Courts can, and have been, effective at enforcing Corporate Social Responsibility policies in recent years. Companies should be wary of making empty promises under their CSR policies. Sustainability standards and environmental justice are evolving. A noticeable increase in regulation and judicial control in this area now mandates environmentally-conscious and human rights-compliant conduct for natural and legal persons alike. This results in a more effective enforcement of companies’ Corporate Social Responsibility, providing a range of remedial actions attached to its substantial breaches. The Vedanta/Konkola Copper Mines case offers a clear example of how judicial control can satisfactorily be exercised through the courts.

THE CORE OF THE DISPUTE

In 2015, a claim was brought by more than 2,000 Zambian residents against Vedanta Resources Limited (one of the biggest mining companies in the world) and its subsidiary Konkola Copper Mines (KCM). It was alleged that the discharge of a toxic effluent from the Nchanga copper mine, over an extended period of time, caused substantial damage to the residents’ livelihoods, whose land and waterways have been severely affected by the effluent’s destructive action. Personal injury resulting from consumption and use of polluted water was also alleged.

A JURISDICTIONAL DILEMMA

Vedanta is a UK-based mining company. In 2004, it bought a controlling share in Konkola, Zambia's biggest employer, effectively establishing it as one of Vedanta’s many subsidiaries. When corporate wrongdoing occurs, it can be very difficult to establish extra-territorial liability bearing on the parent company. If a company has its main seat in a particular state but has subsidiaries in others, and the wrongdoing has predominantly occurred in the territory where that subsidiary is located, jurisdictional rules and evidentiary thresholds can prevent legal liability.

There are complex domestic and international rules that regulate the choice of a proper legal forum for proceedings of this sort. With the foreign defendant being located in an extra-EU state, the main problem to getting the case heard in English courts was establishing a real justiciable issue against Vedanta. Once a real issue is established, it must be reasonable for the English courts to try it, and it must bear real prospects of success against the anchor defendant (Vedanta). Additionally, the foreign defendant (KCM) must be a necessary or proper party to the proceedings. Ultimately, the choice of forum must be prompted by the appropriateness of the English courts in the face of a real risk of miscarriage of justice, had the case been heard in the Zambian courts.

After the claim was launched in 2015, permission to appeal was sought (and received) by the anchor and foreign defendants on grounds of abuse of EU law, lack of a real triable issue, and inappropriateness of the English courts given that the claimants would not be substantially denied justice if the case were in Zambian courts. With regards to the latter, the claimants previously argued that the lack of available funding and qualified legal representation for collective claims would have barred them from achieving substantial justice in Zambia.

PUBLIC REPRESENTATIONS AND DUTY OF CARE

In April 2019, the UK Supreme Court handed down a landmark decision confirming that the Vedanta case be heard in the English High Court at a date to be determined. The decision was welcomed for its sensible approach to holding corporations accountable. If companies make public representations stating their intentions to take specific actions regarding both their subsidiaries and the community they serve, the company can be held accountable for those statements. These representations, the court declared, give rise to a duty of care they owe to their communities.

In the case of Vedanta, the court pointed to the company’s public statement that it had responsibility over KCM and that it intended to set sustainable standards for the local communities in which the subsidiary operated. As per material published by the company, those standards were to be achieved through the establishment of appropriate group-wide environmental control, carried out through training, monitoring, and enforcement.  In so acting, Vedanta created legitimate expectations that could be reasonably relied upon by the communities it addressed and it owed the community a duty of care.

The case was settled in January 2021, after more than four years of legal struggle, with the following statement issued:

Without admission of liability, Vedanta Resources Limited and Konkola Copper Mines Plc confirm that they have agreed, for the benefit of local communities, the settlement of all claims brought against them by Zambian claimants represented by English law firm Leigh Day.

Although a settlement is different from the remedies initially sought by the claimants (those were damages, remediation, and cessation to the alleged continual pollution), the outcome serves as a powerful reminder that Corporate Social Responsibility does not exist as a mere reputational tool to be displayed as a badge of honour. Without real matching actions taken by companies to concretely achieve a more sustainable conduct, legal liability will—rightly—ensue.

Diana is a law graduate, legal advisor and research assistant. She has worked in the fields of immigration, asylum and equality law. She strongly advocates for minority rights, social welfare and the rule of law. Diana holds an LL.B. in European and Comparative Law from Maastricht University and is currently studying the accelerated LL.B. at the University of Glasgow to qualify as a solicitor-advocate.

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