Business and Human Rights, ESG and Sustainability

Overview

• Business & Human Rights

• Introduction to the United Nations Principles on Business and Human Rights(UNGP’s);
• Human rights due diligence
• Cases from Other Jurisdictions

• ESG & Sustainability

• What is ESG?
• ESG versus Sustainability
• ESG and the SDG’s

• Key Environmental Law Court Cases

• Xolobeni Case
• Shell Case

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United Nations Principles on Business and Human Rights

• "The UN Guiding Principles on Business and

Human Rights are a set of guidelines for States and
companies to prevent, address and remedy human
rights abuses committed in business operations.”

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The Duty of States to Protect Human Rights

• Mandatory human rights due diligence measures;

• “The adoption of an international legally binding instrument, which would require States parties to
implement mandatory human rights due diligence measures."
• Enforcement and Sanctions;
• A lack of multilateral policy coherence;
• Mainly amongst international financial and development institutions (like the OECD and the United Nations
itself)
• Victims access to effective remedies;
• Non-State-based grievance mechanisms;
• State-based non-judicial grievance mechanisms;
• Judicial remedies;

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Cases from Other Jurisdictions

• Dominic Liswaniso Lungowe and Others v. Vedanta Resources Plc and Konkola Copper Mines Plc (2016)
EWHC 975 (TCC); (2017) EWCA Civ 1528; and (2019) UKSC 20.;
• Okpabi and Others v. Royal Dutch Shell Plc and Another (2017) EWHC 89 (TCC); (2018) EWCA Civ 191; and
(2021) UKSC 3;
• 2020 WL 4368895 (United States District Court for the Northern District of California);
• Choc v. HudBay Minerals Inc. (2013), Ontario Superior Court of Justice 1414;
• Das v. George Weston Limited (2017), Ontario Superior Court of Justice 4129;
• Nevsun Resources Ltd. v. Araya (2020), Supreme Court of Canada 5 (CanLII);
• Kiobel v. Royal Dutch (2019) at https://uitspraken.rechtspraak.nl/inziendocument?id;
ECLI:NL:RBDHA:2019:6670;
• Vedanta Resources PLC and another v. Lungowe and others (2019);

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Environmental Social Governance (ESG) and Sustainability

• What is ESG?
• Environmental
• Social
• Governance
• The difference between ESG and sustainability;
• ESG includes sustainability as one of its three
pillars, but also incorporate broader social and
corporate governance considerations;

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ESG and the Sustainable development Goals (SDG’s)
• SDGs are global goals set out by the United
Nations;
• Adopted by the United Nations in 2015 as a
universal call to action to end poverty, protect the
planet, and ensure that by 2030 all people enjoy
peace and prosperity;
• The eradication of poverty is key aspect of the the
“S” in ESG
• The protection of the environment is an integral part
of the ”E” in ESG
• Paris Agreement
• 2030 Agenda for Sustainable Development

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Shell Case
Factual background

Time Line:
• 14 July 2011 - Impact applied for a technical co-operation permit.
• 27 July 2012 - Permit was granted by the Deputy Director-General of the Department of Mineral Resources and
• 18 February 2013 - Impact applied for an exploration right to, inter alia,
• 01 March 2013 – The Application was accepted
• Impact was required to submit an environmental management program (EMPr) for consideration and approval by the
Minister of Mineral Resources.
• Public Participation;
• Adverts were placed in The Times, Die Burger (Eastern Cape), The Herald and The Daily Dispatch newspapers on Friday 22 March
2013 notifying members of the public of the proposed project;

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Factual background

• 09 September 2013 - PASA recommended the approval of the EMPr

• 17 April 2014 - The Deputy Director-General approved the EMPr.
• 29 April 2014 - The exploration right applied for by Impact was granted.
• 17 May 2017 – Application for the first renewal of the exploration right which was granted on 20 December 2017.
• 13 March 2020 - Impact applied for the second renewal of the exploration right which was granted 30 July 2021.
• 29 October 2021 – Shell gave notice of intention to commence with a 3D seismic survey along the Wild Coast, pursuant
to the exploration right and the EMPr approved in 2014.

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What was the Court’s decision

• Grounds of Review:
• Procedural unfairness;
• Public Participation
• Failure to take into account relevant considerations; and
• Old EMPr
• Failure to comply with applicable legal prescripts,

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What was the Court’s decision

Court Held:
1.The decision taken by the first respondent on 29 April 2014 granting exploration right 12/3/252 to the fourth
respondent for the exploration of oil and gas in the Transkei and Algoa exploration areas is reviewed and set
aside.
2.The decision taken by the first respondent on 20 December 2021 to grant a renewal of the exploration right is
reviewed and set aside.
3.The decision taken by the first respondent on 26 August 2021 to grant a further renewal of the exploration right
is reviewed and set aside.
4.The first, fourth and fifth respondents shall pay costs of this application, jointly and severally, the one paying
the other to be absolved, such costs to include, in the case of the first to seventh applicants, the costs of three
counsel and, in the case of the eighth and ninth applicants, the costs of two counsel.

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What was the Court’s decision

Grounds of Review Court Held:

• Grounds of Review:
• Procedural unfairness;
• Public Participation was flawed/inadeqate
• Failure to take into account relevant considerations; and
• The use of outdated EMPr
• Failure to comply with applicable legal prescripts,
The decision taken by the Minister on 29 April 2014
granting exploration right 12/3/252 to the fourth
respondent for the exploration of oil and gas in the
Transkei and Algoa exploration areas is reviewed and
set aside.
1.The decision taken by the Minister on 20 December
2021 to grant a renewal of the exploration right is
reviewed and set aside.
3.The decision taken by the Minister on 26 August
2021 to grant a further renewal of the exploration
right is reviewed and set aside.

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 Is this the end of the road for the Shell?
• Is this the end of the road for the Shell?
• https://mg.co.za/environment/2022-12-19-shell-mantashe-
impact-africa-granted-leave-to-appeal-wild-coast-seismic-
survey-ruling/
• In November 2021 the Eastern Cape high court granted Shell and
Impact Africa, as well as Minister Gwede Mantashe leave to appeal;
• ”The applications for leave to appeal and leave to cross appeal (by the
applicants) “do not pass muster; the appeal sought has no reasonable
prospects of success”.
• “But the court found that the parties agree that this matter is of
significant importance and requires ventilation by the supreme court of
appeal.”
• Wilmien Wicomb, of the Legal Resources Centre, said: “Given the novelty and
significance of the judgment and its extraordinary importance for communities
around the country that bear the brunt of extractivism and climate change, it is
in the public interest for the supreme court of appeal to rule on the matter."
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Sustainable Development versus Human Rights

• Fuel Retailers Association of Southern Africa v Director-General: Environmental Management, Department of

Agriculture, Conservation and Environment, Mpumalanga Province and Others 4:
• ‘. . . [D]evelopment cannot subsist upon a deteriorating environmental base. Unlimited development is detrimental to the
environment and the destruction of the environment is detrimental to development. Promotion of development requires
the protection of the environment. Yet the environment cannot be protected if development does not pay attention to the
costs of environmental destruction. The environment and development are thus inexorably linked.’

• Precautionary Principle:
‘that a risk-averse and cautious approach is applied, which takes into account the limits of current
knowledge about the consequences of decisions and actions.’

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The Relevance and Significance the Case within the context current
discussion

• These Guiding Principles are grounded in

recognition of:
• States’ existing obligations to respect, protect
and fulfil human rights and fundamental
freedoms;
• The role of business enterprises as specialized
organs of society performing specialized
functions, required to comply with all
applicable laws and to respect human rights;
• The need for rights and obligations to be
matched to appropriate and effective
remedies when breached.

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Xolobeni Case
BRIEF FACTS

Local community – wild coast v Minister of Mineral Resources & Others (including an Australian
Mining Co – Transworld Energy Mineral Resources (SA) Pty Ltd “TEM”) (73768/2016)

Australian Mining co ( wants to mine the titanium-rich sands under the Xolobeni Mineral Sands
Project

TEM applied for a mining right for titanium ores and other heavy minerals in the Xolobeni area,
Eastern Cape

The proposed mining area comprises of land over a coastal land and also inland

The applicants (and families) live within or in close proximity of the proposed mining area

TEM failed to present to the community a proposal on how it will mitigate the impact of the proposed
mining on individual families/the community

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Environment v Human rights (local communities)

DISPUTE: the applicants and the community have not consented to mining activities

Court emphasized: Where the land is held on a communal basis – the community must be placed in a position
to consider the proposed depravation and be allowed to take a communal decision in terms of their custom and
community on whether they ‘consent or not’ to a proposal to dispose of their rights to their land

Courts decision: that the two pieces of legislation must be read together (Mineral Pretroleum Resources
Development Act 28 of 2002 and the Interim Protection of Informal Rights to Land Act 31 of 1996)

Courts decision: the Minister of Natural Resources is obliged to obtain the full and informed consent of the
applicants/community before granting any mining right to TEM

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Environment v Human rights (local communities)

• SIGNIFICANCE OF THE CASE:

❖Case affirms the human rights of the local communities and the significance
of upholding the rights prior to multinational companies engaging in
developmental activities within those areas

❖Any concluding reflections?

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THANK YOU