Justice Increasingly Distant for Victims of Corporate Abuse

Some countries’ legislatures proposed laws to shield companies of liability for foreign abuses.
By @clbtea |
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    (Photo/marissaorton via Flickr)

    (Photo/marissaorton via Flickr)

    WASHINGTON — Victims of corporate human rights abuses are finding it more difficult to access justice or hold companies accountable for such crimes, according to new research released this week.

     Two years after the international community unanimously agreed to a landmark safeguards framework known as the Guiding Principles on Business and Human Rights, scholars and rights defenders are warning that governments have either failed to implement or gone backward on a key provision of this agreement.

    Known as judicial remedy, it refers to the ability of victims of corporate abuses to access justice. This factor is considered so important to the overarching process that it’s known as the framework’s “third pillar,” following the need for both governments and corporations to respect human rights standards.

    “Since the universal endorsement of the [Guiding Principles] … there has been little focus on the implementation of the third pillar,” warns a new report from the International Corporate Accountability Roundtable (ICAR) and two European civil society coalitions, written by three prominent academics, including Olivier De Schutter, the U.N.’s special rapporteur on food security.

    “Further, some States have taken regressive steps since the adoption of the [Guiding Principles], rather than work positively to ensure that effective remedy is accessible.”

    The report looks at seven countries in North America and Europe and tracks any legal or legislative changes that have been put in place following the 2011 agreement of the Guiding Principles. These countries are considered particularly important given that most of the world’s major multinational companies are headquartered in these states, and thus the typically stronger legal systems in these countries should be able to offer some type of judicial recourse for corporate abuses.

    Yet in each case, the researchers found that governments are failing to act to strengthen these processes, while the situation in the United States and the U.K. has actually made it more difficult for victims to access justice in some important regards.

    “The global reach of transnational businesses has significantly increased over the past 30 years as a result of the liberalization of international trade and investment. Yet conditions under which these businesses may be held liable for human rights abuses have not aligned with this evolution,” the report states.

    “Moreover, States have, in general, failed to fulfill their duty to protect human rights by ensuring that victims have access to effective remedies, including judicial remedies, particularly for human rights abuses that occur abroad … at the hands of businesses.”

    Indeed, in some countries the courts and legislatures have offered up new laws to “shield” companies from liability for such foreign abuses, or generally to throw up new obstacles to victims seeking redress.

    “On a global scale, human rights victims are being blocked from judicial remedy. There is no jurisdiction, no country, where victims can bring these cases without facing immense hurdles,” Katie Shay, a legal and policy associate with ICAR, a U.S.-based network, told MintPress.

    “The United States and others need to make changes to bring their systems in line with the international legal duty to provide remedy to victims.”



    Two of the most significant ongoing obstacles to justice for victims of corporate abuses are extremely basic: prohibitive cost and an often bewildering corporate structure. According to the ICAR report, transnational litigation is “incredibly expensive,” with plaintiffs in the U.S., for instance, not entitled to legal aid.

    On the other hand, while such cases in the U.K. used to be paid for through public funding, new policies have significant cut down on this opportunity. Law firms are now required to put up funds on their own, creating an inherent disincentive to take on complex human rights cases against multinational corporations in the first place. Needless to say, deep-pocketed companies thus start out with a substantial advantage over often poor or marginalized alleged victims.

    Corporate structure, meanwhile, remains a primary impediment to any legal recourse, in part because companies often structure overseas subsidiaries specifically in order to shield themselves from liability. Add to this the often purposefully complex nature of these arrangements, and the potential for litigation becomes difficult not only for those alleging abuse but even for the lawyers contemplating taking on a case. Of course, the situation is not helped by a constantly changing legal situation, with domestic and international law and regulations often shifting the definition of who can be sued and how.

    In this regard, undoubtedly the single most damaging recent legal decision on judicial remedy came earlier this year from the U.S. Supreme Court. In a widely watched case known as Kiobel vs. Royal Dutch Petroleum, a surprise decision from the justices pushed back on the longstanding use of a unique U.S. law, the Alien Tort Claims Act, to prosecute for overseas crimes.

    The case stemmed from allegations from Nigerian plaintiffs that accused Royal Dutch Petroleum of employing thuggish security in the oil-rich Niger Delta during the 1980s, including violently crushing opposition to oil development. Although Royal Dutch Petroleum is listed on U.S. stock exchanges (as the Shell Oil Company) and has a significant presence in this country, the justices found that its connection to the United States was insufficient to allow the plaintiffs to sue it under U.S. law.

    The result was a decision that makes the Alien Tort Claims Act far less available for victims of human rights abusers to take forward cases against corporations, especially when the harm they’ve suffered has taken place abroad.

    “Kiobel definitely provided new limitations, but we still don’t know extent of those limitations,” Marco Simons, legal director at EarthRights International, a watchdog group, told MintPress.

    “Since Kiobel there have been a half-dozen decisions from the district courts but only one significant decision from the court of appeals, though several more are expected in the next six to nine months. From our perspective, the one from the Second Circuit is not a good decision, as it takes a very expansive and simplistic view that Kiobel says you simply can’t bring any extraterritorial claims in the United States – that’s just not what the Supreme Court said.”

    Simons co-authored a related analysis released in September.

    Several cases have also been dismissed due to the Kiobel precedent that many experts believe wouldn’t otherwise have been. A case was dismissed earlier this year, for instance, against a Virginia-based defense contractor called CACI International, which had been sued by former detainees who alleged that CACI guards abused them while in detention at Iraq’s Abu Ghraib prison. The case was appealed in mid-November on the argument that the court had incorrectly understood the Kiobel decision.

    It now appears likely that lawyers in the U.S. system will seek to take more such extrajudicial cases forward through the state rather than federal courts system. There are trade-offs in such a change, however, including the fact that most state systems would impose a two or three-year statute of limitations on allegations, rather than the decade or nonexistent limits in place under the federal system. For victims who may not even know that they have potential rights to redress under a foreign system, two or three years could prove far too short.

    “The first question people should ask when looking at these cases isn’t why they’re in U.S. court, but rather what is the best forum for victims to obtain justice?” Simons said.

    “These are serious abuses of the environment, labor and human rights, and simply taking a parochial view that such cases don’t belong in the U.S. system ignores the realities of the global economic system these days. The fact is, in virtually all of these cases there is essentially no other place to effectively seek a remedy.”


    Special (individual) prosecutions

    In fact, there does remain a notable opportunity for the prosecution of extraterritorial crimes under the federal system, but thus far the U.S. government has failed to take full advantage of this option.

    In 2010, the Justice Department set up a new office, the Human Rights and Special Prosecutions Section, tasked specifically with pursuing justice for a broad spectrum of human rights violations, including war crimes, genocide, torture and the use of child soldiers. These and others crimes under its mandate typically take place abroad.

    Yet thus far, the Special Prosecutions Section has focused the vast majority of its firepower on individuals, rather than corporate entities, accused of wrongdoing. (The DOJ failed to respond to repeated requests for comment or clarification on this record.)

    “Although the Special Prosecutions Section is responsible for bringing criminal cases against human rights abusers, we have not seen prosecutions of corporations from this section,” ICAR’s Shay said. “So one clear way of offering aid to victims would be to ensure more robust prosecution from this section.”

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