Friday, June 17, 2005

New Talisman (Alien Tort Statute) decision upholding corporate liability

I've just finished reading the newly released decision in Talisman Energy v. Presbyterian Church of Sudan (plus other parties), by Southern District of NY judge Denise Cote. I'm not sure where to find it online; I was sent a pdf. Bottom line is that Talisman, which had lost in earlier rulings in this ATS case, sought relief based on the the Supreme Court decision in Sosa v. Alvarez-Machain and the Second Circuit in Flores v. Southern Peru Copper Corp. Judge Cote denied relief, stating that neither of those decisions altered the findings of earlier courts that corporate liability could be found under international law.

It is true that various US district courts have ruled in ATS cases in favor of corporate liability - Judge Weinstein did in the Agent Orange litigation in which I participated as an expert on international law for the defendant corporations (discussed earlier on this blog). I find the basis for this conclusion unfathomable on the basis of international law itself, as distinguished from the highly idioyncratic interpretations given it by US judges, and then repeated and amplified by other US judges. I am not the only one puzzled by this - British international law authority Christopher Greenwood, for example, has raised exactly such questions, as has Yale law school's Michael Reisman. Nonetheless, the self-amplification of US courts citing each other for authority as to the content of international law continues apace, on the basis of nothing other than what these courts extract and then amplify from each other and in response to moralizing pressures from well-organized, long-term thinking litigators such as the Center for Constitutional Rights and other NGOs.

My own view of corporate liability in international law - first, the question of whether corporations, as distinguished from individuals, can be subjects of liability and, second, whether there exists in international law a concept of civil, rather than a very limited body of criminal, law with respect to individuals - is found in my expert affidavit in the Agent Orange litigation before Judge Weinstein (note: the footnote links don't work properly):

1. As a general proposition, international law imposes obligations solely upon states. The proposition is authoritatively stated in a leading treatise, Oppenheim’s International Law:
“States are the principal subjects of international law. This means that international law is primarily a law for the international conduct of States, and not of their citizens. As a rule, the subjects of the rights and duties arising from international law are states solely and exclusively, and international law does not normally impose duties or confer rights directly upon an individual human being, such as an alien or an ambassador.[1]

Even areas like international human rights law, which confer rights upon individuals, still only impose obligations on states.[2]

2. The only real exception to this general rule is international criminal law, which imposes obligations, as opposed to rights, upon individuals. Although international criminal law (which includes the laws of war pertaining to war crimes and grave breaches, as well as genocide and crimes against humanity) imposes obligations on non-state actors, the only type of non-state actors on whom it imposes obligations are natural individuals. International law does not, in the context of international criminal law or elsewhere, impose obligations or liability on juridical actors or artificial persons such as corporations.

3. The gradual development of individual criminal liability in the post-war period (with the greatest leaps forward beginning in the 1990s, well after the Vietnam War) does not create a precedent for corporate liability, for at least two reasons. The first is that even international criminal law is addressed only to natural individuals, and not to artificial persons such as corporations. Second, international criminal law is addressed to criminal liability rather than civil liability. For both of these reasons, individual criminal liability provides no precedent for corporate civil liability.

4. Individual versus corporate liability. Of the five international criminal tribunals established beginning with Nuremberg, none has provided for corporate criminal primary or secondary liability. The Charter of the Nuremberg Tribunal established procedures for the trial of persons who, “whether as individuals or as members of organizations”, committed certain crimes.[3] While several German businessmen and industrialists were tried at Nuremberg, those trials were exclusively of individuals as directors and officers of companies, and the record contains no suggestion that corporations could themselves incur criminal liability.[4] Likewise, the International Military Tribunal in Tokyo only permitted individuals to be prosecuted.[5] This position had not changed by the Vietnam War.

5. Indeed, this position has not changed in contemporary, post-Vietnam War international law. Even today, international law recognizes no form of corporate liability. The ICTY, for example, has jurisdiction only over natural persons; Article 6 of its Charter provides that it shall “have jurisdiction over natural persons pursuant to the provisions of the present Statute.”[6] Likewise, Article 5 of the Statute of the International Criminal Tribunal for Rwanda (ICTR) provides that the ICTR shall “have jurisdiction over natural persons pursuant to the provisions of the present Statute.”[7] And Article 25(1) of the Rome Statute of the International Criminal Court (ICC) provides that the court shall have jurisdiction only over natural persons.[8] The proposal was indeed put forward in negotiations to include juridical persons in the jurisdiction of the ICC, but it was consciously rejected because, in part, there are “not yet universally recognized common standards for [private entity] liability.”[9]

6. Criminal versus civil liability. Although international law in narrow circumstances does provide for individual criminal liability, it does not generally provide for civil liability – not even for individuals, let alone for corporations. In modern times, the only exception to this general rule is a novel provision of the Rome Statute of the ICC which came into effect in 2002. Article 75 of the Rome Statute provides, in a section dealing with reparations to victims, that the “court may order reparations” to be paid by individual defendants. Accepting such reparations as essentially civil in nature, Article 75 was recognized to be innovative and departure from past practice.[10] Thus, civil liability of non-state actors – individual and corporate – is not generally a part of international law today, and certainly did not exist at the time of the Vietnam War.

7. No corporate liability in weapons conventions. The absence of any precedent for corporate civil liability is reinforced with respect to weapons and armaments by the fact that the leading weapons treaties have imposed obligations only upon states, not juridical entities. The first modern weapons treaty, the St. Petersburg Declaration banning certain exploding bullets, is about use only and imposes obligations only on states, and that pattern is followed throughout the history of treaties governing the use of weapons as well as arms control. The 1925 Geneva Protocol, although it came about in the course of an interwar conference on disarmament and arms control, is solely about the use of certain weapons, not their production or sale by private actors, and it imposes obligations on states only.[11] Neither the 1993 Chemical Weapons Convention[12] nor the 1972 Biological Weapons Convention[13] – treaties dealing comprehensively not just with use but also with production – impose obligations on corporate actors; they instead confine themselves to addressing state actors. The weapons treaty that would have been most likely to have addressed the issue, the 1997 Ottawa Convention Banning Landmines – which comprehensively prohibits all use, production, sale, stockpiling, and transfers of antipersonnel landmines – likewise imposes obligations only on states.[14]

While some would regard this failure of international law to impose obligations on corporations and juridical entities as a serious gap in the law, in my view, it actually performs a useful function. My experience in monitoring the laws of war and experience in international campaigns to ban such weapons as landmines has strongly taught me that, from the standpoint of controlling behavior in war and armed conflict, including the weapons used, it is better to place the burden directly on states (or, in the case of civil war, on the parties to a conflict). The executive branches of states are the only actors with the plenary regulatory power and machinery to make and enforce policy among private actors. It is superficially attractive to believe that accountability is maximized by allowing corporations to be pursued in such venues as courts for violations of the laws of war or of weapons treaties, but in my estimation that is not the case. The result, in my experience, tends to be fragmentation of responsibility. Accountability tends to be diluted as states allow courts to deal – more precisely, are happy to outsource the problem by letting courts deal – with such issues as though they were ultimately about corporations rather than about state policies and practices. States sometimes actually seem to feel that they are morally off the hook if legal action is directed against corporations. But the buck has to stop someplace if there is to be accountability, and it is frankly better, in my view, for it stop with states in order to have a single, visible actor to hold accountable, whether legally or politically.

[1] Sir Robert Jennings and Sir Arthur Watts, 1 Oppenheim’s International Law 16 (9th ed., 1992).
[2] See, e.g., Restatement (Third), vol. 2, Part VII, Introductory Note at 144 (although international law “governs primarily relations between states … Increasingly, international human rights agreements have created obligations and responsibilities for states in respect of all individuals subject to their jurisdiction”) (emphasis added); § 701 (“A state is obligated to respect the human rights of persons subject to its jurisdiction”) (emphasis added); and § 702 (defining customary international law of human rights in terms of state violations: “A state violates international law if, as a matter of state policy, it practices, encourages, or condones” certain behavior) (emphasis added). And this is notwithstanding the caution earlier raised about the Restatement (Third) being overly permissive in the development of human rights law as custom. See supra note 29.
[3] Nuremberg Charter (Charter of the International Military Tribunal), 8 August 1945, art. 6, U.N.T.S. vol. 82, 279
[4] See, e.g., United States v. Krupp (“The Krupp Case”), 9 Trials of War Criminals 1327 et seq.; United States v. Flick (“The Flick Case”), 6 Trials of War Criminals 1187 et. seq.; United States v. Krauch (“The Farben Case”), 8 Trials of War Criminals 1081 et. seq.. Confusion sometimes arises over the fact that the Nuremberg Tribunal was able to impose individual criminal liability based solely on membership in entities such as the SS and the Nazi party. Even leaving aside that the SS was an institution of the German state and that the Nazi Party was fully integrated into the totalitarian state – and thus neither were “private” actors in the sense of a private business corporation – the Nuremberg trials imposed no liability on the entities as such, but instead imposed liability on individuals for their membership. Indeed, the tribunal stated that: “Crimes against international law are committed by men, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced.” International Military Tribunal for the Trial of Major War Criminals, Judgment of 1 October 1946, reprinted in 41 Am. J. Int’l L. 172, 221 (1947).
[5] Charter of the International Military Tribunal for the Far East (Tokyo Charter), January 19, 1946, as amended April 26, 1946, art. 5, T.I.A.S. No. 1589 (“The Tribunal shall have the power to try and punish Far Eastern war criminals who as individuals or as members of organizations are charged with offenses…”)
[6] Statute of the International Tribunal for the Former Yugoslavia, Security Council Resolution 827, 48 UN SCOR (3217th mtg), UN COD S/Res/827 (1993), 32 I.L.M. 1203.
[7] Statute of the International Tribunal for Rwanda, Security Council Resolution 955, 49 UN SCOR (3452nd mtg), UN Doc S/Res/955 (1994), 33 I.L.M. 1598.
[8] Rome Statute of the International Criminal Court, adopted July 17, 1998, UN Doc A/Conf.183/9 (1998), at Article 25(1). The United States has not ratified the Rome Statute.
[9] See Kai Ambos, Article 25: Individual Criminal Responsibility, in, Commentary on the Rome Statute of the International Criminal Court 475, 477-78 (Otto Triffterer ed., 1999)
[10] See David Donat-Cattin, Article 75: Reparations to Victims, in, Commentary on the Rome Statute of the International Criminal Court 965, 966 (Otto Triffterer ed., 1999).
[11] 1925 Geneva Protocol, supra note 9 (defining obligations accepted by the “High Contracting Parties”)
[12] Convention on the Prohibition of the Development, Production and Stockpiling and Use of Chemical Weapons and on Their Destruction, 32 I.L.M. 800 (1993) See, e.g., art. 1 (phrasing each obligation as “Each State Party to this convention undertakes ...” and “Each State Party undertakes…”)(emphasis added).
[13] Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on Their Destruction, 10 April 1972, 1015 U.N.T.S. 163 (entry into force 26 March 1975). See e.g., art. 1 (phrasing each obligation as “Each State Party to this Convention undertakes ...”)(emphasis added).
[14] Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on Their Destruction, Sept. 18, 1997, 36 I.L.M. 1507 (hereinafter the “Ottawa Convention”) See e.g., art. 1 (phrasing each obligation as "Each State Party undertakes never under any circumstances to ...")(emphasis added). Even the prohibitions on production, sales, and transfers, which of course might involve private corporations, are addressed to states, which then have treaty obligations to carry out the provisions through domestic legislation and regulation. The United States is not a party to the Ottawa Convention.

(Update, July 3, 2005: Here is the ASIL summary of the new Talisman decision:

"U.S. District Court for the Southern District of New York: Presbyterian Church of Sudan et al. v. Talisman Energy, Inc. (June 13, 2005)

The U.S. District Court for the Southern District of New York (“the Court”) denied the defendant’s motion for judgment on the pleadings.

One of the key issues in dispute between the parties was whether corporations could be held liable under customary international law for violations of jus cogens. Jus cogens norms include the prohibition on genocide, torture, slavery, crimes against humanity and extrajudicial killing. The plaintiffs, who are current and former residents of Southern Sudan, alleged in their complaint that they were victims of genocide, crimes against humanity and other violations of international law as a result of acts perpetrated by the Canadian energy company, Talisman Energy, Inc (“Talisman”) and the Government of Sudan (“Sudan”). Talisman moved for a judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. Talisman contended that, in accordance with the standards set forth in recent Second Circuit and Supreme Court decisions, there was insufficient evidence that customary international included corporate liability for grave human rights violations, or for secondary liability for aiding and abetting or conspiracy to commit serious human rights abuses. In particular, Talisman argued that since the district court’s 2003 decision in Presbyterian Church of Sudan et al. v. Talisman Energy, Inc.244 F. Supp. 2d 289 (S.D.N.Y. 2003), in which the judge held, inter alia, that corporations may be held liable under international law for violations of jus cogens norms, more recent decisions such as the Supreme Court decision in Sosa v. Alvarez-Machain, 124 S. Ct 2739 and the Second Circuit decision in Flores v. Southern Peru Copper Corp., 406 F.3d 65 narrowed the scope of permissible claims under the Alien Tort Claims Act.

Citing Flores, Talisman argued that customary international law, defined as “those clear and unambiguous rules by which States universally abide, or to which they accede, out of a sense of legal obligation and mutual concern,” could not include corporate liability for human rights violations in view of the fact that there was no treaty or international tribunal decision imposing such liability. Talisman further claimed that the ICTR and ICTY Statutes did not reflect customary international law as these statutes were created under special circumstances.

The Court disagreed, citing the ICJ decision in Military and Paramilitary Activities in and Against Nicaragua, noted that “in order to deduce the existence of customary rules, … it is sufficient that the conduct of States should, in general, be consistent with such rules, and that instances of State conduct inconsistent with a given rule should generally have been treated as breaches of that rule.” The Court also held that the ICTY and ICTR Statutes and the decisions of their Tribunals confirm the principle that customary international law prohibiting violations of jus cogens norms such as genocide applies to private actors in addition to state actors. The Court held that the Supreme Court in Sosa v. Alvarez-Machain explicitly contemplated the existence of corporate liability under customary international law.")

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