Alternative Dispute Resolution and the Business and Human Rights Justice Gap

In May 2013, the Office of the United Nations High Commissioner for Human Rights (“OHCHR”) commissioned Dr. Jennifer Zerk to prepare an analysis of the effectiveness of domestic judicial systems in relation to business involvement in gross human rights abuses. Last week, Dr. Zerk released her report.

The report is damning and a must-read, in part because it does not blindly focus on the failure of businesses to respect -- or at least refrain from participating in gross violations of -- human rights. As the report illustrates, there is consensus that corporate involvement in human rights violations is a major problem and something that the international community is obliged to address. And, no matter how much energy we pour into attacking businesses and shining a light on these abuses, they will surely continue.

Importantly, the report highlights that it is rare for a company to be accused of directly committing a gross human rights violation. (She highlights five such cases, all but one of which centers around events related to either the Iraq war or World War II.) Instead, the vast majority of cases involve a corporation that was allegedly complicit in gross human rights violations carried out by a third party (usually a private security force, militia or government armed force). The most notorious involve companies in the extractive industries -- Total, Shell, Unocal, Rio Tinto, to name a few -- that purportedly enlisted or benefited from violence aimed at facilitating the continued extraction of the desired resource. In the now famous Kiobel case, for example, plaintiffs alleged that Shell had hired the Nigerian government to violently repress protests against their drilling operations. Similarly, a 2002 case against Total alleged that the company provided logistic, financial and military support to security forces of the Myanmar government, which then went on to engage in forced labor, deportations, murder and other gross human rights violations.

There are many other such cases, too, and they all rightly provoke outrage towards business. Yet, as Dr. Zerk points out, what is perhaps most troubling is that, when these violations do occur, victims have virtually no recourse against the corporate perpetrators. Impunity, in other words, continues to prevail. As Dr. Zerk observes:  “While these cases may attract the theoretical possibility of sanctions under the criminal laws of many states, ... the reality of the experiences of those seeking justice is very different.” (Zerk, Page 7). This reality is underscored by any number of recent cases, like last week’s Chevron decision purporting to invalidate the Ecuadorean plaintiffs’ record verdict against Chevron for Texaco’s alleged contamination of Lago Agrio.

Rather than focus on companies, then, the report takes aim at domestic legal systems. “Domestic law on business involvement in gross human rights abuses is in an undeveloped state,” Dr. Zerk writes, and “states are not engaging with the problem of corporate involvement in gross human rights abuses at all proactively.” (Zerk, Page 52) The United States, with its Alien Tort Statute (“ATS”), is arguably the most receptive to such claims; however, as we have seen, U.S. courts are in the process of severely limiting the ATS' reach. In other words, “from the perspective of individuals and communities seeking to hold companies accountable for the abuses they claim they have suffered, the system is patchy, uneven, often ineffective and fragile.” (Zerk, Page 103) Dr. Zerk is hardly the only expert to reach this conclusion.

So what to do?  Dr. Zerk stresses the importance of strengthening the rule of law and encouraging formal judicial mechanisms to address these obstacles. Clearly, that is a meritorious area on which to focus. Yet, “this is not to overlook the importance of access to remedy at [the] local level.  The fact that so many claimants prefer to bring their claims in faraway jurisdictions than seek local remedies is revealing in itself.” (Zerk, Page 104)  She does not go so far as to say that we should explore the encouragement of non-judicial dispute resolution mechanisms, but I think it is something to seriously consider.

The U.N. Guiding Principles on Business & Human Rights, for instance, refer specifically to non-judicial grievance mechanisms, which may be either state or a non-state based. (See, for example, Principles 27, 28 and 31) According to the OHCHR Commentaries on the Guiding Principles: “Gaps in the provision of remedy for business-related human rights abuses could be filled, where appropriate, by expanding the mandates of existing non-judicial mechanisms and/or by adding new mechanisms.” One such non-judicial grievance mechanism, which could be either state-sanctioned or otherwise, is alternative dispute resolution (“ADR”).

ADR has been touted for its ability to build trust, encourage rationality, reduce bargaining costs and increase the range of enforceable contracts. And although ADR also has its drawbacks, which may even include further undermining the rule of law, a recent study suggests that merely educating people about their rights in an ADR system has a beneficial effect on peaceful conflict resolution.

That study, published in the American Political Science Review by, among others, Chris Blattman (Assistant Professor of Political Science & International and Public Affairs at Columbia University), evaluated an education campaign designed to promote ADR across 86 communities in postwar Liberia. The authors found that the educational campaign itself resulted in shorter and less violent land disputes. In treated communities -- i.e., those that were targeted by the campaign -- “land disputes were 29 percent less likely to remain unresolved at the end of the year, property destruction decreased by 32 percent, and disputant’s were 10 percent more satisfied with outcomes.”

In other words, even “modest education campaigns have the potential to change behavior around longstanding disputes.” (Blattman, Page 20) This is supported by Dr. Zerk’s recommendation that stakeholders focus on the role of “promoting awareness of legal rights and remedial mechanisms” (Zerk, Page 11), and the OHCHR’s conclusion that “[e]nsuring access to remedy for business-related human rights abuses requires also that States facilitate public awareness and understanding of these mechanisms, how they can be accessed, and any support (financial or expert) for doing so.”

States and businesses both have a duty to help provide victims of human rights abuses with access to appropriate remedies, and ADR and ADR-related awareness campaigns are one area where the two could work together to fulfill that duty. While there is no substitution for an efficient and unbiased judicial system, perhaps there is a role to play for non-judicial mechanisms, too.

Image credit: Flickr/US Mission Geneva