Commentary: Businesses with African subsidiaries need to understand consequences of human rights abuses given increasing use of litigation

Author: Ben Rigby, African Law & Business (UK), Published on: 22 June 2018

"Human rights and legal risks"

The need for businesses with African subsidiaries to keep appraised of the consequences of alleged human rights abuses is increasing...Human rights and business law, at first blush, may appear to have little in common with each other. Yet, increasingly, thanks to United Nations initiatives, the links between both areas of law are growing, Of late, there has been an increasing focus on business compliance with human rights norms, particularly following international litigation in which African claimants Iin the United Statesi, Canada or the United Kingdom have sought to establish jurisdiction for civil wrongs, often forming class action groups for property damage, personal injury, negligence and nuisance, or the like.

One such case was heard by the Court of Appeal, in London, last year. Lungowe and others v Vedanta Resources and Konkola Copper Mines was a landmark judgment which enabled almost 2,000 Zambian villagers can bring a claim in the English courts against UK-based Vedanta Resources and its Zambian subsidiary KCM. As Gemma Lindfield, a human rights barrister...tells ALB: “The villagers claimed that since 2005, they had suffered personal injury, loss of income, amenity and land enjoyment, as well as damage to property at the hands of the Nchanga copper mine, one of the mines operated by KCM.” The decision raises important questions about whether parent companies can be liable alongside their non-UK subsidiaries for adverse human rights impacts occurring abroad and leaves open the possibility that parent companies could be liable to communities affected by the operations of their subsidiaries.

A 2014 research report, by Jures and law firm, Womble Bond Dickinson, suggested that over 49% of in-house counsel agreed, seeing their role as being expected to acting as a moral compass for their organisation, in integrating ethical as well as legal factors into their advice. A further 37% said it was not an expected part of their role, but that they did it anyway. One general counsel commented “lawyers and [the] company secretariat are at the heart of company ethics and at the heart of governance in a business”. To that process, now add human rights.

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Related companies: Konkola Copper Mines (joint venture Vedanta Resources, Zambia Copper Investments & ZCCM Investments)