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.

“To those who believe in resistance, who live between hope and impatience and have learned the perils of being unreasonable. To those who understand enough
to be afraid and yet retain their fdenverpost.com


Corporate Abuse Abroad, a Path to Justice Here

By LINCOLN CAPLAN, Published: March 3, 2012 , NYTIMES

Should foreigners be allowed to use American courts to sue foreign corporations for human rights atrocities committed abroad?

 Charles Wiwa in Chicago last month. He is one of the Nigerians trying to sue three companies in American courts, charging them with human rights violations in Nigeria.

The Supreme Court heard arguments last week on this question in a case brought by Nigerian citizens against the Royal Dutch Petroleum Company and other firms, charging gross violations of human rights in Nigeria. Four conservative justices expressed skepticism about the federal courts having the reach to deal with such disputes.

But an arcane 1789 law, called the Alien Tort Statute, permits just such lawsuits to be heard in federal courts if brought against individual defendants. The same should hold true for corporations accused of such offenses abroad, provided they have contact with this country, say, by selling products here.

In a world where multinational corporations are primary actors, the need for a way to hold them accountable for extreme abuses is more urgent than ever. When corporations do business in America, they have to operate under American law. Providing a forum for victims seeking justice against corporate bad actors is appropriate to America’s history and role in the international community.

The aim of the statute — which allows suits for “any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States” — was to help enhance this role. The law was passed as part of the new nation’s efforts to show the world respect for the law of nations by opening its courts to foreign claimants. The statute lay dormant for 170 years, but the principle is just as important today.

It was not until 1980 that the law was unearthed and employed in a watershed case that led to a $10.4 million judgment against a former official of Paraguay (who was visiting the United States) for the torture and murder of a young man in Paraguay. Since then, federal courts have heard over a hundred cases brought by foreign nationals against foreign individuals, and since 1997, against corporations as well.

Human rights lawyers realized that suing only individuals was often inadequate because multinational firms were among those violating international law. Offenses growing out of companies’ operations (for example, the brutal use of forced labor) contributed to their profits, so it made sense to seek damages from them for ill-gotten gains.

It was not until 2004 that the Supreme Court took up a case applying this law. In a 6-to-3 ruling, it confirmed that the law allows foreigners to sue for violations of a limited category of universally accepted rights. It also held that those rights and violations should reflect the law when a case is brought.

In 1789, the violations concerned piracy, mistreatment of ambassadors and violations of safe passage. Today, federal courts have found that such violations include torture, genocide, slavery and other crimes against humanity.

The statute does not explicitly say who can be sued. But even in 1789, corporations could be sued for damages for their actions and those of their employees. Under American law, corporations are granted rights like the ability to shield their investors from liability, and in exchange, they are legally accountable for wrongdoing.

Four federal appeals courts have ruled since 2005 that corporations can be held liable under the Alien Tort Statute. Only the Second Circuit Court of Appeals, in Kiobel v. Royal Dutch Petroleum, the case now before the Supreme Court, has rejected that concept on grounds that international tribunals have not held corporations liable for human rights violations.

The Nigerian plaintiffs are seeking monetary damages for a brutal campaign in the mid-1990s by three oil companies and the military dictatorship in Nigeria to silence protesters against environmental damage caused by oil operations. Scores were allegedly killed. Many others, including the plaintiffs, said they were captured and beaten. The conduct alleged includes torture, crimes against humanity and executions.

Royal Dutch Petroleum argues that the Supreme Court must look to the law of nations on the question of corporate liability and that no such provision exists in international law. It also contends that finding liability could create international tension.

That stance is wrong on law and policy. International law defines the violations, but enforcement is up to each nation’s domestic law, and under American law, corporations have been subject to suits for centuries. Worries about international repercussions are also overblown. As the Supreme Court decided in 2004, the statute applies only to the most abhorrent conduct, and federal courts have carefully rejected suits for infringing on American foreign policy-making as well as for evidentiary reasons.

There is no good justification for a categorical rule against corporate liability. As the economist Joseph Stiglitz said in an amicus brief, these lawsuits can be an efficient way to enforce human rights in countries where court systems and other means of policing violations are ineffective. Potential civil liability gives corporations an incentive to improve their conduct. If a multinational company commits an offense like torture, the fact that it is a corporation and not an individual is immaterial in the pursuit of justic


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