Lawyers for Palestinian Human Rights vs. J.C. Bamford Ltd

Date filed

10 December 2019

Keywords

Countries of harm

Occupied Palestinian Territory

Current status

No resolution

Sectors

NCP

NCP United Kingdom

Allegations

On 10 December 2019, UK legal organisation Lawyers for Palestinian Human Rights (LPHR) filed a specific instance against J.C.Bamford Excavators Limited (JCB) at the UK NCP. The complaint relates to the use of JCB’s products and construction machinery in the demolition of Palestinian property and settlement-related construction in the occupied West Bank, including East Jerusalem.

The complainant alleges that JCB is failing to take the actions needed to identify, prevent, mitigate, and address the use of its heavy machinery products in demolitions and settlement construction. The complainant submits that JCB is not meeting its human rights responsibilities under the Guidelines, namely, by contributing to adverse human rights impacts by selling (or failing to stop the sale of) products that facilitates anther entity to cause harms; failing to prevent or mitigate human rights harms that are directly linked to its operations and products; failing to have a human rights policy in place; and failing to carry out appropriate human rights due diligence.

The complainant is seeking the UK NCP’s support to help ensure JCB’s compliance with the Guidelines and to prevent further negative impacts on the human rights of Palestinians. Specifically, LPHR sought the following from JCB:

Immediately suspend supply of JCB’s products to Israeli company Comasco (the exclusive dealer of its products in Israel) that could be part of the supply chain that results in demolitions or settlement-related construction, and to permanently cease supply to Comasco should JCB not be able to guarantee that such products will not be involved in the violation of Palestinian human rights.
Develop and publish online a human rights policy that sets out the due diligence it applies to ensure that its products are not at risk of contributing to and/or being directly linked to a business relationship that violates human rights.
Agree to participate with LPHR and other stakeholders in establishing an effective grievance mechanism to enable remediation.

Relevant OECD Guidelines

Outcome

On 12 October 2020, the UK NCP issued an initial assessment partially accepting the complaint for further consideration. The NCP accepted for further consideration the claims relating to JCB’s human rights due diligence, the company’s alleged direct links to business relationships and its human rights policy commitments. However, the NCP decided that the allegations relating to JCB’s contribution to human rights abuses did not merit further consideration.

The NCP offered mediation to the parties, which JCB refused. The NCP then proceeded to investigate the claims itself. Both parties continued to submit information and documents to the NCP during its examination process.

On 12 November 2021, the UK NCP issued a final statement with three determinations.

The NCP found that JCB had breached principles 4 and 5 of the Guidelines’ Human Rights chapter, which require, respectively, enterprises to have policy commitments to respect human rights and to carry out human rights due diligence:

The NCP determined that JCB “has not supplied any evidence of its policies enshrining human rights protection other than that it has a Supplier’s Code, Dealer’s Charter and Statement on Modern Slavery”, which the NCP found was “not sufficient to meet [JCB’s] obligations under the Guidelines.”
The NCP determined that JCB had done no human rights due diligence, apparently based on the incorrect belief that adverse human rights impacts caused by users of its products could not be attributed to the company, and thus that no human rights due diligence was necessary. The NCP stated: “It is unfortunate that JCB, which is a leading British manufacturer of world-class products, did not take any steps to conduct human rights due diligence of any kind despite being aware of alleged adverse human rights impacts and that its products are potentially contributing to those impacts.”

In OECD Watch’s opinion, the NCP’s final statement incorrectly determined that JCB had not breached the Guidelines as regards principle 3 of the Human Rights chapter, which requires that enterprises seek ways to prevent or mitigate adverse human rights impacts that are directly linked to their business operations, products or services by a business relationship:

Despite the NCP’s determination of the existence of “a clear business relationship between JCB and Comasco” and that “Comasco is the sole dealer of JCB products in Israel”, the NCP concluded that “the alleged adverse human rights activities as depicted in the photographs and videos cannot be conclusively linked to JCB because of their business relationship with Comasco”. The NCP determined that because it could not prove “conclusively” that the specific JCB machines shown in the submitted visual evidence came directly via Comasco, but instead could have “come from multiple sources” such as “third parties, individuals, small dealers, construction companies, or the Israeli Government (or its public authorities)”, or could also have come from “the second-hand market, as identified by JCB” and “may be owned by those who have commissioned the demolition, be on hire, or be equipment owned by contractors employed to do the work,” all this “creates a complex web of supply chain which goes beyond the business relationship between JCB and Comasco.”
Based on this analysis, the UK NCP also found that “The complex web of supply chain, and the nature of the business relationship between JCB and Comasco, as indicated above, means that JCB does not have any leverage over suppliers and customers beyond the first tier of its business relationship with Comasco.”

These findings represent a fundamental misinterpretation of the meaning of business relationship and what ‘directly links’ a company to an impact under the OECD Guidelines and UN Guiding Principles. Responsibility and linkage go both upstream and downstream in a value chain (as confirmed by multiple NCPs (see, e.g. the Dutch NCP’s final statement in the Mylan complaint) and the OECD (see, e.g. the OECD Due Diligence Guidance for Responsible Business Conduct). While companies generally only have a contractual relationship with the company at the next stage in the value chain, upstream or down, linkage happens not just through direct contracts but also the series of business relationships, as in a supply chain. If the UK NCP’s logic were applied “up” the supply chain, it would mean that companies would only be linked to abuses committed by their first-tier suppliers, and no earlier tiers – clearly a wrong interpretation considering the staged production of most modern products. By correct interpretation of the Guidelines, looking “down” the chain, JCB is directly linked to any impact that is caused using its products, even if its product is sold (or leased, or loaned) multiple times before it causes the harm. JCB does have a responsibility to seek to address those impacts, and it should use all the leverage it has and can create through contractual provisions and due diligence operations to seek to ensure its products are not used to violate human rights. This responsibility places the burden on JCB (not the complainants) to prove that the machines photographed while engaged in settlement-related demolition work are not their products (i.e. are counterfeits), or at least show what research and steps JCB has taken to ensure that its products are not so used.

In addition, in its decision the NCP did not provide reasoning for its conclusion that JCB had not contributed to the alleged harms. This lack of reasoning is problematic as it does not allow for scrutiny of the reasonableness of the NCP’s decision on this critical aspect of LPHR’s complaint.

In the complainant and OECD Watch’s view, the UK NCP applied an overly high standard of proof to LPHR’s claim that there was a direct link between JCB, Comasco and the human rights violations. As noted by LPHR in its press statement following the decision, the NCP stated that it could not “conclusively” prove that the JCB machines in question were obtained via Comasco rather than via an “established second hand market”. However, even if the complainants did not have photos showing plainly that JCB machines are used to cause human rights abuses, the complainants’ claim of direct linkage would satisfy this standard for investigation under the OECD Guidelines. The complainants assert that the NCP should applied a lower standard of proof (‘reasonable grounds to believe’) given its role as a fact-finding body rather than the higher ‘beyond reasonable doubt’ standard of proof implied by the NCP’s statement that it required ‘conclusive’ proof to establish a direct link.

On 18 November 2021, Amnesty International launched a report on JCB entitled “JCB Off Track: Evading responsibility for human rights violations committed with JCB machines in the Occupied Palestinian Territories.” Amnesty also published a video explainer and interactive map highlighting the many incidents where JCB’s machines have been used to destroy Palestinian homes, property, water pipes, olive trees and agricultural structures.

The UK NCP also made two recommendations in its final statement. First, for JCB to adopt a separate human rights policy. Second, for JCB to conduct human rights due diligence to assess its actual and potential human rights impacts, and to implement a plan to integrate and act on the findings of its due diligence – including how impacts are addressed.

The UK NCP will request an update from the parties one year after the publication of its final statement.