The Human Rights Of Companies

Russia mulls move to block Strasbourg court rulings

By HRC Correspondent, 21 June 2011 

Russia provides the European Court of Human Rights with over a quarter of its caseload and a high number of decisions, mainly over things like prison conditions, have gone against it.

Perhaps that is why Russia is contemplating a move that could see the Russian Constitutional Court override some of the Court's decisions.

A bill that would allow Russia to review decisions made in Strasbourg, is due for its first reading before the State Duma, the Russian lower house of parliament, on July 1.

The move is controversial because states signed up to the European Convention on Human Rights have a duty to respect the Court's rulings.

The plan has been criticized by rights groups and theoretically would endanger Russia’s position within the Council of Europe, but it is doubtful that either Moscow or the Council itself would allow things to get that far out of hand.

Radio Free Europe reported Sergei Markov, a legislator from the United Russia party, as saying that the proposed legislation is to defend against anti-Russian sentiment in the Council of Europe.

"It has become clear that Russia needs to defend itself not from the European Court of Human Rights but from politically coloured and unjust decisions by the European court," Markov was quoted on the RFE website as saying.

Most states have an uneasy relationship with the European court because of the tension between state sovereignty and the commitments of signatories of the European Convention on Human Rights - just observe the UK's annoyance with the Court's ruling over the right of prisoners to vote.

In terms of the human rights of companies, while Russia does not particularly see a greater number of these cases than other countries, it is soon to be part of the largest - the court is set to give its verdict in the case of Yukos, the dismembered Russian oil giant, which has brought a claim against the state for over $32bn.

 

The Economist on the ECtHR

By HRC Correspondent, 10 June 2011

Readers of The Economist’s Charlemagne blog will have seen the newspaper had some relatively positive things to say about the European Court of Human Rights this month.

For all its failings, the Court’s central role in the evolution of human rights discourse is undisputed and it operates, as The Economist says, “in some dark areas that others cannot reach“.

Many of those dark areas are the former Soviet bloc countries that became party to the European Convention on Human Rights after 1989.

The number of cases filed against Russia, for example, has risen dramatically. In 2000 just 8% of cases were brought against Russia, but the Court’s statistics for 2010 show nearly 30% of its caseload concerns Russia, more cases than were brought against any other country.

There were only 13 member states when the Convention entered into force in 1953, but today 47 states are party to it. The Court’s jurisdiction extends to all of them covering over 800 million people, as well as “non-governmental organisations”, including companies.

But that expansion has brought with it an enormous caseload. Ministerial conferences in Interlaken and Izmir have focused on finding some way of streamlining the Court’s functions, including examining the right of individual application – the right that allows individuals, associations and companies to bring cases against states.

It is a right that activists are keen to safeguard in any attempt to reform the Court. Ahead of the Izmir conference, held in April, a coalition of NGOs released a statement calling for it to be protected in any attempt at reform.

Particularly important perhaps if the Court is to continue to operate in those “dark areas”.

 

May at the European Court of Human Rights

By HRC Correspondent, 2 June 2011

 The European Court of Human Rights examined three cases involving the human rights of companies in May, mainly concerned with the right to fair trial, while a hearing for a fourth that alleged violations of the right to freedom of expression and non-discrimination, was adjourned.

Poprad-based construction firm Stavebná spoločnosť TATRY Poprad brought a complaint against Slovakia under Article 6(1) of the European Convention on Human Rights, the right to fair trial.

The company had sued another firm for money outstanding over reconstruction work on a spa building in 1996. A contract between the two had allowed for part-payment to be withheld in the event of construction delays. The Slovak courts dismissed Stavebná spoločnosť TATRY’s claim that part of the contract had been invalid.

The company brought its claim to the European Court of Human Rights alleging unfairness on the part of the Slovak courts which it said had made its judgement on the basis of evidence not included in the case file, had disregarded the company’s arguments and had failed to give reasons for its decision.

The Court found there had been a violation of Article 6(1), but no compensation was awarded.

Also in May, the Société Métallurgique Liotard Frères, a French metal-working firm, brought a complaint against France over alleged violations of Article 6(1) and Article 8, the right to respect for private life and the home, over search and seizure orders in an anti-competition investigation.

 The case made the blog, below, but the Court ultimately only examined the case on the basis of Article 6(1), upholding the company’s complaint that it had been denied an effective judicial review of the decision to authorised the investigation.

The court also returned to Megadat.com SRL v Moldova, where it had already ruled in 2008 that there had been a violation of Article 1 of Protocol 1, the right to protection of property.

Megadat.com, once Moldova’s largest internet provider, closed down in 2004 when the company’s telecoms licences - which constitute legal possessions and the “enjoyment” of which is protected under Protocol 1, Article 1 - were withdrawn after it failed to notify regulators of a change of address.

The parties were given time to resolve the dispute, but the company pursued the case, rejecting an offer of compensation by the Moldovan government. In May, the Court decided to strike the case from its list, a power it can exercise under Article 37(1) in the event it decides the safeguarding of human rights no longer justifies continuing an examination of a case.

Finally, the hearing for the case of Centro Europa 7 SRL and Di Stefano v Italy was adjourned.

The case concerns what the company, an Italian TV broadcaster, alleges were violation of the right to freedom of expression (Article 10 of the Convention), the right to freedom from discrimination (Article 14), as well as the right to access to court and the right to protection of property.

At the time of writing, no date had been set for another hearing.

 

French company brings case over search and seizure order

By HRC Correspondent, 20 May 2011

A French metal working firm has brought a case before the European Court of Human Rights alleging a violation of the right to respect for private life and the home, as well as a violation of the right to a fair trial.

Unfortunately for observers of the human rights of companies, the court decided it relevant to consider only the complaint on the grounds of Article 6(1), access to courts.

The judgement is available here in French.

While a great number of cases brought by companies involve Convention Article 6(1), there are far fewer instances of complaints concerning Article 8, which calls on states to "respect" one's private life, family life, home and correspondence.

But companies do have a right to protection in this regard. In Colas Est SA and Others v France the court noted that corporate business premises could be considered as "home" within the meaning of Article 8.

As to the facts of the recent case, the applicant company, the Société Métallurgique Liotard Frères, complained that, following an investigation into alleged anti-competitive practices, it had been denied an effective judicial review of the decision to authorise the inquiry, and that the searches and seizures carried out constituted a violation of Article 8.

The company, which is based in Saint-Pierre-des-Corps,  was investigated by French authorities in 2006. Its appeal against the investigation was dismissed by the French Supreme Court in September 2007, by which time the searches and seizures had been carried out.

The Strasbourg Court found that there had been a violation of Article 6(1).

 

April at the European Court of Human Rights

By HRC Correspondent, 6 May 2011

In terms of the human rights of companies, April was a quiet month in Strasbourg, with the European Court of Human Rights passing judgement on only one case where the applicant was a company.

Late in the month, Elcomp sp zoo, a Warsaw-based electricals manufacturer, brought a complaint against the Polish government under Article 6 § 1 of the Convention, the right to a fair trial.

Elcomp claimed that court fees it had pay in order to sue another company for money owed were excessive and constituted a restriction on its access to the courts. The company had twice filed for exception from the fees and been denied.

The company lost its claim. The European Court held that there had been no violation of Article 6 § 1, ruling the fees were not disproportionate and that there was no reason to contest the Polish authorities assessment that the company could pay.

Access to courts, the right enshrined in Article 6, provides the Court with more applications than any other provision in the European Convention on Human Rights. Its economic implications also make it one of the provisions closely associated with the human rights of companies.

Link to the judgement here.

The Izmir Conference

By HRC Correspondent, 29 April 2011

European ministers have been pushing ahead with plans to ease the case load of the European Court of Human Rights.

At the end of April, European ministers concluded a two-day conference in the Turkish city of Izmir where they committed to further examine and attempt to streamline the Court's application procedure.

That has included a discussion focused around Article 34 of the Court's founding document, the European Convention on Human Rights, which allows both individuals and companies to bring cases before the Court because it ensures that complaints can be brought by “any person, non-governmental organisation or group of individuals”.

A statement at the close of the conference saw delegates "reaffirm" that they saw this right as a "cornerstone of the Convention mechanism", a move welcomed by NGOs which had called for individual application to be protected in any efforts to reduce the Court's caseload.

The conference, which builds on a similar meeting last year at Interlaken, also gave the opportunity for states to air some of their grievances with the Court.

Kenneth Clarke, the UK's justice secretary, called for reforms and made reference to Britain's displeasure over the Court's ruling that prisoners be allowed to vote.

Over the last few months the British public has become increasingly familiar with the Convention, mainly over the issues of voting rights for prisoners and superinjunctions.

An article published on The Sun's website at the time of conference claimed that the "hated European human rights act" costs the UK more than £9bn a year and explained the law as being "used by celebs to hide their secrets behind superinjunctions".

But as this website testifies, the rights and freedoms protected by the Convention's 59 articles go much further, allowing companies to bring cases over freedom of expression, lack of due process and violations of property rights.

Belgian broadcaster wins right to speak out

By HRC Correspondent, April 24 2011

Belgium’s RTBF has finally won a 10-year legal battle against state interference with the broadcaster's right to freedom of expression.

Back in 2001, the company produced a programme examining patients’ rights for its show Au Nom de la Loi which contained allegations of malpractice by a neurosurgeon.

The doctor sought an injunction and the Brussels Court of First Instance granted an interim ban on the programme while it decided on the merits of the case.  RTBF lost on appeal and the case was adjourned and still pending when RTBF lodged its complaint with the European Court of Human Rights five years later.

RTBF’s submission to the Court argued violations of Article 10 - the right to freedom of expression, and Article 6(1) - the right of access to the courts. Both were upheld in Strasbourg.

Unsurprisingly, Article 10 has been a mainstay for media companies and the Court has consistently afforded them broad protection.

But Article 10 also covers commercial speech and is open to application by a broader range of companies. The Court made that clear in Autronic v Switzerland in 1990, ruling that protection for freedom of speech "applies to everyone whether natural or legal persons" and includes "profit-making corporate bodies".

Autronic is a Swiss electronics group that at the time specialised in satellite dishes and sought permission to tansmit a Soviet TV programme. The authority said that it needed the "express approval of the Soviet authorities". Autronic complained that the free reception of communications intended for the general public was made subject to the broadcasting State's approval.

Last year, the court upheld 55 complaints of violations of the right to freedom of expression, at least five of which were brought by companies.

Round up for March at the European Court

By HRC correspondent. April 7 2011

The European Court of Human Rights ruled on three significant corporate cases in March, two about protection of property and one concerning freedom of expression and access to the courts.

Romania was found to have breached Protocol 1, Article 1, the right to protection of property, in the case of Granitul, a Romanian company, which had more than 60 hectares of land taken from it without compensation to form part of the government's Giurgiu Free Zone. The question of compensation was left for a later date.

Cypriot company Forminster was awarded 4,000 euros for costs and expenses in its case against the Czech Republic, likewise over a violation of Protocol 1, Article 1.

The court had already ruled in October 2008 that there had been a violation of property after the Czech government seized shares, bought by Forminster, in a company where an executive was under criminal investigation.  Just Satisfaction was delayed then, but the award was made in March.

Both land and shares qualify under Protocol 1, Article 1, which states that every "natural or legal person is entitled to the peaceful enjoyment of his possessions".

The court traditionally interprets possessions broadly, acknowledging in Anheuser-Busch inc v Portugal in 2007 that possessions are "not limited to ownership of physical goods".

Elsewhere, Belgian French-language television broadcaster RTBF had brought a complaint after the Belgian government banned in 2001 the broadcasting of an investigation into patients' rights. Belgian courts had imposed a temporary injunction while they examined a complaint made by a doctor featured in the programme. RTBF alleged breaches of Article 10, the right to freedom of expression, and Article 6(1), the right of access to the courts.

The European Court of Human Rights ruled there had been violations of both.

In the case of Article 6(1), while RTBF had been able to take its case to Belgium’s Court of Cassation, the European Court of Human Rights ruled that the degree of access afforded had not been enough to secure the broadcaster its right.

When the beer investor got skittled

By HRC editor. March 11, 2010

Widespread corruption has stifled international attempts to carry out business in Armenia, according to a new report.

Few examples of Armenia’ corporate quick-sands have made it as far as the European Court of Human Rights, for example, possibly because they get bogged down at a very early stage.

However, the latest Foreign Policy Centre survey highlights a case aired by Armenian investigative journalism group Hetq online that illustrates the pitfalls.

The FPC’s in-depth survey covers media freedom and democratic development as areas in need of urgent reform and focuses heavily on corruption in the judicial system.

As an example of the weak judiciary and the enmeshed relationships that inevitably surface in a small country of just under three million with an even smaller governing class it cites Hetq’s story of Ostinvestor, a German investment company that bought just over 3 per cent of the 150-year-old Yerevan Ararat Brandy-Wine-Vodka Factory. 

“At the time of our purchase, the majority stockholder was the Armenian oligarch Gagik Tsarukyan, the richest living Armenian in the country,” Ostinvestor’s chief executive Stefan Laxhuber told Hetq.

“He holds his shares through his Armenian firm MultiGroup. He is a powerful force in Armenian politics and presides over his political party Prosperous Armenia.  The majority shareholder’s background … led us to trust that proper procedure would be followed,” he said.

Two years later, Ostinvestor received a note from Multigroup demanding that it sell all its shares since MultiGroup wasn’t prepared to recognize the “Ostinvestor” holdings.

 "We were ‘politely yet forcefully’ requested to transfer our stock to  MultiGroup. The CEO of  MultiGroup (his interpreter, rather) shared with us by telephone that the cognac firm now belonged only to MultiGroup. We would have no right to own shares in this company,” said Mr Laxhuber.

Ostinvestor said it asked 10 law firms in Armenia to represent its interests in the courts and all declined saying that they were afraid of the ramifications.

High on the list of factors complicating the business environment are “pervasive corruption and the presence of monopolies that distort the playing field” according to Anna Walker, a senior Analyst for Central Asia and South Caucasus at Control Risks writing for the FPC

Ms Walker cites a survey in which Armenia scored just 2.6 out of 10, where 10 is highly clean and 0 is highly corrupt, “placing it alongside countries such as Eritrea and Niger”.

“One major aspect of the country’s political system that distorts the business environment is the existence of close links between members of the political and business elites,” says the report

“Despite pressure from international financial institutions, successive governments have failed to make significant progress in curbing these links, and the introduction of legislation to prevent conflicts of interest does not yet appear to have had much impact. As a result, small and medium-sized enterprises complain that larger businesses with close connections to political circles enjoy significant advantages when it comes to areas such as the enforcement of tax legislation and regulations, putting businesses without these connections at a commercial and financial disadvantage”

The FPC, which was set up under the Blair administration to promote a non-colonial view of international situations, has been sponsored by The Human Rights Of Companies, to produce its independent report on Armenia.

 

Armenian law - it's the Wild West/East

By HRC Editor, March 3 2011 

The Armenian judicial system is badly paid, nepotistic and corrupt according an in-depth report that raises new questions about the country's legal political and democratic openness.

In the study, sponsored by Human Rights Of Companies, the Foreign Policy Centre has identified deeply entrenched problems running through the system.

The research published this week by the independent UK think tank covers media freedom and democratic development as areas also in need of urgent reform but the judicial system is particularly relevant to companies concerned about their rights as defined by the European Court.

It is important in the wider context of the wave of Middle East revolutions as well. Armenia may be a long way from Egypt but in terms of the geopolitical key party it is a bit of a swinger. As with Turkey there are analysts who believe it could just as easily head east as west.

There were bloody demonstrations in Armenia three years ago and the FPC says that the revolts in Egypt, Tunisia  and Libya have been censored by the Armenian state media.

The extent of the problem and the degree to which it hampers attempts by modernisers to carve out a western democracy are acknowledged internally and externally.

Armenia’s President Serzh Sargsyan said in an address last year that “corruption and bribery are the gravest impediments to our progress”.

The American Bar Association Judicial Reform Index says of its legal relationship with the country: “It is widely believed that the President and Government influence judges in cases with political implications or when a business associated with Government officials is involved.

“Influence from regional governors is also believed to threaten judicial independence in the regions. Attempts to influence judges are not limited to other branches of state power, however, but may take the form of a request from a friend or relative for a favour…While it may be becoming less common than in the past, ‘telephone justice’ reportedly still exists, and because it was deeply rooted in the legal culture it will be difficult to eradicate.

“Sometimes judges know how to decide a case without being told, such as when a state has an interest in the outcome or when a business associated with government officials is involved…When a judge is uncertain about how to decide a case, he/she may reportedly ask the court chairman or even an appellate court judge for advice, in order to avoid issuing the wrong decision.’

“It is the gap between the legislation and practice on rule of law issues that is the source of much of the problem, the lack of enforcement to combat entrenched malpractice rather than a poor legislative framework.

The FPC says that concerns raised during discussions with other experts, include lawyers having to pay tax on pro-bono work, the lack of opportunities to get international experience or training, the need to properly disseminate the decisions of the ethics committee opinions throughout the legal system, the role of retired police without training as lawyers playing a major role in civil legal advice and the sad reality that in certain contentious cases lawyers still need to be brave to stand up to the.

Perhaps the greatest impediment however, is the lack of a fully independent and effective judiciary. The Bertelsmann Transformation Index says:  “Although an independent judiciary does exist in Armenia, it is still largely subordinate to and overly compliant to the demands of the executive branch, which is unquestionably the strongest and most dominant of the branches of government. The judiciary is also directly affected by widespread corruption and general incompetence… The protection of civil rights remains incomplete and far too arbitrary."