Corporate Lawlessness: an Era of Corporate Irresponsibility May Be Coming to a Close

• Publication year: 2015

Corporate Lawlessness: An Era of Corporate Irresponsibility May Be Coming to a Close

Kelsey G. Spillers

CORPORATE LAWLESSNESS: AN ERA OF CORPORATE IRRESPONSIBILITY MAY BE COMING TO A CLOSE

Kelsey G. Spillers^*

Corporations currently benefit from an "impunity gap"¹ in international law, a loophole that both empowers them to commit crimes and shields them from punishment. International tribunals created this loophole by limiting criminal liability to "natural persons," or human beings. This limitation excludes corporations, which are classified as "legal persons." Without the possibility of retribution, these entities are free to do as they please.² By offering their considerable resources and leverage to individuals, corporations provide the means for these "natural persons" to commit crimes of a magnitude far greater than would otherwise be possible.³

In a recent ruling, the Appeals Chamber for the Special Tribunal for Lebanon made a groundbreaking step, laying the foundation for corporate responsibility in international law. The Chamber found, in The Case Against New TV S.A.L., that corporations, or "legal persons," could be prosecuted for contempt.⁴ This decision marks a movement away from restricting jurisdiction in international courts to "natural persons," a significant advancement towards closing the "impunity gap" for corporations in international law.

This piece will investigate the significance of this decision in the scope of international law and the likely consequences with respect to corporate

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responsibility. The structure of the analysis is as follows: A) a historical perspective—focusing on examples of corporate involvement in international crimes; B) the New TV Case and its significance for the future of corporate responsibility in international law; and C) conclusions.

I. Historical Perspective

Corporations have been involved in countless international crimes, acting with the sort of flippancy that comes with the knowledge that there are no rules to break. Without means by which they may be held accountable in international tribunals, these entities have been free to wreak havoc on the world, as evidenced in the following examples.

In Doe v. Unocal,⁵ eleven Burmese villagers brought a suit against Unocal, an oil company, for alleged human rights violations in furtherance of a gas pipeline project.⁶ The villagers, representing a class of tens of thousands of residents of Burma, alleged that Unocal acted through the military and police forces to use violence to commit a number of atrocious crimes, including: "forced relocation, forced labor, torture, violence against women, arbitrary arrest and detention, cruel, inhuman or degrading treatment, crimes against humanity, the death of family members, battery, false imprisonment, assault, negligent hiring, or negligent supervision."⁷ Several villagers described the harsh conditions they endured under the military's brutal command— threatened with violence, held against their wills and forced to build the pipeline with no compensation.⁸ Testimonies demonstrate that refusal was not an option—when workers protested or became too feeble to contribute, the soldiers executed them.⁹ One villager identified as John Doe I tried to escape the forced labor program.¹⁰ The soldiers allegedly responded by opening fire at him and, as further retribution, threw his wife and infant child into a fire.¹¹ His

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wife sustained severe burns and injuries.¹² Their child died as a result of the burns.¹³

Doe's story is but one of the many tragedies that Unocal facilitated through its alleged complicity with the Burmese government.¹⁴ Though the district court found that there was evidence Unocal knew of and benefitted from these crimes, the corporations ultimately evaded court sanctions by reaching an out-of-court settlement with the plaintiffs before a jury could be empanelled to hear a Doe v. Unocal state case.¹⁵ This settlement left many with questions—as a result of the settlement and a previous court order from the Ninth Circuit, the plaintiffs can never bring a suit on the merits of their claims.¹⁶

In Nigeria, two non-governmental organizations¹⁷ lodged a complaint to the African Commission on Human and Peoples' Rights¹⁸ concerning violations of social and economic rights in Nigeria.¹⁹ The complaint alleged that the Nigerian National Petroleum Company, the Nigerian State oil company, had formed a joint venture with Shell Petroleum Development Corporation. The complaint further alleged that this petroleum company's activities had contaminated the environment and caused health problems among the Ogoni people.²⁰ The Nigerian government allegedly supported these violations by providing military personnel to the oil companies and failing to monitor the companies' operations.²¹ The petroleum company's operations contaminated the water, soil, and air.²² The complaint alleged that this contamination had many very serious short and long-term impacts on the health of the local

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people, including "skin infections, gastrointestinal and respiratory ailments, [] increased risk of cancers, and neurological and reproductive problems."²³

After the Nuremburg Tribunal, several corporations were scrutinized for their assistance in the heinous crimes of WWII. These corporations were indicted for a variety of crimes including: providing weapons and resources to further the aggressive war, benefitting significantly from the illegal taking of plants and private property in occupied countries, providing gas to the concentrations camps, and employing victims of the forced labor programs and the concentration camps.²⁴ None of these corporations were held responsible for their actions.²⁵ For example, in U.S. v. Carl Krauch,²⁶ although the court acknowledged that the officials of the corporation "act[ed] through the instrumentality of [the corporation]. . .,"²⁷ it stated clearly that the corporate entity as such would not be held criminally liable, supporting instead the principle of individual responsibility established in the Tribunal.²⁸

II. A Step in the Right Direction

Though it is indisputable that corporations have been involved in many horrid crimes, the concept of criminal liability for legal persons has been the object of heated debate in international law. Several reservations have been presented, including: i) whether punishing corporations for criminal acts also effectively punishes innocent members of the entity, such as shareholders and employees;²⁹ ii) conflicts with State sovereignty;³⁰ and iii) the issues that corporate liability poses, in contrast to individual liability, in international law.³¹

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Despite these reservations, the benefits of corporate responsibility are overwhelming. Some justifications for holding these entities accountable include: i) when a corporation is involved in a crime, the likelihood of harm is far greater than when a crime is carried out by individuals alone; ii) the...