U.S. corporations don't have to compensate victims of abuses overseas, but "persons" do
High Court to hear case of Shell Oil, which allegedly used violent military units to protect pipeline
Victims allege military tortured, killed, detained people to protect pipeline and assure labor
Marco Simons: Court ruled corporations "people," status must apply in abuse cases
Editor’s Note: Marco Simons is the legal director at EarthRights International (ERI), a nongovernmental organization dedicated to protection of human rights and the environment worldwide. Marco oversees ERI’s Legal Program, which aims to hold corporations and other actors accountable for human rights and environmental abuses, and has represented victims in several transnational human rights cases in U.S. courts, including Doe v. Unocal, Wiwa v. Royal Dutch Petroleum Co. (Shell), Bowoto v. Chevron, and Doe v. Chiquita. He has co-authored numerous amicus briefs for ERI, including four briefs in the U.S. Supreme Court.
For the past decade, I’ve represented victims of human rights abuses in court, trying to achieve a measure of justice for people who have suffered torture and political imprisonment, have been forced to work at gunpoint, and have seen family members killed before their eyes.
But changing my line of work to advising modern-day pirates and human traffickers would be much more successful. My advice would be: It’s easy – if you want to shield your money from the victims of your crimes, all you have to do is incorporate.
Is it really that simple? In 2010, a federal appeals court in New York said yes – as long as the perpetrators or abettors of human rights abuses form a corporation, their money cannot be used to compensate their victims. Other federal courts have disagreed, however, and on February 28 the Supreme Court will hear the case.
Known as Kiobel v. Royal Dutch Petroleum, the case was brought by several Nigerians who said they suffered torture, arbitrary detention, and the killings of family members in the 1990s. This was a particularly dark period in Nigeria’s recent history, when a brutal military dictatorship violently suppressed a popular movement of the Ogoni people, who were fed up with living with the environmental consequences of decades of reckless oil development.
The oil company was Royal Dutch/Shell, more commonly known as Shell Oil, which allegedly called in violent military units to respond to protests, participated with the military in joint operations, and bribed witnesses in sham trials of Ogoni leaders, which led to illegal executions, according to the complaint.
There’s no question that humans – whom lawyers call “natural persons” – can be sued for such acts. A law called the Alien Tort Statute (ATS) allows lawsuits in U.S. federal courts for serious violations of international law, including egregious human rights abuses. The Bosnian Serb leader Radovan Karadzic and the former Philippine dictator Ferdinand Marcos have been successfully sued for their crimes, as have a number of other perpetrators of abuse.
The ATS is one way in which the United States shows leadership on protecting human rights globally. It demonstrates a commitment that our nation will not become a safe haven for human rights criminals, who sometimes emigrate here after being driven out of power. It upholds the ideal that all people are equal before the law, because a U.S. court may be the only place where these victims of abuse stand on equal footing with their tormenters.
About 15 years ago, victims began trying to use this law to seek justice against corporations which, in many cases, fund, control, or otherwise abet serious abuses. The seminal case was Doe v. Unocal, the first lawsuit I ever worked on. Our clients were refugees from Burma (now called Myanmar), who had fled their villages to escape the brutality of the Burmese army – torture, rapes, killings, forcible relocations of entire villages, and an epidemic of forced labor, in which the army regularly conscripted villagers to serve as “porters” carrying ammunition and other supplies.
These villagers knew the reason the army was there, the reason that it uprooted their homes and lives, and the reason that it conducted its operations with such brutality, was to provide security for a natural gas pipeline project – a project led by multinational oil companies, including U.S.-based Unocal. The pipeline consortium had hired the army to secure their project, knowing full well that these soldiers were notorious for their abuses.
The courts ruled that we could sue Unocal under the ATS, because international law clearly prohibited offenses such as which Unocal had abetted. One court cited evidence that Unocal and its partners “hired the military to provide security for the project, a military that forced villagers to work and entire villages to relocate for the benefit of the project,” and “committed numerous acts of violence.”
The ATS was a beacon of hope and a source of power for these refugees. It gave them the promise of justice. After nine years of litigation, Unocal agreed to settle and compensate the victims.
But now the ATS is in danger of being the latest demonstration of a legal culture that protects corporations – which lawyers often refer to as “legal persons” – and grants them special rights.
The Supreme Court has already decided that these legal persons, which would not even exist if state laws did not allow for incorporation, have equivalent constitutional rights to natural persons. The Citizens United decision in 2010, allowing unlimited corporate expenditures to influence elections, demonstrates that the Court has no hesitation to call corporations “people” when it benefits corporate interests.
But calling corporations “people” should also benefit the victims of corporate wrongdoing. The appeals court in the Kiobel case thought otherwise; it ruled that corporations, and corporate profits, could not be reached by victims of human rights abuses. Despite having constitutional rights, corporations simply aren’t subject to human rights law, according to this court.
Want to sell poison gas to the Nazis? No problem, your profits are safe. Want to traffic child prostitutes into the U.S.? Form a corporation, and even if you go to jail, the proceeds of your crimes can’t be reached by your victims under the ATS. Organize a genocide, hold slaves – as long as it’s done in the corporate name, the Kiobel ruling would prevent the victims from seeking any remedy.
The Supreme Court has an opportunity to correct this error and to make it clear that corporations must accept responsibilities along with the rights that they’re granted.
Any other result would send the message to the rest of the world that the United States cares more about profits than people, and that our commitment to justice is halfhearted. And it would leave people like the Kiobel plaintiffs, or the refugees who sued Unocal, with no effective remedies for the alleged abuses they suffered.
There’s no good reason that the law should allow those who participate in serious human rights abuses, whether they are human beings or corporations, to shield their assets from recovery. Profits from piracy, or trafficking in child prostitutes, or selling poison gas, should be used to compensate the victims of these crimes.
I hope that, ultimately, the answer to my initial question is an emphatic “no”: Incorporation is not all you have to do to shield your money from the victims of your crimes. The law should provide justice against those who participate in abuse, regardless of how they organize themselves. Corporations have no special rights. And the United States will remain a source of hope for victims of abuse worldwide.
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The opinions expressed in this commentary are solely those of Marco Simons.