Five on Friday – Five Recent Developments that We’ve Been Watching Closely

iStock_000011057325XSmallIt’s Friday and time for another overview of developments in the field of business and human rights that we’ve been monitoring.

This week’s post includes: litigation developments in cases that address the “Social Cost of Carbon,” the liability of interactive media service providers, and human trafficking in corporate supply chains; and a new global ranking of countries according to the relative risk of human trafficking and forced labor.

  • On August 8, the 7th Circuit Court of Appeals affirmed new energy efficiency requirements for commercial refrigeration equipment that had been issued by the U.S. Department of Energy. As discussed on Foley Hoag’s Law and the Environment blog, the decision represents the first time that a U.S. court has sanctioned consideration of the “Social Cost of Carbon” (“SCC”) in formulating new regulations. The SCC has been defined as “an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year[.]” Noting that the Energy Policy and Conservation Act specifically requires the DOE to consider the need for national energy conservation, the Court observed that “the expected reduction in environmental costs needs to be taken into account” when determining whether to enact specific conversation measures.
  • On August 10, the District Court for the Northern District of California granted Twitter’s motion to dismiss in case in which plaintiffs alleged that the company’s provision of accounts to ISIS was a proximate cause of the deaths of two individuals killed in Jordan by a ISIS supporter. Plaintiffs specifically alleged that, by providing members of ISIS with social media accounts, the company knowingly provided material support or resources for terrorist activities. The Court relied on Section 230 of the Communications Decency Act in dismissing plaintiffs’ complaint, specifically finding that, as a publisher of content, Twitter cannot be held liable for the content created by third parties. The Court found that, in making decisions about the structure and operations of the website, including decisions about what third-party content may be posted, the company was engaged in the type of publishing activity that is protected by Section 230. Notably, on August 18, Twitter announced that it had suspended approximately 235,000 user accounts in the last six months for violating its policies on the promotion of terrorist activity.
  • On August 10, defendants filed a motion to dismiss in a lawsuit filed pursuant to the Trafficking Victims Protection Act (“TVPA”) by Cambodian plaintiffs who allege that they were victims of human trafficking as a result of their recruitment to and subsequent forced labor at factories in Thailand that produce seafood for export to the United States. The corporate defendants, which include both Thai-based companies and U.S.-based companies that import and distribute seafood from Thailand, are alleged to have knowingly benefited from the acts of trafficking or forced labor in violation of Section 1593A of the TVPA. The motion to dismiss argues that the civil liability and “knowingly benefiting” provisions of the TVPA do not apply to extraterritorial conduct and that plaintiffs have not alleged facts sufficient to support claims of human trafficking and forced labor. As companies are increasingly expected to conduct human rights due diligence on their supply chains, this case is being watched closely by those seeking to determine what litigation risks may exist for companies that know, or should know, that they may be benefiting from acts of human trafficking.
  • On August 12, Verisk Maplecroft, a risks analytics company, released a new global ranking that concluded that human trafficking and forced labor is a “high” or “extreme” risk in 115 countries around the world. Notably, 10 of the 12 top garment-producing countries and more than 20 of the top cocoa-bean producing countries all ranked as “high” or “extreme” risk.  China and India were both ranked as “extreme” risk countries. Such rankings should serve as a red flag to companies seeking to address human right-related challenges in their supply chains, but should also facilitate corporate efforts to prioritize their risk management activities.
  • In mid-August, the Corporate Human Rights Benchmark (“CHRB”) announced that it would release its initial pilot rankings in early 2017, not in November 2016 as was originally expected. As previously discussed, the CHRB will rank 100 companies on their human rights performance as part of an initial pilot. The companies chosen for the pilot include members of the extractive, apparel, and agricultural sectors. Companies will be assessed in the following areas: governance and policy; systems and processes; performance; responses to allegations; and transparency. The CHRB’s most recent announcement stated that the additional time would allow for more review of corporate disclosures and more time to crosscheck all indicators in order to ensure that the pilot benchmark is fair and credible.

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