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Nevsun Resources Ltd. v. Araya and Customary International Law: the Phoenix Reborn in Canada

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Nevsun Resources Ltd. v. Araya and Customary International Law: the Phoenix Reborn in Canada Aquilina Law August 17, 2021

Nevsun Resources Ltd. v. Araya and Customary International Law: the Phoenix Reborn in Canada

Introduction On February 28, 2020, the Supreme Court of Canada released a judgment dismissing a motion to strike pleadings in the judicial saga of Nevsun Resources Ltd. v. Araya, a case relating to alleged violations of the human rights of three Eritrean miners by Nevsun Resources Ltd. (“Nevsun”) through the actions of entities controlled by the Eritrean government. This case addressed the question of whether a non-state Canadian legal person could be liable for breaches of customary international law while operating in foreign countries. In a majority 5-2-2 decision, the Supreme Court answered the question in the affirmative, while also rejecting the applicability of the argued “act of State” doctrine in Canada. This ruling leaves open the possibility for claimants to sue Canadian companies for actions abroad that directly or indirectly violate human rights and international norms.

Case Facts Nevsun is a Canadian mining company headquartered in British Columbia (B.C.). Nevsun owned sixty percent of the Bisha Mining Share Company, which owned the Bisha mine in Eritrea, with the other 40% owned by a government entity. The Bisha Mining Share Company hired a South African company, SENET, to manage the mine. SENET subcontracted two companies for labour: The Mereb Construction Company, which was owned by the Eritrean military and the Segen Construction Company, which was run by People’s Front for Democracy and Justice, Eritrea’s only political party.

Three Eritrean workers claimed that they were indefinitely conscripted into the Eritrean military and were forced by SENET’s subcontractors to work at the Bisha mine under horrid conditions. The workers escaped to Canada and initially brought a class action suit on behalf of more than 1,000 individuals who claim to have been compelled to work at the mine between 2008 and 2012 against Nevsun in B.C. They claimed damages resulting from a litany of torts including conversion, battery, false imprisonment, conspiracy and negligence. In addition, they included novel claims of breaches of customary law stemming from forced labour, slavery, cruel, inhuman or degrading treatment and crimes against humanity caused by the subcontractors, but under the supervision and control of the Bisha Mining Share Company. [1]

In response, Nevsun made a number of court applications that, inter alia, contested jurisdiction and argued forum non conveniens. In this case, Nevsun brought a motion to strike the plaintiff’s claim on the basis that it had no reasonable prospect of success. Nevsun relied on the English common law “act of State” doctrine, which prevents domestic courts from assuming jurisdiction over, and evaluating the acts of, a foreign government. Nevsun also argued that even if the act of state doctrine was inapplicable, the claims of the plaintiffs based on customary international law had no reasonable prospect of success. Nevsun’s motion was dismissed by the Supreme Court of B.C., as well as by the B.C. Court of Appeal; Nevsun appealed this decision.

Questions on Appeal The Supreme Court of Canada addressed two main two questions:

  1. Does the “act of state” doctrine form part of Canadian common law?
  2. Can the customary international law prohibitions against forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity ground a claim for damages under Canadian law? [2]

The Supreme Court began by stating the following: “This appeal involves the application of modern international human rights law, the phoenix that rose from the ashes of World War II and declared global war on human rights abuses. Its mandate was to prevent breaches of internationally accepted norms. Those norms were not meant to be theoretical aspirations or legal luxuries, but moral imperatives and legal necessities. Conduct that undermined the norms was to be identified and addressed.”[3] The court further noted that in the ongoing and evolving fight to uphold these norms and human rights, courts are often a vital front line actor. It went on to explain the act of state doctrine as one that “holds the national court incompetent to adjudicate upon the lawfulness of the sovereign acts of a foreign state.” [4] After tracing the judicial history of the act of state doctrine in England and Australia, where it continues to prevail, the Court iterated that while Canadian and English common law have the same roots, Canadian law developed principles of conflict of laws and judicial restraint independently, rather than as elements of a broader act of state doctrine, as is the case in England. A majority of the bench noted that the doctrine does not apply in situations where governments are not party to the action in question and that, moreover, even its use in England is limited. The court highlighted the absence of any cases applying the act of state doctrine in Canada, enumerating instead many instances where Canadian jurisprudence has required the assessment of the lawfulness of foreign state acts. [5] The majority explained that Canadian courts regularly “determine questions dealing with the enforcement of foreign laws [in this instance, the act of State doctrine] according to ordinary private international law principles which generally call for deference, but that they retain judicial discretion to decline to enforce foreign laws where such laws are contrary to public policy, including respect for public international law.” [6] Conversely, the court will assess foreign law in instances of clear violations of fundamental human rights. [7] In this case, if there ever was an act of state doctrine in Canada, it has been completely subsumed within the jurisprudence and Canada has since diverged from England in this regard. Ultimately, the Supreme Court rejected the applicability of the act of state doctrine in Canada. In regards to the second issue, the Court sought to determine whether it was plain and obvious that the worker’s novel claims of customary international law had no reasonable prospect of success. The majority described customary international law as the common law of the international legal system though it can be difficult to define it with any precision. [8] The Court recognized two requirements for a norm to be recognized as customary international law: “general but not necessarily universal practice, and opinio juris, namely the belief that such practice amounts to a legal obligation”. [9]

After tracing the development of their origins and utilization in public international law, all argued prohibitions, for example those against slavery, crimes against humanity, cruel and degrading treatment, were found to clearly fulfill both requirements so as to be considered customary international law. [10]

The Court reviewed case law of past centuries and found that customary international law has automatic application in Canadian domestic law through the doctrine of adoption, absent any conflicting legislation, without any need for legislative action or ratification. Since the court was unable to find Canadian laws which would conflict with prohibitions on slavery, cruel and degrading treatment, etc., the customary international law pleaded was found to have a real and active role in Canada’s judicial system. [11] Moreover, the Court viewed such claims as so serious that regularly pleaded torts of battery and conversion in Canada would be insufficient to properly encapsulate the gravity behind gross human rights violations.

In the Court’s view, Nevsun failed to establish that it was “plain and obvious” that the customary international law claims had no reasonable likelihood of success.

Conclusion This is a case that comes with a foreboding warning: companies must review their supply lines and policies to ascertain whether they are involved, directly or indirectly, with human rights abuses. Companies conducting business abroad that profit from activities linked to violations of human rights and norms caused by foreign actors, can expect to face costly and lengthy litigation. More broadly, the ruling breathes air into long standing principles of international human rights that grew to prominence in the twentieth century and modernizes them to better suit modern society.

[1] Nevsun Resources Ltd. v. Araya 2020 SCC 5 at paras 7-15.

[2] Ibid at para 26.

[3] Ibid at para 1.

[4] Ibid at para 29.

[5] Ibid 46-54.

[6] Ibid at para 45.

[7] Ibid at para 50.

[8] Ibid at para 74.

[9] Ibid at para 77.

[10] Ibid at paras 101-103.

[11] The majority disregarded out of hand the notion that international law, such as norms governing treaties and other international instruments have no application to corporations. In the Supreme Court’s view, human rights are not merely enforceable against the State, rather they are “discrete legal entitlements, held by individuals, and are to be respected by everyone”. The Court also considered it heterodox to view corporations as immune from civil liability, when it is a well-known reality that corporations can be responsible for violations of international criminal law. Ibid at paras 110-112.

Article written by Martin Aquilina, with assistance from Alexander Krush

This article is for informational purposes only and does not constitute legal advice. If you wish to seek legal advice, contact Martin Aquilina today.

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