Index of the session

Fundamental Rights of Companies in Transnational Law Dr. E-mail: gordillo@deusto.es European Master in Transnational Trade Law and Finance Third Edition 2010/2012 www.transnational.deusto.es/emttl Index of the session I. Preliminary Questions II. Companies as Fundamental Rights holders III. Companies rights in a multilevel constitutionalism IV. Companies rights and conflicts of legal orders V. Concluding remarks 1

I. PRELIMINARY QUESTIONS A matter of words: Human Rights Fundamental Rights Constitutional Rights Civil il Rights Legal instruments of protection The ratio essendi of fundamental rights Are companies / corporations able to hold fundamental rights? If yes, why it is relevant? 2

Are companies / corporations able to hold fundamental rights? If yes, why it is relevant? Ability to enjoy certain rights Qualified access to Court II. COMPANIES AS FUNDAMENTAL RIGHTS HOLDERS Historical Background US Constitutional Law Santa Clara County v. Sourthern Pacific Railroad Company, 118 US 398 (1886), First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978). Corporate personhood Corporation Bill of Rights Abuse 3

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US Constitutional Law Corporate personhood includes today: Rights to equal protection Due process Freedom of speech Freedom from unreasonable searches and seizures Political rights 5

The situation in Europe Several Constitutions recognize fundamental rights to legal persons (Germany, Portugal) Constitutional Courts have also extended fundamental rights to legal entities -Which rights? Substantive rights compatible with their nature (domicile, property) Procedural guarantees (access to justice, right to a fair trial, non bis in idem- double jeopardy) Practical importance: possibility to use the individual appeal for the protection of fundamental rights (Spain, Germany, Austria, Switzerland, Poland) European National Constitutional Laws Explicit recognition of Fundamental Rights Article 19.3 Grundgesetz Article 12 Portuguese Constitution Key concept: Corporations should have any fundamental right compatible with their nature Individual appeal for the protection of Fundamental rights: Recurso de amparo in Spain (art. 161),Verfassungsbeschwerde in Germany (art. 93). Austria (arts. 140 and 144), Belgium (art. 134), Switzerland (article 189.1.a), Poland (art. 79). Latin America, South Korea (art. 111) 6

III. COMPANIES RIGHTS IN A MULTILEVEL CONSTITUTIONALISM National Constitutional Level Constitutional guarantees in ordinary proceedings - Access to justice, Fair trial, Presumption of innocence, etc. Special reference to the Spanish system - Extend of constitutional rights to legal persons - The right to a fair trial and not to remain undefended - The individual appeal fo the protection of fundamental rights and corporate bodies European Convention of Human Rights (ECHR) ECHR, ECtHR, Council of Europe - Scope of the Convention Ratione personae, materiae and loci - Proceedings before the ECtHR - Present situation Protocol 14 (just ratified) Company s Rights before the ECtHR: Substantive: Domicile (art. 8), property (art. 1, First Protocol) Procedural rights (art. 6, 13) 7

The Companie s home Article 8 Right to respect for private and family life 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. The English version uses the word home and the French one uses domicile, which connotes a broader scope.the ECtHR stated: «As regards the word "home", appearing in the English text of Article 8, the Court observes that in certain Contracting States, notably Germany, it has been accepted as extending to business premises. Such an interpretation is, moreover, fully consonant with the French text, since the word "domicile" has a broader connotation than the word "home" and may extend, for example, to a professional person s office». Case Niemietz vs. Germany, 1992. Companie s property Article 1 Protection of property Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. The preceding provisions i shall not, however, in any way impair i the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties. The English version uses the word possesions and the French one uses biens, which connotes a broader scope.the ECtHR stated: «The Court recalls that the notion "possessions" (in French: biens) in Article 1 of Protocol No. 1 (P1-1) 1) has an autonomous meaning which is certainly not limited to ownership of physical goods: certain other rights and interests constituting assets can also be regarded as "property rights", and thus as "possessions", for the purposes of this provision», Case of Gasus Dosier- und Fördertechnik gmbh v. The Netherlands, 1995. 8

Companie s procedural rights Article 6 Right to a fair trial 1 1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests t of juveniles or the protection ti of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. 2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. 3. Everyone charged with a criminal offence has the following minimum rights: a. to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him; b. to have adequate time and facilities for the preparation of his defence; c. to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient i means to pay for legal l assistance, to be given it free when the interests of justice so require; d. to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; e. to have the free assistance of an interpreter if he cannot understand or speak the language used in court. Companie s home protection scope: the Court s test a) Has taken place an interference with the exercise of a right protected by Article 8? b) Is the interference in accordance with the law? c) Does the interference pursue a legitimate aim? d) Is the interference necessary in a democratic society? 9

Breaches of article 8 guarantees in corporate cases a) Search warrant written in very wide terms (Niemietz) b) Absence of a judicial warrant in a professional s home and absence of an independent observing authority (Funke) c) Absence of judicial warrant, independent authority in a company dwelling search (Société Colas Est) d) The search and seizure of a company s electronic data in the context of a search of its premises must accomplish with all the procedural and substantive guarantees (Wieser and Bicos) Regulation 1/2003, on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (38) Legal certainty for undertakings operating under the Community competition rules contributes tib t to the promotion of innovation and investment. Where cases give rise to genuine uncertainty because they present novel or unresolved questions for the application of these rules, individual undertakings may wish to seek informal guidance from the Commission. This Regulation is without prejudice to the ability of the Commission to issue such informal guidance, 10

Regulation 1/2003, on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty Article 20 The Commission's powers of inspection 3. The officials and other accompanying persons authorised by the Commission to conduct an inspection shall exercise their powers upon production of a written authorisation specifying the subject matter and purpose of the inspection and the penalties provided for in Article 23 in case the production of the required books or other records related to the business is incomplete or where the answers to questions asked under paragraph 2 of the present Article are incorrect or misleading. In good time before the inspection, the Commission shall give notice of the inspection to the competition authority of the Member State in whose territory it is to be conducted. Regulation 1/2003, on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty Article 20 The Commission's powers of inspection 5. Officials of as well as those authorised or appointed by the competition authority of the Member State in whose territory the inspection is to be conducted shall, at the request of that authority or of the Commission, actively assist the officials and other accompanying persons authorised by the Commission. To this end, they shall enjoy the powers specified in paragraph2. p 6. Where the officials and other accompanying persons authorised by the Commission find that an undertaking opposes an inspection ordered pursuant to this Article, the Member State concerned shall afford them the necessary assistance, requesting where appropriate the assistance of the police or of an equivalent enforcement authority, so as to enable them to conduct their inspection. 11

Regulation 1/2003, on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty Article 20 The Commission's powers of inspection 7. If the assistance provided for in paragraph 6 requires authorisation from a judicial authority according to national rules, such authorisation shall be applied for. Such authorisation may also be applied for as a precautionary measure. The European Union Level Article 6 TEU-L (ex Article 6 TEU) 1. The Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union of 7 December 2000, as adapted at Strasbourg, on 12 December 2007, which shall have the same legal value as the Treaties. ( ) 2. The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Such accession shall not affect the Union s competences as defined in the Treaties. 3. Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union s law. 12

The European Union Level EU: art. 6.3 TEU-L: Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union s law. Dialogue between the ECJ and the ECtHR Protection of Business Premises The ECJ Human Rights case law implications IV. COMPANIES RIGHTS AND CONFLICTS OF LEGAL ORDERS National Constitutional Level EU Level EU Level - ECHR EU Level UN Sanctions 13

National Constitutional Level EU Level Constitutional Courts accept Fundamental Rights interferences - From the EU as long as the level of protection dispensed EU is equivalent to the one recognized by the national constitutions. Germany: Solange Decisions, Maastricht Urteil, Banannenstreit Decision, Treaty of Lisbon Italy: Granital, Fragd Spain: DTC 1/2004 Poland: Case K 15/04 They usually remain competent to control that compatibility EU Level ECHR Level Art. 6.3 TEU-L Fundamental rights, as guaranteed by the European Convention o for the Protection o of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union s law. How do we control it? Senator Lines Case, 2004 Bosphorus Case, 2005 Kadi vs. Council and Commission, 2008 14

Senator Lines Case Art. 6.2 EU Treaty (before Lisbon) The Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 and as they result from the constitutional traditions common to the Member States, as general principles of Community law. Specifics of the Senator Lines case. Very high fine by the EC to Senator. In order to appeal there was the obligation to provide a bank guarantee for payment of the fine. Appeal before CFI (on merits) At the same time: interim measures to the CFI, then the ECJ, and then the ECtHR. Final decision of the CFI on the merits about the fine and case dismissed before the ECtHR. Bosphorus Case Introduction: Travel Agency (Irish Courts / ECJ / ECtHR) The ECJ ruled that the fundamental interests of the international community could justify restrictions of property or trade rights caused by the impounding of a Yugoslav-owned aircraft leased by the applicant (Bosphorus), even where the latter appeared to be entirely uninvolved in any activities of the Yugoslav State (Case C-84/95, 1996). Bosphorus right to property (under ECHR) and Ireland s obligations under EU Law The question was if, and to what extend, the general interest of compliance with EC obligations could justify the State s interference with Bosphorus property rights Two major principles: 1.- Neither the EU nor the EC can be sued before the ECHR. 2.- Absolving contracting parties completely from ECHR reponsability in areas covered by transfer of power to international organizations would be incompatible with the purpose and object of the ECHR Solution: State action taken in compliance with such legal obligations is justified as long as the relevant organisation is considered to protect fundamental rights 15

Bosphorus Case Equivalent protection doctrine: which level of protection? «By equivalent the Court means comparable : any requirement that the organisation's protection be identical could run counter to the interest of international co-operation pursued. However, any such finding of equivalence could not be final and would be susceptible to review in the light of any relevant change in fundamental rights' protection». «such presumption can be rebutted if, in the circumstances of a particular case, it is considered that the protection of Convention rights was manifestly deficient. In such cases, the interest of international co-operation would be outweighed by the Convention's role as a constitutional instrument of European public order in the field of human rights». Has the ECtHR established a two standard level of protection of fundamental rights? EU Level UN Sanctions The fight against terrorism Smart sanctions / targeted sanctions UN Security council resolutions and access to justice Possibility to contest the sanction? Guidelines (diplomatic protection) Yusuf / Kadi / Ayadi Cases The CFI established a kind of equivalent protection ti doctrine, even when it recognizes the weaknesses of the access to justice right. The ECJ has reversed this judgement in September 3rd 2008 (C-402/05 P) 16

How can we manage the inter-ordinal relations? National Constitucions / UE Law / ECHR / UN Charter. The current situation: ti fragmentation ti of International Law. How the situation is being managed? Court decisions Models: Pluralism Constitutionalism Soft constitutionalist approach Soft Constitutionalist Approach Description of this model: Acceptance of the the existence of an international comunity. Universalizability: The use of principles that may be accepted by all the participants. Common norms or principles for addressing conflicts. In order to partially accomplish this model, at least: Sign and ratify the ECHR by the EU. Establish a review procedure before the Sanctions Committee of the UN. 17

V. Concluding Remarks Companies may profit any Fundamental right compatible with its nature Fundamental rights (especially) fair trial must be always taken into account in companies transnational litigation Companies lawyers are major contributors to the development of this field which includes also the relationship between the different HR protection systems Thank you for your attention 18