There are many hurdles preventing victims of corporate rights abuses overseas from bringing claims in European courts against European companies and accessing an effective remedy. The claim against German retailer KiK is one of the few that “made it” to court. The KiK-case concerns a factory fire in 2012 in Ali Enterprises textile factory in Pakistan. 260 workers died and 32 were injured. German retailer KiK was by its own admission the factory’s main customer. In 2015, a compensation claim was filed against KiK in Germany. The case was declared admissible; a final decision is pending.
The German National Action Plan on Business and Human Rights states that “Anyone who considers that his or her rights have been infringed in Germany by the actions of an enterprise can make claims before the civil courts.” What are the hurdles to filing a claim in European courts and how did the claimants in the KiK case successfully overcome these?
- Fear of job loss: Day-to-day labour rights violations are often not litigated as workers fear losing their jobs, but in the KiK case the survivors and surviving dependants had already lost their jobs and means of support. In addition, the strong organization of the Affectees Association and the support of trade unions like NTUF Pakistan played an important role, wheras often the organization of workers is torpedoed by companies, for example, through yellow unions.
- No group claims: The claim in Germany is filed on behalf of four claimants, because group or class actions are not available. Whenever you work with a selection of plaintiffs, there is a risk for conflicts and distrust between them and other affectees. The KIK-plaintiffs and the Affectees Association have shown exceptional perseverance and wisdom in working collectively to minimize these risks and jointly use the action as a flagship for the entire organizational process. Even so, many still remain without remedy.
- Prescription and limitation periods in tort actions are short, often between one and three years. But transnational cases need more time to work with affected groups, lawyers and investigators across borders, languages, and cultures. The KiK case was only possible due to ongoing negotiations, and a limitation waiver declared by KiK.
- Costs: Transnational lawsuits are expensive. Even though the claimants were granted legal aid, that did not cover all costs. Without the pro bono support by lawyers, professors, students, translators, and many others as well as the funding from aid organization medico international for travel to meet with clients, the KiK case would not have been possible.
- Access to information and evidence: A media article which revealed that KiK purchased 75% of the Ali Enterprises factory played a key role in this case. In most cases, supply chains are covert and relevant evidence is inaccessible.
- Openness by judges and prosecutors: Such cases need open-minded judges and prosecutors. Cases such as Mercedes Benz (Argentina), Danzer (DR Congo) or Nestlé (Colombia) show how judicial authorities shy away from transnational investigations. In civil cases, a judge cannot reject a case out of discretion, but can guide the parties towards settlement using case management powers. This has happened in several Alien Tort Claims actions in the US, and has limited the development of case law.
- Attribution of wrongdoing to European headquarters: Ali Enterprises was a first tier producer for KiK, which meant that claimants could show direct influence by KiK. However, many labourers are working in sub-contracted factories. Long and opaque supply chains, for example, in the textile, automobile, construction, weapons, IT, or agricultural industries make it impossible to show whether the European managers have operational influence over an exploitative labour situation.
The KiK case is exceptional, in terms of access to remedy. Many structural obstacles remain, but there are ways forward. Firstly, victims should have access to collective or representative actions. Secondly, human rights due diligence should be mandatory and legally actionable along the supply chain. Thirdly, the victims’ burden of proof should be alleviated. Rebuttable presumptions, discovery and disclosure rules are options.
National Action Plans often lack such concrete proposals, even though they are covered by the UN Guiding Principles for Business and Human Rights (Principles 17, 25 and 26 and respective commentaries) and also taken up by the Elements for a Draft UN Binding Treaty.
If we hope to develop UNGP, NAPs and the UN Binding Treaty into sucessful tools, we need more strategically litigated cases: beyond hopefully providing remedy for the plaintiffs, they use innovative legal arguments and by doing so can serve to test the practicability of new policy and regulatory initiatives.