Holding Canadian Mining Companies Accountable: IHRP intervenes in Nevsun Resources v Araya

Nicole Thompson (2L) and Madeline Torrie (2L)

Over the past semester, the International Human Rights Program (IHRP) prepared to intervene in the case Nevsun Resources Ltd. v Araya et al., which we were fortunate enough to see argued before the Supreme Court of Canada (SCC) on January 23^rd, 2019. While only addressing preliminary issues, this case has tremendous implications for international human rights litigation in Canada, particularly for corporate social responsibility.

Nevsun Resources Ltd. is being sued for conscripting forced labour in Eritrea. Nevsun is a Vancouver based majority shareholder of the Bisha Mine, where allegedly Eritrea’s National Service Program (NSP) conscripted indefinite forced labour. In 2016, the United Nations Commission of Inquiry into Eritrea estimated that the government had enslaved up to 400,000 people as part of the program, many of whom were conscripted to work in the Bisha mine.

The plaintiffs were among those conscripted as part of this forced labour project, and later fled to Canada as refugees. They brought the case before the British Columbia Supreme Court, alleging that Nevsun Resources, in collision with Eritrea, committed torts which violated customary international law, including torture, slavery and forced labour. Nevsun contended that the plaintiff’s claims that had no reasonable likelihood of success; however, the court was reluctant to dismiss a claim for being “novel” and allowed the application to continue. Before the BC Court of Appeal, a unanimous court dismissed Nevsun’s appeal, and Nevsun subsequently appealed to the SCC. 

Part of Nevsun’s argument was that the common law act of state doctrine would bar a Canadian court from hearing a decision which addressed any state conduct in its subject matter, with no exceptions. If the SCC accepted this formulation of the doctrine, it would be difficult to hold any corporation accountable for misconduct jointly conducted with the state, as those violations could be said to be “state conduct” and immune from judicial scrutiny.

Preparing for the Litigation

As IHRP clinic students, we were part of the the legal team preparing for the intervention, along with counsel Cory Wanless (Waddell Phillips PC), Yolanda Song (IHRP Research Associate), and Professor Audrey Macklin (University of Toronto Faculty of Law). Cory has been working on Corporate Social Responsibility (CSR) litigation for almost ten years, and has represented interveners and clients in landmark cases such as Hudbay Minerals and Yaiguaje v Chevron Corp.

Our role as an intervenor for IHRP was to support IHRP’s mission to advance the field of international human rights law and to ensure that the Canadian common law evolves in a way that is consistent with international human rights. This intervention is part of a long legacy of IHRP’s work in promoting human rights values through SCC interventions in landmark international human rights cases such as Khazemi v. Iran, Canada v. Khadr, and Charkaoui v Canada.

Intervenors are given a limited number of pages (only 10) and speaking time (5 minutes) to make their submissions. Therefore, we had to narrow our research and select our topics carefully. We also communicated with intervenors, including Amnesty International, Earthrights International, and Mining Watch Canada to limit overlap, and ultimately decided to focus on the act of state doctrine, an issue raised by Nevsun designed to bar the plaintiff’s claim. 

Act of State Doctrine

The act of state doctrine is a common law doctrine that, in the form proposed by Nevsun, would bar a Canadian court from referencing another state's conduct as part of a subject matter jurisdiction immunity. The underlying idea is that a court should not pass judgment on another country’s actions. The act of state doctrine has never been applied in Canada, but Nevsun argues that it should apply in this case.

If Nevsun were to succeed in their claims, no party could bring a claim against a private entity where another nation’s conduct is involved, even though a judgment by a Canadian court would have no binding consequences on Eritrea, and would mainly concern the company’s liability. Resource extraction companies often work closely with national governments, and employing act of state would mean that any time a state was complicit in a company’s violations of human rights, the victims would be barred from seeking damages against the offending corporation.

The act of state doctrine has a number of exceptions, and one which was particularly important to the plaintiff’s position was the public policy exception. This exception, which is recognized in the United Kingdom, the United States, and Australia, provides that act of state does not apply when a state violates public policy and international law. The public policy exception has a clear application in this case: the plaintiffs were conscripted into forced labour, which is a violation of international and human rights law conventions, and widely considered a violation of a peremptory norm. However, counsel for Nevsun argued that even this exception should not apply.

Human Rights and Corporate Social Responsibility (CSR)

This case fits into a wider and growing concern in Canada about corporate accountability for human rights abuses. In recent decades, as corporations have moved beyond national borders, CSR has become an important and complicated part of international human rights law. Nevsun v Araya highlights Canada’s duty to hold its own corporations accountable for the harms they cause, regardless of where those harms take place. The United Nations has formed numerous non-binding instruments with the intention of providing access to justice for plaintiffs harmed by foreign corporations, but these tools are insufficient. Civil litigation conducted in the corporation’s home state can be the necessary bridge that translates fundamental principles of international human rights into concrete guarantees.

The SCC’s decision will ultimately either add or remove a barrier to transnational human rights litigation in Canada. However, even a positive step forward does not mean the road is smooth and inviting for potential litigants. The litigation process is notoriously difficult to navigate for claimants. The plaintiffs in Nevsun v Araya have been embroiled in these proceedings since 2014. It has taken four years for these preliminary questions to reach the SCC, and even if the court rules in favour of their application, the matter is not resolved. The case will return to the British Columbia Supreme Court, where the plaintiffs will endure a prolonged trial and possibly an appeal. As important as the substantive issues are, these procedural challenges must not be overlooked.

We were honoured to have met the plaintiffs after the proceedings in Ottawa, when they shook our hands and thanked us for our hard work. We imagined how hard it must have been be for them to watch the same case litigated three times, before the actual trial on the abuses they suffered could begin.

The IHRP legal team at the Supreme Court of Canada. Left to right: Yolanda Song (JD 2017), Madeline Torrie (2L), Nicole Thompson (2L), Cory Wanless (JD 2008).

Ottawa

It was a snowy day when we arrived at the SCC. We sat in the Press Gallery to watch the submissions of the parties, eagerly waiting to watch Cory present the IHRP’s submissions. It was an exhilarating experience to hear the fruition of our semester’s worth of research and work before a full bench of SCC justices, and to hear them ask the very questions we had been grappling with. Cory did a wonderful job representing the IHRP and expressing our position: Canadian law should not consider the act of state doctrine in disputes between victims and private Canadian corporations.

In a tense moment, Justice Abella asked Nevsun’s counsel during their submissions, “Is there any court that has the act of state doctrine, then, that doesn’t have exceptions for things like breaches of international human rights law?” He had no response, confessing, “I am not sufficiently au fait with the jurisprudence in all common law courts to tell you what the status of the exception is.” The questioning continued, with Justice Abella concluding, “You want to take us back to Grotius.”

Her observation articulates exactly what is at stake in this case. Nevsun’s proposition favours the state-based approach to international law at the expense of allowing remedy for human rights violations.

It is difficult to predict how the SCC will decide the case. Will it recognise or dismiss the act of state defence? As we await the SCC’s judgment, we are optimistic that Canadian courts will step into their role and hold Canadian corporations accountable for human rights violations committed abroad.