Alien Tort Claims Act Comes Under Scrutiny

Date: Jul 01, 2003

About seven years ago, a group of Burmese villagers sued Unocal under the terms of the Alien Tort Claims Act (ATCA), claiming the company was responsible for human rights abuses by Burmese troops that provided security for a pipeline.

Last fall the Ninth Circuit Court of Appeals in California agreed the Unocal case could proceed to trial. Unocal, supported by the US Dept. of Justice (DOJ), has appealed on grounds it cannot be sued in the US for alleged human rights abuses committed outside the US by a foreign government. Nevertheless, concerns the Unocal decision will prompt additional ATCA claims against US multinational companies, and that the ATCA will be a tool used to seek to enforce signed (but unratified) treaties privately, including the Kyoto Protocol, are focusing industry attention on repealing or modifying the ATCA.

ATCA suits - and the potential that more will be filed - have implications for converters, their suppliers, and their customers in today's global environment.

The ATCA actually is an ancient statute, adopted in 1789 by the first Congress of the US. The text of the statute (found at 28 U.S.C. 1350) is simple. It states: The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the US.

The impetus for adoption was to provide a legal tool to combat piracy on the high seas. The ATCA as a legal tool was "discovered" in 1980, when a Paraguayan citizen sued a former Paraguayan policeman - who had moved to the US - and won a $10 million verdict under the ATCA for the kidnapping and torture of a deceased family member. Damages were never collected. (The Torture Victim Protection Act now provides a separate right of action in similar cases.) Since then, ATCA cases have been filed against oil, mining, banking, and even a soft drink company on the theory the companies benefited from the foreign government's abuses against its own citizens.

Cases range from suits by Holocaust survivors to suits against companies allegedly supporting the apartheid regime in South Africa to suits alleging both human rights abuses and environmental damages.

Human rights organizations defend modern-day use of the ATCA as a needed tool to combat corporate complicity in human rights abuses. The DOJ, on the other hand, said in its brief in the Unocal case that use of the act potentially interfered with important foreign policy interests and could damage the war on terrorism.

Critics contend US companies are at risk of ATCA suits under a wide variety of situations, and this risk is causing US companies to shy away from investments in certain areas of the world for fear abuses by host governments or other third parties could result in corporate liability.

Companies, like individuals, are appalled by human rights abuses. They take seriously their obligations to comply with laws in the jurisdictions in which they do business and to meet corporate responsibility pledges. To some degree, the suits may be motivated by a desire to promote corporate changes and focus more on human rights as part of corporate social responsibility discussions.

Many corporations have endorsed corporate responsibility principles and are working with human rights organizations, the US government, and others to balance security imperatives with respect for human and civil rights.

With some 20 cases under the ATCA pending, however, understanding the policy implications of these suits has taken on renewed urgency. Thus it is important for members of the converting industry to understand implications of the Alien Tort Claims Act.

Reproduced with the permission of Paper, Film & Foil CONVERTER magazine (312.726.2802). Copyright © 2002 by Intertec Publishing. All rights reserved.

Sheila A. Millar, a partner with Keller and Heckman LLP, counsels both corporate and association clients. Contact her at 202/434-4143; millar@khlaw.com. Visit PackagingLaw.com.