Fight impunity for cross-border corporate crimes by choosing to assert jurisdiction
Exercising jurisdiction in cross-border corporate crimes cases is essential to fighting impunity. For these purposes, consider the State’s obligations under international law, all potential bases for jurisdiction and the likelihood that victims will not receive effective remedies elsewhere. If it is legally or practically impossible to exercise jurisdiction, refer the case to appropriate authorities, collaborate with them where possible and provide support to any investigation or prosecution that may occur.
Investigators and prosecutors noted additional challenges specific to cross-border corporate crimes cases, where a corporate actor registered or domiciled in one jurisdiction (the home State) is suspected of causing or contributing to a human rights abuse in another jurisdiction (the host State).
Multinational corporate entities act across borders with ease due to developments in technology as well as favourable corporate, trade and investment laws. They exercise significant power and influence. Laws to protect human rights and deter companies from committing wrongful acts have not kept pace with these developments. For example, the issues of separate legal personality and limited shareholder liability present significant legal challenges for accountability where the case involves a parent company based in a home State that operates through a local subsidiary or joint venture in the host State. This “governance gap” has created an environment in which corporate actors are able to commit serious human rights abuses and other corporate crimes with little accountability for doing so.
The governance gap may be exacerbated when law enforcement in the host State where the harm occurred is unwilling or unable to pursue the case. The corporate actor may exercise significant economic and political power and influence in the host State, and law enforcement may be under-resourced or have weak institutional capacity. As such, legal action against corporate actors is rarely taken. There may also be specific practical barriers to overcome – the corporate entity involved in the abuse may no longer operate in the host State, other corporate actors involved may have fled the jurisdiction or the corporate entity (including its subsidiary or affiliates) may have insufficient assets or resources in the host State to meet any fine.
Home State laws may not provide for jurisdiction over offences committed abroad. Even where grounds for exerting jurisdiction exist, law enforcement may not know they can assert jurisdiction or may be reluctant to do so because the harm occurred in another country. The prosecutors may also need to overcome certain additional procedural hurdles before exercising jurisdiction. These may include: (1) the need to obtain consent from senior and other government officials; (2) legal restrictions on the home State prosecuting crimes more closely connected with another State; (3) a requirement that the relevant act be an offence in both the home State and the host State; or (4) a requirement that the suspect be present in the jurisdiction.↥ Back to top
Where the relevant host State is unable or unwilling to exercise jurisdiction, or where remedies provided to victims have not been effective, law enforcement in home States should, as a matter of principle, exercise jurisdiction over all cross-border corporate crimes cases that come to their attention, taking the following into account:
- Whether the State is obligated under international law to investigate and prosecute the case (see sources in Endnote 1);
- The possibility of victims not achieving effective remedies in any other jurisdiction; and
- The challenges or threats that victims and witnesses may face if the case is pursued in an alternative jurisdiction.
When determining whether the State should exercise jurisdiction, law enforcement should consider all potential bases for asserting jurisdiction, such as the following:
- Nationality and location of the victims and the relevant corporate actors;
- Location of the harm;
- Location of the evidence;
- Where the elements of the offence were committed; and
- The role played by the corporate actors in the wrongdoing and the location of the corporate entity’s subsidiaries and affiliates, business activities and assets as well as where key decisions were made.
If law enforcement determines that it is legally or practically impossible to exercise jurisdiction, they should refer the case to appropriate authorities in another relevant jurisdiction (such as where any corporate actors involved may be registered, are nationals or reside). They should commence discussions with relevant jurisdictions as early as possible to determine who is in the best position to successfully investigate and prosecute the case. They should then cooperate with any investigation and prosecution in that jurisdiction and, as appropriate, offer support to law enforcement.↥ Back to top
The prosecution for genocide and war crimes of a Dutch businessman who supplied chemicals to Saddam Hussein’s regime in Iraq shows how pursuing cross-border cases not only ensures justice for victims but also catalyses action in future cases.
Between 1984 and 1988, Dutch national Frans van Anraat purchased large quantities of thiodiglycol from the United States and Japan and then sold the chemicals through numerous companies in different jurisdictions to the government of Saddam Hussein in Iraq.20 The government used the thiodigylocol to produce mustard gas.21 The gas was used in chemical weapon attacks by the Iraqi government against the Kurds in Iraq in 1987 and 1988, including an attack in Halabja that killed over 5,000 people.22
Van Anraat was originally arrested in Italy in 1989 at the request of the U.S. government.23 He was released on bail and then fled to Iraq, where he stayed until 2003.24 In December 2004, van Anraat was arrested in the Netherlands and charged with complicity in genocide and war crimes for, among other things, providing the opportunity and/or means to commit those crimes by supplying chemicals.25 He was prosecuted under Article 1 of the Genocide Convention Application Act and Article 8 of the Criminal Law in Wartime Act, in conjunction with Article 48 of the Dutch Penal Code.26
In December 2005, van Anraat was found guilty by a court in The Hague of complicity in war crimes and sentenced to fifteen years in prison (later extended to seventeen years).27 Although the court found that the attacks against the Kurds amounted to genocide, it found van Anraat not guilty of complicity in genocide due to insufficient evidence that he knew of the genocidal intent of the Iraqi government.28 In March 2013, a Dutch court ruled that van Anraat must pay €25,000 (then US$33,000) each to sixteen victims who originally joined his criminal case as plaintiffs to seek civil damages.29
The case is notable because it is relatively rare for corporate actors to be charged with international crimes and because it was one of the first such international crime cases brought in the Netherlands. Originally established in 1994 to investigate war crimes in the former Yugoslavia, the Dutch International Crimes Unit that brought the case is now widely recognised as one of the most effective and active units specialising in international crime. It consists of both investigators and prosecutors as well as specialist consultants hired on a case-by-case basis.30↥ Back to top
A 2006 toxic waste dumping case involving multinational commodities trader Trafigura shows how a corporate crime case involving multiple jurisdictions can give law enforcement in relevant jurisdictions legal grounds to take action. The case is also relevant to Principle 5 (Collaborate widely to ensure accountability for corporate crimes, particularly in cross-border cases), as it shows how a lack of international cooperation and experience in tackling cross-border cases obstructs justice.
In August 2006, toxic waste was dumped at various locations in and around the city of Abidjan, Côte d’Ivoire. The waste had been generated by Trafigura by using caustic soda to “wash” on board a vessel at sea an extremely sulphurous petroleum product called coker naphtha. Trafigura intended to mix the cleaned naphtha with gasoline and sell it to the West African market, among others, for a profit of around US$7 million per cargo. This process (called “caustic washing”) produces a hazardous and highly-odorous waste product. Trafigura attempted to dispose of the waste in Amsterdam using a company that processed ships’ waste. The company unloaded half of the waste from the ship but, the next morning, residents near the port complained of a bad smell and experienced nausea, dizziness and headaches. The company tested the waste and realised it was more contaminated than Trafigura had led them to believe. Trafigura rejected the company’s offer to dispose of the waste safely in the Netherlands for €544,000 (then US$694,000). The waste was loaded back onto the ship and ultimately dumped in Abidjan by a local company hired by Trafigura to dispose of the waste for just under US$17,000.31
As a result of the dumping, over 100,000 people sought medical assistance, and extensive clean-up and decontamination was required. Côte d’Ivoire authorities recorded about fifteen deaths.32 At the time of publication, the extent of ongoing pollution and the long-term health impacts of the dumping remain unclear.
In September 2006, authorities in Côte d’Ivoire arrested two Trafigura executives who visited the country following the dumping and charged them with poisoning and breaches of public health and environmental laws.33 In October 2006, authorities also started a damages claim against Trafigura for 500 billion West African francs (then around US$1 billion).34 In February 2007, Trafigura entered into a settlement agreement with the Côte d’Ivoire government for 95 billion West African francs (then around US$200 million) with no admission of liability.35 In return, Trafigura and its executives and employees were granted blanket protection from any legal proceedings in Côte d’Ivoire, effectively granting them immunity from prosecution. The following day, the Trafigura executives were released from prison and left the country. The prosecution against them was subsequently dropped due to insufficient evidence. Ultimately, successful prosecutions were brought against only two local residents who were not Trafigura employees.36
Criminal actions were also explored in the Netherlands and the United Kingdom. Action was pursued in the Netherlands because the parent company of the Trafigura group was based there and because of Trafigura’s attempt to dispose of the waste in Amsterdam. Actions were pursued in the United Kingdom on the basis that Trafigura’s UK subsidiary coordinated the events leading to the dumping.
In September 2006, Greenpeace filed a report with the Dutch Public Prosecutor requesting that a criminal investigation be instigated into offences relating to the dumping of the waste in Côte d’Ivoire.37 In June 2008, Dutch prosecutors brought limited charges against Trafigura and an employee in relation to the events that occurred in the Netherlands (i.e., illegally importing and exporting the waste). Trafigura was found guilty and eventually fined €1.3 million (then around US$2 million).38 Although having jurisdiction under the Dutch Penal Code, prosecutors decided not to prosecute Trafigura for the dumping in Abidjan because, despite attempts to do so, it “appeared impossible” to conduct an investigation in Côte d’Ivoire.39
In March 2014, Amnesty International sent a detailed legal brief and supporting evidence to UK authorities calling on them to investigate whether Trafigura’s UK subsidiary conspired in the United Kingdom to dump the waste in Abidjan.40 In March 2015, the UK Environment Agency refused to investigate despite acknowledging that, if the allegations were true, “a serious offence was committed with a relevant aspect of the conduct taking place within the jurisdiction”.41 The Environment Agency acknowledged that, despite having a criminal enforcement unit, it lacked the resources (particularly due to government financial cuts), expertise and capacity to pursue the case. The Environment Agency only agreed to look at Amnesty’s evidence under threat of judicial review proceedings.42
Civil actions have also been pursued in the United Kingdom, the Netherlands and Côte d’Ivoire.
In November 2006, 30,000 victims of the dumping brought a civil claim against Trafigura in UK courts.43 Under a September 2009 settlement agreement, Trafigura agreed to pay £30 million (then US$45 million), amounting to around £1,000 (US$1,500) to each person with no admission of liability for the dumping.44
At the time of publication, victims are still pursuing civil proceedings against Trafigura in Côte d’Ivoire and the Netherlands.
As such, while Trafigura has been subject to civil and criminal proceedings related to the dumping and paid some compensation to victims, it has never admitted responsibility, or been properly held to account, for its role in the actual dumping of the waste.45
Trafigura denies responsibility for the dumping and maintains that this case and earlier publications contain significant inaccuracies. It disputes in particular that the matter has not been subject to proper judicial scrutiny, that the dumpsites have not been remediated and that the long-term health impacts of the dumping remain unclear. Trafigura also maintains that it believed the local company would dispose of the waste safely and lawfully.46↥ Back to top
A case involving serious human rights abuses in the Democratic Republic of the Congo (DRC) and Canadian/ Australian multinational Anvil Mining Ltd. illustrates how the failure of States to assert jurisdiction can leave victims with no avenue to obtain justice or an effective remedy. This case is also relevant to Principle 3 (Guarantee accountability and transparency in the justice process when pursuing corporate crimes) because it shows that a government policy of deliberately not commenting on individual investigations, to any degree, can detract from ensuring that victims have adequate information, accountability and transparency with respect to the process itself.
In 2004, a United Nations in-country investigative mission found that multinational Anvil Mining LTD (Anvil Mining) had provided logistical support to a Congolese army operation carried out in October 2004. This operation had been conducted to counter an attempt by a small armed rebel group to take over the town of Kilwa, a key port for the company’s operations.47 The UN report stated that Anvil Mining had provided the army with trucks, food, lodging and other logistical support for the operation.48 In addition it found that planes, chartered by Anvil Mining to evacuate its personnel to the nearby city of Lubumbashi, were used to transport around 150 soldiers back to Kilwa.49 The UN report stated that, during the operation, soldiers from the army murdered and tortured civilians. The UN concluded that seventy-three civilians were killed, including at least twenty-eight who were summarily executed.50 In response, Anvil claimed that the logistical support was forcibly requisitioned by authorities and has publicly denied that the company or its employees committed any wrongdoing.51
In October 2006, a Congolese military prosecutor charged three employees of Anvil Mining’s DRC subsidiary with aiding and abetting war crimes committed by the Congolese army.52 These employees, as well as nine Congolese soldiers, were tried before a DRC military court between December 2006 and June 2007 under, among other things, Articles 173 and 174 of the DRC Military Code and Article 8 of the Rome Statute of the International Criminal Court.53 Ultimately, all twelve defendants were found not guilty. The court also found Anvil Mining’s DRC subsidiary “not guilty” despite the company never being formally tried before the court.54
Contrary to the findings of the UN investigation, the Congolese court held that no summary executions had occurred in Kilwa, but that people had been killed during “fierce” fighting between the rebels and the army.55 As a reaction, the United Nations High Commissioner for Human Rights at the time publicly expressed serious concerns about the verdict.56 Non-governmental organisations (NGOs) expressed concerns relating to flaws in the trial process, including intimidation of witnesses and political interference.57 In February 2008, the military court denied the victims’ appeal against the judgment. Subsequent criminal actions were explored in Australia and Canada because of relevant links. Australia was chosen because the ultimate parent company of the corporate group was listed on the Australian Stock Exchange. It was the principal place of business of Anvil Mining, as well as the jurisdiction of incorporation of one of the holding companies of Anvil Mining’s DRC subsidiary. Furthermore, the CEO at the time, Bill Turner, who publicly represented the company’s view on the events that occurred in Kilwa on Australian TV, was Australian.58 Engaging a third jurisdiction, the ultimate parent company had legally reorganised in Canada at the time of the incident and was listed on the Toronto Stock Exchange. The Canadian entity directly employed two senior employees of the Congolese entity, both of whom were Canadian, one of whom managed the Congolese operations. 59
The Australian Federal Police opened an investigation into the Australian entity in September 2005 based on acts carried out in the DRC, but advised that they closed the case following the military court decision. They advised that investigations could be re-opened if new evidence came forward.
In March 2007, Rights and Accountability in Development (RAID) and Global Witness asked the Canadian Minister of Justice to open a formal investigation into the Canadian entity based on acts carried out in the DRC.60 The War Crimes Unit of the Royal Canadian Mounted Police (RCMP) in Canada opened an investigation, but its current status, many years later, is unknown. In a letter to RAID and Global Witness of June 2007, the Minister of Justice and Attorney General of Canada stated that “it is generally contrary to Canadian government policy to comment on individual investigations, or even to provide information as to whether or not a particular investigation is being conducted”.61 In August 2016, RAID, acting on behalf of victims, wrote to the RCMP seeking an official statement relating to the status of the investigation. A response is pending.
The victims also made subsequent attempts to seek compensation through non-criminal processes in Anvil Mining’s home States of Australia and Canada but faced significant hurdles.
The victims’ preliminary efforts to obtain disclosure of documents prior to starting a civil lawsuit in Australia had to be abandoned when DRC authorities refused to allow the victims’ legal representatives to travel to Kilwa to meet the claimants. The DRC lawyers received death threats and the Australian law firm withdrew. Given the extremely limited financial means of the Congolese claimants as well as the security threats that had blocked access to Kilwa and prevented confirmation of the lawyers’ instructions, it was not possible at that time to approach another law firm to take up the case.
In November 2010, the Canadian Association Against Impunity (CAAI), an organisation established by an international consortium of NGOs with the primary purpose of undertaking a class action, filed a class action complaint in Québec on behalf of the victims.62 Although the lower court in Québec ruled that it had jurisdiction and that there was no other viable forum for the victims to seek justice, the Québec Court of Appeal overturned this decision in January 2012.63 The appellate court ruled that, on the facts of the case, the conditions for taking jurisdiction under Québec law were not met.64
In May 2014, the African Commission on Human and Peoples’ Rights agreed to hear a complaint submitted on behalf of the victims against the DRC for violations of the African Charter on Human and Peoples’ Rights.65 At the time of publication, there has not been a ruling on this complaint.↥ Back to top