US Supreme Court rejects Nestle bid to throw out modern slavery law suit- 2016
Since our recent update in the 11-year long case of Doe v Nestle, Archer-Daniels-Midland Co and Cargill Inc there has been some movement towards this case finally being settled. Following the earlier case, the U.S Supreme Court ruled allowed the plaintiffs time to amend their case.
The facts of the case
The case involves a lawsuit against Nestle and Cargill Inc filed by former victims of slavery. The plaintiffs, who were originally from Mali, contend that companies aided and abetted human rights violations through their active involvement in purchasing coco from the Ivory Coast. It is alleged that despite being aware of the child slavery, the companies offered financial and technical assistance to the local farmers in a bid to guarantee the cheapest source of cocoa.
The Ninth Circuit court held that such an amendment should be allowed unless it is clear that the amendment would be futile. One of the points asserted by the Ninth Circuit was that the ‘prohibition against slavery is universal ‘ (therefor not bound by US jurisdiction and the previous legal constraints in bringing this claim before a US court ) and therefore could be asserted against the corporate defendants.
The decision
The court also evaluated whether the plaintiffs had properly alleged the elements of an aiding and abetting claim. It found that the ‘allegations explain how the use of child slavery benefited the defendants and furthered their operational goals in the Ivory Coast, and therefore the allegations support the inference that the defendants acted with the purpose to facilitate child slavery’ . The Court also found that the defendant’s failure to stop or limit child slavery supports an inference that they intended to keep the system in place’. Finally the court found that the allegation that the companies had lobbied against the US federal legislation that would have required certification of chocolate as ‘slave free’ to ‘corroborate the inference of purpose’
In July 2016 year the plaintiffs submitted their amended case.
What are the implications for business?
The findings by the judge have potentially serious implications for companies that are aware of modern slavery risk in their supply chains. It seems ironic that Nestle recently had a motion dismissed where they were being sued for failing to disclose that some of the ingredients in their cat food contained seafood sourced from forced labour[1] now to be faced with defending this case where there is strong inference that their actions facilitated the use of child labour in their supply chains.
In the growing media coverage of child labour issues in supply chains[2] organisations need to consider some key principles to take action, namely:
- Map supply chains
- Know the law!
- Consider relevant guidance and voluntary frameworks
- Ensure that due diligence procedures are in place
- Don’t be complicit!
- Raise awareness and implement training
- Develop appropriate policies and procedures
- Monitor effectiveness
Ardea International supports business and organistions in implementing these actions. Our gap analysis checklist can be a useful starting point. If you would like to know more or have a chat about how we can support you, contact me directly Colleen.Theron@ArdeaInternational.com
About Ardea
We are a specialist sustainability, business and human rights consultancy with expertise in modern slavery.
[1] Fohttp://www.edie.net/news/7/BBC-Panorama-Syrian-refugee-children-labour-in-clothing-supply-chain-factoriesr a summary of that case http://clt-envirolaw.com/barber-v-nestle/