The UK’s Supreme Court direction on Vedanta raises hope that corporates could be held to account over their subsidiaries’ impact on non-EU local communities where they operate.
The United Kingdom’s Supreme Court handed down a landmark judgment today in a case between Zambian villagers and a subsidiary group of Vedanta Resources Plc. This may have set a legal precedent for other non-EU communities like India, that are adversely affected by mines run by the parent company. The ruling also means that other communities in the developing world affected by large multinational corporations could seek similar legal redress in the UK.
In a brief statement on Wednesday, Lord Briggs, who was one of the five justices in the Lady Hale-led bench dealing with the case, stated that “had it not been for the access to justice problem” faced by the Zambian claimants in their home country, the apex court would have dismissed the case. However, because the court believed that such an issue would negate the possibility of legal relief for the farmers affected, it ruled that the proceedings against Vedanta and its subsidiary Konkola Copper Mines (KCM) “must proceed in England”.
The claimants, largely villagers belonging to communities along Zambia’s River Kafue, as well as the city of Chingola, allege that KCM’s activities have resulted in the severe pollution of their water sources with toxic chemicals such as sulphuric acid, the destruction of their farmlands, and numerous health issues such as respiratory illnesses amongst the local population.
James Nyasulu from Chingola, a long-term campaigner and lead claimant in the Zambian case, said in a statement that the judgment “…will finally enable justice for the thousands of victims of pollution by KCM’s mining activities, who have suffered immensely since 2006.”
Martyn Day, senior partner at law firm Leigh Day, which is representing the Zambian villagers, said, “I hope this judgment will send a strong message to other large multinationals, that their CSR (Corporate Social Responsibility) policies should not just be seen as a polish for their reputation, but as important commitments that they must put into action.”
The news potentially sets a precedent in terms of “duty of care” owed by a UK-based parent company, to local communities affected by its foreign subsidiaries, potentially opening up a new avenue for legal relief for other areas affected by Vedanta-owned mines, such as Thoothukudi in Tamil Nadu.
The Anil Agarwal-led company had delisted from the London Stock Exchange last year, but is headquartered in the UK, according to its website. The company on Wednesday, said in a statement that the judgement pertains to procedure and does not reflect the merit of the allegations. “Vedanta and KCM (Konkola Copper Mines) will defend themselves against any such claims at the appropriate time,” it said.
“This is a landmark judgment that will open the door for similar cases across the Third World,” says Samarendra Das, a researcher and senior member of the non-profit organisation Foil Vedanta, which played a key role in bringing the case to the attention of the UK’s legal system.
“Previous cases against MNCs like Unilever and Shell have failed. So, this ruling is a much-needed step in the right direction, that has come after 13 years of struggle,” he added. “It also shows the need for the British government to put in place a fast and cost-effective method of redressing violations by its companies abroad.”
The claimants were able to try Vedanta and KCM as parties, suggesting that a similar approach could be taken in the case of those affected in Thoothukudi. “This is an early phase, but those affected by Sterlite’s activities in Tamil Nadu can also follow a similar procedure and name them and Vedanta as parties in a future lawsuit,” adds Das.
In April 2016, a High Court ruling granted the claimants jurisdiction to have their case against KCM and Vedanta heard in the UK, citing KCM’s uncertain and opaque finances as one reason they may not be able to get justice in Zambia. The Court of Appeal upheld this verdict in July 2017.
Some legal experts, however, have cautioned against optimistic evaluations of the Supreme Court’s judgement, given that its basis was founded in the plaintiffs being able to prove that they could not access legal justice in their home country; something which is notoriously difficult to prove in a court of law.
“The judgment makes some sense, but now worried that plaintiffs will need to show #accesstojustice issues,” tweeted Dr Tara Van Ho, a lecturer at the University of Essex’s School of Law.
However, the Supreme Court judgment noted that a significant factor in determining whether the Zambian claimants could gain access to justice was “…the practicable impossibility of funding such group claims where the claimants are all in extreme poverty, because they could not obtain legal aid and because conditional fee agreements (CFAs) are unlawful in Zambia.” India is one of the few countries in the world where lawyers are prohibited from charging conditional fees under The Bar Council of India Rules, Part VI, Chapter II, Section II, Rule 20 due to fears of conflicts of interest.
In May last year, Tamil Nadu state police opened fire on a crowd of anti-Sterlite protestors agitating against the environmental pollution of the area and the numerous health issues faced by the local community, as a result of the Vedanta-owned copper smelting facility. Thirteen people were killed and over a hundred injured.
The plant was subsequently sealed by the state government, but was cleared to be reopened by a National Green Tribunal commission. The Sterlite Plant is currently closed, a decision Vedanta is contesting in the Madras High Court, which will hear the case on April 23.