4. NATIONAL LAWS WITH EXTRA TERRITORIAL EFFECTS
TANN Boravin, RADU Mares
In the last 10 years, developed states have increasingly adopted laws regulating the conduct of ‘their’ companies operating internationally. The main type of law has been reporting regulations that oblige companies to be transparent about their policies, impacts and remedial measures wherever they operate. This is a significant break with the past when many industrialized states – including the EU – argued that CSR is by definition voluntary and therefore there is no place for ‘hard law’ to promote CSR. The first country to go one step further was France as its law since 2017 requires French companies to not only practice increased transparency but also to adopt special management plans to protect human rights even when operating in other countries through their subsidiaries and contractors. However, victims still struggle to sue transnational companies in their home countries. Notably, the US used to be the leading state when it came to opening its courts to foreign plaintiffs; however in 2013 the US Supreme Court interpreted narrowly a rather unique American law (Alient Tort Claims Act) making it much more difficult for foreign claimants to sue in the US. As it stands, plaintiffs are seeking justice particularly in common law countries such as the UK and Canada, from where some progressive judgements have come, but increasingly also in a number of EU countries (Netherlands, France). Importantly, in 2020 the EU announced that it will adopt a law on CSR (mandatory human rights due diligence) which will be applicable in all EU member states and will have effects globally, including in Cambodia. Access to remedies remains a big challenge in ‘business and human rights’ area (see chapters 6-7) and involves many human rights aspects (for example, chapters 15-18, 25-29). States can also have extraterritorial impacts through their public procurement regulations that can create a market for sustainable goods, or can set conditions to those companies that require state financial support. These types of regulations are in addition to other roles that states can play to promote CSR (see chapters 2 and 5). Questions about jurisdiction can arise but such concerns can be addressed by carefully distinguishing between types of jurisdiction and paying close attention to the content of the laws at hand.
Cambodia is not a ‘home country’ to large transnational companies (TNCs), but is a ‘host’ country where subsidiaries and suppliers of TNCs based in industrialized states (US, EU, China etc). Therefore, Cambodia has not adopted laws to protect human rights in other countries, that is, laws with extraterritorial effects. Instead, Cambodia has been on the receiving end of such extraterritorial laws. Extraterritorial jurisdiction is the situation when a state extends its legal power beyond its territorial borders. Consequently, the promotion and protection of human rights in the context of business in Cambodia is not only a conceptual issue but also a political discourse on the extraterritorial application of human rights law and treaties. The Cambodian government, in most cases, expresses its unwelcoming remarks by either explicitly rejecting or remaining silent. On the other hand, civil society organizations, including human rights organizations, play a more active role in invoking the respect of domestic laws concerning human rights and due diligence of the home states. It is important to understand the responses of various actors in Cambodia to such extraterritorial laws on CSR, and place this discussion in a larger context of Cambodia’s compliance with human rights treaties and cooperation with oversight mechanisms in the UN. In other words, this is a discussion about sovereignty and protection of human rights and it takes place in the ‘business and human rights’ area, but also in the broader international human rights system in which Cambodia participates.
- Home states and their obligations (respect and protect human rights)
- Jurisdiction: legislative (or “prescriptive”), executive (“enforcement”) and judicial (“adjudicatory”)
- Extraterritoriality: direct extraterritorially (jurisdiction over foreign companies) versus extraterritorial effects (jurisdiction over national companies with operations abroad)
- Corporate transparency
- Regulations on conflict minerals
- Slavery in supply chains
- Corruption and anti-bribery
- Taxation and revenues from natural resources
- Transboundary issues
- Land rights
- Rights of indigenous peoples
- Child labour
- Right to health
- Environmental protection
- Civil and criminal liability
- Parent companies, subsidiaries and supply chains
- Human rights due diligence
- National sovereignty and political interference
UN Special Representative, Further Steps
46. All States have the duty to protect against corporate-related human rights abuses within their territory and/or jurisdiction. In several policy domains, including anti-corruption, anti-trust, securities regulation, environmental protection and general civil and criminal jurisdiction, States have agreed to certain uses of extraterritorial jurisdiction. However, this is typically not the case in business and human rights.
47. Legitimate issues are at stake and they are unlikely to be resolved fully anytime soon. However, the scale of the current impasse must and can be reduced. To take the most pressing case, what message do States wish to send victims of corporate-related abuse in conflict affected areas? Sorry? Work it out yourselves? Or that States will make greater efforts to ensure that companies based in, or conducting transactions through, their jurisdictions do not commit or contribute to such abuses, and to help remedy them when they do occur? Surely the latter is preferable.
48. In the heated debates about extraterritoriality regarding business and human rights, a critical distinction between two very different phenomena is usually obscured. One is jurisdiction exercised directly in relation to actors or activities overseas, such as criminal regimes governing child sex tourism, which rely on the nationality of the perpetrator no matter where the offence occurs. The other is domestic measures that have extraterritorial implications; for example, requiring corporate parents to report on the company’s overall human rights policy and impacts, including those of its overseas subsidiaries. The latter phenomenon relies on territory as the jurisdictional basis, even though it may have extraterritorial implications.
49. Thus, extraterritoriality is not a binary matter: it comprises a range of measures. Indeed, one can imagine a matrix, with two rows and three columns. Its rows would be domestic measures with extraterritorial implications; and direct extraterritorial jurisdiction over actors or activities abroad. Its columns would be public policies for companies (such as CSR and public procurement policies, export credit agency criteria, or consular support); regulation (through corporate law, for instance); and enforcement actions (adjudicating alleged breaches and enforcing judicial and executive decisions). Their combination yields six types of “extraterritorial” form, each in turn offering a range of options. Not all are equally likely to trigger objections under all circumstances.
UN, Guiding Principles on Business and Human Rights
I. The State duty to protect human rights
States should set out clearly the expectation that all business enterprises domiciled in their territory and/or jurisdiction respect human rights throughout their operations.
At present States are not generally required under international human rights law to regulate the extraterritorial activities of businesses domiciled in their territory and/or jurisdiction. Nor are they generally prohibited from doing so, provided there is a recognized jurisdictional basis. Within these parameters some human rights treaty bodies recommend that home States take steps to prevent abuse abroad by business enterprises within their jurisdiction.
There are strong policy reasons for home States to set out clearly the expectation that businesses respect human rights abroad, especially where the State itself is involved in or supports those businesses. The reasons include ensuring predictability for business enterprises by providing coherent and consistent messages, and preserving the State’s own reputation.
States have adopted a range of approaches in this regard. Some are domestic measures with extraterritorial implications. Examples include requirements on “parent” companies to report on the global operations of the entire enterprise; multilateral soft-law instruments such as the Guidelines for Multinational Enterprises of the Organization for Economic Cooperation and Development; and performance standards required by institutions that support overseas investments. Other approaches amount to direct extraterritorial legislation and enforcement. This includes criminal regimes that allow for prosecutions based on the nationality of the perpetrator no matter where the offence occurs. Various factors may contribute to the perceived and actual reasonableness of States’ actions, for example whether they are grounded in multilateral agreement.
US, Kiobel v Shell
[Alien Tort Claims Act (ATCA)/Alien Tort Statute (ATS): The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.]
Petitioners, Nigerian nationals residing in the United States, filed suit in federal court under the Alien Tort Statute [ATS], alleging that respondents—certain Dutch, British, and Nigerian corporations—aided and abetted the Nigerian Government in committing violations of the law of nations in Nigeria. (…) [Court asks] whether and under what circumstances courts may recognize a cause of action under the ATS, for violations of the law of nations occurring within the territory of a sovereign other than the United States. (…)
In contending that a claim under the ATS does not reach conduct occurring in a foreign sovereign’s territory, respondents rely on the presumption against extraterritorial application, which provides that “[w]hen a statute gives no clear indication of an extraterritorial application, it has none” (…) The presumption “serves to protect against unintended clashes between our laws and those of other nations which could result in international discord.” (…) It is typically applied to discern whether an Act of Congress regulating conduct applies abroad (…), but its underlying principles similarly constrain courts when considering causes of action that may be brought under the ATS. Indeed, the danger of unwarranted judicial interference in the conduct of foreign policy is magnified in this context, where the question is not what Congress has done but what courts may do. (…)
The presumption is not rebutted by the text, history, or purposes of the ATS. Nothing in the ATS’s text evinces a clear indication of extraterritorial reach. Violations of the law of nations affecting aliens can occur either within or outside the United States. And generic terms, like “any” in the phrase “any civil action,” do not rebut the presumption against extraterritoriality. (…)
[ATS] does not suffice to counter the weighty concerns underlying the presumption against extraterritoriality. Finally, there is no indication that the ATS was passed to make the United States a uniquely hospitable forum for the enforcement of international norms. (…)
The presumption against extraterritorial application helps ensure that the Judiciary does not erroneously adopt an interpretation of U. S. law that carries foreign policy consequences not clearly intended by the political branches. (…)
Applying U. S. law to pirates, however, does not typically impose the sovereign will of the United States onto conduct occurring within the territorial jurisdiction of another sovereign, and therefore carries less direct foreign policy consequences. Pirates were fair game wherever found, by any nation, because they generally did not operate within any jurisdiction. We do not think that the existence of a cause of action against them is a sufficient basis for concluding that other causes of action under the ATS reach conduct that does occur within the territory of another sovereign (…)
Indeed, far from avoiding diplomatic strife, providing such a cause of action could have generated it. Recent experience bears this out. (…) (listing recent objections to extraterritorial applications of the ATS by Canada, Germany, Indonesia, Papua New Guinea, South Africa, Switzerland, and the United Kingdom). Moreover, accepting petitioners’ view would imply that other nations, also applying the law of nations, could hale our citizens into their courts for alleged violations of the law of nations occurring in the United States, or anywhere else in the world. The presumption against extraterritoriality guards against our courts triggering such serious foreign policy consequences, and instead defers such decisions, quite appropriately, to the political branches.
On these facts, all the relevant conduct took place outside the United States. And even where the claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application. (…) Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices. If Congress were to determine otherwise, a statute more specific than the ATS would be required.
California, Transparency in Supply Chains Act
Businesses may inadvertently promote human trafficking through their supply chains. In 2013, the U.S. Department of Labor’s Bureau of International Labor Affairs identified 122 goods (from 72 countries) believed to be the product of forced or child labor. These goods range from everyday items like coffee, cotton and shoes to more complex products such as carpets, minerals, or furniture.(…)
California, which boasts the world’s seventh-largest economy and the country’s largest consumer base, is unique in its ability to address this issue, and as a result, to help eradicate human trafficking and slavery worldwide. (…)
The California Transparency in Supply Chains Act (the “Act”) provides consumers with critical information about the efforts that companies are undertaking to prevent and root out human trafficking and slavery in their product supply chains – whether here or overseas.
This Act requires large retailers and manufacturers doing business in California to disclose on their websites their “efforts to eradicate slavery and human trafficking from [their] direct supply chain for tangible goods offered for sale.” The law applies to any company doing business in California that has annual worldwide gross receipts of more than $100 million and that identifies itself as a retail seller or manufacturer on its California tax return. Companies subject to the Act must post disclosures on their Internet websites related to five specific areas: verification, audits, certification, internal accountability, and training.
The California Transparency in Supply Chains Act does not mandate that businesses implement new measures to ensure that their product supply chains are free from human trafficking and slavery. Instead, the law only requires that covered businesses make the required disclosures – even if they do little or nothing at all to safeguard their supply chains. Companies subject to the Act must therefore disclose particular information within each disclosure category, and the Act offers companies discretion in how to do so.
UK, Modern Slavery Act
2.3 The Act specifically states that the statement must include ‘the steps the organisation has taken during the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains, and in any part of its own business’. When the Act refers to ensuring that slavery and human trafficking is not taking part in any part of its supply chain, this does not mean that the organisation in question must guarantee that the entire supply chain is slavery free. Instead, it means an organisation must set out the steps it has taken in relation to any part of the supply chain (that is, it should capture all the actions it has taken).
2.4 The provision requires an organisation to be transparent about what is happening within its business. This means that if an organisation has taken no steps to ensure slavery and human trafficking is not taking place they must still publish a statement stating this to be the case.
Failure to comply
2.6 If a business fails to produce a slavery and human trafficking statement for a particular financial year the Secretary of State may seek an injunction through the High Court (…) requiring the organisation to comply. If the organisation fails to comply with the injunction, they will be in contempt of a court order, which is punishable by an unlimited fine. (…)
2.8 We expect organisations to build on their statements year on year and for the statements to evolve and improve over time. However, a failure to comply with the provision, or a statement that an organisation has taken no steps, may damage the reputation of the business. It will be for consumers, investors and Non-Governmental Organisations to engage and/or apply pressure where they believe a business has not taken sufficient steps.
Responding to an incidence of modern slavery
9.7 Organisations can benefit from working collaboratively with others – such as industry bodies and multi-stakeholder organisations – to improve industry-wide labour standards and to advocate for improved laws and policies in sourcing countries, where appropriate. This could be more likely to achieve long-term change than working alone.
France, Corporate Duty of Vigilance Law
Any company that at the end of two consecutive financial years, employs at least five thousand employees within the company and its direct and indirect subsidiaries, whose head office is located on French territory… must establish and implement an effective vigilance plan.
The plan shall include the reasonable vigilance measures to allow for risk identification and for the prevention of severe violations of human rights and fundamental freedoms, serious bodily injury or environmental damage or health risks resulting directly or indirectly from the operations of the company and of the companies it controls …, as well as from the operations of the subcontractors or suppliers with whom it maintains an established commercial relationship…
The plan shall be drafted in association with the company stakeholders involved, and where appropriate, within multiparty initiatives that exist in the subsidiaries or at territorial level. It shall include the following measures:
- A mapping that identifies, analyses and ranks risks;
- Procedures to regularly assess, in accordance with the risk mapping, the situation of subsidiaries, subcontractors or suppliers with whom the company maintains an established commercial relationship;
- Appropriate action to mitigate risks or prevent serious violations;
- An alert mechanism that collects reporting of existing or actual risks, developed in working partnership with the trade union organizations representatives of the company concerned;
- A monitoring scheme to follow up on the measures implemented and assess their efficiency.
The vigilance plan and its effective implementation report shall be publicly disclosed and included in the report(…)
When a company does not meet its obligations in a three months period after receiving formal notice to comply with the duties laid down in I, the relevant jurisdiction can, following the request of any person with legitimate interest in this regard, urge said company, under financial compulsion if appropriate, to comply with its duties.
According to the conditions laid down in Articles 1240 and 1241 of the Civil Code, the author of any failure to comply with the duties specified in Article L. 225-102-4 of this code shall be liable and obliged to compensate for the harm that due diligence would have permitted to avoid.
US, Dodd–Frank Act
Section 1502: Conflict Minerals
It is the sense of Congress that the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein (…)
Disclosures Relating To Conflict Minerals Originating In The Democratic Republic Of The Congo
[Businesses shall]… disclose annually… whether conflict minerals … did originate in the Democratic Republic of the Congo or an adjoining country and, in cases in which such conflict minerals did originate in any such country, submit to the Commission a report (…)
Strategy and map to address linkages between conflict minerals and armed groups
The Secretary of State, in consultation with the Administrator of the United States Agency for International Development, shall submit to the appropriate congressional committees a strategy to address the linkages between human rights abuses, armed groups, mining of conflict minerals, and commercial products. [The strategy shall include the following]:
(i) A plan to promote peace and security in the Democratic Republic of the Congo by supporting efforts of the Government of the Democratic Republic of the Congo, including the Ministry of Mines and other relevant agencies, adjoining countries, and the international community, in particular the United Nations Group of Experts on the Democratic Republic of Congo, to
(I) monitor and stop commercial activities involving the natural resources of the Democratic Republic of the Congo that contribute to the activities of armed groups and human rights violations in the Democratic Republic of the Congo; and
(II) develop stronger governance and economic institutions that can facilitate and improve transparency in the cross-border trade involving the natural resources of the Democratic Republic of the Congo to reduce exploitation by armed groups and promote local and regional development.
(ii) A plan to provide guidance to commercial entities seeking to exercise due diligence on and formalize the origin and chain of custody of conflict minerals used in their products and on their suppliers to ensure that conflict minerals used in the products of such suppliers do not directly or indirectly finance armed conflict or result in labor or human rights violations.
(iii) A description of punitive measures that could be taken against individuals or entities whose commercial activities are supporting armed groups and human rights violations in the Democratic Republic of the
EU, Regulation on Conflict Minerals
(1) Although they hold great potential for development, natural mineral resources can, in conflict-affected or high- risk areas, be a cause of dispute where their revenues fuel the outbreak or continuation of violent conflict, undermining endeavours towards development, good governance and the rule of law. In those areas, breaking the nexus between conflict and illegal exploitation of minerals is a critical element in guaranteeing peace, development and stability.
(7) This Regulation, by controlling trade in minerals from conflict areas, is one of the ways of eliminating the financing of armed groups. The Union’s foreign and development policy action also contributes to fighting local corruption, to the strengthening of borders and to providing training for local populations and their representatives in order to help them highlight abuses.
(10) Union citizens and civil society actors have raised awareness with respect to Union economic operators not being held accountable for their potential connection to the illicit extraction of and trade in minerals from conflict areas. Such minerals, potentially present in consumer products, link consumers to conflicts outside the Union. As such, consumers are indirectly linked to conflicts that have severe impacts on human rights, in particular the rights of women, as armed groups often use mass rape as a deliberate strategy to intimidate and control local populations in order to preserve their interests. (…)
1.This Regulation establishes a Union system for supply chain due diligence (‘Union system’) in order to curtail opportunities for armed groups and security forces to trade in tin, tantalum and tungsten, their ores, and gold. This Regulation is designed to provide transparency and certainty as regards the supply practices of Union importers, and of smelters and refiners sourcing from conflict-affected and high-risk areas.
2.This Regulation lays down the supply chain due diligence obligations of Union importers of minerals or metals containing or consisting of tin, tantalum, tungsten or gold (…)
‘Supply chain due diligence’ means the obligations of Union importers of tin, tantalum and tungsten, their ores, and gold in relation to their management systems, risk management, independent third-party audits and disclosure of information with a view to identifying and addressing actual and potential risks linked to conflict-affected and high- risk areas to prevent or mitigate adverse impacts associated with their sourcing activities.
EU, Non-Financial Reporting Directive
Article 19a: Non-financial statement
1. Large undertakings which are public-interest entities exceeding on their balance sheet dates the criterion of the average number of 500 employees during the financial year shall include in the management report a non-financial statement containing information to the extent necessary for an understanding of the undertaking’s development, performance, position and impact of its activity, relating to, as a minimum, environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters, including:
(a) a brief description of the undertaking’s business model;
(b) a description of the policies pursued by the undertaking in relation to those matters, including due diligence processes implemented;
(c) the outcome of those policies;
(d) the principal risks related to those matters linked to the undertaking’s operations including, where relevant and proportionate, its business relationships, products or services which are likely to cause adverse impacts in those areas, and how the undertaking manages those risks;
(e) non-financial key performance indicators relevant to the particular business.
Where the undertaking does not pursue policies in relation to one or more of those matters, the non-financial statement shall provide a clear and reasoned explanation for not doing so.
European Parliament, Recommendations on Corporate Due Diligence
1. Considers that voluntary due diligence standards have severe limitations and that the Union should urgently adopt minimum requirements for undertakings to identify, prevent, cease, mitigate, monitor, disclose, account, address and remediate human rights, environmental and governance risks in their entire value chain; believes that this would be beneficial for stakeholders, as well as for businesses in terms of harmonization, legal certainty and a level playing field; stresses that this would enhance the reputation of EU undertakings and of the Union as a standard setter;
2. Recalls that due diligence is primarily a preventative mechanism and that companies should be first and foremost required to identify risks or adverse impacts and adopt policies and measures to address them; highlights that if an undertaking causes or contributes to an adverse impact it should provide for a remedy;
3. Stresses that human rights abuses and breaches of social and environmental standards can be the result of a company’s own activities or of those of its business relationships; underlines therefore that due diligence should encompass the entire value chain;
4. Considers that the scope of any future mandatory EU due diligence framework should be broad and cover all undertakings governed by the law of a Member State or established in the territory of the Union, including those providing financial products and services, regardless of their size or sector of activity and of whether they are publicly owned or controlled undertakings; (…)
6. Underlines that due diligence strategies should be aligned with the Sustainable Development Goals and EU policy objectives in the field of human rights and the environment, including the European Green Deal, and EU international policy;
7. Stresses that due diligence should not be a ‘box-ticking exercise’ and that due diligence strategies should be in line with the dynamic nature of risks; considers that those strategies should cover every actual or potential adverse impact although the severity of the risk should be considered in the context of a prioritisation policy;
8. Highlights that sound due diligence requires that all stakeholders be involved and consulted effectively and meaningfully; (…)
10. Considers that, to enforce due diligence, Member States should designate national authorities to share best practices as well as to supervise and impose sanctions, including criminal sanctions in severe cases;
11. Considers that company-level grievance mechanisms can provide effective early-stage recourse, provided they are legitimate, accessible, predictable, equitable, transparent and human rights-compatible; (…)
EU, Directive 2013/34/EU on the Annual Financial Statements
44. In order to provide for enhanced transparency of payments made to governments, large undertakings and public-interest entities which are active in the extractive industry or logging of primary forests should disclose material payments made to governments in the countries in which they operate in a separate report, on an annual basis. Such undertakings are active in countries rich in natural resources, in particular minerals, oil, natural gas and primary forests. (…)
45. The report should serve to help governments of resource- rich countries to implement the EITI principles and criteria and account to their citizens for payments such governments receive from undertakings active in the extractive industry or loggers of primary forests operating within their jurisdiction. The report should incorporate disclosures on a country and project basis. (…)
2. We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.
5. We underline the importance of transparency by governments and companies in the extractive industries and the need to enhance public financial management and accountability.
8.We believe in the principle and practice of accountability by government to all citizens for the stewardship of revenue streams and public expenditure.
EU, Directive on the Activities and Supervision of Pension Funds
Article 21: General governance requirements
1. Member States shall require all IORPs [institutions for occupational retirement provision] to have in place an effective system of governance which provides for sound and prudent management of their activities. That system shall include an adequate and transparent organisational structure with a clear allocation and appropriate segregation of responsibilities and an effective system for ensuring the transmission of information. The system of governance shall include consideration of environmental, social and governance factors related to investment assets in investment decisions, and shall be subject to regular internal review.
Article 41: Information to be given to prospective member
1. Member States shall require IORPs to ensure that prospective members who are not automatically enrolled in a pension scheme are informed, before they join that pension scheme, about: … (c) information on whether and how environmental, climate, social and corporate governance factors are considered in the investment approach; (…)
EU, Directive on the Encouragement of Shareholder Engagement
(14) Effective and sustainable shareholder engagement is one of the cornerstones of the corporate governance model of listed companies, which depends on checks and balances between the different organs and different stakeholders. Greater involvement of shareholders in corporate governance is one of the levers that can help improve the financial and non-financial performance of companies, including as regards environmental, social and governance factors, in particular as referred to in the Principles for Responsible Investment, supported by the United Nations. In addition, greater involvement of all stakeholders, in particular employees, in corporate governance is an important factor in ensuring a more long-term approach by listed companies that needs to be encouraged and taken into consideration.
Article 3g: Engagement policy
1. Member States shall ensure that institutional investors and asset managers either comply with the requirements set out in points (a) and (b) or publicly disclose a clear and reasoned explanation why they have chosen not to comply with one or more of those requirements. (a) Institutional investors and asset managers shall develop and publicly disclose an engagement policy that describes how they integrate shareholder engagement in their investment strategy. The policy shall describe how they monitor investee companies on relevant matters, including strategy, financial and non-financial performance and risk, capital structure, social and environmental impact and corporate governance, conduct dialogues with investee companies, exercise voting rights and other rights attached to shares, cooperate with other shareholders, communicate with relevant stakeholders of the investee companies and manage actual and potential conflicts of interests in relation to their engagement.
EU, Regulation on Sustainability Disclosures in the Financial Services Sector
Article 10: Transparency of the promotion of environmental or social characteristics and of sustainable investments on websites
1. Financial market participants shall publish and maintain on their websites the following information for each financial product (…):
(a) a description of the environmental or social characteristics or the sustainable investment objective;
(b) information on the methodologies used to assess, measure and monitor the environmental or social characteristics or the impact of the sustainable investments selected for the financial product, including its data sources, screening criteria for the underlying assets and the relevant sustainability indicators used to measure the environmental or social characteristics or the overall sustainable impact of the financial product; (…)
US, Foreign Corrupt Practices Act
It shall be unlawful for any issuer [business subject to this US law] … or for any officer, director, employee, or agent of such issuer [to make] an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to
(1) any foreign official for purposes of
(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or
(B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,
in order to assist such issuer in obtaining or retaining business (…)
The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.
Congress enacted the FCPA in 1977 after revelations of widespread global corruption in the wake of the Watergate political scandal. SEC [Securities and Exchange Commission] discovered that more than 400 U.S. companies had paid hundreds of millions of dollars in bribes to foreign government officials to secure business overseas. SEC reported that companies were using secret “slush funds” to make illegal campaign contributions in the United States and corrupt payments to foreign officials abroad and were falsifying their corporate financial records to conceal the payments.
Congress viewed passage of the FCPA as critical to stopping corporate bribery, which had tarnished the image of U.S. businesses, impaired public confidence in the financial integrity of U.S. companies, and hampered the efficient functioning of the markets. As Congress recognized when it passed the FCPA, corruption imposes enormous costs both at home and abroad, leading to market inefficiencies and instability, sub-standard products, and an unfair playing field for honest businesses. By enacting a strong foreign bribery statute, Congress sought to minimize these destructive effects and help companies resist corrupt demands, while addressing the destructive foreign policy ramifications of transnational bribery.
The FCPA: Anti-bribery Provisions
The FCPA addresses the problem of international corruption in two ways: (1) the anti-bribery provisions… prohibit individuals and businesses from bribing foreign government officials in order to obtain or retain business and (2) the accounting provisions… impose certain record keeping and internal control requirements on issuers, and prohibit individuals and companies from knowingly falsifying an issuer’s books and records or circumventing or failing to implement an issuer’s system of internal controls. Violations of the FCPA can lead to civil and criminal penalties, sanctions, and remedies, including fines, disgorgement, and/or imprisonment.
Maastricht Principles on Extraterritorial Obligations of States
9. Scope of jurisdiction.
A State has obligations to respect, protect and fulfil economic, social and cultural rights in any of the following:
a) situations over which it exercises authority or effective control, whether or not such control is exercised in accordance with international law;
b) situations over which State acts or omissions bring about foreseeable effects on the enjoyment of economic, social and cultural rights, whether within or outside its territory;
c) situations in which the State, acting separately or jointly, whether through its executive, legislative or judicial branches, is in a position to exercise decisive
10. Limits to the entitlement to exercise jurisdiction.
The State’s obligation to respect, protect and fulfil economic, social and cultural rights extraterritorially does not authorize a State to act in violation of the UN Charter and general international law.
While Principle 9 sets forth the basis for the mandatory application of human rights obligations to a state’s conduct that has extraterritorial effect, Principle 10 recalls that the duty of the state to respect, protect, and fulfill human rights outside its national territory should not be invoked as a justification for the adoption of measures that violate the UN Charter or general international law. Article 2 (4) of the UN Charter imposes on UN member states to “refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations.” Moreover, as described in greater detail under Principles 24 and 25 regarding the duty to protect human rights extraterritorially through regulation, the sovereignty of the state on the national territory of which a situation occurs that another state seeks to influence, as well as the principle of the equality of all states, may impose limits to the scope of the duty of that other state to contribute to the full realization of human rights.
25. Bases for protection.
States must adopt and enforce measures to protect economic, social and cultural rights through legal and other means, including diplomatic means, in each of the following circumstances:
a) the harm or threat of harm originates or occurs on its territory;
b) where the non-State actor has the nationality of the State concerned;
c) as regards business enterprises, where the corporation, or its parent or controlling company, has its centre of activity, is registered or domiciled, or has its main place of business or substantial business activities, in the State concerned;
d) where there is a reasonable link between the State concerned and the conduct it seeks to regulate, including where relevant aspects of a non-state actor’s activities are carried out in that State’s territory;
e) where any conduct impairing economic, social and cultural rights constitutes a violation of a peremptory norm of international law. Where such a violation also constitutes a crime under international law, States must exercise universal jurisdiction over those bearing responsibility or lawfully transfer them to an appropriate jurisdiction.
European Commission, Corporate Social Responsibility: Overview of Progress
The 2014 Public Procurement Directives101 expand possibilities for EU contracting authorities to use sustainable procurement criteria in their tenders102.
Promotion of quality criteria, and in particular sustainability criteria, is a priority for the Commission’s policy on public procurement, as highlighted in the Communication on public procurement “Making Public Procurement work in and for Europe”103 of October 2017.
The use of Green Public Procurement (GPP)/ Socially Responsible Public Procurement (SRPP) in public purchasing can create additional market opportunities for sustainable products, promote supply chain due diligence and encourage the market to shift towards more environmentally friendly and socially responsible solutions. To support the use of these criteria, the Commission has taken a number of actions. EU guidance exists in the field of GPP and SRPP. (The latter will be updated in 2019 to reflect the 2014 Directives).
Furthermore, the Commission has produced GPP criteria in over 20 sectors, which are periodically updated through scientific research and a consultation process. The Commission is also engaged in awareness-raising actions on the importance of sustainable procurement and in the dissemination of good practices to inspire procurement initiatives at national level.
Augenstein & Dziedzic, State Obligations under the European Convention
This study examines State obligations to prevent and redress corporate-related human rights violations under the European Convention for the Protection of Human Rights and Fundamental Freedoms. It discusses the evolving jurisprudence of the European Court of Human Rights in two areas of international legal doctrine of particular relevance to the business and human rights debate: the application of international human rights obligations to non-state actors (the public-private divide); and the jurisdictional scope of international human rights treaties (the territoriality-extraterritoriality divide). (…)
Part B systematises the case law of the European Court of Human Rights (ECtHR) on the public-private divide in terms of two categories of State obligations: negative obligations to respect human rights in relation to corporations acting as state agents; and positive obligations to protect human rights in relation to corporations acting as third parties. Part C discusses the ECtHR’s approach to the extraterritorial dimension of State obligations to prevent and redress corporate-related human rights violations. The study discusses cases of direct extraterritorial jurisdiction (acts ‘performed’ outside the State’s territory) and extraterritorial effects cases (acts ‘producing effects’ outside the State’s territory), and their respective relevance to the business and human rights domain.
While the ECtHR’s approach to extraterritorial human rights protection has significantly evolved over the past years, it remains premised upon an essentially territorial notion of jurisdiction. While, accordingly, the extraterritorial application of the European Convention remains the exception, the Court has given State obligations to secure human rights ‘to everyone within their jurisdiction’ (Article 1 ECHR) an increasingly broad interpretation that encompasses acts performed outside the State’s territory and acts producing effects outside the State’s territory. The category of acts performed outside the State’s territory is of limited value to the business and human rights domain because it requires the physical presence of State agents on the territory of another State. While extraterritorial effects cases appear more promising in this regard the ECtHR has not (yet) endorsed the view of the UN Treaty Bodies according to which a State’s exercise of authority and control over a corporation domiciled within its territory is sufficient to establish a jurisdictional link with a victim located outside its borders
Methven O’Brien, The Home State Duty to Regulate TNCs
The notion that states have extraterritorial human rights obligations is one basis upon which calls are made for an international treaty on business and human rights. In particular, it has been claimed that “home” states of transnational corporations (TNCs) have a duty to protect against human rights abuses occurring on the territory of a “host” state that may be breached by a failure to regulate TNCs’ extraterritorial activities. At the same time, advocates of such a duty often criticise the UN Guiding Principles (UNGPs) for failing to reflect this obligation to its full extent.
This paper challenges the claim that such a home state duty to regulate TNCs’ extraterritorial human rights impacts can be said currently to exist. Specifically, through a systematic analysis of principles and authorities relating to the various legal building blocks needed to get such a duty off the ground, it demonstrates that extraterritoriality advocates only appear to reach their desired conclusions because, at each step in their argument, the true position in existing international law is subtly misinterpreted or misrepresented. Incidentally, it is affirmed that the UNGPs’ evaluation of the status quo regarding states’ competence to regulate extraterritorially remains substantially a correct one. (…)
This paper … summarises arguments made by “extraterritoriality advocates”. It then proceeds to dispute them, with reference, in turn, to the issues of jurisdiction; attribution and responsibility; and positive obligations by demonstrating, in respect of each, a lack of legal authority and flaws in the analysis of extraterritoriality advocates for the conclusions they advance.
Each state’s general jurisdiction is primarily territorial: extraterritorial exercise of jurisdiction is the exception that makes the norm. This canonical rule may be observed in operation across general public international law jurisdiction’s three dimensions, legislative (or “prescriptive”), executive (or “enforcement”) and judicial (“adjudicatory”).
As regards prescriptive jurisdiction, even if the “overlap” of municipal laws is today no rare occurrence, the right to make laws remains in principle territorially bounded, “in the sense that a state by definition has the prerogative to legislate for persons present in its own territory” and, by implication, not for others who, after all, lack formal and also usually substantive opportunities to influence its government.
Yet states may enact rules affecting the rights and duties of parties beyond their
borders without consent from other states, where there is some “connecting factor” between the state and the target of its regulatory efforts. Such a link may be provided, for example, by nationality, whereby a state is allowed to attempt to control the conduct of its nationals (“active personality”) or to protect them (“passive personality”) even when abroad; by damage to the vital interests of the state (“protective principle”); or by damage to the international community as a whole, implicitly affecting the state as one of its members (“universality”). Beyond these permitted scenarios, extraterritorial legislation is likely to draw controversy as an interference with other states’ economic, social and other interests. (…) One state may not exercise jurisdiction on the territory of another without consent, invitation or acquiescence (…)
Skogly, Extraterritoriality: Universal Human Rights without Universal Obligations
In international human rights discourse, the concept of universalism has been key since the adoption of the UN Charter in 1945, and the labelling of the 1948 Declaration as the Universal Declaration of Human Rights (UDHR) signifies the importance of this concept. (…) Yet, in the development of human rights law and its implementation through national and international bodies, the concept of universalism has been rather one-sided: it concerns human rights enjoyment, but not human rights obligations. (…)
However, this way of looking at obligations has in recent times been questioned by a number of actors in the international human rights community. Academics, policy makers, non-governmental organisations (NGOs), and international institutions have begun to question the logic of this approach, and indeed the legal justifications for it. (…) Thus, the altered approach is to address whether states have obligations in regard to the human rights effects on individuals in other states as a result of actions and omissions in their international cooperation or foreign policy. (…)
This increased interaction and interdependence of states in the international community has resulted in a debate that questions whether states have obligations that go beyond their national borders, and include human rights problems caused by the actions or omissions of one state in the territory of another state. The question raised is whether the foreign state fails to comply with legal obligations if its actions or omissions result in human rights violations abroad. This debate concerns questions that have been addressed through the use of different terms: extraterritorial obligations, transnational obligations, international obligations, or global obligations, to mention the most common.
European Commission, Withdrawal of Preferential Access to EU Market
The European Commission (EC) has decided to withdraw part of the tariff preference granted to Cambodia under the European Union’s Everything But Arms’ (EBA) trade scheme due to the serious and systemic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights.
The Royal Government of Cambodia, Statement on Temporary Withdrawal of EBA
The RGC considers their decision as an extreme injustice when the EC disregards the concrete measures and substantial progresses made by the RGC in its adherence and commitment to the implementation of the 15 UN and ILO Conventions, which are the pre-conditions to the continuation of the EBA unilateral trade preferences, (…).
The RGC is of the view that the EC has not acted on the principles of ‘good faith’ and ‘fairness’. While many countries receiving the EU trade preferences have not fully complied with these international conventions and to which the EC has closed a blind eye, the EC hiding behind its political agenda has unfairly imposed and expected the ‘perfect implementation’ of these Conventions from Cambodia (…) The EC has not shown due respect to Cambodia’s sovereignty when their EBA demands are tantamount to acts of interference with the political development in the country. (…)
The EC has not shown due respect to Cambodia’s sovereignty when their EBA demands are tantamount to acts of interference with the political development in the country. (…)
All these arguments notwithstanding, the government is committed to continue enhancing the democratic space, human rights and labour rights. However, we are as much determined to protect our peace, stability, independence and sovereignty at all cost.
Transparency International Cambodia, Business Brief
One of the most common forms of corruption is “Facilitation Payments”. Facilitation payments are a small bribe paid to access a routine government service that companies and citizens at large have a legal right to access without additional payments. (…)
Surprisingly, facilitation payments are an exemption under the US Foreign Corrupt Practices Act (FCPA). The FCPA states that its anti-bribery prohibition “shall not apply to any facilitating or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or secure the performance of a routine governmental action”. The scope of this exemption has, however, become very narrow and opaque. By looking at recent corruption cases under the FCPA, it becomes clear that what traditionally has been accepted as exemption is now subject to a more stringent interpretation. This stringent interpretation increases legal risks for companies who allow facilitation payments in their policy framework. In order for companies to protect themselves against legal risks, a policy prohibiting facilitation payments is strongly recommended. (…)
Under the UK Bribery Act (2010), facilitation payments are strictly prohibited regardless the size and frequency. As previously mentioned facilitation payments are an exemption under the FCPA but the scope of that exemption is becoming much narrower. In conclusion, companies are facing an increasing legal risk by having a policy that allows facilitation payments. (…)
This is especially important in a business environment like Cambodia where facilitation payment has been seen as a way to encourage government officials to work by supplementing their low salary.
Ministry of Labour, Ministry to Probe Child Labor [re UK Modern Slavery Act]
“We will start investigating. The ministry issued a statement preventing [this issue of child labour]. We will review what the report says.”
“In the past, we didn’t know about it. After knowing about it, we will inspect the locations mentioned in the report. If it is true, we will take the necessary legal action to put a stop to it,” (…)
(…) the ministry issued a statement warning it will mete out fines and take other legal action against brick kilns which use child labour or commit other violations.
Chheang Suyheang, the president of two brick kiln associations representing more than 100 factories in Kandal province, denied the existence of child labour in brick factories.
“There is no impact on them. Their hands and feet do not fall into the machines or [get] cut off like before because there is no child labour in the brick [industry] and we do not allow minors to work because the organisation has strengthened,” he said.
Suyheang acknowledged that every “brick family” has borrowed money from the kiln owners. This is because they can quickly pay off their bank and microfinance loans.
NagaCorp, Code of Conduct [re US Foreign Corrupt Practice Act]
Statement of Principles
NagaCorp Ltd. (NagaCorp) is committed to maintaining high ethical standards in all of our operations and business activities. This involves each of us – employees, officers and members of the Board of Directors alike – fostering and maintaining NagaCorp’s reputation for integrity, honesty and transparency. With this in mind, NagaCorp is dedicated to a zero-tolerance policy with regard to involvement in corruption or bribery activities of any type. This policy document is intended to help employees of NagaCorp and all its subsidiaries achieve a better understanding of corruption and bribery, and how to avoid them.
Corruption in the workplace involves the abuse of power for personal gain. Acts of corruption include bribery, kickbacks, rebates, fraud, extortion and embezzlement. Corruption in any form, commercial or political, is forbidden in all NagaCorp business dealings. No NagaCorp funds may be used, either directly or indirectly, for any bribe or other unlawful payment anywhere or under any circumstance. The purchase or sale of goods and services on behalf of NagaCorp must not lead to employees or their families receiving personal kickbacks or rebates. Kickbacks and rebates can take many forms and are not limited to direct cash payments or credits in connection with a particular transaction. Such practices are not only unethical, but in many cases are also illegal.
NagaCorp is the largest hotel, gaming and leisure operator in Cambodia and the company has been listed on the Hong Kong Stock Exchange since 2006. NagaCorp is in compliance with best international standards and practices in dealing with anti-corruption and anti-bribery issues which include, but are not limited to, Cambodian law, Hong Kong Stock Exchange list requirements, the Organization for Economic Cooperation and Development, the United Nations Convention Against Corruption and the principles supporting the Foreign Corrupt Practices Act.
International Standards Regarding Anti-Corruption and Anti-Bribery
To combat the damaging effects of bribery in international business transactions, the United States Congress passed the Foreign Corrupt Practices Act (FCPA) in 1977. The law established substantial penalties for persons and corporations making payments to foreign government officials, political parties and candidates for public office in order to obtain or retain business.
The FCPA has had a major impact on how U.S. companies conduct business overseas. However, in the absence of similar legal prohibitions by key trading partners, U.S. businesses were put at a significant disadvantage in international commerce. Their foreign competitors continued to pay bribes without fear of penalties, resulting in billions of dollars in lost sales to U.S. exporters. In 1988, Congress amended the FCPA as part of a broad legislative effort to strengthen the global competitiveness of American businesses. These measures were enacted as part of the Omnibus Trade and Competitiveness Act of 1988. The 1988 amendments were aimed at reaffirming Congressional commitment to stemming transnational corporate corruption.
The scope of FCPA is quite broad and it applies to American corporations, corporations that trade in the U.S. securities market, nationals, citizens, and residents. Foreign corporations and their officers are also covered by the Act if the corrupt conduct occurs on U.S. territory.
OECD Anti-Bribery Convention
The Organization for Economic Cooperation and Development (OECD) was founded in 1961 to stimulate economic progress and world trade. The Anti-Bribery Convention requires its parties to criminalize the bribery of foreign public officials in international business transactions.
The Anti-Bribery Convention is the only legally binding instrument globally to focus primarily on the supply of bribes to foreign public officials in international business transactions. All Convention countries must make the bribery of foreign public officials a criminal offense. They are obligated to investigate credible allegations and, where appropriate, to prosecute those who offer, promise or give bribes to foreign public officials and to subject those who bribe to effective, proportionate and dissuasive penalties. At the same time, Parties to the Convention undertake to provide “prompt and effective legal assistance” to other Parties investigating offenses within the scope of the Convention. They are also required to deny the tax deductibility for such bribes.
Normington, It’s the End of the Year, the Global Magnitsky Sanctions Are Here
In what’s become something of a festive tradition over the past few years, the US Treasury Department has released new designations of individuals and entities sanctioned under the Global Magnitsky Act – essentially a Santa’s list of the corrupt and serious human rights abusers.
The Global Magnitsky Human Rights Accountability Act (known as the Global Magnitsky Act for short) allows the US government to sanction perpetrators of serious human rights abuses and corruption outside of the country, denying them visas and freezing their US-based property and interests in property.
Council for the Development of Cambodia, Press Statement on US Sanctions
The Council for the Development of Cambodia (CDC) voices great disappointment with the announcement by the US Department of the Treasury regarding its decision to impose sanctions on the Union Development Group Co., Ltd (UDG) that invested in the development of a resort in Botumsakor and Kirisakor districts, Koh Kong province, for alleged reasons that do not reflect the facts. (…)
Allegation that UDG is a Chinese State-owned entity. (…)
Allegation that the allocation of land over 10,000 hectares to UDG for development exceeded the time of land concession permitted by law. (…)
Allegation that UDG has forced people from their land. (…)
Allegation that the development has devasted the environment. (…)
Allegation that the UDG’s investment project could be used as a military base.
(…) Therefore, the Council for the Development of Cambodia is of the view that the US Department of the Treasury’s sanctions will not only cause damages to the UDG, but could also seriously affect the livelihood of blameless local people and the business and investment climate of the Kingdom of Cambodia as a whole.
The Chinese Embassy in Cambodia, Statement on the US Sanctions
The U.S. Government fabricated the fact, unreasonably accused and used its own domestic law to impose sanction on the project of Chinese enterprise in the territory of Cambodia. This is the act of using power for severe oppression. The oppression of the U.S. on the lawful investment of the Chinese enterprise in Cambodia does not only affect interest and human rights of enterprise, but also a complete violation of sovereignty of Cambodia.
The Chinese embassy in Cambodia opposes and emphatically condemns this act. We insist that the US side revise this method immediately and lift its sanctions totally.
European Court of Justice, GMAC v Commission [re EBA]
The applicant claims that the Court should:
— annul the Commission’s Delegated Regulation (EU) 2020/550 of 12 February 2020 (…) with regard to the temporary withdrawal of the GSP preferences for all customs codes that are affecting GMAC members (…)
In support of the action, the applicant relies on two pleas in law.
1. First plea in law, alleging that the Contested Regulation violates the principle of proportionality and the requirement of consistency between the Union’s policies and activities. The Commission allegedly failed to properly assess the proportionality of the partial temporary withdrawal of customs preferences for the Cambodian garments, footwear and travel goods sectors. C 287/42 EN Official Journal of the European Union 31.8.2020
2. Second plea in law, alleging a violation of the applicant’s procedural rights due to the Commission’s failure to provide adequate reasoning pursuant to Article 296(2) TFEU, corresponding to a violation of the right to good administration.
H&M, Comments on EU Trade Preference Withdrawal for Cambodia
H&M Group strongly agrees with the EU’s aim to address serious human and civil rights violations in Cambodia. We have had consultations with the government on labour rights and freedom of association, and also to express concerns about the human rights situation. We are, together with local and international stakeholders, as well as other brands, continuously working to develop a sustainable textile industry. While there are clear signs of progress, challenges remain. […]
The partial withdrawal of the EBA will have a negative impact on the employment of the people in the textile industry. […]
We fully recognise the complexities for the EU in balancing the need to influence Cambodia towards becoming a country where human and civil rights are respected, and to support job creation and poverty alleviation through inclusive economic growth.
ECBA, Statement on EC’s Cambodia Decision
EBCA supports the EU’s commitment to high social and labour standards and condemns any violations against human and labour rights and strongly encourages the Cambodian authorities to continue work on the Commission’s conditions for a decision reversal in accordance with Article 20 of the Generalised System of Preferences (GSP) Regulation. (…)
We urge the Cambodian authorities to commit to a better respecting of human and worker rights, as well as allowing more room for domestic political debate. We also would call upon the Commission to establish a clear roadmap and timeline for the Royal Government of Cambodia in order to track progress over the coming months. We would likewise ask for transparency and predictability from the Commission in their decision-making processes, as EBCA is committed to finding a positive solution for all parties involved.
Inclusive Development International, Case Brief [re Mitr Phol Sugar Case]
On March 28, 2018, a group of Cambodians who were forcibly displaced and dispossessed to make way for a sugarcane plantation owned and operated by Mitr Phol Sugar Corporation filed a class action lawsuit against the company in the Civil Courts of Bangkok, Thailand, where Mitr Phol is domiciled.
In January 2008, the Cambodian Ministry of Agriculture, Forestry and Fisheries (MAFF) granted three 70-year economic land concessions (ELCs) for industrial sugarcane production in the Samrong and Chongkal districts of Oddar Meanchey province to the three companies linked to Mitr Pohl.
Throughout 2008-2009, the plaintiffs and group members were forced to give up their land for the Angkor Sugar Company concession. Affected households lost extensive rice fields, plantation/orchard land, and grazing land as well as the associated crops that sustained their livelihoods. (…) Common property resources, including community-managed forests, were also lost or degraded as a result of Mitr Phol’s plantation development.
In May 2013, Cambodian NGOs Equitable Cambodia and LICADHO submitted a complaint on behalf of 602 affected families to the National Human Rights Commission of Thailand. Following an investigation by the Thailand Human Rights Commission between 2013 and 2015, the defendant submitted a request to the Cambodian government to cancel its economic concessions in Cambodia. All three concession agreements were cancelled on August 9, 2015. It appears that the defendant closed Angkor Sugar as a company that year as well.
Amnesty International, Cambodian Villagers Sue Mitr Phol to Thai Court
This case is significant from a regional business and human rights perspective as it could set an important precedent by enabling cross-border accountability for human rights abuses involving corporate actors in Southeast Asia. The submission by Amnesty International seeks to assist the court by setting out relevant international legal principles and standards, including Thailand’s obligations in relation to the right to remedy, access to justice, and non-discrimination in the context of transnational corporate abuses of human rights. (…)
“Today’s ruling is a watershed moment for human rights and corporate accountability in Southeast Asia. The decision rightly recognises that national borders must not provide corporations with a free pass to act with impunity, nor should they pose a barrier to anyone seeking justice for alleged human rights abuses.
“After a decade-long battle, the hundreds of affected Cambodian families will finally have their day in court after years of struggle and destitution. A powerful message has been sent to corporate actors across the region that they will be answerable for their conduct.”
CCHR, Asia’s First Transboundary Class Action on Human Rights Abuses
The transboundary class action Hoy Mai & Others vs. Mitr Phol Co. Ltd. is the first of its kind in Southeast Asia. (…)
For Thailand and the region, the decision changes the legal landscape, providing that class action legislation can be used in transboundary cases and to protect some of the region’s most vulnerable people. “The importance of this legal precedent cannot be overstated,” said Natalie Bugalski, Legal Director for Inclusive Development International. “This is a David vs Goliath case that will redefine access to justice for the victims of corporate abuse in Southeast Asia and beyond.”
It is also a key test of corporate accountability. Mitr Phol is the biggest sugar supplier in the region and has counted some of the world’s largest consumer brands, including Nestle, Coca-Cola, Pepsi, Mars Wrigley and Corbion, as past and current customers. While Coca-Cola took initial steps to investigate the allegations against Mitr Phol, it failed to use its leverage to compel the company to provide redress to the victims in Cambodia. Instead, in 2018, Coca-Cola informed Inclusive Development International that it no longer sourced sugar from Mitr Phol. It has never reported the termination of the supply relationship publicly. Mitr Phol is also a member of the sugar industry’s “sustainability” certification body Bonsucro, which is under scrutiny by the UK National Contact Point for the OECD (a government body that monitors the operations of British businesses overseas) for failing to hold Mitr Phol accountable for its abuses against these communities.
Earth Rights International, No Fish, No Food [re Don Sahong Dam]
A coalition of local, regional and international NGOs, filed a complaint today with the Human Rights Commission of Malaysia (SUHAKAM), requesting investigation of the impacts of the Malaysian-built Don Sahong Dam project on behalf of Thai and Cambodian communities faced with losing their main food source and the extinction of an endangered dolphin population. The complaint asks SUHAKAM to ensure that the Malaysian project developer, Mega First Corporation Berhad, complies with international human rights standards, including the responsibility to respect the rights to life and livelihood and the obligation to meaningfully engage with and inform affected communities. (…)
Middleton, NHRI, Extraterritorial Obligations and Hydropower in SEA
Despite the political challenges it faces, SUHAKAM is recognized as having made some progress on indigenous rights to land, on establishing a business and human rights agenda, and on maintaining its engagement with civil society. (…)
Given that domestic access to justice in some countries in Southeast Asia such as Laos, Cambodia, and Myanmar are extremely weak, civil society organizations have sought to make cross-border investments more accountable through utilizing arenas within the home countries of investors rather than the location of investment. This effort has led to the emergence of ETOs, especially in Thailand. The nascent practice of ETOs reflects a wider global trend in which transnational obligations are increasingly referenced in international human rights pronouncements. ETOs are, however, not universally endorsed, including due to the difficulties of conducting extraterritorial investigations.
- What is extraterritorial application of human rights laws and why it can be problematic?
- What are the effects of extraterritorial application of domestic laws? Do they succeed in increasing protection for human rights?
- How do stakeholders in Cambodia view extraterritorial laws in the area of business and human rights? Are they generally supportive or concerned about such laws?
- What can lawmakers do to address concerns about their extraterritorial laws?
- What types of extraterritorial jurisdiction can you identify? Are some types more problematic than others?
- David Hess, ‘The Transparency Trap: Non-Financial Disclosure and the Responsibility of Business to Respect Human Rights’, American Business Law Journal, v 56:1 (2019) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3300303.
- Jordan J. Paust, ‘Human Rights Through the ATS after Kiobel: Partial Extraterritoriality, Misconceptions, and Elusive and Problematic Judicially-Created Criteria’, 6 Duke Forum for Law & Social Change 31 (2014) https://ssrn.com/abstract=2486875.
- Olivier De Schutter et al., ‘Commentary to the Maastricht Principles on Extraterritorial Obligations of States in the area of Economic, Social and Cultural Rights’, Human Rights Quarterly 34 (2012) https://www.jura.uni-bonn.de/fileadmin/Fachbereich_Rechtswissenschaft/Einrichtungen/Lehrstuehle/Herdegen/de_Wet/SoSe_2016_IWR_und_MR/35_Commentary.Maastricht.pdf.
- Radu Mares, ‘Corporate Transparency Regulations: A Hollow Victory?’ Netherlands Quarterly of Human Rights (2018) www.researchgate.net/publication/326130140_Corporate_transparency_laws_A_hollow_victory.
- Phallack Kong, ‘Cambodia’ in Human Rights Resource Center (HRRC), Business and Human Rights in ASEAN: A Baseline Study (2015) http://hrrca.org/wp-content/uploads/2015/09/Business-and-Human-Rights-in-ASEAN-Baseline-Study-ebook.pdf.
- European Commission, Guidelines on Non-Financial Reporting(2017)https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017XC0705(01)&from=EN.
- European Parliament, Everything but Arms: The Case of Cambodia (2019) https://www.europarl.europa.eu/RegData/etudes/ATAG/2019/637931/EPRS_ATA(2019)637931_EN.pdf.
- U.S. Securities and Exchange Commission, Disclosing the Use of Conflict Minerals, Fact Sheet (2017) www.sec.gov/opa/Article/2012-2012-163htm—related-materials.html.
- Sherpa, Vigilance Plans Reference Guidance (2019) www.asso-sherpa.org/wp-content/uploads/2019/02/Sherpa_VPRG_EN_WEB-VF-compressed.pdf.
- Development International, EU Non-Financial Reporting Baseline Report and Company Snapshots (2019) www.ipoint-systems.com/nfrd-report-2018.
- Royal Holloway University of London, Blood Bricks: Untold Stories of Modern Slavery and Climate Change from Cambodia (2018) https://www.projectbloodbricks.org/s/Blood-bricks-high-res-v2.pdf.
- Asia Pacific Forum on Women, Law and Development (APWLD), The Bangkok Declaration on Extraterritorial Human Rights Obligations (2014), http://www.escr-net.org/sites/default/files/Bangkok%20Declaration%20on%20ETOs%20.pdf.
- Transparency International, Corporate Social Responsibility in Cambodia: A Guide on Practical Implementation (2018) http://ticambodia.org/library/wp-content/files_mf/1554347408CSREngVer.27.03.19.pdf.
- Thida Sreng, Human Rights Diplomacy: The Case of Cambodia, Master Thesis (2020) http://lup.lub.lu.se/student-papers/record/9020379.
- Kornkanok Wathanabhoom, Analysis of the Implementation of the UN Guiding Principles on Business and Human Rights in Terms of Extraterritorial Obligations Framework: Case Studies from the Greater Mekong Subregion, Master Thesis (2019) http://repository.essex.ac.uk/27024/1/1802848_Dissertation.pdf.
 John Ruggie, Business and Human Rights: Further Steps toward the Operationalization of the “Protect, Respect and Remedy” Framework, Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises A/HRC/14/27 (2010) http://www2.ohchr.org/english/issues/trans_corporations/docs/A-HRC-14-27.pdf.
 Note: see hard law (on extraterritoriality in general), and reporting and slavery chapters (on distinct laws).
 Human Rights Council, UN Guiding Principles on Business and Human Rights, Seventeenth Session (2011) http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.
 Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (United States) (2013) https://www.supremecourt.gov/opinions/12pdf/10-1491_l6gn.pdf.
 United States, Alien Tort Claims Act (ATCA) (1789), https://www.law.cornell.edu/uscode/text/28/1350#:~:text=The%20district%20courts%20shall%20have,treaty%20of%20the%20United%20States.
 Kamala D. Harris, The California Transparency in Supply Chains Act – A Resource Guide (2015) https://oag.ca.gov/sites/all/files/agweb/pdfs/sb657/resource-guide.pdf; United States, California Transparency in Supply Chains Act (2010) https://oag.ca.gov/sites/all/files/agweb/pdfs/cybersafety/sb_657_bill_ch556.pdf.
 UK Home Office, Transparency in Supply Chains – A practical guide (2015) www.gov.uk/government/uploads/system/uploads/attachment_data/file/471996/Transparency_in_Supply_Chains_etc__A_practical_guide__final_.pdf; United Kingdom, Modern Slavery Act (2015) http://www.legislation.gov.uk/ukpga/2015/30/section/54/enacted.
 ECCJ, French Corporate Duty Of Vigilance Law: Frequently Asked Questions (23 February 2017) http://corporatejustice.org/news/405-french-corporate-duty-of-vigilance-law-frequently-asked-questions.
 United States, Dodd–Frank Wall Street Reform and Consumer Protection Act (2010)
 European Union, Regulation (EU) 2017/821 of the European Parliament and of the Council laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas (2017) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32017R0821&from=ES.
 European Union, Directive 2014/95/EU regarding disclosure of non-financial and diversity information by certain large undertakings and groups (2014) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014L0095.
 European Parliament, Draft Report with recommendations to the Commission on corporate due diligence and corporate accountability (2020/2129(INL)) (11 September 2020) https://www.europarl.europa.eu/doceo/document/JURI-PR-657191_EN.pdf.
 European Union, Directive 2013/34/EU of the European Parliament and of the Council on the Annual Financial Statements, Consolidated Financial Statements and Related Reports of Certain Types of Undertakings (2013) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32013L0034.
 Extractive Industry transparency Initiative, The EITI Standard (2016) https://eiti.org/document/eiti-standard-2019.
 European Union, Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the Activities and Supervision of Institutions for Occupational Retirement Provision (IORPs) (2016) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32016L2341.
 European Union, Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (2017) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32017L0828.
 European Union, Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (2019) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019R2088&from=EN.
 U.S. Department of Justice, A Resource Guide To The U.S. Foreign Corrupt Practices Act (2015)
https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2015/01/16/guide.pdf; United States, Foreign Corrupt Practices Act of 1977 (FCPA) https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2012/11/14/fcpa-english.pdf.
 Maastricht Principles on Extraterritorial Obligations of States in the area of Economic, Social and Cultural Rights (2011) http://www.etoconsortium.org/nc/en/main-navigation/library/maastricht-principles/?tx_drblob_pi1%5BdownloadUid%5D=63.
 European Commission, Corporate Social Responsibility, Responsible Business Conduct, and Business & Human Rights: Overview of Progress (2019) https://ec.europa.eu/docsroom/documents/34963.
 Daniel Augenstein and Lukasz Dziedzic, State Obligations to Regulate and Adjudicate Corporate Activities Under the European Convention on Human Rights, EUI Department of Law Research Paper No. 2017/15 (2017) https://ssrn.com/abstract=3100186.
 Claire Methven O’Brien, The Home State Duty to Regulate the Human Rights Impacts of TNCs Abroad: A Case of Extraterritorial Overreach? University of Groningen Faculty of Law Research Paper 2016-31 (2016) https://ssrn.com/abstract=2854275.
 Sigrun I. Skogly, Extraterritoriality: Universal Human Rights without Universal Obligations (2010) https://eprints.lancs.ac.uk/id/eprint/26177/1/Microsoft_Word_-_Monash_-_Extraterritoriality_-_Final_draft.pdf.
 European Commission, Commission Decides to Partially Withdraw Cambodia’s Preferential Access to the EU market (2020) https://trade.ec.europa.eu/doclib/press/index.cfm?id=2113#:~:text=The%20European%20Commission%20has%20decided,on%20Civil%20and%20Political%20Rights.
 Ministry of Foreign Affairs and International Cooperation, Statement of the Royal Government of Cambodia in Response to the European Commission’s Decision to Launch the Formal Procedure for the Temporary Withdrawal of the Everything But Arms (EBA) Preferences for Cambodia (2019) https://pressocm.gov.kh/wp-content/uploads/2019/02/20190212-Ministry-Foreign-Affairs-International-Cooperation-ENG.pdf.
 Transparency International Cambodia, Business Brief (2017) http://ticambodia.org/library/wp-content/files_mf/1493710589BusinessBriefEnglish.pdf.
 Mech Dara, ‘Ministry to Probe Child Labour’, Phnom Penh Post (19 October 2018) https://www.phnompenhpost.com/national/ministry-probe-child-labour.
 NagaCorp, Code of Conduct and Anti-Corruption (2020) https://www.nagacorp.com/eng/cg/sectionB1.php.
 Mark Normington, ‘It’s the End of the Year, the Global Magnitsky Sanctions Are Here’, Global Witness (31 December 2019) https://www.globalwitness.org/en/blog/its-the-end-of-the-year-the-global-magnitsky-sanctions-are-here/?gclid=CjwKCAiAn7L-BRBbEiwAl9UtkMXNCgrME7A2YlXXLKI68rdf9yb4jq_4jUnwPmWE8EEk3p1-eiqCrRoCxp0QAvD_BwE.
 United States, Global Magnitsky Human Rights Accountability Act (2016) https://www.congress.gov/bill/114th-congress/senate-bill/284/text.
 Council for the Development of Cambodia, Press Statement (CDC Disappointed with U.S. Treasury Department’s Decision To Impose Sanctions On UDG) (20 September 2020) https://www.information.gov.kh/detail/496303.
 Chinese Embassy in Cambodia, Statement on the U.S. Sanctions against Chinese-funded enterprises in Cambodia, Press Release (16 September 2020) http://kh.china-embassy.org/chn/dssghd/t1815352.htm.
 European Court of Justice, Garment Manufacturers Association in Cambodia v Commission (Case T-454/20) (16 July 2020) https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62020TN0454&from=GA.
 H&M, Comments on EU trade preference withdrawal for Cambodia (2020) https://hmgroup.com/media/news/general-news-2020/h-m-group-comments-on-eu-trade-preference-withdrawal-for-cambodi.html.
 European Branded Clothing Alliance, Statement on European Commission’s Cambodia Decision (2020) https://www.ebca-europe.org/policy-priorities/international-trade/details/statement-on-european-commission-s-cambodia-decision.html.
 Inclusive Development International, Case Brief: Class Action Lawsuit by Cambodian Villagers Against Mitr Phol Sugar Corporation (2 April 2018) https://media.business-humanrights.org/media/documents/files/documents/Mitr-Phol-Class-Action-Case-Brief.pdf.
 Amnesty International, Thailand: Eviction Cambodian Villagers Sue Sugar Giant Mitr Phol; Amnesty International Submits Third Party Intervention to Thai Court (30 July 2020) https://media.business-humanrights.org/media/documents/files/documents/Public_Statement_AI.pdf.
 Amnesty International, Cambodia/Thailand: Court ruling on Mitr Phol watershed moment for corporate accountability in SE Asia (31 July 2020) https://www.amnesty.org/en/latest/news/2020/07/court-ruling-mitr-phol-case-watershed-moment-for-se-asia-corporate-accountability/.
 Cambodian Center for Human Rights (CCHR), Thai Appeal Court decision paves the way for Asia’s first transboundary class action on human rights abuses (31 July 2020) https://cchrcambodia.org/index_old.php?title=Thai-Appeal-Court-decision-paves-the-way-for-Asia-s-first-transboundary-class-action-on-human-rights-abuses&url=media/media.php&p=alert_detail.php&alid=80&id=5&lang=eng.
 Earth Rights International, No fish, No Food: NGO Coalition Files Complaints Against Don Sahong Dam Developer (2014) https://earthrights.org/blog/no-fish-no-food-ngo-coalition-files-complaint-against-don-sahong-dam-developer/.
 Carl Middleton, ‘National Human Rights Institutions, Extraterritorial Obligations and Hydropower in Southeast Asia: Implications of the Region’s Authoritarian Turn’, Current Research on Southeast Asia (2020) https://aseas.univie.ac.at/index.php/aseas/article/view/2684/2296.
Copyright © 2023 RAOUL WALLENBERG INSTITUTE.
All rights reserved