Thursday, November 5, 2015

Following up on Arbitration and Human Rights

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

ADR, Human Rights, International Law | Permalink


Thanks for this post, Greg. As you suggest, I think arbitration may be useful in adjudicating certain human rights claims, especially if there is a powerful party or organization advocating on behalf of the victims.

Consumer arbitration, the focus of the first NYT article, has a number of problems stemming, at least in part, from the power/information asymmetry. The abuses of consumer arbitration are likely beyond the scope of your post, but definitely seem to raise a set of serious issues.

Posted by: Haskell Murray | Nov 5, 2015 10:53:24 AM

Fantastic post. This issue was discussed at the last UN Forum on Business and Human Rights in Geneva in 2014 and prompted very spirited discussion about potential power imbalances. The topic will be discussed at the next forum which begins in mid-November. I will report on this issue and how it related to Greg's post after that meeting. I also highly recommend Greg's great article linked in the main post.

Posted by: MARCIA NARINE | Nov 5, 2015 3:54:01 PM

Thank you for this. I'd love to hear as much as you'd like to share from the UN Forum on Business and Human Rights.

Posted by: Greg Day | Nov 5, 2015 7:40:52 PM

Thanks for this post, and for joining us as a guest blogger, Greg. The cynic in me worries that touting private dispute resolution in this context just serves as a safety valve for reducing the pressure for meaningful change on the access-to-courts front, but effectively leaving victims without any forum while that battle continues isn't particularly appealing either.

Posted by: Stefan Padfield | Nov 6, 2015 5:53:24 AM

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