The Human Rights Of Companies

Disgruntled UK and Swiss government propose overhaul of the ECHR

Following the controversial ruling last year that inmates in British prisons must be allowed to vote – a decision that was overwhelmingly rejected by the UK parliament - the British government has dramatically stepped up its campaign to push for far reaching changes in the way the ECHR functions.

On taking over the role of overseer the UK has formed an alliance with Switzerland, where voters have stuck by their government’s decision to deport foreign criminals despite an ECHR ruling to the contrary.

In a document circulated by the UK and Swiss foreign offices to the 47 member states, the two governments warn that the international body must be drastically reformed to “address growing public and political concern” and to abstain from interfering in cases that “do not need to be dealt with at the European level”.  The report says, “urgent action is needed in order to avoid further damage to the reputation and effectiveness of the convention system.”

The British government, which has become increasingly frustrated with the extent to which the ECHR has interfered in national policy and court rulings, has gone so far as to threaten an intention to walk away from the ECHR completely. 

The ECHR is currently struggling under a vast backlog of cases and losing much of its popularity as it continues to routinely interfere in national cases. Too many desperate claimants are using the court as a last resort when they feel let down by their own national legal system.

The blueprint of the UK/Swiss report has been submitted to an intergovernmental committee of Council of Europe representatives for deliberation. All members have agreed in principle that substantial reform is required to improve the workings and reputation of the ECHR.

Some have argued that the reforms, which would restrict the right of individual petition, would undermine the role played by the court. They claim that the current overload of applications in Strasbourg is due to the failure of member states to implement the Convention effectively at home – better application at home would automatically ease the workload of the court.

The UK will hold the role of overseer until May this year. During that time, they are keen to push through the proposed reforms to the body since both pro-Europeans and eurosceptics believe that its practices need overhauling.

Although it is almost undeniable that some operational reforms are necessary, states must not get carried away with private grudges concerning the perceived “over-reaching” powers of the court. It remains imperative that the reforms in no way restrict the ability of the court to safeguard the human rights of the 800 million under its protection.

Guardian Article

Telegraph Article

October and November at the European Court of Human Rights:

By HRC Correspondent, 2 December 2011

The European Court of Human Rights has considered two applications regarding the human rights of companies over the past two months. However, the case of Verein gegen Tierfabriken v Switzerland has been unanimously (and perhaps unsurprisingly) been declared inadmissible, since the Swiss Post Office has been deemed not to be in breach of freedom of expression or association in its decision not to deliver the magazine of the animal protection association to letterboxes which stated “no publicity please”.

The remaining case is that of Centro Europa 7 S.R.L. and Di Stefano v Italy, which concerns an Italian TV company’s inability to broadcast, despite having a broadcasting licence, due to the lack of television frequencies allocated to it. The authorities granted the company a licence in 1999, but the frequency allocation plan, had been effected by interim legislative schemes, which had allowed existing TV channels to extend their use of frequencies that they should in principle have given up. As a result, Centro Europe 7 S.R.L had no frequency attributed to it and was unable to broadcast.

The case rests on the company’s claim that they have been denied their right to impart information in violation of Article 10 (freedom of expression), but they also claim a violation of Articles 14 (prohibition of discrimination), 6:1 (right to a fair hearing) and Article 1 of Protocol 1 (protection of property). The Chamber originally assigned to the case, when it was first brought in 2009, has relinquished responsibility in favour of the Grand Chamber.

 

No circulars please - and I do mean ever

By HRC Correspondent, 1 November 2011

The case of Verein gegen Tierfabriken v Switzerland, brought to the Grand Chamber in November 2011, has unanimously been declared inadmissible by the European Court. It has been ruled that the Swiss Post Office is not in breach of freedom of expression or association under Article 10 in its decision not to deliver the animal protection association’s magazine to letterboxes which stated “no circularsplease”. The reason given for refusal was that the magazine constitutes a form of political advertising.

VGT is an organisation dedicated to reducing and eventually ending the exploitation or abuse of animals. In 2009, VGT brought another case to the ECHR (32772/02) following the refusal by the Swiss authorities to air a television commercial they had produced which was critical of battery pig farming. The commercial was banned by broadcasters on the basis that political advertising is prohibited. This view was upheld by the Federal Court of Switzerland, but was overturned by the ECHR. It was deemed to be in breach of the protection of freedom of expression under Article 10.

Unfortunately for VGT, this time they have been impeded in their continuing efforts to participate in the ongoing debate on the protection of animals.

A broadcast license - but no way to broadcast

By HRC Correspondent, 21 October 2011

Centro Europa 7 S.R.L. is an Italian broadcasting company based in Rome, who together with their statutory representative Francescantonio Di Stefano, have brought a case against the Italian government regarding its inability to broadcast despite having a broadcasting licence, due to the lack of television frequencies allocated to it.

In 1999, Centro Europa was allocated a licence for national TV broadcasting by the Italian authorities, allowing it to set up and use a TV network. However, the licence referred to a national frequency allocation plan, which had been set up in 1998 and never actually implemented. This meant that, due to a series of interim legislative schemes, existing TV channels had been able to extend their use of frequencies that they should in principle have given up. As a result of this oversight, Centro Europa had no frequency attributed to it and was unable to broadcast.

The applicants lodged their case with the Court on 16 July 2009, but the Chamber to which the case had been allocated relinquished its jurisdiction in favour of the Grand Chamber. Their case is centred on the fact that Europa claim to have been subjected to an unjustified breach of their right to impart information, which is a violation of their freedom of expression as set out by Article 10. They also claim to have suffered discrimination under Article 14 as well as being denied the right to a fair hearing under Article 6:1. Centro Europa also maintain that the licence that they were granted in 1999 constituted a “pecuniary interest”, which warranted the protection of property. They are challenging this under Article 1 of Protocol No.1.

In addition to the evidence brought by Centro Europa, the organisation Open Society Justice Initiative were permitted to submit written comments as a third party. This organisation is one of George Soros’ Open Society Foundations, which  uses law to protect and empower people around the world. Using litigation, advocacy, research, and technical assistance, the Justice Initiative promotes human rights and builds legal capacity for open societies.

 

Russia’s troubled relationship with the ECtHR

By HRC Correspondent, 14 October 2011

The Yukos judgement has flagged up the large number of cases brought against Russia that pass through the European Court of Human Rights. In fact, since ratifying the European Convention on Human Rights in 1998, Russia is regularly the country with the most complaints filed against it per year.

An op-ed piece in The New York Times wryly observed that because of political interference in the Russian legal system, the European Court had become Russia's court of last resort.

This perhaps explains Russia's fraught relationship with the Court. The Russian Duma is still considering a bill submitted in June by Alexander Torshin, the acting chairman of the Federation Council, that would allow Russia's Constitutional Court to over-rule judgements against Russia by the European Court. The bill was submitted at the exact time the Yukos judgement was agreed in the European Court, although the judgement was not announced until last week.

Since states that are signed up to the European Convention on Human Rights have a duty to respect the Court's rulings, if Russia were to pass that kind of legislation it would likely have to leave the Council of Europe.

But Russia appears to have largely welcomed the European Court's ruling in the Yukos case, mainly as the court ruled that there had not been enough evidence to suggest a political motivation behind the case. Mikhail Barshchevsky, a Kremlin spokesperson, called it "an indisputable victory", according to Russia’s RIA Novosti.

The Court did, however, rule that the oil company’s Convention rights to a fair trial and to the peaceful enjoyment of its property and possessions had been violated.

September at the European Court of Human Rights

By HRC Correspondent, 27 September 2011

In terms of the human rights of companies, September has been a big month at the European Court of Human Rights, mainly because of the highly anticipated Yukos Oil Company judgement, but the month also saw at least two other cases involving the human rights of companies.

The Neftyanaya Kompaniya Yukos v Russia case saw the court rule that the Russian state had violated the company's Convention right to a fair trial, Article 6, and the right to protection of property, contained in Article 1 of Protocol 1. A blog post dedicated specifically the the Yukos case can be found below.

Other cases in September saw the Court consider a complaint brought by a Moldovan educational firm alleging violations by the Moldovan authorities of Article 6(1) and Article 1 of Protocol 1, and a Italian medical diagnostics company alleging a violation by Italy of Article 6.

In the Moldovan case, Dragostea Copiilor Petrovschi-Nagornii, which runs a primary school in the Moldovan capital of Chişinău, had been ordered by the Moldovan authorities back in 2001 to pay $78,400 to an individual named in the court transcript as Mr M.

When the money wasn't paid, in 2005 Mr M made a formal request for it, but in a court decision in 2007 his request was dismissed because it fell outside a three-year time bar on enforcement. Following further proceedings, Moldova's Supreme court eventually ruled in favour of Mr M and ordered that the money to be paid.

The company argued it's right to a fair trial had been violated by the quashing of the 2007 judgement, and further that the Supreme Court judgement violated the company’s right to peaceful enjoyment of its property. Since under the Convention “property” is construed as possessions, in this case, it meant the money.

The court found in the company's favour on both counts, noting that the sum involved placed an "individual and excessive burden" on the company.

In the case of the Florence-based Menarini Diagnostics, the company had in 2001 come under investigation by the Italian competition watchdog and was fined €6m ($8m) for anti-competitive practices on the diabetes diagnosis test market. The company made several appeals but all were rejected, leading it to make a complaint at the European Court that its right to a fair trial had been violated by being denied access to a court or to a judicial review of the regulators' decision.

On 27 September 2011, the Court ruled that there was no violation of Article 6 (1) of the Convention (right to a fair trial).

ECtHR rules Russia violated oil company’s rights

By HRC Correspondent, 21 September 2011

The Russian state violated the human rights of the Yukos Oil Company, specifically the right to a fair trial and the right to protection of property, according to a judgement at the European Court of Human Rights.

The Court ruled on the Yukos case last week, possibly the largest case involving the human rights of companies to come before the court, and a big one of course for readers of this blog.

Yukos' filed its complaint against the Russian state back in April 2004, complaining that the Russian authorities had hit it with a series of hefty and unexpected tax claims from 2000-2003, prevented it from paying them and then purposefully dismantled it.

In terms of the European Convention of Human Rights, the company alleged a violation of Article 6, the right to a fair trial; several violations of Article 1 of Protocol 1, the right to protection of property; as well as a violation of Article 14, the general prohibition on discrimination; and a violation of Article 18, which offers protection against a states’ miss-use of its powers. Both those last were in conjunction with Article 1 of Protocol 1.

The court found much in Yukos’ favour. It ruled that there had been a violation of Yukos' right to fairness in legal proceedings in relation to a tax re-assessment for 2000, in view of the amount of time the company was given to respond. The Russian authorities had hit Yukos with a re-calculated tax bill for about €2.9bn ($3.9bn) and when Yukos disputed it, the company was given just four days to study more than 43,000 pages of documents. Then, just 21 days from the end of those proceedings, the company's appeal went before an appeals court.

Secondly, the Court ruled that there had been a violation of the right to protection of property, mainly through the speed and inflexibility of enforcement proceedings carried out over tax assessments from 2000-2003. The Russian authorities applied huge fines and enforcement fees (as much as 7% of the total debt) and auctioned off Yukos' prize asset, Yuganskneftegaz, to cover a tax debt that the company might have been able to pay had the Russian authorities not frozen its assets.

The Court also considered retrospective changes to Russian criminal law that affected the 2000 tax assessment proceedings and hiked the fines imposed in the 2001 tax assessment as a violation of Article 1 of Protocol 1.

But the Court did not rule in Yukos' favour in every respect, something parts of the Russian media have been quick to point out. The tax assessments themselves were not considered disproportionate and the Court found there was not enough evidence to suggest that Yukos had been treated differently from other companies and so found no violation of Article 14.

That was perhaps to be expected, in several instances in the past - including the case brought earlier this year by the former owner of Yukos, Mikhail Khodorkovsky - the Court has concluded that there is not enough evidence to indicate a political motive on the part of the Russian authorities.

In general, the court sets robust standards for proving a violation of the prohibition against discrimination, usually requiring some form of documentary evidence to support such an allegation.

Speaking at a news conference following the ruling, Piers Gardner, the barrister representing Yukos in the Court, said: “There are aspects of Yukos' complaint on which Yukos did not meet the high threshold that the European Court imposes to establish a violation, whereas in the important areas ... the absence of a fair trial and the draconian enforcement of the liabilities, the court was satisfied that the rights of Yukos had been violated.”

One intriguing part of this case for observers of the human rights of companies is what will happen about compensation. The sheer size of the company involved - Yukos had been Russia's largest oil company - means the compensation could potentially be enormous.

Yukos is demanding  €81bn ($109bn), which is not unrealistic since Yukos' key assets now make up about 80% of Rosneft, the Russian state oil company, which has a stock market valuation of nearly $100bn.

But the Court traditionally does not award those kind of sums for compensation, either in cases involving individuals or companies.

So another milestone in the human rights of companies could still be ahead. The court's September 20 ruling was not final - there is a three month period in which the parties can reach a settlement on damages.

The story behind the Yukos case is well documented on The Yukos Library website and more details of Yukos' case at the European court, as well information on the court itself, can also be found here.

 

July & August at the European Court of Human Rights

By HRC Correspondent, 26 August 2011

Observers of the human rights of companies will have been disappointed that only two cases brought by businesses made it through the Court in all of July and August, but the tabloid-style detail of those cases will have more than made up for it.

Both were brought by media companies and, as might be expected, mainly concern Article 10 of the European Convention on Human Rights, the right to freedom of expression.

Ringier Axel Springer, a Slovak multimedia publisher, alleged a breach of its right to freedom of expression after it was sanctioned for reporting that a Slovak member of parliament, aided by a high-ranking police official, had urinated from a restaurant terrace.

The journalist who reported the incident back in 1999 was sued for libel and the police official (the European case was concerned only with the police official) was awarded compensation. The case in the European Court of Human Rights, filed in 2005, examined the media company's complaint that the Slovak courts had failed to hold to the requirements of Article 10 by insisting that the journalist prove the truthfulness of his report - the Slovak courts censured the journalist for reporting something that he had not himself seen, although he had gone to the restaurant and interviewed the staff.

The European Court found that there had been a violation because although the Slovak courts had weighed up the usual issues of, for example, privacy, they had failed to consider the news reports in light of journalistic ethics and good-faith reporting - the company had acted within its "duties and responsibilities" under Article 10(2).

In the second case, Cypriot media company Sigma Radio Television Ltd claimed it had been unfairly sanctioned and fined by the Cypriot authorities over a number of radio and television broadcasts that the authorities alleged were inappropriate - including what the authorities, in some cases responding to complaints by the public, said was advertising aimed at children, product placement, news programmes that lacked objectivity and discriminatory remarks in an entertainment show. Those remarks were that a particular local town had been "full of dark-skinned Arabs" and that in others all the prostitutes were Russian.

The Cypriot authorities viewed those comments as disrespectful to the towns' residents, and to Arabs, and Russian women and women in general.

Perhaps unsurprisingly, given the European Court's role as a protector against discrimination, the Court found that there had been no violation of Article 10 in Sigma's case.

Article 10(1) protects freedom of speech, but 10(2) provides for States to impose conditions and penalties "as are prescribed by law”. The Court also gives a margin of appreciation to States in decisions over what is or is not appropriate and the Court found that the censure by Cypriot authorities had not been outside of what is, in Convention terms, "necessary in a democratic society".

The company had included in its complaint alleged breaches of other articles in the Convention, including Article 1 of Protocol 12, a prohibition against discrimination, and Article 6(1) on the right to fair trial, but the Court declared those inadmissible. An alleged violation of Article 1 of Protocol 1, the right to protection of property, was judged admissible, but the court felt its reasoning under Article 10 applied and that there need be no further examination.

European Court of Human Rights ‘must be careful’ UK warns

By HRC Correspondent, 4 July 2011

Britain has again been exploring the tension between state sovereignty and the rulings of the European Court of Human Rights.

The debate is as much a concern for companies that apply under the European Convention on Human Rights as it is for individuals.

Dominic Grieve, Britain's attorney general, addressed the Parliamentary Assembly of the Council of Europe, in Strasbourg in June, saying that the Court "must be careful to respect that primary role" of the state.

In a tacit hint at the UK's dissatisfaction with Strasbourg's ruling that offenders in prison have a right to vote, he said: "It is not enough simply to hand down from on high, telling people that 'this is a human right', or 'that is not'."

The text of his speech can be found here. 

June at the European Court of Human Rights

By HRC Correspondent, 29 June 2011

The European Court of Human Rights considered three cases concerning the human rights of companies in June, although readers of this blog will be disappointed to know that two of those were unexcitingly struck from the case list.

At Romania’s request the court reviewed the case of SC Placebo Consult SRL v Romania after it was discovered that the company’s sole shareholder had died prior to the court’s judgement, delivered on September 21, 2010.

The court had originally ruled in favour of Placebo Consult, a Romanian construction firm based in Craiova, ruling that the lengthy back-and-forth in the domestic courts meant that there had been a violation of Article 6, the right of access to court.

Although it had awarded damages, with the death of the company’s manager and sole shareholder the court stuck out the case.

The court also struck out a complaint brought by a Turkish mixed-interest tourism company against the state after the two parties reached an amicable settlement.

In Günaydın Turizm ve İnşaat Ticaret Anonim Şirketi v Turkey the company had alleged a violation of Article 1 of Protocol No 1, the right to protection of property, after the state acquired a palace and outbuildings belonging to the company.

More typically, the Court ruled that that there had been a violation of Article 6(1), safeguarding access to courts, in a complaint brought by Bulfracht Ltd, a Bulgarian shipping company.

The company had complained about the refusal of the Croatian Supreme Court to examine its appeal against a domestic court ruling that had gone against it in its bid to get payment for $500,000 in freight in the 1990s.

The court awarded costs and expenses to the company.