Focus on Fairness: Garcia v. Tahoe Resources

By Erin Brandt.

What happens when a Canadian company is accused of human rights violations in a foreign jurisdiction? A recent British Columbia court ruling suggests that businesses with overseas operations may soon be subject to increased scrutiny from Canadian courts.

In theory, an individual alleging human rights abuses would take legal action in the country where they occurred. However, where that country lacks a rigorous legal infrastructure, this can be problematic. If the company accused of abuse has Canadian operations, the complainant can seek to have his or her case heard in the relevant province.

To do so, the complainant must first convince the Canadian court that it has jurisdiction over the matter. Generally, if the company carries on business in British Columbia (for example), this will be a sufficient basis for a BC court to accept jurisdiction.

However, the defendant company could then argue the legal doctrine of forum non conveniens, which allows a court to dismiss a case where another court (or forum) is better suited to hear it. Until recently, this has kept Canadian courts from looking too closely at the foreign operations of Canadian-based companies.

A 2017 decision out of the BC Court of Appeal may have changed that.

Garcia v Tahoe Resources Inc.

In Garcia, seven individuals brought a claim in BC against Tahoe Resources Inc. after the individuals were allegedly shot and injured by Tahoe’s private security personnel at Tahoe’s mine in Guatemala. In an effort to have the BC Court stay (i.e. halt) the claim, Tahoe argued forum non conveniens (FNC). Tahoe was originally successful in obtaining a stay, but the plaintiffs appealed the preliminary judge’s decision to the BC Court of Appeal.

In considering the matter, the BC Court of Appeal reviewed the appropriate legal test for FNC and ruled that:

  • It is inadequate to ask whether the alternate forum is ‘capable’ of providing justice.
  • Rather, the correct question is whether there is a real risk of an unfair process in the foreign court.

In the circumstances of Garcia, the Court concluded that:

  1. Guatemalan courts have limited discovery procedures available to the plaintiffs.
  2. It was unclear whether the plaintiffs would be able to pursue their claims in Guatemala due to expiry of the limitation period (i.e. the period in which they were allowed to bring a claim).
  3. There is a real risk that the plaintiffs would not obtain justice in Guatemala, given the context of the dispute – “a highly politicized environment surrounding the government’s permitting of a large foreign-owned mining operation in rural Guatemala” – and the evidence of endemic corruption in the Guatemalan judiciary.

As a result, the Court declined Tahoe’s application to stay the BC proceeding.

Post-Garcia

Following Garcia, the Canadian Centre for International Justice (part of the plaintiffs’ legal team) noted the following implications of the Court’s ruling:

  • Garcia “represents the first time that a Canadian appellate court has permitted a lawsuit to advance against a Canadian company for alleged human rights violations committed abroad”.
  • A 2016 court victory by Eritrean plaintiffs in a “slave labour” lawsuit against Vancouver-based Nevsun Resources Ltd. is on appeal and will be heard by the BC Court of Appeal in September 2017.
  • Three Ontario lawsuits alleging that Hudbay Minerals is liable for violent physical abuses in Guatemala are also moving toward trial.

In the meantime, the clarity given to the FNC test by the Court in Garcia suggests that Canadian courts may well start to see an increase in lawsuits against companies with operations in Canada who are accused of committing environmental and human rights abuses abroad.

The principle of fairness underlying the decision in Garcia fits well with our own ideas about sustainable employment. Just as Canadian employers and employees benefit from fair, respectful and collaborative practices, so too will those operating abroad.


NOT LEGAL ADVICE. Information made available on the Kent Employment Law website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action, based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. One of our lawyers would be pleased to discuss any specific legal concerns you may have.

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