Legal waivers in settlement agreements: Implications on access to remedies in business and human rights

Abstract

Legal waivers in the business and human rights context are an agreement corporations use to provide compensation to victims in exchange for waiving their right to file future claims in a court of law in corporate human rights abuses. Corporations use legal waivers to further secure legal immunity from potential future claims for adverse human rights impact. In contrast, right-holders accept legal waivers as they provide quick resolution of grievances, mainly in the form of monetary compensation. This article investigates the inequality of bargaining power under which legal waivers operate. It advances the central claim that the use of legal waivers in private remedial processes reflects corporate attempts to renegotiate human rights standards by exercising authority. I use the Porgera case study to shed light on how power inequalities between corporations and right-holders distort the nature of business actors’ governance authority in business and human rights. I further argue that legal waivers strengthen the power of corporations while simultaneously not serving the public interest that corporations claim to uphold in facilitating a private remedial process for right-holders. I conclude that the power inequalities exacerbate the “power” element of authority without affecting the legitimacy of corporations but distorting the nature of their governance authority.

Acknowledgments

An earlier version of this article was presented at the “Human Rights Responsibilities beyond the State Pushing the Boundaries of Public and Private” (Online conference) on June 10–11, 2021. I would like to thank all the participants in my panel—Lottie Lane, Nadia Bernaz, David Birchall, and Chiara Macchi—for their insightful questions and criticisms. I am thankful to Anneloes Hoff and Janne Mende for reaching out to me to contribute to the Symposium. I am indebted to Justine Nolan and to Jonathan Bonnitcha for reading numerous versions of this article and offering their guidance for its improvement. I would also like to thank the referees for their careful reading of the article and their invaluable suggestions.

Disclosure statement

No potential conflict of interest was reported by the authors.

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Justin Jos

Justin Jos is a PhD candidate at the Faculty of Law, University of New South Wales, Sydney. His main research interests lie in corporate accountability and remedies, international human rights law, business, and human rights.