Saturday, July 14, 2012

John Ruggie and Philip Alston: Amici on Kiobel v. Royal Dutch Petroleum--On Corporate Liability Under International Law, Extraterritoriality and Culpability for Aiding and Abetting

Kiobel v. Royal Dutch Petroleum et al., 621 F.3d 11 (2d Cir. Sept. 17, 2010), cert. granted (U.S. Oct. 17, 2011) (No. 10-1491),), which will be re-argued before the U.S. Supreme Court in late 2012,  has proven to be a case potentially rich in consequences for corporate and international law.  From out of the efforts of the powerless in Nigeria seeking some redress for alleged wrongs committed by state and private organizations and individuals, it has become an important site for the development of notions of international and corporate law in the United States with far ranging repercussions abroad. 

 (From  Peter Weiss, The question before the US supreme court in Kiobel v Shell, The Guardian, Feb. 28, 2012 ("Charles Wiwa, in Chicago, 2012. Wiwa fled Nigeria in 1996 following a crackdown on protests against Shell's oil operations in the Niger Delta. He and others claim Shell was complicit in Nigerian government actions that included fatal shootings, rapes, beatings and arrests in the Ongoni region. Photograph: Charles Rex Arbogast/AP"))

Re-argument has re-focused the case on an additional issue: "[w]hether and under what circumstances the Alien Tort Statute,"  28 U.S.C. §1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.” (Kiobel v. Royal Dutch Petroleum Co., et al., 621 F.3d 11, order for reargument (U.S. Mar. 5, 2012). Yet the core issues also remain. For international law, the issue revolves around the extent of liability for human rights abuses under international law that might be cognizable within ATS under the standard articulated in Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) and its progeny. For corporate law, the questions around around the consequences of corporate person hood in the wake of Citizens United v. Federal Election Commission, 558 U.S. 50 (2010) and its implications for liability under international law.  It is no surprise, then, that "Kiobel has attracted a great deal of interest in the legal community. Over 20 friend-of-the-court briefs have been filed on the side of the plaintiffs and almost that many on the other side." (From Peter Weiss, The question before the US supreme court in Kiobel v Shell, The Guardian, Feb. 28, 2012).  

This post considers one of them, the amici brief filed by John Ruggie and Philip Alston on the question of corporate liability under international law for human rights violations. Kiobel v. Royal Dutch Petroleum Co, No. 10-1491 Brief Amici Curiae Of Former Un Special Representative For Business And Human Rights, Professor John Ruggie; Professor Philip Alston; And The Global Justice Clinic At Nyu School Of Law In Support Of Neither Party dated June 12, 2012 (the "Ruggie/Alston Brief").

The United States has, over the last generation, served as the great focal point for efforts to domesticate international law norms, rules and principles.  For those who still believe in the primacy of the state system, and the legal character of international law somehow tied to the domestic legal orders of states from which they derive, the courts of the United States has proven to be more receptive than most. The domestic law basis for this activity has been the Alien Tort Statute (28 U.S.C.§ 1350 (ATS or also sometimes referenced as the Alien Tort Claims Act (ATCA)).  Enacted in the late 18th century and dormant for much of the next two centuries, ATS provides simply: "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." 

Since 1980, ATS has been viewed by many as a useful potential gateway for imposing liability for violations of international law against states, individuals and corporations, especially when those actors committed offenses in places with weak governance or where the state itself is complicit in the breaches of international law.  It might also have been hoped that the scope of the international law subject to to ATS would eventually be broadened.  Eventually, ATS, if appropriately extended, could be used as a model for turning the barrier between domestic and international legal orders into a more permeable membrane. states The potential and limitations of ATS was brought into sharp focus by the Appellate Court's opinion in Kiobel:
 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))
 It is with respect to the treatment by the Appellate court of the issue of corporate liability,  that the parties to the Kiobel litigation sought to contest before the Supreme Court. For a discussion see, e.g.,  Joel Slawotsky on Corporate Liability in Alien Tort Litigation, Law at the End of the Day April 2, 2011; Guest Essay--Joel Slawotsky, Rumors Of Corporate Liability’s Demise In The Context Of Alien Tort Suits Have Been Greatly Exaggerated, Law at the End of the Day,  July 20, 2011.

In their arguments before the U.S. Supreme Court, both sets of parties had sought to rely on the SRSG's Guiding Principles on Business and Human Rights, an international soft law instrument that had been endorsed  by he UN Human Rights Council at its June 2011 session. "The SRSG’s reports and conclusions have been quoted and relied upon by both Petitioners and Respondents and by various amici curiae in this case." (From Ruggie/Alston Brief at 1).  And thus the amici's interest in Kiobel: "First, to provide context about the SRSG’s mandate and the conclusions reached during it. Second, to correct any mistaken impressions arising from references to the SRSG’s reports in the brief of Respondents or in oral argument." (Ibid., at 2).  

This is no small matter.  In the absence of a strong central office to manage the development of the interpretation of the Guiding Principles, national litigation, and the statements of parties thereto that might make their way into legal opinions, may serve to influence the consensus about the meaning of the Guiding Principles.  On the other hand, the U.N. has put on place a Working Group to provide an institutional framework for carrying on the work of developing and implementing the U.N. Guiding Principles on Business and Human Rights. (Discussed in Larry Catá Backer,  Outcome of the second session of the Working Group on the issue of human rights and transnational corporations and other business enterprises, Law at the End of the Day, June 13, 2012).  Still, if an important part of the project fo the Guiding Principles is its incorporation into domestic law, then errors in interpretation by litigants in important domestic law cases might substantially affect the Guiding Principles project.

The error that is the object of the Ruggie/Alston Brief is straightforward but critically important--"Respondents argue that there is no corporate liability under international law for the human rights violations alleged by Petitioners, including torture, extrajudicial executions, and crimes against humanity. In support of this argument, Respondents place significant reliance on one sentence in a 2007 report to the UN by the SRSG. However, Respondents do not accurately represent the SRSG’s views and findings." (Ruggie/Alston Brief, supra, at p. 2-3).   

The offending sentence, reads in part: "it does not seem that the international human rights instruments discussed here currently impose direct legal responsibilities on corporations.”(Ibid., p. 4; quoted from the SRSG's 2007 Report,  ¶ 44). This sentence, the Ruggie/Alston Brief then contends, taken out of context is erroneously used to support Respondents' conclusion, which they would have the Supreme Court adopt, that international law sources on the specific offenses at issue refute corporate responsibility.  (Ruggie/Alston Brief, p. 5, citing Respondents' brief at p. 8).  "Instead, the Ruggie/Alston Brief declares that "the SRSG concluded that corporations may have direct responsibilities under international law for committing international crimes, including crimes against humanity, torture, genocide, and slavery." (Ibid., p. 3).

The Ruggie/Alston Brief advances two arguments in support of their position.  First, it makes the point that the SRSG's work has always suggested the potential liability of corporations for international crimes (Ruggie/Alston Brief, p. 6-8).  Second, it suggests that SRSG has advanced this position consistently over the course of his six year mandate (Ruggie/Alston Brief, p.  8-9).  With respect to the first point, it is suggested that the (mis)used language is taklen from a section of the SRSG's 2007 Report focusing specifically international treaties, with respect to which the SRSG did conclude that  these international instruments did not impose direct legal responsibilities on corporate actors. (Ibid., p. 6-7).  However, this conclusion "is limited on its face solely to an assessment of liability under the treaties referenced in the section.," (Ibid).  Beyond the state of current treaty practice, the SRSG sought to describe what he viewed as a movement toward at least limited imposition of liability against corporate actors.

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).
Beyond potential, Professors Ruggie and Alston suggest the possibility of incorporation.  Corporate  liability for violations of international law could be actualized, not through treaty, or the direct application of international law standards, but through incorporation of international standards into the criminal law of a domestic legal order or as a civil cause of action. "For these reasons, the SRSG concluded in 2007 that “the most consequential legal development” in the “business and human rights constellation” is “the gradual extension of liability to companies for international crimes, under domestic jurisdiction but reflecting international standards.” Id. ¶ 84." (Ibid., p. 8). The Ruggie/Alston Brief then  suggests the way oin which the SRSG consistently took the position that customary international law, if not the practice of states through treaties, was moving toward the possibility of admitting corporate liability for a number of actions deemed criminal under international law principles and norms.  (Ibid., p. 9). The movement toward liability was especially strong in the context of complicity.  (Ibid., 9-10). But see, e.g., Larry Catá Backer,  Avoiding Corporate Complicity in the Human Rights Violations of States--Microsoft and Software Licensing, Law at the End of the Day, Nov. 14, 2010.

The Ruggie/Alston Brief makes a good point.  But perhaps it is one that is more useful outside the United States, in the construction of a uniform application of the Guiding Principles, than within it. Professors Ruggie and Alston recognize that, like most regulatory systems, international law, however it is framed, is a dynamic enterprise--it grows, changes, and adapts to changing circumstances with time.  Specifically with respect to the issue of the liability of corporate actors for breaches of international law, that change appears to be pointing toward a greater breadth of liability.  But the problem is that at the moment, that potential has not been realized at the core level of International law itself. That was clear enough in the review of the way ion which states continue to understand the international status of corporation within international law framed through treaty. There is one potentially powerful exception--the emerging international criminal law adjudicated through international tribunals, and now the International Criminal Court under the Rome Statute. But even here, the expansion is understood as potential rather than actual and deep and is intimately connected with the domestication of criminal liability for corporate activity.

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.  

(From Antoine Martin, Comment: Corporate liability for violations of international human rights: law, international custom or politics? Minnesota Journal of International Law Online,  March 3, 2012)

Thus Professors Ruggie and Alston's are both important outside the United States and defensive within the domestic jurisprudence of the U.S. But this is only part of the story and only a portion of the governace regimes within which Kiobel is situated.     A great difficulty of these arguments is that they are necessarily are framed within the narrow boundaries of conventional law discourse, one in which the formative issue is one of characterization of norm within a framework that no longer has a substantial relation to the realities of governance within globalized transnational networks of governance regimes. That is, I suppose, as it should be.  The litigants are seeks action by a state; they must therefore play by the rules of states.  But those rules require a sort of arbitrary strategic game of "meaning making" in which victory is assured only to those who can most convincingly characterize the operative norm as "law" and more specifically as "law" actionable within the jurisdictional parameters of the state in which the action is interposed.  For lawyers this is little more than an acknowledgement of an ancient reality.  When that reality framed substantially the entire universe of effective governance regimes these questions remained substantially uninteresting.  But when, in the face of what Professor Ruggie has shown to be the broad governance gaps in state ideology driven legal regimes founded on domestic law with narrow bridges between them labelled international law, the presumption of coverage no longer applies, then exercises, like those involved in Kiobel, serve to remind one of the increasingly irrelevance of states as centers for the development of global governance rather than international legal regimes.   Discussed in Larry Catá Backer, "The Structure of Global Law: Fracture, Fluidity, Permeability, and Polycentricity" (July 1, 2012). CPE Working Paper No. 2012-7; and "Governance Without Government: An Overview and Application of Interactions Between Law-State and Governance-Corporate Systems," in Beyond Territoriality: Transnational Legal Authority in an Age of Globalization (Günther Handl, Joachim Zekoll, Peer Zumbansen, editors, Leiden, Netherlands & Boston, MA: Brill Academic Publishers, forthcoming 2012). 

Two other arguments in the Ruggie/Alston Brief are worth a nod. First is the acknowledgement of the power of states to regulate extra territorially (Ruggie/Alston Brief, p. 11-12).  The Ruggie/Alston Brief characterizes this authority as permissive and contextual.  The context (and thus the limits) touch on the obligation of states to comply with their treaty obligations, including treaty obligations that touch on human rights. But it also continues the more ancient notion that stronger and more civilized states have the authority, under international law, to project their power into the territory of other weaker or less developed states.  While the outer boundaries of that concept as applied a century ago--permitting colonization and control of the states, has been rejected, at least in theory since 1945, the functional result of the practice is the substitution of the regulatory power of one state for another outside the territory of the regulating state. The effective projection of power is not as complete as it might have been possible to assert under older rules, but, at least within functionally differentiated regimes (human rights, investment, environment, etc.), the result is the same.  And, as in the days of the League of Nations, still effectively encouraged under the cover of international law.  Now, of course, that permission is couched in the language of enforcing International law or providing the effective mechanisms of state organization in weak governance zones, rather than in the more primitive language of civilizing peoples.  This is not to suggest that the notion of intervention is necessarily always wrong or impossible under emerging regimes of national dignity, but it is to suggest that its use carries dangers that may be as significant as those it is designed to alleviate. In the rush to use whatever available resource to mitigate human rights abuses, it might be worth pausing long enough to consider as well the abuses to political dignity of the nature and scope of the extraterritorial intervention contemplated.

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.

The second focuses on the appropriate standard for aiding and abetting liability under international criminal law. (Ruugie/Alston Brief, pp. 13-15). Professors Ruggie and Alston argue that "knowledge" is the appropriate standard  for aiding and abetting liability for corporate actors that might be directly liable under international law.  They argue that emerging U.S. opinion in this, as in the American refusal t domesticate international law without the positive act of the political branches was "'against the weight of international legal opinion' as it applies to individual perpetrators , and further cautioned about the effects of applying that standard to companies."  (Ruggie/Alston Brief, p. 13, criticizing Presbyterian Church of Sudan v. Talisman Energy Inc., 582 F.2d 244, 249 (2nd Cir. 2009). The knowledge standard requires only knowledge of the intent of the principal and thereafter to provide substantial assistance. (Ibid., p. 14). This standard was urged as useful guidance for domestic courts in the context of the project of harmonizing national standards applying international law concepts and because the standard would be useful in influencing non-criminal legal proceedings. (Ibid., p. 14-15).  See, e.g., Larry Catá Backer, Avoiding Corporate Complicity in the Human Rights Violations of States--Microsoft and Software Licensing, Law at the End of the Day, Nov. 14, 2010.

And thus the 'take-away': business enterprises including corporations "may have" direct liability under international law for gross abuses of human rights; states may project their legal authority extraterritorially as long as there is a connection to the object or effect regulated; and a knowledge rather than an intent standard ought to trigger aiding and abetting liability for individuals and business entities,.  (Ibid. p. 15).  These conclusions may not have much effect on the internal law of the United States.  And it may have only marginal relevance for the domestic legal analysis that the Supreme Court will likely use to cabin examination and discussion of the legal issues in Kiobel.  But the Amici is still significant for  two principal and related reasons:  first it will make it harder for the Justices of the Supreme Court to legitimately misconstrue the way in which international law is being developed in the rest of the world by perverting sources in international law and governance to which it makes no connection and which several of them at least will seek to demonize and on that basis reject.  Second, it provides Professors Ruggie and Alston an important platform for seeking to intervene in international conversations about the meaning of the Guiding Principles and its collateral effects on the development of notions of international law (and governance outside of law frameworks) as it might apply to corporations and other business entities.  As a matter of the advancement of law discourse in the United States it may, then, have less effect than as a means of advancing international discourse and further isolating American judges from effective participation in the development of international law. 

John Ruggie is the Berthold Beitz Professor in Human Rights and International Affairs at the Harvard Kennedy School of Government, and an Affiliated Professor in International Legal Studies at Harvard Law School and the former Special Representative of the United Nations Secretary-General on the issue of human rights and transnational corporations and other business enterprises (“SRSG”).  Philip Alston is the John Norton Pomeroy Professor of Law at NYU School of Law and the former United Nations Rapporteur on extrajudicial, summary or arbitrary execution.

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