Impunity Forever: US Supreme Court Shields Multinationals from Liability for Human Rights Violations

On April 17, the United States Supreme Court made a critical decision with the result that in the future it will be impossible to hold multinational companies responsible for their crimes.

On that day, the chief judges in Washington, D.C. delivered a verdict on the question of whether the Alien Tort Statute is applicable to companies or only to individuals. The ATS was passed by the United States Congress in 1789 and remains in force, offering foreigners the right to turn to U.S. courts when an international law is violated. The statute was necessary at the time it was passed since cases such as piracy could not be prosecuted in the criminals’ country of origin due to those “failed states” protecting them: the Bahamas, Cuba, the Cayman Islands and so on. In the centuries that followed, international agreements were drawn up, and the ATS remained forgotten until it was rediscovered by the human rights movement and used against South American torturers who, owing to amnesty laws, went unpunished in their countries of origin. Several sentences were levied against torturers, but such prosecutions invoking the ATS are not the subject of the present debate.

In April, the Supreme Court debated whether the ATS applies to multinational companies with foreign headquarters, given that American companies — at least for now — can always be prosecuted in U.S. courts. Although in reality this entails a competitive disadvantage for U.S. industry, class solidarity won out.

According to the opinion of the majority of the nine Supreme Court judges, the ATS should not apply to multinationals, so as not to hinder international trade. This is to prevent multimillion dollar claims from being heard by a judge in a lower court against a foreign company that should be prosecuted in the country of origin, either where the company is based or where the events took place. In such a situation, a judge could take on executive rights that are not his to assume and thus create a conflict between two governments. The Supreme Court judges argue that the mechanism of a trial should not be used to conduct foreign policy. Moreover, the ATS was drawn up more than 200 years ago to combat piracy. According to the judges, piracy takes place at sea, in an international space and in a legal vacuum, and trying pirates will not give rise to bilateral disputes, as there will be no interference with the sovereign rights of another state (“and therefore carries less direct foreign policy consequences”).

In the specific case, a few claimants from Nigeria — including the widowed Kiobel — have brought a lawsuit against the Royal Dutch Shell Petroleum Company for its participation in death and torture squads in the African country. The New York Court of Appeals refused to open proceedings, which led the plaintiffs to appeal to the Supreme Court. At the Supreme Court, a veritable “amicus battle” took place in which human rights groups, ecologists, lawyers’ guilds and universities from around the world wrote letters of support with their views — called “amicus curiae” — in which they identified the need to bring this type of lawsuit to the U.S. courts. The courts of the countries where these crimes took place were not and are not in a position to take on such lawsuits; their national governments are blackmailed or bought. In an amicus brief filed in February 2012, the German federal government threatened the United States with a deterioration in diplomatic relations should U.S. law continue to cover foreign companies within its jurisdiction: “The Federal Republic of Germany believes that overbroad exercises of jurisdiction are contrary to international law and create a substantial risk of jurisdictional conflicts with other countries.” Thus, Angela Merkel once again made it clear that human rights are of negligible importance versus the pursuit of maximal corporate profits.

Like the German government, the Cato Institute, the U.S. Chamber of Commerce, the National Foreign Trade Council and a number of banks and mining companies also exerted pressure through amicus briefs before the court.

A few Supreme Court judges — the minority — held a different opinion. In the ruling, they maintain that 18th century piracy did not take place in a legal vacuum, since the pirates had sailed under the flag of a state; the trial of these foreign pirates at the time when the law was passed also entailed diplomatic conflict with other governments that protected the pirates. But the prosecution of these crimes was, then as it is today, deemed more important than avoiding diplomatic conflict with states that do not put human rights first. “Who are today’s pirates?” asked the judges of this minority.

For the international human rights movement, the Supreme Court’s ruling comes as a hard blow, since in recent years U.S. courts have been victims’ last hope of seeing human rights violations investigated and tried, at least in civil court. Today, it is not known how these trials will continue or whether they will now come to an end. The April 17 ruling leaves room for interpretation on some points. For instance, it seems that the ruling on the Kiobel case left a back door open. It reads on page four that federal courts may recognize private claims under federal common law.

Washington, D.C.-based attorney Terry Collingsworth will use these words to proceed with the lawsuit in the Mercedes-Benz Argentina case, in which he represents the survivors and relatives of Mercedes-Benz Argentina. During the military dictatorship, 14 workers disappeared at Mercedes-Benz Argentina; three survived torture. In San Francisco in 2004, Collingsworth brought a civil lawsuit against Daimler AG, invoking the ATS, the Convention Against Torture and California state law. Finally, in November 2011, the Court of Appeals in Northern California confirmed that it was within its geographical jurisdiction. If a company makes large profits of this type in California, accordingly it must be answerable to the state’s courts. And the judges of California become interested in their own laws (“federal law”) if the company in question has denounced its workers as terrorists to a dictatorship and if it has collaborated in the abduction of infants from torture camps. In 2011, Daimler appealed against said ruling and requested an “en banc” hearing. Of the 12 judges, only one agreed to re-hear the company’s case. Their appeal was rejected in no uncertain terms.

Whether the Court of Appeals in California lets its geographical jurisdiction be rescinded by the Supreme Court’s latest ruling remains to be seen. It won’t be easy. But, just in case, the Supreme Court in Washington announced Monday of this week that, at the request of Daimler AG, it will investigate the case of the disappeared Argentinian labor representatives in a separate trial. In October, the first hearing will take place. The press will be present, and the case will receive worldwide attention.

In the Kiobel/Nigeria lawsuit, the Argentinian government submitted its own amicus brief in order to highlight the importance, in terms of human rights, of the case being sent to trial. Since the dictatorships in Latin America, the availability of legal proceedings in the United States has been very useful. Kirchner’s government thus clearly assumed that it would be difficult to prosecute the British oil company, Royal Dutch Shell, for its crimes in Nigeria. Now, the Argentinian government has another opportunity to write an amicus brief — this time for the trial of the German manufacturer Daimler AG — whose complicity with the Argentinian military junta still has not been condemned by an Argentinian court, despite a series of complaints pending since 2002.

But recently, Daimler, together with Cristina Kirchner, has announced the launch of a new investment in González Catán — in Buenos Aires province — for a total of 800 million pesos. The families of the disappeared Mercedes-Benz workers wish to ask the president why the promises made by Néstor Kirchner have not been upheld. In 2005, he received the relatives and announced an extensive investigation. Cristina has refused to hold a conversation with the relatives.