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Reactions to Kiobel @ SCOTUS #1: No corporate impunity

Editorial Note: This morning the U.S. Supreme Court heard oral arguments in Kiobel v. Royal Dutch-Shell, a case which we have blogged about extensively over the past 18 months. Several of our staff members were in attendence, and four of them wrote brief initial impressions. This is one of those four.


I was struck by two things at today's argument. First, although several of the justices - especially Justice Alito - asked difficult questions that suggested a skepticism about using the ATS for transnational human rights cases, they did not ask pointed questions that supported applying different rules to human beings and corporations. 

Justice Alito focused in particular on whether the ATS should apply to acts outside the United States, or acts committed by foreigners. When it was pointed out that theFilartiga case, which is the seminal modern ATS human rights case, involved torture by a Paraguayan official against a Paraguayan citizen in Paraguay, Justice Kennedy (who is often the deciding vote on controversial cases at the Supreme Court) stated that he thought we could assume that Filartiga was a valid precedent.

Second, although there were many interesting questions, statements, and examples (not least of which was Justice Breyer's hypothetical involving Blackbeard claiming that his stolen gold was exempt from recovery because it really belonged to Pirates, Inc.), the single line that impressed me the most was delivered by Kathleen Sullivan, the attorney for Shell. She stated: "We do not urge a rule of corporate impunity here."

What she meant was that even if the corporation itself could not be sued, any responsible corporate officers or employees could be sued. Of course, what she was urging is exactly that: corporate impunity. Shell's position would prevent the corporate treasury from ever being used to compensate victims of corporate-abetted human rights abuses, even if the . . .

Human rights in the spotlight at the US Supreme Court (VIDEO)

Our legal director, Marco Simons, was interviewed this morning by Amy Goodman on Democracy Now. The topic? The Kiobel v. Royal Dutch Shell case, one of two human rights cases that will go before the US Supreme Court next Tuesday. Here’s the video:

The stakes on Tuesday are very high, and Marco summed it up nicely:

"This case is really about whether a corporation that participates in serious human rights abuses, such as crimes against humanity or genocide or state sponsored torture, can profit from those abuses and shield those profits from the victims when the victims come to take them to court."

A favorable ruling will not only bring the Kiobel plaintiffs closer to a small measure of justice for the terrible abuses they suffered,  but it will also firmly establish the principle that victims of serious human rights abuses may bring suits against corporations under the Alien Tort Statute (ATS) in US  courts. A ruling in favor of Royal Dutch Shell, on the other hand, would be an enormous setback for corporate accountability and human rights litigation, and help immunize corporations from liability for complicity in some of the worst abuses imaginable, including forced labor, genocide, and other crimes against humanity.

In addition to the Kiobel case, the Supreme Court will also be hearing arguments in Mohamed v. Palestinian Authority, which raises similar questions about human rights lawsuits against organizations, including corporations, under the Torture Victims Protection Act (TVPA). The stakes in this case are also high. With our partners, we’ve been campaigning around both cases at the newly launched website, Corporate Accountability Now.

The Obama Administration has weighed in on both cases as well, and earlier this week my colleague Rick sent me some notes on the . . .

Private arbitration panel ignores human rights, gives Ecuador unprecedented order to shield Chevron from Amazon cleanup costs

On Wednesday, Marissa noted that the Lago Agrio plaintiffs - the 30,000 victims of Chevron's toxic legacy in the Ecuadorian Amazon - had taken the step of filing a petition against the Ecuadorian government with the Inter-American Human Rights Commission, asking the Commission to ensure that Ecuador compels Chevron to pay the court-ordered costs of cleaning up its mess. Yesterday, a private arbitration panel demonstrated exactly why this petition is necessary. The arbitrators' award orders the Ecuadorian government, including the court system, to take all measures to prevent enforcement of the court judgment against Chevron.

This is an egregious and apparently unprecedented decision. These arbitration panels, convened under investment treaties, are supposed to decide whether a government has treated a foreign investor fairly - usually in the context of a state expropriation of assets, for example. Never before has such a panel, which is made up of private lawyers who act as arbitrators in a lucrative side business, attempted to reach into a country's judicial system and order the domestic courts around.

The worst aspect of the new award is that it completely fails to take into consideration the rights of the Lago Agrio plaintiffs, who continue to suffer from the toxic contamination. Until the judgment is enforced, the contamination won't be cleaned up. Chevron is claiming that it was mistreated by the Ecuadorian government in the Lago Agrio lawsuit, but this award doesn't affect the rights of the Ecuadorian government; it only affects the rights of the victims themselves.

This is an extremely troubling development in investment arbitrations.


Update: According to the Lago Agrio plaintiffs' lawyers, the Ecuadorian courts have put due process and human rights above the investment treaty arbitration. Today the judgment against Chevron was certified by the court, which specifically rejected the notion . . .

Family Members of Victims of Congolese Massacre Denied Justice in Québec Appellate Court

One Friday afternoon in October 2004, Anvil Mining employees transported a Congolese army detachment in company plane to Kilwa, a copper mining town located near Anvil’s Dikulushi copper mine, which had come under the control of a small group of poorly armed men who had explicitly announced they did not intend to stop the company’s mining activities.  Over the course of two days, Anvil employees drove the soldiers around Kilwa in Anvil cars while they slaughtered townsfolk, burned their houses, and buried them in mass graves.  When the smoke cleared, over eighty civilian Kilwans were dead

On January 24, three judges on the Québec Court of Appeals informed the representatives of the victims that the courts of Canada are closed to their claims for redress.  (The judgment, in French, is available here.) 

As I described in a previous post, the victims of the Kilwa massacre sought justice in Congolese and Australian courts for years.  A Congolese military tribunal acquitted several defendants (including three company employees) of all responsibility for the killings after a trial marred by internationally criticized irregularities.  Australian lawyers who initially took on the case with the intention of suing Anvil at its headquarters in Perth ended up dropping it due to intimidation through costly procedural maneuvers, and interference by D.R.C. officials who prevented them from meeting their clients. 

All this seemed set to change when a judge in Montréal accepted the case and rejected Anvil’s efforts to dismiss the claims.  In an April 2011 decision, the court found that jurisdiction in Québec was proper, as Anvil maintained an office in the province, and its staff in Queébec necessarily dealt with issues related to the Dikulushi mine, which was Anvil’s sole asset.  The court also noted that as a practical matter, the plaintiffs were . . .

Lago Agrio Case Pits International Human Rights Against International Commercial Law

The Lago Agrio plaintiffs’ increasingly complex struggle for justice against Chevron, and for a cleanup of their rainforest home, has taken a new turn. Last Thursday, the plaintiffs submitted a request to the Inter-American Commission on Human Rights, requesting precautionary measures to ensure that Ecuador enforces the multi-billion dollar judgment that its courts have rendered against Chevron. The plaintiffs argue that their rights to life, physical integrity, health, fair trial, and judicial protection are being placed in imminent danger as a dispute between Chevron and Ecuador  before a private investor-state arbitration panel—in which the plaintiffs themselves are not permitted to participate—threatens to impede the enforcement of that judgment. 

Why are the plaintiffs, who have won in the Ecuadorian courts, now going after the Ecuadorian government in the Inter-American Commission? The answer lies in the structure of international law, and the steps that Chevron has taken to abuse its processes and its principles.  

Since 2009, Chevron has sought to avoid paying for a cleanup by attacking the Ecuadorian judicial process outside of Ecuador. In addition to asking the U.S. courts to prevent enforcement of the judgment (which a U.S. appeals court recently refused to do), Chevron also appealed to a forum that was likely to be more hospitable to corporations: an international arbitration panel. A treaty between Ecuador and the U.S., known as a Bilateral Investment Treaty (BIT), allows U.S. investors in Ecuador to bring a dispute with the government to a panel of three private arbitrators, who are typically commercial lawyers who serve as arbitrators in a (very well-compensated) side business.  

Urging that the Ecuadorian judicial process was interfering with its rights as an investor corporation, Chevron has sought an order from the BIT panel requiring that Ecuador interfere in the judicial process, or indemnify Chevron for . . .

Big Oil Uses Fiction, Not Fact, to Oppose New Transparency Rules

Are wild claims “facts”?  Oil companies would like you to believe so.  Spend some time perusing the avalanche of submissions that oil and gas companies have sent into the Securities and Exchange Commission (SEC) trying to water down forthcoming rules requiring them to publish their payments to the governments where they operate, and you’ll notice that they have one thing in common: a nearly complete lack of facts to back up their wild claims.   

EarthRights International (ERI) advocates for strong rules because our community partners in Burma and elsewhere want to use payment information to hold their governments accountable for the wealth received from resource extraction.  But the companies complain that if they have to disclose their payments as Congress has mandated, they’ll lose contracts to less transparent competitors and could be forced to violate foreign restrictions on disclosure.  Their lawyers and lobbyists have done their job well – nothing keeps regulators off your back like an appeal to their fear of losing out to the Chinese or crippling American enterprise in uncertain economic times.  Yet their submissions are curiously devoid of evidence; instead of providing facts, the companies pose hypotheticals, speak in generalities, and float widely varying estimates of compliance costs with no explanation. 

Meticulous research by Publish What You Pay coalition (PWYP) members has shown that these scare tactics are just smoke and mirrors.  When you place the companies’  claims next to the actual facts, it's clear that what Big Oil really fears is public scrutiny of its questionable dealings, rather than competitive injury to its operations.  The SEC must show that it's not “in bed” with Exxon and Chevron and their friends and issue rules that comply with the law

ERI recently submitted a letter to the . . .

Are big oil and the SEC in cahoots, or is the SEC just scared?

Faced with the threat of a lawsuit if they issue effective rules to implement a new law requiring oil, gas and mining companies disclose their payments to governments, the Securities and Exchange Commission (SEC) was hit today with a hilarious yet appropriate stunt by our friends from Oxfam America. The intended purpose of this pre-Valentine’s Day action was to draw attention both to industry’s high pressure tactics, and to remind the SEC that they are not clients of big business, but government agents tasked with drafting rules to implement laws passed by Congress.

More actions are planned in the near future, beginning next Thursday at Chevron’s Houston offices. Oxfam America, Global Witness and other human-rights and anti-poverty organizations also are planning to place ads in several news publications next week, including the print edition of The Wall Street Journal and web editions of the Hill, the Washington Post, Politico and the Huffington Post. 

Ian Gary, Oxfam’s Senior Policy Manager with their oil, gas and mining program discussed the purpose of the morning’s action: “Our campaign aims to send a strong message that we’re watching, and ready to fight back if the regulatory agency issues weak final rules.” The truth is that only rules that adhere to the law—meaning project-by-project disclosures with no exemptions—will produce information that will allow civil society and investors to evaluate secretive deals between extractive companies and governments, and ensure that people in resource-rich countries benefit from energy development. 

The oil industry, led by their lobby, the American Petroleum Institute (API), has made wild claims that they will lose hundreds of millions of dollars and be forced to break foreign laws if the SEC rules do not grant them exemptions that would, in reality, totally gut the new law.  Their claims are simply untrue, overstated, and unsupported.  . . .

Nigerian Groups Ask Norway to Divest from Shell Over Oil Spills

The Norwegian Government has been given a second chance to put its money where its ethical mouth is.  Earlier this week, a coalition of scientists, environmentalists, and Nigerian community representatives petitioned Norway’s Government Pension Fund to divest from Royal Dutch Petroleum, claiming that the company is violating the Fund’s Ethical Guidelines by causing severe environmental damage through oil spills in the Niger Delta.  Norway should accept the complaint and divest, or risk undermining its public commitment to responsible investment and breaching its own Ethical Guidelines.

The Fund, which is reported to be largest sovereign wealth fund in the world and an influential global investor, subjects its investments to an ethical screen that is meant to prevent Norwegian public money from financing human rights abuses, environmental degradation, war crimes, and the trade in certain destructive products like weapons and tobacco.

Norway’s Council on Ethics investigates companies in the Fund’s portfolio and, based on its research, can recommend divestment if there’s an unacceptable risk that the company’s activities will make the Fund complicit in unethical behavior.  However, the recommendation is not binding; the Norwegian Ministry of Finance can decide to ignore the recommendation entirely, or to prescribe other courses of action, like active shareholder engagement.

The system has often worked well.  The Fund has divested from a number of mining and timber companies based on human rights and environmental concerns; the list of excluded firms even includes Wal-Mart, which was pegged as a violator of labor rights.  It has also divested from arms dealers and tobacco manufacturers.  The Fund was even able to take a position on the Israeli occupation of the West Bank, excluding from its portfolio companies that it deemed to contribute to violations of the law of war.  In a number of other cases, where the Ministry . . .

"¡La gente inteligente, defiende el medio ambiente!" Thousands march for the right to water in Peru

Today, thousands of Peruvians are now participating in a "Grand National March for the Right to Water and Life." Many of the marchers are setting off from the lagoons of Cajamarca, or from the Amazonian jungle, or from the Southern Andes, marching hundreds of miles to arrive in the capital, Lima during the second week of February. The march seeks to broadly respond to a public policy in Peru of valuing a particular model of economic development over the health and wellbeing of communities adversely affected by that "development" — particularly when large resource-extraction projects threaten a community’s water supply.

The focal point for the march is the Conga project, a proposed gold mining operation in Cajamarca, which presents an emblematic example of many of the most salient issues to which the march seeks to respond. Here in our Peru office, we have been keeping a close eye on the development of the project and its opposition. The project was recently put on hold after public protests and a report prepared by the Ministry of the Environment called attention to the environmental risks associated with the proposal. Now, however, a new executive cabinet—formed in the aftermath of the political upheaval following the release of the Ministry of Environment’s report—seems likely to give the project the go-ahead in spite of a great deal of opposition from local civil society organizations and the regional government.

The march has quickly taken on a much broader appeal. It is serving as a rallying point for similar concerns and a growing social movement opposing development policies that leave communities impoverished and sick. Coordinated activities are being organized throughout the country, including by farmers in the north, by those living in the southern highlands, and by organizations of indigenous . . .

US appeals court rejects Chevron's attempt to avoid $18bn pollution judgment in Ecuador

A couple of weeks ago, I blogged about an Ecuadorean appeals court upholding an $18 billion dollar judgment against Chevron for massive oil pollution in the Amazon rainforest. The Court rejected Chevron’s arguments that the judgment was procured by fraud. Today, a decision by a federal appeals court in New York makes it more likely that this judgment can be enforced. 

Last year, fearing that it was going to lose in Ecuador, Chevron sued the plaintiffs in New York seeking a court order that would prevent the plaintiffs from trying to enforce any Ecuadorean judgment outside of Ecuador. Since Chevron no longer does business there, the judgment could not be enforced inside Ecuador.

A New York trial judge accepted Chevron’s arguments that the Ecuadorean proceedings were likely tainted by fraud, and issued an order barring the plaintiffs’ lawyers from enforcing any judgment, at least until Chevron’s fraud allegations could be tried in New York. Then, back in September, the appeals court overturned that trial court order, but it did so without issuing an opinion explaining its reasons, so the parties did not know precisely what the court of appeals had decided. 

Today, the court issued its opinion. It held that the New York law under which Chevron sued only determines if a foreign judgment can be enforced in New York; a New York court lacks power to determine whether a foreign judgment is enforceable anywhere else. Therefore, the trial court was not authorized to order the plaintiffs not to enforce the Ecuadorean judgment outside New York.  

Chevron, of course, will still try everything else it can think of to prevent the judgment from being enforced. We’ll keep you posted. . . .

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