Importing Hudbay Into Environmental Law
Choc v Hudbay1 has received a great deal of media attention. The decision, from the Ontario Superior Court, holds that abuses by companies in other countries can be tried in Canada under certain, specific, circumstances. This comes after a series of alleged abuses at the Fenix location in Guatemala through a corporate subsidiary of the Hudbay company. Newspapers have been keen to point out that this kind of abuses take place around the world through corporate subsidiaries, including environmental degradation, and this could mean the end of using subsidiaries to skirt legal responsibilities.2 Though there are other aspects to the case, here we will be focusing on only the implications of the extending of jurisdiction and piercing the corporate veil could have moving forward.
Several organizations weighed in on the Hudbay case, including Amnesty International who argued that it was becoming an international norm that corporations be held liable for the actions of their subsidiaries where “the possibility of injury or harm” is “foreseeable.”3 In addition, there have been many allegations that the Guatemalan justice system is subject to irregularities and corruption.4 This line of argumentation, that justice was not achievable in the Guatemalan system, was key to Amnesty International’s and the plaintiff’s view that the case be heard in Canadian courts.
The court has laid out the ability for either the “shield for improper conduct”5 exception or the fact that CGN is an “agent” of Hudbay Minerals6 as potential avenues for the piecing of the corporate veil once the case reaches its final hearing in court. These both allow the case to continue and, at the least, allow for international subsidiaries to be potentially held liable in Canadian courts. In regards to “direct negligence” the plaintiffs and the court rely upon Fullowka for finding the capacity for negligence to be found without having to make determinations of the corporate structure.7 It appears that the result of these findings by the court is that international subsidiaries may be able to be found liable for directly negligent acts, or where they are merely using the corporate veil as a shield. The final issue of jurisdiction was addressed by CGN withdrawing their claim that there was no jurisdiction if one of the previous matters does not result in a striking of the case.
While this represents the usual attitude of the court to decline to make determinations where they do not have to, it may suggest an updating of norms. The norms of society can be changed to put more pressure upon companies to waive this issue of jurisdiction making it the de facto situation. The caveat still needs to be voiced, however, that for all the media excitement, there still exists the capacity for the courts to take a step back and choose not to allow standing where companies are not willing to waive the issue of jurisdiction.
If Hudbay is found to be good law, it may be developed and imported into the area of environmental law. There are some who consider a healthy environment and the protection thereof to be a human right, further supporting this premise of importation. Alternatively, the UN High Commissioner for Human Rights argues that a healthy environment is a prerequisite for the enjoyment of human rights.8 The right to a healthy environment and the human rights infringements through adverse environmental conditions are two ares which have been cited as an area of the intersection between these two bodies of law.9 This already establishes a potential avenue for the importation of Hudbay into areas of environmental law.
Hudbay, however, may result in the capacity for many of these environmental wrongdoings to be addressed in Canadian courts. Similar to the penchant for subsidiaries of large corporations using other nations with weaker legal systems to shield themselves from repercussions for human rights abuses, there is a similar tactic used for environmental abuses.10 The principal behind the decision made to allow the hearing, thus far, in Canadian courts can in theory be imported into the area of environmental law. There are already aspects of this evident in the piece where the possession of ancestral lands by the Mayan Q’eqchi’, an aspect of the situation entirely outside of Canadian law, is being considered by Canadian courts. This is already an aspect of human rights law which lies in the more contested area of the law.11
Canadian Jurisdiction and Beyond
Whether you agree with the principal of allowing the corporate veil to be pierced in instances such as these or not, a great deal will change if Canadian corporations are no longer able to protect themselves through a series of subsidiaries. Whether they engage in flight to the United States and other more friendly jurisdictions, or subsidies are merely used less often, it seems likely it will drastically alter the situation. The potential exists, however, for corporations to merely undertake increasingly convoluted strategies to minimize their legal exposure.
If an organization similar to Sea Shepherd is ultimately able to sue and/or be sued within Canadian jurisdictions, it will prove to be a drastic difference from business as usual.
1Choc v Hudbay Minerals Inc, 2013 CarswellOnt 10514, 2013 ONSC 1414.
2Penny Collenette, “After Hudbay Ruling, Canadian Firms on Notice Over Human Rights”, The Globe and Mail, published July 24, 2013.
3As quoted in Jeff Gray, “Amnesty International Weighs in on Hudbay Case”, The Globe and Mail, published March 5, 2013.
4Supra 2 and Supra 3 and Press Conference on International Commission Against Impunity in Guatemala, Department of Public Information, The United Nations, February 2009.
5Trustor AB v. Smallbone and others (No. 2),  3 All E.R. 987, at 996 (HC).
6Parkland Plumbing & Heating Ltd. v. Minaki Lodge Resort 2002 Inc., 2009 ONCA 256,  O.J. No. 1195.
7Fullowka v. Pinkerton’s of Canada Ltd., 2010 SCC 5,  1 S.C.R. 132
8High Level Expert Meeting on the New Future of Human Rights and Environment: Moving the Global Agenda Forward, United Nations Environment Program.
9Nickie Vlavianos, “The Intersection of Human Rights and Environmental Law”, A Symposium on Environment in the Courtroom: Key Environmental Concepts and the Unique Nature of Environmental Damage, 2012.
10Which included the proposition of Bill C-300 in 2010 to attempt to address this, taken from Errol Mendes, “Canada’s Reputation is Tainted by Bribery and Abuse. Only Boards Can Rescue It,” Globe and Mail, published Mar 05, 2013.
11Primer: Canadian Law on Aboriginal and Treaty Rights, University of British Columbia Faculty of Law, 05 Oct, 2009.