Corporate War Crimes Begin

[James G. Stewart is an Assistant Professor at the University of British Columbia Law Faculty.  Until recently, he was on the board of the Conflict Awareness Project, but had no role in this investigation.]

Something momentus happened in Switzerland last week—national prosecutors opened a criminal investigation into one of the world’s leading gold refineries, for pillaging Congolese natural recourses. Pillage, of course, is a war crime. If the case leads to a conviction, it will represent the first ever instance of corporate responsibility for an international crime, and the only time since Nuremberg that pillage of natural resources has featured in a criminal trial. In this short blog, I complement an op-ed I published about this today by setting out the background to the case, some of the legal work that I undertook with Ken Hurwitz at the Open Society Justice Initiative prior to it, and the contemporary significance of all this, especially in the wake of the Alien Tort Statute’s demise.

Argor-Heraeus is one of the world’s largest refiners of precious metals. Between 2004 and 2005, the company is alleged to have acquired approximately three tons of pillaged gold from the Congolese rebel group the Front des Nationalistes Intégrationnistes (FNI), through intermediaries in Uganda and the Jersey Islands. As the International Criminal Court heard recently in a case against one of the FNI’s alleged leaders, the armed group was a Lendu militia based in the North-East of the Congo, neighboring Uganda. According to an excellent report by Human Rights Watch, their existence was largely dependent on the extraction and sale of pillaged gold. According to these new allegations, major western producers were buying.

The reappearance of commercial responsibility for pillaging conflict commodities is a long time in the coming. In 2007, I left the Office of the Prosecutor for the ICTY to write a practically oriented document that fleshed out how the contemporary law of pillage applied to modern resource wars. The DRC was my inspiration. The Open Society generously partnered in the project, and the work began in earnest as part of my scholarly focus on corporate responsibility for international crimes more generally (see here for background). I knew, of course, that various “industrialists” (an archaic term used to distance the law governing war crimes from contemporary corporations) were convicted of international crimes after WWII, but I had no idea that these cases extended well beyond the usual references to Flick, Farben and Krupp.

Trawling through WWII cases, I found numerous hidden examples. Take the case against the businessman Paul Pleiger, who managed a company that profited handsomely under Nazism. After the war, a US Military Tribunal found him guilty of pillage for illegally mining in excess of 50,000 tons of coal from occupied Poland each year of the war. A similar fate awaited Walther Funk, when he appeared before the Nuremberg Tribunal charged with pillage for his role in the management of a commercial enterprise named the Continental Oil Company, which exploited prodigious quantities of crude oil throughout occupied Europe over the course of the war. But of what significance are all these dated cases for the realities of modern international criminal law and corporate social responsibility more broadly?

Most importantly, pillage allows prosecutors to focus on root causes of atrocity, instead of addressing rape, torture and murder once a massacre has run its horrific course—natural resources are frequently a means and motivation for armed violence. Since the end of the Cold War, the illegal exploitation of natural resources has substituted for superpower sponsorship as a primary means of conflict financing. Blood diamonds are just part of the problem. All range of natural resources, from gold to timber and beyond, are harvested by willing armed groups to purchase weapons to settle scores, pursue power and perpetrate atrocity. As a consequence, resource wars like that in the Congo are especially brutal, and exceedingly hard to resolve.

In 2010, the Open Society launched our joint project at a conference at the Peace Palace in The Hague. The book, entitled Corporate War Crimes: Prosecuting Pillage of Natural Resources (see English and French versions), provides prosecutors, judges and scholars with a thorough overview of the law governing pillage as applied to illicit resource transactions. It brings together the forgotten WWII cases together and modern case law on pillage, addressing resource predation within a framework structured around the elements of the crime. The text draws on the comparative law governing natural resource title, public international law addressing recognition, the international humanitarian law relative to property and international criminal notions of intent. Just prior to the launch, we trained war crimes prosecutors from various national systems, including Switzerland, at the International Criminal Court.

How is all this relevant?

First and most importantly, this speaks to the benefits of academic/civil society collaborations – without the partnership of Ken Hurwitz at the Open Society, none of this would have happened. Second, the development is a progression of ideas about corporate responsibility for international crimes that began with other academics like Anita Ramasastry and Andrew Clapham, who were pioneers in this field well before this project. Third, it builds upon the work of so many dedicated people in civil society like Global Witness, the FAFO Institute, Rights and Accountability in Development (RAID), but especially in this case, the stellar investigative powers of the Open Society Justice Initiative, Kathi Austin at Conflict Awareness Project and Philip Grant at Trial (for their collective website, see here). Fourth, it substantiates John Ruggie’s call for much greater work on what he describes as “by far the most consequential legal framework” he considered during his mandate as the UN Secretary General’s representative on business and human rights, namely, international criminal law. Fifth, it provides an antidote to the political criticisms emanating from the African Union that international criminal law is racially biased—Western states prosecuting their own corporations for pillage proves otherwise.

And finally, the rise of corporate criminal liability for international crimes fills the vacuum left after Kiobel. In fact, it may even outperform its near moribund predecessor. In a forthcoming piece entitled The Competitive Advantage of Corporate Criminal Responsibility for International Crimes: Atrocity, Commerce and Accountability after Kiobel, I point to several upsides that result from reprocessing ATS cases within a criminal framework. First, international crimes in national legal systems usually apply extraterritorially, bypassing the issue that ultimately proved the ATS’s undoing. Second, cases like Argor-Heraeus involve states asserting criminal jurisdiction over their own corporate nationals, thereby transcending the controversies of universal jurisdiction and the absence of corporate criminal liability in the ICC Statute. Third, corporations are made responsible for international crimes nationally through what Harold Koh calls transnational law, instead of raising the question of corporate personality in public international law. Fourth, neither side of complicity debates in ATS litigation ever faithfully captured the true scope of the doctrine, including that which will apply in Argor-Heraeus if the case moves to trial. Fifth, much of the commentary on the propriety of the ATS process overlooked that, in the eyes of the criminal theory at least, companies should be called to account because they are guilty. And finally, the availability of corporate criminal liability in many jurisdictions throughout the world reduces the pressure the ATS always placed on just one.

In all, it is hard to resist the view that the Argor-Heraeus investigation is a watershed moment for international criminal justice, regardless of how the case pans out.