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Environmental Damage, Civil Liability and Jurisdiction (or Arbitration?)

On 12 December 2019, Judge Bruno Simma and the Drafting Team of The Hague Rules on Business and Human Rights officially launched The Hague Rules at the Peace Palace in the Hague.

Having been a member of the Sounding Board, I was indeed happy to see the Project achieved and the Rules out.

Of course, whether the Rules and the underlying idea of arbitration for human rights violations will be of any real use remains to be proven, but as time goes by and we face once and again the same scenarios of lack of remedy before the courts, proposals for alternatives cannot but be greeted.

In January 2019, a working paper of the MPI Institute Luxembourg, authored by Burkhard Hess and Martina Mantovani, titled Current developments in forum access: Comments on jurisdiction and forum non conveniens – European perspectives on human rights litigation, provided an overall description of the situation in Europe. American cases are also well known.

Recently, I have spotted another example in Asia, in the same lines. The last word has not yet been said, though: let’s keep fingers crossed, not only for the victims’ sake, but also because it would be encouraging to see the courts making good use of available procedural tools, such as forum necessitatis.

On 6 April 2016, toxic waste was discharged into the sea by Formosa Plastic Group (FPG) subsidiary Ha Tinh Steel Corporation – the largest foreign direct investment in Vietnam as well as the biggest integrated steel mill in Southeast Asia.

Subsequent pollution led to the death of massive amounts of fish and marine life affecting Hà Tĩnh, Quảng Bình, Quảng Trị and Thừa Thiên–Huế provinces in central Vietnam. FPG accepted responsibility for the disaster on 30 June 2016, and agreed to give 500 million USD in compensation to the Vietnamese government for disaster relief work.

Yet, the Vietnamese government mainly gave compensation to those living in Hà Tinh. Victims living in other provinces tried to bring the case to local courts in Vietnam. Their attempts were unsuccessful on the grounds that they had failed to prove their factual damages.

On 11 June 2019, almost three years after FPG acknowledgment of liability, a group composed of 7,875 victims of the marine disaster filed a lawsuit against FPG at the Taipei district court. They are supported by environmental and human rights organizations in Taiwan, Vietnam, US, France and Canada.

The legal representatives of the Vietnamese plaintiffs are asking for US$4 million dollars in compensation for the first group of 51 plaintiffs.

There are two reasons for the plaintiffs to file the lawsuit in Taiwan.

Firstly, the Vietnamese government has arrested several protesters after the marine disaster, and (allegedly) there is no court in Vietnam willing to accept the lawsuit under the pressure from the Vietnam government. The plaintiffs who attempted to seek remedies before the Vietnamese courts have been violently suppressed. Therefore, they can only find justice in other countries.

Secondly, the lawyers in Taiwan believe that they can prove that FPG in Taiwan bears the responsibility for the wrong doings and negligence of Ha Tinh Steel Corporation’s malpractice. Ha Tinh Steel Corporation in Vietnam was jointly invested by FPG, China Steel, and JFE Steel.  Moreover, FPG holds most of the shares: in other words, FPG plays an important role in the operation of Ha Tinh Steel Corporation, and makes profit from Ha Tinh Steel Corporation.

As Taiwan is a home-state to multinational corporations investing in industries that cause environmental harm in other third-party countries, the case, if successful, would have major implications for setting up a regulatory frame regarding environmental protections in global investments. It would also be the first transnational litigation case regarding environmental harm in Taiwan.

The Taipei District Court had accepted NT$1.2 million (US$39,234) court fees on 13 June 2019. However, four months later, it rejected the case arguing lack of jurisdiction.

The plaintiff’s lawyers filed an appeal on October 24. The lawsuit is now pending for a High Court ruling over the jurisdictional issue. I will try to keep track and post on the next developments.

 

Note: The Formosa Plastic Group and its international subsidiaries have already faced major fines and lawsuits in the United States, notably in Texas, Louisiana, and Mississippi after discharging poisonous chemicals into the land and underground water sources.

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