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Legal victory sparks hope for tighter controls on multinationals

Buoyed by the success of a litigation against the owners of disused asbestos mines in South Africa, lawyers are now setting their sights on the country's lucrative gold mining industry.

Buoyed by the recent success of a litigation against the owners of disused asbestos mines in South Africa on behalf of workers and their families who have contracted the deadly disease of asbestosis, lawyers are now setting their sights on the country's lucrative gold mining industry.

The claimants won out-of-court settlements in February against the London-based asbestos mining company, Cape Plc, in Britain and the investment holding company, Gencor, in South Africa.

Richard Spoor, an occupational health lawyer based in the Mpumalanga province, who acted for 37 asbestos claimants, believes about 500,000 South African gold miners had been abandoned penniless after contracting silicosis. Silicosis fibrosis of the lung, thought to be the oldest known occupational disease, is caused when miners inhale crystalline quartz silica dust.

"The [$57 million] Gencor asbestos settlement is a message for the rest of the mining industry: you will be held accountable for killing or injuring literally hundreds of thousands of miners, and for devastating the environment of entire towns," Spoor told Panos Features.

The question of corporate governance and liability has come strongly to the fore over the past few years following a wave of legal actions in Britain, the United States, Canada and Australia against parent companies for actions by subsidiary companies operating in developing countries.

"These 'foreign direct liability' claims represent the flip side of foreign direct investment," says Halina Ward, an academic at the London-based International Institute for Environment and Development.

"They complement campaigners' calls for minimum standards for multinational corporations by testing the boundaries of existing legal principles."

Recent voluntary codes of conduct include the 1999 United Nations Global Compact – based on nine 'universal' principles for business covering labour standards, environment and human rights – and the Organisation for Economic Co-Operation and Development, or OECD, Guidelines for Multinational Enterprises agreed in 2000.

Ward thinks a serious international debate should be started, involving national and multinational companies, governments and nongovernment groups, to develop "globally applicable, legally enforceable, minimum standards for multinational corporations".

Richard Meeran, a London-based lawyer who acted for the Cape Plc claimants, believes progress is being made towards international guidelines, "but such regulations would be irrelevant if they are not binding on national law".

The Cape Plc case, and an earlier case brought against British multinational Thor Chemicals, marked a major breakthrough for South African workers: they were the first time a parent company had been taken to court in Britain, although both Cape Plc and Thor argued strongly that their cases be heard in South Africa where the operations were based.

After a drawn-out battle spanning nearly three years, the House of Lords decided in a landmark judgment in July 2000 that the 3,000 plaintiffs could sue Cape Plc in Britain. The Thor judgment came in September that year. The decisions gave claimants the chance of receiving much higher damages.

Richard Meeran believes that the Thor and Cape Plc cases have given multinationals a timely warning.

"Multinational companies have generally been able to utilise the concept of limited liability which protects them, on the grounds that the liability for the conduct of subsidiary companies based elsewhere could not attach to the shareholder," he told Panos Features.

"Major multinationals operating in developing countries, where access to justice by local citizens is practically impossible, have consistently managed to avoid liability to victims by hiding behind worthless local subsidiaries."

South Africa enacted asbestos regulations in 1954, but these were routinely flouted, and workers continued to be exposed to levels that were hundreds of times what was widely considered acceptable. Because most of the workers affected were from the coloured and black communities, the Apartheid government of the day paid scant respect to their health.

"I saw my father Gert, 73, die of asbestosis in February 2001 after he suffered for five years. It was painful to see him deteriorate, especially in the last year when he was bed-ridden," said Cecil Skeffers, secretary of the Concerned People against Asbestosis, a group based in the mining town of Prieska, Northern Cape Province, that supports and processes the claims of victims of asbestosis and their families.

Skeffers says his group wants the present South African government to do an audit of all mining companies to ensure that they properly rehabilitate areas which have been mined.

Snuki Zikalala, director of communications in South Africa's Department of Labour says that his department has tightened up considerably on its health and safety legislation.

"All employers now have to appoint health and safety committees which must also include workers. The workers have to go for training in order to be able to identify any potential dangers in the workplace. If any company, no matter how big, fails to comply with this they will be liable for prosecution," he says.

Meanwhile the claimants in Prieska are desperately waiting to be paid out.

"The money must come quickly," says Skeffers. "We ask God every day so that we can have a new life in Prieska. We don't want our children dying too. Our children are going to die if nobody helps get rid of the asbestos."

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