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The Emergence of Customary International Law Recognizing Corporate Liability for Violations of International Human Rights and Environmental Law
By Kathleen Morris*
I. Introduction
"With the exception of a handful of nation-states, multinationals are alone in possessing the size, technology, and economic reach necessary to influence human affairs on a global basis."[1] Half of the world's 100 greatest powers are transnational (or multinational) corporations.[2] The vast financial power and economic influence of transnational corporations (TNCs) enables them to affect human rights and the environment in a fundamental way.[3] TNCs represent a huge proportion of the world's economy and much of their operations exploit natural and human resources in developing countries.[4] Unfortunately, TNCs have been responsible for human rights abuses and environmental disasters of immense magnitude.[5] TNCs also have the power to protect the human rights of people in the developing countries in which they operate.[6] International custom stemming from judicial recognition of corporate liability, international instruments addressing TNCs, stricter corporate regulations in developing countries, as well as voluntary codes of conduct by TNCs have begun to develop which should allow TNCs to be held legally liable for human rights abuses and environmental damage they cause.
International law recognizes the basic human dignity of all individuals through certain customary human rights norms which dictate the obligation to protect and uphold human rights.[7] The Universal Declaration of Human Rights calls for "every organ of society" to respect, promote, and protect human rights.[8] The Universal Declaration represents customary international human rights law and, as such, states, individuals, and "every organ of society" are obligated to promote and protect human rights as articulated in the Declaration.[9] Some of the human rights recognized under international law include the rights to: life, liberty, and security of person; freedom from slavery or servitude; freedom from torture, inhuman or degrading treatment; equality before and equal protection of the law; freedom from discrimination; freedom from arbitrary arrest, detention, or exile; a fair and public hearing by an independent and impartial tribunal when charged with a crime; freedom from arbitrary interference with privacy, family, and home; ownership of property - no one shall be arbitrarily deprived of his property; freedom of opinion and expression; freedom of peaceful assembly and association; free choice of employment; just and favorable work conditions; reasonable limitation on working hours; a standard of living adequate for the health and well-being of himself and his family, including food.[10] The Universal Declaration holds all segments of society responsible for respecting, promoting, and protecting these basic human rights.[11] Corporations represent a powerful segment of global society and therefore should be held to the obligations of international human rights law.
International environmental law is less developed than international human rights law. However, some widely recognized principles of international environmental protection are emerging among the international community.[12] These principles are derived from the Stockholm and Rio Declarations, U.N. General Assembly Resolutions, arbitral decisions such as the Trail Smelter Arbitration, judicial decisions in the International Court of Justice, and an increasing number of environmental treaties.[13] Basic international environmental principles include: the human right to a healthy environment; sustainable development which involves balancing environmental and development interests, reducing or eliminating pollution, and controlling the use of renewable and non-renewable resources; the obligation of states not to cause harm to the environment of other states - recognized as customary international law; and the overall obligation to not cause harm to the environment.[14] Individual states have implemented regulations addressing corporate responsibility toward the environment, discussed infra section V(D), which add to the environmental principles for which corporations should be liable.[15] Additionally, international tribunals have recognized the existence of a human right to a healthy environment, which creates an individual right to pursue redress for environmental damage.[16]
"Despite their international character, corporations are creatures of domestic law."[17] United States corporations are subject to state law of the state in which they are incorporated.[18] While domestic regulation protects human rights from abuse by corporations through anti-discrimination, health, safety, environmental, and labor laws, international law does not directly address international activities of corporations.[19] "TNCs have been able to operate in a legal vacuum because international human rights law imposes no direct legal obligations on TNCs."[20] Some international environmental treaties have sought to regulate corporate activities as they relate to the environment: the Montreal protocol prohibits corporate activities relating to CFCs and the Basel Convention addresses corporations and the hazardous waste trade.[21] Unfortunately, the scope of these conventions is much too narrow to truly address the huge range of activities and investments in which TNCs are involved.[22]
This paper will explore the ways in which international legal custom, recognized as binding law by the International Court of Justice, has emerged to hold TNCs liable for environmental and human rights violations. International and domestic legal cases, such as the African Commission's condemnation of Shell Oil's activities in Nigeria, discussed infra section IV(A), taken together with international instruments, treaties, and domestic regulations that address conduct of TNCs support the contention that international legal custom has emerged and TNCs should be held legally responsible for violations of international environmental and human rights standards. Additionally, evolving corporate codes of conduct, such as those demonstrated by BP, discussed infra pp. IV(B), may indicate the evolution of customary law regarding corporate responsibility for human rights and the environment.
Customary International Law
International custom is a recognized source of international law.[23] Customary international law is "the practices or customs of states, undertaken based on a sense of legal obligation."[24] Customary international law will be recognized when there is evidence of extensive and uniform practice of the rule and it must appear that the practice comes from a sense of legal obligation (opinio juris).[25] In practice, complete uniformity is not required; substantial uniformity is sufficient.[26] It is generally required that the conduct is consistent with the customary rule and that inconsistencies with the rule are treated as a breach of the rule, not as recognition of a new rule.[27] Uniform practice can further be shown through State legislation and court decisions, as well as statements by government officials, among other things.[28] Opinio juris may be established using, inter alia, policy statements and press releases, international and national judicial decisions, and resolutions and declarations by the United Nations.[29] With the advent of technology and the increasing role of non-governmental organizations in international law, opinio juris may become apparent over shorter periods of time than in the past.[30] Additionally, when a significant number of states have accepted a treaty, it may become customary law under which even non-parties to the treaty may be bound.[31] The International Court of Justice allows treaties to be evidence of both state practice and opinio juris.[32] Once customary law is recognized, all states (and actors) are bound by it to the same degree as treaty law.[33] However, while treaty law only binds parties which consent to a treaty, customary international rules become universally binding with or without the consent of states or other actors.[34]
There is significant support for the contention that TNCs should be held liable for international environmental and human rights violations under customary international law. Uniform practice is evidenced by international instruments, including United Nations declarations, which dictate acceptable standards for TNCs, the acceptance by TNCs of voluntary codes of conduct based on international environmental and human rights law, as well as increasing state regulation of corporations in developing countries and judicial decisions in countries where TNCs are headquartered allowing legal liability for violations of international law. Opinio juris is demonstrated by international and national court decisions recognizing TNC liability for environmental and human rights violations and by declarations by the United Nations sanctioning conduct by TNCs in accordance with recognized international human rights and environmental standards.
The following case studies illustrate the environmental and human rights devastation caused by TNCs, the legal recognition of these violations, and the evolving recognition by TNCs of their social, and possibly legal, obligations to protect human rights and the environment in their operations. The case of Shell Oil in Nigeria demonstrates the blatant lack of respect for human rights and the environment by oil companies in the Niger Delta. Unfortunately it is just one example of the devastation that TNCs have been known to cause around the world. Additionally, the Nigeria case shows that international and domestic courts recognize the active participation of TNCs in human rights abuses and environmental violations. The African Commission on Human Rights and domestic United States' courts recognized Shell's involvement in human rights abuses and environmental devastation in the Niger Delta. United States courts have also demonstrated recognition of the legal liability of TNCs for proven violations of international law abroad through the Shell/Nigeria case.
The positive, preventative measures taken by BP in Azerbaijan, Georgia, and Turkey demonstrate the evolving acceptance by TNCs of codes of conduct relating to human rights and the environment. Just as uniform state practice indicates the creation of customary international law which binds states, uniform practice adopted by TNCs in order to prevent human rights and environmental violations, and possible legal liability for such, should create legally binding norms of customary international law for TNCs - recognized in both domestic courts and international tribunals. Because TNCs have more financial power than most nations, TNCs should be recognized as subjects of international law and as such, uniform practice adopted out of a sense of legal obligation by TNCs should bind them to legal liability for violations of international law.
A. Royal Dutch Shell in Nigeria: International Judicial Recognition of Corporate Responsibility for Environmental Devastation and Human Rights Violations
i. Background
Oil was discovered in Nigeria in 1958[35] and Shell Oil started operating in the Niger Delta of Nigeria the same year.[36] Today, Nigeria receives ninety-five percent of its foreign exchange earnings from oil.[37] Oil is the main source of Nigeria's income representing sixty-five percent of its national revenue and twenty percent of its Gross Domestic Product.[38] However, the Niger Delta remains undeveloped and very poor.[39] Oil extraction has cost the Niger Delta its environment, its fresh water, its fresh air, its agriculture, and its peoples' right to subsistence and security.[40]
Before oil extraction began the people of the Niger Delta farmed the arable lands and fished in the rich waters of the region.[41] Unfortunately, oil extraction has caused horrible environmental damage to the Niger Delta over the past fifty years.[42] Shell has been the principal oil company in the Niger Delta since 1958.[43] The African Commission on Human and Peoples' Rights, as well as several non-governmental organizations and other national governments, recognize Shell's role in human rights abuses and devastating environmental damage in the Niger Delta.[44]
ii. Environmental & Human Devastation by Oil Industry Activities in Niger Delta
Shell's exploitation of the natural oil resources in Nigeria has effectively destroyed the region's environment, water, air, and land.[45] The pollution is so extensive that fishing, forestry, and agriculture are now impossible in many areas of the Niger Delta.[46] Frequent oil incidents have left layers of oil, further suppressing and destroying the ecosystem of the area.[47] Shell's oil spills in Nigeria represented forty percent of Shell's worldwide spills between 1982 and 1992.[48] This provides solid evidence that Shell poorly maintained its pipelines in the Niger Delta in complete disregard for the environment and the people of the region.[49] Shell took no measures to prevent pollution and environmental damage and has failed to sufficiently clean up its spills which exacerbates the pollution.[50]
The consequences of oil extraction in the Delta include "footpaths blocked by petroleum pipelines, polluted wells, continual noise, delay in necessary repairs to damages, and flooding and disruption of fresh water supplies due to canals created through farmlands."[51] Poorly maintained pipelines frequently leak causing water pollution and "fountains of emulsified oil pouring into villagers' fields."[52] Most villagers have no clean drinking water because it is heavily polluted with oil; clean drinking water must now be imported even though the Niger Delta was once rich with fresh water.[53] Gas flaring has been documented by environmental publicists in the Niger Delta as well.[54] The constant gas flaring has led to greenhouse gases being released into the atmosphere and the creation of acid rain.[55] These results are documented in the Delta. Acid rain has destroyed plant and wildlife in the region.[56] The people of the Delta report respiratory diseases, deafness from the constant noise of the gas flares, and there has been an increase in cancer and other diseases associated with water pollution.[57] Blow outs from wells are also a problem of oil exploitation in Nigeria.[58] These blow outs are caused by poor maintenance of the wells and lack of due care and result in further oil pollution of the land and air in the region.[59] Pollution also comes from oil refineries in Nigeria.[60] Solid and liquid toxic wastes are deposited directly into the environment through drainpipes exiting the refineries, sometimes being dumped straight into nearby water.[61] These toxic wastes are barely treated when released into the environment causing severe damage to the water, land, and air. [62] Clearly, Shell used insufficient measures to treat the waste, again in complete disregard for the environment and people of the Niger Delta and for international environmental and human rights standards.[63]
Shell Nigeria obviously used lesser operating standards than used by Shell in developed nations, demonstrated by the fact that forty percent of its total worldwide spills occurred in Nigeria over a ten-year period.[64] Shell resisted independent environmental audits which are used as a best practice in the oil industry by other transnational oil companies.[65] The damage to the environment of the Niger Delta is an example of the huge, and unfortunately not rare, cost of the international business operations of TNCs.[66]
Shell's devastation of the environment in the Niger Delta violates the human rights of the people whose land and environment have been ruined by denying them their right to a healthy environment and their right to subsistence.[67] However, Shell's activities in Nigeria have led to blatant human rights abuses as well.[68] Shell's activities in the Niger Delta were executed through a consortium agreement with the Nigerian government.[69] To protect Shell and its own investment in oil extraction in the Niger Delta, the Nigerian government carried out devastating attacks on local citizens who opposed Shell's destruction of their local environment, sources of food and water, and means of subsistence.[70]
Shell's disregard for the environment and people of the Niger Delta resulted in massive protests by the native Ogoni people.[71] Due to these protests, Shell was at one point forced to shut down operations in Ogoni land.[72] Shell asked its business partner, the dictatorial Nigerian government, for help.[73] In response to Shell's request, the Nigerian government launched a hostile campaign toward the Ogoni people which included "extrajudicial executions, rapes, looting, beatings, shooting, and arrests and detentions completely lacking in due process protections."[74] The Nigerian government essentially placed its "legal and military powers ... at the disposal of the oil companies" and allowed "ruthless military operations" against the Ogoni people.[75]
Nigerian security forces have attacked, burned and destroyed several Ogoni villages and homes under the pretext of dislodging officials and supporters of the Movement of the Survival of Ogoni People (MOSOP). These attacks have come in response to MOSOP's non-violent campaign in opposition to the destruction of their environment by oil companies. Some of the attacks have involved uniformed combined forces of the police, the army, the air-force, and the navy, armed with armoured tanks and other sophisticated weapons. In other instances, the attacks have been conducted by unidentified gunmen, mostly at night.[76]
Records of memos exchanged between the Shell Petroleum Development Company and Nigeria's security forces provide evidence that Shell had a role in the campaign of terror against the Ogoni people.[77]
The most prominent incident of human rights violations occurred with the execution of Ken Saro-Wiwa and eight other Ogoni activists in 1995.[78] Ken Saro-Wiwa, an environmentalist, writer, and poet, created the Movement for the Survival of the Ogoni People (MOSOP).[79] In 1994, Saro-Wiwa and eight other MOSOP leaders were arrested and charged with inciting the murder of four pro-government Ogoni leaders.[80] The trial of Saro-Wiwa and the others was internationally condemned as a fraud: "[T]op U.S. and British government officials joined Nelson Mandela and Amnesty International in condemning it, and the Pope pleaded for clemency."[81] Saro-Wiwa and the others were found guilty, sentenced to death, and executed just two days following the convictions.[82] Although Shell's call for help in dealing with the Ogoni people essentially led to the Nigerian government's execution of Saro-Wiwa, Shell did nothing to influence the Nigerian government to save the lives of the nine activists.[83] "Shell claimed that as a commercial entity, it was not entitled to intervene in the ‘legal processes of a sovereign state.'"[84] Shell has been widely accused of condoning the human rights violations of the Nigerian government including Saro-Wiwa's execution.[85]
iii. International Legal Response
The international legal community has taken notice of the vast environmental damage and human rights violations in Nigeria. In May 2002, the African Commission on Peoples' and Human Rights (Commission) found that the Nigerian government, in consortium with Shell, was involved in oil production and operations that "produced contamination causing environmental degradation and health problems; that the consortium disposed of toxic wastes in violation of applicable international environmental standards and caused numerous avoidable spills near villages, consequently poisoning much of the region's soil and water."[86] The Commission found this to be a violation of rights protected under the African Charter on Human and Peoples' Rights (Charter) including the right to life, the right to property, the right to health, the right to housing, the right to food, the right of peoples to freely dispose of their wealth and natural resources, and the right to a generally satisfactory environment favorable to their development.[87] Clearly, "international environmental standards" and international human rights law were recognized by the Commission and implicated in this decision.[88] The Commission noted that the right to a clean and safe environment is closely akin "to economic and social rights insofar as the environment affects the quality of life and safety of the individual."[89] It also found that the right to a satisfactory environment "imposes clear obligations upon a government" and requires that reasonable measures be taken to "prevent pollution and ecological degradation, to promote conservation, and to secure an ecologically sustainable development and use of natural resources."[90]
The African Commission explicitly recognized that oil companies, specifically Shell, had devastated the Niger Delta and violated the human rights of its people stating that "the Nigerian Government has given the green light to private actors, and the oil Companies in particular, to devastatingly affect the well-being of the Ogonis."[91] While the Commission found that Shell was as much at fault as the Nigerian government for these violations, the Commission only has jurisdiction over member states to the African Charter on Human and Peoples' Rights and has no jurisdiction over corporate entities.[92]
However, Shell is being sued in the United States under the Alien Tort Claims Act (ATCA) by Nigerian citizens for its activities in the Niger Delta, specifically for human rights violations.[93] The ATCA allows jurisdiction in federal courts when "(1) an alien sues (2) for a tort (3) committed in violation of the law of nations (i.e., international law) or a treaty of the United States."[94] This suit alleges that Royal Dutch/Shell's conduct in Nigeria violates customary international human rights law.[95] The court in Wiwa v. Royal Dutch/Shell recognized the plaintiffs' claims against Shell and stated that "plaintiffs have adequately alleged violations of international law, and ... have satisfied the state action requirements of the ATCA."[96] Further, the court found that the plaintiffs effectively alleged human rights violations under international law which are actionable under the ATCA.
[P]laintiffs have alleged conduct that violates the rights of Jane Doe and Owens Wiwa as secured under international law, and which therefore constitutes actionable conduct under the ATCA, with respect to the following claims: (1) crimes against humanity with respect to Doe and Owens Wiwa; (2) torture with respect to Doe; (3) cruel, inhuman, or degrading treatment with respect to Doe and Owens Wiwa; (4) violation of the right to life, liberty and security of person with respect to Doe; (5) violation of the right to peaceful assembly and association with respect to Doe and Wiwa.[97]
The case has not yet gone to trial on the merits. The court's recognition of the adequacy of the claims demonstrates that there is a potential for legal liability of TNCs for violations of international human rights norms in U.S. courts if those violations can be proven.[98] This judicial recognition supports a finding that customary international law exists to hold TNCs legally liable for human rights and environmental violations in international tribunals such as the African Commission for Human Rights, the European Court of Human Rights, or the Inter-American Court of Human Rights.
Shell and Nigeria's actions in the Niger Delta also resulted in political consequences for Nigeria.[99] In condemnation of the executions of Saro-Wiwa and the other activists "the United States and Great Britain removed their ambassadors from Nigeria, the World Bank cancelled a one hundred million dollar loan to Nigeria . . . and Nigeria was suspended from the Commonwealth of Nations."[100]
B. British Petroleum in Azerbaijan, Georgia, and Turkey: Pre-emptive Protection of Human Rights and the Environment
Despite the devastating effects TNCs have had on human rights and the environment, especially in developing countries, there is reason to believe that TNCs are becoming more responsible in preventing environmental damage when they operate in developing countries.[101] Many TNCs now incorporate environmental protection and sustainable development into their operations.[102] Whether TNCs are doing this out of a perceived legal obligation or for purely profit-driven reasons, these codes of conduct are in keeping with norms of international law and provide justification for holding TNCs responsible for violations of such.
i. Background
British Petroleum (BP) is in the process of building a massive oil and gas pipeline which will transport one million barrels of oil a day over a thousand miles through Azerbaijan, Georgia, and Turkey.[103] The Baku-Tbilisi-Ceyhan (BTC) pipeline is expected to produce up to ten percent of incremental global oil demand over the next ten years.[104] BP, doing business on this pipeline as BTC Co., is seeking to "establish a new benchmark for a major infrastructure project" by promoting internationally recognized human rights and environmental standards..[105]
BP chose this particular route for its pipeline because it is a commercially viable option that also minimizes risk, avoids displacement of communities, prevents additional tanker traffic in the overcrowded Turkish Straits, and circumvents internationally and nationally protected areas, including the Borjomi-Kharagauli National Park.[106] This project is an example of forethought that integrates international standards for human rights and environmental protection into development of a major transnational corporate project.[107]
ii. Consultation with Affected Communities
BP has sought to involve all the communities affected by the BTC pipeline in its planning.[108] It consulted with 30,000 land-owners and land-users in over 450 communities over a twenty-month period to produce a comprehensive socio-and macro-economic assessment of the project's impact in the region.[109] It also developed comprehensive Public Consultation and Disclosure Plans (PCDP) for each country involved with the pipeline as part of the consultation process.[110] Over 11,000 pages of project documents are available on the BTC website which provides stakeholders with a wide range of information about the project and its impact.[111] BP also committed to publishing a Citizens Guide to the project on the website in local languages.[112]
iii. Legal Mechanisms
BP has also worked from a legal standpoint on the BTC pipeline project.[113] Because the pipeline involves three host countries which are currently in political and economic transition, the parties created a special legal framework for the project - a Prevailing Legal Regime (PLR).[114] The PLR will supplement the structure of existing local laws and regulations in order to ensure that human rights, health, safety, labor, and environmental standards implicated by the project will "in no event be less stringent than the highest applicable European Union standards... World Bank group standards, and standards under international labor and human rights treaties."[115] BP also signed a joint statement in May 2003 with the host governments which guarantees adherence to internationally recognized human rights, labor rights, and environmental standards.[116] The Joint Statement made the Voluntary Principles on Security and Human Rights part of the PLR.[117] This is a clear indication that BP recognizes its obligation to uphold international legal standards for human rights and the environment.
Additionally, in response to concerns by non-governmental organizations (NGOs), specifically Amnesty International, that the pipeline would endanger human rights of local residents, endanger the environment and cause conflict in the region, BP drafted and signed a "Deed Poll - a legally binding contract designed to protect the rights of the three host governments and to promote and regulate human rights and environmental issues."[118] While not endorsing the BTC project, Amnesty International welcomed BP's willingness to maintain "open dialogue on implementing mechanisms for hearing individual grievances and on implementing other aspects of international best practice."[119] Amnesty International continues to voice concern over the impact and effectiveness of the Deed Poll as the project moves forward and how BTC will make it known to the people affected so that they may bring lawsuits for damages caused by the project.[120] Additionally, Amnesty International is concerned with the unilaterally binding nature of the Deed Poll stating that "it could be changed, revoked, modified or even ignored by the beneficiaries, namely the governments of Georgia, Azerbaijan and Turkey." [121]
iv. Developing Uniform Practice for Responsible International Operations by TNCs
BP's efforts to ensure the protection of human rights by following recognized international human rights standards on the BTC project are commendable.[122] It remains to be seen whether or not these efforts will be successful in preventing the type of damage done by TNCs in the past but it is certainly a sign that corporations recognize international human rights standards and are starting to include these standards in the planning stage of development projects.[123] Additionally, BP's willingness to create a legally binding obligation to the people affected by the pipeline shows its recognition that it is legally liable for violations of international human rights and environmental standards. The World Business Council for Sustainable Development lists additional case studies showing how other corporations are honoring international environmental and human rights standards addressed in the Global Compact and other international policy documents in their operations.[124]
In addition to following internationally recognized human rights and environmental standards for TNC operations in developing countries, BP's legal actions to protect human rights and the environment have engendered commitments by the host governments to live up to international standards in these areas as well.[125] That is an admirable by-product of the power of TNCs. Because of the awesome financial power held by TNCs, they have a unique opportunity to influence the governments of developing countries to respect internationally accepted environmental and human rights norms.[126] As BP has done with the BTC pipeline, TNCs can work with host governments to ensure adherence to international human rights and environmental standards.
A. Recognition of Corporate Standards by International Legal Entities
In addition to the Montreal protocol and the Basel Convention which directly address international corporate behavior in narrow environmental areas[127], several other international legal entities sanction codes of conduct for TNCs.[128] The United Nations, the International Labor Organization, the Organization for Economic Cooperation and Development (OECD), the European Union, and the International Organization for Standardization have all identified certain codes of conduct expected of TNCs.[129] The OECD Guidelines for Multinational Enterprises are recommendations by governments to TNCs operating in or from those countries.[130] The OECD Guidelines typify the standards set out by international entities and suggest that TNCs:
1. Contribute to economic, social and environmental progress with a view to achieving sustainable development.
2. Respect the human rights of those affected by their activities consistent with the host government's international obligations and commitments.
7. Develop and apply effective self-regulatory practices and management systems that foster a relationship of confidence and mutual trust between enterprises and the societies in which they operate.[131]
More specifically, the OECD Guidelines call for TNCs to: Establish and maintain a system of environmental management appropriate to the enterprise including assessing the environmental impact of their activities and establishing measures for improving environmental performance; Regularly monitor and verify progress toward environmental performance; Provide information to public and employees about environmental impacts of activities and consult with communities affected by environmental policies of operations; Assess foreseeable environmental impacts associated with operations, goods and services and where appropriate prepare environmental impact statements; Not use lack of scientific certainty of environmental risk where a threat is present to postpone cost-effective measures to prevent the damage; Maintain contingency plans for preventing, mitigating and controlling environmental damage from their operations; Continually seek to improve corporate environmental performance; Provide training to employees in environmental safety matters; Contribute to the development of environmentally meaningful public policy.[132]
Additionally, the OECD guidelines provide that TNCs should also respect the right of their employees to participate in trade unions, contribute to the abolition of child labor, contribute to the elimination of forced labor, not practice discrimination, observe favorable employment standards, and ensure occupational health and safety in their operations.[133] All of these principles can be found in international customary human rights law and treaties.[134]
The OECD guidelines reflect the consensus of international and national institutions which seek a means to influence TNC behavior internationally.[135] The fact that thirty-nine countries have endorsed these Guidelines and recommended them to TNCs is an indication that these governments recognize these standards as expected practice by TNCs.[136] The broad governmental support for the OECD Guidelines indicates widespread and uniform state practice of recognizing these human rights and environmental standards for TNCs.
Additionally, the United Nations created the Global Compact in 2000 which incorporated principles derived from the Universal Declaration on Human Rights, the Declaration of the International Labor Organization on fundamental principles and rights, the Copenhagen Summit, and the Rio Declaration of 1992 - recognized sources of international law - into a Global Compact for good corporate global citizenship which corporate members must adopt.[137] This is a clear declaration by the United Nations of expected international environmental and human rights standards which shows that opinio juris exists.[138] These emerging corporate standards derived from international governmental policy declarations and treaties show that uniform practice and opinio juris exist in the realm of corporate responsibility for human rights and environmental protection.[139]
B. National and International Legal Decisions
International and national legal cases stand for the proposition that TNCs should be held liable for the human rights abuses and environmental damage they cause.[140] This recognition of liability demonstrates that both uniform state practice and opinio juris exist in the area of corporate responsibility for violations of international human rights law and environmental standards.[141] Corporate legal liability for complicity in human rights abuses was even recognized at the Nuremburg tribunal.[142] "For all intents and purposes, the standards of liability that we are trying to apply to corporations complicit in human rights abuses were recognized at Nuremberg, and they have not changed a whole lot since Nuremberg."[143] Unfortunately, judicial practice recognizing legal liability for corporate violations of international law has not been consistent at the international level.[144] If international tribunals were to recognize all of the factors discussed in this paper which support the creation of customary law holding TNCs legally liable for violations of international law, custom would be absolutely established and it would be the rule of law.
In the Shell Nigeria case, discussed supra, the African Commission clearly opined that Shell Oil was as much to blame for the environmental and human rights violations in Nigeria as the government was.[145] The Commission's lack of jurisdiction or power to impose actual legal liability on Shell does not diminish the fact that the Commission condemned Shell for the violation of international environmental and human rights standards.[146] Further, the principles of the African Charter on Human and Peoples' Rights reflect those in widely recognized international human rights legal instruments such as the Universal Declaration of Human Rights and the International Convention on Economic, Social, and Cultural Rights, [147] which shows that universal, and not simply regional, international legal standards were implicated in this case.[148] Therefore, the African Commission's recognition of Shell's responsibility for violations of these standards extends to TNCs operating all over the world.[149] Thus, TNCs should be bound by international standards set out in these types of international instruments. Establishing this as customary international law would enable international and domestic courts to impose legal liability on TNCs for these violations.[150]
Additionally, several national cases support the uniform practice of holding corporations legally liable for violations of international law.[151] In the infamous Union Carbide-Bhopal case, a highly-toxic chemical spill at Union Carbide's plant in Bhopal, India killed thousands and injured or permanently disabled hundreds of thousands more.[152] While a class action case under the Alien Tort Claims Act in the United States failed, the case did go to the Supreme Court of India and Union Carbide settled with the victims for hundreds of millions of dollars, thereby accepting liability for the disaster.[153] Again, this case shows that TNCs may be held legally liable for violations of human rights and international environmental standards.[154]
The Alien Tort Claims Act case against Shell in the United States, discussed supra, indicates recognition of corporate responsibility for violations of international human rights law.[155] The recognition by the court in that case that sufficient claims had been alleged against Shell based on its activities in Nigeria, is a clear indication that legal liability for corporate violations of human rights may be found in United States courts.[156] Several other cases of environmental and human rights violations by TNCs have been brought in the United States under the Alien Tort Claims Act.[157] These cases seldom reach the merits as they are usually dismissed under the theory of forum non conveniens (inconvenient forum).[158] However, although these cases often do not succeed in U.S. courts, the decisions make it clear that TNCs should be held liable for these violations in some legal tribunal.[159] In Dow Chemical Co. v. Alfaro, Costa Rican banana workers sued Dow Chemical for personal injuries including cancer and male sterility caused by Dow's use of a chemical pesticide known to cause reproductive damage and banned in the United States for that reason.[160] The Texas Supreme Court refused to dismiss the case for forum non conveniens, recognizing that TNCs should be held liable for endangering the lives of workers and the environment in developing countries in which they operate.[161] In Aguinda v. Texaco, indigenous people of Ecuador sued Texaco for environmental contamination caused by Texaco's activities in the region.[162] The case was eventually dismissed for forum non conveniens, but the dismissal was premised on a requirement that Texaco consent to the jurisdiction of Ecuadorian courts, so that the plaintiffs could pursue their legal claims.[163] This decision indicates that while the United States court would not hear this case, it did accept the idea that Texaco could be held legally liable for its activities in Ecuador by an Ecuadorian tribunal if the plaintiffs' allegations were proven.[164] This is yet another recognition that claims against TNCs for violations of international human rights law and environmental standards should be recognized and heard in legal tribunals.
Similar cases have arisen in domestic courts in Australia, Canada, and the United Kingdom which seek to hold parent companies in those countries legally liable for environmental and human rights violations perpetrated by their corporate entities in developing countries.[165]
In general, these foreign lawsuits reflect pressure for parent companies of multinational corporate groups to ensure that their behavior as direct investors in other countries matches the standard of care in the home country. Litigation involves many complex jurisdictional and procedural issues, and legal rulings have been inconclusive. Nonetheless, the potential threat of such claims in the corporation's home country is raising TNC awareness of human rights and other responsibilities. The loss of shareholder confidence and the threat of substantial financial liability will also induce greater internal scrutiny of worldwide operations.[166]
These international and domestic cases show that corporations are considered liable for violations of international law, even if they have escaped legal liability in the past.[167] Once an international custom is recognized in this area, subsequent case law will follow to hold TNCs liable when they violate human rights or damage the environment. Additionally, if the international legal community adopts the idea of legal corporate liability as customary international law, States may be expected (and even required) to recognize legal claims against corporations for violations of international law. It is important to note that while these cases indicate recognition of legal liability of TNCs for violations of international law, there is still a dearth of actual judicial decisions holding TNCs liable for violations and imposing criminal or civil penalties on them for such.[168]
C. State Practice of Recognizing Corporate Responsibility
It is also significant that developing countries are increasingly regulating business activities in order to protect the environment and human rights.[169] Some examples of developing countries' use of domestic regulations in this area are:
[I]n Central and South America, Belize, Brazil and Ecuador have adopted legislation or taken action to slow the progress of deforestation, and Bolivia has committed $90 million to efforts to eradicate child labor. In Asia, Thailand has adopted legislation protecting women from sexual harassment and increased enforcement of prohibitions upon child labor and environmental degradation, while Cambodia has acted to impose criminal sanctions upon those involved in illegal logging operations. In Nigeria, a country with a long history of human rights violations, the government has directed enterprises engaged in the petroleum industry to submit reports on pipeline maintenance and plans to combat pollution associated with their operations. [170]
A variety of substantive domestic laws in many countries address corporate responsibility regulating such issues as labor standards, health and safety, consumer protection, and product liability among other apparently human rights oriented concerns.[171] "While the terminology may not expressly refer to human rights or environmental sustainability, these laws are a vital element of corporate social responsibility."[172] This increasingly uniform practice of states holding corporations legally liable - through judicial decisions and legislation - for violations of international human rights and environmental laws further demonstrates that there is international custom regarding corporate responsibility for environmental and human rights abuses.
D. Voluntary Corporate Codes of Conduct and Uniform Practice
Transnational corporations, as the name suggests, are truly international or global in nature.[173] Overall, they hold more power than most states, and hence, should be treated as subjects of international law. If TNCs were treated more like states in the international legal community, uniform practice taken because of a sense of legal obligation would support a finding of customary international law binding TNCs to the codes of conduct they have undertaken which conform with international human rights and environmental standards. TNCs have adopted voluntary corporate standards which comply with norms of international environmental law and reflect the international standards promoted by governmental policy declarations,[174] as evidenced by the BTC pipeline project, discussed supra. "[I]n recent years a number of companies have become leading voices for environmental protection by greatly reducing waste and engaging in consensus-building dialogues with environmental groups and governments."[175] "Voluntary corporate compliance with codes of conduct can be both a signal by companies that they are responsible partners in environmental protection and recognition that corporate responsibility in these areas increases profits."[176] Voluntary codes of conduct are not binding upon signatories but may become necessary for TNCs to remain competitive in the marketplace if sufficient public and governmental pressure is put on TNCs to comply.[177] Most significantly, State and international recognition of these corporate codes of conduct indicate a uniform practice of holding TNCs to internationally recognized standards in support of the creation of customary international law.[178]
The World Business Council for Sustainable Development (WBCSD) is a coalition of 200 international companies with a "commitment to sustainable development via the three pillars of economic growth, ecological balance and social progress."[179] The WBCSD espouses a belief that "sustainable development is good for business and business is good for sustainable development."[180] The WBCSD provides suggested "best practices" of operation that support sustainable development and reflect international environmental standards.[181] The WBCSD also highlights TNCs' successful strategies for complying with standards laid out in the Global Compact and other international conventions on corporate codes of conduct.[182] The BP case study, discussed supra, is an example of the WBCSD's principles put to work.[183] Notably, many of the practices employed by BP (and extolled by WBCSD) closely reflect the principles of the OECD which supports the contention that recognized international human rights and environmental standards are becoming uniform practice among corporations.
Several other non-governmental corporate organizations, similar in nature to the WBCSD, have guidelines for TNCs, which also reflect international legal standards, including the International Chamber of Commerce's Business Charter for Sustainable Development and the Coalition for Environmentally Responsible Economies (CERES), whose principles have been endorsed by some of the largest corporations in the world including General Motors.[184] The guidelines promoted by these groups are directly drawn from international human rights and environmental standards as stated in several international treaties.[185] Again, the development and growth of these groups shows a move toward uniform practice of corporations following these international environmental and human rights standards as recognized by international and national legal entities.[186] Because of the international nature of TNCs and their ability to affect human rights and the environment on a global scale, these practices which adopt international legal standards support the development of an international legal regime to hold TNCs legally liable for violations of international human rights and environmental law.
IV. Conclusion
It is evident that the elements of international custom, uniform practice and opinio juris, exist to bind TNCs to recognized international human rights and environmental standards in their international operations. Not only has state uniform practice of regulating corporations increased, TNCs themselves have adopted uniform practices of operation which reflect recognized international legal standards at least in part to avoid legal liability for human rights and environmental abuse caused by their operations. Additionally, United Nations declarations, policy statements by other international legal entities, and international legal instruments sanctioning international standards for TNCs, as well as international and national cases supporting legal liability of TNCs for violations of international environmental standards prove that opinio juris exists. Based on this vast evidence that international custom has developed, it should be recognized international customary law that TNCs may be bound by international law and thus held legally liable for violations of such.
* The author would like to thank Professor James Celto Vache and Professor Upendra Acharya for your inspiration and guidance in developing this article.
[1] Thomas Donaldson, The Ethics of International Business 31 (1989).
[2] Koriambanya S.A. Carew, Note, David and Goliath: Giving the Indigenous People of the Niger Delta a Smooth Pebble-Environmental Law, Human Rights and Re-Defining the Value of Life, 7 Drake J. Agric. L. 493, 495 (2002).
[3] David Hunter, James Salzman & Durwood Zaelke, International Environmental Law and Policy 1405 (2nd ed. 2002); see also, David Kinley & Junko Tadaki, From Talk to Walk: The Emergence of Human Rights Responsibilities for Corporations at International Law, 44 Va. J. Int'l L. 931, 933 (2004).
[4] Robert J. Fowler, International Environmental Standards for Transnational Corporations, 25 Envtl. L. 1, 1-2 (1995).
[5] Kinley & Tadaki, supra note 3, at 933-34.
[6] Id.
[7] Jeffrey L. Dunoff, Steven R. Ratner & David Wippman, International Law: Norms, Actors, Process: A problem oriented approach 403-05 (1st ed. 2002).
[8] Universal Declaration of Human Rights, G.A. Res. 217A, Preamble, U.N. GAOR, 3d Sess., 1st plen. mtg., U.N. Doc A/810 (Dec. 10, 1948) (hereinafter Universal Declaration of Human Rights).
[9] Melissa Robbins, Powerful States, Customary Law and the Erosion of Human Rights Through Regional Enforcement, 35 Cal. W. Int'l L.J. 275, 280-81 (2005).
[10] Universal Declaration of Human Rights, supra note 8.
[11] Universal Declaration of Human Rights, supra note 8, at preamble.
[12] Hunter et al., supra note 3, at 372.
[13] Id.
[14] Id. at 372-73.
[15] Lucien J. Dhooge, Beyond Voluntarism: Social Disclosure and France's Nouvelles Regulations Economiques, 21 Ariz. J. Int'l & Comp. L. 441, 454-55 (2004).
[16] Dinah Shelton, Decision Regarding Communication 155/96 (Social and Economic Rights Action Center/Center for Economic and Social Rights v. Nigeria). Case No. ACHPR/COMM/A044/1, at http://www.umn.edu/humanrts/africa/comcases/allcases.html (last visited Nov. 20, 2007); African Commission on Human and Peoples' Rights, May 27, 2002, 96 A.J.I.L. 937, 942 (2002).
[17] Hunter et al., supra note 3, at 1408.
[18] Id.
[19] Kinley & Tadaki, supra note 3, at 934-35.
[20] Id. at 935.
[21] Hunter et al., supra note 3, at 1408.
[22] Id.
[23] Id. at 310.
[24] Carew, supra note 2, at 509.
[25] Id.
[26] Id.
[27] Id.
[28] Id. at 510.
[29] Hunter et al., supra note 3, at 312.
[30] Carew, supra note 2, at 509.
[31] Id. at 510.
[32] Id.
[33] Robbins, supra note 9, at 295.
[34] Id.
[35] Carew, supra note 2, at 496.
[36] Adriadne K. Sacharoff, Note, Multinationals in Host Countries: Can They Be Held Liable Under the Alien Tort Claims Act for Human Rights Violations?, 23 Brook. J. Int'l L. 927, 958-59 (1998).
[37] CIA World Fact Book, Nigeria, https://www.cia.gov/library/publications/the-world-factbook/geos/ni.html (last visited Oct. 10, 2007).
[38] Id.
[39] Carew, supra note 2, at 497.
[40] Joshua P. Eaton, The Nigerian Tragedy, Environmental Regulation of Transnational Corporations, and the Human Rights to a Healthy Environment, 15 B.U. Int'l L.J. 261, 266-67 (1997).
[41] Carew, supra note 2, at 497.
[42] Id.
[43] Sacharoff, supra note 36, at 958-59. See also Carew, supra note 2, at 497
[44] The Social and Economic Rights Action Center for Economic and Social Rights v. Nigeria, African Commission on Human and Peoples' Rights, Comm. No. 155/96, ¶ 50 (2001), available at http://www.serac.org [hereinafter African Commission Decision].
[45] Eaton, supra note 40, at 266.
[46] Id. at 266-67.
[47] Carew, supra note 2, at 499.
[48] Id. at 500.
[49] Id. at 501.
[50] Id. at 500.
[51] Id. at 499.
[52] Eaton, supra note 40, at 267.
[53] Carew, supra note 2, at 500.
[54] Id. at 501.
[55] Id.
[56] Id.
[57] Id.
[58] Id.
[59] Eaton, supra note 40, at 268-69.
[60] Id. at 269.
[61] Id.
[62] Id.
[63] See id.
[64] Carew, supra note 2, at 500-01.
[65] Id. at 501-02.
[66] See Eaton, supra note 40, at 263.
[67] African Commission Decision, supra note 44, at ¶¶ 66, 67.
[68] Id.
[69] Id. at ¶ 1.
[70] Id. at ¶¶ 1-9.
[71] Carew, supra note 2, at 515.
[72] Id.
[73] Id.
[74] Id.
[75] African Commission Decision, supra note 44, at ¶ 3.
[76] Id. at ¶ 7.
[77] Id. at ¶ 8.
[78] Carew, supra note 2, at 514; Eaton, supra note 40, at 270.
[79] Eaton, supra note 40, at 269.
[80] Id. at 270.
[81] Barry Bergman, Remembering Ken Saro-Wiwa: A decade after the Nigerian writer-activist's execution, the struggle for human rights lives on, Berkeleyan Online, Oct. 10, 2005, http://www.berkeley.edu/news/berkeleyan/2005/10/12_Wiwa.shtml.
[82] Carew, supra note 2, at 516.
[83] Id.
[84] Id.
[85] See id.
[86] Shelton, supra note 16, at 937.
[87] Id.
[88] Id.
[89] Id. at 939.
[90] Id.
[91] African Commission Decision, supra note 44, at ¶ 58.
[92] Shelton, supra note 16, at 942.
[93] Wiwa v. Royal Dutch Shell Petroleum Co., 2002 U.S. Dist. LEXIS 3293, *1 (S.D.N.Y. Feb. 22, 2002).
[94] Id. at 9.
[95] Id. at 6-7.
[96] Id. at 15.
[97] Id. at 36.
[98] See Shelton, supra note 16, at 942.
[99] Carew, supra note 2, at 516.
[100] Id.
[101] See Hunter et al., supra note 3, at 1409.
[102] Id.
[103] World Business Council for Sustainable Development, Following through with Global Compact commitments: BP 1, 1 (2005), available at http://www.wbcsd.org/web/publications/case/btc_pipeline_full_case_final_web.doc. (hereinafter WBCSD)
[104] Id.
[105] Id.
[106] Id. at 2.
[107] Id. at 1.
[108] WBCSD, supra note 103.
[109] Id.
[110] Id. at 2.
[111] Id.
[112] Id. at 3.
[113] WBCSD, supra note 103, at 2.
[114] Id.
[115] Id.
[116] Id. at 3.
[117] Id.
[118] WBCSD, supra note 103, at 3.
[119] Amnesty International, Human Rights On The Line: The Baku-Tbilisi-Ceyhan Pipeline Project, available at http://www.amnesty.org.uk/content.asp?CategoryID=10128 (last visited Sept. 1, 2007).
[120] Id.
[121] Id.
[122] Id.
[123] Id.
[124] The World Business Council for Sustainable Development, Case Studies, available at http://www.wbcsd.org/templates/TemplateWBCSD5/layout.asp?type=p&MenuId=ODY&doOpen=1&ClickMenu=RightMenu (last visited Sept. 1, 2007).
[125] WBCSD, supra note 103, at 2.
[126] Kinley & Tadaki, supra note 3, at 933.
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