The Rome Treaty Has Nothing to Do with Jesner v. Arab Bank

Ed. note. This post  is the latest in our series on the upcoming U.S. Supreme Court case Jesner. v. Arab Bank, a case with implications for everything from human rights to terrorism financing cases that will resolve the question of whether corporations can be sued under international law.

I recently delivered the keynote address commenting on Jesner v. Arab Bank at a conference about Corporations on Trial: International Criminal and Civil Liability for Corporations for Human Rights Violations held at the Frederick K. Cox International Law Center of Case Western Reserve University School of Law on September 15, 2017.  While the full keynote address and the other highly informative papers of the conference will be published in the Case Western Reserve Journal of International Law next year, I believe my own comments might merit attention in Just Security’s symposium due to the Supreme Court’s consideration of the case on October 11, 2017.

I also filed an amicus brief with the Supreme Court about three issues relating to the case: the negotiations leading to the Rome Statute of the International Criminal Court  (the “Rome Treaty”), the fact that national and international codification of the corporate criminal liability has been growing since 1998, and the recognition of corporation criminal liability by international bodies.  Each of these issues is briefly examined in this essay.

While Jesner v. Arab Bank concerns civil rather than criminal liability, the fate of corporate liability under the Alien Tort Statute, and how such liability is framed by egregious human rights violations, hangs in the balance, unless the Supreme Court simply invokes the presumption against extraterritorial application of U.S. law in favor of Arab Bank.  I doubt that particular outcome even on the facts, but also because the case presumably was granted on certiorari for the singular purpose of addressing the issue of corporate liability under the Alien Tort Statute.  To repeat the Kiobel II exercise of raising the issue of corporate liability only to bury it under the presumption against extraterritorial application of U.S. law would be an odd undertaking and outcome for the Supreme Court.  There is a clear circuit split on the issue of corporate liability, reaffirmed by the outlier Second Circuit in Jesner v. Arab Bank, so the battle lines are drawn and the time has arrived.  The Alien Tort Statute either subjects corporations, as well as natural persons, to liability for violations of the law of nations or U.S. treaties, or it only covers the liability of natural persons.  The relatively recent split in the circuits must be repaired.  

First, the Second Circuit and the Respondent continue to rely on the Rome Treaty and the negotiations leading to its conclusion to deny liability for corporations.  Take it from someone who was there throughout the U.N. talks: There is simply no basis in the history of the negotiations leading to the Rome Treaty that prohibits civil liability of corporations for commission of or complicity in the commission of genocide, crimes against humanity, or war crimes, the most egregious types of human rights violations.  Our relatively brief discussions about the status of criminal liability of corporations for commission of or complicity in these atrocity crimes led to a dead end, but that only speaks to the issue of criminal liability.  We were not discussing civil liability, which is the only form of liability under the Alien Tort Statute but has no application whatsoever, even for natural persons, under the Rome Treaty.

The Second Circuit and the Respondent assume, incorrectly, that the 1998 Rome Treaty, which exclusively and deliberately focused on the establishment of a criminal court, purposely reflected a widely accepted international consensus against all criminal and civil liability of corporations for crimes against the law of nations, as if corporations essentially are immunized from any legal liability in their operations.  That incorrect assumption is flatly refuted by the history of the Rome negotiations and the structure of the Rome Treaty itself, both of which expressly and solely address criminal liability.  The Second Circuit also wrongly assumes that this purported international consensus (namely, against holding corporations accountable in civil as well as criminal legal proceedings) continues to be accepted widely in customary international law.  Even disregarding the fundamental error of the Second Circuit’s predicate assumption, the notion that there is a continuing consensus against civil liability is contradicted by the broad acceptance among legal systems that public law can provide remedies for corporate misconduct.

Indeed, in addition to the widespread acceptance of civil liability, there is an increasing acceptance of criminal liability in the almost two decades since the Rome Treaty was completed.  The Second Circuit and Respondent hold a position that in its final analysis would entitle corporations to commit or be accomplices in atrocity crimes, wherever they operate in the world unless there is a national law on the territory where they operate that outlaws specific crimes by juridical persons.  Luckily, provided the Supreme Court so rules, in the United States there is the Alien Tort Statute that at least imposes civil liability on such corporate conduct against aliens, including when it occurs on foreign territory and also, under the Kiobel II test, touches and concerns the United States.

So, it is true, but irrelevant to the issue before the Supreme Court in Jesner v. Arab Bank, that there was divergence among States and legal systems at the time of the Rome Treaty’s negotiation regarding the applicability of criminal statutes to juridical persons that cannot be subjected to the traditional criminal penalty of deprivation of liberty.  Exclusion of corporations from International Criminal Court prosecution was inevitable not because States agreed that corporations are above the law as a matter of right or of principle, but because a fundamental underpinning of the Rome Treaty is the preference for and deference to domestic prosecution (the principle of complementarity) and the obligation of States Parties to undertake the capacity to prosecute.  If a legal system does not hold juridical persons liable under criminal law, then under the Rome Treaty that national system likely would fail the test of complementarity.

The U.S. delegation at Rome, which I headed, was fully aware of the fact that corporations are subject to criminal sanctions in the United States.   Including juridical persons in the Rome Treaty would have been an easy “give” for the United States if we only had our own jurisdiction to consider.  But given the diversity of treatment of corporate criminal liability globally, it was not possible to negotiate a new standard of corporate criminal liability with universal application in the time frame permitted for concluding the Rome Treaty.  Equally, it was not plausible to foresee implementation of the complementarity principle of the Rome Treaty in light of such differences in criminal liability for juridical persons among so many national jurisdictions.  Nor was it possible, in so few days at Rome, to consider the complex revisions to the long-evolving text of the treaty that would be required to extend the personal jurisdiction to corporations.

The omission in the Rome Treaty of provisions for civil proceedings against juridical persons is utterly insignificant.  To the contrary, the negotiations in Rome leading to the creation of the International Criminal Court understandably steered clear of civil liability for tort actions—by multinational corporations as well as by natural persons—because civil liability fell outside of the self-described criminal tribunal.  No conclusion can be drawn, either from the negotiations leading to the Rome Treaty or from the absence of corporate criminal or civil liability in the Rome Treaty, that undermines the general principle of law regarding corporate civil liability or that prevents national courts from holding corporations liable in civil damages for torts (including egregious torts like atrocity crimes in violation of the law of nations or U.S. treaties) committed on national or foreign territory.

Second, national legal systems have not frozen in time.  Article 10 of the Rome Treaty expressly accepts that international law may evolve for purposes other than the treaty (“Nothing in this Part shall be interpreted as limiting or prejudicing in any way existing or developing rules of international law for purposes other than this Statute.”).  Since 1998, corporate criminal liability has been growing rapidly across the globe.  A significant number of nations that have ratified the Rome Treaty, indeed 29 countries that I list in my amicus brief, also enacted national implementing legislation that establishes corporate criminal liability for atrocity crimes falling within the jurisdiction of the Rome Treaty or have adopted comparable laws for the same or other serious crimes.  These States certainly did not act as if the Rome Treaty precluded expanding corporate liability into the realm of atrocity crimes.  Indeed, one might speculate that the Rome Treaty, by focusing ratifying States’ attention on atrocity crimes, has provided an impetus to accord greater accountability within their domestic legal systems.

These developments point to the evolving codification of corporate criminal liability at the national level that increasingly aligns with the long-standing general principle of law of corporate civil liability for torts that is found in almost all jurisdictions, including the United States and, with respect to Jesner v. Arab Bank, the Alien Tort Statute.

Third, at the international level, the Appeals Panel of the Special Tribunal for Lebanon, an international criminal tribunal, found in a 2014 contempt case that corporate criminal liability has become a general principle of law.  The Respondent scoffs at this ruling, as if the deliberations of an international tribunal in The Hague are insignificant.  I think we know better.   

The United Nations International Law Commission is crafting a Convention on Crimes Against Humanity that includes corporate criminal liability.  The commentary to the inclusion of corporate liability in the draft convention states that the ILC “decided to include a provision on liability of legal persons for crimes against humanity, given the potential involvement of legal persons in acts committed as part of a widespread or systematic attack directed against a civilian population.  In doing so, it has focused on language that has been widely accepted by States in the context of other crimes and that contains considerable flexibility for States in the implementation of their obligation.” (p. 264)

The International Law Commission commentary also provides a rich source of authorities demonstrating the presence of corporate criminal liability in multilateral treaties. (pp. 263-264)  So while the Rome Treaty has been a major impetus in the trend towards corporate criminal liability in national legal systems, so too have the many recent multilateral treaties confirming corporate criminal liability for, inter alia, terrorism, bribery of foreign public officials in international business transactions, protection of the environment, transnational organized crime, corruption, the unauthorized transboundary movement of hazardous wastes, and perhaps, some day, crimes against humanity.

But let’s return to the fundamental premise of the Alien Tort Statute: it is a law that concerns civil liability, and while grave criminal conduct certainly can constitute violations of the law of nations, that fact does not translate into having to establish that corporations are subject to criminal liability as a matter of international law in order to be held responsible for criminal acts, falling within the extreme degree of torts no doubt, under a national statute of civil liability; it simply means that the criminality of certain actions, such as atrocity crimes, in which corporations engage, either directly or as accomplices, can certainly be subject to civil liability under a national statute, such as the Alien Tort Statute.  Imposing additional criminal liability on corporations, which has been standard fare in the United States for certain corporate conduct for more than a century, can be pursued under other laws and with further legislation.  But to suggest that the Alien Tort Statute, imposing only civil liability, can only reach corporations if they are subject to criminal liability as a principle of international law is, frankly, nonsensical.  The general principle of law, as a major source of international law, that corporations are subject to civil liability for torts, remains standing as strong today as it has during the past.

The bottom line is this: Corporate impunity for violations of the law of nations or U.S. treaties should not be read into the Alien Tort Statute based upon a misinterpretation of the Rome Treaty or an unfamiliarity with the evolution, globally, of both domestic and international law.


About the Author(s)

Ambassador David Scheffer

Mayer Brown/Robert A. Helman Professor of Law at Northwestern Pritzker School of Law, Director of the Center for International Human Rights at Northwestern University Pritzker School of Law, Former U.S. Ambassador at Large for War Crimes Issues (1997-2001)