Stewart Mini-Symposium: From the ATS to Corporate Criminality under ICL — Mind the Gap

[Steven Ratner is the Bruno Simma Collegiate Professor of Law at the University of Michigan Law School.]

James Stewart’s “The Turn to Corporate Criminal Liability for International Crimes” provides an important contribution in the ongoing debates regarding corporate accountability for human rights violations, a debate that has assumed even greater prominence since the publication of the UN’s Guiding Principles and an ongoing process of discussions within the UN on new strategies for businesses to respect human rights. Stewart makes three compelling points with which I think most observers of the topic would agree. First, many human rights advocates and scholars have had far too much faith in the ATS as a vehicle for accountability, leading to undue disappointment in its limited scope after Kiobel. Second, the ATS jurisprudence was marred by doctrinal confusion, the straitjacket of identifying norms as customary international law, and concerns that courts were acting at odds with legislative and executive branch policy. Third, international criminal law (ICL) offers a potentially useful tool for corporate accountability in overcoming some of the difficulties of the ATS. The acceptance of corporate criminality in many states offers a domestic law mechanism for trying corporations.

Despite my agreement with the thrust of the piece and the need to tackle what has remained a marginal method of corporate accountability, I think corporate criminality is not quite the promising terrain for corporate accountability that Stewart’s analysis suggests, for three different reasons.

Ÿ First, the link between the ATS and ICL that dominates the piece (e.g., calling them “brother[s]-in-arms”) — and thus views ICL as a response to the demise of the ATS vehicle – seems somewhat strained. The ATS was and remains a uniquely American statute – there is none other like it in the world – and despite great faith in it by some, my sense is that sophisticated human rights advocates never saw it as the major forum for even judicial accountability of corporations. ICL is not an alternative to the ATS; it is an alternative to other forms of corporate responsibility, including civil responsibility, loss of reputation, and other ways that corporations can be held to account for any human rights violations. The post-Kiobel constraints on the ATS, and the conceptual confusion before Kiobel, thus do not themselves call for switching to criminal liability. Most obviously, civil liability may be viable in other venues, as seen in the other lawsuit against Shell, in the Dutch courts.

Moreover, even if we think the conceptual problems in the ATS caselaw somehow doom civil liability, it is not clear how switching to the ICL model eliminates one serious problem with all efforts by home states to regulate corporations through national law — the very problem that Kiobel addressed, i.e., the extraterritorial reach of domestic law. While international crimes are subject to universal jurisdiction, universal jurisdiction is still only permissive and not mandatory. The duty, if there is one, for states to punish all international crimes (e.g., as suggested in the preamble to the ICC Statute) is a very weak one; the only clear duties are those in specific treaties like the Torture or Disappearances Conventions. So why assume that states will pass criminal statutes (even covering obvious international crimes) covering conduct by their companies abroad, let alone that they will criminalize conduct by foreign companies against foreigners abroad? Though certainly states have interests in regulating much overseas corporate conduct (making the Kiobel majority’s presumption completely antiquated), they still have many reasons not to criminalize extraterritorial human rights abuses, either by individuals and corporations. True, states have shown the political will to criminalize some corporate conduct abroad through the UN Corruption Convention, but that took thirty years of American pressure, dictated by a commercially driven desire to level the playing field.

It is also not clear how the move to ICL eliminates one of the other problems that Stewart thoughtfully identifies regarding the ATS caselaw – the muddied notion of accomplice liability. Although domestic criminal laws define degrees of complicity, they vary significantly throughout the world. That is not a problem if we are content with a corporate criminality regime that tolerates significant diversity across states, but in that case, why not just rely on diverse notions of civil or even administrative liability around the world? If, on the other hand, we think such diversity of criminal law accomplice liability standards is suboptimal, then states will need to incorporate not merely the definitions of crimes in international law into their domestic law, but also an international notion of accomplice liability.

ŸSecond, Stewart calls for a greater acceptance of retribution as a justifiable goal of human rights law, an acceptance that would pave the way for ICL as an accountability vehicle, and not merely civil or other sanctions against violations. My disagreement is partly historical and partly philosophical. Historically, human rights law and retribution are not at odds. In my view, at least, contemporary human rights law was born with Nuremberg, not with the UDHR. Nuremberg was about the development and enforcement of global standards of conduct to respond to mass atrocities. But if Nuremberg was not also about retribution, what was? Of course, the UDHR, the two Covenants, and the rest of the International Bill of Human Rights do not criminalize state or individual conduct. But the strategies for improving human rights have often had retributivist motivations. South Africa was a human rights pariah, and the sanctions were not just an effort to undermine apartheid, but to show our righteous indignation at the evil system. When the US denies visas to human rights offenders, it is not just (or even at all) to get them to change, but to punish them. When states engage in lustration after systemic abuses, they seek to punish abusers.

Philosophically, I admit that I prefer to evaluate strategies to protect human rights for their effectiveness in consequentialist terms, so using ICL to bring more retributivism into human rights law (which, as noted, I believe is already there) does not offer any obvious advantages. In the case of corporate conduct, I am not convinced that a huge fine – or even a boycott or disinvestment — will do less to deter violations than a guilty verdict against a company. I am willing to assume that a guilty verdict against corporate employees would have a significant deterrent effect, but at that point we are not in the realm of corporate criminal liability at all, but individual criminal responsibility.

Ÿ Third, and most important, ICL will not capture the range of corporate conduct that requires regulation. Stewart’s push for more corporate criminality is based on the example of pillage and the inquiry into Argor-Heraeus’s conduct that Switzerland recently began. Such egregious conduct, if true, strikes me as something that ought to be as criminal for corporations as it is for individuals. But the real world problems of corporations and human rights are principally not in the list of international crimes in the ICC Statute or other treaties such as those on slavery, torture, or disappearances.

Rather, the most pressing concerns are still all the human rights that engender state responsibility, but are not international crimes at all. Polluting in a way that violates the right to health? Depriving workers of decent conditions of employment? Collaborating with a regime on censorship or political repression? These are not international crimes today. To take an example worse than pillage, what international crime did the owners of Rana Plaza commit in operating a factory so unsafe that it led to the deaths of 1129 workers? It does not meet the definition of a crime against humanity, and other violations of the right to life are not international crimes.

And just as there are very good reasons not to enlarge the scope of ICL when it comes to individuals, there are reasons not to do so for corporations. The chief reasons are institutional commitment and resources. If states and the ICC lack the capacity or interest to prosecute individuals for the small set of egregious violations of human rights law and IHL, why assume they will begin to prosecute corporations for a broader set of acts? Stewart, to his credit, says that he does not wish to eliminate other methods of accountability. But the great advantage of all those other methods is that they do not require any kind of consensus that the conduct we want to prohibit or deter is actually an international crime.

In the end, this takes me back to Ruggie’s Guiding Principles. While not precluding states for punishing corporations – they indeed suggest so in paragraph 1 — they open up the entire corpus of human rights to corporate attention in their second pillar (the corporate responsibility to respect). Rather than expanding the corpus of ICL, they work with the human rights law we have, even as they push states to assert their duties under that law to protect against abuses by non-state actors. In some cases, like Rana Plaza, prosecution of a company seems warranted, but such a prosecution is not one under the auspices of ICL.

The Guiding Principles also offer the singular advantage of gradualism. Sure, we need to hold corporations accountable for human rights violations. But the goal of that accountability is to improve corporate behavior. And if over-emphasis on one form of accountability – the hammer of criminal prosecutions — so threatens corporate engagement with the project Ruggie started, then we will have set back a great deal of the progress made in the last ten years. Just as states, international organizations, and civil society have used the “civilizing power of hypocrisy,” to quote Jon Elster, to induce states to follow human rights since the UDHR, we should catalyze that process when it comes to corporations. And just as it might well have been too threatening to states to focus on international criminal responsibility of individuals at a time when the human rights architecture was just being constructed, so it seems that an overly retributivist approach, carried out through ICL, at this relatively early time in the development of corporate responsibility is not the wisest course of action. We certainly need more hard law – both international and domestic — than we have now. But starting with the hardest of the hard law – criminal law – even while useful in some exceptional situations of corporate conduct, seems less promising than the alternative forms of accountability.