Was Kiobel Detrimental to Corporate Social Responsibility? Applying Lessons Learnt From American Exceptionalism

• Author: Benjamin Thompson
• Position: Utrecht University, the Netherlands
• Pages: 82-98

Benjamin Thompson, ‘Was

Kiobel

Detrimental to Corporate Social

Responsibility? Applying Lessons Learnt From American Exceptionalism’

(2014) 30(78) Ut recht Journal of International and European Law 82, DOI:

http://dx.doi.org/10.5334/ujiel.ce

I. Introduction

The rights enjoyed by transnational corporations have increased manifold over the past two dec-

ades, as a result of multilateral trade agreements, bilateral investment pacts, and domestic liber-

alization… Along with expanded rights, however, have come demands… that corporations accept

commensurate obligations.1

Until the mid-1970s international human rights law was not seen as imposing specific human rights obliga-

tions on corporations.2 Instead the rationale was that States’ obligations under human rights law contained

the obligation to ensure all natural or legal actors, including corporations, operating within their respective

territories respected human rights.3 The regulatory response to growing multinational activity has been

largely ineffective or even absent.4 Instead the focus has been on soft initiatives of business codes of con-

1 John Ruggie, ‘American Exceptionalism, Exemptionalism, and Global Governance’ (2004) KSG Working Paper No. RWP04-006 372.

2 Surya Deva, Regulating Corporate Human Rights Violations: Humanizing Business (Routledge 2012) 6-7 citing August Reinisch, ‘The

Changing International Framework for Dealing with Non-State Actors’ in Philip Alston (ed), Non-State Actors and Human Rights

(OUP 2005) 79-82.

3 ibid.

4 Michael Koebele, Corporate Responsibility under the Alien Tort Statute. (MNP 2009) 45. See also Deva (n 2) 8.

The recent decision in the US Supreme Court

Kiobel

case applied the presumption against extra-

territoriality towards the Alien Tort Statute, decreasing the potential scope of tort actions

that can be made against corporations for severe human rights violations. In light of the grow-

ing inuence of multinational corporations and the lack of any international law regime to

regulate corporate wrongdoing, this decision might be seen as a blow against one of the few

potential avenues for justice for those victims of corporate human rights violations.

The Alien Tort Statute is not a jurisdictional statute that allows for claims under interna-

tional law but is rather a uniquely American cause of action unconnected to international law.

The question remains whether an extension of American law to provide remedies for severe

corporate human rights abuses can be justied in the absence of any such remedies existent in

international law.

This article will attempt to answer this question applying criteria developed by leading schol-

ars in response to American exceptionalism. It will argue that the

Kiobel

decision, rather than

being detrimental to holding corporations accountable, actually addresses many of the negative

aspects of extraterritorial litigation whilst preserving some possibility of remedy for victims of

severe human rights violations by corporations.

RESEARCH ARTICLE

Was

Kiobel

Detrimental to Corporate Social

Responsibility? Applying Lessons Learnt From

American Exceptionalism

Benjamin Thompson*

* Utrecht University, the Netherlands

ben@small-voices.net

Keywords: human rights; corporate social responsibility; alien tort statute; kiobel; extra

territorial litigation

UTRECHT JOURNAL OF

INTERNATIONAL AND EUROPEAN LAW

Thompson 83

duct.5 Many authors believe that the Alien Tort Statute serves as a means to hold corporations accountable

in the absence of international law.6

Historically, States have been unwilling to regulate the behaviour of multinational corporations and

their local subsidiaries due to the fear that this might impair their competitiveness to attract much

needed foreign investment.7 Attempts to enact an extraterritorial law to regulate the overseas activities

of corporations registered in their respective jurisdictions have failed in the US8 as well as elsewhere.9

The ATS has been the most fertile ground for instituting legal actions against companies for human

rights violations.10

The decision in the recent Kiobel case11 applied the presumption against extraterritoriality to the ATS.

Whilst this decision has been discussed at length in academia, this article will attempt to evaluate the deci-

sion using the criteria of leading scholars in their discussions regarding American exceptionalism. This arti-

cle will first detail the development of the ATS. The second part will explain why litigation under the ATS

is better seen as the unilateral enforcement of American law abroad than as a jurisdictional statute for

international law claims. The third part will then look to discussions of American exceptionalism in the

context of human rights, identifying the criteria developed by leading scholars and using them to evaluate

ATS litigation.

II. ATS Litigation and Corporations

Litigation under the ATS has provided an unparalleled route for victims of human rights abuse to seek

justice against corporations. The ATS was first enacted as part of the Judiciary Act of 178912 to deal with

mistreatment of foreign ambassadors and piracy.13 It states: ‘The district courts shall have jurisdiction of any

civil action by any alien for a tort only, committed in violation of the law of nations or a treaty of the United

States.’14 It lay dormant for 170 years until the 1980 Filartiga v Pena-Irala15 decision introduced it as a vehicle

for non-nationals to hold human rights abusers civilly liable in US.16 This precedent was largely followed by

other courts over claims including genocide, war crimes, summary execution, forced disappearance, slavery

and cruel, inhuman, and degrading treatment.17 Whilst the Filartiga case had concerned alleged torture by

a State official, the court held that the ATS’s scope also extended to private actors in the Kadic v Karadzic

case.18 Since the mid-1990s, actions have been brought against corporations under the ATS for their alleged

involvement in human rights violations19 and, since the Sosa case20 in 2004, around half of ATS actions have

been brought against multinational corporations.21

International law regulates the conduct of States and consequently, in the majority of instances, there is a

requirement for private actors to have co-operated with States in order to give rise to liability under the ATS:

the State action requirement.22 However, in the Kadic case it was ruled that the law of nations was not lim-

ited to State action but could also extend to conduct of those acting as private individuals.23 Deva identifies

the norms that do not require State action as jus cogens norms.24 Professor Koebele reasons there are areas of

public international law which extend to non-State actors without need for State action, such as war crimes

5 ibid.

6 ibid.

7 Deva (n 2) 5 citing Andrew Clapham, Human Rights Obligations of Non-State Actors (OUP 2006) 238.

8 Corporate Code of Conduct Bill 2000 (US), HR 4596, 106th Cong. (2nd Sess. 2000).

9 Deva (n 2) 51.

10 ibid 60.

11 Kiobel v Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013).

12 Koebele (n 4) 3.

13 Kiobel (n 11).

14 Alien Action for Tort, 28 USC 1350 (2004).

15 Filartiga v Pena-Irala 630 F.2d 876 (2d Cir. 1980).

16 Virginia M Gomez, ‘The Sosa Standard: What Does It Mean for Future ATS Litigation?’ (2006) Pepperdine Law Review 33:2 469, 470.

17 Koebele, (n 4) 4.

18 ibid 6.

19 Tyler Giannini and Susan Farbstein, ‘Corporate Accountability in Conflict Zones: How Kiobel Undermines the Nuremberg Legacy

and Modern Human Rights.’ Harvard International Law Journal 52 (2010): 119, 120 note 5.

20 Jose Francisco Sosa v Humberto Alvarez-Machain 124 S. Ct 2739.

21 Koebele (n 4) 6.

22 ibid 212.

23 Kadic v Karadzic 70 F.3d 232, 239.

24 Deva (n 2) 69 citing Kadic (n 23) 239 and Doe v Unocal Corp 963 F Supp. 880 (CD Cal., 1997) even though these norms are not

expressly referred to in the cases as jus cogens.