American and Canadian Laws on Multinational Corporations - Essay Example

? INTERNATIONAL LAW ILBT 566: International Law, Essay June 7, The American and Canadian Laws on Multinational Corporations The present nations despite thriving in an open economy have been arranged in a way that they have sound administrative systems which control their economies. The need for an increase in foreign investment regulation has been stimulated by liberalization and the end of the global economic crisis. This is very necessary in today’s world and especially in businesses with operations beyond their home countries.1 Though there have been strict regulations imposed on multinational companies in American states since the nineteen nineties, there has been a continuous increase in the number of foreign victims who commenced actions in the American courts. Due to the increase in these multinational corporation cases, American courts employed the doctrine of forum non conveniens, as a shield to limit the increasing use of the American legal system by foreign plaintiffs. The argument behind all this is that the foreign victims tend to take advantage of the procedural and substantive law.2 As a result of global development and globalization of most business activities, the multinational corporations are discussed at an international platform. The globalization of these corporations as well as economic institutions in the world brings wider media coverage that even the very small accidents can be viewed by millions in the world. This keeps the whole world alert about the multinational corporations, which are best known to violate human rights. This has interpreted the reasons why American courts have dismissed many case against the American multinational corporations on the basis of forum non conveniens.3 Because of the ambition to protect human rights and the environment from the abuse of multinational corporations, there has been recognition of the regulatory right of a state to interfere in circumstances where multinational corporations abuse rights, such as labor rights or damage to the environment. This is evident in the United States, where an Act made in 1789 has been revived, in order to base trial against the United States multinational corporations for wrongs under international law committed abroad.4 This Act of 1789 also included the Alien Tort Statue (ATS), which was enacted in the same year as part of this judicial Act. The reasons for the inclusion of the Alien Tort Statue in this Act were not very clear, but however its enactment was originally for the use against pirates, and to prevent the mistreatment of foreign ambassadors, but it was left inactive and forgotten until 1980 when it was rediscovered and put into use by lawyers.5 The Alien Tort Statute was first used in solving the Filartiga V. case. The plaintiffs were a Paraguayan father and daughter who brought a complaint with the help of human rights activists. They alleged that the defendant a former Paraguay police officer had tortured their brother and son to death. They won the case and were rewarded a significant monetary amount.6 Since the enactment of the Alien Tort Statue, a significant number of cases have been brought forth concerning human rights abuses committed abroad including claims against American corporations. The Alien Tort Statute has really helped to solve many cases. This statute has made it possible and easier for foreigners to bring civil cases in the United States district level courts, for crimes committed anywhere in the world by an individual, government, and corporations that violates the law of nations or treaty of the United States.7 The Alien Tort Statue also gained importance in kadic V, Karadizic. Karadizic expanded the capacity of human rights claims under Alien Tort Statute to cover private non-state actors who violated human rights. This means that, it was directly applied against corporate defendants and this indicated that American courts were, and are willing to consider claims based on violations of international human law against Multinational Corporations.8 Kiobel v. Royal Dutch Petroleum Company Case This case was between three oil companies and Nigerian citizens. The companies included the Royal Cutch Petroleum Company, Shell Petroleum Development Company of Nigeria Ltd (SPDC), and the Shell Transport & Trading Company.9 The Nigerian citizens living in the oil rich Niger Delta led by their leader Kiobel, Barinem accused the three foreign oil companies of using military force to suppress their opposition efforts against these companies that were apparently committing human rights violations in the Niger Delta. The companies, who wanted to continue with their activities normally without getting any opposition from locals in the Niger Delta committed extrajudicial executions, torture, and other human rights violations. These acts were mainly committed against the Ogoni people between 1992 and 1995.10 Kiobel, who led the oppositions against the foreign oil companies through an organization known as MOSOP was held in seclusion by the military, where he was tortured before being taken to a special military court, where he was unfairly tried. The defendants, who were mainly the managers and owners of the oil companies bribed witnesses, who in turn gave false testimonies that, favored the defendants’ side. Among the other human rights activists that joined hands with Kiobel in opposing the three foreign oil companies was Saro-Wiwa, Ken.11 Due to the unfairness of the trial, Kiobel together with other activists faced murder convictions, and ten days after the judgment, they were executed. However, political leaders and human rights groups around the world were very disappointed with the act. Due to the dissatisfaction of the Nigerian people, the original case was filed again in a New York court in 2002.12 The companies were once again accused of committing human rights violations, which are against the international law. During the course of this case, debated rose on whether corporations could face Alien Tort Statute lawsuits. 13 The case continued until in 2013, when the court gave its decision. The decision of the Supreme Court was that it could not make judgment over a case that happened in another nation.14 The decision has been regarded as unfair by most people, especially due to the fact that it further complicated the nature of cases involving corporations located overseas, as well as their employees. The following are other examples of Canadian and American multinational corporations’ cases involving human rights violations: The Jota and Texaco case. This was a case of violation of human rights by the Texaco Oil Company. More than 5500 Ecuadorians and Peruvian residents brought claims in November of 1993 against the Texaco, a United States oil company. They alleged that the company had brought environmental and personal injuries, especially to the tropical rainforest habitats in the Amazon, due to the exploration and extraction operations. These claims were based on theories of negligence, public and private nuisance, trespass and violations among others of the Alien Tort Statute. The case was assigned to judge Rakoff of New York who dismissed the claims on grounds of forum non conveniens. He argued that the districts courts of United States are courts of limited jurisdiction. This is enough proof that even though the claims of crimes committed abroad are brought to the American courts the highest probability is then being dismissed. 15 The Anvil Mining Company case. Anvil Mining Company is a Canadian-Australian company. This company was accused of involvement in serious human right violations and war crime activities in the Democratic Republic of Congo (DRC). Despite the gravity of the allegations against this company, it received great support from the British publicly owned international development fund (the CDC), this shows that despite the fact that the crimes committed by multinational corporations are reported to the courts of their home countries, justice is never served.16 The Hamid versus Price House Water Coopers. This was case brought forth to district court of Southern California. It was against a claim against 77 individual, firms and foreign nation, Abu Dhabi in 1992. The plaintiff alleged that the defendants had misused and misappropriated funds, misstated the banks financial conditions and breached their judiciary duty. The court dismissed the case and the Appeal Court for the ninth circuit affirmed their dismissal. This case stands as one of the most obvious cases that the Alien Tort Statute cannot embrace, but has been dismissed by the American courts thus affirming that, crimes of violations of human rights by American states’ multinational corporations should not be transferred to their home courts; rather, the host countries should try and solve them in their courts.17 From this discussion, it is clear that transferring cases involving violations of human rights by foreign multinationals to their home nations has not been an effective solution. There is need for all nations that play host to multinational corporations to establish effective justice systems that can handle these cases. In conclusion, no case committed by a Canadian or American multinational corporation should be transferred to the corporation’s home country, and this applies to all multinational corporations in the entire globe. What the host countries through the help of their government should do is to ensure that there are more effective mechanisms, ensuring justice for the victims of corporate abuse. It is important to note that laws differ from one nation to another. A certain act might be argued to be violation of human rights in one country, and when transferred to another nation, the law does not find any wrong doing in the alleged punitive act. The responsibility of preventing human rights violations should not be left only on the side of the host countries, since the home countries of these multinational corporations also have roles to play. The home countries to these corporations are responsible in controlling and preventing occurrences of human rights violations in countries where these companies have established branches. This is because each state has a general duty to act in such a way that it does not cause harm or discomfort to any other country; it should take that responsibility of preventing activities that will cause harm to other states. Every State should ensure that all bodies that are subjects to its control, such as multinational corporations respect the rights of human beings in other countries. A home nation can achieve this by regulating and controlling these multinational corporations in such a way that none of them violates human rights, or else they face sanctions of operating.18 Bibliography Center for Constitutional Rights. “Kiobel v. Royal Dutch Petroleum Co.” http://ccrjustice.org. June 9, 2013. http://ccrjustice.org/ourcases/current-cases/kiobel. Eroglu, M. Multinational Enterprises and Tort Liabilities: An Interdisciplinary and Comparative Examination. Cheltenham: Edward Elgar Publishing, 2008. Graduate Institute of International and development Studies. Small Arms Survey 2011: States of Security. Cambridge: Cambridge University Press, 2011. Kenway, J. and Fahey, J. Globalization the Research Imagination. Oxon: Routledge, 2008. Koebele, M. Corporate Responsibility under the Alien Tort Statute: Enforcement of International Law through US Torts Law. Leiden: Koninklijke Brill Publishers, 2009. Kontorovich, Eugene. “Kiobel v. Royal Dutch Petroleum - Post-Decision SCOTUScast.” fed-soc.org. June 9, 2013. http://www.fed-soc.org/publications/detail/kiobel-v-royal-dutch-petroleum-post-decision-scotuscast. Niels B, Corporations and Human Rights: An Analysis of ATCA Litigation, Location: Peter Lang, 2009. Paul, J. Business Environment. New Delhi: Tata Mc Graw-Hill Education, 2010. Samp, Rich. “Supreme Court Observations: Kiobel v. Royal Dutch Petroleum & the Future of Alien Tort Litigation.” forbes.com. June 9, 2013. http://www.forbes.com/sites/wlf/2013/04/18/supreme-court-observations-kiobel-v-royal-dutch-petroleum-the-future-of-alien-tort-litigation/. Soohoo, C., Albisa, C., and Davis, Martha F. Bringing Human Rights Home: A History of Human Rights in the United States Pennsylvania: University of Pennsylvania Press. 2009. Sornarajah, M. The International Law on Foreign Investment. Cambrigde: Cambridge University Press, 2010. Read More