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19 Mar 2020

Malcolm Rogge, Research Fellow, Corporate Responsibility Initiative, Harvard Kennedy School

Nevsun puts Canada’s Corporate Decision Makers in the Human Rights Zone

This short essay on the corporate human rights zone makes an important theoretical contribution to the field of business and human rights. Rogge argues that the Supreme Court of Canada’s Nevsun decision (Nevsun Resources Ltd. v. Araya, 2020 SCC 5)puts the multinational corporate decision-maker in an uncertain yet also demanding human rights decision-making ‘zone’This ‘zone’ is not a physical place; rather, it is a thinking space where business leaders must make judgments among and between the distinct concerns of human dignity and economic profit.

When allegations of human rights abuses are levelled against a company, the decision makers at the highest levels are thrust into the uncertain realm of the corporate human rights zone. In this zone, corporate decision-makers must grapple with the fact that things may not be as they appear on the surface; indeed, the truth may be very much at odds with what they are initially inclined to believe. In this precarious decision-making space, acting on superficial understandings often turns out to have very negative rebound effects for the company. With Nevsun, senior decision makers in Canada’s extractive industry are challenged to do a better job of knowing more about conditions ‘on the ground’.

While leaving much to be worked out in years ahead, Nevsun crosses a legal threshold that makes it more difficult for corporate decision makers to play down a company’s responsibility to respect human rights. Beyond legal necessities, the “moral imperatives” (as Justice Abella called them) that are contained within international human rights influence and constrain the boundaries of fiduciary loyalty that a decision maker owes to the corporation and its shareholders. When there is potential for this constraining effect to occur in thinking about what choices to make, corporate decision makers find themselves in the human rights zone. Few directors and managers will relish the thought of entering such uncertain terrain, but with the global reach of complex value chains today, the likelihood of falling into it only increases. 

As in Delaware corporate law’s famous Revlon zone, there is no bright line that demarcates the boundary of the corporate human rights zone in every case. Decision makers may be within its depths long before they become aware of the problem—in the most difficult cases, they might find themselves slipping into Hollywood quicksand. Getting into a human rights controversy can happen extremely quickly; climbing out of it takes time and a willingness to see the problem using a different lens. 

Rogge argues that there is something to be gained in homing in on the role of reflective decision makers in bringing the abstract corporate entity to life. In the corporate human rights zone, the normative priors that lie in Justice Abella’s moral imperatives of international human rights apply not for instrumental reasons that serve the corporate bottom line, but for the value of humanity as an end in itself. It makes little sense that business decision-makers have complete immunity from responsibility for living within such normative constraints, though one must also recognize the practical constraints that they face as managers, as well as the internally oriented demands of their fiduciary duty to the corporation and its shareholders. The tension that lies between all of these constraints and responsibilities is most palpable in the human rights zone.  

With Nevsun, corporate decision makers who may have been reluctant yesterday to turn their minds to human rights impacts abroad have a very compelling reason to do so now. 

This paper and others by Rogge can be accessed without registration on SSRN at: