International Human Rights Law Does Not Support Giving Less Compensation to Claimants from Poorer Countries

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In response to my post last week, Yousuf Aftab of the consulting firm Enodo Rights, the principal author of an assessment of Barrick Gold’s remedial framework for survivors of rape and other sexual violence, has posted a rebuttal. His principal argument is that yes, it is appropriate to compare compensation for non-pecuniary injuries due to sexual violence by benchmarking them to the average per capita GDP in each country. (Non-pecuniary, in this context, means non-economic – injuries that are not readily stated in terms of monetary loss.) In other words, awards for non-pecuniary damage due to rape are comparable if they reflect a similar “multiple” of average per capita GDP.

Yousuf and I are corresponding privately, and I hope we’ll be able to come to some consensus on relevant principles. I do feel the need to respond publicly, however, because I think Enodo’s approach mis-applies the relevant law, and is undesirable from a policy perspective.

This is going to be long, and gets into the weeds of legal analysis.

Compensation for non-pecuniary losses

Yousuf’s fundamental argument is that because the concept of “integral reparation” in international law requires consideration of the claimant’s situation before to the occurrence of the abuse, and an attempt to restore that victim to the position she enjoyed prior to the violation, this means that the prevailing economic context – measured in terms of average GDP per capita – needs to be taken into consideration in assessing non-pecuniary (i.e. non-economic) harms. The premise is correct, but I think the conclusion is not.

Several concepts are getting mixed up here. First, compensation is only one part of the notion of integral reparations. The compatibility of the Remedy Framework with the full range of remedies required for integral reparations is beyond the scope of my critique, but the Harvard and Columbia clinics’ report made an effort to assess this (see Chapter 5). Second, in international court judgments, compensation comes in two types – compensation for pecuniary (economic) and non-pecuniary damage.

Yousuf cites some of the factors that are considered in the calculation of pecuniary damage – such as “occupation with pre-injury gross and net earnings; lost earnings; security of employment; likely future earnings and earning capacity” – and then concludes that the economic context is therefore relevant in determining non-pecuniary damage. I disagree.

Yousuf relies heavily on the work of Professor Dinah Shelton, a leading scholar in the area of remedies in international law. I talked to Prof. Shelton yesterday, to make sure that I was not off-base in my critiques. I won’t quote her directly, but she did give me permission to reference her views; any errors in representing her position are my own.

Prof. Shelton emphasized that every international tribunal considers compensation for non-pecuniary damage to be equitable in nature, which requires a consideration of all of the facts of the abuse and the respondent’s culpability (in international tribunals, the respondent is typically the government). But it does not include consideration of the local average income. In other words, for the same conduct, injury and culpability, Prof. Shelton would expect a tribunal to give the same award for non-pecuniary damage to someone from a poor country as someone from a rich country. She thinks there is no support for the idea that non-pecuniary damage should have any relation to the individual’s income or standard of living.

Prof. Shelton did suggest that the local cultural context might be relevant to non-pecuniary damage awards. For example, in a culture where an abuse such as rape is stigmatized more highly, awards might be higher for the same conduct, because it would effectively lead to greater injury. But that reasoning would most likely lead to higher awards in Papua New Guinea – where rape is highly stigmatized – than in, for example, the United States.

I also looked (again) at the caselaw cited in Enodo’s report to see if it supports this methodology. I haven’t found any international cases that use per capita GDP as a reference point for an appropriate award of compensation for non-pecuniary damage.

Enodo’s report relies primary on the Rosendo Cantú v. Mexico judgment at the Inter-American Court of Human Rights, a rape case. The Court reiterated the general principle that the “concept of non-pecuniary damage” takes into consideration “both the suffering and hardship caused to the direct victims and their family, the impairment of values of great significance to them and also the changes of a non-pecuniary nature in the living conditions of the victim or her family.” (Para. 275.) Not the local per capita GDP. The Court goes on to discuss the relevant facts in that case, which include:

  • “the nature of the case and the gravity of the damage suffered by the victims and their family”
  • the claimant’s “constant state of pain, sadness, guilt and anxiety caused by the rape itself, by her stigmatization and abandonment by her husband and her community, as well as feelings of impotence and despair due to the lack of justice”
  • her feelings of “defenseless[ness] and total[] vulnerab[ility]”
  • her experience of  “traumatic moments and [destruction of] her roots in the community”
  • her “feelings of impotence, anguish and sadness”

(Paras. 276-278.) The Court then awarded US$60,000 for these injuries, which is the award that Enodo compared the Remedy Framework’s awards to. The Court also did discuss “the loss of or prejudice to the income of the victims, the expenses incurred as a result of the facts, and the consequences of a pecuniary nature that have a causal relationship with the facts of the case” (para. 270) – but this was in the context of assessing pecuniary damage, not non-pecuniary damage.

The other award relied on in Enodo’s report is another Inter-American Court judgment, Espinoza Gonzáles v. Peru. While that case also awards US$60,000 in compensation for non-pecuniary damage arising out of rape, its discussion is much thinner. In its entirety:

[The Court] has verified the pain and suffering experienced by Gladys Carol Espinoza Gonzáles, Teodora Gonzáles de Espinoza and Manuel Espinoza Gonzáles due to the facts of this case. Consequently, and pursuant to the criteria developed by the Court with regard to the concept of non-pecuniary damage, the Court considers that the State must, in equity, pay the following sums of money (in United States dollars) to the victims: (a) US$60,000.00 (sixty thousand United States dollars) for the non-pecuniary damage suffered by Gladys Carol Espinoza Gonzáles; and (b) US$5,000.00 (five thousand United States dollars) for the nonpecuniary damage suffered by Manuel Espinoza Gonzáles.

(Para. 334.) The Court does, however, cite two previous judgments for the “criteria” it references. (As I said, into the weeds.) The first is the “Street Children” case, Villagrán Morales v. Guatemala, in which the Court discussed the issue at length. The Court first set out the general standard:

The Court will now consider those harmful effects of the facts of the case that are of neither a financial nor patrimonial nature and, therefore, cannot be assessed in monetary terms.  This non-pecuniary damage may include both the suffering and distress caused to the direct victims and their next of kin, and the impairment of values that are highly significant to them, as well as other sufferings that cannot be assessed in financial terms.  A common feature of the different forms of non-pecuniary damage is that, since it is not possible to assign them a precise monetary equivalent, for the purposes of making integral reparation to the victims they may only be compensated and this can be done in two ways.  First, by the payment of a sum of money or the assignment of goods or services that can be assessed monetarily, as prudently determined by the Court, applying judicial discretion and the principle of equity.  And, second, by the execution of acts or works of a public nature or repercussion, which have effects such as recovering the memory of the victims, re-establishing their reputation, consoling their next of kin or transmitting a message of official condemnation of the human rights violations in question and commitment to the efforts to ensure that they do not happen again.

(Para. 84.) This gets back to the first point above – compensation is only one part of integral reparation, and shouldn’t be the entire focus of remedies. But with respect to compensation, the Court is again clear that what’s being discussed here is not related to the economic context. The Court goes on to discuss a number of particular circumstances of the case:

  • “the physical and mental suffering experienced by the direct victims and their families”
  • “the loss of life, considering life to be a value in itself”
  • “the destruction of the life plan of the youths who were assassinated and that of their next of kin”
  • “the damage suffered by three of the direct victims, owing to their status as minors, by having been deprived of the special measures of protection that the State should have provided to them”
  • “the overall adverse conditions of abandonment endured by the five street children, who were in a high-risk situation and without any protection as regards their future”
  • that five victims “were forcibly retained in secret, isolated from the external world and subjected to extremely violent treatment, including severe abuse and physical and psychological torture before being assassinated”
  • that three of them “were minors .  . . and, consequently, there were particularly vulnerable”
  • that their mothers and grandmothers “were affected by the disappearance, torture and death of their sons and grandson”
  • that their siblings “were affected by the disappearance, torture and death” of the victims

(Paras. 91-92.) Again, nothing in this discussion suggests that it is appropriate to consider relevant per capita income.

The other case cited in Espinoza Sanchez is Alibux v. Surinam, whose discussion is much shorter and mostly relies on the “Street Children” case. Again, however, the Court is clear that compensation for non-pecuniary damage is made to remedy “suffering and distress” and “impairment of values” as well as “changes of a non-pecuniary nature in . . . living conditions,” and awarded compensation because the claimant had “suffered damage in his moral sphere.” (Paras. 156-57.) There is no discussion of the average income.

I haven’t done exhaustive research from other tribunals, but I did take a quick look at a 2008 case from the European Court of Human Rights, Maslova v. Russia, involving compensation for non-pecuniary damage arising from rape. The discussion is brief, but again there is no mention of the economic context:

The Court observes that it has found above that the authorities subjected the first applicant to repeated rape and ill-treatment, in breach of Article 3 of the Convention. Under this provision it has also found that there was no effective investigation . . . . Having regard to the seriousness of the violations of the Convention as well as to its established case-law, the Court awards the first applicant the entire amount claimed, i.e. EUR 70,000 for non-pecuniary damage, plus any tax that may be chargeable on that amount.

(Para. 133.) The guidepost here is not the economic context, but the “seriousness of the violations.” That is confirmed by the three cases cited by the European Court to support this paragraph: Aydin v. Turkey (Para. 226: awarding compensation for non-pecuniary damage “on an equitable basis” for death, “inhuman treatment,” and failure “to undertake an effective investigation or to provide a remedy”); Mikheyev v. Russia (Para. 157: considering the fact that the claimant was “now unable to work” in the calculation of pecuniary damage; Para. 163: considering “torture,” “severe mental and physical suffering,” loss of “mobility and sexual and pelvic function,” and inability to “work or have children” in compensating non-pecuniary damage); Selmouni v. France (Para. 123: awarding compensation for non-pecuniary damage “on an equitable basis” in “regard to the extreme seriousness of the violations” and the claimant’s “personal injury”).

The conclusion from all of these sources is that compensation for non-pecuniary damage does not take into consideration comparative economic contexts, at least in terms of relative average income.

In fairness, however, the task of calculating non-pecuniary damage is extremely difficult. I should note that Prof. Shelton opposed the very idea of “benchmarking” awards to examples from international tribunals, because every case needs to be assessed on its own terms, and the facts of every case are different. That makes assessing non-pecuniary damage into something of a dark art; it’s impossible to come up with any kind of precise formula. But, in my view, that’s another reason to object to Enodo’s conclusion that the Remedy Framework awards were equitable under international law.

Mapping onto the corporate context

All of the above is drawn directly from the legal sources. But there are very good policy reasons to oppose this approach as well.

International tribunals typically deal with governmental responsibility, and governments usually operate within their own territory. Corporations like Barrick, however, operate globally. They have real bottom-line decisions to make about how to allocate resources.

If Enodo (and Barrick) are correct that appropriate compensation for rape depends on per capita GDP, then it makes sense for Barrick to spend a lot of money making sure that rape isn’t a problem in its operations in (for example) Canada, or the United States. According to Enodo’s formula – that a little over three times per capita GDP might be considered equitable compensation – each rape might cost $133,105.23 in Canada, and $165,046.18 in the US. But for Barrick’s mines in poorer countries, the financial risk is lower. After all, each rape in PNG led to an average Remedy Framework award around $9,800; for Barrick’s Lumwana mine in Zambia, the “equivalent” (using Enodo’s approach) would be a similarly low $11,794.73. (This is using World Bank figures.)

I’m not suggesting that Barrick wants to engage in rape anywhere – of course they don’t. But corporations are economic animals, and they respond to economic incentives. Compensation for pecuniary injuries is already going to be skewed toward richer countries. Making a similar adjustment for non-pecuniary injuries would lead an economically rational corporation to invest far more resources in preventing abuse in richer economies than poorer ones. (This is of course an oversimplification – there are lots of other risks, such as reputational hits and questions of social license to operate, that arise out of abuses to local communities in poor countries – but the financial risk is an important piece.)

Prof. Shelton also pointed out that adjusting non-pecuniary compensation in this way would be contrary to the basic notion of human dignity, because it would be treating some individuals’ rights, dignity and values as more valuable (in a monetary sense) than others’. Sometimes the law is contrary to human dignity, but it would be strange for international human rights law to adopt an approach to compensation for human rights abuses that is fundamentally inconsistent with basic human rights principles.

Additionally, while she didn’t mention it in my discussion with her, it’s worth noting that Prof. Shelton has also made arguments that would suggest that international tribunals generally make damage awards that are far too low to meet the purpose of deterrence:

The economic approach considers the impact of violations on society as a whole, aiming to deter violations through the adjustment of damage awards. In the human rights context, such an approach can help in calculating the amounts needed to uphold a treaty regime by adequately deterring state misconduct. It suggests that international tribunals may need to consider awarding far higher amounts of damages than have heretofore been adjudged.

Dinah Shelton, Remedies in International Human Rights Law (2d. ed. 2005), at 19. Given that corporations may be even more responsive to economic incentives than governments are, this argument is worth serious consideration in determining appropriate compensation in corporate-involved abuses.

Where we agree – and disagree – about purchasing power parity

To be clear, I agree with Yousuf on a fundamental point – adjustments for purchasing power parity (PPP) are appropriate when converting relevant awards between countries. Thus, for example, if you’re comparing awards from the United States in determining an appropriate award for Papua New Guinea, discounting the US figure by about 20% is appropriate, to reflect the slightly greater purchasing power in PNG. It may well be that international tribunals make such adjustments, although I haven’t found direct evidence of this so far. (It’s also the case that awards for pecuniary damage, such as lost income, depend heavily on the local economic context, and in that case claimants from richer countries – and higher-income individuals within those countries – may be entitled to higher compensation.)

Where I disagree is in adjusting for local per capita GDP. That approach doesn’t reflect differences in local purchasing power, it just compares awards as a factor of local income.

That’s why I think Enodo’s description of its approach needs to be changed, even if they stand by their methodology. The way Enodo compared remedies from international tribunals – specifically, the Rosendo Cantú case – and the Remedy Framework was by saying: “Applying the World Bank’s measures of comparative purchasing power, US$60,000 in Mexico is the equivalent of approximately US$9,804 in Papua New Guinea.” That’s just not what “comparative purchasing power” means. What Yousuf meant was: “Applying the World Bank’s calculations of per capita GDP on a purchasing power parity basis, US$60,000 in Mexico is approximately the same multiple of per capita GDP as US$9,804 in Papua New Guinea.”

While I disagree with Yousuf’s discussion of the ways in which PPP is used, I don’t want to get into it, because I think it’s both confusing and beside the point. I think there’s only one appropriate way in which PPP should be used in comparing compensation awards at the international level – and that is simply to compare the actual purchasing power of the award in different countries.

On MiningWatch, listening to the claimants, and corporate capture

I don’t want to belabor Yousuf’s responses to the remaining points, because I doubt we’ll get anywhere productive. In brief:

With respect to the critique of MiningWatch Canada, Yousuf responds that what I characterized as “vitriol” for the advocacy group – in placing blame on them for publicizing the Remedy Framework and thus threatening the security of participants – is simply factual findings. I think the disconnect here arises from two places. First, MiningWatch was raising concerns about human rights abuses at Porgera long before anyone else took them seriously – there’s a pretty good argument that none of this, from Human Rights Watch’s involvement to the Remedy Framework – would have happened without MiningWatch’s advocacy. So it seems like a particularly one-sided critique to focus on the fact that they publicized the Framework. Second, I think the facts that Enodo finds are simply incorrect – the facts as I know them don’t support this narrative. Barrick itself publicized the Framework on its website, and did not suggest that others should refrain from publicity out of concerns for security. In fact, the consensus around ERI’s office is that we had a greater role than MiningWatch did in raising awareness of the Remedy Framework among stakeholders in Porgera, and that MiningWatch wasn’t any more “indiscriminate” in their outreach than anyone else. In particular, if Enodo is referring to the fact that MiningWatch worked with organizations dominated by powerful men in Porgera, it’s worth noting that those same men and organizations knew about the Remedy Framework because Barrick announced it and discussed it with them, in the context of an OECD mediation in which the Framework was one of the “Agreed Action Items”, well before MiningWatch visited Porgera; in fact Barrick itself told the UN that these organizations “had an opportunity to review the Framework,” and had been familiar with it for “quite some time.” I hope that Enodo will explain the basis for its factual findings here – we were there, and this is totally at odds with our experience.

With respect to the issue of “blaming the claimants,” I think the response misses the point. Enodo cited the fact that the Remedy Framework issued cash compensation as the source of a number of problems. But the report also acknowledged that the rape survivors themselves requested cash compensation. While Yousuf’s response criticizes international stakeholders who allegedly “promote the agenda of patriarchal groups with little demonstrable interest in protecting survivors of sexual violence,” the point is that, to the extent that they were pressuring the Framework to issue cash compensation, these advocates were supporting the demands of the women themselves.

Finally, on the “independence” point. I didn’t mean for this to be a criticism of Yousuf personally, or his integrity or independence. My actual point – which Yousuf didn’t really engage – was that if corporations are selecting those who assess their operations, there will eventually be an inescapable problem of corporate capture of the assessors. To illustrate this point, I’ll throw out three possibilities. (1) Enodo might be consciously skewing its report to please clients such as Barrick. (2) Enodo’s outlook, philosophy and culture are friendly to corporations such as Barrick. (3) Enodo’s outlook, philosophy and culture are either perfectly neutral or unfriendly to corporations such as Barrick.

I’ll eliminate (1) right off the bat; I don’t have any reason to believe this. The real issue is between (2) and (3). If there is a marketplace of consultants that fall into both of these categories, then it’s likely that only those falling into category (2) will survive as long as corporations are picking and funding them. That’s not to say which category Enodo falls into, but it is saying that if they’re in (3), they will either find it increasingly hard to survive, or need a different funding model. So I would hope that Yousuf would agree that this funding and selection model is undesirable in the long run.

 

* * *
Update: Yousuf has posted an additional reply to the above post. Most of it is an extended defense of considering the “local economic circumstances” in awarding compensation for the non-pecuniary (non-economic) harms from rape. We could probably go back and forth about this without end, so I’ll try to stick to a few brief additional thoughts. First, Yousuf’s characterization of my position – that I reject consideration of the individual’s subjective circumstances in awarding compensation – is dead wrong. What I reject is the notion that average per capita income has anything to do with the individual’s subjective circumstances. The other factors Yousuf mentions – “the impact of the violation in terms that make sense to the victim: the value she places on stigma; the value she places on anxiety and distress; the value she places on the impairment of her life” – are absolutely appropriate to consider. So this discussion has I think produced some useful advancements in understanding of the relevant considerations for remedies.

What the discussion hasn’t produced is a response to the original critique. My objection was twofold: first, that the way Enodo described its evaluation of the “equitability” of the Remedy Framework awards was misleading, because it implied a comparison to purchasing power in different economies rather than a comparison to average per capita incomes. (To his credit, Yousuf accepts that he should have “more clearly expressed” his methodology.) Second, that the actual methodology of that evaluation, focused solely on benchmarking against average per capita income, was unsupported by international law. I wasn’t actually critiquing the Remedy Framework awards – we did that long ago – I was critiquing Enodo’s methodology.

Yousuf seizes on my comment that “it’s impossible to produce any kind of precise formula” and concludes that that means I think it’s impossible to assess the equitability of an award. Those are different things. The lack of a precise formuladoes not make the exercise impossible; there might be some cases that are close to the line, and others that are obviously adequate or inadequate. This is no different from what a jury does, for example, when assessing non-economic damages – there’s no precise formula, but that doesn’t mean they throw up their hands and say they can’t do the job.

So, to be clear, here’s a restatement of the critique:

A reviewer cannot conclude that an award of compensation is “equitable” in comparison to an international tribunal judgment by examining how the award and the judgment compare as factors of local per capita income.

Yousuf marshals a few sources in support of this approach. Notably, none relates to the Inter-American Court of Human Rights, whose jurisprudence the original report was based on. And one of them actually contradicts Yousuf’s approach: the study “Measuring Violations of Human Rights” makes amply clear that it is talking about differences in “price levels,” not per capita income, in analyzing the European Court’s awards of non-pecuniary damage. (While Yousuf points out that “price levels” roughly correlates with per capita income in Europe – unlike, for example, between Europe and PNG – he doesn’t explain why the study consistently refers to “price levels” and cites data that only looks at comparative purchasing power, which is exactly the approach I had suggested.) In any event, while there may be extremely thin support for considering differences in standard of living between countries when making non-pecuniary awards, there is no support for Enodo’s mechanical approach of using a comparison with per capita income as the sole criterion to judge equitability.

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