Want to enslave, murder or commit other atrocities, all while evading accountability entirely? Easy, simply incorporate overseas.
Victims of human rights violations can no longer sue foreign corporations in U.S. Courts. With its recent decision in Jesner v. Arab Bank the U.S. Supreme Court has handed would-be violators of international human rights a victory by categorically excluding all claims against foreign corporations for violations of the “laws of nations” — no matter the scale or magnitude of the abuse.
Victims of human rights violations have used the Alien Tort Statute (ATS), a federal law that gives U.S. courts authority to address “any civil action by an alien for a tort, committed in violation of the law of nations or a treaty of the United States,” to hold violators accountable for abuses — including corporations that have been complicit in committing violations of international law.
Indonesian villagers sued Exxon for hiring military security forces that murdered members of their community. Chiquita and Coca-Cola were forced to defend their payments to paramilitaries that used torture and targeted assassinations to intimidate and eliminate labor organizers in Colombia. Imprisoned pro-democracy political dissents sued Yahoo! for disclosing identifying information to Chinese authorities. Pfizer faced claims from the families of Nigerian children injured in medical experiments.
In Jesner v. Arab Bank, the Supreme Court rejected claims brought by victims of terrorist attacks against a bank alleged to maintain accounts used by known terrorists to finance attacks and fund families of suicide bombers. The court concluded that the judiciary does not have authority to impose liability on “artificial entities like corporations.” Actual persons can be held liable for violating the laws of nations but artificial persons incorporated overseas now cannot be.
Pointing to foreign policy issues as the institutional responsibility of the political branches of government, the court explained it would be: “inappropriate for courts to extend ATS liability to foreign corporations absent further action from Congress.”
It is imperative that Congress act. Congress must make clear that it will not be possible to evade accountability for abusing human rights by incorporating overseas. The court has previously recognized corporations as persons for the purpose of extending rights protections to corporations. The categorical exclusion of foreign corporate persons from liability for violations of international law risks removing protection from victims of violations.
More often than not the contributions of the business community serve to create value and promote innovation but sometimes business policies and practices can create problems that put rights at risk. The capacity of corporations to impact human rights has been acknowledged by the United Nations and addressed in the UN Framework and Guiding Principles on Business and Human Rights which provide that governments have a responsibility to protect human rights, business enterprises should respect human rights and victims of rights violations should have access to a remedy.
The Jesner decision ends an effective avenue for access to remedy for victims of universally recognized wrongs — genocide, war crimes, modern slavery, human trafficking and torture. Where avenues for access to remedy in courts of law are closed, other paths elected by those wronged to vindicate their rights could serve to escalate conflict or impede investment and innovation. The court has done no favor for the rule of law by shielding foreign business enterprises from accountability.
Congress can and must correct the court’s failure to protect access to remedy for victims of human rights atrocities where business enterprises are involved. Congress should exercise its authority to enact legislation consistent with the responsibility to protect human rights by allowing access to an effective legal remedy in U.S. courts where redress is not available elsewhere. Access to remedy and accountability for gross human rights violations cannot and should not depend on whether an actual or “artificial person” is responsible for the abuse.
Erika George is the Samuel D. Thurman Professor of Law at the University of Utah S.J. Quinney College of Law. Her current research explores the responsibility of transnational corporations to respect international human rights and various efforts to hold business enterprises accountable for alleged abuses. She is the author of the forthcoming book, “Incorporating Rights,” under contract with Oxford University Press. She is a member of the executive board of the American Bar Association Center for Human Rights.