Corporate social responsibility and its counterpart, corporate immunity, have gained popularity in recent years as there is a growing awareness of corporate wrongdoing at the intersection of human rights violations and environmental justice. Judicial involvement and legislative action have been pivotal in the resolution of extraterritorial corporate liability disputes which lie at this intersection.

The Cargill and Nestlé claims have become (in)famous in this respect. Allegations have been brought against the two chocolate companies for human trafficking, child slavery, and forced labour crimes - connected to their cocoa supply chain activities in the Ivory Coast.  

Cargill, Nestlé, Mars, Barry Callebaut, Olam, Hershey, and Mondelēz are amongst the largest chocolate producers in the world. While the former two have been battling legal claims regarding child slavery for more than a decade, the remainder have only recently been named as defendants in a new class action lawsuit brought by International Rights Advocates on behalf of eight Ivorian claimants.

THE CORE OF THE DISPUTE

The claimants - eight former child labourers in the Ivory Coast - have accused Cargill and Nestlé of child slavery and exploitation. They seek damages for forced labour and further compensation for unjust enrichment, negligent supervision, and intentional infliction of emotional distress. Cargill and Nestlé are both US-based companies, with extraterritorial subsidiaries in the African continent. They do not own the African subsidiaries, but exercise sufficient operational and financial control over the foreign branches. This triggers the application of the long-standing US Alien Tort Statute (ATS) – a centuries-old human rights accountability tool. 

The statute gives foreign claimants the right to sue in US courts for fundamental violations of international law. However, its territorial scope of application is, in principle, limited to the geographical boundaries of the US federation. This means that foreign claimants can sue US actors in US courts, provided the alleged crime has mainly been committed on US territory. There is a (rebuttable) presumption against the statute’s extraterritorial applicability, as well as a presumption against the right to privately sue a legal entity, both established in Jesner v Arab Bank.  

In the case of Cargill, the alleged crime is that of aiding and abetting the commission of well-established norms of human rights law. Typically, ancillary criminal actions of this kind are given the same geographical scope as the underlying criminal offence, making it problematic to establish US domestic corporate liability for an anchor crime which has mainly been carried out elsewhere.

THE LEGAL ISSUE

Cargill and Nestlé’s subsidiaries in the Ivory Coast pose a significant jurisdictional issue in the resolution of this dispute. The crime, having been predominantly committed on Ivorian land, does not meet the territorial scope of the ATS and thus liability may not ensue. Furthermore, it is disputed whether a legal entity can be sued for violations of international law under private legal proceedings. The Kiobel case established that “actionable norms of international human rights law” apply to corporations as to natural persons. However, the alleged conduct must have sufficiently “touched” and “concerned” the US territory (the "Touch and Concern" threshold). In addition, the previously established Jesner case seems to run contrary to the assumption that corporations are liable under the ATS. As such, it is contested whether corporate liability is a norm at customary international law (CIL).

The main argument which denies corporate liability is the US separation of powers doctrine. Extending the application of the ATS by judicial intervention may be regarded as judicial “activism,” and, as such, would breach a fundamental constitutional doctrine. This has become informally known as the “Leave it to Congress” argument.

However, in the case of Cargill and Nestlé, the US Supreme Court was evidently uncomfortable with the idea of letting aiders and abettors of international human rights crimes off the hook. The court allowed arguments which were aimed at rebutting the presumption against extraterritoriality, as well as affirming the existence of a legitimate basis to establish corporate liability. As for extraterritoriality, it was averred that holding the two US companies liable is consistent with the original intent of the legislators - to hold US actors accountable for foreign CIL violations. Corporate liability is rightly limited when a foreign company is brought before US courts. This would dangerously overlap with the objectives of US foreign policy, creating unwanted political and doctrinal tensions, but this does not apply in the cases of Cargill and Nestlé. Moreover, it was argued that the presumption against corporate liability is unfounded as the ATS affords the right to sue multiple individuals. This renders the distinction between “multiple natural persons” and “one legal entity” wholly artificial.

AN ONGOING STRUGGLE

The saga is an ongoing legal – and ethical – struggle, with new class actions being filed on various different grounds. The ATS being a problematic legal basis, there are other legal routes available. For example, via the Trafficking Victims Protection Reauthorization Act of 2017 which is the current legal basis for the International Rights Advocates action.

Notwithstanding the jurisdictional dilemmas that come with establishing liability in cross-border corporate crime - when the latter carries a heavy human impact, it is imperative that accountability is pushed.

While it is recognised that international law presents difficult loopholes that cannot always be overcome (for reasons of democratic legitimacy and legal certainty), we must not run the risk of frustrating the most basic of human protections in the name of abstract jurisdictional concepts and legalisms. When the legislative branch appears unresponsive, it is envisaged that judicial intervention will grow in areas where grave human rights breaches occur internationally, all the while maintaining a clearly identifiable domestic scope (compare the Nevsun and Vedanta rulings for reference).

The claimants were children between the ages of 10 and 14. Abducted by the so-called “locateurs” in Mali to be sold to the cocoa plantation farmers in the Ivory Coast, they then effectively owned the children for the years they were “employed” in said plantations. Coerced to comply with the promise of a job and some form of remuneration, the children never saw any payment; were kept in inhumane conditions; forced to perform hazardous and strenuous work; and were only given enough food to keep them alive. The described conduct falls under the “worst forms of child labour,” codified in the International Labour Organization’s Convention No. 182 which the US has ratified. It is unacceptable that a group of powerful corporations enjoying the privilege of market dominance prey on the vulnerability and despicable economics of human trafficking and slavery, under the guise of innocent by-standers who have exhausted all available remedies in the attempt to do good. Doing good may not be good business, but good business is not all there is. It might take some time, but the law will catch up and serve justice in due course.

Diana is a law graduate, legal advisor and research assistant. She has worked in the fields of immigration, asylum and equality law. She strongly advocates for minority rights, social welfare and the rule of law. Diana holds an LL.B. in European and Comparative Law from Maastricht University and is currently studying the accelerated LL.B. at the University of Glasgow to qualify as a solicitor-advocate.

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