The ‘silent casualty’ of war: armed conflict, environmental protection and corporate liability – trends in international law and the impact on commercial disputes

Victoria Pigott
Mishcon de Reya, London
victoria.pigott@mishcon.com

Emily Nicholson
Mishcon de Reya, London
emily.nicholson@mishcon.com

Charlotte Overington
Mishcon de Reya, London
charlotte.overington@mishcon.com

Helena O’Mahony
Mishcon de Reya, London

The 2023 Global Peace Index report indicates a concerning surge in global conflicts, with conflict-related deaths having increased by 45 per cent between 2020 and 2021.[1] One can now walk the entire 6,000 kilometre stretch from the easterly Red Sea to the Atlantic coast of West Africa, entering only countries which have experienced coups in the last three years.[2] This global surge in conflict is set to increase, particularly as climate change, environmental degradation and extreme weather events amplify tensions.

The environment is a ‘silent casualty’ of war.[3] The Geneva Conventions define environmental harm in terms of widespread, long-term and severe damage to the surrounding environment, but the reality is that the relationship between conflict and the environment is more complex. Conflict can contribute to carbon emissions and drastically affect biodiversity, while environmental degradation, such as resource scarcity or water shortages, increases the likelihood of violent conflict.

The involvement of business entities in armed conflict is not new,[4] but it is evolving. In the context of a globalised economy, and complicated international supply chains, companies hold increasing power and resources. This can influence, and potentially exacerbate, situations of armed conflict, often by contributing to environmental harm. Pollution of local water supplies, illegal land possession and unsustainable extraction of resources are just some examples of corporate activities which can cause conflict.

The law of armed conflict, however, remains embedded in international law, which focuses on liability at state level, and so corporate liability for actions during conflict can be difficult to establish. Despite this, there is a growing recognition of the international legal personality of transnational corporations, notably exemplified by the recent ILC Draft Principles on the Protection of the Environment in relation to Armed Conflicts which explicitly refer to corporate liability.

This article explores the impact this trend will have on commercial disputes in the context of armed conflict. Climate and environmental litigation is blazing a trail of creative, innovative ways of using the law to secure justice. We argue that environmental harm caused in the context of conflict is no exception, and the ILC Draft Principles represent a promising step forward in establishing corporate accountability for their activities before, during and after armed conflict.

Trends in international law

In 2011, the UN formally endorsed John Ruggie’s Guiding Principles on Business and Human Rights (UNGP), reflecting an increased consciousness of how businesses, particularly large multinationals, affect the human rights and livelihoods of communities. The UNGP challenged the traditional notion that only states and state agents can be held accountable for violations of international human rights law. Several notable cases of human rights infringements by corporate entities demonstrated the global influence of large companies and gave impetus to this development. This influence, particularly in situations of armed conflict, justified to the international legal community that businesses should not enjoy immunity from established human rights principles on the basis that they are not a state. And so, the UNGP were endorsed.

The UNGP form part of a growing list of international law documents which address corporate actors,[5] demonstrating a shift away from the traditional notion of international law as being relevant only to states. This trend is also reflected in domestic case law. In the case of Nevsun Resources Ltd v Araya [2020] 4 WWR 1,[6] the Supreme Court of Canada held that companies should not enjoy a blanket exclusion from liability under customary international law. The case related to human rights violations by a Canadian company overseas; but increasingly, environmental protection is also understood as a norm of customary international law, perhaps even a peremptory or jus cogens norm. So how does this trend apply to environmental harm during armed conflict?

The Draft Principles

In 2022, the International Law Commission (ILC) adopted the Draft Principles on Protection of the Environment in relation to Armed Conflicts (Draft Principles). Notably, Draft Principle 10 and 11 recognise the intersection between corporate actors, armed conflict and environmental harm and, importantly, note the impact of this throughout the entire conflict lifecycle (before, during and after conflict arises). Draft Principle 11, in particular, requires states to hold businesses accountable for harm caused to the environment, in an area affected by armed conflict. This represents a significant step forward in acknowledging the role of corporate entities in armed conflict and addresses the ‘accountability gap’ in international law.

The impact on commercial disputes

In light of this trend in international law and the recent introduction of the Draft Principles, we consider the litigation risks that companies should consider when operating in areas affected by any stage of the conflict lifecycle.

Claims based in the Draft Principles

The Draft Principles are a non-binding soft law instrument, and as such do not create direct obligations on corporate actors on which to base commercial disputes. Despite this, their potential impact on commercial disputes should not be underestimated. The use of the UNGP is instructive in this regard, as courts are increasingly citing it in cases against corporate entities for human rights violations, and indicates how domestic courts might seek to utilise the Draft Principles.

In Milieudefensie v Shell [2021], the Hague District court found that the Shell Group has an obligation to comply with the unwritten standard of care under Dutch tort law, the scope of which was said to be informed by international human rights obligations, the UNGP, and the goals of the 2015 Paris Agreement.[7] The court considered that even though the UNGP is not legally binding, it can provide guidance for the interpretation of the standard of care. Courts in Argentina, Colombia, Peru, Brazil and Mexico have also made reference to the UNGPs in their judgments.

Recognising the international legal personality of transnational corporations is not however uniform and varies by jurisdiction. For example, in the case of Association France Palestine Solidarité v Alstom SA,[8] the French Court of Appeal held that international humanitarian law treaties create obligations between states and could not serve as grounds for holding companies liable. [9] However, it is broadly a growing trend. As environmental litigation against corporate actors continues to increase, it seems likely that the Draft Principles will feature as persuasive authority in holding corporates to account for environmental harm caused in the context of armed conflict.

Claims based in domestic legislation

Draft Principle 11 requires states to implement domestic legislation to hold businesses accountable for environmental harm in conflict zones. We may therefore start to see the introduction of such legislation which might ultimately give rise to increased litigation in this area.

Litigating in relation to armed conflict and environmental harm, however, can be complicated when using domestic law: the harm can be borderless, and often claims are against multinational corporations causing harm in foreign jurisdictions. Transnational litigation, considering parent/subsidiary liability might bridge this accountability gap.[10] In Vedanta v Lungowe [2019] UKSC 20,[11] 1,826 Zambian villagers brought a claim in the English courts against UK-based Vedanta and its Zambian copper mining subsidiary, KCM. Despite KCM being responsible for causing the harm (polluting local water resources), due to its influence over its subsidiary, Vedanta also owed a tortious common law duty of care to the claimants itself. The case established that parent companies could be liable for the acts of their international subsidiaries, albeit in limited circumstances. Given the patchy nature of domestic laws, and the borderless impacts of conflict, environmental harm and corporate influence, the ability to claim against foreign entities, based on the parent/subsidiary relationship, is an interesting development of which multinational corporations need to be aware.

Environmental litigation, in itself, is a fast-evolving area as environmental damage and climate change gain increasing attention. For example, 11 countries now criminalise ‘ecocide’: the unlawful or wanton acts committed with knowledge that there is a substantial likelihood of severe and either widespread or long-term damage to the environment being caused by those acts. In 2023, the European Parliament and Council provisionally agreed on a new directive criminalising environmental harms, comparable to ‘ecocide’, which places significant focus on corporate liability and sanctions. This demonstrates that corporate accountability is not only gaining traction within human rights law, but also in the environmental law space.

Although developments in the domestic and international courts indicate an increasing appetite to hold corporates to account for both environmental harm and human rights abuses, this area remains in its infancy, with few successful claims. However, the law is developing: as the International Criminal Court Prosecutor (2012–2021) Bensouda confirmed, prosecuting international crimes committed by businesses is a key discussion within the international legal community,[12] perhaps indicating we are on the precipice of change. With the introduction of the Draft Principles, this could culminate in corporate liability for environmental harm in the context of armed conflicts, and businesses should be prepared for this. Careful consideration of supply chains, local community rights, and subsidiary activity will become increasingly necessary for corporate actors.