Courting International Business: What Are the Human Rights Obligations of Global Capitalism? (Capitalism)

By Aaronson, Susan Ariel | The International Economy, Spring 2003 | Go to article overview
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Courting International Business: What Are the Human Rights Obligations of Global Capitalism? (Capitalism)


Aaronson, Susan Ariel, The International Economy


In recent years, many of America's largest and most prominent multinational companies have been called to court to defend their international business practices. For example, Exxon Mobil was sued by the International Labor Rights Fund (ILRF) for allegedly aiding and abetting human rights violations by the military in Indonesia. Del Monte has been sued by the for allegedly permitting local managers to torture union leaders in Guatemala. And Coca-Cola has been sued by the United Steel Workers for allegedly hiring right-wing death squads to frighten workers at its bottling plant in Colombia.

These cases have been brought under two laws, the Alien Tort Claims Act of 1789 and the Torture Victim Protection Act of 1992. The Alien Tort Claims Act (ATCA) provides federal courts with jurisdiction over violations of the "law of nations," and the Torture Victim Protection Act applies only to torture and extrajudicial killing. The plaintiffs seek to determine whether corporations can be held accountable in U.S. courts for human rights and other abuses carried out by foreign governments against non-U.S, citizens. Although many of these cases have progressed in U.S. courts, not one has yet proceeded to trial. Nonetheless, business leaders are very concerned.

Most of these cases have been brought by international human rights organizations such as the Earth Rights Institute, Amnesty International, and the ILRF mentioned above. However, last year, attorneys brought two broad class action lawsuits under the ATCA which allege injury based on vicarious or indirect liability. The plaintiffs allege that some of the world's most visible multinationals indirectly caused injury when products or services they sold to the South African government were used to undermine human rights during the apartheid era. The first suit was filed in June, 2002, by Ed Fagen (one of the lawyers who pioneered the lawsuits against insurance companies, banks, and corporations that profited from property and labor stolen during the Holocaust). This suit seeks damages for personal injuries inflicted on the plaintiffs through a variety of means during the apartheid era (1948-1993) based on the theory that the defendants' actions caused the injuries by perpetuating the apartheid regime. The defendants were charged with culpability for lending funds used to bolster police and armed forces under the apartheid regime. On November 11, 2002, a similar case was brought against some of America's most admired and socially responsible companies such as Ford, General Motors, IBM, and Hewlett Packard. Interestingly, the South African government has not supported these class action suits, fearing that they would undermine foreign investment.

Such lawsuits have not been addressed solely at U.S. multinationals nor limited to U.S. courts. Similar cases have also been brought in Australia, Belgium, Canada, France, and the United Kingdom. Ambassador Tom Niles, president of the U.S. Council for International Business (the U.S. arm of the International Chamber of Commerce), recently warned that these cases place executives and directors of companies that have done or are now doing business in countries with undemocratic regimes at increased risk of liability. Executives have also argued that trial lawyers will reap huge verdicts in frivolous cases against multinationals. And finally, they have asserted that the proliferation of these cases will force companies to reduce their investment in the developing world.

International law clearly delineates that companies have human rights responsibilities, although some of the specific responsibilities are ambiguous. The Universal Declaration of Human Rights calls upon all organs of society, whether civic groups, corporations, or governments, to protect and promote human rights. United Nations Secretary Kofi Annan has argued that corporations have a social responsibility and moral duty to use the power of markets to make globalization a positive force for all.

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Courting International Business: What Are the Human Rights Obligations of Global Capitalism? (Capitalism)
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