Canada Court Rules Nevsun Can be Sued in Canada for Alleged Abuses Abroad

The Supreme court did not settle the merits of the plaintiff’s claims. But it gave the green light for a case against Nevsun to be tried in a B.C. court.

Supreme Court of Canada Dismisses Nevsun's Appeal
Supreme Court of Canada dismisses Nevsun’s appeal. It means, the human-rights lawsuit against it can be heard in the future in British Columbia court to see if Nevsun is in violation. (Photo by Andrew Meade)

BY TESFANEWS *

The Supreme Court of Canada has ruled that Canadian mining company Nevsun Resources Ltd. can be sued in a Canadian court for alleged human rights abuses abroad.

A number of years ago, three Eritreans launched a civil suit against Vancouver-based Nevsun in the Supreme Court of British Columbia, alleging they were subject to forced labour, slavery and torture during the construction of Nevsun’s Bisha mine in the east African country of Eritrea.

In a split decision, the Court has allowed the three Eritreans to proceed with a civil claim for alleged human right abuses against this Canadian mining company.



Two judges partially dissented and two dissented fully with Friday’s decision.

The question before the Supreme Court was whether the Eritrean refugees can sue Nevsun for damages caused by the actions of its mining operation in a partnership with companies in Eritrea.

Previously, Canadian companies operating abroad could only be sued in the jurisdiction in which alleged infractions occurred.

Nevsun argued that the case should be dismissed under a legal principle called the Act of State, which holds that one country can’t hold another legally liable for its actions inside its borders.

However, in the ruling on Friday, a majority of Supreme Court justices disagreed with Nevsun’s argument, and concluded Act of State does not apply in Canada.

The top court, 7-2, ruled the act of state doctrine is an English law and is not part of Canadian jurisprudence.

“The doctrine is not part of Canadian common law,” the majority decision read, and it is not “a bar to the Eritrean workers’ claims.”

The top court did not settle the merits of the refugees’ claims. But it gave the green light for a case against Nevsun to be tried in a B.C. court.

This majority decision from the Supreme Court is, therefore, expected to have broad implications for any domestic company that operates abroad. For the mining industry in particular, the ruling potentially adds an extra layer of risk to its business model.



It also gives individuals added options when considering launching a civil lawsuit, allowing them to pick the jurisdiction with the sturdiest legal system.

Nevsun no longer owns the Bisha zinc and copper mine. It was acquired by a Chinese mining company couple of years ago.

It will be up to a B.C. court in the future to see if Nevsun was in violation. However, it it may prove to have significant implications for Canadian mining companies.

These are civil, not criminal, claims which makes the case unusual. This is also not a class action suit, but three individual claims. Nevsun, in its brief to the top court, wrote, “permitting claims like this one may discourage foreign investment in developing economies.”

Half of the world’s mines are operated by Canadian mining companies, often in the poorest of countries.

* iPoletics and The Globe and Mail have contributed to this story