In short, because customary international law imposes individual liability for a limited number of international crimes — including war crimes, crimes against humanity (such as genocide), and torture — we have held that the ATS provides jurisdiction over claims in tort against individuals who are alleged to have committed such crimes. As we explain in detail below, however, customary international law has steadfastly rejected the notion of corporate liability for international crimes, and no international tribunal has ever held a corporation liable for a violation of the law of nations. (Kiobel v. Royal Dutch Petroleum CO., 621 F.3d 111, 120 (2010))
In Section II, the SRSG explicitly recognized that corporations may be held directly liable for human rights violations that constitute international crimes. After reviewing the law and state practice, the SRSG found that there was “observable evidence” of “emerging corporate responsibility for international crimes.” Id. ¶ 33. The SRSG examined developments in the area of corporate responsibility for international crimes and found that the interaction between “the extension of responsibility for international crimes to corporations under domestic law” and “the expansion and refinement of individual responsibility by the international ad hoc criminal tribunals and the ICC Statute” has created “an expanding web of potential corporate liability for international crimes.” Id. ¶ 22. He refuted the argument that the lack of a current international body for adjudicating corporate responsibility for international crimes points to the fact that such responsibility does not exist, stating that “just as the absence of an international accountability mechanism did not preclude individual responsibility for international crimes in the past, it does not preclude the emergence of corporate responsibility today.” Id. ¶ 21.(Ruggie/Alston Brief, p. 7).
Yet, it is in the "wild lands" of international law--within that hazy area of norms, exhortations, declarations and habit, some of which having risen to status recognized as the customary law of states (but by no means all of it)--that Professors Ruggie and Alston's argument is better centered. Professors Ruggie and Alston point to areas of changes recognized by some states in customary international law, practice and the opinions of many, but by no means a substantial portion of expert opinion. (Ruggie/Alston Brief at p. 9). But the great difficulty here is the focus on internaitonalization through domestication. Thus, for example, Professor Ruggie was right to conclude that
“expanding web of potential corporate liability for international crimes” and the fact that “[t]he number of domestic jurisdictions in which charges for international crimes can be brought against corporations is increasing, and companies may also incur non-criminal liability for complicity in human rights abuses.” (Ruggie/Alston Brief, p. 9))
But this provides U.S. litigants little comfort in Kiobel and under emerging ATS standards precisley because the United States is not one of those jurisdictions that has domesticated corporate internaitonal liability, nor might it be one that has conceeded the expansion of customary international law in the wway described by Professored Ruggie and Alston. The United States has extended liability for international crimes under its domestic jurisdiction but only for those actors subject to international criminal liability. While corporations may be subject to liability as individuals in the United States as persons under domestic law, the domestic law character of corporations might not extend to define the character of corporations for liability under international law. The division between domestic and international law remains substantial in the United States. As a consequence, there is no-inconsistency in adhering to an internal rule that treats corporations as individuals for purposes of the application of domestic law, and simultaneously to apply international law solely by reference to the character of corporations under that distinct system, one that does not have its origins in and does not derive the logic of its development from, the same sources as U.S. domestic law. This is not to suggest that this distinction is the better approach in the United States; it is, however to suggest that this approach is plausible.
And, indeed, in any case, with respect to international treaty and customary law, the issue of corporate liability remains cloudy, through the trajectory of its development might be reasonably divined. It is clear that Professor's Ruggie and Alston are correct--there appears to be a movement toward the softening of the divide in international law between states and everyone else. That has long bee conceded. it is also true that there is a tendency to treat corporations as substantially equivalent to natural persons, at least for the application of domestic law in the United States (Citizens United, supra), though this notion is rejected explicitly most every place else, and has not been accepted definitely in international law. But it is as well true that there is no consensus on the status of the corporation under international law beyond treaty. If the Supreme Court applies the Sosa standard, the ambuguity may be fatal to an argument in favor of liability under ATS. Thus the logic of Professors Ruggie and Alston's argument emerges--even if their point is rejected precisely because there is ambiguity and all they can offer is potential, that acknowledgement of potentiality could have a profound effect on the further development of international law, without impediment from a misinterpretation of trends beyond the United States by American justices in the opinion of an important national court.
It may be possible, of course, to build extraterritoriality on a new base, and Professor Ruggie has gone a long way in this direction: that while a state may be forbidden to apply its own laws outside its borders, all states are obligated to apply their respective obligations under international law (whether or not domesticated within their national territories) to all individuals or entities under their control. That control issue might include persons and entities operating within the national territory of a state or persons or entities who owe obligations to such states based on a connection (citizenship, chartering or activity). As such, extraterritoriality would be transformed from an instrument of the projection of national power to impose the domestic legal order of a state abroad to a reciprocal policy to extend the application of international obligations irrespective of national borders. Sadly, this idea requires substantially more development.
And this notion of the internationalization of extraterritoriality, that is its conversion to an instrument of international law, it is tied to another also worth developing: the transnational scope of private regulatory power grounded in international law and norms (the subject, indeed, of the corporate responsibility to respect human rights in the Guiding Principles). The current scope of the extraterritoriality arguments vest too much responsibility on states and limit the scope of intervention across borders to state actors and their related entities. It does little to recognize the reality of supra-territoriality asserted by non-state actors. It may be more important to consider the effectiveness of governance regimes managed by international economic actors to resolve issues of human rights abuses than it is to use the cover of civilized state intervention to the same effect. Backer, Larry Catá, Economic Globalization and the Rise of Efficient Systems of Global Private Lawmaking: Wal-Mart as Global Legislator. University of Connecticut Law Review, Vol. 39, No. 4, 2007. Indeed, the former approach is more consistent with the logic of globalization than the more ancient later approach suggested in the Ruggie/Alston Brief.