Corporate Complicity in Human Rights Violations: Conflicting Decisions in U.S. Courts

Authors

• Faris Natour

  Former Managing Director, Advisory Services, BSR

The question of when a company can be considered complicit in human rights violations that are perpetrated by government has always been a difficult one. Now, a new ruling by the U.S. Court of Appeals for the Second Circuit further muddies the picture.

The decision affirms a lower court’s dismissal of a case brought against Talisman Energy under the U.S. Alien Tort Statute, a law that allows foreign citizens to initiate lawsuits in U.S. courts for alleged human rights violations abroad. In the decision, the court ruled that in order for a company to be considered complicit, the firm’s support would have to have been "purposeful," meaning plaintiffs must prove that the company’s intent was to harm civilians. This contradicts an earlier decision by the U.S. Ninth Circuit Court, which held that a company’s mere knowledge and "substantial contribution" were enough to establish complicity.

This decision raises two important issues: First, the lack of clarity on the standard for corporate complicity in government’s human rights violations is difficult for all sides. The U.S. courts’ contradictory decisions have created confusion about which standard will be applied, making it even more difficult for companies to implement appropriate safeguards to avoid complicity. To address this issue, the U.S. Supreme Court should establish a clear standard for complicity for cases under the Alien Tort Statute.

Second, there is a general need for more effective remedies, both judicial and non-judicial, for victims of human rights abuse. It has long been clear that governments in countries where many of the Alien Tort cases originate must strengthen the rule of law and access to judicial remedies. In addition, business should establish more effective non-judicial remedies, such as mediation, ethics hotlines, ombudsmen, and meaningful community engagement.

While these processes are no substitute for a functioning judicial system (victims of human rights abuse should always have their day in court), they can provide a more effective alternative in cases of less severe human rights impacts. In addition, non-judicial remedies can serve as an early-warning mechanism to identify and mitigate human rights impacts before they become more severe.