisner, Robert (June 17, 2020). "Liability: how a new court ruling could put Canadian miners in the dock". Mining Technology. Retrieved July 8, 2020. For Canadian mining companies, [Nevsun] means that they may now be liable for the actions of their subsidiaries operating abroad on issues such as labour standards and human rights …{{cite web}}: CS1 maint: url-status (link)
  31. ^ Jamasmie, Cecilia (February 28, 2020). "Nevsun loses bid to stop lawsuit over alleged forced labour in Eritrea". Mining.com. Retrieved July 8, 2020. 'There are contractual commitments in place that strictly prohibit the use of national service employees by Eritrean subsidiary Bisha Mining Share Company's ('BMSC') contractors and subcontractors,' Nevsun said …{{cite web}}: CS1 maint: url-status (link)
  32. ^ a b Sarabia, Luis; Frankel, Steven G.; Taschereau, Martin (February 28, 2020). "Supreme Court of Canada Rules in Nevsun Resources Ltd. v Araya". Davies Ward Phillips & Vineberg. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  33. ^ Nevsun BCSC at para 1.
  34. ^ a b Lam, Miranda; Gifford, Robyn (November 2, 2016). "Araya v. Nevsun Resources Ltd., 2016 BCSC 1856: British Columbia Supreme Court refuses to allow a "common law class action" alleging human rights violations at Eritrean mine". Class Actions Monitor. McCarthy Tétrault. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  35. ^ Nevsun BCSC at para 43.
  36. ^ AFP (February 28, 2020). "Canada mining firm accused of slavery abroad can be sued at home, supreme court rules". The Guardian. Retrieved June 21, 2020.{{cite news}}: CS1 maint: url-status (link)
  37. ^ Nevsun SCC at paras 8–9.
  38. ^ a b Howie, Rachel A. (July 31, 2019). "Araya v Nevsun: Potential expansion of local liability for international actions". Mining Law Canada Blog. Dentons. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  39. ^ Nevsun SCC at para 10.
  40. ^ Albin-Lackey, Chris (January 15, 2013). Hear No Evil: Forced Labor and Corporate Responsibility in Eritrea’s Mining Sector. Human Rights Watch.
  41. ^ Hansell 2018, p. 177.
  42. ^ a b Lauzon 2018, p. 148.
  43. ^ Nevsun BCSC at para 227.
  44. ^ Nevsun BCSC at para 341.
  45. ^ a b c Fitzgerald, Alison G.; Hussain, Azim (April 23, 2020). "The Supreme Court's judgment on Canadian businesses in foreign states and potential liability for alleged human rights abuses". Norton Rose Fulbright. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  46. ^ Forcese, Craig (2007). "De-immunizing Torture: Reconciling Human Rights and State Immunity". McGill Law Journal. 52 (1). Note 25 and accompanying text (p. 134). 2007 CanLIIDocs 139 – via CanLII.
  47. ^ Nevsun BCSC at paras 424–25.
  48. ^ Nevsun BCSC at para 12.
  49. ^ Nevsun SCC at para 22.
  50. ^ Nevsun Resources Ltd v Araya, 2018 CanLII 53456 (SCC) – via CanLII.
  51. ^ "Case Information: Nevsun Resources Ltd. v. Gize Yebeyo Araya, et al". Supreme Court of Canada. May 4, 2018. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  52. ^ Nevsun SCC at para 26.
  53. ^ a b Nevsun SCC at para 132.
  54. ^ Nevsun SCC at para 44.
  55. ^ a b Dodge, William S. (March 26, 2020). "Supreme Court of Canada Recognizes Corporate Liability for Human Rights Violations". Just Security. Retrieved June 21, 2020.{{cite web}}: CS1 maint: url-status (link)
  56. ^ See R v Hape, 2007 SCC 26 at para 39.
  57. ^ Hansell 2018, p. 179.
  58. ^ Nevsun SCC at para 1.
  59. ^ Nevsun SCC at para 135.
  60. ^ Nevsun SCC at para 267.
  61. ^ Rogge, Malcolm (March 20, 2020) "Nevsun Puts Canada's Corporate Decision Makers in the 'Human Rights Zone'". Corporate Responsibility Initiative Working Paper No. 70. Harvard Kennedy School. SSRN 3557902
  62. ^ Nevsun SCC at para 188.

Bibliography

Caselaw

Secondary sources

Further reading

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