<i>Nevsun</i> Puts Canada's Corporate Decision Makers in the <i>'Human Rights Zone'</i>

Abstract

With Nevsun Resources Ltd. v. Araya, 2020 SCC 5 (Nevsun), the Supreme Court of Canada has changed the way that senior business decision makers must think about the human rights impacts of their decisions on people abroad. The author argues that Nevsun puts the multinational corporate decision maker in a human rights decision-making ‘zone.’ In this precarious decision-making space, acting on superficial understandings often turns out to have very negative rebound effects for the company. The author draws on the Anglo-American corporate law concept of the ‘Revlon zone.’ Both the Revlon zone and the corporate human rights zone require reflective judgments to be made with reference to distinct normative and ethical concerns. The “moral imperatives” that are contained within international human rights have influence-over and constrain the boundaries of fiduciary loyalty that a decision maker owes to the corporation and its shareholders. When there is potential for this constraining effect to occur in thinking about what choices to make, corporate decision makers find themselves in the human rights zone. As in the Revlon zone, there is no bright line that demarcates the boundary of the corporate human rights zone in every case. The fiduciary demands of loyalty are circumscribed by the exigencies and pressures of moral and economic life; in the human rights zone, those pressures are especially forceful and evident to see. When the moral pressures on decision makers are great enough, a metamorphosis of values can occur: the value of humanity constrains the range of corporate loyalty and allegiance.