Kiobel vs Shell: blow to promoting human rights in business

shellI wanted to write something about the Kiobel vs Shell judgment last week, but haven’t found the time. That, along with the flood of commentary by people more capable than myself, prompted a rethink: better than reading my humble opinion, I’d share links to several opinions coming at the issue from different perspectives.

First some background …

Last week the US Supreme Court dismissed a case against Royal Dutch Shell brought on behalf of Dr. Barinam Kiobel, a murdered Ogoni leader, and eleven other Nigerians from the Ogoni region and resident in the US, accusing Shell and its Nigerian subsidiary 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. Shell fought the case all the way to the Supreme Court, which ultimately decided in Shell’s favour. The gist of the court’s judgment was that Shell cannot be held accountable in a US court for its actions in Nigeria because the Alien Tort’s Statute does not apply to conduct outside the US. The court reasoned that the presumption against extraterritorial application of laws applies to claims under the Alien Tort Statute, and nothing in the statute rebuts that presumption. The complete judgement is  available here and background documents are at the bottom of this post.

The National Law Journal’s Marcia Cole has written a good summary of the judgment and reasoning, while accused Shell of using extraterritoriality as a sanctuary for impunity.

Picking up the theme, Stephanie Safdi in The Huffington Post wondered when a corporation’s links with a state are sufficient to make it domiciled: “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’. It appears that the complicated ownership structures of multinational holding companies is enabling them to escape the reach of states’ laws …

… especially when courts appear to lack appetite to enforce them. Writing on The American Lawyer website, Michael D. Goldhaber argued the decision ‘zombified’ the Corporate Alien Tort: “Rather than kill the corporate alien tort outright, the Court maimed all forms of alien tort by restricting their territorial reach. The corporate alien tort is therefore doomed to remain a zombie doctrine–not quite alive and not quite dead.”

Even the undead have legacies: “One lasting legacy of corporate alien tort is the nurturing of a wider movement for business human rights, best embodied by the International Corporate Accountability Roundtable, with the “Ruggie rules” promulgated by former U.N. guru John Ruggie as its rallying point. Another is the internalization of human rights norms by large public corporations.”

Perhaps, but the chilling effect of the Kiobel precedent were felt almost immediately. Bloomberg reported on Monday that the U.S. Supreme Court has ordered reconsideration of a 2011 ruling requiring Rio Tinto to defend against a lawsuit accusing the mining company of genocide in Papua New Guinea.

Jessica Lawrence’s commentary on the European Law Blog notes that the European Commission submitted an amicus curiae brief to the Court detailing the EU’s position on the extraterritoriality issue. In short, it argues that (1) the US should exercise universal civil jurisdiction only in cases for which universal criminal jurisdiction would apply, and that (2) the ATS should include an exhaustion requirement. Giving the lie to a unified European position, the UK and Netherlands submitted opposing amicus curiaes, arguing that the ATS should be limited to civil cases with some US-nexus. Lawrence asks whether anyone is surprised that the two dissenting voices are the defendant’s domiciliary states?

Still with Europe, look out for the European Society of International Law’s Research Forum on 23 May in Amsterdam. ESIL’s Interest Group on Business and Human Rights has issed a CfP (deadline was 15 April) addressing practical challenges, and pointedly asks what the future is of US litigation after the Kiobel judgment.  

Geert Van Calster, a Belgium-based lawyer and academic, also considers implications from an EU perspective. He notes that at least since  1997’s Doe v. Unocal more than 50 cases alleging corporate involvement in human rights abuse abroad have been litigated in the  US under the ATS’s provisions, but that the Kiobel judgment severely diminishes the scope for future litigation.  ‘This means that attention may now be re-ignited in what has been brewing in the EU for some time: using national courts to apply national law for conduct abroad: in other words, classic private international law /conflict of laws coming to the limelight once again.’

More background:

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