U.S. court denies right to sue corporations

The U.S. Court of Appeals for the Second Circuit issued a stunning decision in the Kiobel v. Royal Dutch Petroleum case on Sept. 17. The judges ruled 2-1 that transnational corporations could not be held liable for human rights violations. The case stems from Shell’s actions in Nigeria’s Ogoni region where activists were falsely arrested, charged and summarily executed for organizing protests against the oil company’s destruction of their communities.

Judge Jose Cabranes wrote for the majority: “The principle of individual liability for violations of international law has been limited to natural persons — not ‘juridical’ persons such as corporations — because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an ‘international crime’ has rested solely with the individual men and women who have perpetrated it.” (www.ca2.uscourts.gov; for majority and dissenting opinions, see decisions, Sept. 17)

The court said that the Alien Tort Statute, which has existed since 1789, does allow noncitizens to seek redress involving international law violations but that corporations were immune from liability, even if their actions result in injury and death. Consequently firms such as Royal Dutch Petroleum and Shell Transport and Trading cannot be held accountable for their crimes in collaboration with foreign governments that blatantly disregard the human rights of individuals and communities.

Shell representative Bill Tanner said, “We agree with the decision of the court.” The global corporation has denied any involvement in human rights violations in the oil producing regions of Nigeria. (Bloomberg News, Sept. 17)

The case, which was filed in 2002, alleged that the Shell corporations assisted the military government in Nigeria, through subsidiaries operating inside the country, in carrying out gross human rights violations starting in 1993. Plaintiffs said human rights violations resulted in the suppression of mass protests among the Ogoni people against Shell’s policies.

The case links the oil corporation to the execution of environmental activist Ken Saro-Wiwa and seven of his colleagues. In 1993 they were accused of crimes in Nigeria and executed two years later. Protests have been carried out for years against the environmental and social conditions created by Shell in the Ogoni region.

Judge Pierre Leval dissented from the appeals’ court’s decision, but not over whether the case filed by the Nigerian citizens should be dismissed, but that the law should apply to corporations. He wrote, “The majority opinion deals a substantial blow to international law and its undertaking to project fundamental human rights. According to the rule my colleagues have created, one who earns profits by commercial exploitation of abuse of fundamental human rights can successfully shield those profits from victim’s claims for compensation simply by taking the precaution of conducting the heinous operation in corporate form.”

Judge Leval noted the implications of the ruling for firms involved in crimes against humanity: “So long as they incorporate, businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy — all without civil liability to victims.”

The court’s majority says that the U.S. Congress would have to pass new legislation to include corporations under existing law. After the ruling, legal analysts said that foreign governments are largely immune from lawsuits related to official policy, and therefore the dismissal of the cases brought by Nigerian family members of human rights victims would leave no recourse in U.S. courts.

Cited in the Bloomberg report, Jonathan C. Drimmer, an attorney at Steptoe & Johnson and a lecturer at Georgetown University Law Center, stated, “This [court decision] is going to alter the landscape of existing and contemplated cases. Assuming this ruling stands, and even while it remains in effect, there are going to be motions to dismiss Alien Tort Statute claims cases by corporations.”

Ruling’s implications for U.S.-Nigerian relations

The extraction and export of oil from Nigeria is that country’s largest source of foreign exchange. For many years Nigeria was the largest oil exporter from Africa into the United States. In 2009 it was reported that Angola had surpassed Nigeria in total exports to the U.S.

In recent months Nigeria has embarked upon a restructuring of its oil industry by signing many agreements with the People’s Republic of China valued at $50 billion. The Nigerian legislature recently debated a Petroleum Industry Bill which is a cause of concern for Western-based oil firms that have dominated the industry since 1956.

With so much at stake for the U.S. and other imperialist states in Nigeria, President Goodluck Jonathan’s government has been under tremendous pressure from the Obama administration. The State Department has even sent representatives to Nigeria to demand that the legislature pass a so-called “anti-terrorism” bill.

Nigeria, which has the largest population of any African state, will hold national elections in 2011. The U.S. has attempted to set the terms governing the elections by questioning the composition of the country’s national electoral commission.

This court decision illustrates that the U.S. ruling class is seeking to absolve transnational corporations from being held liable for acts of oppression, suppression and mass murder. The message emanating from such a ruling is that the people in various states around the world will have to seize control of such corporations in order to hold them accountable for their actions.