Corporate Liability under International Law: U.S. and Canadian perspectives

On September 17, 2010, the United States Court of Appeals for the Second Circuit released its decision in Kiobel v. Royal Dutch Petroleum ,(06-4800-cv, 06-4876-cv). In a 2-1 split decision, the Court ruled that the Alien Torts Statute (ATS) grants U.S. courts jurisdiction over alleged violations of international law by individuals only, not by corporations. Essentially, the majority opinion held that corporations cannot be sued under the ATS for violations of customary international law because “the concept of corporate liability . . . has not achieved universal recognition or acceptance of a norm in the relations of States with each other.”  (Slip op. at 49).

*Warning: This is a lengthy post

Two recent articles from both sides of the Atlantic highlight the disparate views on imposing corporate liability in international law. The first article, by Eric Engle (Universität Bremen; Pericles) entitled “Kiobel v. Royal Dutch Petroleum Co.: Corporate Liability Under the Alien Torts Statute” argues that corporate liability is a peremptory norm sufficient to support a finding of corporate liability under the ATS:

“Kiobel v. Royal Dutch Petroleum Co., (2d. Cir.) overruled numerous 2d circuit decisions and contradicts sister federal appellate courts in other circuits, finding that corporate liability in international law is not a sufficiently specific norm to support a finding of liability under the Alien Tort Statute. That decision is clearly erroneous. Kiobel violates the general principle of legality, immunizing corporate conduct from liability even in cases where States would be liable for violating jus cogens norms and thus also violates the principle of sovereign equality of States due to principles of comity and res judicata. Kiobel also is an abnegation by the U.S. of U.S. obligations under international law. While no state is obliged to remedy jus cogens violations, each state is obliged to respect them. Because Kiobel reflects a deep and significant split at the circuit courts, because it concerns U.S. international legal obligations, because the stakes, in human and financial terms are high, because it was so obviously wrongly decided, the split that Kiobel represents will surely eventually reach the U.S. Supreme Court. This article explains precisely why the court’s decision in Kiobel misapprehends the structure and sources of international law and consequently reaches the wrong result for the wrong reasons. The U.S. Supreme Court will likely conclude that the ATS governs jus cogens claims against natural and artificial persons without a showing of state action, but requires state action or complicity with state action otherwise.”

In another recent article, “The Curious Case of Corporate Liability under the Alien Tort Statute: A Flawed System of Judicial Lawmaking” Virginia Journal of International Law, Vol. 51, p. 353, 2010. Julian Ku (Hofstra University-School of Law) takes a contrary view and challenges the widely held view that the ATS imposes liability on private corporations for violations of customary international law:

“I lay out the modern origins and development of this cause of action in U.S. federal courts and argue that doctrine rests on shaky, indeed illusory, analytical and jurisprudential foundations. Despite the absence of a well defined norm of customary international law that imposed liability upon private corporations, courts, when they even considered the validity of the claims, built a consensus around the fact that no norm existed forbidding the imposition of liability on private corporations. This doctrinal approach was particularly questionable in light of the Supreme Court’s position that recognition of causes of action under the ATS be limited to situations involving violations of norms that are specific, universal, and obligatory. Finally, I argue that the rise of this flawed consensus reveals that our system of federal courts is particularly ill-suited to the type of independent lawmaking that modern ATS doctrine has enabled up to this point. These developments indicate that courts should adopt a restrictive approach to corporate liability under the ATS going forward.”

Corporate Liability in International Law: A View from Canada

At the outset, state immunity is an exception to foreign judgment recognition and enforcement and the traditional Canadian judicial approach has favoured restrictive immunity, rather than adopting universal jurisdiction or the jus cogens doctrine.

Justice Goudge, in Bouzari v. Republic of Iran (2004) 71 O.R. (3d) 675 at 690, (2004) 243 D.L.R. (4th) 406, (2004) 122 C.R.R. (2d) 26, (2004) 132 A.C.W.S. (3d) 275 (Ont. C.A.) notes:

“…Where Canada’s obligations arise as a matter of customary international law…customary rules of international law are directly incorporated into Canadian domestic law unless explicitly ousted by contrary legislation. So far as possible, domestic legislation should be interpreted consistently with those obligations. This is even more so where the obligation is a peremptory norm of customary international law, or jus cogens. (citation omitted)”

Canada’s Federal State Immunity Act, 1985 R.S.C., S.18 (as am.). provides that a foreign state cannot be subject to the jurisdiction of Canadian courts except in specific circumstances: where the damage occurred as part of the commercial activity of the state (section 5), or where the foreign state is responsible for death or personal injury that occurred in Canada or damage of loss of property that occurred in Canada (section 6). These exceptions reflect existing peremptory norms of international law and customary international law, which through “adoptionist” theory, were integrated into the law of Canada: See, R. v. Hape, 2007 SCC 26 (SCC) at para.36 per LeBel, J. quoting with approval Trendtex Trading Corp. v. Central Bank of Nigeria [1977] 1 Q.B. 529 (C.A.) at 554 (per Denning L.J.). Cf. Sosa v. Alvarez-Machain, 542 U.S. 692 (2004) (USSC) and the draft United Nations (U.N.) Convention on Jurisdictional Immunities of States and Their Property, Resolution A/RES/59/38 adopted by the United Nations General Assembly, Fifty-ninth session (December 2, 2004)).

In cases involving exclusively tort-based claims for personal injury damages arising from state-sponsored torture or human rights abuses, Canadian courts have resisted assuming jurisdiction. In Bouzari, supra, the trial court dismissed Mr. Bouzari’s claim, finding that the State Immunity Act was constitutional and that there was no international law exception to state immunity for torture. The Ontario Court of Appeal rejected Mr. Bouzari’s appeal, agreeing with the lower court that there was no exception to state immunity for torture. The Court of Appeal also declined jurisdiction on the grounds that Ontario was not the proper forum to hear Mr. Bouzari’s claim, concluding that “Canada’s treaty obligation pursuant to Article 14 of the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, [Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, 10 December 1984, 1465 U.N.T.S. 85, Can. T.S. 1987 No. 36 (in force in Canada as at June 26, 1987)] did not extend to providing the right to civil remedy against a foreign state for torture committed abroad.”

The commercial context, which prompted the torture, was insufficient to bring the lawsuit within the section 5 “commercial activity” exception to the restrictive immunity availing under section 3 of the State Immunity Act. Admittedly, Mr. Bouzari may not have been the ideal plaintiff to establish a precedent for an international human rights claim given that he was not a Canadian resident at the time of the alleged torture at the hands of the Iranian secret police. However, from a procedural standpoint, Bouzari v. Iran was incorrectly decided for two reasons. First, the Court of Appeal failed to consider Rule 17.2(h) of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which confers a jurisdictional basis for service ex juris allowing the court to apply the “real and substantial connection” test without expressly establishing jurisdiction simpliciter vis-à-vis assumed jurisdiction. Rule 17.2(h) reads:

“Damage Sustained in Ontario”

17.02 (h) in respect of damage sustained in Ontario arising from a tort, breach of contract, breach of fiduciary duty or breach of confidence, wherever committed; (emphasis added)

Second, Goudge, J.A. in Bouzari v. Iran also conveniently side-stepped the application of “real and substantial connection” test altogether, which included amongst its eight factors, a consideration of “unfairness to the plaintiff in not assuming jurisdiction: Bouzari v. Iran, supra note 26 at ¶¶ 31 and 38; Muscutt v. Courcelles (2002) 60 O.R. (3d) 20, (2002) 213 D.L.R. (4th) 577 (Ont. C.A.).

Conversely, in Crown Resources Corp. S.A. v. National Iranian Drilling Co., (2005) 142 A.C.W.S. (3d) 421 (Ont. S.C.J.), Justice Greer dealt with a case involving assignees in bankruptcy of a Canadian corporation which commenced actions in Ontario relating to a contractual dispute for oil drilling and related services with a state-owned Iranian company. The actions arose from three contracts, executed in 1990, 1996, and 1998. The 1990 contract contained a clause specifying the Republic of Iran as the choice of forum and Iranian law as the choice of law. In contrast, the 1996 contract forum selection clause in the 1996 contract specified Ontario as the chosen forum and Ontario law as the governing law. The 1998 contract was silent on either choice of forum or choice of law. The plaintiffs were initially successful in resisting a motion for stay of proceedings on various grounds, including jurisdiction simpliciter, forum non conveniens and the state immunity exception. The motions judge concluded that state immunity did not apply because of the commercial nature of the dispute. Moreover, Ontario was the appropriate forum for the case to be heard, despite the fact that much of the dispute concerned activities in Iran, given that the plaintiff would not be able to obtain a fair trial in Iran.

While the lower court’s decision was varied on appeal on the issue of the enforceability of the forum selection clauses, the lower court ruling on the commercial activity exception to state immunity was not: Crown Resources Corp. S.A. v. National Iranian Drilling Co.,[2006] O.J. No. 3345 (Ont. C.A.) per Labrosse, Laskin and Armstrong JJ.A. Application for leave refused with costs on March 8, 2007 (31684) (S.C.C.)

It appears difficult to reconcile these two decisions given the underlying commercial activities. However, under the State Immunity Act, a state committing human rights abuses or torture within its territory is immune to a lawsuit brought in a Canadian court, while a state or affiliated agency violating a commercial agreement with a Canadian company is not.

As I have blawged here before, the Court of Appeal for Ontario recently reformulated the “real and substantial connection” test for assumed jurisdiction in Van Breda v. Village Resorts Limited, 2010 ONCA 84 (Ont. C.A),  leave to appeal granted, Club Resorts Ltd. v. Van Breda, [2010] S.C.C.A. No. 174) (S.C.C. Jul 08, 2010).

Perhaps the most promising change for corporate liability in the international law context is the explicit recognition of a “forum of necessity” exception:

“[100]     The post-Muscutt emergence of the forum of necessity doctrine has a direct bearing on this issue.  The forum of necessity doctrine recognizes that there will be exceptional cases where, despite the absence of a real and substantial connection, the need to ensure access to justice will justify the assumption of jurisdiction.  The forum of necessity doctrine does not redefine real and substantial connection to embrace “forum of last resort” cases; it operates as an exception to the real and substantial connection test.  Where there is no other forum in which the plaintiff can reasonably seek relief, there is a residual discretion to assume jurisdiction.  In my view, the overriding concern for access to justice that motivates the assumption of jurisdiction despite inadequate connection with the forum should be accommodated by explicit recognition of the forum of necessity exception rather than by distorting the real and substantial connection test.” [Id. at ¶100]

In contrast, the Quebec court decision in Bil’In (Village Council) c. Green Park International Inc., 2009 QCCS 4151 (CanLII), aff’d Yassin c. Green Park International Inc., 2010 QCCA 1455 (CanLII) [“Bil”In”] reflects a traditional restrictive approach to imposing corporate civil liability for international human rights claims, including war crimes. In Bil’In, the municipal council and the estate of the deceased owner of land in a small village located on the West Bank sued a Montreal corporation and its director for their involvement in the development of dense residential housing in the area. The plaintiffs alleged that by transferring part of its civilian population to territory it occupies in the West Bank, Israel is violating international law as well as Canadian and Québec laws and that by constructing and selling condominiums exclusively to Israeli civilians, the Defendants are assisting Israel in the perpertrationperpetration of war crimes.

The plaintiffs claimed that the defendants’ actions constituted breaches of the Fourth Geneva Convention , 50 R.T.N.U. 75 and the Rome Statute of the International Criminal Court,  Articles 8(2)(b)(viii) and 25 (3)(c) of the Rome Statute of the International Criminal Court, dated July 17, 1998, as well as Canada’s Geneva Conventions Act  R.S.C. 1985 c. G-3.  and Crimes Against Humanity and War Crimes Act S.C. 2000 c. 24.

The plaintiffs also sought declaratory relief in the form of a permanent mandatory injunction against the corporation, enjoining it from participating in the construction, sale, and marketing of settlement housing in the area, and punitive damages under the Quebec Charter of Human Rights, R.S.Q. c. C-12. By preliminary motions, the defendants sought dismissal of the action or a stay based upon forum non conveniens  and for recognition of judgments rendered in Israel: See, An “Exception to Dismiss Action and, de Bene Esse, to Recognize Judgments (Art. 165 (1), 785, 165 (3) and 165 (4) C.C.P.)” (hereinafter, the “Exception to Dismiss”), and (b) an “Application to decline jurisdiction – forum non conveniens (Art. 3135 C.C.Q.)” (hereinafter, the “Declinatory Exception”) Bil’In, at para. 15.

At first instance, Superior Court Judge Louis-Paul Cullen exercised his discretion to decline jurisdiction on the grounds of forum non conveniens. Somewhat promising what Cullen, J.S.C.’s rejection of the defendants’ state immunity and lack of standing and res judicata defences. Cullen, J.S.C. concluded that :

“ [30] Above all, the Defendants do not contend that they are truly agents of Israel.  Moreover, one of their alternative arguments is predicated on the opposite assumption. It is axiomatic that pursuant to the SIA, immunity may only be claimed legitimately by a “foreign state” or by an “agency of a foreign state”.

[31]  The Defendants are therefore not entitled to state immunity on the basis of the Plaintiffs’ unproven and alternative allegations that they are agents of Israel.”[citations omitted]

On the availability of a tort-based remedy, Justice Cullen held:

“[176] In theory, a person would therefore commit a civil fault pursuant to art. 1457 C.C.Q. by knowingly participating in a foreign country in the unlawful transfer by an occupying power of a portion of its own civilian population into the territory it occupies, in violation of an international instrument which the occupying power has ratified. Such a person would thus be knowingly assisting the occupying power in the violation of the latter’s obligations and would also become a party to a war crime, thereby violating an elementary norm of prudence.

[177]       The essential question, however, is whether the application of the law of Québec with respect to extracontractual civil liability would be engaged in that context rather than the law of the foreign country.

[178]       Before a Québec court, the law of the country where the injurious act occurred, i.e. the lex loci delicti, governs extracontractual civil liability unless the injury appeared elsewhere (art. 3126 C.C.Q.):

3126.  The obligation to make reparation for injury caused to another is governed by the law of the country where the injurious act occurred. However, if the injury appeared in another country, the law of the latter country is applicable if the person who committed the injurious act should have foreseen that the damage would occur.

In any case where the person who committed the injurious act and the victim have their domiciles or residences in the same country, the law of that country applies.

[204]       To summarize, the Superior Court has jurisdiction over defendants domiciled in Québec regarding a civil action based on extracontractual liability for an injury caused and suffered in a foreign country.  The law that normally applies in such case is the law of the country where the injurious act occurred, i.e. where the injury was caused.  That law must be proven.  In the absence of proof, by default, the Superior Court will apply the substantive law of Québec.

[205]       Under Québec law, a defendant will incur civil liability if he causes damages to another by his fault.  Knowingly favouring a breach of a High Contracting Party’s undertakings pursuant to an international instrument or knowingly assisting a state in the perpetration of a war crime are both civil faults.  Assuming for purposes of discussion that the Defendants knowingly assisted Israel for the purpose of committing a war crime as alleged, the Defendants committed a civil fault and are liable to appropriate civil remedies.  This is consistent with a restrictive interpretation of state immunity that limits its benefit to sovereign entities and their agents.

[206]       Given the grave consequences of dismissing an action without a hearing on the merits, as a rule, an action ought not be dismissed summarily on a motion based on art. 165(4) C.C.P. unless such action is obviously not founded.  In the case at bar, a generous reading of the Action, considered as a whole, does not lead to the inescapable conclusion that it is unfounded in law even if the facts alleged are true.”[citations omitted]

Nevertheless, Cullen J.S.C. exercised his discretion under CCQ Article 3135 to decline jurisdiction on the grounds of forum non conveniens applying the factors articulated in Spar Aerospace Ltd. v. American Mobile Satellite Corp., [2002] 4 S.C.R. 205 at 238-244, where LeBel J. cited with approval the ten factors set out in Lexus Maritime Inc. v. Oppenheim Forfait GmbH, J.E. 98-1592 (C.A.).none of which is individually determinative :

  • the parties’ residence, that of witnesses and experts;
  • the location of the material evidence;
  • the place where the contract was negotiated and executed;
  • the existence of proceedings pending between the parties in another jurisdiction;
  • the location of the Defendant’s assets;
  • the applicable law;
  • advantages conferred upon a Plaintiff by its choice of forum, if any;
  • the interest of justice;
  • the interest of the parties;
  • the need to have the judgment recognized in another jurisdiction.

With respect to applicable law, Justice Cullen carefully weighed opposing expert opinions  on the position of whether the High Court of Justice of Israel would adjudicate alleged violation by Israel in the occupied territories under the Fourth Geneva Convention. The plaintiffs relied on the affidavit of Orna Ben-Naftali, a professor of international law who opined on the Israeli judicial policy of declining to review the legality of settlements with respect to” “international humanitarian law.” The defendants countered with an affidavit by Israeli attorney Renato Jarach, who concurred that Israeli courts would not review the legality of settlements with respect to war crimes, but on the ground, that such a judicial determination would interference with Israeli government policy. The Quebec court concluded that the plaintiffs had not demonstrated a violation of public order:

“[288]  On the whole, the evidence shows that the HCJ has not applied Article 49(6) of the Fourth Geneva Convention, not because of its unwillingness to adjudicate on its alleged violation by reason of the political significance of the matter, but either because it was unnecessary to do so or because the HCJ considered that it was not customary international law (contrary to what professor Ben-Naftali states in her footnote) and that it had not been incorporated into the domestic law of Israel through appropriate legislation.

[289]  The fact that Canada, contrary to Israel, has approved the Fourth Geneva Convention by statute is insufficient to conclude that the application of the law of the West Bank would lead to a result that would be manifestly inconsistent with public order as understood in international relations contrary to article 3081 C.C.Q.”

The Quebec court accorded minimal weight to the plaintiff’s in the form of a Government of Canada letter dated December 14, 1998 by the Minister of National Revenue,  purporting to describe Canada’s public policy with respect to permanent settlements in the occupied territories, cited in Magen David Adom for Israel v. Canada, [2002] F.C.J. No. 1269 (F.C.A.). Cullen, J.S.C. also noted that:

“[n]either the Security Council nor the International Court of Justice have declared, however, that Article 49(6) of the Fourth Geneva Convention was part of customary international law or that a state that had not incorporated this provision into its domestic law was acting in a manner that is manifestly inconsistent with public order as understood in international relations.” [citations omitted]

In considering the factor relating to the advantages conferred on the plaintiff by its choice of forum, the trial judge writes,

“[311]   Similarly, in the present case, the Québec forum has jurisdiction over the Action solely because the Defendants are domiciled in Québec.

[312]   Mr. Badt’s evidence and the letter dated January 6, 2009 from the Plaintiffs’ counsel to the Defendants’ counsel clearly establish, however, that this lone and apparent connection is merely superficial: the Corporations have no assets in Québec, are alter egos for another corporation which itself has no assets in Québec and Defendant Laroche has no personal involvement in the Bil’in project or any actual knowledge of same.

[313]   The advantage conferred to the Plaintiffs by their choice of the Québec forum should therefore be given very little weight, if any.”

With respect to the “interests of the parties” factor, the Quebec court concludes:

“[314]   It is in the interest of all the parties that a court of competent jurisdiction decides the Action impartially, promptly and efficiently on the basis of the best evidence available.  In this connection, it is relevant to note that the burden of proof in the Action lies with the Plaintiffs.

[315]   It would clearly be more practical to try the Action in Israel rather than in Québec in light of each and every one of the connecting factors considered above, including the interest of the parties.  It is also clear that the Defendants would be seriously prejudiced if this was not the case.”

Justice Cullen reached a similar conclusion on the “interests of justice” factor:

“[316]      The Plaintiffs strenuously argue that they seek justice in the Québec forum.

[317]   However, as it is presently framed, the Action can hardly lead to a just result:

–         The Plaintiffs have failed to implead any of the numerous owners or occupants of the buildings that they seek to have demolished, thereby depriving those persons of the right to be heard, a fundamental tenet of natural justice.

–         Despite having chosen not to implead the State of Israel, the Plaintiffs indirectly seek the essential finding that it is committing a war crime, thereby effectively by-passing Israel’s absolute immunity to any judicial proceedings. In Canada as in England, the scope of state immunity extends to gross violations of international human rights.

[318]   Moreover, the Geneva Conventions Act and Crimes Against Humanity and War Crimes Act both prohibit criminal prosecution without the Attorney General’s authorisation.  Although the Action is civil, it is predicated on the finding that Israel is committing a war crime in violation of public international law.  While seeking the benefit of the Geneva Conventions Act and Crimes Against Humanity and War Crimes Act, the Plaintiffs are proceeding without having impleaded the Attorney General and without his authorisation.

[319]   The HCJ has jurisdiction over the Action insofar as the Plaintiffs allege that the Defendants are agents of the State of Israel.  In the past, Mr. Yassin has acknowledged the jurisdiction of the HCJ with respect to the Lands by bringing several motions contesting the legality of various actions undertaken by Israel.

[328]   Inappropriate “forum shopping” should thus be discouraged.

[335]   To sum up, this is one of those exceptional situations where the Superior Court is compelled to decline jurisdiction on the basis of forum non conveniens, as the Plaintiffs have selected a forum having little connection with the Action in order to inappropriately gain a juridical advantage over the Defendants and where the relevant connecting factors, considered as a whole, clearly point to the HCJ as the logical forum and the authority in a better position to decide.”

The Quebec Court of Appeal upheld the trial judge’s decision declining jurisdiction on forum non conveniens grounds: Yassin c. Green Park International Inc., 2010 QCCA 1455 (CanLII), supra.  With respect to the “interest of justice” factor in Spar, the Quebec Court of Appeal’s approach differs markedly from the Ontario Court of Appeal’s approach to “fairness” and “forum of necessity” factors in Van Breda. The Quebec Court of Appeal observes,

“[89]   Finally, regarding the interest of justice, the trial judge correctly noted that the appellants did not implead the purchasers of the new residential units.  It is difficult to imagine how a Quebec court could order the evacuation of the owners without their having been impleaded.

[90]    The trial judge noted in passing that there is no Canadian legislative provision relating to the civil liability of its citizens in a foreign country in such circumstances :

[323]   In the United States of America, legislation expressly grants jurisdiction to American courts over civil claims brought by aliens and based on torts committed abroad.  No such legislation exists in Canada.  The Plaintiffs did not submit any precedent of a Canadian court acknowledging that a person may be found civilly liable in Canada for having participated abroad in a war crime as defined by international instruments, neither is the Court aware of any such precedent.”

See also, James Yap, “Corporate Civil Liability for War Crimes in Canadian Courts: Lessons from Bil’inBil’In (Village Council) v. Green Park International Ltd., (2010), 8 J. Int’l Crim. Just. 631, 648 (2010)

Where Do We Go From Here?

Justice Ian Binnie, in “Legal Redress for Corporate Participation in International Human Rights Abuses: A Progress Report” (2009) 38:4 The Brief 44 at 45, suggests that governance gaps remain the stumbling block to redress human rights abuses committed by private enterprise:

“The root cause of the business and human rights predicament lies in the governance gaps created by globalization—between the scope and impact of economic forces and actors, and the capacity of societies to manage their adverse consequences. These governance gaps provide the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation.”

Unless Canada’s State Immunity Act is amended to create a general “torture” or “human rights abuse” exception, or Canadian federal legislation akin to the U.S. ATS, is enacted, the only viable alternative for imposing corporate liability against human rights abuses abroad appears to be the “forum of necessity” exception to the reformulated “real and substantial connection” test in Van Breda.

This will, of necessity, include concurrent claims framed in contract and tort, as well as claims imposing liability against Canadian corporations “aiding and abetting” the alleged torture or human rights violations committed in the host state’s territory and falling within the ambit of acts committed by individuals acting in an official capacity: See, for example, Presbyterian Church of Sudan v. Talisman Energy, Inc. No. 07-0016-cv (USCA 2d Cir. Docketed Jan.3, 2007), cf. Doe I v. Unocal Corp., 963 F. Supp. 880 (C.D. Cal 1997) which imposed liability under the ATS against private corporations by imposing a standard of “knowing practical assistance or encouragement that has a substantial effect on the perpetration of a crime.”

Bill C-35- An Act to deter terrorism, and to amend the State Immunity Act,remains mired at First Reading with debates at second reading held on October 30, 2009, According to the official Legislative Summary:

“Bill C-35 is similar to a number of private members’ bills and senators’ public bills that have been introduced in Parliament since 2005.(4) The primary difference between the previous bills and Bill C-35 is that the other bills sought to include the cause of action in the Criminal Code, whereas Bill C-35 creates a free-standing civil cause of action.”

More promising legislative reform comes in the form of a Private Member’s Bill C-300, An Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries, which has progressed further than Bill C-35 and is now at approaching the Report and Third Reading stages in the House of Commons. A number of politicians, academics, and business groups have testified before the Standing Committee on Foreign Affairs and International Development (FAAE). For more information, see, House of Commons Standing Committee on Foreign Affairs and International Development Transcript of Evidence.

The purpose of Bill c-300 is “to ensure that corporations engaged in mining, oil or gas activities, and receiving support from the Government of Canada act in a manner consistent with international environmental best practices and with Canada’s commitments to international human rights standards.” Bill C-300 would empower the Minister of Foreign Affairs and the Minister of International Trade to administer complaints from Canadian citizens or permanent resident or citizens of developing countries regarding Canadian companies engaged in mining, oil or gas activities. The framework of the Act is based upon guidelines set forth in ss.5(2) which reads:

Content of guidelines

(2) The guidelines shall incorporate:

(a) the IFC’s Policy on Social & Environmental Sustainability, Performance Stand- ards on Social & Environmental Sustainability, Guidance Notes to those standards, and Environmental, Health and Safety General Guidelines;

(b) the Voluntary Principles on Security and Human Rights;

(c) human rights provisions that ensure corporations operate in a manner that is consistent with international human rights standards; and

(d) any other standard consistent with international human rights standards.

While laudable, Bill C-300 neither creates a statutory cause of action nor imposes any financial penalties for breaches of international human rights generally, or the guidelines, specifically. Rather, it appears limited to moral suasion. First, Bill C-300 directs Ministers to notify the President of Export Development Canada and the Chairperson of the Canada Pension Plan Investment Board of any breaches of the guidelines by Canadian mining, oil or gas corporations in developing countries. Second, Bill C-300 enlists Ministers to compile and publish reports on international human rights standards and provide advice to Canadian corporations concerning the latter.

Imposing corporate liability on American and Canadian multinational corporations is a legally complex and politically charged issue.  Allowing equal access to justice for victims of human rights abuses and torture, both in the U.S. and Canada, is everyone’s business.

3 Responses to “Corporate Liability under International Law: U.S. and Canadian perspectives”

  1. Eric Engle Says:

    The term you use, “liability” (Haftung; responsabilite’) is too vague for it encompasses civil and criminal liability. In that same way, much of the ATS corporate liability debate is miscast due to failing to distinguish criminal liability from civil liability. The ATS is a civil statute, not a criminal one. Corporate civil liability under private international law is a universal norm.

    In my article, I addressed corporate tort liability under private international law; not corporate criminal liability under public international law.

    The court in Kiobel misapprehended the structure of international law and so reached the wrong result.

  2. Antonin I. Pribetic Says:

    Thanks for your comment, Eric. My post focused on the Canadian approach to corporate liability (tort or contract) under private international law. The issue of corporate criminal liability under public international law, while interesting, does not factor into my analysis.

  3. flash hard drives Says:

    I should be working but this blog about Corporate Liability under International Law: U.S. and Canadian perspectives [at] The Trial Warrior Blog is great

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