The Dyson Case: a landmark moment for business and human rights?

It's not an isolated case here, this forced labour instance. It's really how manufacturing takes place in a lot of these countries that are very heavily reliant on migrant workforce. Hi there, and welcome to Voices from the Institute for Human Rights and Business, all to known as IHRB. I am Debra Sego in this podcast. You'll hear from people working to make respect for human rights part of everyday business. You just heard from Anna Trapunnel, the founder of Human Level, a consultancy that helps companies address human rights risks in the supply chains. Anna was talking about the recent legal case involved in the company Dyson, and a group of migrant workers from the Paul and Bangladesh. People are calling this a landmark case for business and human rights. But why? My colleagues at Leigh-Chalil Chappati explores the answer in a conversation with Anna and Oliver Holland, a partner at Leigh-Day, the law firm representing the workers in the Dyson case. With you now, Salihm, can you tell us a bit more about this case? Sure. So, one of the things that businesses have grappled with for a long time is of course modern forms of slavery. And one of the manifestations of that is the fact that workers who are migrant workers and who work away from their home in vulnerable situations end up having to pay the recruiters and end up having to work in non-unionized settings or in ways that are much stronger than they ought to work and beyond the novel working hours. So, there were a group of Bangladesh and Nepal workers who took the company Dyson to task. Dyson is a British Singaporean company because now they are based in Singapore and they had facilities in Malaysia in their supply chain. Usually, when people are gone after companies and tried to prosecute them, they tend to be direct owners of the facilities, such as the case that took place earlier in Dambia with Vedanta and so on. But here, this is an interesting case that is the supply chain responsibility that became an interesting case. Dyson did not admit any wrongdoing. The case was heard in the English court and the English court basically ruled that yes, the case can be admitted. And because of that, Dyson decided to settle the case and it has created a kind of a precedent about the kind of remedies that are available to workers in vulnerable situations. And these are the kind of cases that will test the strength and resilience of the system on one hand. And you know, the way in which the parent company has a relationship with its supplier. Why did you want to speak to Anna in Oliver in particular? So, Anna wrote a very nice blog the other day in which she looked at takeaways that she thought were important from this case. She writes on business and human rights issues frequently. And Anna has field experience. She has worked with the team of Professor John Ruggie. She has also worked on human rights due diligence for a long time and she has been observing the situation for a long time. So, Anna wrote a post on LinkedIn. A lot of people read it, shared it and spoke about it. It came to our attention. So, I reached out to her to speak about this issue. And Oliver Holland has been a litigator. He has been representing communities and vulnerable people in difficult situations and trying to trick the companies to court in order to get remedies for that. So, they were absolutely appropriate to talk for this story. Thank you, Sallion. Let's hear that conversation now. [Music] If we take a step back and think about why it's such a landmark case, there are a number of reasons, but the main reason I'll say here today is the fact that we've had an extension in UK courts of what we call "negative principles" and how companies can owe a duty of care towards workers. And we've seen over the last two decades of an extension of that towards workers in subsidiaries. So, people hear a lot about the Vedanta case of 2019 or the Okbabi case of 2021 where we're thinking through what kind of duty does a parent company owe to workers working in a subsidiary of that parent company. But this is one of the first, although there is another one, and the Mavane case. But this is one of the first where we are thinking through, "What about if we extend that duty of care to workers in the supply chain in supplier?" So, that's why it's seen as such a landmark case. So, this lawsuit against Dyson has been over allegations of forced labor in the Malaysian supplier. Dyson, of course, makes household products such as vacuum cleaner, and hand-riar, and many other industrial and commercial-use products around the world. And it's used to be based in Britain, but now it has moved to Singapore. And it is a company that is known for its technical innovations, and quite well, like in the British corporate establishment. Similarly, it is now becoming a very interesting company from the business and human rights jurisdiction issue. But as Anna, you pointed out this raises some significant questions about corporate liability across borders. The claimants have said that Dyson is liable for exploitative conditions with the code finding that the case has a real connection to the UK management. Oliver, how important is this case for establishing where the multinational companies can be held accountable for labor abuses deep within the supply chain? I think in particular the Court of Appeal judgment from this case is really important. The Court of Appeal found that these claims are at least legally arguable. The Court wasn't deciding where the allegations were true, but it accepted that they had a real prospect for success, at the appropriate place for these claims with the English courts. And I think it goes to a trend we're seeing over the last few years that the English courts are very much open to these sorts of cases being heard here. Obviously we have a pubby, we have a Vedanta in the Supreme Court. We obviously had cases before that, but what we're seeing, and more recently in the Brazilian eye in case we're seeing the courts being open and arguably the English jurisdiction now is probably one of the most hospitable jurisdictions for these sorts of cases. So it's incredibly important in that way. Multinationals have often argued that suppliers and not brands are responsible for labor violation. Whether we talk about cases such as what happened in Bangladesh with Rana Plaza, or earlier with Gap and other companies in Southeast Asia at the so-called stretch of factories, they've always said that the brand that should be less responsible for it than the actual supplier. Now what does this case tell us about where responsibility realistically lies between the brand, the contractor, and even the recruitment agents, because here we are talking about migrant workers who have been involved. What sort of lessons can we draw by companies about due diligence in the supply chain? Have we broken new ground now? So if we'd go back to Vedanta, and what we obviously as you say, it was what we call parent company liabilities. So the responsibility of the UK parent company for the actions of its subsidiaries. Now in Vedanta, the Supreme Court sets out five criteria, and it wasn't the exhausted criteria under which a parent company may be liable. But it wasn't limiting it to a parent company subsidiary relationship only. It was very clear that it was outside of that as well. And what you're seeing here in the Dyson case is the implementation of those principles. And you're seeing that in certain situations, particularly where a corporation takes responsibility for certain areas, through publishing of managed-use standards, through auditing, through publishing in their corporate materials, what they take responsibility for, and when that fails, then therefore they may well be at duty of care. And if they breach that duty of care, then they may end up being liable in English courts. And that's what this is showing. It's an extension of the Vedanta. It's a natural next step. And we're seeing more cases being brought in English courts on a supply chain basis, not just on the parent company liability basis. Right. And given all your experience, what is your take on this? So when I'm out on the ground doing human rights and back assessment work, I have work with suppliers that have forced labour in their factories. Either the co-workers have come in having paid a fee before, or literally they have for this job they've paid the fee. And I said to them, "Well, why are you resorting to forced labour?" And how could you not do it a different way? Well, we can't. There's such fast turnaround. The buyers are changing their orders at the last minute. The prices here are really tight. We need the workers here day and night to be able to have the spillover of capacity and to be able to meet the production targets within the pricing. So they are telling us, "Oh, it's on the buyers." Right. Then when we go to the buyers and say, "Well, you know, what about you? How can you ensure you don't have this forced labour happening in your supply chain?" The buyers say to us, "Well, we'd love to not have it, but we have not found an agreement agency that can actually do it. Even if we are still paying for the workforce because they'll do a double-dipping thing of getting fees from the company and also getting it from the workers, we haven't seen that our peers are really doing it. It's a bit like a lip service to the employer/payee principle that actually are really really buyers doing it. Are they factoring in the price of labour and governments? Well, the governments, well, the laws, how they're being enforced. And then we have the government saying, "Well, we have the brands telling us that if we make things too expensive, they're not going to come in." So there's this thing happening, sort of, everyone's passing the buck to each other. But that makes sense because we are actually in a system that is endemic, and it's not an isolated case here, this forced labour instance. So the huge profits to be made, the ILO has said it's 236 billion per year as being made from not paying the wages and that's going into the pockets of these gangmasters making the money. So we are set against this huge economic model of forced labour that's making money. So how do we counter that? And so I just think that question is really important, the one that you asked about, where is the responsibility? It lies in all of these players in the supply tent and also the governments that have their own duty. If you look at it globally are there similar trends that you see elsewhere? When I posted the semanyun, letter. It was almost say the newsletter that got the most traction around the world, so many comments and so many emails I got from people. People really were fascinated by this case. They still are. I think one of these is the way in which Dyson responded to the case. There's the facts and there's what's happened, but it's also the way in which Dyson disputed the facts and then to have sued Channel 4 for reporting. So I think there's a lot of discussion about that as well. But really, it created a whole discussion that I saw about, will it just mean that buyers, well, bands will no longer be doing this in the UK? Will they just be going to other jurisdictions because if they don't want the UK coast to have jurisdiction? That won't happen in a way that people are saying because as you know, Oliver's describing here, there's a trend across jurisdictions of a number of courts who are seeing it in Canada, with seeing it in France, with seeing it in the Netherlands. The courts are saying, yeah, think it is our responsibility to look more at these cases that are happening in supply chain. So they're finding hooks for those cases and in parallel, we're having these due diligence laws that are also giving the teeth for that due diligence and enforcing it. So if companies are being advised by their lawyers, oh, the takeo is don't take that responsibility and don't do due diligence, don't set the policies, don't monitor. Well, you'll then fall foul of the due diligence duties and maybe at the import bands which have a lot of teeth to them. So I think really the lesson is we're taking a step back, we're seeing this court case within the wave of the court cases that are happening and the regulation and together it's showing companies, yeah, criminalized due diligence really is something now that is regulated and legal and expected. Soft floor, hard floor by the courts. I'm really glad you talked about the centrality of the debt-bounded system, but here's the question I hadn't planned, but since you mentioned the lawsuit against channel four, I had a question, if either of you can comment on it, that is this what one might characterize at slap the strategic legal action against public participation, trying to get a prior restraint and preventing the media from reporting something or is it, I mean, of course, Dyson should not let public criticism be stopped in this kind of a situation. What kind of remedies are there? I wouldn't want to necessarily comment as to whether it was a slap or not. I think maybe conclusions can be drawn by the fact that they would drew it, but I wouldn't want to comment directly on that. But I think slaps generally are a real real issue, probably less so in this jurisdiction or they're also an issue, but for migrant worker activists, migrant worker lawyers in many Asian jurisdictions, such as taking Southeast Asian jurisdictions, the risks to lawyers representing workers and trying to get some public attention on their cases, the risk is really high in a and the penalty can be severe, including criminal prosecution, which is really, really tough for them. So I think slaps is a really important issue in this area and we're talking really, really needs to be addressed to many jurisdictions. Celia, I often get called in to companies when they're facing these kinds of issues and I always see this sort of law. Oh, I think always, in fact, but it manifests differently. This tug of war between lawyers who are trained and I get it. You know, I'm a trained corporate lawyer, I passed the point three jurisdictions, I have a factor's law and that's how you're trained. If I was like, I protect the company at all costs and you're taught these things. Well, let's, you know, let's make it drag on. You know, let's dispute the jurisdiction. Let's use all the tools in our legal toolbox to win and I get it, but that's just not how the business human rights world works. And so if Dyson had been able when they found out about the claims or the allegations, let's say, you know, 2019 from Andy Hall, which was two years before the court case was filed, they could have, oh, okay, you know, what's happening here? But it's a collective issue. Is it not? What about the other brands? Surely other brands have it too. We're not the only ones. What can be done? How do we bring the Malaysian government into this conversation? There's a lot more that could have happened right at the beginning to really prevent all the stuff that's happened since. And so, is this a slap? Is it not? We know that Dyson has disputed that it's not. I would say in the business and human rights space, actually like this, lawsuits that have the chilling effect that ripple way beyond this case are categorized as slabs in the sense that it has the chilling effect on anybody else who wants to bring these cases. I'm not arguing that Dyson wants to defend its reputation, but that's not how you do it in the business of the United States. No, absolutely. But since you brought up Malaysia and since both of your experience of many jurisdictions, is Malaysia particularly vulnerable to issues such as is it a question of poor regulation, poor enforcement, or is it a symptomatic of something much larger in the developing world? Yes, and yes, Malaysia is high risk, but so many other countries in that region. I'd say the minute you have this sort of perfect storm of high reliance on foreign labor, employer-tight visas, we know there's been some relaxation in Malaysia, but still employer-tight visas, recruitment intermediaries that go beyond boundaries, and then gaps either in labor laws compared to international standards or in the enforcement and implementation of those laws. That's a recipe for forced labor, combined with, of course, pressures from buyers coming in on cost and production schedules. So it's not only Malaysia, but yes, it is also Malaysia. Right. Right. Now, this is again a question for both of you, which is about another intermediary which comes into the picture and you alluded to it when you talked about human rights due diligence and what I'm talking about are the social audit firms which are sent to monitor factories. Based on what we know about this case and other similar cases, what does it reveal to us about the limitations of social audits, inadequacies, and failure for the conventional supply chain auditing? We know, for example, from the Chinese case of Xinjiang, where the auditors are not even able to go to the place where they are supposed to be auditing from and yet they are supposed to write their modern slavery statements and so on. So are audits working? Oliver, what do you think? I can speak from my opinion. I'm sure I know it's a lot more experienced than I am, but from a lawyer's perspective, no. And broadly, no, I mean, there are probably some instances where they do work, but what we see is that audits consistently fail for a number of reasons, not because they don't take place, but because they're ineffective when they do take place and they don't address the issues at hand. Obviously, in the Dyson case, the high court, when it made its judgment, ordering the defendants to disclose documents and internal documents early in the proceedings, part of those documents were the audits that took place prior to the allegations, or by the claimants. And those internal documents would have been absolutely key to the case, to establish the liability, understanding what actually went on behind those doors. And I suppose that goes to the point that auditing should also be transparent, and any audit that is placed, it should be put out into the public domain. So it's possible to understand what is actually happening behind those doors. I should also add that I think there's another trend potentially in litigation is from social, from supply chain liability to audit liability. And I think that's the next natural step, and we've actually a representing Burmese migrant workers in a case against Tesco and InterTech that's going to a jurisdiction hearing later this year, port against InterTech as well as the brand InterTech being the social auditor that audits it's a factory in Thailand. So I think when if auditing isn't working, then there's also potential for legal ability to attach. And Anna, your thoughts? I was very drawn to audits because it provides this really lovely sense of comfort. I'm like, "Oh, you know, I've got 95% the tick mark, and then just 5% corrective action plan, and here's why I need to work on it. I can close out my and I'm compliant over the year. It just creates this sense of I can manage this issue. But as we know with forced labour, that just isn't how it can be managed. So I just want to give two examples, which I think are really illustrative. So I was working on forced labour in Qatar and one company I was working with said, "Okay, all the people we came over from other countries took Qatar. We asked them when they came in. Have you paid a fee? We really want to know." And they all said, "No, no, we haven't paid a fee." And then they spent six months of sort of getting the comfort levels up or the work of voice and extending that to comfort levels, you know, a higher after six months, same question. 95% said, "Yeah, actually, we did." So, and I was in audit too, but like the comfort levels was so much greater and there was a sense of everything around it worked for that audit and that case in point to work. But that's very, very rare and what often happens, and this is the second example, as in Thailand, just after the seafood, the seafood forced labour, with Nestle Etchra, I was working on this and I was saying, "Okay, what's happening? You know what's happening? Tell me." And I was like, "Yeah, yeah, yeah, our passport is no longer being retained and now we've got the key." You know what, they're taking our ATM credit cards now. But it's the same. The point is, all these audits and these systems, they can either find something, but then the actions that they recommend. Yeah, we found it, and we did see that some of those audits do find forced labour, but the action is, "Oh, we'll stop taking the passport away." Yeah, but something else would just replace it. Or they don't find it, because people don't feel safe enough to raise it, and they don't trust that when they raise it, they will get their, that keep their job next week. So for sure, the system has to be much more work-a-led, water workers feeling, what can they say, how safe do they feel, and then having some security that when they speak it up, they won't be fired and just replaced, and then that the solution that you raise is meaningful, as I, "Oh, how do I sit down and tackle this issue?" Because I'll just say, "Force labour and supply chains." It's not a surprise. We've been tackling this issue for years. and since the modern slave we've had passed, it's got worse. Why? Because there's so much money in it, and because of the economic systems enable it to happen. And so the solution, of course, is not more audits. We know the issue. It's more what can we do about it? And let's be honest about how we can tackle it. Wonderful. Thank you. I want to return to the issue of Dyson as a precedent. And I want to go back to the question of the supply chain case. And focus on the English code. You both alluded to the fact that the English codes are not playing a more active role in applying international standards. Will we see this as a trend? Because a few years ago when the shell case had gone to the US Supreme Court and the alien tort statute was significantly-- its scope was narrowed. At the same time, there have been judgments such as a Chiquita case a couple of years ago, the Earth's Rights case that took place in the Florida court, which did show that it was possible for litigants to come for a civil liability issue, even in a US court. We have the shell case in the Netherlands and so on. So are we seeing greater scrutiny, greater awareness, and greater willingness on the part of courts to listen to the arguments? Yeah, I believe that there is definitely a trend towards greater access to courts, for litigants, in these kind of situations. Certainly in the English courts, we've seen an uptick over the last, I'd say, 10 years. Obviously, we-- a lead-Ave, we've been doing it for nearly 40 years. But we've certainly had an increase recently in an openness on the courts front in terms of allowing access to the courts for these type of litigants. And obviously, with regulations coming in in Europe and in European countries individually, we're seeing generally, I think, a greater degree of accountability in the business human rights field. But I think there's still a quite a way to go. Anna, what's your experience? What do you want to add to that? The fact that this case has now settled, has triggered a course of big discussion about, well, is that better for the claimants? Is it no better for other force labor victims? Is it not? I think, on balance, one can say that it's better for justice in the sense that that Court of Appeals case, as you were saying all over, is stands, it's strong. And so for any company now that has a global supply chain that has operations in the UK, they're thinking, oh, OK, that could be applied to me. Because we don't have that decision on the liabilities. The threat is open and is there, because we don't actually know where they would have landed. So I think it's, in a sense, it's a little bit more-- it's not the word isn't scary, but a little bit more on notice. It comes a little bit more on note. And legal departments need to be able to know this is there. But the answer not being, I take away any decision-making or my decision, the documents from the UK. More about how can I lean in and have what I need ready for when the time comes, all that I'm proactively disclosing before I get the lawsuit. Yeah. Keeping the migrant worker in mind again, the most vulnerable part of the chain year, what would meaningful justice look like for him or her? Beyond compensation, what kind of reforms do we need? Legal, corporate, regulatory to prevent similar abuses? This is almost philosophical the question, but I'm curious about your thoughts. I think when it comes to remedy, this is an important point, which is that what I've seen in my work is that often companies equate reimbursement of recruitment fees with remedy for forced labour. Often, you know, I have to remind people, like, look, I get it. Yeah, of course, it is good, of course, to be in reimbursement fees. But beyond that, though, there are other harms that have been lived and sometimes for years, by this migrant worker. And actually, remedy is also preventing that harm from happening in the first place. So remedy is both the backward looking and the forward looking. So for instance, we did the independent report for FIFA on the migrant workers for Qatar, which is why I know that you've read and it came out a couple of years ago. And we argue to FIFA for the migrant workers in Qatar. It's yes to be in reimbursement all of that, but also the hardships that they live for so many years, having to be in bursts the toll on your emotional well-being of that repayment being in debt for so long, being the primary bread winner owner and sending the money back, not having as much to send back and knowing that your children are going to suffer from that. It takes its toll in such a heavy way. It's hard to quantify that toll. But if you bring in that forward looking angle of how you can prevent it from happening and working with governments to try and create the enabling environment for it to not happen, the remedy is this, as we call it, the bouquet of remedies. It's all of these different things coming together. I think also just to add to that, I think, with settlements and basically, you know, obviously, if you go through to a trial and you have a final judgment, then the court can really only alter compensation. But, and obviously under the common law, there is quite, can be quite a wide range, and it can include things like, and I suggest such as the conditions of forced labour and the impact of that on them. But the benefit of settlement, of course, is that you can then move much more creative with what settlement looks like. And I think that is why settlement can sometimes be better. We've had various cases in the past where we've had real sort of restorative justice measures, which have included not just compensation, but many other factors as well that have really benefited people on a much longer term basis. And I think that really means that settlement can be a much more creative tool than just going through and getting a judgment and getting a normal sort of remedy in terms of compensation. My final question is it to you, and you had written some very succinct eight takeaways from the case. For the benefit of our listeners, can we just go through those, it's a wonderful bullet point depiction of what you learned and what people need to learn from the case. Oh, thanks, very well. And this video was inspired by my experience working with companies when they were in this tug of war that I mentioned, with the lawyers that have trained a certain way to protect the company, and then often the business and human rights practitioners or sustainability practitioners saying, well, I get that that's what it feels more comfortable to do it like that. But actually, for business and human rights, it looked, the answer looks different. And as we're trying to equip the business practitioners to create that conversation before it happens, because I've also worked with companies that have sued and have really regretted it, because it's in the heat of the moment and sort of trying to defend reputation. So my key message was let's prepare for these eventualities before they happen. So number one, UK courts are taking a stronger stance on overseas human rights impacts. Number two, the inequality of arms is central to jurisdiction decisions. We saw in the arguments here that the fact that there was such a vast inequality between Dyson, major global profit-making entity, and these vulnerable workers that had come over for a job was really central to the jurisdiction decision being in the UK. And the latest decision that came out in January, Justice Perfor was very strong on underscoring the importance of that. Number three, that the duty of care is evolving, like we've just discussed, from subsidiary workers to supply chain workers. And Oliver, you really reminded us that while the elements were there already, this is simply an application of that, that is novel to the supply chain workers. Number four, that's jurisdictional tactics. So disputing where the court case takes place does carry risk. It might not feel it when you're doing it, but actually in this case, Justice Perfor in January really took badly to that. And so we have delayed this too much now, Dyson, and we need to now get on with this. Number five, I say, you know, defamation strategies are never a good idea when facing a business-humanized dispute that's suing journalists or NGOs, tarnishes your reputation, and of course the better responses to lean in and engage. Number six, beware of short-sighted legal advice. Sometimes from external lawyers coming in and giving you what you need to be thinking of, but not actually looking at the UNGPs. Number seven, align legal and communications teams with the UNGADN principles. Lawyers of course need to understand that there is this soft law that is also shaping hard law that is shaping expectations of companies in this space and how they respond. I was struck by Dyson's interview when they went to the channel four. Their representative didn't talk at all about the UNGADN principles. They told us, yes, all. It's a shame if they had had more understanding internally, that interview could have come up a lot stronger. Number eight, level the playing field. And this is essentially the fact that this is Dyson, but it's not about Dyson. You know, this is about global supply chain than what's happening. So if companies can really own that, okay, how can we level the playing field so that across the board we can up the standards? We need to be playing a role with other stakeholders, including governments, to be doing that. Those are my eight-tick-waiths, Alil. Thank you, Dosa, very useful. And Oliver, if you have any final thoughts to add, no, those are excellent takeaways. I couldn't improve. I should just add, though, I think what we really need to see in the English jurisdiction is some regulation, legislation, and improvement on the CS Triple D this happening in Europe, and that would really go a long way to avoiding some of these really long disputes over jurisdiction and everything else that really delay justice. And that's the really important thing is these workers who've suffered so much in the need to get justice for those suffered. Thank you so much and more power to both of you for all the great work you do. It's a pleasure talking to you. Thank you so much, Alil. Thank you, Oliver. Thank you, Anna. Thanks to Celil, Anna, and Oliver for that conversation, which is so important for business to take note of. And thank you for listening to this episode of Voices, which is brought to you from the Institute for Human Rights and Business. Until next time, be sure to share and follow this podcast that we will never miss an episode. And if you'd like to find that small about the work that we do at HRB, then head to achrb.org.