The Radical Implications of Nevsun: Corporate Responsibility and Liability under Customary International Law

On 28 February 2020, the Supreme Court of Canada released its decision in Nevsun Resources Ltd. v. Araya, a case with potentially significant ramifications for corporate human rights liability under the common law.

A detailed summary of the case is available here. In brief, it concerns allegations that the Eritrean subsidiary of Nevsun Resources, a Canadian mining company, ordered, solicited, or induced the use of forced labor in a joint venture with the Eritrean government. The plaintiffs seek civil damages against the Canadian parent for alleged violations of customary international law: slavery; forced labor; cruel, inhuman or degrading treatment; and crimes against humanity. Nevsun sought to dismiss the claim on several grounds, including motions to strike on two bases at issue before the Court: (1) non-justiciability of acts of state and (2) “no reasonable prospect” that customary international law could ground civil liability under Canadian common law. In a closely divided decision, the Supreme Court rejected both arguments, allowing the case to proceed to trial on the merits.

The decision is long and winding. This entry focuses on the Court’s application of customary international law directly to Nevsun. We trace below the majority’s novel reasoning on potential corporate civil liability for violations of customary international law before detailing three immediate and significant practical implications of decision: (i) diffuse and magnifying legal uncertainty; (ii) a reshaping of corporate human rights due diligence; and (iii) a heightened need for mandatory corporate human rights legislation.

Customary International Law and (Potential) Corporate Liability

Nevsun reflects a broader litigation trend taking root in Canada and the UK, which has opened the door to common law civil liability for extraterritorial corporate human rights abuses.[1] But there is an important difference. Rather than relying on conventional tort principles to ground claims of negligent risk management, the Nevsun claim is firmly grounded in public international law. It is analogous to an Alien Tort Statute action under US law—with the critical distinction that there is no applicable statute in Canada on which the claimants can rely. That distinction proved insignificant. The majority held that the default rule in Canada is that companies may be held liable under the common law for extraterritorial violations of customary international law, unless legislation displaces that presumption.

The Court’s decision regarding customary international law and common law is potentially revolutionary. As the dissent noted, the majority “cites no cases where a corporation has been held civilly liable for breaches of customary international law anywhere in the world, and we do not know of any.”[2] While the common law and customary international evolve by nature, such a paradigm shift has few precedents and creates extreme uncertainty in Canada and beyond. The provocative reasoning was built on six questions:

  • (i) Do the allegations concern breaches of customary international law?

  • (ii) Is customary international law part of the law of Canada?

  • (iii) Does customary international law apply to corporations?

  • (iv) Can corporations face civil liability for customary law violations?

  • (v) Does Canadian legislation conflict with the adoption of customary law into common law?

  • (vi) Can the common law develop remedies for breaches of adopted customary international law norms?

The answer to the first two questions was straightforward. The alleged breaches were “not simply of established norms of customary international law, but of norms accepted to be of such fundamental importance as to be characterized as jus cogens, or peremptory norms.”[3] In Canada, as in “virtually all states”, such norms are automatically and directly incorporated into the law.[4]

The crux of the challenge facing the claimants—and of the majority’s difference with the dissent—is in the third and fourth questions. The Court focused on international law’s evolution from its state-centric structure to an individual-centric regime with the embrace of international human rights: “A central feature of the individual’s position in modern international human rights law is that the rights do not exist simply as a contract with the state. … They are discrete legal entitlements, held by individuals, and are ‘to be respected by everyone’.”[5] As a result, private actors, including corporations, may owe human rights obligations under customary international law. With regards to potential civil liability for breaches, “it is not ‘plain and obvious’” that corporations are immune from such liability.[6] And, far from conflicting with such potential liability, the Government of Canada promotes corporate respect for human rights across global value chains.[7]

The majority’s most provocative and controversial reasoning is in considering whether the common law is able to develop appropriate remedies for corporate violations of customary international law. The workers argued that customary international law can ground new nominate torts under the common law.[8] The majority accepted this argument. But it went further. “A compelling argument can also be made … for a direct approach recognizing that since customary international law is part of Canadian common law, a breach by a Canadian company can theoretically be directly remedied based on a breach of customary international law.”[9] That is, the potential new tort recognized by the Court is a breach of customary international law norms.

That recognition opens a whole new layer of uncertainty in terms of liability and remedy: “Customary international law norms … [are] of a more public nature than existing domestic private torts since violation of these norms ‘shock[s] the conscience of humanity.’”[10] Against that backdrop, civil remedies alone may be insufficient. Courts may need to develop non-monetary remedies commensurate with the moral opprobrium associated with the norms at issue. “A good argument can be made that appropriately remedying these violations requires different and stronger responses than typical tort claims, given the public nature and importance of the violated rights involved, the gravity of their breach, the impact on the domestic and global rights objectives, and the need to deter subsequent breaches.”[11]

Practical Implications

Nevsun made it to the Court as an appeal on a motion to strike. The threshold for the company to succeed was high: “A pleading will only be struck for disclosing no reasonable claim … if it is ‘plain and obvious’ that the claim has no reasonable prospect of success.”[12] The majority thus made no determination regarding the merits or Nevsun’s actual liability. But the ruling is nonetheless momentous, with potentially far-reaching consequences for corporate human rights liability and risk governance across the globe.


The overriding implication of the majority opinion is uncertainty. That is partly because of the procedural posture—a motion to strike is early in putative litigation—but it is also because the decision opens doors to uncharted legal realms. Taming this uncertainty will need to be a priority for multinationals across jurisdictions. It falls into three broad categories:

  • (i)  Scope of responsibility: The greatest uncertainty in the wake of Nevsun is the precise scope of corporate human rights obligations. Customary law norms are more challenging to identify than convention or treaty rights, because they depend on state practice not commitment alone.[13] Only a subset of human rights are customary, let alone jus cogens. Their precise scope in the business context is unexplored. Would a business, for instance, need to protect people from slavery as a state would? Would there be any intent or knowledge requirements to find a violation, or are customary international norms of strict liability? And, might “different and stronger” remedies include the full panoply of effective human rights remedy under international law, including specific performance in foreign jurisdictions?

    Exacerbating this challenge, it is not at all clear how the legal framework aligns with the dominant voluntary business and human rights standards, particularly the Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. Neither of those standards is part of international law. Yet, they have become the authoritative industry baselines for effective human rights risk governance, from identification to remedy. If customary international law has distinct and parallel expectations of business regarding human rights, it may throw the entire emerging business and human rights regime into disarray.

  • (ii) Corporate separateness: The Court arguably did not need to delve into the intricacies of corporate personality at this stage. But it is noteworthy that the Canadian parent’s legal relationship with the Eritrean subsidiary was of such little interest. The lack of attention may suggest that separate corporate personality is not much of a defense in cases involving potential customary international law liability—which itself may play a significant role in how claimants frame future cases.

  • (iii) Global influence: The majority highlighted that the incorporation of customary international law norms immediately and directly into Canadian law is “far from a niche preserve among nations.”[14] And the common law itself is frequently the product of inter-jurisdictional discourse. If the Court’s reasoning is right and influential, we may see national and international discussions around corporate human rights liability shift radically even absent any significant legislation or treaties. That is, the echoes of this decision could reverberate far beyond Canada.


Despite the uncertainty, it is clear that Canadian (and other) multinationals need to rethink their human rights due diligence through a legal lens. Nevsun changes the meaning of material ESG risk for companies and investors and the implications for effective risk management.  The rapidly expanding range of legal and quasi-legal liability already means that companies need to think about privilege, litigation risk, and regulatory compliance when conducting social and human rights due diligence. Nevsun deepens that expectation. It is no longer sufficient—if it ever was—to rely on rough guesstimates of potential human rights impact. Companies will need to incorporate customary international law considerations, with precise legal definitions of relevant risks, into their global risk governance programs for due diligence and prioritization. That will require grappling with some challenging international law analyses, including identifying which rights are part of customary international law; which are peremptory norms; and how to transpose international legal obligations coherently onto private actors. It will also require understanding how customary international law expectations align with, and diverge from, national law and industry standards.


The uncertainty flowing from Nevsun can be traced to the absence of legislation. Customary international law is automatically incorporated into Canadian law “absent conflicting law.”[15] When it comes to legislation focusing on extraterritorial corporate human rights impacts—whether focused on due diligence or disclosure—Canada is behind the United States, the UK, much of Europe, and Australia.[16] That is in no small part because of industry antipathy. Nevsun may change the calculus. The EU is now seriously examining the possibility of mandatory human rights due diligence legislation, extending across global supply chains. France has already adopted such legislation. While such legal requirements increase compliance costs for global businesses, they also level the playing field and offer predictability, which is particularly important in light of the diffuse reputational, financial, and legal risks raised by accusations of human rights violations. Legislation of similar ambition may be the surest path for Canadian companies to bring certainty to their global human rights responsibilities and potential liability.


Nevsun’s questions and contingencies invite much more detailed and practical guidance from courts and legislatures alike. For now, though, Canadian companies—and their multinational counterparts in other common law jurisdictions—should prepare for burgeoning exploratory litigation to test the boundaries of corporate human rights liability under customary international law. Expect the fascinating and frivolous in equal measure.


[1] See, e.g., Guerrero v. Monterrico Metals plc [2009] EWHC 2475 (Q.B.); Choc v. Hudbay Minerals Inc., [2013] O.J. No. 3375, 2013 ONSC 1414, 116 O.R. (3d) 674 (Ont. S.C.J.); Garcia v. Tahoe Resources Inc. [2015] B.C.J. No. 2431, [2016] 3 W.W.R. 169 (B.C.S.C.); AAA and others v. Unilever plc and another company [2017] EWHC 371, [2017] All E.R. (D) 07 (Q.B.); Lungowe and others v. Vedanta Resources plc and another, [2016] EWHC 975, [2016] All E.R. (D) 60 (T.C.C.).

[2] Nevsun ¶ 188.

[3] Nevsun ¶ 99.

[4]   Nevsun ¶ 88 (citations omitted) and ¶ 95 (“There is no doubt then, that customary international law is also the law of Canada.”).

[5]   Nevsun ¶ 110 (citations omitted).

[6]  Nevsun ¶ 113 (citations omitted).

[7]  Nevsun ¶ 115.

[8]  Nevsun ¶ 141.

[9]  Nevsun ¶ 127.

[10] Nevsun ¶ 124.

[11] Nevsun ¶ 129.

[12] Nevsun ¶ 64.

[13] Y. Aftab and A. Mocle, Business and Human Rights as Law: Towards Justiciability of Rights, Involvement, and Remedy (Toronto: LexisNexis, 2019) at 68.

[14] Nevsun ¶ 88.

[15] Nevsun ¶ 94 (emphasis added).

[16] Business and Human Rights as Law at 40-52.