Repelling the corporate butt buccaneers

Pirates of the Corporation
News: Holding American companies responsible for high crimes committed overseas.
By Joshua Kurlantzick
July/August 2005 Issue

(Excerpt from Mother Jones)

No plaintiff has yet won an ATCA case against a company, but Collingsworth has persisted, pitting his small staff against the nation’s white- shoe firms and weathering appeal after appeal. (“At no point did I feel their 180 lawyers gave them an advantage,” he says staunchly.) In December, he facilitated the first legal settlement under the ATCA by a multinational company—a payout by Unocal to the Burmese villagers. After the Supreme Court determined that the law could indeed be used against companies, Unocal agreed to pay the villagers a sum in the tens of millions.

Elliot Schrage, a former senior vice president at Gap who is now at the Council on Foreign Relations, believes this was a turning point. “The Unocal settlement legitimates the idea that [ATCA] is a real business risk,” he says. So serious a risk, in fact, that big business and the White House have gone on the offensive to undermine it.

Multinationals have grouped together to file briefs seeking to scuttle ATCA cases, and the National Foreign Trade Council, an organization of corporate giants, has been touting a study warning that ATCA suits could “seriously damage the world economy.” Another study cautions that the threat of ATCA suits could discourage companies from rebuilding countries like war-torn Iraq. Some companies have considered drafting legislation that could kill or seriously limit the ATCA—legislation that could be pushed through Congress with little fanfare. Yet Collingsworth thinks there’s still time to win settlements or decisions in other cases. “The business community,” he says, “doesn’t yet have a champion to stand up and say they’re repealing a statute that prohibits slavery [and] dates back to the nation’s founding.”

The White House has launched its own backdoor strike on the law, filing briefs and letters in support of companies accused in ATCA cases. The administration argues that the suits will damage America’s relations with other countries and impede the war on terror. In one letter obtained by Mother Jones, the State Department’s legal adviser, William H. Taft IV, claimed that an ATCA suit against mining giant Rio Tinto’s operations in Papua New Guinea would damage “an important United States foreign policy objective”—evidently U.S. relations with that obscure island nation have become a critical diplomatic matter. Other corporate defendants are now requesting that the State Department intervene with letters in their favor.

As Schrage has put it, “The message of these actions appears to be that the Bush administration opposes enforcement of international law standards against multinational corporations.” But the White House may be motivated by something more than unilateralism. The ATCA “is a real problem for this government,” notes Sarah Cleveland, an ATCA expert at the University of Texas School of Law. For, as some Iraqis and Afghans have begun to realize, a law that holds corporations responsible for torture and abuse just might do the same for government officials.