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With the increasing globalization of business, one of the key challenges for employers in the new millennium is responding to the vast number of worldwide legal standards. As a corollary to these developments, sound corporate responsibility requires multinational corporations to develop comprehensive policies, practices, and programs to integrate compliance with the myriad of legal rules throughout a company’s business operations. At the same time, business decision-making and responsibility are no longer limited to legal and financial factors, but increasingly require recognition of and conformity to an array of social and political standards, particularly in the areas of international human rights and corporate responsibility. To this extent, corporate responsibility, along with economic growth and enhancement of shareholder value, is fast becoming the third pillar of sustainable business development. THE IMPACT OF INTERNATIONAL HUMAN RIGHTS CONCERNS Corporate responsibility as a means of incorporating social and labor-related standards in business decision-making encompasses a number of areas. These include business ethics, sustainable business practices, governance and accountability, and community involvement. The area of international human rights also has significant impact on corporate behavior. As the expectations upon multinational corporations in respecting human rights have increased, so too has the awareness of the potential risks and exposures for failing to develop and implement policies and practices to ensure compliance with international human rights. Significantly, social and labor-related compliance concerns are no longer limited to domestic legal rules, but also cover compliance at an international level given the global nature of these societal forces and the globalization of business markets. The proliferation of international and regional treaties dealing with human rights in the last two decades has had an indelible impact on the manner in which business is currently conducted throughout the world. Although various stakeholders may disagree as to the appropriate framework for human rights protection, almost all of these stakeholders recognize a clear role for corporations to play in promoting and protecting human rights. [FOOTNOTE 1] LITIGATION INVOLVING MULTINATIONAL EMPLOYERS The most visible impetus for awareness of corporate social responsibility has been the increased pressure placed on multinational corporations by global litigation risks. One of the most significant risks is potential corporate liability for activities in foreign jurisdictions and in dealing with overseas employees. In recent years, there is a discernible trend in which multinational corporations are increasingly being held to task in litigation forums for their human rights performance in foreign countries. Most often, corporations are sued in their home jurisdiction on the basis of allegations of human rights breaches arising from the corporation’s activities in a foreign jurisdiction. Almost always, these cases take the form of a class action. In the past, multinational corporations had succeeded in avoiding liability in many cases for harms caused by their subsidiaries in foreign jurisdictions on the basis of the doctrine of forum non conveniens. This principle is often employed by litigating parties to argue that proceedings in a jurisdiction should be blocked on the basis that it is not the appropriate jurisdiction in which to litigate the dispute. However, recent cases illustrate that it is no longer a safe assumption on the part of multinational employers that the principle of forum non conveniens will be sufficient protection when they are sued over alleged “human rights” issues due to the activities of subsidiaries in foreign jurisdictions. These cases include the following: � Broken Hill Proprietary Co., Ltd. (“BHP”), an Australian public company, was sued by Papua New Guinea nationals for alleged losses suffered as a result of effluents from the OK Tedi Mine in Papua, New Guinea polluting the waters of the OK Tedi River and adversely affecting adjacent land. BHP owned part of the mine and had managed it since 1987. The litigation was brought in the Supreme Court of Victoria, Australia, with the threshold question being whether the court had jurisdiction to hear the claims under general principles of private international law. Rather than face an adverse ruling and the risks of further litigation, BHP settled the claims before any jurisdictional determination was made. [FOOTNOTE 2] � Thor Chemicals (UK), Ltd., an English public company which manufactures mercury-based chemicals, was sued by representatives of deceased South African employees for injuries allegedly suffered by working at the Cato Ridge chemical plant. Thor South Africa, a wholly owned subsidiary of Thor Chemicals, operated the plant. In this case, the English Court of Appeals had to decide whether England was the appropriate forum in which to commence proceedings. In the end, the court found that England was not an inappropriate forum and allowed the case to proceed. [FOOTNOTE 3] � Cape PLC, an English public company, was sued by South African plaintiffs for damages for personal injuries as a result of exposure to asbestos while working at Cape PLC’s South African subsidiary. After a lower court denied jurisdiction in favor of a South African forum, the UK House of Lords ruled that the proceedings brought against Cape PLC should not have been stayed in favor of transferring the litigation to South Africa. [FOOTNOTE 4] � In a case involving allegations of extreme human rights abuses, Unocal Corporation was sued in the U.S. District Court in California for damages in connection with alleged human rights violations by the Burmese Army during construction of a gas pipeline by Unocal’s foreign subsidiary in Myanmar. Burmese plaintiffs sued under the U.S. Alien Tort Claims Act (ATCA) [FOOTNOTE 5]on the grounds that Unocal was liable for torts committed against the plaintiffs by the Burmese military during construction of the pipeline under the auspices of the Myanmar government. In 1997, the court denied motions to dismiss for lack of jurisdiction, and held that a U.S. corporation could be held liable for human rights violations in certain circumstances, even if they were committed in foreign jurisdictions. [FOOTNOTE 6]Unocal was then subjected to ensuing discovery and court proceedings. It ultimately secured summary judgment on the merits in a court decision rendered on August 31, 2000. [FOOTNOTE 7] � Most recently, Royal Dutch Petroleum and Shell were sued in U.S. District Court in New York under the ATCA for alleged violations of human rights against Nigerian workers who claimed that they and their families suffered retaliation for political opposition to the companies’ oil exploration activities in Nigeria. On September 14, 2000, the U.S. Court of Appeals for the Second Circuit determined that venue was proper in U.S. courts and that the lawsuit could proceed. [FOOTNOTE 8] These cases demonstrate a trend toward the use of class actions to litigate international human rights disputes. They also confirm that claimants of modest means with complex claims can — in circumstances where their domestic legal systems are not capable of providing competent representation and funding — bring claims against multinational corporations directly in U.S. courts (or other major commercial jurisdictions like Australia and the United Kingdom) for the activities of their foreign subsidiaries. Although each of these cases is highly fact-specific, the lesson to be learned is that multinational corporations will find it increasingly difficult to argue that they should not be required to defend class action litigation in their home jurisdiction over the activities of their subsidiaries when workers or other third parties are injured or abused in foreign jurisdictions. NEW CLASS ACTION RISKS The ATCA is the new weapon which plaintiffs’ lawyers are utilizing to sue U.S. companies for alleged human rights violations committed abroad. A law originally enacted in 1789 to combat piracy on the high seas, the ATCA requires allegations of severe abuses that rise to the level of international human rights violations. In this respect, the ATCA opens U.S. courthouses to foreign litigants who can sue for personal injuries that allegedly involve some breach of international law. In less well-developed countries lacking extensive local workplace regulations, typical exposures entail lower wage rates, substandard health and safety conditions, and environmental problems at work sites and adjacent locations. Although such allegations must involve rather severe human rights abuses to state a claim under the ATCA, [FOOTNOTE 9]this litigation trend nevertheless exposes multinational employers to the risks of massive class actions. CONCLUSION A multinational corporation’s treatment of its workers (and others) throughout the world is a matter of increasing concern and focus — both internally within a company’s own workforce and externally with other stakeholders and watchdog groups. In the new millennium, global implementation of personnel practices and business conduct policies is vitally important to employees, shareholders, institutional investors, consumers, and the media. Failure to adhere to international norms of human rights will subject multinational employers to class action litigation risks. This article is excerpted with permission from CCH’s Journal of Employment Discrimination Law, Winter 2001 Edition. Gerald L. Maatman is a partner of Baker & McKenzie and based in the firm’s Chicago office. Maatman is a graduate of Washington & Lee University (B.A., 1978, Magna Cum Laude) and Northwestern University School of Law (J.D., 1981). He is also an adjunct professor of law at Northwestern University. Maatman is chairperson of Baker & McKenzie’s Global Labor, Employment & Employee Benefits Practice Group, which consists of over 350 attorneys in the firm’s 61 offices throughout the world. ::::FOOTNOTES:::: FN1For example, the AFL-CIO recently announced its Campaign for Global Fairness in August of 2000, which is designed “to educate and … fight employers … who rob workers of their right to organize and bargain collectively, that employ children, that use forced labor, or that discriminate in their workplaces.” FN2 Dagi v. Broken Hill Party Co. Ltd., No. 94-5782 (Supreme Court of Victoria, Australia Sept. 20, 1995) (Cummins, J.) (unreported mem. op.). FN3 Ngobo v. Thor Chemicals Holdings, Ltd., No. 94-1212 (United Kingdom April 11, 1995) (Steward, J.) (unreported mem. op.). FN4 Lubbe et al. v. Cape plc, [1999] All ER 1336. FN528 U.S.C. � 1350. FN6 Nat’l Coalition Gov’t of the Union of Burma v. Unocal, Inc., 176 F.R.D. 329 (C.D. Cal. 1997). FN7 Doe v. Unocal Corp., 110 F. Supp. 2d 1294 (C.D. Cal. 2000). FN8 Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88 (2d Cir. 2000). FN9For example, in Wiwa v. Royal Dutch Petroleum Co., the plaintiffs alleged that they suffered grave human rights abuses at the hands of Nigerian authorities and that the corporate defendants directly or indirectly participated in or directed these abuses. Plaintiffs claimed they were imprisoned, tortured, and killed by the Nigerian authorities in violation of international law at the instigation of the defendants in reprisal for their political opposition to the defendants’ oil exploration activities. It is further alleged that the defendants coercively appropriated land for oil development without adequate compensation, and polluted the air and water of the plaintiffs’ private land. Thereafter, various plaintiffs were allegedly arrested, detained, and tortured for their leadership roles in the protest movement, and thereafter convicted on fabricated evidence solely to silence their political criticism. See226 F.3d at 92-93. � 2001, CCH INCORPORATED. All Rights Reserved.

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