De-Globalizing Justice The Corporate Campaign to Strip Foreign Victims of Corporate-Induced Human Rights Violations of the Right to Sue in U.S. Courts
In December 1994, Jane Doe I, a young mother whose identity must remain secret for her own safety, was with her 2-month old baby in a small village in the Tenasserim region in southern Burma. While she was holding her baby near a cooking fire, Burmese soldiers came to her house. They were looking for her husband, who had been forced by the military to work on a gas pipeline project, and who had fled before his forced labor period was completed. The soldiers were also angry that Jane Doe I had not moved to the prescribed area after the forced relocation of her village.
During the visit, the soldiers kicked Jane Doe I so hard she fell into the fire with her baby in her arms. Her head hit some rocks ringing the fire, which knocked her unconscious. A bystander picked up the baby, whose head had been burned badly in the fire. When she came to, Jane Doe tried for days to get medical attention for her baby, but it was too late. The baby later died from her wounds.
Jane Doe I is now a refugee from the Burmese regime, and one of 15 plaintiffs in a landmark lawsuit against Unocal, the California-based oil company whose project allegedly brought the brutal Burmese military to Jane Doe I's village. The lawsuit claims that the soldiers who killed Jane Doe I's baby were working on behalf of Unocal's natural gas pipeline project. Unocal, the plaintiffs allege, utilized the military despite its well-known history of human rights violations, including use of forced labor. With no legitimate judicial system in Burma, the plaintiffs believe Unocal should be held liable in the United States for the predictable actions of its notorious partner.
But the law that gives Jane Doe I a chance for a modicum of justice is under attack.
The first U.S. Congress passed the Alien Tort Claims Act (ATCA) in 1789, in order to allow cases involving violations of the law of nations, or international law, to be heard in federal court.
In 1979, the first modern ATCA case, Filartiga v. Pena-Irala, was filed against a Paraguayan police inspector living in the United States. Pena-Irala was accused of torturing and killing the son of a Paraguayan dissident in Paraguay. Relatives of the victim won a $10 million judgment, which was never paid.
In 1992, Congress passed the Torture Victims Protection Act, which confirmed the legislative branch's support for using U.S. civil law, including ATCA, against perpetrators of torture and extra-judicial killing, even if those violations took place outside the United States.
Since then, ATCA has been used to bring claims of torture, murder and other internationally recognized human rights violations against government officials, including Ferdinand Marcos of the Philippines and Radovan Karadzic of Serbia.
More recently, victims have filed ATCA suits against corporations they allege have been complicit in egregious human rights abuses. The case that has proceeded the furthest is the lawsuit against Unocal, filed in 1996, with Jane Doe I as one of the plaintiffs.
In September 2002, a three-judge federal appeals court panel ruled that the case could proceed to trial, because the plaintiffs had presented evidence that Unocal knowingly provided substantial assistance to the military in its commission of forced labor, murder and rape. The court held that Unocal could be held liable under international aiding and abetting standards that date back to the Nuremberg Tribunals. The full appeals court of the Ninth Circuit recently decided to re-hear the case.
Approximately two dozen other ATCA cases alleging corporate complicity in human rights violations have been filed. None have gone to trial. Several have been thrown out of court for failure to adequately allege a violation of international law or because the courts believed that an adequate forum existed in the nation in which the abuses occurred.
From the victims' point of view, ATCA has hardly been a cakewalk to justice. Yet ATCA gives hope to victims that any U.S. corporation complicit in grave human rights abuses anywhere in the world can be held accountable in U.S. courts.
Human rights campaigners also believe that ATCA can be an incentive for corporations to ensure that their projects do not perpetuate human rights violations. That, in turn, could help improve the U.S. relationship with communities around the world, to the long-term political and economic benefit of the United States. Indeed, this concern for the U.S. standing in the world was what motivated the passage of ATCA over 200 years ago.
The corporate world sees the matter differently. At a time when corporations are still mired in ethical and legal scandals of their own making, many multinationals have set their sights on ATCA. The National Foreign Trade Council (NFTC), the U.S. Chamber of Commerce, the U.S. Council of International Business and the International Chamber of Commerce are leading the attack on ATCA.
Policy rationale is provided by the Cato Institute and others. "Abuse of 18th Century Law Threatens U.S. Economic and Security Interests," an article by Cato's Daniel Griswold, argues that "misuse of the [ATCA] constitutes bad law, bad economics and bad foreign policy" and that the "unjust wielding of the ATCA threatens to damage the U.S. economy and the often underdeveloped economies of the host countries."
The International Chamber of Commerce calls ATCA suits "an unacceptable extraterritorial extension of U.S. jurisdiction" and believes that the law might result "in a growing reluctance by U.S. companies to invest abroad" and even have "the effect of reducing investment by foreign companies in the United States."
John Howard, of the U.S. Chamber of Commerce, in an article subtitled "Is Our Litigation Run-Amok Going Global?" opens with this question: "Did you know that, under current U.S. law, your company could be sued -- by foreigners, in U.S. courts -- if you simply did business, paid taxes in and complied with the laws of a foreign country in which those foreigners alleged an atrocity occurred?"
The answer to Howard's question, according to human rights lawyers, should be an unequivocal "no."
"No court has ever held that a company can be sued for simply doing business overseas," says Rick Herz, a lawyer with EarthRights International who represents the plaintiffs in a number of ATCA cases.
"The suits that courts have allowed to proceed involve allegations that companies are either directly complicit in gross human rights violations, or that they formed joint ventures with brutal regimes, knowing that their partners will commit abuses for their benefit."
Some believe that big business is overreacting, possibly deliberately, to take advantage of a business-friendly administration and a Republican-controlled Congress. "The stuff about ATCA coming from business lately is meant to scare even the cleanest companies," says Herz. "It is not based on an honest assessment of what courts are actually doing in ATCA cases."
In Doe v. Unocal, for example, a three-judge federal appeals court panel held that the plaintiffs provided evidence that Unocal aided and abetted abuses the Burmese military committed for the benefit of Unocal's project.
In a similar ATCA case, Nigerian plaintiffs are suing ChevronTexaco for assisting the brutal Nigerian military's gross human rights abuses associated with ChevronTexaco's oil production activities in the Niger Delta. The case is based on two incidents: the shooting of peaceful protesters at ChevronTexaco's Parabe offshore platform by soldiers flown in by ChevronTexaco, and the destruction of two villages by soldiers in ChevronTexaco helicopters and boats.
Another case is being brought by the family of Ken Saro-Wiwa against Shell, for its role in facilitating the events leading to the execution of Saro-Wiwa and eight other Ogoni activists by Nigerian's military government in 1995.
While business has focused on supposed short-term harm to U.S. economic interests, these are the kinds of cases that human rights advocates believe cry out for accountability from the corporations involved, and for justice for the victims.
Although U.S. business associations dislike all corporate ATCA cases, the case that most seems to have mobilized them against the law is a class action suit by apartheid victims against over 100 U.S. firms that did business with the apartheid regime in South Africa. The case is being brought by legal maverick Ed Fagan, who won large settlements on behalf of Holocaust victims and is currently representing descendants of U.S. slaves in their search for restitution. The case seeks damages from companies which are alleged to have helped prop up the apartheid regime, through loans to South Africa and other means. According to its corporate critics, the case relies not on allegations of direct complicity such as joint action, or aiding and abetting, but on simply being in South Africa during the apartheid era. In their initial court filing, the plaintiffs counter that "were it not for the direct involvement" of the defendants, "apartheid would not have been possible." The case has generated a frenzied response from the business lobby against ATCA.
Despite the professed worry that ATCA will clog up the courts with frivolous cases and discourage foreign investment, defenders of the law say the reality is that courts have had no trouble dismissing ATCA cases against corporations, and they are exceedingly difficult to bring. For example, a case brought by indigenous communities in Indonesia against Freeport-McMoran in Louisiana, charging Freeport with facilitating human rights violations by the Indonesia military, was dismissed for bringing claims that did not meet the requirements of ATCA. A suit against Texaco for poisoning indigenous communities in Ecuador languished in court for nine years, and then was dismissed because the court found Ecuador to be a more suitable forum, rejecting the plaintiffs' argument that decisions about polluting technology had been taken at company headquarters in New York.
Only a limited number of recognized, serious human rights crimes such as torture or genocide can, in practice, serve as the basis of an ATCA suit. Rather than being a "catch-all civil claims court," as Cato Institute's Daniel Griswold contends, ATCA is a "last resort for victims in extreme cases of human rights violations," according to Rick Herz of EarthRights International.
But the U.S. business community insists, as John Howard of the U.S. Chamber of Commerce says, that in the current situation "anybody can sue anybody under the theory of vicarious liability" and that ATCA, as it is now practiced, "cannot stand."
When it comes to specific changes, business is keeping its options open. John Howard says "we don't have a specific legislative solution." He notes that a repeal of ATCA "would solve the problem" but acknowledges there are "historical reasons why that may not happen." Howard says the Chamber has "begun to make contacts" on Capitol Hill, but "there's not a lot of public awareness" about ATCA, a situation the Chamber aims to change. The Chamber has also had a number of meetings with administration officials, he says, but "it's not clear the administration has taken a position [either way]."
The big business community's contempt for ATCA seems likely to lead to a multifaceted campaign to eviscerate it. Dan O'Flaherty, vice president of the NFTC, points to three possible approaches. The first is amending ATCA to undermine its efficacy. O'Flaherty says the NFTC has begun to "raise the level of knowledge broadly in the policy community," for example, with Judiciary Committee staff, but has not proposed specific legislative language.
O'Flaherty's second approach is for a corporation to get the Supreme Court to challenge "the latest expansive interpretation of the law." The NFTC hopes that the high court will either strike down the law, or block its use against corporations for complicity in human rights violations. So far, the lower federal courts have unanimously refused to take either of these steps.
The third approach would be to obtain a generic letter from the executive branch asserting that any judicial involvement in such disputes would interfere with U.S. foreign policy-making. Thomas Niles, president of the U.S. Council for International Business, has been pursuing this path, meeting with senior officials in the Justice Department.
Petitioning the executive branch has already paid off for businesses in specific cases. In a number of suits, corporations have sought intervention by the State Department.
One such case that sent business scurrying to the government for relief was a suit against ExxonMobil for hiring Indonesian troops notorious for human rights violations to provide security for its natural gas facility in Aceh, a conflicted region on the tip of the Indonesian island of Sumatra. In that case, the State Department issued a letter stating that the lawsuit "would in fact risk a potentially serious adverse impact on significant interests of the United States, including interests related directly to the on-going struggle against international terrorism." The letter goes on to say that the litigation's "potential effects on Indonesia's economy could in turn adversely effect important United States interests."
The court in the ExxonMobil case has not yet ruled on the import of the State Department's opinion.
Another court, however, dismissed a case against Rio Tinto for war crimes associated with its mine in Papua New Guinea based upon a similar State Department letter.
NFTC's Dan O'Flaherty sees business' ATCA problem getting worse, and while the attack on ATCA may not have yet reached the rank-and-file in Congress, the NFTC has a track record of successful advocacy in such matters. The NFTC successfully challenged state laws that seek to limit states from doing business with corporations that support repressive regimes. The NFTC filed suit against the Massachusetts Burma law, a selective purchasing law that discouraged doing business with the Burmese military dictatorship. The case was ultimately heard by the U.S. Supreme Court, which overturned the Massachusetts law as an unconstitutional state infringement on federal foreign policy-making authority.
One legislative aide to a Republican representative who opposes amending ATCA warns that "if there were legislation, the leadership might have the votes to push it through."
On the other hand, there is a strong coalition ready to defend ATCA. Some Republicans, like Representative Chris Smith, R-New Jersey, have joined Democrats like George Miller, D-California, in opposing the State Department's intervention in the ExxonMobil case, arguing that the judicial system should be allowed to run its course on a case-by-case basis. A broad coalition of human rights, labor, religious and environmental organizations are planning to defend ATCA on Capitol Hill and, if necessary, to mount a public campaign.
"If ATCA had not been passed in the eighteenth century, we would have had to invent it for the twenty-first," says Rick Herz of EarthRights International. "Without ATCA, U.S. corporations can literally get away with murder--and forced labor, rape and torture--as long as it takes place overseas. In a world of transnational business, we need transnational accountability."
Kenny Bruno is campaigns coordinator for EarthRights International, which is co-counsel in Alien Tort Claims Act suits against Unocal, ChevronTexaco and Shell.
© Multinational Monitor March 2003