On the 17th of April 2013, the U.S. Supreme Court released its final decision on the Kiobel v. Royal Dutch Shell Petroleum case. The Court upheld the Second Circuit judgment which barred the action brought by Nigerian complainants on the ground of the ATCA – Alien Tort Claim Act.
Corporate accountability: when extraterritoriality is used as a sanctuary for impunity
The Dutch parent company Shell and its Nigerian subsidiary were both accused of aiding and abetting in crimes against humanity, acts of torture and arbitrary execution committed by the Nigerian army against rural populations living in the Ogoni zone, in order to protect Shell’s oil production in Nigeria.
The dismissal of the complaint, which was filed in 2002 at the United States District Court for the Southern District of New York, was confirmed by the Appeal Court on 17 September 2010, ruling that companies could not be held accountable under the ATCA. Enacted by a 1789 Law, the ATCA enables American Federal Courts to have jurisdictions over civil actions brought by foreigners who are victims of a violation of the “law of nations” (i.e. in today’s terms the international human rights law) abroad. This « universal jurisdiction » Law was until now the most sophisticated legal tool for victims of transnational companies to access to Justice when the abuses that occurred in their home country remained unpunished.
However, the U.S. Supreme Court in the Kiobel v. Shell decision strongly reduces the scope of the Alien Tort Claim Act. The Supreme Court based its decision on the doctrinal principle of presumption against extraterritoriality, in order to narrow the ATCA scope. It considered that the ATCA does not apply to violations committed outside the United States territory. The will behind this doctrine is political: relying on the ATCA to provide US Courts’ jurisdiction over violations that were committed abroad could lead to diplomatic tensions with foreign nations.
The prevalence of diplomatic considerations over the respect of the law
While this judgement considerably reduces the scope of the Alien Tort Statute, The Court further noted, however, that the “presumption against extraterritoriality” could be overcome if a plaintiff brings claims that “touch and concern the territory of the United States … with sufficient force …”. It is yet to be known how judges will interpret the “strong links” criterion in subsequent human rights cases.
For instance, a company that has headquarters on the U.S. territory may be held liable on the ground of the ATCA for its activities abroad. But it is clear now that European head-quartered companies such as Shell may benefit from impunity in front of the U.S. Courts despite their strong presence at the U.S. market. This judgement increases legal uncertainty particularly over cases involving TNC characterised by their organization through complex legal framework into different legal entities and multiple countries.
The failure of European States to ensure accountability of its business
The U.S. Supreme Court position in the Kiobel case has successfully weakened a legal instrument which represented an important tool to fight against corporate impunity around the world. It also highlights a failure of European states to come up with effective mechanisms for redress of victims of international human rights violations caused or contributed to by European business. In this sense the ATCA was compensating for absence of similar legislation in Europe.
The ECCJ regrets that the Supreme Court chose to lower the right to an effective remedy despite a context that generally favours a reinforcement of CSR: an increasing number of cases brought to Court against companies as well as the recent adoption of international standards – such as UN and OECD guidelines – demonstrates that there is a growing trend to make companies accountable. In this light, the ECCJ stress again its call on the European Commission and the European Union Member States honour their obligations under the international law to ensure protection of human rights against violations caused or contributed to by the companies in their jurisdictions.
