On 21 December 2011, the United Nations High Commissioner for Human Rights, Ms Navi Pillay, submitted an amicus curiae brief in support of the petitioners, Esther Kiobel et al in their case against respondents, Royal Dutch Petroleum Co. et al to the Supreme Court of the United States.
The brief argues powerfully that holding corporations liable for human rights violations is fully consistent with international law that provides for corporations to be subject to the rule of law on the international plane in which they ubiquitously operate. It argues furthermore that corporations are not immune from responsibility under international law if they engage in, or are complicit in, conduct amounting to international crimes such as genocide, crimes against humanity or war crimes.
These legal arguments are deeply significant to the South Africa Apartheid Litigation brought by the two groups of South African plaintiffs – the Khulumani and the Ntsebeza plaintiffs, which is awaiting the handing down of the judgment of the Second Circuit Court of Appeal after the defendants appealed the order of the District Court judge that case should go to trial.
Judge Pillay submits ten powerful arguments for holding the defendant corporations liable for human rights violations. These arguments apply equally to the “Khulumani lawsuit”. They are that:
1. The United States as a member of the United Nations should honour its obligation “to take joint and separate action in cooperation with the Organization” to promote “universal respect for, and observance of, human rights and fundamental freedoms for all....” and should understand that as an organ of the state, the Court would be acting as an agent of the United States to refuse or to execute the nation’s international legal obligation to promote human rights.”
2. The principle that corporations are subject to civil liability for the wrongful conduct of corporate agents is a general principle of law applicable by the Court in cases presenting claims based on international law” and that consequently, the proposition that corporations may be held accountable for human rights violations pursuant to the Alien Tort Statute is wholly consistent with international law and is validated by the following considerations:
- First, international law obligates States to provide an effective remedy for victims of human rights violations.
- Second, civil liability for corporations helps promote the international legal principle of ensuring accountability for human rights violators.
- Third, in accordance with the principle of complementarity, international law necessarily relies on domestic legal mechanisms to ensure the effective protection of human rights.
- Finally, civil liability for corporations that are complicit in gross human rights violations serves as an avenue for orderly redress of grievances.
Corporations should therefore not be exempt from tort liability under the Alien Tort Statute for violations of the law of nations such as torture, extra-judicial killing and crimes against humanity” and furthermore “corporations are not exempt from the duty to provide effective remedies” without which requirement corporations could continue to violate human rights without any compelling need to cease and desist.
3. A State may be held accountable by way of civil remedies for any violation of human rights attributable to it given that the obligation to respect human rights entails an incidental obligation of accountability owed to the whole world: an obligation erga omnes, the products of which include:
- the idea of universal jurisdiction for the criminal prosecution of natural persons who committed gross human rights violations;
- the establishment of international criminal courts and tribunals; and
- acceptance of the doctrine that national authorities and the international community have a responsibility to protect citizens from the most serious human rights violations – namely, genocide, crimes against humanity, and war crimes.
The argument made at the Second Circuit Court of Appeal in the Kiobel case in 2010 that corporations were not accountable because corporate liability has not attained the requisite level of universal practice, becomes untenable in the context of an obligation ergo omnes.
4. There is no convincing reason to accept that States and natural persons should be held accountable for gross violations of human rights, while denying similar accountability for business entities organized as corporations. Indeed, business corporations never truly escaped accountability. As Judge Posner observed, writing 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 ... and did so on the authority of customary international law.” The Nuremberg judgments made clear that corporations can be held accountable under international law for gross human rights violations committed by corporate agents on behalf of a corporation.
5. General principles of law recognized by civilized nations support civil liability for corporations that commit serious human rights violations. In this regard, the Supreme Court has relied repeatedly on general principles of law to support a finding of corporate liability for a violation of international law, in line with the majority of nations in the world which impose civil liability on artificial persons for the tortious conduct of their agents. The principle that corporations are subject to civil liability for the wrongful conduct of corporate agents is thus a “general principle of law recognized by civilized nations.”
In Kiobel, the Second Circuit majority completely disregarded “general principles of law” as an independent source of international legal rules “that empowers the Court to go outside the field in which States have expressed their will to their relations inter se, and to draw upon principles common to various systems of municipal law or generally agreed upon among interpreters of municipal law”. General principles of law derived directly from shared features of municipal legal orders make possible the expansion of international law along lines forged by legal thought and legal philosophy in different parts of the world and do not require an intermediate process of uniform practice of States in their relations with each other. This is in contract to customary international law, which depends on universality of the practice of States oriented towards the international plane.
6. International law has long recognized that corporations have legal personality, which entails certain rights and responsibilities. The act of incorporation creates a legal person separate from the owners and managers of the underlying enterprise. This allows for the creation of a separate capital fund to be applied for the purposes of the corporation, in that the corporation acquires the right to own its own assets, to enter into contracts in its own name, to pledge its assets to creditors, and to be held liable for its actions. There is therefore no question that corporations have obligations for their own errors in international law.
7. The fact that international law is called upon to recognize institutions of municipal law that have an important and extensive role in the international field means that international law has had to recognize the corporate entity as an institution created by States in a domain essentially within their domestic jurisdiction. International law thus recognizes that corporations have the powers, duties and liabilities assigned to them by domestic law. The claim that international law grants corporations rights without liabilities amounts to a distortion of the idea of corporate personality.
8. The absence of criminal responsibility for “juridical persons” in the ICC Statute is not a rejection of the idea as claimed by the majority in the Second Circuit Kiobel judgment but was in fact the result of “time running out” in the treaty negotiations process.
9. The caution seen in the domestic realm in the area of corporate criminal responsibility has never restricted the civil liability of corporations for the tortious conduct of their agents.
10. The application of the Alien Tort Statute to impose civil liability on corporations for international human rights violations is wholly consistent with the principle of complementarity between domestic and international legal regimes which emphasizes national legal mechanisms as important instruments for enforcing both treaties and customary international law and requires States to take the necessary steps – consistent with their domestic legal systems and with the provisions of that specific treaty – to adopt the measures necessary to give effect to the rights recognized in the particular treaty. An interpretation of the Alien Tort Statute that encompasses corporate liability for violations of international human rights law, in accordance with ordinary U.S. domestic principles of corporate liability, is indeed an essential component of the complementarity between international law and its enforcement through domestic legal mechanisms.
Judge Pillay concludes that the strategy of putting corporations beyond the rule of international law is simply not in anyone’s best interest, least of all the corporations themselves and they should not be exempt from tort liability under the Alien Tort Statute for violations of the law of nations such as torture, extra-judicial killing and crimes against humanity.