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25 Mär 2019

Meg Weddle, International Bar Association

Business and human rights: African mining pollution case could tighten law on parent company liability

An international mining company has appealed to the UK Supreme Court in a pollution case brought by over 1,800 Zambian villagers. The Court’s upcoming decision on whether the case against Vedanta Resources and its subsidiary, Konkola Copper Mines (KCM), can proceed to trial in the UK could help clarify the law on parent company liability. It could also have major repercussions for multinationals with extractive operations abroad.

The case centres on whether a parent company can owe a duty to third parties affected by its subsidiaries’ activities. In January 2019, the Supreme Court heard arguments from both Vedanta and the Zambian claimants regarding the proper jurisdiction for the trial...

..[C]onflicting decisions at the Court of Appeal in two similar cases, involving Royal Dutch Shell and Unilever, have highlighted a lack of clarity in the law regarding parent company liability. ‘If the Supreme Court finds in favour of the claimants, there would be a very strong argument for Parliament to clarify in statute what the actual expectations of company practice are,’ says Marilyn Croser, Director of CORE, a leading civil society coalition on corporate accountability...

Kevin O’Callaghan, Co-Chair of the IBA’s Business Human Rights Committee, says companies operating extra-nationally will want to pay close attention to the outcome of this case. ‘These kinds of cases are opening up people’s eyes to the potential consequences of the gap between what [a company] says on its website and what they’re doing on the ground. Companies need to be aware of the consequence of the statements they make in terms of corporate social responsibility, or business and human rights-related initiatives.’...