human rights & business (and a few other things)

Kiobel v. Royal Dutch Petroleum Co: Overcoming the Collective Hangover

Shell oil spill at Goi, Ogoni Land, Niger Delta. © Alison Dilworth/Friends of the Earth, April 2005

So this is it. After years of speculations about this case in the human rights community, the United States Supreme Court finally rendered its decision in the Kiobel et al. v. Royal Dutch Petroleum Co. et al. case on 17 April. They dismissed the applicants’ claims and ruled in favour of the corporate defendants.

To say that this decision was awaited would be an understatement. The Internet suddenly went crazy, with dozens of reactions from academics, NGOs, journalists and even businesses. All of these reactions were usefully compiled by the Business and Human Rights Resource Centre on a special page. The agitation on Twitter, which continues 2 days later, further reinforces the idea that the Kiobel case was an exceptional one.

This case could have provided us with answers to a variety of fascinating questions, such as whether corporations are subjects of international law and, linked to that, whether they can commit international crimes; and whether companies need to share the intent of the main perpetrators in complicity claims, or whether passing a “should have known” test is enough.

In the end the Court decided to limit the case to only one question: whether and under what circumstances the Alien Tort Statute allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States. Asking the question, of course, is already anticipating the answer they were going to give, at least in this specific instance. The answer is that following the presumption against the extraterritorial application of statutes, only in the rarest of circumstances will courts have jurisdiction, under the ATS, over matters which fall under the jurisdiction of another sovereign state. In other words, the ATS is unlikely to ever provide a legal avenue for victims of human rights violations committed by rogue states with the complicity of business.

This very short opinion (only 14 pages!) is disheartening for the human rights community because many had hoped that the ATS would continue to provide at least a potential remedy for victims of gross human rights violations committed with the complicity of corporations. There are now several initiatives at the international level to encourage corporate accountability in the field of human rights, such as for example the UN Guiding Principles on Business and human Rights and the OECD Guidelines for Multinational Enterprises. But these are soft law initiatives and arguably there is nothing like the fear of a court case to make any organisation change.

So, what next? How do we cure the collective hangover we seem to have suffered from in the past two days? Here are my views and suggestions:

1. The United States are not the only country in the world. While US Courts won’t exercise jurisdiction under the ATS, other countries might be more open to these types of cases against corporations.

2. Even within the US, the Alien Tort Statute is not the only statute that could be used to bring human rights claims against corporations. Also, new legislation could be adopted, as the Supreme Court itself seems to suggest in the very last sentence of the decision.

3. Let’s remind ourselves that “extraterritoriality is not a black and white issue, but a question of degree” (Zerk, 2010). And also that jurisdiction is an adjudicative, as well as a prescriptive (legislative and regulatory) matter. The US Supreme Court has refused to assert direct extraterritorial jurisdiction over a set of events that had occurred abroad. It does not mean that everything happening abroad is outside the reach of US law and regulation. As I have argued in more detail in my recent piece in the Journal of Business Ethics, there are a variety of measures that states can adopt to reach out to, and impose some degree of control over, what companies registered on their territories do abroad, including engaging in human rights violations. These measures range from selective purchasing laws to reinforced reporting requirements, to name but a few.

4. Let’s continue to use the UN Guiding Principles as a basis for engagement with business. It is crucially important we keep the momentum on this and encourage states to mainstream the principles.

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