I. Introduction
Driving along Italian state highway no. 7 in the summer and passing by ILVA, Europe’s biggest steel plant, is an alienating experience. On one side is the Ionic sea, one of Southern Italy’s most impressive pieces of coast, and the city of Taranto, once the beautiful capital of Magna Graecia. On the other is an old industrial giant as big as the city itself, now part of the landscape with its 215 industrial chimneys, the biggest of which is 210 metres tall. Everything is coated in red steel dust; it covers the guardrails, the ground, the streets and the houses, and fills the air.
For 25 years, ILVA has spread death, pollution and disease that are still ongoing in Taranto and the surrounding area despite scientific studies and judicial decisions demanding that managers and authorities take preventive and remedial actions.Footnote 1
This case illustrates how harmful industrial activities are not the unique prerogative of developing states with weak governments and lack of independent judiciary, as is a common narrative in the business and human rights (BHR) field. It can also happen at the heart of the European Union (EU), despite protective legal frameworks and the implementation of the United Nations Guiding Principles on Business and Human Rights (UNGPs) through the adoption of national action plans (NAPs). Furthermore, the ILVA case and its complex judicial history show that, when substantive economic interests are at stake, access to justice is not always available even in sophisticated legal and judicial systems like the Italian one.
A thought-provoking analysis of this issue is contained in the decision of the Italian Constitutional Court of March 2018. The reasoning of the Court shows that constitutional jurisprudence can offer useful clarifications in the difficult task of balancing different constitutional rights, such as the right to work and the right to health. It thus represents a powerful and relatively unstudied tool in the BHR field, where it could serve as inspiration and a point of reference.Footnote 2
To do so, the piece starts with a description of the case (II.A), including of the government’s responses to the pollution caused by the plant (II.B). It further analyses the reasoning of the Constitutional Court on the balance between concurring fundamental rights (III) and concludes by enucleating the criteria that the Court suggests to achieve such balance, which could serve as a reference for the BHR debate.
II. The ILVA Case in a Nutshell
A. Events
The Taranto plant is Europe’s largest complete-cycle steel production facility, with a surface area of 15 million square metres. It was built in 1960 to promote economic growth in Southern Italy, and operated until 1995 as a state-owned plant. In 1995, it was sold to a private company, the Riva Group, managed by the Riva family, but since January 2015 it has been under extraordinary administration (amministrazione straordinaria) and run by three government-appointed commissioners.Footnote 3 After the 2018 elections, the new Italian governmentFootnote 4 had to decide whether to continue with the transfer of the plant to a consortium led by Arcelor Mittal, Footnote 5 or to liquidate it.Footnote 6 It finally decided to carry on the initiated transfer to the consortium that gained full management control of ILVA in November 2018.Footnote 7 Today, ILVA still employs around 11,000 workers and accounts for approximately 75 per cent of the gross domestic product (GDP) of the Province of Taranto and 76 per cent of goods handled in the city’s port.
As far back as 1990, the Italian government declared Taranto an area at ‘high risk of environmental crisis’, due to the consequences of the ILVA activities. However, only in 2012 did the situation escalate, with the Judge for the Preliminary Investigations ordering the seizure of the plant’s production area on the grounds that ‘ILVA’s past and present managers have knowingly and willingly continued their polluting activity for the pursuit of profit, thereby infringing the most basic rules of public health and safety’.Footnote 8 In the decision, the judge also highlighted how it was based on the investigation and strong evidence collected by the criminal prosecutors, who found that company managers (Managing Director, President and Vice President of the Board of Directors, and Plant Director) developed ‘a criminal conspiracy with the aim of committing several crimes against public safety’, Footnote 9 deliberately overlooking the adoption of suitable risk management measures, as required by law. Furthermore, the same prosecutors found that the plant’s managers consciously adopted measures violating several environmental regulations, sometimes with the collusion of people in public positions.Footnote 10
The decision also brought to light data relating to the serious impact of ILVA’s activities on human rights and the environment, through chemical and epidemiological expert reports. Consequently, the judicial order estimated the cost of the clean-up of the area at 8 billion Euros.Footnote 11
B. The Political Response
Despite the seizure decree, which would have stopped the plant’s production, and under pressure from unions and parts of the local population, the Italian government allowed production to resume, by adopting a series (10 to date) of extraordinary legislative measures called law-decrees (decreti legge).Footnote 12 The first law-decree Footnote 13 granted the plant the right to continue production for a limited period (36 months), on the grounds of its status as a ‘strategic plant for national security’, and imposed monitoring of their compliance by the Integrated Environmental Authorization (Autorizzazione Integrata Ambientale). This was considered by the Constitutional Court in 2013 to be a legitimate exercise of executive power because it was motivated ‘by the purpose of installing a reasonable balance between the safeguard of health and employment and not of the total destruction of the former (health)’.Footnote 14
The subsequent measures adopted by the government, however, further extended the initial delay and the deadline for the implementation of the environmental plan (now 2023) and granted immunity from prosecution to the managers of the plant (including to buyers and lessees or their representatives).Footnote 15
III. The Dilemma of an Impossible Balance
The government’s responses in the ILVA case are an example of the dilemma posed by many similar cases involving large industrial projects: the impossible balance between stopping economic activity proven to be harmful to the environment and health, and the consequences of losing thousands of jobs together with an important part of the country’s industrial production. Ultimately, this case illustrates the tensions between economic activity and a number of fundamental rights granted and protected by national constitutions and international law: the rights to life, health, a healthy environment, work and the freedom to conduct a business.
One would reasonably not expect that such a dilemma takes place in EU member states, founded as they are on the rule of law, independent judiciary as well as strict environmental standards. Much less so in Italy, whose 2016 NAP for the implementation of the UNGPs affirms that: ‘Italy is committed to the promotion and implementation of key actions aimed at giving human rights priority status so as to avoid and minimise potentially negative impacts from business activity in this area’ and that ‘in the field of environment protection, the promotion of high environmental standards by enterprises beyond National and EU legislation is an essential contribution to the respect, promotion and fulfilment of human rights’.Footnote 16
However, the ILVA case illustrates how a short-term vision, combined with criminal behaviour and a challenging economic environment, can allow such situations to exist and remain unchecked for almost 50 years. In parallel, the inconsistencies between what is stated by the government in the NAP and the way it treated the situation somewhat corroborate the ‘soft’ character of the engagements taken by governments in NAPs.Footnote 17
A. Decision No. 58/2018
In 2015, the Italian Constitutional Court was again asked to rule on the legitimacy of one of the law-decrees authorizing the continuation of ILVA’s activity in spite of the previous seizure order by the judicial authority. In particular, the Court had to consider if the decision to extend the economic activity of the plant was in line with articles 2, 3, 4 and 32 of the Italian Constitution protecting the right to life, the right to non-discrimination, the right to work in safe conditions and ultimately the reasonable balance between the protection of these rights.Footnote 18 This time the Court stressed even more firmly the duty of the legislator to seek a delicate balance between all the constitutional values at stake.Footnote 19
Such balance, the Court affirmed, must be made according to the principles of proportionality and reasonableness and should not end in one right prevailing over the others.Footnote 20 In this case, it considered that the government privileged the interest for the pursuit of production and ‘totally disregarded the protection of fundamental rights such as the right to health and life as well as the right to work in a safe environment’.Footnote 21 This reasoning is confirmed by the recent decision of the European Court of Human Rights (ECHR) on the same case, stating that the Italian government violated article 8 of the European Convention on Human Rights because ‘the right balance between the well-being and the right to private life of the claimants on one side and the right of society as a whole on the other has not been respected’.Footnote 22
Moreover, the Italian Constitutional Court recalls its own decision on ILVA of 2013, affirming that it is part of the pluralist character of the Italian Constitution that fundamental rights are all interdependent and that ‘the dignity of the individual is the result of this complex and interrelated system of rights and liberties’.Footnote 23 While then stressing the absence of any form of hierarchy between fundamental rights, the Court highlighted that the right to health and to live in a healthy environment could be considered as ‘primary’ rights in the sense that their sacrifice always needs a strict justification and careful evaluation of the balance between different rights.Footnote 24
Thus the Court also analysed the violation of the limits that the Constitution puts on economic activity in Article 41.Footnote 25 It further clarified that it cannot be read independently of the protection of fundamental rights and that economic activity therefore has its limits in the respect of the right to life, to health and to live in a healthy environment.
Article 41 (along with Articles 42, 43 and 44) of the Italian constitution form the economic constitution of Italy containing those principles and institutional arrangements that are central to the management of the national economy.Footnote 26 It has been mainly regarded as the basis of a system of moderated capitalism, allowing the state to intervene in the economic life of the country, as it sets out the freedom to undertake economic activity but subordinates this to the respect of ’social purposes’. In the intent of the constitutional legislator and in the subsequent jurisprudence, ‘social purposes’ was specifically meant to protect the safety and physical integrity of workers with regard to the employer.Footnote 27 In its decision of 2018, the Constitutional Court further develops the definition of the limits that Article 41 imposes on economic activity, stating that the respect of fundamental rights such as the right to life and health is the ‘minimum and necessary condition of compliance of economic and commercial activities with constitutional principles’. This decision can be considered in line with what was affirmed just one year earlier by the French Constitutional Council on the occasion of its revision of the ‘duty of vigilance’ legislation. The Council affirmed that the constitutional principle of the liberté d’entreprendre can be limited in order to pursue other constitutional values and thus considered the mandatory vigilance plan required by the law compliant with that constitutional principle.Footnote 28
IV. Conclusion
The decision of the Italian Constitutional Court is particularly important in the context of today’s debate around further passing into law of business and human rights standards.Footnote 29
It offers three clear criteria that should guide governments in the assessment of the legitimacy of industrial projects that, while creating jobs, could seriously threaten health and environment: (i) the rights to life, to health and to a healthy environment are ‘primary’ rights whose curtailment needs to pass a strict reasonableness and proportionality test; (ii) such a test cannot be passed when one of those ‘primary’ rights is totally disregarded in favour of the fulfilment of other rights, such as the right to work and the freedom to conduct a business; and (iii) respect for the right to life and health is the minimum implicit condition that frames the Constitutional freedom to conduct a business in a pluralist Constitutional system.
While not yet well studied in the BHR field, constitutional jurisprudence and public law and particularly the use of proportionality and reasonableness arguments can therefore offer a concrete reference in cases like ILVA, and operate as an additional tool for scholars, practitioners and lawyers working in this field. In particular, the proportionality and reasonableness principles typically issued from the public law sphere to limit the infringement of human rights by governments could also apply to the private law sphere and more specifically to the debate on corporate liability for human rights abuses, and provide additional clarity to the broad concepts of ‘duty of care’ and ‘human rights due diligence’, thus contributing to frame more thoroughly the scope of businesses’ obligations vis à vis of human rights.Footnote 30
Finally, the decision shows that existing instruments and constitutional provisions can and must be read and interpreted in a way that offers the greatest protection of individual rights. It represents, together with the Conseil Constitutionnel’s decision, a significant step towards the establishment of a constitutional interpretation of the economic activity as intrinsically comprehensive of the respect of human rights and towards the recognition of social purpose as a constituent element of the notion of enterprise.Footnote 31
If such an interpretation was confirmed and further enhanced, constitutional law and jurisprudence could also offer an additional recourse to victims of corporate abuses.
