In what has been described as an “unprecedented” and “extraordinary” intervention, a group of eleven United Nations (UN) representatives have expressed serious concerns about a proposed mine at Frieda River in Papua New Guinea (PNG). The group of ten UN Special Rapporteurs, along with the Chair of the UN Working Group on Human Rights and Transnational Corporations, wrote letters to Frieda River Limited, the company leading the project, as well as the governments of PNG, Australia, China, and Canada. They argue that “the project and its implementation so far appears to disregard the human rights of those affected”.
The UN response highlights an important debate in the business and human rights field: what exactly is the scope of the responsibility borne by corporations, host states, and the states where multinational corporations are headquartered? The answer is not straightforward. We are often quick to point out threats to and alleged abuses of human rights. If we expect any meaningful response, it is important to be diligent about identifying where precisely the responsibility for action lies.
THE SEPIK DEVELOPMENT PROJECT
The proposed copper and gold mine at Frieda River is part of the Sepik Development Project, a large infrastructure development located in the Sepik Basin in PNG. According to the Environmental Impact Statement for the mine, which is currently under consideration by the PNG Conservation and Environment Protection Authority, the mine is expected to operate for 33 years following a seven-year construction period. A hydroelectric power facility to be built downstream from the mine is expected to operate for 100 years and would provide both electricity to the mine and storage of tailings and other mining waste. Supporting infrastructure would include roads, an airport, an ocean port, waste dumps, and a 325 km pipeline.
If the mine goes ahead, it would be the largest PNG has ever hosted, and one of the largest in the world. The Environmental Defenders Office Australia (EDO) has highlighted the danger of constructing a tailings dam to contain toxic waste—which would be more than twice the size of Sydney Harbour—in an earthquake-prone area that is also subject to extreme rainfall and flooding.
OPPOSITION TO THE PROJECT
The UN letters, written in June 2020, have just recently been made public, but environmentalists, including Australian scientist Professor Tim Flannery, have been warning of the risks posed by the Sepik Development Project since at least 2016. The PNG-based Centre for Environmental Law and Community Rights (CELCOR) and their community client, Project Sepik, have called on the PNG government to reject the mining project. Project Sepik is a community group composed of members from the area that will be directly affected by the project.
CELCOR and Project Sepik made an urgent appeal to the UN Special Rapporteurs on Toxics and the Rights of Indigenous Peoples in May 2020, which prompted the remarkable response by the group of UN representatives. Around the same time, the local chiefs of 28 haus tambarans (“spirit houses”), who together represent some 78,000 people living in the Sepik Basin, formally requested that the PNG Government halt the project. Their declaration states that:
It is our innate role to guard the river from exploitation and destruction by outsiders. Our future is in peril from this proposed mine and, therefore, we have gathered together as guardians of the river to stand firm as one.
HUMAN RIGHTS IMPLICATIONS OF THE PROJECT
The UN letters highlight a number of serious risks posed to the right to life, health, livelihoods, and specifically the rights of Indigenous peoples resulting from the project. Pollution by toxic waste and tailings (whether controlled or in the event of a dam failure) could cause severe health impacts and threats to life. It could also destroy livelihoods by irreversibly damaging the natural resources relied on by the communities in the Sepik basin. The letters further note the risk of constructing the tailings dam in a seismically active area:
While termed by the proponents to be “very unlikely,” a failure of the tailings dam and the release of the toxic waste would be catastrophic resulting in loss of life and environmental destruction.
Communities will also be displaced to make way for the project. The UN Declaration of the Rights of Indigenous Peoples requires governments to consult Indigenous peoples about laws and activities that may affect them, and to obtain “free, prior and informed consent” for any activities that would violate or undermine their rights (article 19). This applies to the proposals for construction, resettlement, and disposal of hazardous waste in their traditional lands, as Indigenous peoples have the right to own, use, and control their lands, including water and other natural resources (article 26), and not to be forcibly removed from those lands (article 10).
The UN representatives raise concerns that the requirement to obtain free, prior, and informed consent may not have been complied with, noting that critical information regarding the tailings dam (including analysis of possible failure scenarios) has not been made available to affected communities. The letters note the lack of evidence that villagers have been adequately consulted. They further note that human rights defenders have reportedly been targeted with death threats, intimidation, and gunshots since speaking out about the project.
HUMAN RIGHTS OBLIGATIONS OF MINING COMPANIES
Frieda River Limited owns 80% of the mining joint venture and is a wholly owned subsidiary of PanAust Limited. PanAust Limited is incorporated in Australia but is itself ultimately wholly owned by a Chinese state-owned enterprise, Guangdong Rising Assets Management Co Ltd. The other 20% of the joint venture is owned by a Canadian company, Cobalt 27 Capital Corp.
As the UN letters set out, the UN Guiding Principles on Business and Human Rights (UNGPs) establish a “global authoritative norm” of conduct for all businesses in relation to human rights. Guiding Principle 13 states that businesses have a “responsibility to respect human rights,” which means that they must:
(a) Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur; [and]
(b) Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.
The UNGPs are technically non-binding. They were adopted unanimously by the Human Rights Council and therefore rely on states parties to implement them domestically to be legally enforceable. Moreover, private actors have not traditionally been the subjects of international law obligations—that is, it has not generally been possible to directly enforce these obligations against private corporations.
However, recent jurisprudence in some courts suggests that these norms may be (slowly) moving toward customary international law status (or jus cogens) and could in the future be directly enforceable against corporations in domestic courts. In the recent Nevsun decision, for example, the Canadian Supreme Court cited the work of Professor Beth Stephens, who has argued that international human rights norms are now “routinely applied to private actors”.
In agreement, the majority of the Canadian Supreme Court held that
…it is not “plain and obvious” that corporations today enjoy a blanket exclusion under customary international law from direct liability for violations of “obligatory, definable, and universal norms of international law,” or indirect liability for their involvement in… “complicity offences” (at [113]).
However, it will take more than a handful of domestic cases to crystallise soft-law norms into enforceable customary international law. While the potential enforceability of the UNGPs directly against corporations remains contested, there is, nonetheless, growing consensus that private corporations can and should be held directly to account for violations of international human rights law.
HUMAN RIGHTS OBLIGATIONS OF PNG
While the precise nature of corporate responsibility under international human rights law continues to develop, the obligations of the PNG government are more straightforward. PNG has acceded to (that is, consented to be bound by) the International Covenant on Economic, Social and Cultural Rights (ICESCR) and the International Covenant on Civil and Political Rights (ICCPR). In addition, many fundamental rights are binding on PNG as part of customary international law (jus cogens).
The government of PNG has a clear duty under international law to prevent human rights violations within its territory. Under the ICCPR, for example, it is obliged to take steps to implement human rights protections in national law (article 2(2)), and to provide remedies to victims of abuses that do occur (article 2(3)). This means that the PNG government should impose regulations on private companies to prevent them from engaging in activities that violate human rights. The government must make available effective remedies, including facilitating access to courts or other dispute resolution forums for victims to make complaints and access compensation or remediation.
HUMAN RIGHTS OBLIGATIONS OF CHINA, CANADA, AND AUSTRALIA
The legal obligations of the governments of China, Australia, and Canada, as the home countries of the parent companies, on the other hand, are less certain. At the time that the UNGPs were adopted, it was not generally accepted that states bore any responsibility for human rights violations committed by their nationals while abroad—that is, responsibility for rights violations was considered to end at the border.
Since then, however, academics, civil society, and some UN organs have pushed to expand the scope of responsibility to include extraterritorial human rights violations. The UN Committee on Economic, Social and Cultural Rights (ESCR Committee), for example, has consistently taken the position that the rights guaranteed under ICESCR were intended to apply extraterritorially.
In their letters to the governments of China, Australia, and Canada, the UN representatives cited the ESCR Committee, which has stated that states parties are required to take steps to “prevent and redress” human rights violations that are caused by “business entities over which they can exercise control”. This applies even if the violation occurs in a foreign territory and is particularly important in cases where local remedies in the host country are not accessible or effective.
In relation to ICCPR rights, the UN representatives similarly expressed a position that these governments would be responsible for preventing violations that occur extraterritorially to the extent that they exercise “effective control” or power over a person (natural or legal). Even so, whether the degree of control in this case is sufficient to trigger state duties to prevent human rights violations in PNG is an open question.
One of the strongest arguments for imposing extraterritorial responsibility for human rights in these contexts is the particular risk posed by large multinational corporations operating in Global South countries. Walmart, for example, reportedly has revenues that would make it equivalent to the 25th largest economy in the world. For cash-strapped smaller economies seeking foreign investment, this power imbalance can seriously impede their capacity to enforce human rights standards in the context of large investments like the Sepik Development Project.
Extending the scope of state duties to prevent human rights violations to include extraterritorial violations would help to plug this protection gap, by sharing the responsibility between host countries and the (often wealthier) home countries in which multinationals are headquartered.
It would also be consistent with the latest draft treaty on business and human rights, which currently provides that:
State Parties shall regulate effectively the activities of all business enterprises domiciled within their territory or jurisdiction, including those of a transnational character (article 6.1).
All told, while the obligations of the governments of China, Australia, and Canada may not be as clear-cut as those of PNG in the present context, there is a growing movement aiming to strengthen and clarify the extent of these obligations. In time it may be more difficult for these countries to deny responsibility for the extraterritorial actions of companies headquartered in their territory.
BALANCING HUMAN RIGHTS AND DEVELOPMENT
It is important to recall that most human rights are not absolute. Because they are interdependent and universal, one person’s enjoyment of a right may to some degree infringe on another person’s enjoyment of a different right. In the context of mining, for example, one person’s right to health may be threatened by pollution from a mine that serves to fulfil another person’s right to employment.
In its Environmental Impact Statement, Frieda River Limited stated that the mine presents “broad commercial and socioeconomic development opportunities for Papua New Guinea,” in particular by improving road and other transport infrastructure, and providing renewable power to remote communities. This may well be true, but proponent corporations are incentivised to overstate the likely benefits to local communities in order to get their projects approved. If these benefits are not specifically incorporated as conditions in the approval of a given project, it can be difficult to hold companies accountable when the claimed benefits fail to materialise.
The UN representatives warned that “the people and peoples of the Sepik River Basin will be forced to bear the costs of the Project in perpetuity”. The representatives questioned the capacity of the PNG government to maintain the tailings dam and other abandoned infrastructure beyond the life of the project and after PanAust withdraws. We must remember that massive infrastructure projects like these do not just disrupt communities and ecosystems during their operation but can seriously impact the rights of future generations as well.
To mitigate these risks, the governments of PNG, China, Australia, and Canada should cooperate to examine, understand, and address the human rights implications of the project. PNG could be more confident in enforcing human rights standards if it is supported by the governments that host the parent companies. Equally, those governments could more confidently and justifiably exert pressure on the parent companies to control and monitor the subsidiary in PNG if they have the support of the PNG Government, and are able to coordinate a single strong message about the importance of protecting human rights in the context of large developments.
While the inherent nature of mining means that some disruption and destruction is inevitable, proactive cooperation between these governments and the companies involved could make a significant difference in terms of minimising the harms and maximising the benefits to affected communities.
Tess (BA, LLB(HonsIIA), GDLP) is a Legal Officer at the Australian Law Reform Commission. Previously, Tess was a Visiting Researcher at the University of the South Pacific as a New Colombo Plan Scholar, working on climate change and human rights policy. Her interests include international environmental and climate change law, human rights law, legal pluralism, and the impact of business on human rights and the environment.