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Congress Pressured on Multinational Corporate Accountability

WASHINGTON, Mar 8 2014 (IPS) - Advocacy and accountability groups are urging the U.S. Congress to enact new mechanisms that would allow it to hold multinational corporations accountable for rights infringements abroad.

At a congressional briefing on Thursday, legal experts and advocates from Amnesty International, the International Corporate Accountability Roundtable (ICAR) and Earthrights International proposed measures Congress could take to ameliorate corporate abuses abroad.

“We understand that corporate lobbying is necessary, but at the same time there should be more transparency in that process in order to ensure justice.” -- Seema Joshi

“International law itself requires a country to provide a remedy to individuals who are harmed by citizens,” ICAR’s Gwynne Skinner, an associate professor of law at Willamette University College of Law, told IPS.

“So we’re failing if we’re not providing any remedies to victims who are hurt by our citizens and of course corporations are citizens now, right?” (Skinner was referring to a 2010 Supreme Court decision that allowed corporations to make unlimited political donations on the grounds that they are eligible for the same constitutional rights as individuals.)

Earthrights International and other legal advocacy groups have partnered to create a report card indexing the track record of each U.S. lawmaker on corporate accountability. Marco Simons, Earthrights International’s legal director, noted Congress’s lacklustre record on the issue.

“Unfortunately, so far the results have not been very pretty,” Simons said. “The average score in the Senate was 26.6 percent and 44.2 percent in the House. Twelve representatives and 45 senators received a score of zero.”

Representatives from Amnesty International called for increased transparency in corporate lobbying efforts.

“We are looking at a proposal to deftly deal with the corporate-government relationship,” said Seema Joshi, Amnesty International’s head of business and human rights. “We understand that corporate lobbying is necessary, but at the same time there should be more transparency in that process in order to ensure justice.”


In particular, advocates are calling for reforms to the Alien Tort Statute (ATS), a unique law that allows foreign nationals to sue human rights abusers in U.S. courts. Last year, the Supreme Court significantly limited the scope of the statute against multinational corporations in a case known as Kiobel v. Royal Dutch Petroleum.

“Shell [a subsidiary of Royal Dutch Petroleum] and other multinational corporations are free to do business in the United States, and free to commit human rights abuses in other countries around the world, and not have any fear that the victims of those abuses would be able to gain access to a U.S. federal court to obtain justice for those abuses,” Simons said.

“This essentially contravenes the fundamental purpose of the Alien Tort Statute – to not provide protection in the United States for those who violate international law.”

In light of the Kiobel ruling, Earthrights and ICAR are calling on Congress to implement legislation that would explicitly allow victims to sue multinational corporations that operate in the United States for human rights abuses abroad, regardless of where in the world they’re based.

On Thursday, the panellists noted the difficulty in pursuing ATS cases against corporations irrespective of the Kiobel ruling, which often prompts plaintiffs to sue in state courts.

In Doe v. Unocal, another ATS case involving corporate complicity in the abuses of a military regime, Earthrights represented a client from Myanmar in the California court system after the case was thrown out of federal courts.

“Unocal and its partners contracted with the Burmese military regime to provide security and other services for their pipeline project,” Simons told IPS. “In the course of providing these services and, unfortunately very predictably, the Burmese soldiers conducted a series of human rights abuses, including widespread forced labour, torture, and killings.”

Another case, Al Shimari v. CACI, dealt with a private military contractor’s alleged use of torture in the interrogation of an Iraqi prisoner. While the federal courts dismissed that case, an appeal is pending and a court in Virginia will hear oral arguments on Mar. 18.

Limited liability

In addition to ATS reform, ICAR’s Skinner proposed altering limited liability rules so parent corporations could be held liable for human rights abuses of smaller companies that they own.

“A parent company can have a wholly owned subsidiary – as shareholders, they own shares of that corporation – and then, of course, have no liability whatsoever except for the investment that they’ve made in that corporation,” Skinner said.

“Today what we see is this becoming a tool for large, transnational businesses to outsource the risk yet get all of the profit. So many very complex corporate organisations exist so that corporations have minimal risk but get these benefits.”

While some have argued that victims of human rights abuses should simply litigate in their own country, the Kiobel and Unocal cases indicate that many of the countries in question directly perpetrate the documented abuses themselves and have a weaker, more corrupt judicial system.

Skinner points to the relative strength of the U.S. judicial system as a reason why corporations are better off litigating in the United States rather than in developing countries.

She cites the lawsuit brought by Ecuadorians against Chevron, the U.S. oil company, for polluting the Lago Agrio region. This week, the judge ruled in favour of Chevron because of allegedly fraudulent evidence used by the prosecution.

“This kind of proves the point that corporations should actually want to be in front of United States courts,” Skinner told IPS.

“If you’re in front of a court in a country that’s not a developed country, you don’t know what you’re going to get. At least in the United States you’re going to get … a pretty fair trial. So isn’t it in a business’s interest to be in front of a U.S. court?”

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