Can Corporations Violate Human Rights? In Kiobel v. Royal Dutch Petroleum, the Supreme Court May Say Yes ... or No

by John Knox

February 23, 2012

On February 28, the Supreme Court will hear argument in Kiobel v Royal Dutch Petroleum, a case with far-reaching implications for efforts to hold corporations accountable when they commit or are complicit in abuses of human rights. 

For over fifty years, Shell has extracted oil from Nigeria, causing great harm to the environment and people of the Niger delta.  The Ogoni people living in the delta protested Shell’s operations, and in response the Nigerian government harshly oppressed them.  Most infamously, in 1995 it executed the author Ken Saro-Wiwa, together with eight other leaders of the protests.     

Esther Kiobel, the widow of one of the executed men, as well as other affected Ogoni, sued Shell in U.S. federal court, claiming that it aided and abetted the Nigerian government in its violations of human rights law.  The plaintiffs relied on the Alien Tort Statute (ATS), a law enacted by the First Congress, in 1789, which gives federal courts jurisdiction over claims by aliens arising from torts committed in violation of international law.  In 2004, in Sosa v Alvarez-Machain, the Supreme Court affirmed that the ATS still provides jurisdiction for international tort claims, but it cautioned federal courts not to recognize claims “for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms” familiar when the law was enacted.  As an example of such a historical paradigm, the Court cited the long-standing prohibition against piracy. 

Foreign plaintiffs have used the ATS to accuse corporations of committing grave human rights abuses, including genocide, war crimes, and forced labor.  A few of the suits have resulted in payments, including a 2009 settlement by Shell of another claim arising from its Nigerian operations.  In 2010, however, the Second Circuit Court of Appeals rejected Esther Kiobel’s claim on the sweeping ground that corporations could never be liable for violations of customary international law, because customary international law never imposes any obligations on corporations.  In short order, the Seventh, Ninth, and D.C. Circuits rejected the Second Circuit decision, holding that plaintiffs can sue corporations under the Alien Tort Statute. 

Last fall, the Supreme Court granted certiorari to review the Second Circuit decision.  Its ruling will be its first ATS decision since Sosa, and it will determine whether the many other pending ATS suits against corporations may continue.  It’s possible that the Court will decide the case on grounds that allow it to avoid addressing corporate duties under international law.  But if the Supreme Court does take on international law, as seems likely, what should it decide?  Is the Second Circuit correct that international norms do not prohibit corporate abuses of human rights? 

The Second Circuit is wrong, but it isn’t completely wrong.  Most obligations under human rights treaties are explicitly placed on states, not individuals or corporations.  That doesn’t mean that human rights law has nothing to say about non-state actors, though.  On the contrary, one of the main obligations it imposes on states is to protect against human rights abuses committed by non-state actors, including corporations.  In that sense, human rights law clearly imposes indirect duties on individuals and corporations.  They include, for example, obligations not to engage in slavery.

Although the Supreme Court might conclude that these indirect duties are enough to satisfy the language of the ATS, it seems more likely that it will look for evidence that international law may impose direct duties on corporations.  No one doubts that international law imposes direct duties on individuals not to commit certain particularly heinous abuses, including genocide and war crimes.  The Nuremberg and Tokyo tribunals tried and convicted individuals of violating international law, and today individuals who commit genocide, war crimes, and other international crimes are subject to prosecution before the International Criminal Court. 

The Second Circuit based much of its decision on the fact that these criminal tribunals were not given the authority to try corporations.  Nuremberg tried officials of I.G. Farben, but not the company itself, for using slave labor.  But the decisions not to try corporations for committing international crimes were reached not because corporations were thought to be exempt from international norms, but because many countries don’t impose criminal liability on corporations.  Civil liability, as under the ATS, is a different matter.  I.G. Farben wasn’t off the hook just because it wasn’t sentenced at Nuremberg.  On the contrary, as Judge Richard Posner explained for the Seventh Circuit:  “At the end of the Second World War the allied powers dissolved German corporations that had assisted the Nazi war effort, along with Nazi government and party organizations – and did so on the authority of customary international law.”  I.G. Farben was declared to have “knowingly and prominently engaged in building up and maintaining the German war potential” and its assets were seized.

The application of human rights law to corporations has become clearer in recent years, thanks in large part to the efforts of Harvard Professor John Ruggie, who in 2005 was appointed Special Representative of the UN Secretary-General on Business and Human Rights.  After years of consultations with governments, corporations, and human rights groups, he proposed Guiding Principles on Business and Human Rights, which the UN Human Rights Council unanimously adopted last summer.  The Guiding Principles emphasize that corporations have a responsibility to respect human rights, and that states have a legal duty under international law to protect against corporate human rights abuses and to provide remedies for such abuses when they do occur. 

By providing such remedies, the ATS can provide critical support to the Guiding Principles and other efforts to bring human rights law to bear on corporations.  Its threat of civil liability helps to encourage corporations to support and implement their responsibility to respect, as many corporations around the world already have.    

The most defensible result for the Supreme Court in Kiobel would be a decision that legal persons are just as subject to human rights law as natural persons are.  A decision affirming the Second Circuit’s position that corporations – unlike governments or individuals – are uniquely free from any duty to abide by human rights norms would be a step backwards legally as well as morally.

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Also from John Knox

John H. Knox is the Henry C. Lauerman Professor of International Law at Wake Forest University. He has taken a leave from CPR while serving as the United Nations' first Independent Expert on human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment. 

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