Regulating multi-national corporations through state-based laws: problems with enforcing human rights torts under the United States Alien Tort Statute.

AuthorHarpur, Paul

Abstract

Recent UN reports have called for States to take responsibility for the extraterritorial conduct of non-state actors such as corporations. This article considers how States can respond to this obligation by using State-based domestic legislation to regulate extraterritorial conduct. The USA has a 400 year old statute which regulates its citizens extraterritorial conduct. The Alien Torts Statute was developed through the end of the twentieth century to render USA corporations liable for torts committed in a foreign jurisdiction which caused damage to aliens. The USA has however recently reduced the scope of this statute due to the problems caused by domestic courts passing judgment upon cases which concern international affairs.

Introduction

Human rights law arguably imposes a duty on States to take reasonable steps to prevent domestic corporations from perpetrating human rights violations in foreign jurisdictions. This duty has been supported by the United Nations Committee on Economic, Social and Cultural Rights (1) and most recently by UN Representative John Ruggie where he stated:

The state duty to protect against non-state abuses is part of the international human rights regime's very foundation. The duty requires states to play a key role in regulating and adjudicating abuse by business enterprises or risk breaching their international obligations. (2) As Clapham and Jerbi explain:

The boundaries of what is expected from business, and what a State is obliged to do under international law, cannot be neatly drawn. It must be stressed, however, that governments do still possess wide powers over-and primary responsibility for-the well-being of their citizens and for the protection of human rights. (3) Paust has observed that how this right relates to the law of State responsibility remains an unsettled issue. (4) In order to regulate the conduct of multi-nationals some authors have called for States to impose sanctions upon corporations which engage in human rights abuses in foreign jurisdictions. (5) There are a large number of issues concerning the operation of such exterritorial regulation. However, this article focuses specifically on the potential problems arising from the operation of the US Alien Tort Statute. The statute is the oldest operative legislative scheme which imposes legal duties and sanctions upon individuals for torts perpetrated in a foreign jurisdiction. The judgments associated with this statute provide a guide to the problems that other extraterritorial regulations may encounter, but also expose the limitations in domestic statutory schemes and the need for international law to develop further in the area.

  1. Development of the Alien Tort Statute

    The so called 'Alien Tort Statute' was introduced as part of the Judiciary Act of 1789 by the first Federal Congress. This federal cause of action provides that:

    the district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States. (6) The practical effect of the Alien Tort Statute is that it provides non-US citizens with a cause of action against US citizens where a corporation has committed a breach of the law of nations and where the court has general jurisdiction. (7) The plaintiff has the burden of proof to establish both a breach of the law of nations and jurisdiction. (8)

    Even though the Alien Tort Statute enables plaintiffs to sue for a breach of the law of nations or treaties ratified by the US, federal courts have held that the Alien Tort Statute does not create a general right of US courts to pass judgment on defendants worldwide. For a court to entertain jurisdiction, it is essential for the defendant to be sufficiently connected with the US. (9) For example, in Matsuda v Wada a District Court held that it did not have diversity jurisdiction over a suit involving two Japanese citizens, even though one was a permanent resident alien. (10) In Unkel Ltd v Tay a court dismissed a suit between a Hong Kong corporation and an Indonesian citizen, even though the Indonesian citizen was regarded as a permanent resident alien. (11) In Gall v Topcall a Dutch citizen, who was residing in Pennsylvania, had an action against a foreign company, which was based in Australia, dismissed for lack of jurisdiction. (12)

  2. Who May be Sued under the Alien Tort Statute?

    The scope of who may be sued under the Alien Tort Statute was expanded by the US Court of Appeals for the Second Circuit in Kadic v Karadzic. (13) In Kadic, Croat and Muslim citizens of Bosnia-Herzegovina alleged that they were victims and were representing victims of atrocities including rape, torture, and summary executions perpetrated in Bosnia-Herzegovina by Bosnian-Serb governmental forces. The plaintiffs filed against Karadzic, alleging that, as he was the President of the Bosnian-Serb faction which committed the atrocities, he was liable. The Court held:

    We do not agree that the law of nations, as understood in the modern era, confines its reach to state action. Instead, we hold that certain forms of conduct violate the law of nations whether undertaken by those acting under the auspices of a state or only as private individuals. (14) To determine what constituted the law of nations, the court did not just refer to treaties which were ratified by the US but held that 'evolving standards of international law govern who is within the [Alien Tort Statute's] jurisdictional grant'. (15) Not surprisingly, the Court found that murder, genocide, torture, and rape were contrary to international norms, as espoused by various conventions. (16) Kadic established a precedent which enabled private corporations to be held liable for their involvement in human rights violations in foreign countries. (17) In 1993, the American Unocal Corporation and French company Total entered a joint venture with the Burmese Government's State Law and Order Restoration Council (SLORC) to develop the Yadana gas pipeline in Myanmar. Unocal Corporation and Total agreed that the SLORC would be responsible for clearing land and supplying labour. In 1997 it was alleged that the SLORC had engaged in forced labour, crimes against humanity, torture, violence against women, arbitrary arrest and detention, cruel, inhuman, or degrading treatment and wrongful death. Suit was filed against Unocal Corporation for its financial association with these crimes, even though the actionable conduct was perpetrated by the SLORC.

    In John Doe I v Unocal (2002) it was found that there was sufficient evidence against Unocal Corporation to try them for aiding and abetting SLORC's conduct. (18) There was evidence of rape, murder and forced labour. One woman gave evidence that her husband attempted to escape from the forced labour and was shot at by the Burmese military. In retaliation, she and her child were thrown into a fire. Her child died from these wounds. The US Court of Appeal for the Ninth Circuit sent the case back for trial. In reaching its judgment, the court considered international treaties and customary laws, including those to which the US government had not ratified or introduced legislation to support. The court held:

    Where, as in the present case, only jus cogens violations are alleged-ie, violations of norms of international law that are binding on nations even if they do not agree to them .... it may, however, be preferable to apply international law rather than the law of any particular state, such as the state where the underlying events occurred or the forum state. The reason is that, by definition, the law of any particular state is either identical to the jus cogens norms of international law, or it is invalid. (19) Following this decision, Unocal Corporation settled. (20) The application of jus cogens norms in Doe I v Unocal adopted an approach to norms which is considerably wider than that which is adopted under international law. Article 26 of the Vienna Convention on the Law of Treaties requires States to perform treaty obligations in good faith. (21) Article 53provides that jus cogens norms are superior to other international laws and therefore States' reservations do not limit the impact of jus cogens norms against that State. (22) This does not mean that a breach of a jus cogens norm by a State within its domestic jurisdiction can be actionable in a particular forum. In Democratic Republic of the Congo v Rwanda, the parties in the case accepted that the Genocide Convention stated laws of the jus cogens. (23) However, the majority held that while genocide enjoyed peremptory status, the International Court of Justice did not have jurisdiction to consider an action against a State which had not agreed to be subject to the court's jurisdiction. In effect, this meant that a breach of a jus cogens norm by itself could not support an action against Rwanda, in the absence of consent to jurisdiction. The court in John Doe I v Unocal Corp was able to go further by holding that as genocide constituted a breach of the law of nations, this created an actionable right under the Alien Tort Act for which US district courts would have jurisdiction under domestic US law.

  3. The Law of Nations

    Since the 1980s, US federal courts have expanded the range of torts which are actionable under the Alien Tort Statute because they are found to be breaches of the 'law of nations'. (24) In almost...

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