Earlier this year, Nestlé USA, Inc. v Doe drew much attention to the prospect of holding transnational corporations criminally liable for their involvement in gross human rights violations abroad. Although it seemed like the U.S. Supreme Court would take the opportunity to tackle this issue, the result was rather disappointing – the Court found it lacked jurisdiction under the Alien Tort Statute (ATS) on extraterritorial grounds. Interestingly, a majority of the justices seemed to assume that the ATS supports jurisdiction over U.S. corporations implicated in law-of-nations violations, so long as there is sufficient corporate conduct in the United States (as explained previously by William Dodge and Beth van Schaack).
Nestlé is part of a growing trend seeking to hold corporations accountable for their participation in human rights violations and international crimes. While this trend is not new, it has experienced renewed momentum – in part because of a new chief prosecutor at the International Criminal Court (ICC), but chiefly due to ongoing European cases that show a glimpse of hope in closing this accountability gap.
In this article, we examine recent developments at the ICC and in European national jurisdictions where parent companies are increasingly being called to account for the actions of their subsidiaries abroad.
At the International Level
As explained by Dieneke de Vos, there have been important developments in establishing corporate criminal accountability for international crimes. One such development was the adoption of the Malabo Protocol in 2014, although its aspirations have yet to come to fruition, since it has not been ratified by a single African state.
At the ICC, a group of six NGOs filed an Article 15 communication to the ICC Prosecutor in December 2019 concerning the liability of European companies – all headquartered or operating in ICC member states – for aiding and abetting the commission of war crimes by the Saudi-UAE coalition in Yemen. The communication aimed to expose how the international arms trade can fuel armed conflict and the commission of international crimes, especially when arms companies deal with parties known to commit serious violations of international humanitarian law with the transferred arms.
Although the Rome Statute does not provide for corporate liability, it could be used to hold individuals acting on behalf of corporations accountable. In these situations the question also arises, whether the export licenses granted by states contradict their obligations arising from Articles 6 and 7 of the Arms Trade Treaty, and from Council Common Position 2008/944/CFSP for European States.
Given the nature of Article 15 communications, it remains to be seen whether the ICC’s Office of the Prosecutor (OTP) will proceed with a preliminary examination. According to the 2020 Report on Preliminary Examination Activities, the OTP will provide a response to the NGOs this year. Considering that the nationality of companies mentioned in the communication include some of the court’s strongest European supporters – Germany, Spain, Italy and France, as well as the United Kingdom – there are certainly political interests at play. But this could be an opportunity for the new ICC prosecutor Karim Khan to demonstrate his independence and impartiality.
This welcome development would not, however, entail accountability for the corporations themselves – unlike the Lundin and Lafarge cases, which are explained below.
Sweden: The Lundin Case (2018, ongoing)
Lundin Petroleum AB (now Lundin Energy) is a Swedish company that formed part of a consortium with Petronas (from Malaysia) and OMV Exploration (from Austria) to exploit oil in Sudan, in a concession area called Block 5A. During the time the Lundin consortium operated in Block 5A, between 1997 and 2003, Sudan was engulfed in armed conflict. The land where the consortium operated was the stage for a brutal contest between government forces and opposition forces, like the Sudan People’s Liberation Movement and Army (SPLM/A), to secure the territory for oil exploitation. According to a report from the European Coalition on Oil in Sudan (ECOS), several international crimes were committed during this campaign, including “indiscriminate attacks and intentional targeting of civilians, burning of shelters, pillage, destruction of objects necessary for survival, unlawful killing of civilians, rape of women, abduction of children, torture, and forced displacement.”
While the direct perpetrators of these crimes were the parties to the armed conflict, the report (and others) allege that the Lundin consortium was complicit in international crimes both because they provided infrastructure to support the Sudan Armed Forces (SAF)’s commission of crimes, such as a refurbished airstrip used for Antonov bombers, and because the exploitation of oil was the motivation behind the Sudanese government’s campaign in the area. ECOS’s report also stressed that “[i]t was not unusual for oil companies to provide material support to Government security agencies or militias in Sudan,” and that the consortium should be investigated for providing material and financial support to the commission of international crimes. In particular, a video emerged in which Ian Lundin, then-chairman of Lundin’s board, was filmed besides child soldiers while visiting the concession area. When questioned about the use of child soldiers by militias to protect the oil fields, he claimed that “protecting the oil fields [was] a generalisation.”
In June 2010, two weeks after ECOS’s report was published, the Swedish Prosecution Authority announced a preliminary investigation into violations of international humanitarian law in Sudan between 1997 and 2003. To the best of the authors’ knowledge, no steps have been taken in either Austria or Malaysia to hold other companies in the consortium accountable. In October 2018, the Swedish Ministry of Justice authorized the prosecution of two Lundin executives, Alex Schneiter and Ian Lundin, for complicity in violations of international law. Under Swedish law, those encompass war crimes, crimes against humanity and genocide. Because Alex Schneiter is Swiss, government approval was needed for Swedish courts to exercise criminal jurisdiction for crimes committed abroad. Moreover, the company itself was issued a notification that the prosecution may seek a fine of SEK 3 million (less than 350,000 USD) and forfeiture of economic benefits amounting to SEK 3,282 million (approximately 384 million USD).
In fact, the suspects have filed multiple requests for the investigation to be terminated for violating their right to a fair trial within a reasonable time, enshrined in Article 6(1) of the European Convention of Human Rights. Despite the requests being rejected, the defence took the case to the Swedish Supreme Court, which in July 2021 denied their appeal. The defence teams have also been criticised for claiming that NGO and advocacy groups’ reporting was influenced by the SPLM/A and for saying in an interview that witnesses “from countries like South Sudan” must be better scrutinised than European ones, despite openly admitting not to have read the witness statements at that point.
The Lundin case features important legal issues not only for Swedish law, but also for international criminal law. As masterfully described here, the concept of individual liability for corporate crimes is not sufficiently developed in Swedish law. However, with the notification that Lundin Energy may be liable for a fine and forfeiture of economic benefits, which can only be imposed as a supplement to corporate criminal liability, the prosecution authority has brought corporate liability for international crimes into play. In July 2021, the prosecutor responsible for the investigation informed the Stockholm District Court that the suspects would be indicted soon, although no specific date was given. Therefore, we may soon find out if the company and its executives will face trial together for their possible role in war crimes.
France: The Lafarge Case (2016, ongoing)
On September 7, the French Supreme Court is expected to render a historic decision in the landmark case of Lafarge. (Disclaimer: Our organization is one of the original plaintiff organizations in this case, but the authors are not involved in the case.) The case deals with a French parent company indicted for the alleged crimes of its Syrian subsidiary that include terrorism financing and complicity in crimes against humanity, among other crimes. It is the first time charges of this kind have been brought against a corporate entity.
The actions in question took place amidst the raging armed conflict in Syria and the advance of the Islamic State (IS) between 2012 and 2014. Lafarge holds 98.7% of Lafarge Cement Syria (LCS), which continued to operate during the armed conflict, allegedly by making arrangements with IS (and other armed groups) to pass checkpoints and buying raw materials needed for their production from areas under IS control. While Lafarge evacuated their non-Syrian staff in 2012, their Syrian employees were pressured to work even when they faced kidnappings and the worsening conflict. When IS finally violently seized control of the facility in 2014, the Syrian workers were “left to fend for themselves.”
In 2016, Sherpa and the European Center for Constitutional and Human Rights (ECCHR) filed a complaint alongside eleven former employees of LCS against Lafarge, LCS, and three individuals at a Paris Court. The complaint led to the historic indictment of Lafarge on June 28, 2018, on charges of financing a terrorist enterprise, complicity in crimes against humanity, violating an embargo, and endangering people’s lives. Former CEOs and directors of Lafarge had already been indicted in 2017.
In November 2019, the Paris Court of Appeals overturned the charge of complicity to crimes against humanity and limited Sherpa’s and ECCHR’s standing as civil parties in this criminal case. Both issues are the subject of the pending appeal. It is remarkable, however, that the court upheld the charge of financing terrorism against Lafarge, considering that the money paid to various armed groups – totalling 13 million euros – originated from the accounts of LCS. The court based its determination based on the fact that Lafarge had “significant operational and financial control” over LCS.
The Court of Appeals was the first domestic court ever to expressly find that there was evidence of IS committing crimes against humanity between 2013 and 2014. It also concluded that the financing of IS by Lafarge, estimated at 500,000 euros, could have contributed to the commission of these crimes. Ultimately, the court nonetheless rejected the charge of complicity in crimes against humanity based on Lafarge’s lack of intent to contribute to the crimes of IS. In so doing, it relied on a strict understanding of Article 121-7 of the French Criminal Code by demanding that the accomplice share the intent required of the main perpetrator committing the crime. The current appeal challenges this narrow understanding of the French law, arguing that, according to established jurisprudence, knowledge of the direct perpetrators’ intent to commit a crime suffices for establishing complicity.
Sending a Message
As these developments show, the time has come for courts – national and international – to tackle corporate criminal liability for international crimes and gross human rights violations. If courts were to hold companies accountable, it would be a recognition that such crimes go beyond the decisions or omissions of a handful of individuals. Rather, they are the result of an entire structure that profits from or enables the commission of international crimes. Therefore, corporate criminal liability addresses the circumstances of these crimes better than individual accountability. Moreover, companies like Lundin and Lafarge are better placed than individual perpetrators to provide wide-ranging reparations to victims.
Finally, these legal developments also challenge double standards in international justice by recognizing the responsibility of Global North actors for violations in the Global South. In this sense, it also sends a clear message to transnational corporations that they can no longer evade responsibility for international crimes simply because they are perpetrated far from their headquarters.
Note: This article is written in the authors’ personal capacities and does not reflect the views of the institutions with which they may be affiliated.