Views on Kiobel vs. Shell

Last week the United States Supreme Court once again considered the case of Esther Kiobel vs. Royal Dutch Petroleum (Detailed background of the case here). It is too soon to say what the Court’s verdict will be, but whichever way the judges decide, the burden of identifying the best way to adjudicate on corporate accountability should not have to rest on a single case. At the same time, the case clearly points to the ongoing struggle to ensure access to effective remedies for the most serious violations of international law.

Substantive issues of human rights abuses were not at stake at the Supreme Court hearing on Oct 1. The Court was interested in the process: could the case, alleging complicity by Shell in the deaths of 9 activists in Nigeria in 1995, have been heard elsewhere? Was there any American interest involved? If so, was it for the Court to decide, or for the Congress or the State Department? Would hearing the case expose American corporations to charges filed against them abroad? Such were some of the sharp questions the judges asked both counsel, and the US Government.

The judges’ questioning was understandably robust, but that does not necessarily suggest a predetermined outcome or predisposition on the part of judges, although like all benches, the US Supreme Court has some judges who interpret the law narrowly and are deemed conservative, and some who look at it more broadly, and are considered liberal. Cases involving aiding and abetting human rights violations usually require a high threshold of evidence. The mere presence of a company at a location where violations have occurred, or a tenuous link with a specific abuse makes it less likely for that company to be exposed to a legal risk.

Statements made by judges during oral arguments do not necessarily indicate how they might rule. The likely outcome of Kiobel remains unclear. The Court may decide to limit the reach of the Alien Tort Statute to exclude cases where litigating parties are foreign, and alleged abuses occur overseas.

The judges’ questioning and the attorneys’ responses suggest the following:

• Even if the scope of the Alien Tort Claims Act, which allows non-US citizens to file cases alleging violations of “the law of nations or a treaty of the United States” gets narrowed further after this case, it may still be possible to proceed against an American corporation under the law.

• Plaintiffs may have to demonstrate that they have exhausted local, or other remedies, before turning to a court in the United States.

• The Court may rely on an earlier interpretation of the Alien Tort Statute as revealed by Justice Elena Kagan reading from the judgment in the 1980 case, Filartiga vs. Pena-Irala: “For purposes of civil liability, the torturer has become like the pirate and slave trader before him, an enemy of all mankind.” Other precedents, like the Marcos case and the Sosa case, will also likely guide the outcome.

For victims of human rights abuses, the act of bringing a case against a corporation – any corporation – is always going to be difficult. Doing so in a foreign country against a foreign corporation in another jurisdiction, more so. It seems likely that challenging a foreign corporation in the United States will have to meet several tests to determine if the case can be heard in an American court, and it is hoped that the Supreme Court will provide clarity for such tests, when it rules on Kiobel. But in dealing with cases, critical questions worth addressing are often left unanswered by Courts.

Human rights activists, academics, and experts have long valued the notion of universal jurisdiction involving certain abuses seen as being so grave that perpetrators should be held accountable whenever found, wherever possible. There is much consensus around universal criminal jurisdiction, but less so on the civil side. (In the Kiobel hearing, some judges were concerned during oral arguments about what foreign courts might do in cases involving American corporations, if the principle of reciprocity applies to universal civil jurisdiction.) Criminal matters are different: The pursuit of Nazi-era war criminals is one such example. There is no statute of limitations for violating peremptory norms. Whether Kiobel involves such peremptory norms is indeed for the Court to decide, but to do so it has to hear the case first.

We also live in an imperfect world, where for a range of reasons, local courts may be unwilling or unable to hear certain cases. During the Kiobel hearings the judges acknowledged as much, by not pressing on why Nigeria wasn’t the appropriate forum for the case. Prosecutors too are often unwilling to take up such cases because they lack resources or they fear political pressure.

It is in that environment that litigants have sued companies in the United States under the ATS. But it is worth reflecting if the ATS is the best remedy for the case. Whether the Court takes an expansive view of the statute or not, the fact remains that the ATS has not been an effective deliverer of justice, nor offered compensation to human rights victims in each case.

My conversations with lawyers who take up such cases have shown that the evidentiary threshold is high; mounting such cases expensive; and thanks to seemingly limitless resources, a large corporation’s legal budget can dwarf the resources a trial lawyer can assemble, making it easier for the company to argue effectively against the case being heard. That said, the ATS has enormous normative power, in reminding corporations of what can happen to them, if they disregard human rights. The former chief executive of a company that was a defendant in such a lawsuit once told us in a closed seminar that the case occupied nearly a third of his executive time. Think of the level of a CEO’s pay (running into tens of millions of dollars) and calculate the financial implications for a company when it has to deploy managerial time and resources to defend itself.

Then think of Esther Kiobel: she lost her husband, executed by the Nigerian state after a trial universally condemned as unfair. She has been seeking justice, which she cannot expect to get in Nigeria. She lives in the United States, and is reportedly now an American citizen, still waiting for justice.

What about justice, then?

Here we go beyond the realm of the dry text of the law, into the world of the idea of justice. I find it useful to turn to Amartya Sen, the Indian-born Harvard academic and Nobel Laureate, and what he said about law and justice, in his book, The Idea of Justice, Sen argues that the theory of justice should be more concerned with the elimination of “removable injustices” rather than defining a perfectly just society. Content, not only form; substance, not only process. In classical Sanskrit, there are two ways to describe justice: Niti deals with propriety, rules, processes, procedures and institutions. Nyaya, which is broader, deals with the ultimate realization of justice. Arguably, niti shows the Rawlsian approach, whereas Sen prefers a system based on nyaya. Niti, ultimately, is an abstract exercise that, if implemented completely, will result in maximum public welfare and justice. But nyaya, which relates to how those laws and regulations are enforced, helps a society get there.

Kiobel is a useful reminder of some of these broader issues of accountability. Law alone may not be concerned with that, but societies should. Corporations are legitimate entities, which operate under laws devised by people to perform specific economic functions. We are right in expecting that corporate actions will be legal and that corporations will be accountable under national and international laws and operate consistent with the UN Guiding Principles – and that means human rights are always respected, and not undermined. But Kiobel is also a reminder of the longer struggle to develop effective judicial remedies to bring justice for those who have suffered harm. That struggle will go on.

Detailed Background

Esther Kiobel’s husband, Dr Barinem Kiobel, was among the nine people the military dictatorship in Nigeria executed in 1995, in spite of appeals from world leaders. Besides Dr Kiobel, the nine included the internationally-renowned writer activist Ken Saro-Wiwa, Saturday Dobee, Nordu Eawo, Daniel Gbooko, Paul Levera, Felix Nuate, Baribor Bera, and John Kpuine. They were Ogoni activists campaigning against the operations of Shell, the Dutch oil company, in the Niger Delta. Shell is the largest foreign oil company operating in Nigeria; it began explorations in 1938, and made its first commercial discovery in 1956.

What is at dispute is the role Shell played: the plaintiffs allege that Shell is responsible for the jailing and ultimate executions of the Ogoni Nine; a charge Shell denies. Shell says that in fact its senior managers appealed to the Nigerian authorities not to execute the nine men, but the government ignored the company’s appeal, just as it ignored phone calls from then US President Bill Clinton.

Kiobel is suing Shell not in Nigeria (where the executions occurred), nor in Britain or the Netherlands (where Shell has headquarters), but in the United States, under the Alien Tort Statute of 1789, which states: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”

Meant to secure justice for cases such as the assault on a foreign diplomat on US soil (and other scenarios such as crimes committed on high seas such as piracy), the law has emerged as an unlikely remedy for human rights abuses. Over the years lawyers have interpreted the brief text of the law to bring civil action on behalf of clients who aren’t American, against individuals and companies who need not be American, for a range of crimes, including torture and human rights violations that have occurred abroad.

Over 100 such cases have been filed against corporations over the years, and except for a handful of cases, most have been dismissed. In one case, the defendant decided to settle the case with the plaintiffs after a lower court ruled that the case could be heard. (Another case to reach settlement before trial was Wiwa v Shell. However, since the case was settled out of court and the company did not admit wrongdoing – a condition which the plaintiffs accepted as part of the settlement – that case has limited value as precedent.

Photo: Flickr-islespunkfan