Kiobel Impedes Victims’ Access to Remedy and Contradicts U.S. Commitment to U.N. Guiding Principles on Business and Human Rights

By Angela Chen, American University Washington College of Law, JD candidate 2016

Since the United Nations (U.N.) Human Rights Council endorsed the U.N. Guiding Principles on Business and Human Rights (UNGP), the United States has taken steps to promote the principles advocating for greater corporate human rights responsibility.  Although the U.S. is currently in the process of developing its National Action Plan to promote responsible business conduct abroad through policy and legislation, U.S. courts’ current interpretation of the Alien Tort Statute (ATS) hinders responsible business conduct abroad and contradicts the basic principles of the UNGP. 

Endorsed in 2011, the UNGP are a global standard for preventing and addressing human rights violations linked to business activities.  The three pillars of the UNGP are (1) the state duty to protect human rights, (2) the corporate responsibility to respect human rights, and (3) access to remedy.  The foundational principle of “access to remedy” centers on the state duty to ensure that victims of abuses have access to effective remedy when the abuses occur within the state’s territory or jurisdiction.  The operational principle for judicial remedy requests that states take appropriate steps to ensure the effectiveness of domestic judicial mechanisms when addressing business-related human rights abuses.  States should consider ways to reduce legal, practical, and other relevant barriers that could lead to a denial of access to remedy. 

As a federal statute providing U.S. courts with jurisdiction for foreign nationals to bring claims under customary international law, the ATS satisfies the access to remedy foundational principle.  For three decades, the statute was interpreted to allow remedies for human rights violations committed outside U.S. territory, such as extrajudicial killing, torture, or slavery, and victims of human rights abuses consistently used the ATS to hold corporations accountable for human rights violations committed in other countries.  Without the ATS, victims of corporate abuses seeking remedy in U.S. courts would be limited to state law claims, as the Torture Victims Protection Act (TVPA) only allows claims against natural persons.  State law claims are of limited utility because state laws generally have short statutes of limitations of 1-2 years, whereas the ATS has a 10-year statute of limitations.  Additionally, state law claims often fail to reflect the scope and nature of the human rights abuses, treating them instead as personal injuries rather than systematic human rights violations. 

Although the ATS gives victims access to U.S. courts to seek remedies for international human rights violations, the Supreme Court’s ruling in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), added legal barriers making it more difficult for victims to access effective remedies for abuses committed abroad.  The Supreme Court held ATS claims must overcome the presumption of extraterritoriality, which is the normal presumption that U.S. statutes do not apply beyond the territory of the United States.  As such, ATS claims must “touch and concern” the territory of the U.S. with sufficient force to overcome the presumption of extraterritoriality.  Additionally, the Court explained that a foreign corporation’s “mere corporate presence” in the U.S. is insufficient, implying corporate defendants need to at least be headquartered in the United States.  Given that the ATS limits claims to foreign nationals, who are most frequently subject to human rights violations committed outside U.S. territory, the requirement of overcoming the presumption of extraterritoriality is a significant legal barrier to the access of remedy.  The Supreme Court effectively added a practical and legal barrier reducing victims’ access to remedy and backtracked the United States’ compliance with the UNGP.

Instead of reducing barriers to allow easier access to courts, U.S. courts’ broad interpretation of Kiobel’s presumption of extraterritoriality has resulted in Kiobel becoming a significant barrier to corporate accountability for human rights violations, as courts dismiss most ATS claims for failing to “touch and concern” the United States.  The UNGP asks states “to take steps to ensure the effectiveness of domestic judicial mechanisms when addressing business-related human rights abuses.”  It also provides specific examples of barriers preventing victims’ access to remedy, including situations where victims are denied justice in host states and cannot access home state courts, regardless of the merits of the claim.  In dismissing ATS claims for failing to overcome the presumption of extraterritoriality, victims of U.S. corporations are denied access to the courts of the corporation’s state before the courts even consider the human rights abuses that are basis of the victims’ claims.

Impeding victims’ access to remedy also weakens the efforts of the U.S. in regards to the UNGP’s first two principles of protecting human rights and promoting corporate respect for human rights.  Access to remedy is essential to the UNGP framework because without provisions for investigation, punishment, and redress, the state duty and the corporate responsibility to human rights lack enforcement.  Past ATS cases have resulted in investigations of corporate involvement in human rights abuses abroad, punitive sanctions for liable corporations, and compensation for victims.  The threat of punitive sanctions and negative publicity as a result of investigations also incentivized corporate respect for human rights.  Current barriers to ATS claims not only reduce incentives for corporations to respect human rights, but also eliminate accountability for corporations that commit human rights abuses.  In failing to adopting legislation lifting the court-imposed barriers, the U.S. fails to prevent, investigate, or redress corporate human rights abuses as required by its state duty to protect human rights under the UNGP. 

The U.S. has emphasized its commitment to the UNGP and the promotion of responsible business conduct abroad, and should fulfill its duty to protect human rights and ensure that victims of abuses have access to effective remedy against U.S. corporations in U.S. courts. Although the ATS provided victims with access to effective remedy in the past, courts have recently added legal barriers to remedy.  By requiring victims to overcome the presumption against extraterritoriality, U.S. courts impose an additional burden on victims whose claims are extraterritorial by nature, and impede access to remedy for victims of human rights abuses committed by U.S. corporations.  Rather than taking steps to reduce legal barriers to the access of remedy, U.S. courts have reduced the ATS’ effectiveness in addressing corporations’ human rights abuses and increased barriers for redress and accountability.