The Fundamental Rights Agency (FRA) has released its report on Business and human rights focusing on access to remedy. The report builds on their 2017 Opinion on “Improving access to remedy in the area of business and human rights at the EU level” and gathers data based on interviews conducted with business and human rights experts and practitioners in seven EU Member States (Finland, France, Germany, Italy, the Netherlands, Poland and Sweden. It aims to provide useful evidence for EU action.
Justice at Last welcomes the report, especially the mention of the reversal of burden of proof and the review of Rome II to allow the choice of law for victims, however, it notes that future due diligence legislation does not mention the need for civil liability in case of breaches.
Shifting the burden of proof
A major obstacle facing victims is the rules on the burden of proof. The main reason for this is because ‘disclosure’ – the obligation to release documents and other information by a business entity in a legal dispute – either does not exist in most European legal systems or is available in only a limited way. The FRA recommends the burden of proof be shifted in cases where the fundamental rights of individuals are infringed by corporate activity. Most European legal systems do provide for some degree of reversal in the burden of proof, for instance in cases relating to discrimination or in labour laws. Secondly, the EU should develop clear minimum standards on disclosing information by companies to ensure access to information in order to allow victims to establish a claim. The upcoming review of the Non-Financial Reporting provides an opportunity for this.
Improving availability of collective redress or representative action
One of the hurdles faced is the ability of CSOs to represent victims. The EU must take action to remedy this by ensuring legislation that provides for representative action by CSOs as well as statutory human rights organisations. There is a need for effective collective redress and representation action in cases of business-related human rights abuse.
Supporting civil society organisations
The report underlines the common practice of big corporations exerting pressure on CSOs when representing victims of big corporations. This includes the use of Strategic Lawsuits Against Public Participation (SLAPPs) to intimidate claimants through expensive and frustrating legal proceedings. The EU should introduce strong measures against practices of Strategic Lawsuits Against Public Participation (SLAPPs) as well as ensuring that CSOs receive adequate funding and legal protection.
Strengthening non-judicial mechanisms
The report calls on Member States to strengthen the role of non-judicial mechanisms in the business and human rights field and the role of national human rights institutions, Ombudsman institutions and consumer protection.
Mitigating Financial Risk
The report calls on the Member States to review legal aid mechanisms to see that they take into account the potentially high costs that may be incurred in cases concerning the violation of human rights by corporations as well as other mechanisms to balance the disparity between claimants and corporations.
Addressing challenges in cross-border cases
Interviewees speak of the difficulty of third-country nationals who have had their rights violated by an EU company to hold the company responsible. Two issues here are: choosing the applicable law and the applicable jurisdiction. One suggestion included amending EU law (Rome II) to allow for choice of law so victims of business-related human rights abuse could bring claims for compensation against EU companies before the courts where the company has its ‘statutory seat’, its ‘central administration’ or its ‘principal place of business’, i.e. the EU.
Improving horizontal human rights due diligence
There is an important link between human rights due diligence and legal liability. In this vein, the report calls for future legislation on mandatory horizontal due diligence covering both environmental and human rights impacts of business operations and establish consequences for companies not complying with the regulation as well as ensuring access to remedy for rights holders affected by corporate malpractice. Whilst the Non-Financial Reporting Directive is suggested as a reporting mechanism, there is no reference to civil liability in the case of a breach.
“Obstacles to achieving justice are often multi-layered. Rules on the burden of proof are a major hurdle, as are stringent requirements relating to accessing documents. Collective redress and representation by statutory human rights bodies and civil society organisations can help counter power imbalances, but are only permitted in limited circumstances. Legal aid, though similarly invaluable, is not always available. Cross-border cases are especially difficult to resolve. Even preliminary steps like establishing jurisdiction and determining what country’s laws apply can be immensely complex, derailing proceedings before they gather steam. Nonjudicial mechanisms can be a sensible alternative, but need to be strengthened. Prevention efforts, too, need to be bolstered. Due diligence obligations and impact assessments that explicitly address human rights issues can help flag problems before they result in harm.”
Michael O’Flaherty – Director of the Fundamental Rights Agency (FRA)
Read the full report here.