For more than a decade, dozens of multinational corporations have been sued in federal courts in the United States for alleged human rights violations under the so-called Alien Tort Statute. Now these suits may be over.
In August, a U.S. appellate court ruled that corporations may not be held liable for violations of international law. The decision by the New York-based Second Circuit Court of Appeals will be welcomed by multinationals as well as by many foreign governments, who have protested that U.S. assertion of extraterritorial jurisdiction over the non-U.S. activities of foreign corporations itself violates international law.
Although the court's decision is at present binding only in the New York region, it may be the death knell for most human rights litigation against multinational companies in U.S. courts.
The decision involved a suit by Nigerian nationals against Royal Dutch Petroleum and several Shell Oil affiliates for allegedly encouraging torture, murders and rapes by Nigerian soldiers of Nigerian villagers opposed to the companies' oil exploration activities.
The three-judge panel ruled 2-1 that corporations, unlike individuals, may not be subject to criminal and civil liability for violations of international law. The dissenting judge complained that the majority decision “deals a blow to the efforts of international law to protect human rights.”