Myths and Facts about the Alien Tort Claims Act
Myth: Plaintiffs are using the The Alien Tort Claims Act (ATCA) to hold U.S. companies vicariously liable for abuses committed by foreign governments. Under the ATCA, companies are being sued simply because they did business in a country where human rights violations took place.
Fact: In cases filed under the act, companies are accused of direct complicity in crimes committed by foreign governments and their security forces. For example, plaintiffs suing the oil company UNOCAL allege that it hired highly abusive Burmese military units to provide security for a gas pipeline project, and that the military used forced labor and committed other grave human rights abuses in direct furtherance of UNOCAL’s interests. The oil company Talisman has been sued for allegedly allowing Sudanese military forces to use its facilities to stage operations against civilians, and for providing vehicles and fuel to those forces. ExxonMobil has been accused of providing equipment and logistical support to Indonesian forces who killed and tortured civilians.
Punishing a company for its mere presence in a country where human rights abuses occur would indeed be inappropriate and any such effort would be thrown out of court. As recently stated by the Court of Appeals for the Ninth Circuit in the UNOCAL case (in a case now being reheard by the entire Circuit) , to be liable under the ATCA a company must either have perpetrated a crime, or rendered “knowing practical assistance or encouragement that has a substantial effect on the perpetration of the crime.”
Myth: Suits against companies under the ATCA are proliferating, creating a growing burden, and a risk that the U.S. judicial system will become the world’s civil court of first resort. Their progress has emboldened class action lawyers to file yet more claims.
Fact: Only 25 suits have ever been filed against companies under the ATCA. This compares to 250,000 civil proceedings commencing annually in U.S. federal courts, and 15 million civil suits filed in state courts. Courts have approached these cases with extreme caution: At least eight of the 25 cases have been dismissed before proceeding to trial. No damages have been awarded in any case thus far.
Myth: Plaintiffs are only using U.S. courts because they can get far bigger damage awards in the United States than in their home countries.
Fact: In many cases, plaintiffs are using U.S. courts because they can’t sue at home. If Burmese forced laborers or Sudanese villagers tried to take companies, or their own government, to court in Burma or Sudan, they would likely be arrested.
Myth: Suits filed against companies under the ATCA could damage U.S. foreign policy interests in and relations with the countries where those companies did business.
Fact: The human rights abuses alleged by these suits, whether in Burma or Indonesia or Nigeria, usually already have been documented and condemned by the State Department. If the courts find for the plaintiffs in any of these cases, they will be saying nothing about the conduct of the foreign government in question that has not already been said by the U.S. government. All they will be adding to the record is that a private company was legally complicit in that conduct.
Moreover, courts have made clear that they will carefully weigh whether such suits harm U.S. foreign policy interests, and have routinely given the Department of State an opportunity to weigh in on their foreign policy implications.
Myth: The ATCA hurts human rights because U.S. companies raise standards wherever they invest, and such suits discourage them from investing abroad.
Fact: American companies committed to socially responsible policies can be a powerful force for higher human rights standards abroad. But there is no evidence that the possibility of legal actions under the ACTA has in any way discouraged U.S. companies from investing in overseas markets. A case in point is Nigeria: Nigeria-related cases have been brought under the ATCA against both Shell (in 1997) and ChevronTexaco (in 1999). Yet in 1999 Shell embarked on an $8.5 billion Nigerian investment program that is scheduled to run 8 - 10 years. Around the same time, ChevronTexaco announced a new five-year $4 billion Nigeria investment. Neither company has suggested that ATCA cases have slowed their investments in the country.
The limited use of this law simply helps to ensure that American firms continue to set an example of high legal and ethical responsibility, particularly when they invest in countries where the domestic legal system cannot be relied on to hold them accountable.
Myth: By exposing U.S. companies to legal liability overseas, the ATCA diminishes their competitiveness vis a vis foreign companies not subject to similar restrictions.
Fact: Once again, the ATCA has not discouraged American companies from investing overseas. Moreover, it would be morally repugnant to promote the competitiveness of American companies by giving them license to participate in crimes. U.S. law already forbids U.S. companies from bribing foreign officials, even if that gives less scrupulous foreign companies a competitive advantage. Allowing companies to hire security forces that engage in murder and torture should be seen as equally wrong.
Myth: Such suits do not benefit the victims of human rights abuses because they take so much time to adjudicate and because it is so hard to win damages.
Fact: Winning damages is not the primary motivation of most victims. What matters most to villagers bringing these suits in places like Sudan and Indonesia and Burma is that their claims of injustice be believed and vindicated. What should matter to everyone is that companies remain accountable for their actions overseas. Without the ATCA, companies would enjoy complete immunity for actions in countries where courts do not uphold the rule of law or protect human rights.
Myth: U.S. courts can do little to contribute to the resolution of profound political and historical disputes arising overseas.
Fact: Critics of the ATCA have made this argument with respect to cases involving Holocaust-era slave laborers and victims of apartheid in South Africa, arguing with good reason that such complex political disputes are best resolved out of court. But the purpose of ATCA suits is not the ultimate resolution of great historical questions. It is to achieve something more limited, but still important: to uphold the law, to achieve a measure of justice for individual victims, and to ensure that specific violations of human rights do not take place with impunity.
Moreover, even critics of the ATCA concede that these cases have helped to spur the very out of court settlements they extol. For example, victims’ lawsuits helped to make possible the historic agreement the United States forged in 2000 with the German government and German companies to compensate Holocaust-era slave laborers. After negotiating that agreement, then Deputy Secretary of the Treasury Stuart Eizenstat said: “It was the American lawyers, through the lawsuits they brought in U.S. courts, who placed the long-forgotten wrongs by German companies during the Nazi era on the international agenda. . . . Without question, we would not be here without them.”
May 14, 2003
