Author: Stéphane Brabant
The hereunder presentation is adapted from a speech given during a seminar on ‘Mining and Oil and Gas Law: Transactions and Dispute Resolution’, jointly organised by the International Association of Lawyers and the Senegalese Bar Association in February 2017.
A few years ago, it was still unrealistic to raise the topic of compliance with human rights with companies, and particularly with mining and oil & gas companies. This area was still largely perceived as States’ exclusive realm while the primary purpose of companies was to generate profit. This is true. But should it be at all costs? Can companies operate at the expense of fundamental rights?
The idea that companies must also promote fundamental human rights is new. It is an idea of a new century – the 21st century. We owe this awareness to the late Kofi Annan, a man from the African continent, and probably amongst, if not the greatest man of the 21st century.
This wake-up call was brought about thanks to Kofi Annan’s efforts, then UN Secretary-General, and John Ruggie, Professor at Harvard Kennedy School, appointed in 2005 as Mr. Annan’s UN Special Representative on human rights and transnational corporations and other business enterprises. Together, they elaborated principles and procedures to ensure that companies embrace this new mindset and acknowledge that going forward they will have to reconcile their activities with the respect for fundamental human rights of all affected stakeholders such as workers, local communities or even consumers.
Promotion of fundamental rights is indeed the most important element for a project to be sustainable and profitable, for banks to be reimbursed, for insurers to be spared, for shareholders to obtain return on investment, for the State to find a balanced source of income and for local communities to be respected.
No one is mistaken in that respect. Nowadays, even banks, especially banks in fact, agree that a sustainable mining or hydrocarbons project must be a project that complies with all fundamental rights. How can we concede that a mining project could lead to the pollution of waterways? How can we accept that a mining project will result in the expropriation of entire local communities without fair compensation and relocation for each community member, and especially the most vulnerable?
All this is no longer acceptable and it is this 21st century idea that now prevails. This paradigm shift has extra territorial legal consequences. It is interesting to note that recently, a Canadian mining company was brought before Canadian courts with regard to allegations of slavery, forced labour, torture and crimes against humanity. Harsh words for a 21st century mining company. The applicants claim that the company aided and abetted abuses perpetrated in Africa by its local subcontractors, controlled by the State and the army.
Today, mining activities can only be viable and acceptable if they are indeed socially responsible. Yet the above-mentioned case reflects a grim reality: according to the International Labour Organization, 21 million people worldwide are victims of forced labour, trafficking or modern slavery and the illegal profits from their exploitation are estimated at 150 billion dollars.1
It is against this bitter background that the new trend that companies shall be compelled to promote human dignity emerged. Through a number of texts, amongst which the United Nations Guidelines on Business and Human Rights adopted unanimously by the Human Rights Council in 2011, procedures and tools are now in place to ensure that projects are compliant with human rights.
Thanks to the adoption of these Principles – some of them having been incorporated into positive law – globalization, which was primarily economic and financial, now extends to social and human concerns. As a matter of fact, these issues are not evolving in a legal vacuum but we must go even further than positive law.
These new principles apply to everyone and in all countries. They affect not only all companies, whatever their size, but also every human being in every country of the world. These are principles without borders as they embody universal rights. These principles are in issue before international arbitration tribunals in investment disputes. They are even increasingly incorporated in investment treaties, constitutions and laws. In Senegal, the 2016 Mining Code states this very clearly with the obligation to respect and protect human rights,2 in accordance with the 2009 Ecowas Directive on the Harmonization of Guiding Principles and Policies in the Mining Sector.3
Nowadays, companies are being challenged to think further, to assess risks, not only to themselves, but also henceforth, to any potential victims. The mindset of companies must indeed change. In our modern world, our approach must be not only to identify where tax or commercial risks lie, but also to pay attention to human rights risks generated from or even simply related to their activities and track, prevent, mitigate or provide remedies in relation to those risks to women and men involved in any project.
Time has come for companies to get involved in more than just philanthropy. The construction of a hospital is satisfactory, but is no longer sufficient. It is also necessary to anticipate any adverse impacts that business activities may have on humans. We must therefore go further in our way of thinking the law, our way of thinking projects or companies, and at the end of the day, our way of thinking the role of corporate lawyers as promoters of fundamental rights.
Mr. Kofi Annan with Professor John Ruggie, by inviting us to reconsider the law, may have also invited us to re-evaluate a part of the legal profession. Corporate lawyers’ role is to advise and to defend. This defence is very important and it is twofold. It first concerns companies, and through them, local communities and the fundamental rights of those who take part in the projects of these companies.
Lawyers therefore have a role that goes beyond the traditional but essential role of reading the law. This role must indeed address something new that is no longer just hard law but also incorporates soft law. Whether the expression “hard law” and “soft law” is used, they both contain and refer to the term “law”. Albeit hard law is enforced by the courts, soft law – which is subject to principles that must be respected but not necessarily incorporated into positive law – is enforced by “new judges”.
New judges are the ones that companies face. Companies face serious or hard sanctions when these judges raise their voices against them, for example when a company’s name is on the front page of a newspaper for failing to respect local communities’ or workers’ rights. These sanctions are final. Hence, as the scope of the law expands, so too do the possibilities for action and the role of lawyers. Lawyers must now advise and assist companies to ensure that their clients do not incur the sanctions of these new judges.
All this compels lawyers to expand their advisory role. This ongoing movement may even lead to new accountability for lawyers. Lawyers are expected to handle the expansion of the law, especially as this expansion may disrupt the hierarchy of norms and the international public order. These new rules and international standards now taken into account in international arbitration proceedings, by banks for financing, are perhaps indeed in the process of integrating the international public order without even the need for positive law.
In this perspective, lawyers and bar associations – which remain lawyers’ regulators – are invited to engage with the IBA Practical Guide on Business and Human Rights for Business Lawyers and to integrate these rules in order to pursue this important role, this essence and soul of the legal profession that is the promotion of fundamental rights.
2. See Article 94 of the Law no. 2016-32 dated 8 November 2016 enacting the Mining Code.
3. See Article 15 of the Ecowas Directive on the Harmonization of Guiding Principles and Policies in the Mining Sector dated 27 May 2009.
For more information, please contact Stéphane Brabant or your usual Herbert Smith Freehills contact.