ImageThe full extent of the 1789 Alien Tort Claims Act (ATCA) which allows non-U.S. citizens to file suits in the U.S. for international human rights violations has been the subject of many debates in recent U.S. cases (Sosa v. Alvarez-Machain,KiobelBoimah Flomo I and IIExxon). This comment looks at the key points relied upon in recent decisions to reject the existence of a corporate liability principle under customary international law. The concurring observations of Judge Leval, who argued that the Kiobel decision might have kept the door open to major corporate abuses and created a precedent of corporate impunity, are especially relevant because they have been confirmed by more recent decisions. This comment also considers the arguments presented in the Kiobel re-hearing rejection regarding the policy impact of the decision and the policy-making role of U.S. tribunals. Finally, this comment questions whether U.S. courts should be expected to get involved in international justice, thereby risking being characterized as imperialist, self-appointed world judges.

The paper is availble here, and as a pdf version

In line with our previous posts on the evolution of corporate liability under ATS (See the list of the comments here), it is worth noting that the United States Court of Appeals for the District of Columbia Circuit has rendered a decision on the John Doe v Exxon Mobil Corporation on the 8th of July. The decision interestingly seems to confirm the decision rendered on July 11th 2011 by the US Court of Appeal for the 7th Circuit in Boimah Flomo (see here).

Contracting with the Indonesian government, Exxon Mobil and its subsidiaries operated a large natural gas extraction and processing facility in in 2000–2001. Eleven villagers filed a complaint in 2001 alleging that murder, torture, sexual assault, battery, and false imprisonment committed by the Indonesian military could be attributed to Exxon under the Alien Tort Statute (“ATS”) and the Torture Victim Protection Act (“TVPA”) because they were committed by a unit dedicated only to Exxon’s facilities and placed under Exxon’s authority (p5).

Corporate liability as a new type of claim (Sosa v Alvarez Machain argument)

The Exxon Court first rejected the Sosa tribunal’s finding that ATS tribunals should not recognize private claims under federal common law for violations of any international law norm which did not exist when paragraph 1350 was enacted (See here). “The fact that the law of nations provides no private right of action to sue corporations”, it held, “addresses the wrong question and does not demonstrate that corporations are immune from liability under the ATS”(p56).

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A decision on the Boimah Flomo case was reached on July 11th 2011 by the US Court of Appeal for the 7th Circuit (The decision can be found here). It is worth mentioning because it significantly contradicted the findings of the Indiana’s District Court which dismissed the claim on the ground that the plaintiffs had “failed to establish a legally cognizable claim because no corporate liability exists under the ATS” (See my previous note here). The case is also noteworthy because of its conclusions on child labour.

On corporate liability

Establishing corporate liability was a major issue for the tribunal, which nonetheless provided a fairly clear reasoning and achieved a very acceptable conclusion. It overall rejected Firestone’s (the respondent) argument that “conduct by a corporation or any other entity that doesn’t have a heart-beat can never be a violation of customary international law, no matter how heinous the conduct” (p5), and by the same token clearly rejected the analysis of corporate liability provided in Kiobel, which it clearly deemed ‘incorrect’ (p6).

The Court overall suggested that there had to be a first time for litigation to enforce a norm, especially considering that there is no compelling reason to justify that corporations have rarely been prosecuted criminally or civilly for violating customary international law (p7-8)

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By Antoine Martin.
While I questioned in a recent note some criticisms as to the ‘failure’ of US Courts to recognise the responsibility of foreign corporations for their activities abroad, it is interesting to emphasise briefly that the Canadian House of Common just rejected the idea of holding its mining industry liable for similar abuses.

The Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act

In April 2009 already, John McKay, a Liberal Member of Parliament, proposed the Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act before a sceptical Parliament (a first draft was passed in a vote of 137 to 133). Despite the protests of the Mining Industry, McKay re-presented the Bill last week. The facts, as he formulates, indeed “show companies involved in human-rights abuses, they show companies involved in using rape and murder as measures of security in order to secure their sites, they show companies operating without licenses in countries, they show significant environmental degradation.”[1]

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By Antoine Martin.

Recent news raises complementary thoughts as to the policy consequences of the Kiobel, Boimah Flomo and Sosa decisions on corporate liability under ATCA/ATS. In fact, many criticisms can be read as to the inability of US Courts to admit jurisdiction over claims involving allegations of corporate human rights abuses, but the political nature of such cases is often left unconsidered.

For instance, why should US Courts, more than others, be expected to decide on international issues in the absence of an international Court competent on such matters? Second, which law should apply? Although Boimah Flomo admitted that corporations could act in violation of customary international law, (see here) the content of customary international law with regards to corporations remains undefined. Finally, could claims be considered without international politics being involved? Commenting on Kiobel, Professor Kenneth Anderson indeed recently asked how a finding of liability by US Courts would anyway be accepted by the international community:

“ What happens, that is, when plaintiffs in Africa decide to start using the ATS to sue Chinese multinationals engaged in very, very bad labor or environmental practices in some poor and far away place? Does anyone believe that China would not react — in ways that others in the world might like to, but can’t? Does anyone believe that the current State Department would not have concerns — or more precisely, the Treasury Department?” (Via Conflicts of Laws)

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By Antoine Martin.
Following the findings of the US Court of Appeal for the Second Circuit in Kiobel v Shell, (see a previous Int’Law Notepad Note) the respondent (FNRC) in Boimah Flomo (Boimah Flomo, et al v Firestone Natural Rubber Company (United States District Court Southern District of Indiana Indianapolis Division, Case 1:06-cv-00627-JMS-TAB Filed 10/05/10) contended that “international law does not impose liability on corporations” so that the plaintiffs had no cognizable cause of action (p.2).

The Court, overall, concluded that although it had sufficient jurisdiction to hear the claim, the plaintiffs’ claim was to be rejected due to the absence of corporate liability for human rights violations under ATS/ATCA This note summarises the main findings of the Court’s partial decision.

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