human rights & business (and a few other things)

Complicity issues and redress for victims in the aftermath of Jesner v Arab Bank


This post is the third in the Jesner v Arab Bank special series on this blog. Previous posts are here and here.

It is a pleasure to welcome a team from the Law School at Queen’s University Belfast on Rights as Usual. The team includes Ciara Hackett, Ciaran O’Kelly, Clare Patton and Luke Moffett. Ciara’s research focuses on CSR and Business and Human Rights.  Ciaran is interested in corporate accountability and the language of corporate reporting. Clare’s research focuses on cause related marketing and CSR. Luke researches on reparations, international criminal law and victims. All are staff in the Law School at QUB. This post is theirs.


Last week the US Supreme Court issued their decision on Jesner v Arab Bank. This case concerned whether or not corporate defendants could be held liable under the Alien Tort Statute (ATS). The facts of this case involved an allegedly complicit corporate defendant. As a group, we are working together on how complicity is articulated within the business and human rights field. Thus we were especially interested in whether, and if so how, the Court would speak to issues involving complicit corporations. Our research focuses in particular on how the ‘corporate responsibility to respect human rights’ as outlined in the United Nations Guiding Principles on Human Rights does not explicity reference complicity, but how the requirements of due diligence highlights its importance as an object of investigation. Because of the facts of the case, we had hoped that there would be some discussion on complicity in the decision, although we did appreciate that the issue in the case was corporate liability. We certainly had not anticipated the majority (5-4) decision that foreign corporations cannot be defendants in cases brought under the Alien Tort Statute (ATS). Many issues arise from the Jesner decision and some of them are dealt with on this blog here and here. In this blog post, we focus on two aspects: (1) the Court’s narrow view on complicity and its disregard for passive complicity; and (2) the implications of the decision for victims of human rights violations involving corporations.

There is more to complicity than ‘aiding and abetting’

On complicity, the Court seemed particularly misguided, recognising only ‘active’ complicity – and suggesting that this was an issue for Congress to decide. ‘Active’ complicity is also known as ‘aiding and abetting’ and in Kiobel it was used to accuse the corporate defendant of aiding and abetting the Nigerian Government in committing law of nations violations. In Jesner, the majority seemed to say that plaintiffs allege ‘aiding and abetting’ to use corporations as surrogate defendants. Justice Sotomayor (dissenting) recognises that this is misaligned and suggests that there are other forms of ‘aiding and abetting’. However, and perhaps due to the facts of the case, neither she, nor the rest of the Court seem to recognise the idea of ‘passive’ complicity. This is where corporations may be complicit in human rights violations even when they are not the direct result of their own action. For example, in the Ibañez case (translated amicus here), large sums of banks’ loans provided to the Argentine dictatorship were crucial for its abuses of human rights. The banks were not instigating or financing abuse directly, rather, were facilitating an environment under which abuses could happen. Passive complicity, in an era of due diligence and increasingly complex supply chains, is a key area for business and human rights moving forwards. Indeed, the expansion of human rights due diligence in governance processes suggests that corporations, if only through their actions, recognise passive complicity as something for which they might legitimately be called to account. We had hoped that the Court would recognise the existence of a spectrum of complicity, albeit obiter. This would have aligned the Court’s decision with Principle 2 of the UN Global Compact which recognises direct, beneficial and silent complicity. But this was perhaps an optimistic expectation on our behalf.

What about victims?

In short, the Court did not really mention the victims, and certainly not sympathetically.

The judgment is silent on where victims of human rights violations involving corporations might seek redress. Although perhaps beyond the scope of the judgment, this seems cold – especially given the circumstances of the plaintiffs’ claim. Justice Sotomayor in her dissent does make a nod to this. She notes that whereas the market does not price all externalities (including the profit motive for abuses) ‘the law does’. Well, it should. Sotomayor rightly notes that in allowing entities to be protected with rights in the law but with none of the fundamental responsibilities, the Court is undermining the system of accountability that the First Congress endeavoured to impose.  This is something of a counter argument to the majority who suggested that the ATS cannot apply to foreign corporations because it did not apply to corporations in 1789 (see Justice Gorusch in particular). We believe that this view both embeds and further extends Justice Scalia’s renowned textualism yet sits at odds with the consitutional rights developments such as those outlined in Citizen United.

Where alternative routes to recovery are mentioned, they all focus on an active abuse of human rights as opposed to complicity in the face of human rights abuses (typically against employees of corporations as per Justice Kennedy). Justice Kennedy also notes that actions can be taken against individual employees within the corporation for the human rights violations of the corporation. This ignores the literature on collective responsibility and group agency dominating the area at present. It also highlights a further problem. If the Court has such a narrow view of what complicity is, they are failing to recognise the categories of victims that may exist where a corporation has been passively or silently complicit. In so doing, they are creating a hierarchy of victims (whereby a victim of an actively complicit corporation has a more defined route to recovery than a victim of a passively complicit corporation) which we believe is in conflict with the broader conversations on due diligence within business and human rights.

The plurality in Jesner insisted that corporate liability for human rights violations as a cause of action was a matter for Congress not the courts. They cited the failure of the Torture Victim Protection Act (TVPA)  to extend to corporations as a reason why the ATS could not apply to corporations, suggesting that Congress needed to make this decision in the same way as they did in the TVPA. What is frustrating in this claim is that they note that with the ATS, the First Congress ‘provided a federal remedy for a narrow category of international law violations committed by individuals’ but that two centuries on, it is still for Congress to extend this to include corporations. Yet, Congress has failed to do so.  The foreign policy fears, and the claim that extending the ATS to include foreign corporations would have a detrimental impact on American business in developing countries (a particularly strange argument) that infused the majority judgment, seem also to prevail in the legislature.

In categorically closing the idea of foreign corporations being sued under the ATS for human rights violations, 25 years of human rights based claims against foreign corporations have ended. Other routes to remedy at national and international levels remain, and suits against US corporations also remain possible. But this decision has made victims of abuses involving corporations (actively or complicitly) the biggest losers.

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