Last week, Royal Dutch Shell agreed to pay $15.5m to Ken Saro-Wiwa Jnr. and others in settlement of an action brought against Shell in the wake of the execution of the Ogoni 9. The action was filed in the United States under the Alien Tort Claims Act, 1789. From Myanmar to Indonesia, Ecuador and Nigeria, the hitherto little known Act has been successfully, invoked in the Unites States. Against this background, NIYI AYOOLA–DANIELS examines the international framework for Corporate Social Responsibility for multinationalsIn the KEN SARO-WIWA v SHELL case, the Plaintiffs–Appellants (Ken Saro-Wiwa, Jnr. and others) filed an appeal from the judgment of the court of Southern District of New York which dismissed the plaintiffs’ claim on March 18, 2008 in an action in which Shell Petroleum Development Company and others were accused of having collaborated with the Military Government of Nigeria under the late General Sani Abacha in the execution of Ken Saro-Wiwa and eight other Ogoni leaders.On June 3, 2009, the United States Court of Appeal entered a summary order vacating the judgment of dismissal and remanded the action for further proceedings.The parties subsequently entered into a settlement agreement ‘compromise of disputed claims’ disposing of the action and certain related actions pending in the Southern District of New York pursuant to rule 41 (a) (1) (A) (ii) of the US Federal Rules of Civil Procedure.Shell agreed to pay $15.5 million in settlement of the legal action without conceding or admitting any of the allegations under the Alien Tort Claims Act.The KEN SARO–WIWA V SHELL case or settlement agreement has once again brought to lime light the unrelenting wave of changes in international corporate governance, corporate social responsibility (CSR) and accountability of Multinationals. This historic case has beamed a high wattage search light on the impact of litigation–based strategy to prosecute alleged global human rights violation and abuses.More than ever, American courts have increasingly held on to the enviable status of being a pace setter in international human rights protection by assuming jurisdiction to hear cases brought under the Alien Tort Claims Act. Though the Alien Tort Claims Act was originally drafted in 1789 to deal primarily with piracy and to permit sailors press-ganged into the British Navy to sue Britain in American courts, lawyers representing oppressed clients from the developing countries began using ingenious persuasive argument to expand the scope and application of the Act.Massive credit must be given to American judiciary and her entire legal system for embracing change by allowing the Act to be relied upon by lawyers to sue foreign Multinationals in United States courts for human rights abuses committed abroad. According to Sarah Cleveland, an international law specialist at the University of Texas, American Judges became more familiar with international human rights law and also became more aware of the ineffectiveness of the judicial system in developing countries, thereby becoming more sympathetic to alien tort claims arising from those countries.Under the Alien Tort Claims Act, foreigners could sue each other in American Courts over violations of the ‘law of nations’ – that is international norms regarding genocide, forced labour, slavery and torture, if they could not expect a fair trial in home countries.This new frontier of the Act was eloquently expressed by a US Federal District Court in the XUNCAX v GRAMAJO case where a group of plaintiffs won $47 million alien tort judgment in a US court against a former Guatemalan General held responsible for the rape and torture of an American nun and nine others in Guatemala where the judge observed as follows:‘Reading the Alien Tort Claims Act as essentially a jurisdictional grant only and then looking to domestic tort law to provide the cause of action mutes the grave international law aspect of the tort, reducing it to no more (or less) than a garden–variety municipal tort. This is not merely a question of formalism or even of the amount or type of damage available; rather it concerns the proper characterisation of the kind of wrongs meant to be addressed under the Alien Tort Claims Act: those perpetrated by hostis humani generis (“enemies of all human kind”) in contravention of jus cogens (peremptory norms of human rights law). In this light, municipal tort law is an inadequate placeholder for such values’.In the context of this Act, the liability of the defendant will be identified on the basis of those norms of international laws which are considered specific, universal and obligatory. Unlike Europe, the form of extra–territoriality which victims relying on the Alien Tort Claims Act invoked is both adjudicative and prescriptive.Relying on this Act, lawyers employed by International Labour Rights Fund filed a suit on behalf of a group of impoverished Myanmar villagers against Unocal, the California oil giant in an American court. The villagers claimed that the Company was ‘vicariously liable’ for human rights abuses committed by the Myanmar military during the construction of $1.2 billion Yadana natural gas pipeline. Suits have also been filed in the US against Exxon Mobil for abuses allegedly committed by the Indonesian military in Aceh, a restive province where Exxon extracts over $1.5 billion in natural gas annually. Ecuadorian Indians have equally sued the oil giant Chevron Texaco under the Alien Tort Claims Act for allegedly polluting the jungle region of the Amazon.The growth of alien tort as a tool against human rights abuse came at a time of the explosive growth of multinational corporations. As Nayan Chanda of the Yale Center for the Study of Globalisation notes:‘From a mere three thousand in 1990 the number of multinationals has grown to over 63,000 today. Along with their 821,000 subsidiaries spread all over the world, these multinational corporations directly employ 90 million people (of whom some 20 million [are] in the developing countries) and produce 25 percent of the world’s gross product. The top 1,000 of these multinationals account for 80 percent of the world’s industrial output. With its $210 billion in revenues, ExxonMobil is ranked number 21 among the world’s 100 largest economies, just behind Sweden and above Turkey. The largest multinationals now have as much, if not more, influence on global affairs as many states. Through their lobbyists and contributions to political campaigns around the world, they can directly influence public policy. Through their choices of where they locate production facilities, pay taxes, and allocate investment, they wield enormous power over economic and social policy, tax codes, and labor relations. Through their business practices, they can influence and even define corporate governance and the rule of law in poor countries’.It is my view that the American Judiciary and lawyers advocating for the widening and expanding the scope and application of Alien Tort Claims Act should be applauded for having done a great service to humanity particularly in relation to checking human rights violations committed abroad. Same applause should be given to the UN Sub–Commission on the Promotion and Protection of Human Rights for adopting a Resolution in August 2003 entitled ‘Norms on the Responsibilities of Transnational Corporations and other Business Enterprises with Regard to Human Rights’. The Norms represent a very ambitious attempt at codifying the principles that companies must respect in the field of human rights, labour law, environmental protection, consumer protection and prevention of corruption.Before now, the longstanding laisser faire attitude, corporate impunity and indifference of Multinationals to human rights violation was legendary. This situation is better appreciated when it is realised that private parties to a dispute involving transborder transactions are governed by complex technical rules of private international law or conflict of laws.Generally, under the rules of ‘conflict of laws’ whenever a court is presented with a case it should consider the following:Check whether it has jurisdiction over the dispute – (jurisdiction to adjudicate).Determine the law applicable to the dispute - (jurisdiction to prescribe) andCheck jurisdiction to enforce its judgment – (this is because a decision will only be executed in another legal system when it has been recognised by the local court of that other legal system).The consequential effect of all these rules of private international laws (outside the regime of Alien Tort Claims Act) is that are there large inconsistencies and conflicting rules of resolving private international disputes throughout the different legal systems causing not only legal uncertainty for the parties concerned, but also high volatile frustration in their quest to get redress for alleged violation of their human rights.In conclusion, it is submitted that though litigation-based approach under the Alien Tort Claims Act may be an effective and potent weapon to push multinationals to change their behavior and become more accountable for human rights violation, litigation alone will not guarantee an all round success. International Businesses, Human Rights Activists and Governments will have to find a middle way to allow for the possibility of litigation as a mechanism to protect rights while not depriving developing countries of crucial investment through constant recourse to high cost and negative publicity litigation.
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