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Sue the Sweatshops

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Canada slightly improves in my esteem after its ketchup-related crimes by moving in a very positive direction on holding its corporations accountable for sweatshop labor overseas.

Many countries do not have adequate laws to protect human rights and their legal system and governments lean towards corruption and away from punishing large, multinational corporations. So Canadian companies are able to hide behind government corruption and inadequate legal systems to hurt people in ways that would be illegal in Canada.

This year, the British Columbia Court of Appeal allowed a lawsuit to proceed against a Canadian mining company who, allegedly, hired a private security company to open fire on protestors using weapons that included shotguns, pepper spray, buckshot and rubber bullets. The first judge who heard the case ruled that the lawsuit had to proceed in Guatemala. The Court of Appeal disagreed:

I conclude that the judge erred by ignoring the context of this dispute and placing insufficient weight on the risk that the appellants will not receive a fair trial in Guatemala. That risk should not be ignored … I simply conclude that there is some measurable risk that the appellants will encounter difficulty in receiving a fair trial against a powerful international company whose mining interests in Guatemala align with the political interests of the Guatemalan state. This factor points away from Guatemala as the more appropriate forum.

The case shows Canada’s increasing willingness to hear international cases involving Canadian companies. This is a positive trend that could have a positive impact on international business practices.

Canada is not the only country trying international labour and human rights cases. Lawsuits have been brought against Nestlé in the United States, for example, over allegations of human trafficking and child labour in the Ivory Coast.

Lawsuits against Canadian companies operating abroad serve at least three purposes: educating the public by publicly shaming companies; deterring companies from future abuses, thereby hopefully changing business practices; and, compensating victims who would otherwise have no redress in their home country.

There are limits to relying on international lawsuits. They’re expensive, complicated and require a tremendous amount of work. The victims often barely have enough money to feed their families, let alone hire expensive lawyers. So victims need to be connected with funding and Canadian lawyers willing to take on their case; not an easy task. The corporate defendants also have enough finances to hire teams of skilled lawyers to defend them, creating a true David and Goliath scenario.

A few thoughts here.

First, the issue of where a lawsuit is located is critical. Guatemalan workers are not going to receive a fair trial in Guatemala, nor Bangladeshi workers in Bangladesh. In the latter, the sweatshop owners control the government by holding many of the offices. In an international economy, you can’t have corporations able to move around the world at will to find the most favorable legal climate and workers and citizens forced to deal with the laws of where they live. That playing field must be evened if global workplace justice is ever created

Second, the lawsuit really isn’t the most ideal form of enforcement, for the reasons the author states. Workers don’t have the assets for this and neither do their western supporters. Suing a corporation is very hard to do and of course the corporations are making it harder all the time. But it is a tool that can force some sort of legal mechanism to be created. For instance, the workers’ compensation system in the U.S. was only created because after decades of juries and judges rejecting the claims of injured or dead workers and their families, they started accepting them and companies all of a sudden found themselves liable for large damages. They then pushed for some sort of logical system. It favored them more than the workers, but it was a start. That’s the power of lawsuits in a situation like this.

Finally, in the U.S., the non-interventionist left really doesn’t take foreign policy seriously. That’s true from Bernie Sanders on down to your local activist. What trade agreements look like and what corporations do and don’t do overseas is part of this foreign policy. We have to articulate concrete policies around these issues if we want to fix these problems, not to mention if we want to reorient American relationships with other nations in a more positive and less exploitative way. The ability to sue corporations in American courts for the actions in they or their supply chains commit overseas must be part of this package. It’s good politics too, or at least I think so. This should be something of a model for us and I hope we can move to make this a central plank of liberal/left politics in coming years.

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  • Dilan Esper

    Finally, in the U.S., the non-interventionist left really doesn’t take foreign policy seriously. That’s true from Bernie Sanders on down to your local activist. What trade agreements look like and what corporations do and don’t do overseas is part of this foreign policy.

    In the 1990’s, when I was prosecuting a 28 USC 1350 suit against Unocal for labor abuses in Burma, I had a conversation with a human rights activist who was supporting us on the suit. He was bemoaning trade agreements because they created tribunals, dominated by corporations, which could override labor and environmental standards. I told him I didn’t disagree with him substantively, but such tribunals could actually be a force for good if their jurisdiction was expanded rather than curtailed, because the biggest problem with prosecuting international labor rights claims is getting jurisdiction to attach.

    It’s not a sexy issue for the left, and it’s easier to just flatly oppose free trade agreements, but global governance structures can really make an impact on human rights. A WTO where workers, and not just corporations, can complain about unfair treatment would be a gigantic advance for the world’s workers.

    • Brett

      You’d have to change the focus of them, since ISDS involves a dispute between a state and an investor/corporation. Although maybe you could keep it like that, and let folks sue a country for refusing to abide by its treaty obligations on labor and environmental rights? Not sure how you would enforce the damages though.

  • Brett

    Finally, in the U.S., the non-interventionist left really doesn’t take foreign policy seriously. That’s true from Bernie Sanders on down to your local activist.

    There is talk about Fair Trade and so forth, and at least ostensible respect for the United Nations. I feel like this used to be a bigger issue over on the leftward spectrum back in the 1990s.

    Maybe the interventionistic aspect of it is a turn-off, although I suspect it has more to do with treating trade itself as the enemy of US workers and something to slowed down.

    This year, the British Columbia Court of Appeal allowed a lawsuit to proceed against a Canadian mining company who, allegedly, hired a private security company to open fire on protestors using weapons that included shotguns, pepper spray, buckshot and rubber bullets.

    That’s quite a lucky break on their part, that the Canadian company itself hired the security firm. Usually it’s the subsidiaries and illegal subcontractors who do the violence and exploitative working conditions, and the big foreign corporation feigns ignorance.

    • There is vague talk about these issues, but not very much serious policy creation or even the beginnings of articulation.

      • McAllen

        It also tends to be consumerist, advocating for shopping at Whole Foods and the like rather than advocating for policy change.

        • Right, which isn’t policy at all.

        • elm

          As I argue in my forthcoming book, while Fair Trade is often framed as a purely consumerist movement, it can and often does have policy elements and the sorts of people who support the consumer movements also support policy actions. More can be done on the policy front to make trade policy better for worker, environmental, and human rights, but such policies do exist. (For more details, wait a few more months and see Politics of Fair Trade, forthcoming from Oxford University Press, hopefully sometime early in 2018.)

    • Mike G

      There are some pretty dirty practices among Canadian mining companies operating in the developing world. This is long overdue.

  • elm

    Thanks for the link to this story. Interesting stuff, especially that the Candadian courts themselves seem to have created this power, rather than purely through legislative action. (Similar to universal jurisdiction over human rights, I believe.) there have been similar lawsuits in the US, and courts might be able to expand their use even Without Congressional authorization, although making such a thing more explicit could be a good policy agenda item for labor, environmental, and human rights groups next time Democrats have power in DC.

  • ISDS may look like a cute sacrificial statue of a horse, but it didn’t work out too well for the Trojans.

  • On a related note (and you’ve probably already seen this, but just in case), again we see that there is nothing in this world that the Trumps cannot make worse – https://www.bloomberg.com/news/articles/2017-05-30/men-probing-ivanka-trump-supplier-in-china-arrested-missing

  • Hondo

    So, here’s something that crossed my feeble mind some years ago. In a more perfect world, the western democracies would apply the laws of a corporations home country for all their foreign operations. This would include laws regarding labor practices, workplace safety, overtime pay, environmental regulations, apply some version of Davis-Bacon to the particular country of operation that would provide a living wage.
    Would something like that work?
    Lawsuits are effective, but they only happen after the crime has been committed, and take years to run their course, plus the republicans are always trying to make it harder to sue.

    • elm

      It wouldn’t work because most other rich countries wouldn’t want weaker American laws to apply in our factories located in their countries.

      ETA: And in the South in the US, we wouldn’t accept the stronger European labor policies.

      • Hondo

        Thanks for being considerate enough to respond, and for not tearing into me for making an ill-informed comment. (which is what I half expected)

  • Gregor Sansa

    Note that this lawsuit is for people who were shot during a protest, not for workers who were mistreated on the job. Most companies are more careful about maintaining deniability of responsibility (ie, subcontractors) in the latter case, which would make court-initiated jurisdiction tougher to apply. To make this really work more generally, we’d need explicit laws here in the US to cut through that deniability.

    Also note that one reason the Canadian judge overruled the lower court was NOT the new evidence of how corrupt the Guatemalan justice system (I have a friend who was an appeals judge and had to flee Guatemala to live here in Boston after resisting and exposing corrupt pressure on judges at her level), but rather the fact that the specific defendant had fled Guatemala, which meant both criminal and civil charges were dismissed.

  • dp

    As a friend of mine (who litigates claims of foreign workers in the US and elsewhere) says, venue is outcome-determinative. Simply allowing these suits to go forward in the US, with our standards of justice, is tremendously important to securing these peoples’ rights.

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