Eritrea is a new country, having only been in existence since 1993. It is also a very poor country, ranking 164th out of the world’s 194 states. 80% of its population are engaged in subsistence agriculture. Eritrea’s major source of foreign currency is its Bisha mine at Asmara. Construction began in 2008 and by 2013 gold exports amounted to US$143m, almost all derived from the Bisha mine. The mine is owned by the Bisha Mining Share Company (BMSC) in which a Bermudan subsidiary of a Canadian mining company, Nevsun, holds a 60% share.
However, all that glitters is not gold. Eritrea has a national service programme requiring its adult citizens to serve in the military for 18 months. In 2002 this was extended to an indefinite period of service. Conscripts in the national service programme (NSP) have provided the labour for the Bisha mine. Three Eritrean refugees, Gize Yebeyo Araya, Kesete Tekle Fshazion, and Mihretab Yemane Tekle, brought an action against Nevsun in the courts of British Columbia. They allege that they were conscripted into the NSP and then forced to provide labour to two for profit construction companies, Segen and Mereb, the latter allegedly owned by members of the Eritrean military. They allege that Nevsun and/or its Eritrean subsidiary, BMSC, engaged Segen and Mereb for the construction of the Bisha Mine.
As well as framing their claims under domestic tort law, the plaintiffs also brought the action against Nevsun for violations of customary international law (CIL) as incorporated into the law of Canada, for: the use of forced labour; torture; slavery; cruel, inhuman or degrading treatment; and crimes against humanity. Nevsun mounted a jurisdictional challenge to the claims on three grounds: forum non conveniens; Act of State; denial of the existence of a cause of action based on CIL.
At first instance, Abrioux J dismissed the application to stay proceedings on grounds of forum non conveniens finding that Nevsun had not established that Eritrea was the more appropriate forum. He also dismissed the Act of State application and decided that the CIL claims were not bound to fail and should proceed to trial. The case then proceeded to the Court of Appeal of British Colombia which upheld the decision on forum non conveniens, decided that in the light of the UK Supreme Court’s decision in Belhaj v Straw [2017] UKSC 3; [2017] A.C. 964. the Act of State doctrine would not bar the claims against Nevsun and that there was enough plausibility to the existence of a cause of action base on CIL to allow those claims to proceed.
In January 2019 the Canadian Supreme Court heard Nevsun’s appeal on the Act of State and CILissues. It has now decided (1) 7-2 that the Act of State doctrine does not form part of the law of Canada and (2) 5-4 that a cause of action based on CIL exists. The trial judge will now have to decide whether Nevsun breached customary international law and—if it did—how it should be held responsible.
So is Canada the new frontier for claims against transnational corporations of the sort that we have seen in the US under the Alien Tort Statute? And if Canada, why not the UK? Maybe, but some unanswered questions remain. The claim is against the parent corporation, but the mine was operated by a subsidiary? How is the parent corporation implicated in the alleged aiding and abetting of the Eritrean State’s violations of CIL? What is the mens rea of this new tort – knowing assistance or purposive assistance? What is the applicable statute of limitations for such a tort?
In the meantime, a useful corrective to the excitement that this decision will inevitably provoke may be found by looking at the 2009 decision of Judge Shira Schiendlin in the South African Apartheid claims brought under the Alien Tort Statute in New York. The basis of the claim was aiding and abetting by foreign corporations of violations of CIL by the apartheid regime in South Africa in the 1980s. The mens rea of the tort was knowing assistance. Companies who had supplied military vehicles to the regime which were used to suppress civilian protests, and companies who had supplied IT systems which were then used in the denationalisation of South African citizens could potentially be liable, but not banks who had provided finance to the South African government. Merely doing business in the apartheid state was not enough to constitute aiding and abetting. To supply a violator of the law of nations with funds, even funds that could not have been obtained but for those loans, was not sufficiently connected to the primary violation.
Sounds a bit like the relationship of Nevsun and the Bermudan subsidiary to the Bisha mine project.
[1] Araya v Nevsun Resources Ltd 2016 BCSC 1856
[2] Araya v. Nevsun Resources Ltd., 2017 BCCA 401
