THE BLOG
04/18/2013 04:38 pm ET Updated Jun 18, 2013

Corporate Accountability for Human Rights: Kiobel's Call to Action

On Wednesday, the Supreme Court dealt a substantial, and largely unexpected, blow to U.S. leadership on human rights. In the case Kiobel v. Royal Dutch Petroleum, the Court unanimously denied Nigerian asylees justice for gross violations of human rights perpetrated by the Shell Corporation in Ogoniland, in the Niger Delta. The plaintiffs had sought to hold the corporation accountable under the two centuries-old Alien Torts Statute (ATS), which the Court held does not apply extraterritorially. While the plaintiffs have been granted asylum as U.S. legal residents and Shell is traded on the New York Stock Exchange, the alleged atrocities occurred in Nigeria, and the Court has ruled that it does not have jurisdiction under the ATS. In the process, the Court has raised a question that has haunted our nation through the bank bail-outs (recall the DOJ's refusal to prosecute HSBC for criminal money-laundering) and indeed the rise of the modern corporation: when, and how, are we going to hold corporations accountable for abuses that law, and ethics, universally condemn?

Part of the Judiciary Act of 1789, the ATS gives federal courts original jurisdiction over torts committed by an alien "in violation of the law of nations or a treaty of the United States." At the time of its passage, these violations encompassed threats that were then significant among the law of nations -- including piracy and "infringement of the rights of ambassadors." Already in 1789, Congress recognized through the ATS that global interconnectedness requires that courts sometimes be able to extend the force of their authority over persons and places where it would not ordinarily apply. Without something like the ATS, pirates could evade law entirely by operating in international waters, beyond the reach of any domestic legal system. As Justice Breyer aptly stated in his concurrence, the Court this term was asked to determine "who are today's pirates?" and to similarly bring them to account.

In this case, Shell makes much piracy look comparatively benign. The Kiobel plaintiffs alleged that, after they began protesting Shell's environmental contamination, the company enlisted the Nigerian government to attack, beat, kill, rape, and arrest the Ogoni villagers and loot their property.

For the past several decades, the Alien Torts Statute has offered victims of human rights abuses a rare and important tool to bring to account those who harm them in flagrant violation of international law. After a period of dormancy, the Second Circuit Court of Appeals resurrected the Act in 1980 when it affirmed its jurisdiction under the ATS to hear a case involving torture and murder by a Paraguayan former police chief of a Paraguayan national, which took place in the South American country. Since then, federal court jurisdiction under the ATS for extraterritorial violations has never seriously been in doubt. Recognizing that the law of nations has changed since 1789, courts have used the ATS to address such violations as torture, murder, wrongful death, cruel and degrading treatment, forced labor, and genocide. In 2011, the Ninth Circuit, sitting as a whole, had little trouble finding a "clear indication of extraterritorial applicability in both the ATS' texts and its content." It held the Rio Tinto mining company liable under the ATS for acts of genocide and war crimes perpetrated against the indigenous people of the island of Bougainville in Papua New Guinea, for whom justice was too long overdue.

What is particularly striking about yesterday's decision is that the question of extraterritorial applicability was never even an issue in the lower courts. Indeed, the Second Circuit had dismissed the case upon finding that the ATS does not apply to corporate defendants. After an initial hearing, the Supreme Court ordered the parties to reexamine and argue the question of extraterritoriality, which the Second Circuit had not considered to be at issue. In an opinion by Chief Judge Roberts, the five-judge majority rested its judgment almost entirely on a single canon of statutory interpretation, under which courts presume that a statute does not apply extraterritorially unless Congress has clearly indicated otherwise. In light of the explicitly international nature of the statute, the majority's decision to constrain the ATS to U.S. territory seems bizarre.

What's more, the Court left open the question of when this presumption can be overcome, stating that the ATS will kick in when the claims "touch and concern the territory of the United States...with sufficient force." As Justice Kennedy explained in his concurrence, the extraterritorial reach of the ATS will still require "further elaboration and explanation." The Court's four-judge liberal flank concurred with the majority's holding but would grant jurisdiction "where distinct American interests are at issue." Evidently, the fact that Shell Oil does extensive business in the U.S., which supports nearly 14,000 Shell-branded gas stations, was not sufficient to trigger these interests. Given the complicated ownership structure of today's multinational holding companies, when is a company American enough to necessarily come under the reach of our laws?

Perhaps the most troubling feature of yesterday's decision is that which is mostly likely to be overlooked in the legal discussion that will surely follow. In effect, the Court has articulated a very clean limitation on its institutional responsibility to human rights. Through an act of highly formalistic line-drawing, the Court eviscerated its principal hook for holding human rights violators to account. The murders took place overseas? Shell Oil is headquartered abroad? The refugee-victims living here now were harmed elsewhere? Not our problem. Nevermind that Shell Oil is traded on the New York Stock Exchange, files regular disclosure statements to the U.S. Securities and Exchange Commission, and, by its own account, "generates significant cash flow" from U.S. oil and natural gas extraction and by transporting "over two billion barrels of crude oil and refined products in several states annually."

The ATS was never going to be a quick fix for human rights adjudication. After all, the Court had already narrowed the class of offenses to which it can apply to those that are "specific, universal, and obligatory," like genocide and war crimes. The ATS would likely exclude the broader class of violations that so many corporations consistently perpetrate, often with governmental complicity -- the more mundane atrocities of environmental destruction, displacement of indigenous peoples, degradation of the health and welfare of local populations, and generally imbalanced transfers of resources from poorer to wealthier parts of the globe. If accountability for genocide is a problem, accountability for something like contribution to climate change seems like a pipe dream. In fact, both Nigeria and the African Commission on Human and People's Rights had already found that Shell violated the human rights of the inhabitants of Ogoniland by flaring large quantities of greenhouse gas in the Niger Delta, contributing to climate change and local environmental harms. Nonetheless, Shell continues to flare the majority of extracted gas in the region, much of which the U.S. imports.

The point is not that the U.S. legal system should become the ultimate arbiter of global human rights violation, as yesterday's majority seemed to fear. The point, rather, is that the U.S. -- and all of us within it -- are already complicit in the atrocities that yesterday the Supreme Court shrugged off. We are failing to hold ourselves accountable to the moral and human rights laws and standards we have helped to expound. Of course, it's not just up to the courts (or, in other contexts, a sometimes reluctant Justice Department) to safeguard human rights standards and foundational laws. It's also up to us to do our best to police our own investment and consumption behaviors, divesting ourselves from products that embody violence that we would so rather not see. Yet while a great deal is being done to create better disclosure and labeling systems to guide consumer and investor decisions (as Dodd-Frank now requires disclosure for conflict minerals in or near the Democratic Republic of the Congo), we still need the concentrated force of the legislature and the courts to make and enforce laws to hold corporate persons accountable to human rights standards.

At the end of the majority's decision, Chief Justice Roberts knocked the ball into Congress' court: "Corporations are often present in many countries, and it would reach too far to say that mere corporate presence suffices. If Congress were to determine otherwise, a statute more specific than the ATS would be required." It ought now to be Congress' turn to determine otherwise -- and return the ball.

Just as taxes are part of the price of living in a civilized society, respecting human rights must be part of the price that corporations pay for doing business in our home.