Beyond Customary International Law: What Jesner Can Learn From Corporate Criminal Liability for International Crimes

This piece is a cross-post from an article written for Just Security as part of their series on the U.S. Supreme Court case Jesner v. Arab Bank (see here).  Franziska Oehm is a PhD candidate at the University of Erlangen-Nürnberg.  Her research focuses on the intersection of human rights protection and corporate liability in international and transnational criminal law.

In recent years, several national jurisdictions have commenced formal criminal investigations involving corporate criminal liability for international crimes. These new cases shed light on a legal approach the U.S. Supreme Court could, and arguably should, emulate in Jesner v. Arab Bank.

In earlier work, one of us wrote a normative comparison between the ATS in the United States and corporate criminal liability for international crimes in a range of different jurisdictions around the world. This comparison suggested that although the criminal law certainly has an important set of its own downsides vis-à-vis civil liability, it could offer a smoother way through many of the recurrent problems that have plagued the ATS. That study also emphasized the possibility of synergy between the two regimes, as a matter of both law and enforcement policy. In what follows, we explore one area of law that could operate in this synergistic fashion. We argue that corporate criminal liability for international crimes in national legal systems reveals a legal approach the US Supreme Court might also adopt for ATS cases, thereby harmonizing judicial approaches to corporate responsibility in both fields.

The recent cases we point to show how corporate criminal liability is drawn from national law, even when this local notion of corporate liability couples with an international crime defined in customary international law. Thus, if corporate criminal liability for international crimes is not itself enshrined in customary international law, trying corporations for these offenses nationally is dependent on the ability of domestic legal systems to extend their own law beyond the bounds of international custom. In this sense, corporate criminal liability for international crimes vindicates Judge Leval’s reasoning in the Second Circuit decision in Kiobel v Shell and the contention within the Amicus Brief of International Law Scholars, that “customary international law generally leaves questions of enforcement to the decision of states.”

Below, we highlight the different ways states achieve corporate criminal liability for international crimes in light of this freedom, then provide examples from recent cases.

Before we embark on this undertaking, we offer two preliminary points that set the scene. First, there is no doubt that the absence of corporate criminal liability in statutes of international criminal tribunals says little about its availability under customary international law. Like corporate criminal responsibility, the crime of aggression is conspicuously absent from the statutes of modern international courts, but this fact alone does not undermine its existence in custom. Second, we do not address the various manifestations of a growing recognition of corporate criminal liability in international law, which have been well set-out by others in this blog series (see hereand here). What follows does not depend on custom, so we do not broach those subjects.

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There are three dominant methodologies by which corporate criminal liability for international crimes is achieved, each of which depends on the idea that the means of enforcing customary international law is largely left to states. Each of these methodologies relies on legislative provisions that make the coupling between corporate criminal liability and international crimes explicit to varying degrees, and each dispenses with customary international law entirely. Consequently, this reality points the US Supreme Court away from custom in deciding Jesner, towards garden-variety principles of corporate liability in U.S. federal law.

First, a large number of states that have adopted a comprehensive criminal code dedicate a specific provision within these codes to corporate criminal liability, before going on to prohibit international crimes in subsequent sections. In Australia, for example, the Commonwealth Criminal Code of 1995 in § 12.1(1) first states that “[t]his Code applies to bodies corporate in the same way as it applies to individuals,” then explicitly lists the full panoply of modern international crimes barring only aggression. In Europe, half of the national legal systems allow corporations to be convicted of all crimes announced in the criminal code, because these states deliberately decided to construct a concept of corporate criminal liability that applied to all criminal offences (see here, p. 40-41). To the extent that international crimes are brought into the system too (in ways broadly analogous to the hook created by the ATS), these international crimes can couple with pre-existing, general notions of liability like corporate criminal liability. By this legislative method, national criminal law is employed to construct the basis of liability irrespective of the status of corporations in international criminal justice generally and customary international law in particular.

Second, a range of states create corporate criminal liability within their criminal codes, then specify a limited subset of criminal offenses that corporations can commit. Whereas the blanket approach above implicitly extended corporate liability to all crimes, some states make this extension explicit to international crimes and not others. To illustrate, nine European states depart from the blanket approach mentioned immediate above where corporations can be prosecuted for all crimes within a criminal code by designating a circumscribed class of criminal offenses that corporate actors can commit. Three of these explicitly extend corporate criminal liability to “crimes within the jurisdiction of the International Criminal Court” (see (see here, p. 41). By this method, too, corporations can be held criminally responsible for international crimes without engaging in the contested disputes about the existence of corporate liability in customary international law that have hampered a significant strand of ATS caselaw. Admittedly, these examples represent just a small fraction of the world’s legal systems, but the method illuminates a path the Supreme Court should arguably follow.

Third, in a slightly more circuitous route, another group of jurisdictions have promulgated separate legislation mandating that the term “person” (or its equivalent) be read as including both natural and legal persons in all other legislative enactments. In the United States, for instance, § 2441(a) of the War Crimes Act stipulates that “whoever” commits a war crime is subject to criminal punishment including fine, imprisonment and death. The Dictionary Act of 2000 states in § 1 that “[i]n determining the meaning of any Act of Congress… the words ‘person’ and ‘whoever’ include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.” Once again, whether these sorts of couplings are sufficient to establish corporate responsibility for international crimes likely turns on questions of domestic law, not on whether that coupling already exists in customary international law. Indeed, customary international law often develops based on these sorts of progressive codifications in national systems.

While this typology is relatively abstract, the following are concrete examples of how it has played out in three different jurisdictions.

In 2010, a criminal complaint was filed in The Netherlands against the company Riwal for war crimes and crimes against humanity pursuant to the Geneva Conventions and the Dutch International Crimes Act (Wet Internationale Misdrijven, WIM) by the human rights organization Al-Haq in cooperation with Böhler Advocaten. Drawing on the International Court of Justice’s advisory opinion, Riwal was accused of participating in the construction of the Israel-Palestinian Wall as well as in the construction of a settlement in the West Bank. As mentioned, the war crime involved in the accusation was drawn from the Dutch International Crimes Act, which did not itself contain a provision on corporate criminal liability nor make any claim to reflecting customary international law. Nevertheless, Article 51 of the Dutch Penal Code contained a corporate criminal liability provision applicable to all crimes within the Dutch Kingdom, including the WIM crimes. As a result of this legal approach, a corporation could be the subject of a formal investigation for international offences. That the case was, rightly in our view, ultimately dismissed, does not change the fact that national law and not customary international law furnished the legal basis for initiating a proceeding geared at holding a corporation responsible for international crimes.

A recent case in France reveals a similar logic. In November 2016, members of two civil society organizations filed a criminal complaint against the multinational cement Lafarge and some of their businesspeople for complicity in a range of crimes, including war crimes and crimes against humanity in Syria. The pleadings allege that Lafarge entered, via intermediaries that it hired, into negotiations with ISIS to purchase ISIS-controlled raw materials such as oil and pozzolana. In addition, the complaint alleges that Lafarge paid large amounts of money to ISIL to cross checkpoints. If we use the allegations of war crimes in the case as an example, these were only recently inserted into the French Penal Code by way of legislation in 2010, when France finally overcame its famous reticence about these offences as a matter of internal law. Importantly, the relevant provision now enacted criminalizes “violations of the laws and customs of war or international conventions applicable to armed conflict” (our translation and emphasis). Thus, Article 121-2 of the French Penal Code, which is again a general concept of corporate criminal liability, is used to couple with a war crime derived from custom. Here again, national law created the corporate responsibility whereas customary international law furnished the underlying offense.

Finally, the Argor-Heraeus case in Switzerland is also instructive. In October 2013, a group of civil society organizations filed a suit against the Swiss gold refinery Argor-Heraeus, alleging money laundering and complicity in pillage of Congolese gold. According to the complaint, the company was criminally liable for having violated a provision in Swiss law stipulating that “whoever has contravened provisions of international conventions governing the conduct of hostilities,” and importantly, “whoever has violated other recognized laws and customs of war,” shall be punished with imprisonment (our translation and emphasis). Because pillage is a war crime derived from treaty and customary international law applicable in non-international armed conflicts, combining this provision of the Swiss Criminal Code governing corporate criminal liability could create corporate responsibility for a war crime. On this basis, a Swiss Federal Court ordered police to search the company’s premises for relevant evidence. Although the case was later dismissed (for factual reasons some have questioned), the underlying legal argument is relevant to Jesner. Here again, the international crime was located in international law (treaty or custom), but the existence of corporate criminal liability in either of those international law sources was irrelevant; corporate criminal liability is borrowed from the general part of Swiss national criminal law. National law is again the relevant inquiry, not customary international law.

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A comparison between ATS and corporate criminal liability for international crimes has obvious limitations, but hopefully, it highlights how (a) national law provides the legal basis for enforcement against corporations when customary international law is silent on that score; and (b) national systems can create enforcement mechanisms that outstrip customary international law, including on issues of corporate responsibility for international crimes. Thus, these examples provide another example, albeit in a sister field, supporting the argument contained in the Amicus Brief of International Law Scholars and the Second Circuit decision in Kiobel v. Shell that states independently decide on matters of international law enforcement. If this approach is unequivocally true of corporate criminal liability for international crimes, should it not also hold in cases involving civil liability for violations of the laws of nations under the ATS?