At an event organised by Clifford Chance, Notre Dame Law School and Business & Human Rights Resource Centre in September 2014, Claes Cronstedt from Lawyers 4 Better Business (L4BB) presented L4BB’s proposal for an International Arbitration Tribunal on business and human rights.  The idea that there should be another way to enable victims of corporate human rights abuses to seek remedies when competent courts cannot, came up after the US Supreme Court decision in Kiobel v. Shell.  In this lawsuit, brought by a group of Nigerians against Shell over alleged complicity in torture and extrajudicial killing, the Supreme Court severely limited the ability of victims of human rights abuses abroad to bring cases against companies in the US.

The proposed Tribunal would:

• maintain rosters of highly regarded jurists and attorneys who are familiar with human rights law, and have particular expertise in business and human rights;
• act in a fair and impartial manner;
• have universal civil jurisdiction;
• apply tort/delict principles which are found in most national legal systems;
• in appropriate cases, the Tribunal would have the authority to award compensation;
• cover all internationally-recognised human rights.

Further details about the criteria in the various proposals are available here.

There was a lively discussion on the proposal at the September event.  What follows is a brief summary of the main challenges facing the International Arbitration Tribunal, as expressed by lawyers and civil society representatives who commented on the proposal.

A central challenge of the Tribunal will be to instil confidence in parties bringing claims, both businesses and victims.  Both parties need to have confidence in the Tribunal’s processes and decisions.  If the Tribunal is a standing body, as opposed to an ad hoc tribunal, the risk is that the parties will feel that permanent judges would favour one side over the other.  The same goes for the type of law that the Tribunal would apply.  National law may not be the most adequate when transnational corporations are involved.  If the Tribunal applies the law ex aequo et bono, i.e. according to equity and good conscience, it raises questions of lack of predictability.  Another question that would need to be examined further is whether there will be a right to appeal the decisions of the Tribunal, and if so, who would hear the appeal.

A fundamental question on transparency also comes into play.  For victims, it is important that justice is not only done, but also seen to be done, and that they can access all the relevant information.  However, companies tend to prefer confidential proceedings, and there might be legitimate reasons for this when dealing with private contracts, etc.  In terms of participation and accessibility to the institution, civil society actors could play a role in assisting communities in accessing the Tribunal.  Many questions regarding the funding of the Tribunal remain, including as to how lawyers for the victims would be paid.  The issue of inequality of arms between victims and companies (with often almost unlimited legal, technical and time resources) could seriously limit the number of cases going through the Tribunal.  However Claes and other participants feel that this obstacle is not unsurmountable.  One possible solution is to create a voluntary fund financed by governments, but the question remains on whether companies would be willing to contribute.

There is no doubt that one of the positive and attractive propositions of an International Arbitration Tribunal would be the speed of its procedures in comparison to a traditional lawsuit before a national court that could take years and even decades. 

The proposal is still in its development phase. At this stage, further explorations and discussions are necessary to convince sceptics, particularly on the issue of certainty – an issue critical to business – and on the issue of whether the Tribunal would make a real difference on the ground – an issue critical to victims.

Access to justice for victims of corporate of human rights abuses continues to be a major concern.  Only time will tell whether an International Arbitration Tribunal is the solution.  In the meantime, it is clear that the current gap in formal corporate accountability mechanisms is narrowing, and states, companies and civil society have little choice but to act swiftly to make access to justice for victims of corporate abuses a reality. 

You can help by commenting on the International Arbitration Tribunal proposal here – comments by all are welcome.