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					The International Commission of Jurists’ launch of its report on Corporate Complicity
in International Crimes, 28 October 2008, at Doughty Street Chambers, London.

Transcript of speech by Claes Cronstedt.



Ladies and Gentlemen,

There are two notable men with a clear belief what it is all about. In a way their wisdom
interrelates. I wish to quote them.

First, Groucho Marx. He said: “The secret of life is honesty and fair dealing. If you can fake that,
you’ve got it made”.


The other is Jimmy Carter. He said: “Aggression unopposed becomes a contagious disease”.


Indeed, both statements could well have been about the international community’s commitment
to implement human rights.


I thank you for your presence today and for your interest in our report on “Corporate complicity
in international crimes”. I also thank the hosts and the organizers for this fine event. I am here to
present in a broad manner the main messages of this report and its relevance in challenging the
present legal landscape of human rights. Then I will leave to you and to others the task of
dissecting the chapters of our work.




Well, it’s a fair understatement to say that the implementation of human rights lags far behind
the economical and financial expansion. Many governments are still unable or unwilling to
perform their basic functions - the duty to protect their own citizens.


But we are in a wind shift. We know about the international prosecutions against Taylor,
Milosevitch, Karaditch, and Pinochet. And then, in 2002 the International Criminal Court (ICC)
was established.


There is now an increasing call to hold companies legally accountable for violations of human
rights. Allegations against companies and company conglomerates have become routine. But
there is confusion about what kind of actions or omissions lead to legal liability. One of the major
problems is the lack of competent national jurisdictions and there is no international body that
has jurisdiction over companies. All this contributes to an uncertain legal environment impacting
corporations as well as victims.


In order to bring some legal clarity the International Commission of Jurists (ICJ) in 2006 set up an
eight member expert legal panel to analyze the notion of corporate complicity in gross human
rights abuses, and to explain when companies could be held legally accountable for being
complicit. I was one of the members of this panel.


There are situations where companies are the direct perpetrators of human rights abuses. But
more often, businesses are accused of being complicit with the principal perpetrator which often
is a rough government. But what is complicity? When do we run the risk of being complicit?
Might we be held legally accountable? The Panel has tried to address some of these questions.


Both civil law and criminal law can hold those accountable who violate human rights. In a civil
law litigation, the victim claims money as remedy for damage suffered. In criminal law the
prosecutor claims that the perpetrator should be punished by going to jail and/or pay fines.


Civil Law
The ICJ Panel believes that throughout jurisdictions civil liability is increasingly important when
a company is complicit in gross human rights abuses.


The panel’s analysis of civil liability involved a study of tort law (in common law countries) and
the law of non-contractual obligations (in civil code countries). There is no international civil
law. Civil law is domestic law and only applies in domestic courts. However, in different ways all
domestic legal systems allow victims to bring civil claims in national courts to seek redress from
companies involved in the human rights abuses they have suffered.


One particular and unique piece of domestic law is the Alien Tort Statute in the United States,
drafted 1789 at the first US congress. Under this law people who are not US citizens can take
cases in the US courts seeking damages for gross human rights abuses they have suffered in
places outside the US. In the last three decades there has been a dramatic surge in litigation in the
US under this Act. The cases have created lots of publicity and have inspired lawyers around the
world to seek out the civil liability in all countries and jurisdictions of those who are responsible
for gross human rights abuses.
Criminal Law
Every country has its own national criminal law. And then there is international criminal law,
which makes very grave acts crimes under international law.


The establishment in 2002 of the International Criminal Court in The Hague (ICC) was a big step
forward for the development of international criminal law and for its enforcement. There is now
an international court where those who are involved in very grave crimes can be brought to trial.


ICC has jurisdiction over “the most serious crimes of concern to the international community
regardless of national laws”, known as international crimes, such as slavery, genocide, crimes
against humanity, certain war crimes and torture. Crimes that we hear are being systematically
committed every day and every hour. 108 states have so far ratified the Rome Statute. ICC does
not have jurisdiction over corporations. So, there is no international forum in which corporations
can be prosecuted for international crimes. However, corporate officials can be prosecuted at the
ICC.


Even if ICC only has resources to catch the big fishes, it has a strong psychological effect. It
demonstrates that the teeth of international criminal law are getting sharper. Indeed, major
countries have gone even further than ICC by including corporate crime in their domestic
legislations. These countries are among others: Australia, Belgium, Canada, France, India, Japan, ,
South Africa, USA and United Kingdom. More countries will certainly join. This means that a
company in the domestic courts of those countries could face prosecution for involvement in
things like crimes against humanity, torture and war crimes.


A corporation cannot be sentenced to jail, but there is creative thinking going on. Heavy fines on
corporations or probation on the fines are for example discussed. Indeed, a criminal sentence will
create much more public naming and shaming of the violating company than a civil judgement.


What is complicity in gross human rights abuses?
Do companies and their employees really get involved in things that amount to gross human
rights abuses? That’s impossible, says the CEO. We are only doing business as usual. However,
the following legal claims have been brought alleging the responsibility of companies for
contributing to the perpetration of gross human rights abuses.
The Canadian oil company Talisman has been alleged to be complicit in crimes against humanity
committed by the Sudanese government and Janjaweed militias. The legal claim alleged that
Talisman provided logistics (airstrips) and materials to the government that helped or facilitated
the commission of crimes.


Jeppesen Inc. a subsidiary of the aviation company Boeing, is alleged to be complicit in the CIA
renditions of terrorist suspects to locations by airplane. It is said, that at those locations, they
were held incommunicado and tortured. Jeppesen Inc. allegedly organised flight plans, customs
clearance, arranged ground crews and even booked hotels in the knowledge that this would
contribute to the commission of crimes.


There are three class actions pending in a New York court against fifty corporations and banks
that operated in South Africa during apartheid. The plaintiffs claim 400 billion USD in damages
alleging that the defendants, by doing business with the apartheid-era government, were
complicit in gross violation of human rights. They claim for example that General Motors
manufactured the armoured vehicles used to patrol and destroy townships, that Total, BP and
Shell violated the oil embargoes, that Citibank, Deutsche Bank and Barclays among other banks,
made finance available to enable the South African government to expand its police and security
apparatus and that IBM sold software that was used to operate a racial identification system.


But what is the meaning of complicity? When could a company be legally accountable for
complicity? And what should it do to avoid ending up in a court room?


The ICJ Panel last month published its deliberations in three volumes. As I mentioned we looked
at international criminal law, domestic criminal law and domestic civil law. Volume 2 contains
the criminal law and Volume 3 the civil law. After analyzing all these areas of law we have found
that under all of them, companies or corporate officials could be held legally liable in a number of
ways for complicity in gross human right abuses. In Volume 1 the Panel brings together, in policy
language, the synthesis of its understanding, based on the studies in Volume 2 and 3.


Of course, standards of criminal law and civil law vary across jurisdictions. But in broad policy
terms we believe that there is a threshold of conduct that a prudent company should avoid
crossing so that they do not enter a zone of legal risk where criminal or civil responsibility could
arise.
Firstly. To avoid such risk the company should carefully assess any course of conduct, any
business relationship or transaction which may facilitate, enable or exacerbate the commission of
gross human rights abuses. In the Panel’s view enable is making something likely to occur.
Exacerbate is making something worse. Facilitate is changing the way something happens.


There is a sufficient contribution test. Not every single act or omission will involve a company in
crimes as accomplice. To be considered as an accomplice the company’s contribution shall have a
sufficient level of assistance or encouragement to the perpetrator.


It doesn’t matter what the nature of a company’s conduct is. It could be supplying goods, buying
or selling materials, hiring security forces, providing infrastructure or tools, providing financing,
information or advice, all in the normal course of business.


Secondly. Liability for human rights abuse is subject to the company’s knowledge that its conduct
could risk contributing to such abuse. In criminal law knowledge will turn around the question
whether the company actually knew. (Note: a criminal court won’t take a statement that “we did
not know” on face value – the court will conduct its own analysis if on the facts a company knew
of the risks).


In civil law the law will not only look at what the company knew, but also what it should have
known about the risk that it could contribute to human rights abuses. Civil liability can arise even
if the company did not perceive the risks – if, in the law’s eyes, a prudent company would have
foreseen the risk of doing harm.


So what are the questions the executives should ask themselves to prevent their company from
entering a zone of legal risk where they could be potentially liable under civil or criminal law?
Some examples:


- Do we have information about any risk, that gross human rights abuses might occur in a
particular situation; e.g. information from our own sources, from experts, NGO’s, media,
internet?

- Do other actors involved in the situation have a track record of human rights abuses?
- Have we foreseen the risks which a prudent company would have foreseen; i.e. have we carried
out due diligence and assessment about the risks that our company’s conduct might contribute to
a gross human rights abuse?

- Have we taken precautionary measures to minimise the risk of harm? Are they the kind of
measures that a careful, responsible company would have taken? Do they reflect “best practice?”


A third factor that the Panel has found to be relevant, in policy terms, is proximity. We did not
use the notion sphere of influence which is not a legal concept. But proximity is not a legal term
either. We used proximity because we believe it’s a more descriptive concept. Proximity captures
a number of factors – many are about relationships.


If you think about it - it comprises a lot of common sense. The closeness of a company to the
principal perpetrator or to its victims is highly relevant in determining complicity e.g. in terms of
geography or the nature and intensity of a relationship. The closer the company is to a situation
the more likely it will have the power, influence or authority to have impact on the principal
perpetrator.


Further, a company close to a situation will more likely know what is really going on; its staff will
know, or have access to information, that could show that the company’s assistance risks making
the human rights abuses more likely to occur (enable), or worse in scale (exacerbate), or carried
out in a particular way (facilitate).


When a company is accused of complicity in abuse of human rights certain arguments will NOT
be a defence:


- “We did not want the human rights abuse to occur”; well, this is irrelevant as long as the
company knew or should have known of the likelihood that the perpetrator would carry out the
abuse.


- “The principal actor has not been held legally accountable, why should we be accountable”; this
is irrelevant because a complicit company can be held accountable whether or not the other actors
involved in gross human rights abuses have been subject to legal proceedings.
- “We were merely present at the scene of a crime and did not do anything”; the silence of an
onlooker may create a zone of legal risk if it is coupled with authority or influence over the
principal actors or if the company has a special relationship with the victims.


- “We were complying with national law”; when it comes to violation of international criminal
law – compliance with domestic law is no defence.


Holding Parent Companies Responsible
One of the most frequent questions posed to us and to judges in various jurisdictions is: Can a
parent company be liable for human rights abuses of its subsidiary?


The legal concepts of limited liability and the strict corporate separate legal personality are like
protective stone walls, the corporate veil. A shareholder shall only risk the money invested in a
company. This very old principle is, with few exceptions, respected by courts in most
jurisdictions. To ask the court to pierce the corporate veil and hold a parent company vicariously
liable for the acts of its subsidiary presents significant difficulties to those victims seeking justice.


The Panel has found that there are two effective ways to establish parent company liability in
parallel to subsidiary company liability: (1) where the parent company was itself actively
involved in the abuses, or (2) where the parent company exercised such control over its
subsidiary that it should have taken steps to influence the subsidiary’s conduct. This means that
the parent company’s liability has to be based on its own conduct – and not simply on the
conduct of its subsidiary.


The Panel would urge lawyers, policy makers and commentators to avoid confusing these two
separate bases for accountability, both of which have very different justifications and legal
implications.


Jurisdiction
Civil proceedings can be brought in other jurisdictions than that where the harm occurred, for
example, in the country where the violating company is domiciled (Forum non convenience
could, however, be a hindrance. This means that a court could refuse jurisdiction on the basis that
there is a more appropriate jurisdiction elsewhere).
Criminal prosecutions can be initiated in many jurisdictions throughout the world for most gross
human rights abuses because the acts are so serious that the international community has said
that certain or all countries have an obligation to pursue the perpetrators. International principles
concerning extraterritorial jurisdiction are, however, still fluid and are seldom used, specifically
concerning universal jurisdiction (the Pinochet case is one of the few examples).


Indeed, there are enough laws in the world to fight human rights abuses, but enforcements are
hindered in many countries because of politicized courts or inexperienced judges, prosecutors
and lawyers. It’s called the jurisdiction filter, a major obstacle.


Finally, don’t forget that for many international crimes no statute of limitation applies. So the
perpetrator and its accomplice will never have a good night sleep.


To return to Groucho Marx who would be saying today: “The secret of life is honesty and fair
dealing. If you can fake that by avoiding jurisdictions, don’t think you’ve got it made”.


Jimmy Carter would perhaps say: “Aggression is opposed only by enforcement of the rule of
law”.




 / Thank you.




www.cronstedt.com

				
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