Regulating corporate human rights abuses: is Unocal the answer?

• Author: Thadhani, Pia Zara
• Position: National Coalition Government of Burma v. Unocal Inc.

"International law is the normative expression of the international political system"(1) and as a result, international law governs the relations between states.(2) Within this international system, however, states are free to regulate their nationals, as well as the relations between their nationals and other states.(3) A rational corollary to this is the right of a state to regulate a multinational corporation (MNC) incorporated within its territory.(4) The steady growth in the overseas operations of MNCs, through their foreign subsidiaries, collaborations with alien corporations, and joint ventures, has complicated this traditional view of jurisdiction.(5)

The issue of jurisdiction over MNCs is further complicated by the fact that international law fails to provide a framework within which a corporate actor may act responsibly.(6) Without an established framework, the courts are unclear as to the level of involvement and type of conduct that constitutes a violation of international law. Given the increasing importance of MNCs in the global market, these issues deserve better treatment than the current judicial stance provides.

Over the last two decades, the attention of international law has shifted from violations committed by governments to violations committed by private actors, especially MNCs.(7) Corporate human rights violations have become the focus of social and judicial disapproval.(8) U.S. courts have witnessed an increase in human rights suits brought by aliens against MNCs.(9) In one such case, National Coalition Government of Burma v. Unocal Inc.,(10) a United States district court held that a corporation could be held liable for its overseas violations of international human rights.(11) This decision reflects the growing trend in federal courts of holding private individuals accountable under the Alien Tort Claims Act (ATCA)(12) for violations of international human rights law.(13) Several courts had already rejected the traditional view that only states could violate international law and held that individuals acting under "color of law" could also be liable.(14) Unocal, however, went a step further and implied that a corporation's purely private actions could also be sanctioned under international law.(15) Unocal and subsequent cases incorporating the Unocal approach are of concern because the standard set by these courts is unclear--there is no bright line rule regarding the type of conduct and the level of involvement necessary for a corporation to be held accountable for its human rights violations overseas.(16)

This potential expansion of accountability, although laudable, raises a disturbing question: what are the implications of the Unocal decision for corporations, including alien corporate entities, if their questionable business practices are subject to sanctions under international law?

This Note analyzes Unocal's impact on corporations against the backdrop of customary international law as applied in U.S. courts through the ATCA. Part I discusses the concept of "law of nations," or customary international law and the place of human rights in this legal scheme. Part II examines the ATCA, specifically its use in international human rights suits in U.S. courts and the courts' interpretation of the ATCA. Part III analyzes Unocal's impact on U.S. and foreign corporations and proposes that a mandatory code of corporate conduct might ensure that the judiciary does not overreach its authority in crafting its definition of international law. Although there are other significant jurisdictional restraints on the power of federal forums to sanction foreign corporate activity, this does not give federal courts the authority to disregard the scope of international law.

This Note concludes that federal courts should be wary of sanctioning the conduct of corporations under the murky standard of international law. As a solution, this Note proposes the adoption of a mandatory code of corporate conduct similar to the corporate codes of conduct proposed by the United Nations, which were never formally adopted.(17)

CUSTOMARY INTERNATIONAL LAW-THE LAW OF NATIONS

Origin of Customary International Law

The earliest definition of the law of nations(18) is found in Blackstone's Commentaries. According to Blackstone, the law of nations signifies "a system of rules, deducible by natural reason, and established by universal consent among the civilized inhabitants of the world."(19) The law of nations referred to the body of rules binding upon civilized states in their relations with each other.(20) Classical international law was predominantly statist:(21) a law was binding on a state only by its consent and a state could refuse to accept a norm for itself.(22) The norms that fell within this category embodied national interests and could be abrogated by treaty.(23) International law, however, also recognized jus cogens--another class of norms that binds all nations and cannot be preempted by treaty.(24)

Jus Cogens Norms Defined

A jus cogens norm is "a norm accepted and recognized by the international community of States as a whole as a norm from which no derogation is permitted."(25) The origins of jus cogens are unclear, but since World War II it has developed as an exception to the classicist principle of state consent in determining international law.(26) Its unconventional entry into the law has given jus cogens the status of customary law.(27)

Jus cogens norms, however, are distinguished from other customary norms on the grounds that they satisfy not merely the needs of individual states, but the "higher interest of the whole international community."(28) These are norms that are "ordered to a transcendent common good of the international community."(29) Determining jus cogens requires a two-step approach: first, the establishment of a proposition as a "rule" of general international law, and second, the acceptance of that rule as a "peremptory" norm by the international community as a whole.(30) This concept essentially recognizes certain norms under international law that cannot be modified by consent or treaty.(31) Whatever its origins, the concept of jus cogens is now accepted and allows norms without unanimous state consent to attain the status of international law and bind all states.(32)

The norms, although easy to define, are more difficult to identify.(33) Violation of safe conducts, infringement of the rights of ambassadors, and piracy formed the initial jus cogens violations.(34) In essence, "certain acts specified as universally reprehensible [made] the perpetrator liable to capture and trial wherever he went."(35) The violators of jus cogens are classified as hostis humani generis--enemies of all mankind.(36) The common denominators underlying this classification were "the magnitude of the threat posed by the acts coupled with the universality of condemnation."(37) The universal condemnation standard suggests that the forum in which the violator is tried represents all humanity. As a consequence, a jus cogens violator may be tried in any forum.(38) This original list has grown to include genocide, slave trade, and torture among the violations of nonderogable norms.(39)

Although important, jus cogens norms are merely a narrow subset of norms that fall within the law of nations.(40) A norm of customary international law (CIL) rises to the level of jus cogens if the international community recognizes the norm as so fundamental that it is nonderogable.(41) Other violations, though within the scope of CIL, do not reach the level of jus cogens violations.(42)

Distinguishing Customary International Law

Although related, jus cogens and CIL differ in one important respect.(43) Unlike the somewhat fixed jus cogens categories,(44) CIL is more evolutionary in scope.(45) Customary international norms are not permanently affixed and evolve to include new norms as they gain universal acceptance.(46)

Contemporary international law is therefore best characterized as having an established core, the classical system which incorporates a predominantly statist view of international law, and a modern expansion at the periphery, corresponding to developments, largely in the human rights and environmental protection areas, which do not fit within the classical paradigm.(47) In the post-World War II era, the proliferation of human rights agreements expanded the scope of CIL to include international human rights.(48) Section 702 of the Restatement (Third) categorizes the human rights abuses that constitute violations of CIL.(49) Human rights abuses not currently listed may be included in the future if they achieve the status of customary law.(50)

This flexibility in the scope of CIL, although desirable, also creates the potential for abuse because courts can, and sometimes do, confuse the two categories and stretch the bounds of jus cogens to include norms that fall within a moral "gray area."(51) Even when the universal applicability of these norms is unclear, the courts often characterize morally reprehensible acts as jus cogens norms.(52) Although courts claim that ATCA jurisdiction extends only to jus cogens violations, they have interpreted the scope of jus cogens fairly broadly on occasion.(53)

Courts' growing tendency to expand the scope of jus cogens has at times stretched the imagination. The most liberal view of private liability for a violation of the law of nations was taken by the Maryland district court in Adra v. Clift.(54) The Adra court held that passport fraud constituted a violation of CIL.(55) Although undoubtedly a criminal act, fraud of this nature is by no means in the same category as piracy or slavery. Even though a violation may offend one's sense of natural justice, this does not necessarily elevate it to the level of a universally condemned act.(56)

CUSTOMARY INTERNATIONAL LAW IN U.S. COURTS

Interpreting the Scope of Customary International Law

The problem with the...