Posted 27th May 2001

Corporates In Doc

Three South African professors of medicine have finished rummaging through boxes of x-rays in a Johannesburg storehouse for evidence to be used in a case which could set a precedent for all multinational companies. After the medical records of 650 miners have been screened, the doctors' report will go to a London court today, where lawyers will show evidence that the overwhelming majority of miners suffered asbestos-related damage in the workplace. Now ill or dying, the miners are among 4,500 workers who are claiming compensation from Cape Plc, the British parent company of a subsidiary in South Africa that employed them in asbestos mines and processing plants more than 20 years ago.

The attempt to pin responsibility for unsafe working conditions on the parent company is the latest step in the battle to force transnational corporations to accept their social obligations in all the countries in which they operate. The English court will be asked to decide for the first time whether a British parent company has a "duty of care" towards overseas workers, just as if the workers were employed in Britain. The subsidiary, Cape Asbestos SA (Pty) Ltd, ran the South African mines until they were closed 20 years ago. Many of the grim sites that housed the mines and their refuse have been "rehabilitated", but their outlines remain, reminding former workers of the place where they are convinced they sustained their illnesses. The workers' lawyers believe their case is strong.

A former manager at an asbestos plant operated by a Cape subsidiary in Barking, Essex, says that the company closed the plant in 1968 because of concerns about the rate of asbestosis, a swelling of the lungs caused by the chronic inhaling of asbestos, among staff there. The parent company gave the British employees compensation. But Cape's subsidiary in South Africa maintained its operations for a further decade, even though the dust levels at its mine in Penge were 30 times higher than those permitted in Britain, according to figures released by the company itself. The case against Cape will be watched closely by human rights campaigners and non-governmental organisations (NGO), hoping to use the legal precedents set in rich countries to gain redress for corporate actions in poorer countries.

This move to force ethical standards on multinationals - echoing earlier consumer boycotts - has been fuelled by the internet, which has made it easier for campaigners to keep in touch, and by a growing sense that transnationals are making a mockery of national sovereignty. The number of transnational court cases is growing worldwide. Judges in the US have started to hear cases against Shell for alleged human rights violations in Nigeria, and against the oil company Unocal for allegedly condoning forced labour in Burma. Richard Meeran, who heads the Solicitors' Human Rights Group and is acting for the South African asbestos workers in the case against Cape, says: "Everyone knows big companies enjoy a total lack of accountability under international law. Why shouldn't a parent company, which is in control of and profits from mining, be regarded as owing a duty of care just like anyone else?"

The growing recourse to the courts has infuriated corporate lawyers such as the American John Reynolds, who accused environmental campaigners of using these cases to frustrate multinationals in their commercial exploitation of natural resources in the developing world. "Activists use methods that create a hysterical ambience in which legitimate development gets painted with a negative brush of fabricated human rights abuses and alleged environmental disasters," he said recently. To defeat the claims some companies have resorted to "forum shopping", picking the country in whose courts they think they can get most favourable treatment. This action threatened the claims made by the thousands of South African miners who worked for Cape's subsidiary. Cape argued that the miners should apply to a South African court, but the issue was appealed to the House of Lords, which ruled that English courts must try the case. More than 60 claimants have died while these proceedings rumble on.

Now lawyers in London will argue whether the dispute can be dealt with as a group action based on a few test cases. Cape's lawyers want to look at each case individually, a proceeding which will take a great deal of time. In the US, claims against corporations for violating labour and environmental standards have had a better chance of being heard thanks to the Alien Tort Claims Act of 1789. This allows foreigners to file claims in US courts for major breaches in international human rights law wherever they took place. California's courts last year saw the case of 15 villagers from the Tenasserim region of south Burma who alleged that Unocal used forced labour to lay a pipeline to take natural gas to Thailand. The French company Total was also involved. The judge said the evidence suggested that the two companies knowingly benefited from forced labour, but ruled that this alone was insufficient to establish their liability. The decision is under appeal.


Whatever the outcome of Cape plc's case, efforts to make global responsibility go hand in hand with profit are bound to continue.

Corporate cases pending

• Burmese villagers are appealing against a US judgment in favour of Unocal on the use of forced labour

• Chevron is being sued in California for the alleged killings of protesters in Nigeria

• Freeport McMoran is being sued in US courts for alleged environmental damage in Irian Jaya, Indonesia

• Texaco is being sued in New York for allegedly violating the rights of Ecuadorean Indians..

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