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	Chocolate Slavery Case Against Nestlé Allowed to Proceed by Pratap Chatterjee Business & Human Rights Resource Centre & agencies   Jan 2014   Morgan Stanley knew about “Nuclear” Mortgage Loans, Taiwanese Lawsuit Reveals.   Morgan Stanley, a major U.S. investment bank, was well aware of the problems in the sub-prime mortgage market as far back as 2005, according to documents just released in a New York court under a lawsuit brought by the China Development Industrial Bank (CDIB) from Taiwan.   Sub-prime mortgages are a name for loans made to people who have bad credit and cannot borrow money to buy houses under normal circumstances. A flood of such loans from U.S. banks that lasted till 2006 created over $1 trillion in debt, typically for poor people, whose property values crashed when the housing bubble burst in 2007.   On July 15, 2010, CIDB brought a lawsuit in New York State Supreme Court in Manhattan over a $275 million portion of a collateralized debt obligation (CDO) sold to them by Morgan Stanley which contained large quantities of mortgage-backed securities that were built on pools of such loans. “The complaint asserts claims for common law fraud, fraudulent inducement and fraudulent concealment,” wrote Morgan Stanley in a summary of the legal charges it was facing in its annual filings. The plaintiffs alleged that the bank “knew that the assets backing the CDO were of poor quality when it entered into the credit default swap with CIDB.”   The court allowed CIDB to examine Morgan Stanley’s emails which have just been made public. Jesse Eisinger of ProPublica, an investigative website, has written an excellent article explaining the scam. The documents reveal that the Wall Street bankers even cracked jokes about the quality of the loans that they packaged and resold to the Taiwanese suggesting that the CDO be called “Subprime Meltdown”. Instead they played it safe and named the financial instrument STACK 2006-1.   “ Those hilarious investment bankers,” writes Eisinger sarcastically. “We are never going to have a full understanding of what bad behavior bankers engaged in the years leading up to the financial crisis. We are left with what scraps we can get from those private lawsuits.”   “We are pleased that the court in this case is ordering Morgan Stanley to turn over damning evidence, so that the jury will get to see what Morgan Stanley really knew about the troubled nature of its supposedly ‘higher-than-AAA’ quality product,” Jason Davis, a lawyer representing CIDB, told ProPublica.   “While investors and taxpayers all over the world continue to choke on Wall Street’s toxic subprime products, to this day not a single major Wall Street executive has been held accountable for misconduct relating to those products.”   The bank has not denied the emails. “While the e-mail in question contains inappropriate language and reflects a poor attempt at humor, the Morgan Stanley employee who wrote it was responsible for documenting transactions,” the bank wrote in a statement to ProPublica. “It was not his job or within his skill set to assess the state of the market or the credit quality of the transaction being discussed.”   But even more damning is the fact that Morgan Stanley had already laid bets in the markets that such CDOs would fail. Howard Hubler, who set up an internal hedge fund named the Global Proprietary Credit Group at the bank in April 2006, where he “shorted” the sub-prime mortgage market. Hubler, however, made a costly mistake though by insuring other mortgages to pay for his bet, a tale told in Michael Lewis’s book – The Big Short, which costs Morgan Stanley $9 billion.   http://www.corpwatch.org/article.php?id=15810   December 2013   Chocolate Slavery Case Against Nestlé Allowed to Proceed   Eight years after they sued Archer Daniels Midland (ADM), Cargill and Nestlé for allegedly forcing them to work as child labor on a Côte d"Ivoire cocoa plantation, three young men from Mali have won a small victory – the ability to be heard in a California court.   The lawsuit was first filed as a class action to represent thousands of former plantation workers in July 2005 by the Washington-based International Labor Rights Fund (ILRF) and Global Exchange, which is based in San Francisco. The non-profit organizations recorded videotape testimony from the three specific individuals who stated that they had been lured across the border between 1994 and 2000 with the promise of easy work and good wages.   “Plaintiffs, aged 12 to 14 when first forced to work as child slaves, had to work 12 to 14 hour days with no pay. They often worked with guns pointed at them, and were given only the bare minimum of food scraps,” write their lawyers in the complaint.   “Plaintiffs were locked in small rooms at night with other child slaves so they could not escape the plantations. They were whipped and beaten by the guards and overseers when the guards felt they were not working quickly or adequately.”   “I tried to run away but I was caught … as punishment they cut my feet and I had to work for weeks while my wounds healed,” one of the three boys is heard saying on video tape. All three are now adults living in the city of Sikasso, Mali, after escaping slave-like conditions on plantations in Abobogou and Region de Man in Cote d"Ivoire.   The lawsuit has its origins in a 1997 report by the UN Children"s Fund (UNICEF) that estimated that some 200,000 children are smuggled across borders in West African countries like Benin, Burkina Faso, Mali and Togo. A later U.S. State department report estimated that some 15,000 children between the ages of 9 and 12 were forced to work as on cocoa, coffee, and cotton farms in northern Cote d"Ivoire.   After media reports documented such cases in 2001, Nestlé and other major chocolate producers signed a six point agreement with the International Labor Organization in 2001 that they would ensure that their products to be made without slave labor by July 1, 2005.   In 2005 Global Exchange and ILRF’s investigations found that the companies had failed to fulfill their promises.   “Nestlé crossed a very bright line and proceeded in bad faith,” Terrence Collingsworth, executive director of ILRF told Forbes magazine. “It’s clear the only way they are going to change is if they get smacked.”   An amended complaint was filed on July 22, 2009, accusing the three companies of being complicit in the slave trade: Cargill from Minneapolis which buys cocoa beans and operates a cocoa processing plant in Côte d"Ivoire; ADM of Decatur, Illinois, which imports cocoa and manufactures chocolate-based products in factories in California; and Nestlé from Switzerland, which markets chocolate products in the U.S.   The plaintiffs argued that the case could not be heard in Côte d"Ivoire because courts there are "notoriously corrupt” or Mali because it lacked basic laws.   The lawsuit hit a roadblock in 2010 when U.S. District Judge Stephen Wilson dismissed the case saying that U.S. laws did not allow corporations to be sued in for abuses abroad.   However, in April last year, when the U.S. Supreme Court dismissed a case against Royal Dutch Petroleum for human rights abuses in Nigeria, the court ruled that lawsuits against corporations for abuses overseas could be brought in U.S. courts in specific circumstances.   Based on that ruling, Dorothy Nelson and Kim Wardlaw, two appeals court judges, ruled on December 19 that the plaintiffs should be allowed to show that the defendants fulfilled the “actus reus” standard for aiding and abetting a crime.   * Visit the Business & Human Rights Resource Centre for more details: http://www.business-humanrights.org/
	Calls for concrete measures to prevent business related human rights abuses at UN Forum by Business & Human Rights Resource Centre   Opening Remarks by the United Nations High Commissioner for Human Rights at the Annual Forum on Business and Human Rights.   Last year’s inaugural Forum was the biggest global stock-taking of the business and human rights agenda to date. The interest was overwhelming with more than 1,000 participants from more than 80 countries. It showed the seriousness with which people view the issue of human rights and business.   The importance of this issue has not waned – nor, I am pleased to note, has interest in the Forum, with registrations well exceeding last year’s total to reach some 1,700.   The Forum is a unique event that brings together many groups - States, human rights defenders, businesses, employers’ organisations, trade unions and national human rights institutions.   It is not only a chance to discuss how to prevent negative business effects on human rights, but an opportunity to hear from people you may not normally engage with, including those whose rights have been directly affected.   The Human Rights Council’s endorsement in June 2011 of the Guiding Principles on Business and Human Rights was a milestone. It provided for the first time a common, global platform, grounded in international human rights law, for advancing business respect for all human rights. The significance of this achievement should not be overlooked: in just six years, we went from prolonged deadlock in the United Nations to global agreement on a framework for action and accountability.   Having a common reference point for our efforts to protect against and prevent business-related human rights abuses, and for ensuring accountability, is powerful. That is why this Forum is so important. It allows us to share information on progress and challenges, which is why I am heartened to see many business representatives present here.   The Forum is an opportunity to discuss strategies for increasing State protection against business-related abuses. I am encouraged that a number of States are developing national action plans for implementing the Guiding Principles. But it is also clear that there is a long road ahead to ensure full implementation.   My Office has been planning our priorities for the next four years. The message from colleagues in the field was clear: human rights in the context of business activities are becoming priorities for action.   Across the world, people are being displaced as a result of land grabbing for development projects; their livelihoods are being harmed when companies pollute the environment; human rights defenders are being criminalised for their peaceful opposition to development projects; and people, including children, are being forced to work in deplorable conditions.   That is why my Office has made human rights in the economic sphere one of its six thematic priorities. We will be devoting increasing resources and attention to this issue.   The Guiding Principles have helped the human rights community to engage with business representatives and helped businesses to understand what is expected of them.   A number of industry associations, employers’ organisations and individual enterprises have begun to implement the Guiding Principles. Industry associations are exploring how to establish rights-compatible grievance mechanisms and a number of companies have begun to address how to perform human rights due diligence. Responsible supply chain initiatives are increasingly going beyond auditing suppliers to addressing systemic issues.   As the United Nations Office tasked with promoting and protecting human rights, we have a mandate to develop ways to enhance such protection. With regard to the Guiding Principles, we are providing advice and capacity-building on their interpretation and implementation. We are examining areas where the Principles can provide a framework for further development. In particular, we know that victims of corporate-related human rights abuses all too often face barriers when seeking access to effective remedy. That is of particular concern in cases of gross human rights abuses linked to business.   The Secretary-General has recommended that all United Nations agencies, funds, programmes and initiatives incorporate the Guiding Principles into their policies, and has given my Office a mandate to lead the business and human rights agenda within the United Nations system. We are excited to take on this task.   As the United Nations, it is important that we speak with one voice in our engagement with States and business enterprises. We must also ensure that the issue of business respect and accountability for human rights is integrated into global development frameworks. Nowhere is this more important than in the Post-2015 development agenda.   The Human Rights Council took an important step in 2011 with its endorsement of the Guiding Principles. Now it is up to States, international and regional organisations to ensure that they are implemented effectively across the world.   http://www.ohchr.org/EN/Issues/Business/Forum/Pages/2013ForumonBusinessandHumanRights.aspx http://www.business-humanrights.org/SpecialRepPortal/Home   UN Forum on Business and Human Rights – A time for Action, by Phil Bloomer.   Mary Robinson closed this year’s Annual Forum. She made a rousing plea for governments, business, and civil society to make 2014 the year for action and implementation on human rights, and climate change (the latter, sadly, having hardly been mentioned in the 2 days)   This was echoed by Aron Cramer and Debbie Stothard in their remarks. In many ways that sentiment summed up the best of the conference. Over 1700 delegates came from every continent, many of them with a hunger to drive rapid action to make human rights a reality across the complex supply chains of globalised markets.   Civil society from around the world brought an urgency to proceedings. They kept the debate honest by bringing the appalling reality of victims and the vulnerable into the debates, calling for protection of human rights activists who are increasingly threatened, and demanding systemic change that attacks the root causes of human rights violations. A refrain was the demand for a strengthened mandate for the UN Working Group on business and human rights when it comes up for renewal in a year.   Some of the most insightful comments came from company delegates as they described the struggles they face inside their sectors, and their companies to put human rights alongside their fiduciary duty to shareholders. Sometimes they must convince senior executives of the ‘business case’ for human rights in a 21st Century company. Sometimes they face profound moral dilemmas they feel ill-prepared for. A number of companies spoke out for stronger state action to enforce laws and regulation to uphold human rights. They described their own complex and duplicating human rights auditing as ‘inefficient and ineffective’ (this call for more state action had far more credibility from those companies who are recognised for paying fair taxes to the states where they operate).   One candid executive pointed out (under Chatham House rules) that, for many companies, the state is the largest procurer, and states should use this power to insist human rights standards and UN Guiding Principles are upheld by the companies they buy from. A disappointment was the relatively few businesses present, the lack of any major CEOs, and the general reticence of most businesses to speak (often the business speaking slots were sadly not used).   Joe Stiglitz spoke on the first day. He injected some straight-talking economics into the proceedings. “For the good function of capitalism, business must go way beyond profit maximisation” and integrate human rights fully into their core business model. ‘Those who say companies’ responsibility is simply to maximise profits within the laws set by government, conveniently forget that the private sector promotes laws that deny human rights’. He called for cross-border collaboration between states to deliver norms and accountability through extra-territorial justice.   Trade unions had a welcome power in key debates (despite being only 3-4% of delegates). They sent senior representatives who spoke with passion and experience about the “muck and bullets” of their everyday experience negotiating for living wages, fair shares, and safe workplaces. It was refreshing to see the almost universal acceptance of the central importance of freedom of association and the right to collective bargaining as foundation stones to human rights. Indigenous and minority rights organisations were also highly effective in pressing for respect of their lands, culture, and well-being.   The toughest session I attended was on ‘Access to Remedy’ for those whose rights have been violated. It was tragic to hear, yet again, of the dispossession, rape, and thuggery which had gone unpunished from Papua New Guinea to Peru. There was harsh criticism for those non-judicial mechanisms for access to justice that place all the power with the company. Perhaps the ugliest was the reported case of the victims of rape by security guards of Barrick’s Porgera mine in Papua New Guinea. It was reported by Miningwatch Canada that the victims have been offered benefits through the remedial programme, but only contingent on their signing legal waivers that would grant the company permanent legal immunity.   Debate continues on whether the UN Guiding Principles on Business and Human Rights should be strengthened with a ‘Binding Treaty’. Business associations spoke of the need to encourage adoption of the Guiding Principles, while much of civil society wanted a treaty with teeth, especially in light of the slow incorporation of the Guiding Principles into policy by both companies and governments.   One interesting addition came from a German lawyer who proposed more use of competition law, at least in Europe. He suggested cases might be brought against companies gaining an unfair advantage through out-sourcing in a manner that leads to human rights abuses.   The Forum was a success in bringing diverse and vocal actors from around the world to learn from each other’s experiences, and listen to other’s perspectives. The UN Working Group, who organised the Forum with the support of the Forum Secretariat at OHCHR, looked elated and shattered as the Forum closed – it’s a credit to them that these were the mixed emotions shared by many of the participants.   * Phil Bloomer is Executive Director of Business & Human Rights Resource Centre. http://www.business-humanrights.org/Home   Bhopal disaster: Never again? by Joe Westby, Corporate Campaigner, Amnesty International.   This week marked the 29th anniversary of one of the world’s worst ever industrial disasters: the infamous gas leak from a Union Carbide plant in Bhopal, India that, on the night of 2-3 December 1984, killed thousands. Many more have been left to suffer since then, given the abject failure by both the Indian government and the companies involved to provide survivors and their families with an adequate remedy and justice.   This week there was also a major UN conference on business and human rights. During this annual Forum, 2000 participants, including myself, descended on Geneva to discuss how to prevent corporate human rights abuses and ensure survivors are not forgotten – essentially how to prevent another Bhopal from ever happening again.   These two events provide an opportunity to reflect on the progress that has been made on business and human rights over the past decades – and how much more still needs to be done.   In Bhopal, we are entering the 30th year since the disaster – but action is needed as much now as ever. Far from being forgotten, the impact of the leak continues to be felt today, as a hundred thousand people have been left with health problems but largely without compensation or adequate medical treatment. Women have suffered in particular, and many are now leading the communities’ campaign for justice.   The scale of the failures following the Bhopal gas leak is staggering. Even as people continued to die, Union Carbide was able to divest its interest in the company that owned the plant and walk away. The abandoned factory site is still polluted, with an estimated 350 tonnes of toxic waste remaining. As the polluter, Union Carbide has a responsibility to foot the bill for clean up; however, its present parent company Dow has consistently denied all responsibility for the ongoing impacts of Bhopal.   In Geneva, I was able to enjoy the plush surroundings at the UN Palais de Nations, with fine art adorning the walls and a serene view over Lake Geneva. The abandoned Bhopal plant site, with its toxic legacy, is about 5,000 miles away but might as well be on another planet.   The discussions at the Forum were primarily focused on implementation of the UN Guiding Principles on Business and Human Rights, endorsed by the UN Human Rights Council in 2011. But despite much talk of progress, there was little evidence that governments are actually willing to tackle the root causes of problems around business and human rights.   Governments in “home states” still turn a blind eye to serious human rights abuses involving their companies abroad. Many of the barriers to justice faced by the Bhopal survivors are systemic problems that require concerted action; however, avenues to justice seem to be closing rather than opening. Research conducted by Amnesty International into the dumping of toxic waste in Abidjan in 2006 shows that corporate human rights disasters continue to happen, and that serious obstacles to obtaining an adequate remedy continue to exist.   Meanwhile, companies continue to publicly support human rights, but when faced with even modest demands - for example to disclose payments made to governments or publicly report on their supply chains or their impact on human rights – they fight tooth and nail to oppose them. It is overwhelmingly clear that companies will not go far enough on their own initiative – which is why the UN has such a potentially key part to play.   The UN must take a much stronger lead in ensuring existing standards are implemented and strengthened - not only through guidance and support, but also by pressuring the governments and corporations that are falling short. In relation to Bhopal, UN Special Procedures should call for remedial action to be taken immediately.   In order to prevent another business and human rights catastrophe like Bhopal, States must better enforce existing laws that regulate business operations and their respect for human rights, and introduce further mandatory regulations that have extraterritorial effect. Efforts to improve access to remedy should focus primarily on state-based mechanisms, and governments in both home and host states must ensure that people whose human rights are abused by companies can file cases in their courts, without facing onerous obstacles.   At the Forum, we were eager to see appetite for such concrete measures. But as I listened to a great deal of talk but few real commitments, I found myself wondering whether we could confidently say that - almost 30 years on - the failures of Bhopal could not happen again today. Sadly this year’s Rana Plaza garment factory collapse in Bangladesh suggests otherwise, as concerns around both inadequate safety measures before the incident, and ongoing delays in providing compensation to victims, seem all too familiar.   People whose human rights have been undermined by business operations should not have to wait 30 years without justice. The frustration among NGOs over slow progress exhibited at the UN Forum is borne out of the urgency required for the people of Bhopal and other communities around the world whose rights have been abused by corporate actors. We must mean it when we say “Bhopal: never again”.   http://www.escrnetpeoplesforum.org/forumwatch-blog/2013/12/5/bhopal-disaster-never-again http://www.escrnetpeoplesforum.org/joint-statement-binding-international-instrument http://www.ishr.ch/news/corporate-accountability http://www.hrbcountryguide.org   October 2013   Joint NGO Statement to the Human Rights Council in support of the initiative of a group of States for a legally binding instrument on transnational corporations. (Fidh)   The operations of many Transnational Corporations (TNCs) and other business enterprises cause the devastation of livelihoods, territories and the environment of the communities where they operate; they pursue the commodification of essential services and of nature itself.   Many TNCs and other business enterprises also violate or are complicit in violations of human rights and labour rights, erode the basis of food sovereignty, pollute water sources and lands, and plunder natural resources.   The Vienna+20 Civil Society Organizations (CSO) Conference with 140 participants was held in Vienna on June 25/26 this year to commemorate the Second World Conference on Human Rights and address current challenges for human rights. This Conference called on States to urgently develop and institute binding systems of international regulation and norms for TNCs.   States have the obligation to ensure, by establishing strong legal systems of accountability for violations of rights and effective remedy and justice for all affected people, including along the supply chain. The Conference strongly urged States to hold accountable those transnational actors, TNCs and other business enterprises that violate human rights.   On the occasion of the recent UN regional forum on business and human rights in Medellín more than 100 CSOs from Latin America and other regions expressed the same concerns and called for a binding instrument. Likewise during a Round Table in the European Parliament in Brussels on September 5th, governments were also urgently asked for a binding instrument to address the accountability of TNCs and end their impunity.   The undersigned social movements and civil society organisations welcome and support the initiative taken by a number of States in the Human Rights Council towards establishing an international legally binding instrument, concluded within the UN system, clarifying the human rights obligations of transnational corporations, in particular in relation to human rights violations, economic and ecological crimes, and abuses, and establishing an effective mechanism to provide remedies and access to justice for all affected people in cases where such remedies are de facto not provided in domestic jurisdictions.   http://www.fidh.org/en/globalization-esc-rights/joint-ngo-statement-to-the-human-rights-council-in-support-of-the http://www.icj.org/on-video-access-to-justice-and-corporate-complicity-in-human-rights-abuses/ http://www.escr-net.org/node/365434 http://www.treatymovement.com/joint-statement-binding-international-instrument Visit the related web page
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