Thursday, November 5, 2015
I would like to build off of Marcia Narine’s post about binding arbitration clauses. In her post, she discusses two related subjects. The first concerns the importance of civil procedure, noting that jurisdictional problems prevented the human rights victims in Kiobel from finding justice. The second addressed the grim picture painted by the New York Times about how companies use arbitration clauses to undermine meritorious legal claims. I mention this because there seems to be a radical development brewing about how arbitration clauses might actually help human rights victims.
The problem with adjudicating human rights claims is that few courts have been able, or willing, to remedy violations. Most abuses occur in countries where legal systems are too weak to prosecute offenders. And, in light of Kiobel, the United States generally lacks jurisdiction over entirely foreign defendants and events. This has led commentators to conclude that courts of law are poorly equipped to hear human rights cases.
But could arbitration be the answer? Consider the Bangladesh Accord, which was recently signed by over 200 apparel companies—including H&M, Abercrombie & Fitch, and Adidas—after a series of sweatshop fires in Bangladesh. Signatories agree to take numerous proactive and remedial measures intended to prevent future factory tragedies. The novelty of the Accord is found in its dispute resolution provision, requiring signatories to settle disputes by binding international arbitration. Since the New York Convention makes international arbitral awards globally enforceable, the Bangladesh Accord seems to have found a solution to the aforementioned jurisdictional issues. Although the Bangladesh Accord pertains only to a small subset of potential human rights abuses, the agreement suggests that private dispute resolution could offer a superior forum to hear types of human rights abuses.
The question is whether other agreements might similarly seek to use arbitration clauses to resolve human rights disputes—or whether the Bangladesh Accord will remain an anomaly. Convincing other companies in other industries to arbitrate corporate responsibility standards will certainly prove difficult since, as it currently stands, transnational firms face little liability for their torts in developing countries. However, it does appear that the International Olympic Committee is using a similar mechanism now that host countries must abide by human rights standards, enforced by the Court of Arbitration for Sport. Indeed, the potential use of binding arbitration to enforce corporate responsibility is certainly an interesting development considering arbitration’s reputation as an obstacle that frustrates less sophisticated and resourceful parties.
There are a couple of articles discussing the potential use of international arbitration to promote human rights. Consider this article by Professor Roger Alford (who also has a great article about the future of human rights litigation after Kiobel) or me.