Business and Human Rights: A New Lens on Rule of Law and Access to Justice

Business and Human Rights: A New Lens on Rule of Law and Access to Justice

Podcast with Lucas Roorda

The rule of law is fundamentally about regulating the conduct of powerful actors, be they states or corporations. Just as states are bound by rules that protect human rights, corporations, given their significant influence on our lives, should also adhere to these rules.

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Olena Uvarova: Hello, and we continue our podcast series on the rule of law and corporate actors. I’m happy to introduce Lukas Roorda, Assistant Professor of the Department of International and European Law at Utrecht University and also a research chair at the Utrecht Center for Accountability and Liability Law. Lukas, hello, and thank you very much for agreeing to participate in our series.

Lucas Roorda: Thank you for the invitation. It’s been a very interesting podcast series, and I’m happy to be a part of it.

Olena Uvarova: Thank you very much. My first question to you is, what comes to your mind when you hear the rule of law and corporate actors?

Lucas Roorda: That’s a question with so many answers, so many facets. But I think the core question, of course, is the rule of law is really about structuring and regulating the conduct of powerful actors. That’s the whole idea of the rule of law. Like it doesn’t matter how much power you have, there’s a system that you have to abide by. In the past, we tended to think of the state as the most powerful actor, which I think is still correct, and that the rule of law, to a large extent, tells us what the state can and cannot do. Especially if we think of human rights as a component of the rule of law, like our limits, we are imbued with rights that states cannot touch or can only touch with a particular justification. If we take that thought, we can extend that to corporations. If we realize that corporations in certain ways affect our lives just as much as the state does, they can hold just as much or similar power over us. Then the question is, how do we make sure that they also, no matter their power, no matter their position, have to follow this set of rules and can only behave themselves in certain ways, including with respect to our human rights. I think that’s the core question.

Challenges in Access to Justice in Case of Corporate Human Rights Abuses

Olena Uvarova: Thank you for this point. Our key focus for today’s podcast is access to justice in litigations against private companies. When we are talking about access to justice traditionally, we, of course, are talking about barriers to access to justice. When we’re talking about this kind of cases, could we say that we have the same barriers to access to justice, or can we list some additional barriers?

Lucas Roorda: I think it’s best to say it’s different. And maybe before we really get to the barriers to accessing justice, I think it’s good to realize that there’s a sort of distinction that you have to make between where something happens. So under human rights law, if you have your rights abused, if you have a negative human rights impact, in principle, the state where that happened has a responsibility or at least an obligation to give you access to justice, to give you access to remedies, a way to remedy what went wrong, remedy the violation. The same goes if the state was the one that conducted the violation itself, or the corporation conducts the violation, the state should protect you against the corporate conduct. If they don’t, they have an obligation to ensure access to remedies that can be non-judicial, but it can also be access to court.

So if you’re talking about the sort of domestic situation, you talk about basically the same problems with companies and states, roughly speaking. I mean, of course, there are some exceptions, but the main problem is if the state doesn’t do that, if it doesn’t give you that access to justice, if it doesn’t have a well-functioning court system, where do you go? And we see in the past that victims of corporate human rights violations have then looked not just to the state where it happened, but also to the state where the corporation came from or its parent company came from, or the lead company where its manufacturing company supplies to where it comes from.

So if you have a clothing factory, who does that factory sell its clothes to? Are they owned by a brand? Are they supplying to a brand? And they basically trace that line back to the home state of the parent company or the lead company. So it could be the Netherlands or it could be the UK, it could be France. That’s when you come into a situation where the Netherlands and France, they don’t have obligations to give you access to justice because what happened didn’t happen on their territory, didn’t happen in their jurisdiction, but there might still be ways in which victims can bring their case. It can still be a legitimate complaint from a civil law perspective. If they do that, that’s when they encounter barriers to access to justice. These can include the jurisdiction of the court.

So whether or not the civil courts of that home state can even take on that case, or whether it’s too foreign for them, it can be whether or not you have access to legal aid, whether you have access to lawyers, whether you have access to evidence. That’s what we collectively call barriers to justice or barriers to access to remedy. These are things that prevent legitimate claims from coming into courts, like claims where otherwise, on a merit basis you’d say, “No, there’s a reasonable complaint here,” but for other reasons that may or may not be reasonable, it doesn’t come before a court or it doesn’t really have a chance of succeeding. It’s not unique to cases against corporations, but because of the transnational business practices, these cases do occur quite often in the context of corporations. They are different from, let’s say, if you would sue the Dutch state, because then that would only be possible if the Dutch state acts directly in another territory, and that has all these implications for sovereignty and so on. That’s where you really see the difference between corporate conduct with extraterritorial tentacles all over the place and state companies.

 Olena Uvarova: And I have one more question, probably just a step back about terminology because I have a feeling that in the business and human rights field, sometimes it doesn’t align with classical or traditional jurisprudence terminology. For example, when we are talking about barriers to access to justice in a general context, sometimes we use human rights risks and consider human rights risks as barriers to access to justice, such as discriminatory practices or something like that. But is it correct for the business and human rights field to use such terminology?

Lucas Roorda: I think so. It’s also very difficult to define what business and human rights means. I’m not going to even go into the relationship with corporate social responsibility. But the way I like to think about it is in two ways. They are connected. So the first way is you have all these interactions between different fields of law and different actors. You have a bit of private law, a bit of criminal law, a bit of public international law, human rights, and in some cases, European law. They all come together around the problem of business operations and the harms caused by business operations. You can draw a line around that and call it business and human rights. It’s a way to describe a number of interactions between different fields and different actors.

The other way is not just to draw that line but also to make that into your normative perspective. So if you call something a business and human rights problem, that tells you two things. On the one hand, you’re looking from the perspective of human rights that have been harmed by business conduct. And there’s a duty bearer somewhere. Whenever you call something a rights problem, it means that there’s a rights holder, someone who has rights that have been impeded. And you also have a corresponding duty bearer. What business and human rights tells you is that either directly or indirectly, businesses can be looked at as duty bearers in this respect. So not just businesses or states are still relevant duty bearers also in the business and human rights context. But labeling something a BHR problem describes it and also gives you a normative outlook. It’s basically a pair of glasses that you put on to look at a problem.

And if you do that, I think you can very reasonably use all other human rights doctrines and concepts and ways in which we understand human rights generally and problems that manifest themselves in other aspects of human rights and see how they work in a business and human rights problem. Because if you say businesses have a responsibility to respect human rights, that also means you can think about the various ways in which they can affect human rights, but also how they can improve human rights. And that incorporates all this case law and jurisprudence on what human rights mean, or used to mean, only in the state context. So yeah, I definitely think you can use that terminology just by labeling it a human rights problem and by putting businesses as one of the duty bearers, again directly or more as a responsibility in that problem.

Reevaluating Rule of Law Indexes: Considering Corporate Impact

Olena Uvarova: Thank you very much for this response. And actually, to go back to your previous response, in one of the podcasts with Nadia Bernas, we discussed that some business models are based on operations in environments lacking the rule of law. It correlates with what you said about the key problem with access to justice in these cases, where some companies operate in jurisdictions with a lack of the rule of law. So if we take this into account, should we add some additional indicators and criteria to the rule of law indexes and to our understanding of the rule of law as a general concept and the related ratings indexes?

Lucas Roorda: Why would that be necessary? What would we achieve?

Olena Uvarova: Should we add these indicators when we assess the rule of law environment in a specific country? Because there’s a lack of information even in the World Justice Project’s rule of law index about the impact of corporate actors in a given legal system. So from the perspective of access to justice in specific jurisdictions, in cases against corporations, and from the perspective of how well-established democracies with a relatively high level of the rule of law environment react or don’t react to these barriers to access to justice in other jurisdictions for their corporate actors. Should we use these criteria for assessing the rule of law in a specific country? What do you think? Because right now we have the rule of law index, but it doesn’t truly reflect these issues.

Lucas Roorda: Yeah, a good question. I don’t necessarily have a problem with adding it in the sense that if you want to talk about and have some kind of indication of what the rule of law situation is in the country, just looking at it in isolation, pretending as if it’s not affected by foreign investment, by foreign companies, I think is fiction. So in that respect, I can absolutely agree that having some kind of indicators or measurements, I don’t know what would be the best way to do it, but having some kind of indicators, which is already going on, to understand how much is influenced by foreign corporate conduct is helpful to understand the situation in context.

However, my main gripe is that I don’t think it solves much because states already know. First of all, a lot of the situations where corporations can exploit weak rule of law systems, exploit economic inequalities, are a consequence of systems that were deliberately created by states. So the way we’ve organized our liberal economic trade system, for example, the way we organize foreign investment, the way we organize free movement of capital, everything around privatization and liberalization, is not something that came about by accident. This is the product of a well-developed economic and political philosophy. So just saying, “Look, this is what corporations do”, I think also obscures what home states do. That’s one.

The other thing is that if you look at how states continue to protect corporations that way, like if you look at, for example, investment regimes, and I’m pretty sure you talked about this as well. This is one of my topics too. There’s a weird sort of shrouding our justice system situation going on where. If Western states conduct investment treaties with states, and I say this between brackets, the global South, so certain Asian countries, certain African countries, even certain Latin American countries, they will insert all these clauses to give corporations and investors specific protection with the presumption that the local justice system isn’t fair and doesn’t work sufficiently to protect investors.

So if you don’t do that, you run the risk of being expropriated, yadda yadda yadda. It’s like really like a post-Cold War way of thinking.

Those are still there and those are still being concluded. And on the other hand, if the corporations then are sued in home state courts, as something that came up time and time again in my research, they will argue, and of course will sometimes agree that, this case is actually better at home in the state where they invested and where the harmful acts occurred. So apparently the justice system abroad is completely unfair and corrupt and not working for corporations, but it is more than sufficient to deal with rights holders and their injustices. States know this. This is not an accident. So I’m all for having these indicators in the rule of law index, but I don’t think we should pretend like that’s not very clear to states already.

Maybe one last thing that’s good to highlight here is that I think the primary document in business and human rights, the UN Guiding Principles, which in a lot of ways are a very good thing that contributed so much to the discussion.

So, I don’t want to make it seem that this is a negative development. It is not. But I think one of the major weaknesses is that they operate on the presumption that this current economic system, with its inherent inequalities, with business models that are predicated on exploitation, should and can continue. That it is possible to reform or change it in a way that keeps the system as it is intact, but can make it sufficiently human rights compliant. And I would really challenge that presumption. And they also don’t give any guidelines as to like if you have to conclude this business model or this business practice cannot be done sustainably, cannot be done in a human rights compliant way, what do you do? When do you leave? How do you leave? What are the consequences? What do we do with consumption patterns? Do we mean to an extent? If we take this seriously, we have to accept that some things are going to be impossible. Your €12 shirt is impossible in a human rights compliant economic system. So and those are things that I think the UNGP do not account for sufficiently built on the idea that the system as it is and this is explicit, by the way, this is not something secret should and can continue. So we know and if we don’t and if we don’t go to the more fundamental conclusions. I don’t think adding it to the rule of law index changes much.

Exploring the Role of Non-Democratic Regimes and Corporations

Olena Uvarova: Great point. And I should say that we also had a podcast with my good colleague, initially from Belarus, and she is based now in Lithuania, Yekaterina Deikalo, about business and human rights in non-democratic regimes. And it’s also a very interesting discussion of what companies could do when they operate in non-democratic regimes. And from our perspective, when we have this experience of non-democratic regimes and some countries are still there, of course, corporations could have a very positive impact on the political system. And it’s probably the easiest way to say companies go away from non-democratic regimes, countries. But sometimes the truth is that corporations could be the most influential drivers of positive changes in these non-democratic regimes.

Lucas Roorda: If I can pick up on that just a bit, I don’t want to be too cynical in that respect. So what I see in my research currently, and I’m working mostly on these mandatory human rights due diligence instruments of legislation and there’s a lot of huffing and puffing around the development of going, but it’s so difficult for companies to deal with these states that are inherently unfriendly. And that’s used as an argument against this legislation, which I don’t understand that. I understand sort of superficially what they’re trying to do with it. But if you go one step further, it actually doesn’t quite make sense, because it’s not like if you don’t have this legislation that the that sort of the dilemma goes away. The dilemma will still be there. But this legislation gives you an opportunity as a state to help companies that do want to do responsible business, find actors on the ground, find contract partners, find other companies that try to at least try to act responsibly and reinforce them, do business with them, find the right contract partner and not  just like refrain from doing stuff, but also contribute to that positive change. And I think we should be kind of careful about giving companies this responsibility of eliciting positive change. And that’s coming from a perspective where I don’t think corporations should have a general responsibility over public governance at all, given they’re not democratically accountable. But in your business decisions, you can do make bad decisions, but you can definitely also make good and improving decisions. And the whole idea of human rights due diligence is to assess, get information, learn from it, learn from earlier impacts, and have this sort of ongoing process of learning, hopefully guided by states and whatever knowledge they have on the situation on the ground. So rather than say, this is the reason we should not do it, no, this this is the reason why we should do it. We should create a process for this and create assistance, guidance, information, to help  companies do well. And  again, I might be cynical  in some respects, but I’d rather have that sort of learning process than nothing, then nothing at all.

Olena Uvarova: I should say that is a perfect final point for our discussion and  thank you. Thank you very much for so many great ideas. And I’m sure that our listeners will enjoy to to hear this podcast. Thank you very much. And I enjoyed it.

A Long Road Ahead: Advancing Accountability and Judicial Remedies

Lucas Roorda: Maybe one thing I can add to that. I was hoping I think it’s good to end on the positive side, but the one thing and that’s very connected to my own research and my work on accountability, which I’ll take full responsibility for not addressing before, I do still see a lot of uneasiness with states, also the states that develop this legislation, for giving control to victims. And if we talk about human rights, if we talk about the human rights approach, if we call something business and human rights, what it means is that the rights holders are in the driver’s seat. And if we talk about barriers to remedy, what they do is impede rights holders from asking questions about their rights. And even if that all that the due diligence legislation, a lot of the more relevant ones, the practical barriers, the costs, access to representation, stuff that is often used as an argument for not litigating at home remains an issue in these  supposedly strong democratic rich home states. If you don’t have access to legal aid, how are you ever going to be able to conclude like a multi-year litigation project against a corporation with I don’t know how many times the resources you have.

And it really seems even in the development of this legislation, how many local communities, rights holders, foreign states, host states, production countries, whatever you want to, however you want to conceptualize it, have actually been consulted. Like have they been at the table? No. And do we create the conditions in all these norms for them to participate in the discussion, to participate also in the legal discussions and the accountability discussions? Well, maybe on paper, but not in practice. And that’s I think, where really the apart from sort of recognizing the inherent problems with this, this economic system lies. And really the step towards actually meaningfully involving rightsholders all the way up until accountability and judicial remedies all the way up until their day in court. And I think we’re quite a long, long way from that. That’s I think where the big, big, big improvement currently is, regardless of the positive steps we’re, we’re taking.

Olena Uvarova: Yeah, great. And it’s a good step to look on the problem of access to remedies from a much broader perspective of business and human rights. Thank you again very much. It was great pleasure to talk with you.

Lucas Roorda: Thank you very much.