When corporations abuse human rights

Can a corporation face civil liability in a U.S. court for aiding a foreign government’s acts of torture and murder of innocent villagers? That was the question before the Supreme Court on Oct. 1 when it heard oral arguments in Kiobel vs. Royal Dutch Petroleum.

The plaintiffs, all Nigerian nationals now living in the U.S., claimed that Dutch, British and Nigerian corporations affiliated with Shell (and engaged in oil exploration and production in Nigeria) assisted the Nigerian military in committing human rights abuses between 1992 and 1995 to quash protests over grave environmental damage caused by the oil operations.

The Supreme Court initially heard this case in its last term on the question of corporate civil liability under a U.S. statute that permits an “alien” to bring a civil action for violation of international law in the U.S. federal court. A divided Second Circuit Court of Appeals had ruled that  customary international law does not recognize corporate civil liability and hence corporations are immune under the statute in question, the Alien Tort Statute. That reasoning was subsequently rejected by three other federal courts of appeal.

The Supreme Court asked the parties for supplemental briefing on whether the statute allows courts to hear a case concerning violations of international law “occurring within the territory of a sovereign other than the United States” — that is, whether the law applies extraterritorially.

The statute in question, enacted by the first Congress in 1789, lay dormant for two centuries until the Second Circuit decided a case in 1980 which involved a Paraguayan tortured and killed in Paraguay. The court held that since torture is prohibited under international law, jurisdiction is proper under the statute, and it found the defendant liable for huge damages. Subsequently, in another decision, the Supreme Court left the door open for a federal court to hear a case based on an international norm accepted by the civilized world as “specific, universal, and obligatory.” Torture and extrajudicial execution, as occurred in this case, fit that definition. But the court has not ruled on whether corporations can be sued under that statute.

The Kiobel case has broader implications. Will the Supreme Court with its conservative majority insulate companies from liability for human rights violations committed abroad? The five-member majority led by Chief Justice John Roberts has in the last few years issued a series of opinions favoring corporations, such as the 2010 Citizens United ruling.

What are the court’s options? It could rule that while the Alien Tort Statute applies to persons it does not apply to corporations. However, under American law, plaintiffs have been able to sue corporations for more than 200 years. Why should this principle not apply to claims against corporations under the Alien Tort Statute in the case of severe human rights violations? If corporations have constitutional rights, as Citizens United established, why should they not be held to the same standards as persons?

On the other hand, the court could hold that the statute does not apply to acts committed abroad and thus corporations committing human rights violations abroad are shielded from liability.

The United States must uphold its tradition of protecting international human rights by not allowing a corporation to avoid liability when it has committed heinous human rights crimes abroad.

Ved P. Nanda (vnanda@law.du.edu), Thompson Marsh Professor of Law and director, International Legal Studies Program, University of Denver Sturm College of Law.
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