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Corporate Crime and Punishment

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Should corporations have immunity for human rights abuses? On February 28, the Supreme Court will hear arguments in a case that will decide whether corporations will be exempted from a crucial law that allows foreign victims of serious human rights abuses to sue them in US courts for civil damages. Any decision that lets corporations off the hook would be a major blow to justice and contrary to the global move toward more corporate accountability.

The case currently before the Supreme Court, Kiobel v. Royal Dutch Petroleum, concerns allegations by 12 Nigerian plaintiffs that Royal Dutch Petroleum, also known as Shell, collaborated closely with Nigeria's then-military government as it carried out a campaign of intimidation and violence against the Ogoni people, a local community opposed to oil development on their land. The plaintiffs accuse the company of aiding and abetting abuses by the Nigerian government, including arbitrary arrest, torture, rape, and the hanging of Dr. Barinem Kiobel, an Ogoni leader who was executed in 1995 alongside the author and activist Ken Saro Wiwa. Saro Wiwa's family filed a separate lawsuit against Shell, which they settled in 2009 for $15.5 million.

The Alien Tort Statute of 1789 under which the Nigerians are bringing their case was designed to ensure that foreigners could seek justice on US soil for crimes against "the law of nations." The First Congress had in mind crimes such as piracy, but a Supreme Court ruling in 2004 found that acts such as genocide, torture or crimes against humanity are regarded everywhere as serious violations of international law and could be a reason for suing under the law.

In 1996 Burmese villagers filed a suit against Unocal under the Alien Tort Statute, which produced a human rights landmark. The plaintiffs alleged that Unocal (now Chevron) was complicit in killings, torture, rape, forced labor and forced relocations by the Burmese military, who carried out these abuses when clearing land and providing security for the construction of a natural gas pipeline partly owned by the company. The case was ultimately settled for an undisclosed sum believed to be in the tens of millions of dollars.

In the years since that case, the concept that companies should not violate human rights wherever they operate has become mainstream. While it is easy for companies to make social responsibility pledges when there are no strings attached, increasingly they are being held to basic standards through independent monitoring of their actual practices. For example, private security companies that want to join a new industry code of conduct have to agree to allow an independent oversight body to assess their compliance.

The core principle that companies should respect human rights was formally endorsed by the UN Human Rights Council in 2008. But companies still need to be held legally accountable if they are implicated in human rights violations.

National criminal, civil and administrative laws in virtually every country allow corporations to be held liable in some way for their involvement in serious abuses. The universal recognition across all legal systems that corporations are liable for their wrongful conduct is so compelling that it in fact is the basis for a rule under international law. Under this "general principle of law," governments can and should use domestic means to hold corporations responsible for egregious conduct that violates international human rights norms.

It is still extraordinarily difficult to bring corporate perpetrators of human rights abuses to justice, though. Multinational corporations argue that cases should proceed in courts where the abuses took place, rather than where they are headquartered. But local victims cannot always afford or obtain representation and local judiciaries frequently lack the independence to adjudicate these cases credibly against powerful investors. The local law may not reach to corporate headquarters where the real decisions and profits are located. Local legal processes can drag on for years, draining the meager resources of victims and their advocates. Or they can end abruptly with a decision that fails to deliver justice.

The Alien Tort Statute provides a vital avenue for human rights cases against companies to be heard. Victims and surviving family members can hold multinational companies responsible for complicity in abuses, and the corporations can't hide from the U.S. legal system or from international law. The victims and their families deserve a day in court.

The Supreme Court's decision in the Kiobel case could be a watershed moment for corporate accountability. If it blocks the plaintiffs' suit, it will send a disturbing message that multinational corporations do not have to pay a price for their involvement in torture, unlawful killings and other violations of the law of nations. Corporations, like pirates of old, should not be able to flout firmly established and universal legal norms with no real prospect of facing justice.

Arvind Ganesan is director of the Human Rights Watch business and human rights program. Along with other international human rights organizations, Human Rights Watch submitted an amicus brief to the Supreme Court in the Kiobel case.