1 In search of justice and corporate accountability in Europe

Following World War II, multinational enterprises (MNEs) emerged as the main actors of economic globalization.¹ The rapid growth of foreign investments, and the adoption of international legal rules that encourage international trade, allowed MNEs, based mainly in Western countries, to develop their activities throughout the rest of the world. As a result, they now dominate economic activity across the world and operate in all sectors.² MNEs can contribute to economic prosperity and social development in the countries where they operate. However, their activities may also directly or indirectly cause, or benefit from, harm to humans and the environment.³ Following a number of widely publicized corporate scandals over the past years, MNEs have faced growing criticism from international organizations, civil society organizations (CSOs),⁴ and academics over their involvement in human rights abuses and environmental damage, especially in developing countries.⁵

The case of the oil industry in Nigeria provides a clear example of poor environmental practices by MNEs resulting in severe environmental destruction and human rights abuses.⁶ For example, intensive use of gas flaring has resulted in severe air pollution and acid rain. Continuous oil spills have also contaminated land and water, destroying important natural resources and the livelihoods of local communities. In turn, the impact of oil pollution on local communities in the Niger Delta has been severe and has resulted in health problems, polluted drinking water, and unproductive soils and ponds.⁷ In addition to violations of the right to a clean environment, constant abuses of other human rights, such as the rights to property and to life, have been reported.⁸ In general, the worst cases of corporate-related human rights abuses occur in countries where governance challenges are greatest. According to the United Nations (UN), the risk of business-related harm is especially high in low-income countries, in conflict-affected or post-conflict countries, and in countries where the rule of law is weak and the level of corruption is high.⁹

In various cases, victims of business-related harm have sought to obtain redress in the country where the abuse took place. However, they have faced various legal, procedural, and political obstacles, such as inadequate regimes of liability or procedural rules. In poor countries, MNEs may provide the State with its main source of income, thus creating a situation where States are reluctant to regulate corporate activities. Furthermore, judicial institutions may be unreliable, as a result of severe delays in legal proceedings or corruption. MNE subsidiaries may also become financially insolvent, preventing victims from obtaining financial compensation.¹⁰ Moreover, the political situation of the host country may be unstable, thereby creating a risk of State abuse of human rights and a lack of real legal protection.¹¹

During the 1990s, new types of claims emerged that challenged MNEs’ activities in developing countries. In order to have access to remedy, and to hold MNEs liable for the abuse of human rights and environmental damage occurring in the context of their global business activities, victims and non-governmental organizations (NGOs) started bringing liability claims against MNEs directly in their home countries. An increasing number of claims have been brought for human rights abuse or environmental damage occurring in foreign countries (host countries) against MNEs in the country where they are headquartered or have their main business activity (home country).¹² In this book, this legal phenomenon will be referred to as ‘transnational litigation against MNEs’. The character of the claims falling under this type of litigation varies considerably, ranging from tort suits for environmental pollution caused by oil spills to criminal proceedings alleging forced labour, or contractual liability claims for violations of international law. In addition, these cases raise complex legal questions and require overcoming important procedural obstacles. To date, these claims have rarely resulted in a court ruling in favour of the plaintiffs. Nonetheless, the number of transnational claims against MNEs is increasing and expanding to more countries.

Until recently, transnational litigation against MNEs was mainly concentrated in common law jurisdictions in the global North, most notably in the United States (US) and England.¹³ In the 1990s in the US, foreign victims brought the first tort claims against MNEs under the Alien Tort Statute (ATS)¹⁴ for violations of international customary law or international treaties to which the US was a contracting State. At the same time in England, the first tort claims against MNEs were based in common law. In these proceedings, plaintiffs raised the tort liability of the parent company for damage arising out of its subsidiary’s activities in foreign countries, often under the law of negligence.

Nonetheless, since the beginning of the 21st century transnational litigation against MNEs has developed significantly in European countries of civil law tradition. If cases against MNEs in common law and civil law countries hold in common the search for remedy and corporate accountability, they are different in their form. While the use of tort claims has been the favoured approach in common law countries, plaintiffs have used both civil and criminal litigation against MNEs in European civil law countries. For instance, Total, a French oil and gas MNE, faced various criminal lawsuits in France and Belgium for gross human rights abuses which had taken place in Myanmar in the 1990s.¹⁵ In 2013, an NGO filed a tort claim in Sweden against Boliden Mineral AB, a Swedish company, for dumping 20,000 tonnes of toxic mining waste in Chile in the 1980s.¹⁶ In Germany, a senior manager of Danzer, a timber trading company, was accused of failing to prevent its Congolese subsidiary from participating in State-sponsored violence against civilians in the Democratic Republic of Congo (DRC).¹⁷ In Switzerland, Nestlé, a food MNE, faced a criminal lawsuit for its involvement in the murder of a trade unionist in Colombia.¹⁸

Overall, there is an increasing trend for MNEs to face liability claims in the national courts of European countries over human rights abuses and environmental damage taking place in developing countries.¹⁹ Despite the difference in the nature of these claims, they share a common aim, which is to hold parent companies of MNEs liable for the negative impacts of their global activities. These claims represent ‘the flip side of foreign direct investment’,²⁰ as they target the parent company ‘as the apparent “orchestrator” of company-wide investment standards and policies’.²¹

In parallel to the emergence of transnational litigation against MNEs, the debate on access to justice and corporate accountability has gained momentum with the development of the business and human rights (BHR) field. At the international level, States, NGOs, businesses, and international organizations have discussed the need to regulate MNEs to hold them responsible for the human rights abuses and environmental pollution they cause. In 2008, the UN Human Rights Council (UNHRC) adopted the UN ‘Protect, Respect and Remedy’ Framework (UN Framework). This policy document aims at ‘adapting the human rights regime to provide more effective protection to individuals and communities against corporate-related human rights harm’. In 2011, the UN Framework was completed by the UN Guiding Principles on Business and Human Rights (UNGPs),²² which aim at providing recommendations for the implementation of the UN Framework. Both the UN Framework and the UNGPs recognize three complementary and interdependent principles, or ‘pillars’: (1) the State duty to protect against human rights abuses by third parties, including businesses; (2) the corporate responsibility to respect human rights; and (3) the need for effective access to remedy.

Under the third pillar, or the ‘remedy pillar’, the UN Framework acknowledges that victims of corporate abuse have sought remedy outside the State where the harm occurred, particularly through home State courts, but have faced extensive obstacles. These challenges may deter claims and prevent victims from gaining effective access to remedy. In order to avoid such a situation, the UNGPs provide that States, as part of their duty to protect against business-related human rights abuse, must take appropriate steps, through judicial, administrative, legislative, or other means, to ensure that victims have access to effective remedy and to guarantee the effectiveness of domestic judicial mechanisms.

Also of importance is the inclusion, under the second pillar on corporate responsibility to respect human rights, of ‘human rights due diligence’ (HRDD), which is seen as ‘a process whereby companies not only ensure compliance with national laws but also manage the risk of human rights harm with a view to avoiding it’.²³ It is also described as ‘the steps a company must take to become aware of, prevent and address adverse human rights impacts’.²⁴

Following the adoption of the UN Framework and the UNGPs, some States have enacted legislation, or have adopted policy instruments, to impose due diligence upon corporate actors and improve effective access to remedy. In Europe in 2017, France enacted groundbreaking legislation imposing a general ‘duty of vigilance’ on parent and controlling companies in respect of the impact of their global activities on human rights and the environment.²⁵ Any damage resulting from the failure to respect this duty may lead to liability in tort for these companies. HRDD legislation has also been enacted in the Netherlands²⁶ and Germany,²⁷ while some countries such as Finland,²⁸ as well as the European Union (EU),²⁹ are discussing the adoption of such legislation. In most of these States, the growing influence of the corporate accountability movement has been a key trigger in the adoption of these legislative and policy instruments, and the inclusion of access to justice as a topic of major importance.

Regional supranational actors in Europe have also increasingly paid attention to the debate on corporate accountability and access to justice, especially since the adoption of the UN Framework and the UNGPs. First of all, the EU recognized the UNGPs as an ‘authoritative policy framework’ and stated the importance of working towards their implementation in the EU, as ‘better implementation of the UNGPs would contribute to EU objectives – some of them enshrined in the Treaties – in relation to specific human rights issues’.³⁰ This is an important statement, as the EU is a major economic player. It is home to a large number of MNEs and has competence in fields touching upon the economic life of the Union. As a result, any policies and/or standards it adopts on BHR issues are likely to have a significant impact in the EU and beyond. However, until recently the EU has shied away from imposing legal obligations on companies, preferring a voluntary approach based on corporate social responsibility (CSR).³¹ Moreover, the EU’s contribution to the implementation of the UNGPs has been insufficient so far. It has lacked a general vision on BHR and has adopted a piecemeal approach to the implementation of the UNGPs.

In relation to the effective access to remedy pillar, the Treaty of Lisbon has, over the years, strengthened the role and powers of the EU institutions in the field of civil and criminal justice, imposing a general requirement on the EU to facilitate access to justice.³² Article 47 of the Charter of Fundamental Rights of the EU (EU Charter),³³ which has the same legal binding force as EU treaties, also guarantees the right to an effective remedy and to a fair trial. Despite this increase in power in the justice field, the EU has, however, neglected to offer a targeted and comprehensive response to the need for effective access to remedy in the context of corporate abuse, especially when such abuse takes place extraterritorially. To date, the 2017 opinion of the EU Agency for Fundamental Rights (EU FRA) on improving access to remedy in the area of BHR at the EU level³⁴ is the only policy document providing a general approach for further work on the third pillar.

Another important regional actor is the Council of Europe (CoE), which offers one of the most developed legal regimes protecting the right to an effective remedy through the European Convention on Human Rights (ECHR)³⁵ and the case law of the European Court of Human Rights (ECtHR). Following the adoption of the UN Framework and the UNGPs, the CoE initiated a reflection on the feasibility of setting new standards in the field of CSR. It stressed the central place of the UNGPs as an authoritative reference point for its work on this topic.³⁶ Notably, there were discussions on the elaboration of a complementary legal instrument, such as a convention or an additional protocol to the ECHR, on human rights and business. However, the CoE ultimately refrained from adopting binding standards for companies to respect human rights. Furthermore, while the CoE has recognized the importance of effective access to remedy in the context of corporate abuse, it has neglected to spell out a coordinated and effective approach to guarantee the adequate implementation of the third pillar.³⁷

Finally, under the auspices of the United Nations Economic Commission for Europe (UNECE), the Aarhus Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention)³⁸ guarantees the right of access to justice to members of the public in specific situations, including when private persons contravene national environmental law. However, the interplay between the Aarhus Convention and the third pillar of the UN Framework and the UNGPs has not been explored yet, and it remains to be seen whether the Aarhus Convention can play an effective role in improving access to remedy in the context of business-related environmental pollution. Overall, European supranational organizations have lacked an ambitious approach to imposing corporate accountability and improving access to justice for victims of business-related harm, despite their economic power (EU) or their role in guaranteeing human rights (CoE) and the protection of the environment (UNECE) in Europe.

2 Aim of the book

This book aims to explore the interplay between access to justice and corporate accountability through the study of transnational litigation against MNEs, especially in European civil law countries, and ongoing legal and policy reforms at the international, European, and national level. Using national litigation experiences as a starting point, and focusing on the European region, this book asks the following questions: how effective has litigation against MNEs been in achieving access to justice and corporate accountability in Europe? Furthermore, how will ongoing regulatory developments, both legal and policy, achieve access to justice and corporate accountability in the future?

To answer these questions, this book follows an analysis in three stages. It first describes the wider legal and social context in which demands for access to justice and corporate accountability have emerged. It then compares civil and criminal litigation against MNEs for their involvement in human rights abuse and environmental damage in two European civil law countries, namely France and the Netherlands. This second part assesses how the substantive and procedural laws applying to transnational litigation against MNEs create opportunities and/or challenges for foreign victims of business-related harm when they seek to obtain remedy and hold MNEs accountable before domestic courts. Finally, this book questions how recent international, European, and national regulatory developments may contribute to the realization of access to justice and corporate accountability in the future.

3 Scope

This book focuses on European civil law countries for a number of reasons. Until recently, transnational litigation against MNEs had been predominantly practised in common law countries,³⁹ and most of the existing scholarship had, therefore, largely focused on litigation under the ATS in the US⁴⁰ and tort-based claims in England⁴¹ and other common law countries (eg the US, Canada, and Australia).⁴² For some time, scholars generally assumed that transnational litigation against MNEs was a legal phenomenon limited to, or mainly possible in, common law countries.⁴³ However, the significant development of transnational litigation against MNEs in European civil law countries since the beginning of the 21st century has provided material to reflect on the adequacy of the legal systems of these States to deal with such claims and the feasibility of seeking justice through their courts. Importantly, the progressive decline of the ATS as an instrument to hold corporations accountable in the US⁴⁴ and the threat of the potential reintroduction of the doctrine of forum non conveniens in the United Kingdom (UK) following Brexit⁴⁵ are likely to push litigators to look at other jurisdictions for litigation opportunities. In this respect, European civil law countries may look attractive, in particular in a context where an increasing number of these States and the EU are adopting mandatory HRDD statutes likely to open the door to a new type of litigation against corporations for their impact on human rights and the environment. As a result, research on the contemporary challenges of access to justice in European civil law countries is timely due to the likelihood of its growing importance.

This book focuses on France and the Netherlands for two main reasons. First, the recent increase in the number of claims brought against MNEs in these countries, especially in France, provides sufficient material from which to draw conclusions on the accessibility of their legal systems for victims of corporate abuse and the transformative potential they hold for corporate accountability. Second, France and the Netherlands are European countries of civil law tradition. They share a common legal history, which has, to some extent, influenced the shaping of their current legal systems.⁴⁶ Therefore, it is instructive from a comparative law perspective to assess the similarities and differences in the way these countries treat transnational claims against MNEs. It also allows for a better understanding of the influence of legal culture on transnational claims against MNEs and whether this type of litigation has developed its own characteristics in civil law countries. Furthermore, their legal and procedural frameworks are, to a certain extent, influenced by the existence of common institutions and rules in Europe. Since the end of World War II, various regional organizations, such as the EU, CoE, and the UNECE, have contributed to the development of a common legal and policy framework, which is now shared by a majority of countries in Europe.

It should be said that the above-mentioned developments and the growing popularity of access to justice as a research and advocacy topic within the BHR sphere have already led to an increasing interest by scholars and CSOs in the study of claims brought against MNEs in countries outside the common law tradition.⁴⁷ As a result, a number of academic and non-academic studies were published on claims against MNEs in Europe during the time of the research for this book.⁴⁸ However, this book remains relevant as it provides a comparative study of both civil and criminal claims against MNEs in civil law countries. Until recently, the existing scholarship mainly focused on the study of tort claims and, as a result, the study of the role of criminal proceedings as a means to achieve MNE accountability remains largely unexplored.⁴⁹ Furthermore, this book analyses how the most recent BHR developments – that is the increasing adoption of mandatory HRDD legislation and the negotiations for a legally binding instrument on BHR⁵⁰ – will contribute to the achievement of access to justice and corporate accountability.

4 Key concepts

This book adopts a number of frequently used terms that need to be defined and understood from the outset.

Multinational enterprises

There is a multitude of types of business entities operating across borders and, consequently, various terms are used to describe them (multinational corporations, transnational corporations, etc).⁵¹ Different definitions may focus on the type of foreign investment (direct/portfolio), the nature of operations (transnational/multinational), or the extent of managerial control.⁵² In its 2011 Guidelines for Multinational Enterprises (OECD Guidelines), the Organisation for Economic Co-operation and Development (OECD) provides for a flexible definition of MNEs:

The OECD’s definition of MNEs is the one used in this book. This definition insists on ‘the ability to coordinate activities between enterprises in more than one country’.⁵⁴ It is broad enough to encompass various legal forms of undertaking while emphasizing the notion of direct investment.⁵⁵ As this book will show, MNEs’ structure, organization, and management are significant obstacles to holding parent companies and other entities of MNEs accountable.

Corporate accountability

This book explores the use of legal mobilization as a strategy to achieve corporate accountability. It is not concerned with the search for corporate responsibility through private regulation and other types of soft law instruments.⁵⁶ As a result of linguistic constraints imposed by the English language, and to represent various legal realities, this book distinguishes between the concepts of corporate responsibility, liability, and accountability.⁵⁷

Responsibility refers to ‘a moral obligation to behave correctly towards or in respect of’ something or someone. Thus, corporate responsibility imposes a moral, not a legal obligation upon companies.⁵⁸ Liability evokes ‘the state of being legally responsible for something’.⁵⁹ As a result, corporate liability implies a legal obligation upon companies. Accountability refers to the fact or condition of being ‘required or expected to justify actions or decisions’.⁶⁰ Therefore, corporate accountability is a wider concept than corporate liability. It encompasses ‘the idea that those accountable should be answerable for the consequences of their actions’ and refers to both legal and non-legal risks.⁶¹

Transnational litigation against MNEs

In the existing scholarship on transnational litigation against MNEs, authors use various expressions to talk about claims alleging the liability of corporate actors in the context of foreign investment, including ‘foreign direct liability litigation’ and ‘transnational human rights litigation’.

Ward was the first author to use the expression ‘foreign direct liability’ (FDL). She described it as follows:

Ward distinguishes between domestic liability claims raising ‘the direct responsibilities of corporations under international law’ (eg the ATS in the US) and other domestic claims raising the liability of parent companies in home country courts.⁶³ However, she suggests that both types of litigation question the contribution and the adequacy of existing international or national legal frameworks to solve issues of transnational corporate accountability.⁶⁴ Following Ward, other authors have used the same expression, most notably referring to tort claims brought directly against the parent company of an MNE before its home country courts for its involvement in activities occurring in foreign countries. For instance, Enneking, who has written extensively on this topic, has used the term ‘foreign direct liability cases’ to refer to:

As a result, other types of claims, such as criminal complaints, have rarely been regarded as FDL litigation. Other authors have used the expression ‘transnational human rights litigation’, especially in the context of tort claims for violations of international human rights law under the ATS in the US.

In this book, the use of both expressions is excluded. The expression ‘transnational litigation against MNEs’ is favoured in order to emphasize the cross-border dimension and, as a result, challenges of this type of litigation. Furthermore, the transnational nature of legal claims against MNEs echoes that of the economic activities of the same actors across borders. It also highlights the contemporary challenges created by economic globalization, particularly foreign investment, to classical theories of the domesticity of law, State sovereignty, and international law. The expression ‘transnational litigation against MNEs’ is also broader, as it includes not only tort proceedings, but also criminal proceedings, as well as liability claims against not only parent companies but also their subsidiaries, partners, or other companies under control. It also covers litigation not only for human rights abuse but also for environmental damage. Ultimately, the expression ‘transnational litigation against MNEs’ is broad enough to encompass the variety of legal strategies used by litigators to hold MNEs to account and obtain remedies.

5 Background to the book

Transnational litigation against MNEs is the indirect result of the imbalance between the economic and political power accumulated by MNEs following an increase in foreign investment and trade over the last decades, and the absence of legal responsibility for the harm they may cause in the context of their worldwide activities. This situation demonstrates a two-speed globalization: while companies have benefited from the considerable development of economic globalization, victims of corporate wrongdoing have been left behind as a result of unachieved legal globalization. This asymmetrical situation has led to counter-hegemonic globalization, or ‘insurgent cosmopolitanism’, where ‘oppressed groups’ organize their resistance on the same scale and through the same type of coalitions used by their ‘oppressors’ to victimize them.⁶⁶ The corporate accountability movement is the visible face of this insurgent cosmopolitanism and has organized in the same way as MNEs through transnational networks. Access to justice is a significant aspect of the identity of the corporate accountability movement. In this context, access to justice goes beyond simply access to a court or to a remedy. It also means holding businesses to account and claiming a paradigm shift in the way the law envisages business actors.

Globalization

Transnational litigation against MNEs is directly linked to the debate on corporate accountability in the context of globalization.⁶⁷ Generally, authors disagree on the nature and the novelty of globalization, as well as its normative values and processes.⁶⁸ De Sousa Santos insists on the fact that globalization comprises a very broad set of phenomena and dimensions and, as a result, there is no ‘one sole entity called globalization, instead there are globalizations’.⁶⁹ The existing legal scholarship offers various definitions of the concept of ‘globalization’. Twining defines it as economic, political, social, and cultural processes that ‘tend to create and consolidate a unified world economy, a single ecological system, and a complex network of communications that covers the whole globe, even if it does not penetrate to every part of it’.⁷⁰ Other authors insist on the fact that national frontiers are becoming irrelevant in the context of globalization.⁷¹ For Garcia, globalization is ‘the sum total of political, social, economic, legal and symbolic processes rendering the division of the globe into national boundaries increasingly less important for the purpose of individual meaning and social decision’.⁷² Ultimately, globalization is an economic, political, social, and legal phenomenon where the relevance of national borders and sovereignty to individual and societal decision-making processes is challenged.

In the more recent phase of economic globalization, MNEs have gained in power and influence.⁷³ However, the law has been slow to respond to this evolution and inadequate in controlling MNEs’ behaviour.⁷⁴ Although the modern MNE emerged in the second half of the 19th century, MNEs started to acquire unprecedented importance in international production following World War II.⁷⁵ The period from the 1990s until the time of writing has seen the influence of MNEs grow as a result of various factors, including growth in foreign direct investment (FDI), the adoption of truly global production chains by MNEs, a marked shift from raw materials and manufacturing towards services-based FDI, and the development of major regional trade and investment liberalization regimes, alongside the establishment of the World Trade Organization (WTO). As a result, MNEs can potentially bring economic and social benefits to the countries where they operate. At the same time, they may also pose a threat to the enjoyment of human rights and a clean environment.⁷⁶

If international law has allowed MNEs to increasingly gain rights in the fields of foreign investment and international trade, thus facilitating their global expansion, it has also been unable to ensure that MNEs respect human rights or the environment, especially in States where regulation provides little protection to individuals or the environment. MNEs may use their ‘transboundary subjectivity and structure’ to escape from liability when they cause harm to people or the environment in other countries.⁷⁷ Moreover, international law is fragmented into a myriad of treaties and institutions with different objectives, sets of values, and decision-making processes. The excessive specialization in each field of international law, and the lack of coordination and dialogue among those various fields, contribute to the creation of conflicts, especially between international economic law and international human rights law. Garcia suggests that these conflicts raise a problem of justice, as ‘the inquiry into the effects of market globalization on human rights law becomes an inquiry into how the economic facts and regulatory infrastructure of globalization enhance, or interfere with, the contributions which international human rights law seeks to make towards the attainment of justice’.⁷⁸ National law also appears ill-adapted, as its predominant focus on domestic issues and its devotion to the economic persona have impeded its effectiveness in regulating and controlling MNEs.⁷⁹

At the same time, globalization has given rise to new demands on corporations to exercise their power responsibly and to account for it. It can exert a transformative effect on corporate accountability, turning it from a choice into an imperative.⁸⁰ Transnational litigation against MNEs is the visible face of these demands. Several aspects of the interplay between globalization and transnational litigation against MNEs must be considered here.

First, the processes of globalization are fundamentally changing the significance of national and societal boundaries, generally making them less important.⁸¹ In the same way, transnational claims against MNEs challenge territorial conceptions of State jurisdiction firmly embedded in international and domestic legal systems. In particular, they point out ‘the mismatch between the territorial scope of State regulatory jurisdiction and the globally integrated organisation of the MNE’.⁸²

Second, globalization has renewed the debate on legal personality.⁸³ While businesses have insisted on keeping a traditional interpretation, advocates for greater corporate accountability have supported new definitions of legal personality under international law.⁸⁴ Similarly, plaintiffs in transnational claims against MNEs have challenged the application of separate legal personality and limited liability to MNEs.

Third, a variety of significant actors who are relevant to the analysis of patterns of legal and law-related relations in the modern world are emerging in the context of globalization.⁸⁵ While MNEs are increasing their economic and political importance on the world stage, transnational activist movements advocating for new forms of corporate accountability are becoming influential in shaping international and domestic policies and laws through various strategies, including legal mobilization. Ultimately, transnational claims against MNEs represent one aspect of the globalization of the international legal system.⁸⁶ Paul holds that they ‘represent both a frustration with the limits of traditional international institutions and cooperative regimes and a positive step toward building a new international legal order’.⁸⁷

Another fundamental characteristic of the litigation discussed in this book, which is reinforced by globalization, is its transnational legal nature. Jessup defines the term ‘transnational law’ to include ‘all law which regulates actions or events that transcend national frontiers. Both public and private international law are included, as are other rules which do not wholly fit into such standard categories’.⁸⁸ Importantly, transnational law may not be formally enacted by States, as it may be concerned with legal activity involving various actors, including States but also individuals, corporations, CSOs, and other groups.⁸⁹ Transnational litigation against MNEs reflects the intertwining of both public and private international law, as these claims raise not only questions of private international law (eg the choice of jurisdiction or applicable law) but also issues of public international law (eg the application of international human rights and environmental law to non-State actors in cross-border situations). It also involves a variety of actors, such as lawyers and CSOs, who seek to influence regulatory behaviour by challenging the application of legal norms and practice beyond borders.

Transnational claims against MNEs also provide an example of the concept of ‘interlegality’, described by De Sousa Santos as the phenomenological dimension of legal plurality in which ‘everyday life crosses or is interpenetrated by different and contrasting legal orders and legal cultures’.⁹⁰ Interlegality is:

In Europe, transnational claims against MNEs reveal the interactions between various legal orders, namely EU/Member States, host/home countries, international/national. Furthermore, litigators have developed creative legal strategies, mixing aspects of different legal orders, to challenge the perceived increase in corporate power and force a debate on corporate accountability for human rights and environmental abuse.

Social movements and cause-lawyering

Since the 1990s, CSOs and lawyers have played an important role in ensuring that global companies are held accountable for human rights and environmental abuse.⁹² Therefore, the concepts of social movements and cause-lawyering are useful for understanding how the development of transnational litigation against MNEs is closely associated with the existence and the demands of the corporate accountability movement.⁹³

Scholars from various fields of social sciences have written extensively on the concept of ‘social movements’.⁹⁴ Therefore, there is no unique definition of what a social movement is. Diani provides a basic definition of social movements as ‘networks of informal interactions between a plurality of individuals, groups and/or organisations, engaged in political or cultural conflicts, on the basis of shared collective identities’.⁹⁵ In general, social movements are different from interest groups, political parties, protest events, and coalitions.⁹⁶ According to Della Porta, four elements are common in social science definitions of social movements: a network structure, the use of unconventional means, shared beliefs and solidarity, and the pursuit of some conflictual aims.⁹⁷ Della Porta and Diani argue that the beginning of the 21st century saw the emergence of a wave of mobilizations for a ‘globalization from below’.⁹⁸ They also call this new wave the ‘global justice movement’. Della Porta and Diani suggest that the initiatives of the global justice movement are very heterogeneous and not necessarily connected to each other. Actors address a range of issues, from child labour and corporate human rights abuses to deforestation. Their initiatives take a myriad of forms and different points of view.⁹⁹

Keck and Sikkink have also provided a landmark analysis of transnational advocacy networks.¹⁰⁰ They argue that activist networks, both transnational and national, share similar central values or principled ideas, make creative use of information, and employ sophisticated political strategies in targeting their campaigns.¹⁰¹ In particular, Keck and Sikkink suggest that:

It was pointed out earlier that De Sousa Santos describes different globalizations.¹⁰³ In this context, he distinguishes between hegemonic and counter-hegemonic globalizations. One mode of production of counter-hegemonic globalization is ‘insurgent cosmopolitanism’.¹⁰⁴ De Sousa Santos describes this as follows:

An important feature of insurgent cosmopolitanism, as defined by De Sousa Santos, is ‘the aspiration by oppressed groups to organize their resistance on the same scale and through the same type of coalitions used by the oppressors to victimize them, that is, the global scale and local/global conditions’.¹⁰⁶

Insurgent cosmopolitanism lies at the heart of the mobilization and construction of the corporate accountability movement. At the beginning of the 21st century, CSOs, lawyers, and victims started grouping together to challenge corporate impunity and demand accountability for business-related human rights abuse and environmental damage resulting from the various processes of economic globalization. They have organized their resistance through transnational activist networks, thus operating on the same scale as MNEs.¹⁰⁷ They have also mobilized financial and modern communication resources to build campaigns and other activities, such as transnational litigation against MNEs, which help them strategically to achieve their aims. In particular, the corporate accountability movement focuses on the role of States and national courts in imposing human rights and environmental obligations on companies. Ultimately, the corporate accountability movement is a major actor in counter-hegemonic globalization.

The interactions of the corporate accountability movement with cause-lawyers have contributed to the development of transnational litigation against MNEs as a strategic form of legal mobilization.¹⁰⁸ The concept of cause-lawyering poses a number of definitional challenges, as a result of the range of possible settings and styles of cause-lawyering.¹⁰⁹ Generally, cause-lawyers are activist lawyers who seek to use the courts as a vehicle to achieve social change or social justice beyond the individual claim at stake.¹¹⁰ Menkel-Meadow defines cause-lawyering as ‘any activity that seeks to use law-related means or to change laws or regulations to achieve great social justice – both for particular individuals (drawing on individualistic “helping” orientations) and for disadvantaged groups’.¹¹¹

Cause-lawyering contrasts with conventional lawyering in the sense that cause-lawyers participate in parallel advocacy and legal reform activities for the benefit of the cause they fight for. Furthermore, scholars suggest that cause-lawyers have the propensity to transgress conventional or generally accepted professional ethical standards of legal practice, such as neutrality, client selection, or partisanship.¹¹² Another important aspect of cause-lawyering is that it is often said to be characteristic of common law countries, especially the US, where strategic litigation and public interest litigation are widely accepted.¹¹³

Various types of cause-lawyers have been involved in transnational claims against MNEs. While plaintiffs have been represented by lawyers practising in activist law firms in the UK, the Netherlands, and Belgium, claims against MNEs have been led by NGOs created by lawyers in France and Germany. One commonality between these lawyers is that they are specialized in human rights, environmental, and, in particular, corporate accountability litigation. These cause-lawyers demonstrate a particular legal entrepreneurship, as they make ‘creative use of existing laws and procedures’ to seek redress and challenge corporate impunity in the home country of MNEs.¹¹⁴ Furthermore, they have been involved in advocacy and legal reform activities in parallel to litigation.

Access to justice

Access to justice is a central concept of this book. However, defining access to justice is a difficult task, as there is a lack of clarity or consensus about what it means.¹¹⁵ In the context of this book, the multidimensional nature of access to justice raises several questions pertaining to the dichotomy between the procedural and the substantive nature of access to justice, the difference between access to justice and access to remedy, and the meaning of ‘effective access to justice’.

Procedural versus substantive access to justice

Access to justice is often conceived from a procedural perspective.¹¹⁶ However, its substantive nature is equally important. Discussing the problem of access to justice in the US context, Rhode rightly asks the following question: ‘To what should Americans have access? Is it justice in a procedural sense: access to legal assistance and legal processes that can address law-related concerns? Or is it justice in a substantive sense: access to a just resolution of legal disputes and social problems?’¹¹⁷ This question has been debated beyond the US legal sphere for a long time now. In the 1970s, access to justice received particular attention in the work of Cappelletti and Garth.¹¹⁸ According to these authors, the words ‘access to justice’ serve to focus on two basic purposes of the ‘legal system’.¹¹⁹ Access to justice means that the legal system must be ‘equally accessible to all’ and lead to results that are ‘individually and socially just’.¹²⁰ Their basic premise is that ‘social justice, as sought by our modern societies, presupposes effective access’.¹²¹ The effectiveness of justice is undermined when litigants must overcome barriers resulting not only from procedural rules but also from the social realities and practicalities shaping the legal system, such as litigation costs, party capability (including financial resources and competence to recognize and pursue a claim or defence), and the existence of diffuse interests.¹²² Cappelletti and Garth observe that ‘the obstacles created by our legal systems are most pronounced for small claims and for isolated individuals, especially the poor; at the same time, the advantages belong to the “haves”, especially to organizational litigants adept at using the legal system to advance their own interests’.¹²³ However, any reform to improve effective access to justice must take into account that barriers to access, as a result of their interrelationship, cannot simply be eliminated one by one.¹²⁴

Access to justice is a central aspect of the rule of law and, as a result, the procedural and substantive aspects of access to justice take on a different meaning. Ghai and Cottrell argue that a critical feature of the rule of law is the equality of all before the law and, as a result, that all persons are entitled to the protection of their rights by State organs concerned with the enforcement of law, particularly the judiciary.¹²⁵ Nonetheless, in such a context, there is a narrow and broad meaning of the concept of access to justice. The narrow approach focuses on the courts and other institutions administering justice, and with the process whereby a person presents a case for adjudication. The broader approach, however, addresses the process of lawmaking, the contents of the law, the legitimacy of the courts, alternative modes of legal representation, and dispute settlement.¹²⁶ Ghai and Cottrell also suggest that access to justice means more than being able to raise one’s case in a court or other judicial institution:

Therefore, as a broad concept, access to justice goes beyond the processes of getting to the courts. It can be understood as covering ‘the entire machinery of law making, law interpretation and application, and law enforcement’. It also covers ‘the ways in which the law and its machinery are mobilized, and by whom or on whose behalf’.¹²⁸

The way we understand the nature of access to justice may need to be extended for disadvantaged and marginalized groups in order to respond to the specific needs of these groups. Discussing access to justice by people with disabilities, Flynn adopts a definition ‘which goes beyond the formal legal system and questions of “access” to this, to a more holistic understanding of what justice means for people with disabilities’.¹²⁹ To fully understand the various barriers experienced by people with disabilities in accessing justice, Flynn sets an intersectional frame for analysis in which she notably considers the work of Bahdi – who defines access to justice as comprising three distinct but interlinking components, namely substantive, procedural, and symbolic — with reference to the lived experience of people with disabilities.¹³⁰

First, substantive access to justice ‘concerns itself with an assessment of the rights claims that are available to those who seek a remedy’.¹³¹ It focuses on the content of the legal rules and principles which shape the decisions made about those who make a ‘justice’ claim. Flynn argues that substantive access to justice ‘extends beyond individual tribunal or court rulings into the realms of constitutional and statutory law reform processes and demands the adoption of laws promoting substantive equality which are sensitive to social context’.¹³² The substantive element of access to justice requires the development of laws and policies that promote substantive equality. However, this cannot be achieved without the involvement of the disadvantaged group. Flynn notes that the negotiation of the Convention on the Rights of Persons with Disabilities (CRPD) is often acknowledged to be the most inclusive human rights treaty-drafting process with an overwhelming number of CSO participants. One result is that this ‘involvement can be directly linked to the innovative articulation of equality of opportunity which appears in the CRPD’.¹³³

Second, procedural access to justice ‘is closer to the traditional, or narrow, interpretation of “access to justice” as the process by which claims are adjudicated, generally in legal or administrative systems’. However, a wider approach to the procedural component of access to justice should include ‘the type of institutions where one might bring a claim, the rules that govern the complaint and conduct of the parties once the complaint is brought within a particular institution, the particular mandate of a given institution and the factors – outside of the substantive law itself – which influence the nature and quality of the encounter for [individuals] within a particular legal institution’. In order to achieve procedural justice, one should examine the opportunities and barriers to getting one’s claim into court or another dispute resolution forum.¹³⁴

Third, symbolic access to justice steps outside doctrinal law and asks to what extent a particular legal regime promotes citizens’ belonging and empowerment. This requires a society in which individuals from marginalized communities are fully included and empowered to participate as equal citizens, thanks in part to that society’s laws and justice system. Symbolic access to justice is closely linked to the ‘precursor access to justice question’, meaning ‘the extent to which law can be harnessed to achieve progressive social change’.¹³⁵ Flynn argues that a participatory component of access to justice should be added to this definition, which reflects the importance of participation of disabled people in all aspects of the life of their communities.¹³⁶

Access to justice or to remedy?

When unpacking the concept of access to justice, the question of the relationship between access to justice and access to remedy arises. Is access to remedy comparable to access to justice? While both concepts are intertwined, access to remedy does not imply access to justice. From a lexical perspective, the words remedy and justice have different meanings. While the Oxford Dictionary defines remedy as ‘a means of legal reparation’,¹³⁷ it defines justice as ‘just behaviour or treatment’ or ‘the quality of being fair and reasonable’.¹³⁸ While access to remedy entails obtaining ‘reparation’ or compensation for the loss suffered, access to justice appears to have a broader meaning than access to remedy, as it presupposes obtaining just or fair and reasonable treatment.

The distinction between access to remedy and access to justice is particularly relevant in the BHR context; both terms can be found in the BHR literature. However, there is no clear conceptual distinction between the two terms. The UNGPs, which have shaped the debate about BHR over the last decade, focus solely on access to remedy. They do not mention access to justice once. The UNGPs state that access to effective remedy has both procedural and substantive aspects. In particular, ‘the remedies provided by the grievance mechanisms … may take a range of substantive forms the aim of which, generally speaking, will be to counteract or make good any human rights harms that have occurred’.¹³⁹ The UN Working Group on the issue of human rights and transnational corporations and other business enterprises (UNWG) has clarified the difference between access to remedy and access to justice.¹⁴⁰ The concept of access to effective remedies is derived from, and dependent on, the right to an effective remedy. However, simply providing access to remedial mechanisms will not suffice. At the end of the process, there should be an effective remedy in practice. This is why access to an effective remedy as having both procedural and substantive aspects is recognized in the UNGPs.¹⁴¹ Access to justice, on the other hand, is a more elastic concept than the notions of the right to an effective remedy and access to an effective remedy. The UNWG explains:

As a result, the meaning of access to justice varies depending on whether it is understood from an individual perspective (where it can be equated with access to remedy) or a societal perspective (where it requires more than access to remedy to benefit others and society as a whole). Both meanings, however, produce different expectations and outcomes, which may lead to tension. This tension has been visible in the context of out-of-court settlements between plaintiffs and MNEs, as will be seen later in this book.

Effective access to justice

Even when there is access to justice, one can question whether this is effective. What does effectiveness mean in the context of access to justice? According to the Oxford Dictionary, effectiveness means ‘the degree to which something is successful in producing a desired result’ or success.¹⁴³ Therefore, based on the aforementioned understandings of access to justice, ‘effective access to justice’ can mean several things. From a procedural perspective, it means the successful opportunity to bring a legal complaint to the legal system, meaning the courts or other bodies with the authority to adjudicate, in order to solve a dispute. However, from a substantive perspective, it means the successful opportunity to see one’s claim be treated in a fair manner or lead to just outcomes. Although interrelated, both visions of ‘effective access to justice’ differ.

The question of what effectiveness means in relation to access to justice has gained renewed interest over recent years.¹⁴⁴ Looking at civil legal services, Albiston and Sandefur claim that an explicit theory of ‘effectiveness’ is still lacking.¹⁴⁵ Nonetheless, the current socio-legal literature offers a broad base for conceptualizing effectiveness on the individual, institutional, and societal levels. Based on this literature, Albiston and Sandefur suggest defining effectiveness more broadly in order to shift the ‘focus from individualistic measures limited to legal remedies to consider how legal problems affect the well-being of claimants, their families, and society in multiple, interconnected ways’.¹⁴⁶ They explain the need for such a theoretical move based on several arguments that resonate with the approach taken in this book. First, when looking at legal representation, effectiveness encompasses more than case outcomes, so any definition of effectiveness should therefore consider the broader, systemic effects of representation on individuals and those around them. Second, not all outcomes relevant to effectiveness are material; some operate at the level of social meaning, such as empowerment (or disempowerment) of individuals who claim their legal rights. Third, effective legal representation may help clients overcome subjective barriers to accessing legal rights that address, for instance, poverty and inequality. Importantly, legal representation may provide important benefits beyond an individual case. It can improve perceptions of fairness.

Access to justice and corporate accountability

The aforementioned conversations about the meaning of access to justice are relevant and, at times, resonate with ongoing debates on access to justice and corporate accountability in the context of transnational litigation against MNEs.

Transnational litigation against MNEs raises access to justice issues of both a procedural and substantive nature. Complainants have faced various procedural barriers when seeking to hold MNEs to account and obtain remedy for the harm they have suffered. One of these obstacles has been the victims’ difficulty in accessing a court that will hear their claim, especially when legal doctrines such as forum non conveniens apply.¹⁴⁷ The inability for victims to bring group claims has also been a major hurdle. On a substantive level, existing international and domestic liability regimes have failed to take into account the reality of corporate groups’ impacts on humans and the environment. In transnational claims against MNEs, current standards of corporate liability make it almost impossible for plaintiffs to hold the parent company of an MNE liable for the harm occurring in the context of its group activities.¹⁴⁸

Transnational litigation against MNEs also raises access to justice issues of a symbolic nature. Plaintiffs, lawyers, and NGOs have challenged not only the perceived impunity of businesses towards human rights and the environment in the context of foreign investment, but also international, regional, and national lawmaking processes, the contents of corporate liability regimes, and the role of national and regional courts in protecting the interests of the most vulnerable. As such, transnational litigation against MNEs questions the extent to which the legal system can lead to fair and just outcomes regarding corporate accountability. Moreover, it has shed light on the inability of legal and justice systems to include, take into account the specific needs of, and empower victims of harm caused by MNEs, especially when they are poor and from developing countries. More broadly, this reflects the exclusion of citizens from economic, legal, and political decisions in both host and home States.

Ultimately, transnational litigation against MNEs is a search for justice for both the direct victims of corporate abuse and society at large. It aims to restore the balance between the interests of corporations and those of the most exposed elements in society by influencing policy-makers and courts.

6 Structure of the book

This book is divided into nine chapters grouped under three parts.

Part I aims to describe the legal and social backdrop against which demands for access to justice and corporate accountability have emerged in home countries, especially in Europe. Chapter 1, which is the present chapter, introduced the setting, aim, scope, key concepts, and background of this book. Chapter 2 discusses how international and European legal systems regulate the activities of business actors and guarantee access to justice, and presents existing normative gaps. Chapter 3 provides a historical, legal, and social account of the general development of transnational litigation against MNEs. It describes the main characteristics of the various cases brought in common law and European civil law jurisdictions. Finally, Chapter 3 sheds light on the relationship between social movements and transnational litigation against MNEs.

Part II aims to understand whether transnational litigation against MNEs in European home countries of civil law tradition has been an effective strategy to achieve justice for victims of business-related harm abroad. Chapter 4 and Chapter 5 compare the relevant legal and procedural aspects of civil and criminal litigation in France and the Netherlands respectively. They use case law to illustrate the opportunities and barriers faced by plaintiffs while seeking to hold corporations accountable, and highlight similarities and differences in the legal strategies used by plaintiffs. Chapter 6 deals with the study of civil and criminal corporate liability regimes in the context of MNEs in France and the Netherlands.

Part III offers a comprehensive analysis of the most recent regulatory responses towards achieving access to justice in the field of BHR at international, European, and national levels. Chapter 7 discusses the development of mandatory HRDD legislation at national and European levels, and its potential impacts on access to justice. Chapter 8 then examines the current negotiations on a potential legally binding instrument on BHR, as well as the potential options and impacts on access to justice. Finally, Chapter 9 evaluates the achievements of transnational litigation against MNEs in Europe and discusses the potential future of access to justice in the context of BHR.