Nestlé & Cargill v. Doe Series: Remedying the Corporate Accountability Gap at the ICC

[Editor’s Note: This article is part of a Just Security series on the consolidated cases of Nestlé USA, Inc. v. Doe I and Cargill Inc. v. Doe I, which was argued before the Supreme Court on Dec. 1. The introduction to the series and all other articles can be found here.] 

“With great power comes great responsibility,” right? Maybe not. When it comes to corporations and their involvement in grave human rights violations amounting to international crimes, it seems that corporations are almost untouchable.

Modern phenomena such as globalization, industrialization, and technical growth have changed our society and market infrastructure immensely. Many corporations, characterized by their transnational nature, do business all over the world. Society benefits greatly from the presence of these corporations as they stimulate innovation, economic activity, and competition. However, the other side of the coin cannot be overlooked; even if corporations have the ability to create thriving societies, their activities can also have negative consequences – for example, the environmental damage caused by highly polluting activities or gross negligence of human rights in developing countries where they conduct business. At worst, corporate activities can amount to international crimes.

Corporate involvement in international crimes is not a novelty; it has only become more compelling due to the growing omnipresence and power of transnational corporations within society. Corporate involvement can range from supplying weapons (e.g. Chiquita Brands International Inc.) to providing services that have exacerbated abuse (e.g. Lafarge), to the illegal exploitation of natural resources (e.g. DRC v. Uganda). Corporations often play a key role in fueling and facilitating conflicts, due to their involvement at every stage of the production and distribution process. In general, there are roughly three forms of corporate involvement in international crimes: direct involvement as a primary perpetrator or through acts which constitute aiding or abetting; indirect involvement by knowingly benefitting from crimes committed by others; or involvement of a more passive nature when their mere presence and participation in a country’s economy contributes to the commission of abuses by State or non-State actors in that country.

As the U.S. Supreme Court considers whether and how to hold U.S. corporations accountable for human rights violations, including aiding and abetting crimes abroad, it is important to map the global legal landscape and outline where corporations face legal liability – and where there are accountability gaps. This article will review one such gap in current international criminal law, which has no explicit provisions for corporate liability. I will discuss the arguments for such liability, the history and reasoning behind the accountability gap, and some recent hints in international law that the time for corporate criminal liability has come. I will then explore the prospects of amending the Rome Statute of the International Criminal Court (ICC) to include corporate liability.

The Accountability Gap

Transnational corporations have vast influence far beyond the economic sphere of society. This includes the ability to affect international and national law-making. The results of this influence can be seen in the international legal landscape: although corporate activities often transcend all national borders, there are no international treaties that explicitly regulate corporate criminal responsibility for international crimes or offer redress for victims. This creates an accountability gap, as corporate perpetrators – despite their vast power and responsibility – cannot be held criminally accountable under international law.

This issue becomes especially concerning as States outsource traditionally sovereign tasks to corporations; these public-private partnerships may generate shared responsibility for any harms that result, but the international legal architecture for such responsibility does not (yet) exist. In order to deter corporate involvement in crimes, it is imperative to hold all actors involved responsible under international criminal law, not only individual perpetrators.

The ability of the ICC to only adjudicate business and human rights abuses by holding individual corporate officer accountable fails to take into account the inherently collective nature of international crimes and the dynamics of corporate conduct. International crimes are often an expression of systematic, wide-spread malfeasance involving many actors. Focusing solely on individual responsibility therefore fails to capture the nature of the harm. This is especially the case when this harm is linked to corporate conduct, particularly since a corporate structure and identity is more than the mere sum of individual employees and principals and the corporation is capable of actions that individuals would be unable to commit by themselves. The exclusion of corporate responsibility is therefore artificial in cases in which the criminal conduct is primarily rooted in the corporate culture, rather than an individual mens rea. Yet, the international system allows the corporation to go unpunished, thus creating an accountability gap.

Nevertheless, individual accountability should not be set aside entirely in favor of corporate criminal responsibility. In an ideal world, both should work in perfect symbioses. This means the dynamics of the collective are taken into account while avoiding an outcome in which no one is held responsible except the abstract corporate entity. The co-existence of individual and corporate responsibility would also mean corporate officers can no longer be used as scapegoats.

To be sure, it is not the case that corporations bear no international legal responsibility at all. They can be held accountable through certain human rights obligations, such as the U.N. Guiding Principles on Business and Human Rights. Nevertheless, most of these instruments are soft-law initiatives and do not constitute binding law; rather, they are dependent on the voluntariness and willingness of corporations to adhere to them. Nonetheless, they should be seen as international tools to enable cultural change that may eventually lead to a greater transparency and accountability for corporations.

However, it is necessary that international criminal law addresses corporate responsibility, as these soft law initiatives and other civil and administrative sanctions are not sufficient and do not fully capture the severity of the crime and the importance of the protected values. Criminal sanctions would reflect the key role that corporations often play in society and set a clear, deterrent standard for other corporations. One caveat should be made, however: corporations do not behave the same as individuals, for whom the deterrence effect of the criminal law is questionable. “Naming and blaming” is in fact a very effective strategy for shaping corporate behavior, as business reputation is key. Criminal sanctions could lead to a public relations disaster for a multinational firm, which in turn would translate into tangible financial losses and potential shareholder litigation.

National legislation has also failed to ensure comprehensive justice. Even though many national jurisdictions have adopted legislation imposing civil or criminal liability (or both) for corporations, States often fail to translate theoretical legal liability into actual accountability, mostly due to political and economic concerns.

It should also be noted that the majority of litigation under national legislation, including cases brought in the U.S. under the Alien Torts Statute, must be brought in courts far from the location of the alleged harm. The fact that claimants have to travel to (and find representation in) foreign jurisdictions to receive any sort of remedy for transnational corporate criminal harms raises questions about the efficacy of domestic courts in responding to abuses that take place in their own country. In some cases, these failures of domestic justice reflect a lack of capacity. But there are also often powerful national interests involved in not prosecuting corporate crimes: States might depend economically on foreign investment and certain corporate structures, giving them an incentive not to prosecute. In some cases, the State itself can also be a co-perpetrator, or benefit from unlawful conduct, which will naturally weaken the State’s willingness to address corporate misconduct.

From Nuremberg Through Today: Individual Criminal Responsibility Prevails

The concept of corporate criminal responsibility has a contentious history in both national and international law. Ever since the Nuremberg Trials and the Subsequent Trials, individual responsibility was put forward as the main liability principle in international criminal law, in part because collective blaming after World War I was deemed to have contributed to the rise of the Nazi regime. Nonetheless, Nuremberg prosecutors did acknowledge corporate involvement in armed conflict for the first time; indeed, German industrialists and bankers were brought before U.S. and British Military Tribunals. Nonetheless, the Nuremberg Trials cannot be seen as a direct precedent for corporate criminal responsibility as only corporate officers – not corporations themselves – were indicted, in accordance with the individual responsibility principle.

The discussion about corporate criminal responsibility was re-ignited at the 1998 U.N. Diplomatic Conference in Rome, which established the ICC. The French delegation put forward a proposal that would have granted the ICC jurisdiction not only over natural persons, but also legal entities. However, no consensus emerged on the topic as there was a deep divergence of views between different States. In particular, many legal orders had not yet implemented corporate responsibility in their domestic systems at the time, leading to concerns that the complementarity principle would not function if corporations were to be included within the jurisdiction of the ICC. In the end, there was not enough time to fully consider the proposal; it was scrapped to avoid impeding the ratification of the Rome Statute in general. To date, ICC jurisdiction is limited to individuals as defined in Article 25 of the Rome Statute.

An Opening for Corporate Criminal Responsibility

However, several recent developments suggest an evolution in the prospects for corporate criminal responsibility. Times have undoubtedly changed since the 1998 Diplomatic Conference; the maxim societas delinquere non potest – or, roughly, “society cannot commit crimes” – is no longer an established principle as more and more domestic jurisdictions are repudiating the idea that corporations cannot be held criminally responsible. While the acceptance of corporate criminal responsibility in domestic legal systems is increasingly wide-spread, developments in international law have lagged behind. However, two relatively recent examples suggest that corporate criminal responsibility is gaining support even on the international level.

First, in the New TV S.A.L. and Akhbar Beirut S.A.L. cases brought before the Special Tribunal of Lebanon (STL), the Appeals Panel decided the STL had jurisdiction over corporations for contempt of court. It stated, “It is in the interest of justice to interpret the Tribunal’s personal jurisdiction under Rule 60 bis as encompassing legal persons”. Even though contempt of court is not a core crime, and the STL is merely an ad hoc tribunal, these decisions are of symbolic importance as they emphasize the need for corporate responsibility and the increasing consensus that such responsibility can be accommodated in international law.

A more concerted attempt by States to include corporations within the personal jurisdiction of an international tribunal was made in 2014, when the African Court of Justice and Human Rights (ACJHR) adopted the Malabo protocol. Article 46C of this Protocol empowers the ACJHR to exercise jurisdiction over legal persons, arguably remedying the current accountability gap. It should be noted, however, that Article 46C was adopted rather quickly, meaning not all legal issues have been hashed out. For example, it fails to define the concept of the ‘legal person.’ Moreover, the protocol has not yet been ratified.

Nevertheless, both the Malabo protocol and the STL cases signify the interest of international lawmakers to adequately hold corporations responsible for their involvement in the commission of international crimes.

Amending the Rome Statute

Of course, the inclusion of corporations as legal entities within the personal jurisdiction of the ICC would remedy the accountability gap that these recent, partial measures attempt to patch. The previous attempts to include corporations under ICC jurisdiction, including the French proposal described above, have met resistance; however, the legal landscape has changed in such a way that amending the Rome Statute to include legal entities in addition to natural persons does not seem far-fetched anymore.

The ICC should be able to adjudicate corporate criminal responsibility as the very nature of international crimes call for the exercise of international jurisdiction since not only national interests are at stake. Furthermore, only relying on the willingness and ability of domestic jurisdictions leads to ambiguity for victims, but also for the corporation itself. It is both inefficient and ineffective to rely solely on powerful jurisdictions, such as the United States, to judge extraterritorial matters, especially given the national interests involved. An international court would, in theory, guarantee more impartial and unbiased justice.

The issues that impeded an amendment of the Rome Statute in 1998 are not as insurmountable anymore. The problem with regards to the complementarity principle has been remedied partially as the majority of Western States, both from common and civil law jurisdictions, have introduced some sort of corporate criminal liability. It is also important to note that the international legal landscape has changed in general. There is an upward trend in different areas of law, such as International Human Rights Law, International Humanitarian Law and Environmental Law to confer obligations on corporations and hold them accountable for their actions. These developments not only show that one of the major impediments to include corporate criminal responsibility in the Rome Statute is increasingly disappearing but also signifies the interest to hold corporations adequately accountable for their grave human rights violations in both national and international law. Amending the Rome Statute would mean changing International Criminal Law in such a way that it meets the demands of a changed society in which corporations are important key players and international crime is highly organized.

Nonetheless, amending the Rome Statute will not be easy as the treaty has a rigorous amendment process that requires a high degree of State support. Moreover, it will be necessary to choose the preferred model of liability, which is not the same in all domestic legal systems. Certain concepts – such as production of evidence, due process rights, and potential financial sanctions – have to be reconsidered given that international criminal law is heavily focused on the individual and developed to address the psychological characteristics of natural persons.  However, these hurdles are not insurmountable.

Conclusion

With the Nestlé/Cargill v. Doe case currently pending before the U.S. Supreme Court, the question of whether and how to hold corporations accountable for their wrongdoings is revisited once again.

It is clear that the degree of power and influence of transnational corporations should correspond to greater legal responsibility than that faced by individuals when their actions amount to international crimes. However, the current international legal framework is insufficient, as only corporate officers can be held accountable before the ICC and other, ad hoc efforts to recognize corporate criminal liability in international law have been partial at best. This gap should be rectified, not least because initial problems, once deemed insurmountable, have been partially countered by developments in the two decades since the passage of the Rome Statute. For one, the complementarity principle is no longer as big of a problem as it was in 1998, as many States have implemented corporate criminal responsibility in their domestic law. In addition, some international institutions have also begun to implement forms of corporate criminal responsibility.

The time has come. “Business as usual” is no longer acceptable. The current accountability gap can –  and hopefully will – be remedied by including corporations within the jurisdiction of the ICC.

Image: The ICC seal on a window at the International Criminal Court Building in The Hague. The windows act as mirrors, reflecting more of the ICC complex across from it. 

 

About the Author(s)

Fien Schreurs

Junior Associate at the Belgian law firm EVEREST LAW, where she specializes in Corporate Criminal Law and Anti-Fraud.