Corporate Accountability Comes before the U.S. Supreme Court

Erica Razook attended Tuesday's hearing of arguments at the US Supreme Court in the case of Esther Kiobel et al. v. Royal Dutch Shell Petroleum. The case focuses on the extent of US jurisdiction over global corporations for abuses allegedly committed outside U.S. borders. It is being closely watched by human rights advocates, international companies and governments around the world.

When Esther Kiobel visited her husband Barinem in a Nigerian prison to bring him some food in January 1995, she was stripped, beaten and thrown into a cell herself. In November that year, Barinem was executed alongside eight other activists from the Ogoni region of Nigeria, provoking widespread international condemnation of the country’s military rulers.

On Tuesday, Ether Kiobel was on the steps of the US Supreme Court, awaiting the start of the presentation of arguments in Esther Kiobel et al. v. Royal Dutch Shell Petroleum – a civil case seeking damages from Shell on the grounds that the global oil company, which operates in the Ogoni region of the Niger Delta, shares responsibility for what happened to her, her husband and others from the community.

The case has become a test of whether corporations may be held civilly liable for international human rights violations under the US Alien Tort Statute (ATS). More broadly, Kiobel has become a test case for the notion of corporate accountability.

When the court opened at 9 am, there was a line outside, as law students and others hoped for a chance to hear noted lawyers argue before the nine Supreme Court justices, in a battle between Ms. Kiobel and the 11 other Nigerian plaintiffs and one of the world’s largest oil companies.

It was easy to get lost in the deliberations, even for the ones fortunate enough to make it inside the packed chambers.

The ATS is a statute almost short enough to fit in a tweet.  It reads, simply: 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.

Those 180 characters, though, have stirred up quite a ruckus.

The judicial throw-down at the Supreme Court centered, for the most part, on one question: is corporate liability for violations of international law a matter of substantive international law itself, or a matter of how the US decides to provide remedies, domestically, for violations of international norms?

There is good cause for the court to conclude that the ATS is a remedial enforcement vehicle, providing jurisdiction over actions, and not dictating specific forms or classes of actors – a position supported by the US government, which weighed in in favor of the Nigerian petitioners.

The ATS is unique in its provision of a specific domestic channel for legal remedy for internationally established harms. But being unique does not make it wrong.  The acts the ATS covers are the most egregious conduct known to us -- torture, cruel, inhuman, or degrading treatment, genocide, war crimes, crimes against humanity and summary execution among them. They deserve special treatment. And, in fact, many states find ways to provide remedy for these wrongs.  It’s what they’re supposed to do.

The statute was established in the late 1700s when assaults on ambassadors and piracy represented a threat to a new member of the community of nations. In 1980, human rights advocates revived the statute to sue a former Paraguayan police chief on behalf of two torture victims. The statute has subsequently been used in a range of cases against other individuals as well as companies; Esther Kiobel et al. v. Royal Dutch Shell Petroleumrepresents the first challenge to corporate liability under the statute before the Supreme Court.

In an open letter to Shell published to coincide with the hearing, Nigerian, UK and US groups and individuals reminded us of the slew of attacks on the people and environment in the Niger Delta region, which they asserted that Shell has exacerbated, in part via routine payments to armed militants. The atrocities committed included the destruction of the Rumuekpe town between 2005 and 2008 and the deaths of 60 people.

During oral arguments on Tuesday, Justice Samuel Alito painted Shell and its activities in the Niger Delta as too remote for a US court to adjudicate. But, Shell itelf is not quite so removed from the US.

Though legally anchored in the United Kingdom and the Netherlands, Shell’s US subsidiary is one of its largest, with approximately 22,000 Shell employees in the US. Including its consolidated holdings and share in equity companies, Shell is one of America’s largest oil and natural gas producers and marketers, gasoline marketers and petrochemical manufacturers. It has approximately 25,000 gas stations in the US, Shell's most visible public presence. And it has a large base of US shareholders.

To exclude such a defendant from responsibility under the ATS would foreclose one of the few paths for redress for corporate involvement in gross violations of human rights in order to protect one of the richest corporate persons in the world.

It denies the collective power, impact and influence that a corporate entity as a whole commands by suggesting, as Shell did, that merely taking legal action against officers and directors is sufficient.

It would leave us with the absurd result Justice Breyer posed to the Shell lawyer: Pirates, Incorporated.

“Do you think in the 18^th century if they’d brought Pirates, Incorporated, and we get all their gold, and Blackbeard gets up and he says, ‘Oh, it isn’t me; it’s the corporation’….do you think that they would have then said: ‘Oh, I see, it’s a corporation. Good-bye. Go home.’?”

Esther Kiobel should not be told “Good-bye, go home”.