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Vedanta Resources lawsuit (re water contamination, Zambia)

Zambia MineIn September 2015, a group of 1826 Zambian villagers filed a lawsuit against Vedanta Resources in UK court over water pollution caused by its subsidiary's copper mining operations. They claim that the water pollution from the Nchanga Copper Mine damaged their lands and livelihoods.

On 27 May 2016, an English High Court judge ruled that the lawsuit against Vedanta Resources could proceed.  In July, the companies appealed and challenged the English courts' jurisdiction. On 13 October 2017, the Court of Appeal dismissed the companies' appeal and allowed the villagers to pursue their claim in the UK.

In March 2018, the companies were granted permission to appeal and the Supreme Court's hearing that will determine jurisdiction took place on 15 and 16 January 2019. On 10 April 2019, the Supreme Court ruled that the Zambian villagers' case against Vedanta Resources can be heard in English courts. 

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Article
9 August 2019

Leigh Day seminar highlights Lungowe v Vedanta case and its impact on future legal liability of corporations

Author: Leigh Day

"Lungowe v Vedanta: perspectives from the front line", 31 Jul 2019

Last month we hosted our seminar on the decision in the Supreme Court: Lungowe & Others v Vedanta Resources and KCM and its impact on the future legal liability and standards of behaviour of multinationals...

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Article
9 July 2019

Victory over Vedanta

Author: Louise Eldridge, CORE Coalition

In a historic ruling, the UK Supreme Court has allowed 1,826 Zambian villagers to continue to pursue their case (Lungowe and others v. Vedanta Resource Plc) against UK-based mining giant Vedanta in the UK courts. The villagers from Chingola, in Zambia’s copper belt, have been fighting for over a decade for compensation following serious pollution from a mine owned by Vedanta’s Zambian subsidiary, Konkola Copper Mines (KCM), which poisoned their land and waterways...

...The case has significant implications for other victims of business-related human rights abuses and for multinationals, because it expands the parameters of a company’s legal “duty of care.”...

In April, 25 UK NGOs and trade unions launched a call for a new law to make UK companies take action to prevent negative impacts on human rights and the environment from their international operations (including their subsidiaries) and supply chains.

This would provide clarity for business on their responsibilities. If harms did occur, the burden would be on companies to prove that they had implemented appropriate procedures, making it easier for people from communities like those in Chingola to hold them to account in court...

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Article
28 June 2019

Commentary: Parent companies soon to be unable to claim immunity from subsidiaries’ liabilities

Author: Julius Melnitzer, Financial Post (Canada)

"Why parent companies may soon be unable to claim immunity from their subsidiary's liabilities", 23 Jun 2019

The corporate veil — the hallowed legal concept that separates the personality and liabilities of a parent company from that of its subsidiaries — is coming under attack as courts around the world struggle with the ever-extending reach of multinational organizations.

While Canadian courts and others have been gnawing away at the edges of the veil in recent years, the U.K. Supreme Court recently struck what may be the most telling blow so far when it allowed 1,800 Zambian villagers to continue with a lawsuit against U.K.-based mining company Vedanta Resources Plc over alleged pollution emanating from the Nchanga copper mine owned and operated by Konkola Copper Mines, Vedanta’s Zambian subsidiary.

Although traditional corporate law protected Vedanta from the liabilities of KCM, the court ruled in April that the parent had intervened in the management of the mine to such an extent that it may have attracted a “duty of care” to the villagers...

As evidence of the “high level of control and direction” exercised by Vedanta, the court pointed to public statements in which the company lauded its group-wide environmental controls and sustainability standards, and its implementation of these controls and standards throughout the corporate group.

“There is an increasing belief on the part of policymakers that we need to take a new, harder look at the legal concepts that govern multinationals and families of corporations,” said Julie Rosenthal, a lawyer at Goodmans LLP in Toronto. “And this is a belief that is being reflected in the jurisprudence.”...

 

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Article
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Author: Chancia Plaine, Huglo-Lepage Avocats, dans Actu Environnement

« Vers une application du devoir de vigilance et de la responsabilité civile extraterritoriale », 27 mai 2019

Les entreprises britanniques peuvent-elles être jugées au Royaume-Uni pour les pollutions environnementales de leurs filiales étrangères ? Oui, répond le juge. Une décision historique expliquée par Chancia Plaine, juriste au cabinet Huglo-Lepage Avocats...

L'affaire Lungowe c. Vedanta, toujours en instance, est potentiellement historique. En effet, l'arrêt rendu le 13 octobre 2017 par la Cour d'appel a confirmé la décision de la Haute Cour prononcé en 2016 de valider la compétence juridictionnelle en estimant que l'affaire pouvait être jugée par les tribunaux anglais, car il était suffisamment raisonnable de soutenir que la société mère britannique avait une obligation de diligence (devoir de vigilance) envers les demandeurs étrangers. Par ailleurs, le devoir de vigilance (duty of care) dont il est question dans cette affaire est régi par la théorie sur les torts en droit anglais. On doit noter que la seule question pendante devant le juge dans cette affaire, à ce stade de la procédure, était relative à la compétence des tribunaux anglais. Pour la société mère défenderesse Vedanta, la compétence juridictionnelle appartient aux tribunaux de la Zambie...

...[D]ans le jugement du 10 avril 2019, la Cour a décidé que, même si l'Angleterre n'était pas le lieu approprié pour juger l'affaire, les demandeurs pourraient établir leur compétence en montrant le risque réel (voir, §88-89) qu'ils ne puissent obtenir une justice substantielle en Zambie. Notamment, du fait que la profession juridique zambienne manquait des ressources et de l'expérience (voir §91) pour mener ce type de litige avec succès...

Ce procès va permettre d'enclencher le cours des contentieux environnementaux dans le monde en matière de consécration d'un devoir de vigilance des sociétés mères, notamment en ce qui concerne la responsabilité des multinationales vis-à-vis de leurs filiales et des populations victimes des atteintes environnementales et sociales...

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Article
15 May 2019

Maysa Zorob talks Vedanta and Zambian farmers on CNBC Africa

Author: Adam Barnett, Communications Officer, BHRRC

BHRRC's Maysa Zorob, head of Corporate Legal Accountability, discusses the UK Supreme Court ruling on Vedanta vs Zambian farmers.

This episode of CNBC Africa's Capital Connection was broadcast on April 17 2019.

 

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Article
19 April 2019

Not quite ‘beating your head against a brick wall’: the Supreme Court’s decision in Vedanta v. Lungowe

Author: Nadia Bernaz, Rights as usual

On 10 April 2019, the Supreme Court of the United Kingdom delivered its highly-anticipated decision in the case of Vedanta v. Lungowe (Lungowe v. Vedanta in the lower courts). The Supreme Court unanimously decided the case should proceed in English courts, dismissing the appellants’ arguments against English courts assuming jurisdiction. This marks an important next step in an ongoing series of cases, wherein foreign victims of human rights and environmental harms sue corporations and their foreign subsidiaries in the domestic courts of the companies’ European home States. Next to Lungowe, the series includes Okpabi v. Shell that I discussed previously on this blogAAA v. Unilever and Akpan v. Shell, discussed here.

This post examines how the Supreme Court has provided some important clarifications on both the substantive and jurisdictional rules that govern these cases, thus making it somewhat easier for claimants to argue duties of care on parent companies. It also shows the Court’s emphasis on access to justice compared to the lower courts may be laudable in the abstract, but is unlikely to increase access to justice in practice…

Nadia Bernaz, Associate Professor of Law and Governance at Wageningen University in the Netherlands, analyses the UK Supreme Court's landmark decision., 18 April 2019

…The Supreme Court’s decision delivered by Lord Briggs focused primarily on the jurisdiction issue and the appropriateness of England as a forum…

…The main issue here was whether England was the ‘proper place to bring the claim’, as per the third part of the necessary and proper party test (para. 66). This requires Courts to balance the factors that connect the case with England – i.e., the case against the parent company over which English courts have mandatory jurisdiction – against the factors that connect the case to Zambia – i.e., the domicile of the claimants, the defendants and the locality of the harmful acts…

 

…This meant that in principle, England was not the proper place to try the case against KCM.

[One] point, however, is of substantive law: duty of care litigation based on Chandler is still very much alive in English courts. In para. 53 the Court even appears to extend the situations where a parent company may be under a duty of care. Whereas under Chandler claimants need to demonstrate that parent companies actually exercised control over their subsidiaries, Lord Briggs mentions that duties of care can also exist when parent companies claim they have control, but do not exercise it in practice…

From an academic perspective, more emphasis on access to justice as a relevant issue in these cases is positive... 

It remains to be seen how Lungowe will proceed from now. From the perspective of an academic observer, it would be good to finally see another case litigated on the merits. The case may also get settled before it moves on to the merits. Even if that happens, the Supreme Court decision in Lungowe will remain important for future foreign direct liability cases.

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Article
12 April 2019

Zambian farmers can take Vedanta to court over water pollution. What are the legal implications?

Author: Gabrielle Holly, Omnia Strategy LLP

Gabrielle Holly at Omnia Strategy LLP analyses the UK Supreme Court's landmark decision.

This morning, the Supreme Court delivered its much anticipated judgment in Vedanta Resources PLC and anor v Lungowe v and ors. In a unanimous decision, the court found that a claim brought by a group of Zambian villagers against UK-based Vedanta Resources Plc and its Zambian subsidiary, Konkola Copper Mines (KCM), could proceed in the UK.

The duty of care

The claimants in Vedanta and other similar cases (Okpabi and ors v Royal Dutch Shell plc and anor and AAA and ors v Unilever and anor) have all relied on the case of Chandler v Cape Plc to argue that a UK parent company could owe a duty of care to those affected by acts of a foreign subsidiary.

Chandler set out a series of factors which established that the parent company in that case owed a duty of care to the employees of its subsidiary. However, though tried and tested, these factors have not been an easy fit for subsequent claims.

In a significant step, the Supreme Court in Vedanta confirmed that the Chandler factors are not the only path available to prospective claimants. It found that the relevant duty in parent company cases can be established by reference to basic tort principles rather than the “straitjacket derived from the Chandler case” (at [60])...

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Author: La Fiva

« Les Zambiens peuvent engager une action en justice pour pollution dans les mines devant les tribunaux anglais », 10 avril 2019 

Deux mille villageois zambiens qui affirment que leur vie a été détruite par un ruissellement toxique provenant de la deuxième plus grande mine à ciel ouvert au monde ont obtenu le droit de faire une réclamation devant les tribunaux anglais.

Dans un arrêt historique, la Cour suprême a jugé que le conglomérat minier Vedanta Resources, basé à Londres, et sa filiale zambienne Konkola Copper Mines (KCM) pouvaient être tenus pour responsables par les juges anglais, malgré les arguments des sociétés selon lesquels ils devaient se défendre eux-mêmes en Zambie.

La décision ouvre la porte à toute une série d'autres actions en justice à l'encontre de sociétés mères basées au Royaume-Uni pour les actions de leurs filiales à l'étranger…

Les demandeurs d'asile ont d'abord comparu devant un tribunal de Londres en 2015, alléguant leur négligence et leur violation de l'obligation légale de rejet d'effluents, mais avant de pouvoir procéder, Vedanta a contesté la compétence des tribunaux anglais…

Un élément clé de l'affaire concernait les affirmations dans la littérature d'entreprise publiée par Vedanta – une entreprise d'une valeur de 10 milliards £ – selon lesquelles elle assumerait la responsabilité des normes environnementales et de durabilité dans l'ensemble du groupe. Il avait accepté de se poursuivre devant les tribunaux zambiens aux côtés de KCM, mais les juges de la Cour suprême ont souscrit à l'argument des requérants selon lequel ils risquaient de ne pas avoir accès à la justice en Zambie…

La plainte contre Vedanta et KCM peut maintenant être traitée devant la haute cour.

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Article
10 April 2019

UK: Supreme Court rules Zambian villagers' case against Vedanta to be heard in English courts

Author: Leigh Day

The claimants allege that as a result of the toxic effluent discharge from the Nchanga Copper Mine which is run by KCM they have suffered loss of livelihoods through damage to the land and waterways and health problems through having to consume and use polluted water. Now that jurisdiction has been determined their claims will be heard in the High Court at a date to be determined. As part of the judgment today the Supreme Court also ruled that companies can be held to account for the commitments they make publicly regarding their subsidiaries and their commitments to the communities they serve...

The claimants, represented by law firm Leigh Day, have been fighting for four years to have their case heard in the English courts. They argued that they would not be able to achieve justice in the Zambian courts due to the lack of funding available for claimants in such claims and the lack of legal representatives with the necessary qualifications and experience to properly bring the case. The Supreme Court agreed with these arguments. The court also determined that there is a triable issue between the claimants and Vedanta, as well as KCM, and that Vedanta arguably owes a duty of care to the claimants as the parent company of KCM. 

Oliver Holland, solicitor at law firm Leigh Day representing the Zambians, said:

“After four years fighting for this case to be heard by the English courts we are delighted that our clients’ case can now go ahead in the UK where there is a real opportunity for justice. “Our clients argued that as the UK-based parent company of KCM, Vedanta also had a duty of care towards them and should be held responsible for the damage they allege has been caused by the mine. Indeed in Vedanta’s own published materials the company claims to have control over the mine and to have responsibility for the proper standards of environmental control across its subsidiaries. The court has ruled today that Vedanta cannot merely pay lip service to these statements and must be held accountable for them.”

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Article
10 April 2019

UK: Supreme Court rules Zambians can sue miner Vedanta

Author: Jane Croft, Financial Times (UK)

Thousands of Zambian villagers can bring a legal challenge in the English courts against mining company Vedanta over alleged pollution in Zambia, the UK’s highest court ruled on Wednesday. The Supreme Court said that the lawsuit brought by 1,800 Zambian villagers can be heard in London despite arguments by Vedanta that the case should be tried by the Zambian courts. It ruled that the lawsuit could proceed in England because the claimants, who are all living in poverty, would struggle to access justice in Zambia and the country does not permit “no win no fee” arrangements for claimants to pay legal fees...

The ruling is significant because it paves the way for more environmental claims to be brought in London against large multi nationals with global operations — particularly from claimants living in poorer countries where there is a difficulty in accessing legal funding. The ruling also indicates that companies have a duty of care to third parties for the commitments they make publicly regarding their subsidiaries...

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