Thursday, March 29, 2018

A la alien tort, German court engages business, human rights case of Pakistan fast fashion tragedy

In 2012, fire ravaged a textile factory in western Karachi, killing 260 and injuring 32.  The fire occurred only hours after a shoe factory fire in Lahore killed scores, and two months before the Dhaka fire in Bangladesh killed more than 100 and injured 200.  The Karachi fire is now the subject of civil litigation in Germany, taking advantage of a federal law that does what human rights advocates would like to see happen—but probably won't—under the U.S. alien tort statute, 28 U.S.C. § 1350.

These recurring factory tragedies have short half-lives in western media, owing to time-honored if callously objective journalistic measures of relevance (e.g., Jacoba Urist in The Atlantic).  But the connection between these deaths and our daily lives in the west runs much deeper.  These deaths represent just one adverse consequence of fast fashion, the global commercial trend that gives us retail clothing at an affordable cost that dramatically undervalues human and environmental externalities.  My friend and colleague Nick Anguelov (Twitter) speaks powerfully on this subject and wrote about it in his 2015 book, The Dirty Side of the Garment Industry (CRC Press, Amazon) (see also Nick at UIA, on this blog).

Claudia Müller-Hoff and Carolijn Terwindt, advocates with the European Center for Constitutional and Human Rights, recently highlighted the German case for the Oxford Human Rights Hub and Law of Nations blogs.  As they explain, a decision is now anticipated on claims in Dortmund by four plaintiffs against KiK, a clothing retailer that was the principal customer of the Karachi factory.  Forensic architects in the U.K., Goldsmiths at the University of London, produced an unsettling and damning video that aided the plaintiff's case, published online two months ago.



A meaningful "win" for plaintiffs came once already in the court's preliminary ruling to admit the case under a German federal law, adopted in December 2016, the "National Action Plan on Business and Human Rights."  The law represented implementation in the EU of the U.N. Guiding Principles on Business and Human Rights, which are, in turn, an instrument of the corporate social responsibility movement and under the umbrella of the U.N. Sustainable Development Goals.

The German law, as reported by Müller-Hoff and Terwindt, states: “Anyone who considers that his or her rights have been infringed in Germany by the actions of an enterprise can make claims before the civil courts.”  The law is heralded as an important advancement for human rights protection in the vein of universal jurisdiction, though it reasonably does require a jurisdictional connection to Germany. 

The KiK case has a parallel in the U.S. alien tort case currently pending in the U.S. Supreme Court, Jesner v. Arab Bank (SCOTUSblog).  Jesner was heard in oral argument in October; see this excellent analysis by Amy Howe.  The dispute in Jesner focuses principally on whether the alien tort statute applies to corporations.  Meant to give U.S. courts jurisdiction over violations of international law, probably to protect commerce, the statute dates to the Judiciary Act of 1789, when corporations and international law were both very different from what they are today.

The U.S. Supreme Court has evidenced reluctance to construe the statute as broadly as its text might suggest in contemporary terms.  Previous case law established that the statute cannot reach a "foreign cubed" case—foreign plaintiff, foreign defendant, and foreign soil—but myriad questions remain.  Since the 1980s, human rights advocates have championed the alien tort statute as an appropriate mechanism to protect human rights abroad.  The WNYC podcast More Perfect did an outstanding episode in October on the history of the statute: Enemy of Mankind.  (Amy Howe also wrote a good summary here.)  For the skeptical view of Jesner's and the statute's viability in this vein, see an excellent op-ed by Professor Samuel Estreicher in the New York Law Journal in January.

There has been some speculation that the Court might duck the corporate liability question in Jesner by ruling instead that the case is foreign cubed.  And there lies the interesting parallel to KiK.  The plaintiffs in Jesner seek to hold Amman-based Arab Bank liable for financing terrorism in Israel and Palestine.  To satisfy the "touch and concern"-the-United-States jurisdictional test, plaintiffs-petitioners rest their case on a rather thin reed: that a U.S. office of the bank had a hand in laundering funds for Hamas.  In Germany, the only link to German jurisdiction is KiK's role as principal buyer from the Pakistani factory. It's hard to imagine such a connection supporting liability in conventional tort analysis in American law; think of Apple's more-moral-than-legal responsibility for working conditions at Chinese Foxconn.

The German law certainly steps out in liability exposure in a way that American law does not permit.  If the alien tort statute is not an appropriate vehicle to effect human rights accountability in the American private sector, and subsequent legislation is not forthcoming, the United States will be increasingly divergent from the EU in relying on market forces alone to ensure corporate social responsibility.  And as Shankar Vedantam of The Hidden Brain reported on NPR, the free market might not cut it.

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