Seeking Justice: The State of Transnational Corporate Accountability
abstract. Corporations have dramatically expanded their transnational political and economic influence since World War II, primarily through investment, litigation, and lobbying. Domestic and foreign legal systems, meant to uphold human rights and sanction bad actors, have not evolved adequately to address the magnitude of corporate power or the realities of transnational business operations and corporate abuse of human rights. Historically, workers in global supply chains and communities located near multinational business operations have borne the brunt of this unbalanced dynamic, paying handsomely for the shattering consequences of corporate externalities and enjoying few, if any, effective means of redress. Creative and resilient victims and their counsel, however, have over the last few years made headway in several respects against corporate impunity for transnational human-rights abuses. This may usher in a new era characterized by greater accountability, as the corporate duty of care expands and real consequences for human-rights due-diligence failures are imposed.
This Essay highlights selected opportunities and challenges in the evolving landscape for corporate accountability for human rights abuse in transnational supply chains. It focuses on legislation and litigation in Global North countries, paying particular attention to the emergence of due-diligence legislation across Europe and diverging trends in civil litigation.
Perhaps the most emblematic case of corporate impunity for transnational human-rights abuse involves the Indigenous Ogoni people of the Niger Delta and their struggle against the Dutch and British oil giant, Shell (formerly known as Royal Dutch Petroleum). The Ogoni people claim that Shell’s Nigerian operations have severely damaged the environment and robbed residents of food sources and income. In the 1990s, Nigerian soldiers, allegedly at the behest of Shell, sowed terror through physical, sexual, and psychological violence across Ogoni communities opposing Shell’s operations. This repression culminated in 1995, with the Nigerian government leveling false accusations of murder and other crimes against Ken Saro-Wiwa and eight other Ogoni activists, for which they were publicly hanged.1 These tragic deaths set off a decades-long search for justice that would take members of the Ogoni community to courts across the globe. Saro-Wiwa’s family and their organization, the Movement for the Survival of the Ogoni People, have diligently fought to compel Shell to clean up the thousands of oil spills that have polluted the Ogoni people’s ancestral lands and for reparations to compensate victims of human-rights violations.2 Over the course of nearly three decades, this struggle has come to symbolize both the extraordinary difficulties plaintiffs face in these kinds of cases and the sometimes novel opportunities that are available to those who nevertheless remain undaunted in seeking justice.
This Essay explores the evolving landscape for corporate accountability across the globe and the challenges and opportunities for survivors who, like the Ogoni, are resilient, adaptive, and steadfast. Affected communities pursuing vindication of their rights quickly encounter a paradox: we live in an economically interconnected world where commercial activity knows no borders,3 but the practice of law is largely domestic. Despite some international tribunals with limited jurisdiction4 and some cases in domestic courts premised on international law (which often stop short of holding private actors accountable), most disputes are adjudicated in domestic courts, under domestic law. This leads to massive gaps in accountability, particularly where survivors are harmed in countries in which the perpetrator does not reside.
In these cases, victims often lack effective recourse against the corporation in their home country for reasons such as lack of personal jurisdiction over the corporation,5 judicial corruption, underfunded courts, and the risk of physical danger.6 On the other hand, when victims seek recourse in the jurisdiction where the corporation is based and personal jurisdiction is assured, courts often find a lack of subject-matter jurisdiction over harms that occurred abroad7 or dismiss cases under discretionary doctrines like forum non conveniens.8
The rules and legal cultures that are relevant to transnational corporate accountability vary from country to country. Even if victims can surmount the physical, educational, and financial barriers to seeking recourse, they face the extraordinarily complex task of determining where to bring suit, finding lawyers to represent them, and choosing among myriad legal strategies that offer distinct types of remedy, highly varying odds of success, and, in all cases, significant uncertainty.
Adding to the ambiguity, legislation and evolving doctrine in the past fifteen years have transformed previously promising forums into dead ends and opened new opportunities in places that had been overlooked. Although the pace of change is accelerating, particularly with respect to the emergence of corporate due-diligence regulatory frameworks, civil-liability trends in the countries where multinational corporations are typically based are equivocal. In recent years, U.S. courts have resisted corporate accountability for transnational human-rights harms while courts in other jurisdictions have trended in more encouraging directions.
All of this is taking place in the context of increasingly favorable international legal norms (especially “soft law”), which in some instances are becoming jurisprudential reference points in domestic courts. In Part I of this Essay, we briefly discuss the roadblocks that have historically impeded corporate civil liability for transnational harms.9 In Part II, we turn to new opportunities and challenges, including the evolution of soft law, the emergence of due-diligence laws and regulations, and landmark judicial rulings. In Part III, we explore promising new approaches for holding transnational corporations accountable.
I. barriers to effectiveness of civil litigation
Primarily in common-law jurisdictions, civil litigation has been a useful tool in obtaining compensation for personal or economic injury. In a transnational human-rights context, however, civil litigation in domestic courts has seen highly variable results—both within and across jurisdictions. A key strategic consideration when bringing such cases is deciding whether to pursue claims based on customary international law (CIL), even when CIL squarely encompasses the claims.
CIL is comprised of practices states enact “general[ly] and consistent[ly],” as well as “from a sense of legal obligation.”10 Like treaty law, CIL is legally binding on states, although it can be difficult to determine what norms constitute CIL and how they should be enforced. CIL reflects substantial global consensus on a set of norms and is thus a promising tool for addressing gross transnational human-rights violations. At present, the set of CIL norms is limited but significant. CIL norms are generally understood to include prohibitions on slavery, the use of force, genocide, gross violations of the right to self-determination, and racial discrimination.11
CIL is potentially useful in reaching conduct occurring outside of the forum in which a case is brought, and unlike a treaty, CIL does not need to be signed and ratified by a country for that country to be bound by it internationally,12 as both the Restatement (Third) of Foreign Relations Law of the United States and the International Court of Justice recognize.13 However, although states’ human-rights obligations under CIL are the subject of a substantial body of scholarship and are debated and negotiated at the United Nations, they can be hard to enforce domestically, especially when national legislation has not established a cause of action for CIL claims.14
Notably, U.S. courts have typically required a statutory rationale for bringing claims of CIL norm violations,15 despite the absence of any law precluding the direct pleading of violations of CIL norms.16 In many cases, plaintiffs in U.S. courts have consequently turned to the Alien Tort Statute (ATS) as a vehicle for bringing claims, given its provision of a cause of action based on certain international law norms.17 The utility of that statute, however, has narrowed dramatically in recent years, particularly as it applies to alleged violations by companies.18
Civil litigation can be hampered by other jurisdictional and procedural restrictions as well. For example, the forum non conveniens doctrine has posed a significant obstacle for human-rights litigants in the United States.19 In addition, plaintiffs can face very short statutes of limitations under ordinary tort law, regardless of whether a court applies the limitations period of a U.S. state, other country in the Global North, or country where the harm occurred.20
Corporations have used these restrictions in conjunction with substantive corporate law, as well as a regulatory environment that generally prescribes voluntary corporate social-responsibility measures rather than mandates backed by tangible consequences for noncompliance, to stand in the way of the most economically efficient means of addressing human-rights abuses: placing liability on the actor that is best situated to prevent abuse and to remedy it when it occurs. In other words, such doctrines enable impunity for acts that lie at the very heart of common patterns of abuse.
II. new and emerging opportunities and challenges
By enacting new laws and developing domestic jurisprudence, some jurisdictions are creating opportunities for victims of human-rights abuse to seek recourse. The opportunities vary in terms of complexity and promise. In some cases, a victim can file a case under ordinary tort law in the jurisdiction where the relevant company is based, while in others the path is more circuitous.
The UN Guiding Principles on Business and Human Rights (UNGPs),21 first introduced in 2011, reflected and reinforced a growing consensus around human-rights norms that has spurred companies and governments to begin to come to terms with corporate responsibility for supply-chain harms. The UNGPs articulate the norm that companies should avoid infringing on human rights22 and, to the extent that they fail to do so, have a responsibility to address the adverse impacts of their conduct.23 To achieve this, businesses are expected to conduct due diligence24 by identifying and assessing actual and potential adverse human-rights impacts associated with their operations, implementing measures to prevent and mitigate such impacts,25 tracking the effectiveness of these measures,26 and reporting27 on their human-rights due-diligence efforts.
The UNGPs have gained significant traction with companies and are now widely accepted,28 at least rhetorically. It is often expected that certain corporate activities (e.g., grievance mechanisms set up by companies under which human-rights complaints from workers, community members, and other stakeholders can be heard and potentially addressed) will be “UNGP compliant.”29
Although the UNGPs are not the sole driver of change, and in many ways now represent minimum standards, their influence is undeniable, particularly in relation to mandatory human-rights due-diligence legislation. It is therefore appropriate to view them in relation to more obligatory legal instruments. With the UNGP framework as a backdrop, the following sections highlight cases and legislative developments gaining attention in the field, with the caveat that even more significant shifts in the near-term are almost assured.
A. European Due-Diligence Laws
Mandatory human-rights and environmental due-diligence laws started in a few European countries but are poised to become the norm across the continent.30 These laws take different forms from jurisdiction to jurisdiction. Although a due-diligence provision that would greatly expand corporate civil liability for human-rights and environmental abuses was formally proposed in one European country, it was not actually enacted.31 Advocates have, however, begun to experiment in specific cases with ways that due-diligence requirements can give rise to tort liability, even absent an express right to remedy for victims.
These new laws are building a regulatory framework in Europe that will impact companies’ activities around the world, no matter where they are based. Divergent rules for companies across jurisdictions may create uncertainty and difficulty with compliance, but companies might choose to comply with the most stringent rules covering any significant part of their operations because of the infeasibility of complying with different rules in different jurisdictions.32
Critics have raised concerns about the structure of the due-diligence model, arguing that it may allow companies to conduct merely performative sustainability practices.33 This critique is rooted in the fact that the due-diligence model is process oriented, targeting the way supply chains are managed, rather than outcome oriented, which would hold companies accountable for abuses whenever they occur. The extent to which these laws will create new avenues, albeit indirectly, for civil claims by victims of corporate human-rights abuses remains to be seen.
This Section describes and assesses recent laws and the extent to which they live up to the potential of effective due-diligence models. We begin with a recent European Union (EU)-wide initiative and then explore legislation in France, Germany, and the Netherlands.
1. The EU’s Due-Diligence Directive
On February 23, 2022, the European Commission moved a proposal forward for an EU-wide directive on corporate-sustainability due diligence.34 The aim of the directive is to “translate the principles laid out in the UNGPs and the OECD Guidelines into legal requirements for companies.”35 To that end, the directive imposes a legal obligation on certain companies to conduct environmental and human-rights due diligence.36 Under the directive, each EU member state must incentivize compliance by establishing administrative penalties and a civil-liability regime for abuses, and businesses must address the adverse impacts of their actions regardless of where such impacts occur. As a result, this mechanism at least partially addresses critics’ concerns about failing to remedy harms to victims.
Even if one accepts the basic conceptual framework of the directive, which does not afford rightsholders a role in determining how businesses will address human-rights violations, it embodies significant compromises that may undermine its ultimate impact. First, limitations on the scope of application will make it easy for some companies to evade responsibility. The directive would only apply to those companies with whom the target company had an “established business relationship,” a concept that is vaguely defined, apparently subject to the company’s own interpretation, and would likely exclude a significant number of suppliers.37 Further, given the thresholds based on company size and profits, less than one percent of EU companies would be subject to the law.38
Second, while the directive does require member states to establish a private right of action for violations, it also creates a loophole when companies have taken certain due-diligence steps.39 This may incentivize companies to conduct due diligence in a perfunctory manner, then use that as a shield from liability.
Finally, the directive allows companies to rely on third-party social auditors to monitor supply chains, despite significant data indicating that the social-auditing model is failing workers as well as impacted communities.40 Social audits can afford companies the appearance of being concerned about human-rights violations in their supply chains while they avoid knowledge of, and responsibility for, egregious harms.
2. France’s Duty of Vigilance Law
The directive follows the passage of several laws in European jurisdictions that relate to supply-chain due diligence. France’s Duty of Vigilance Law introduced new provisions into the French Commercial Code requiring large companies (those with more than 5,000 employees in France or 10,000 worldwide, including subsidiaries) to establish, publish, and effectively implement vigilance plans.41 The plans apply to the activities of suppliers and subcontractors where there is an “established commercial relationship.”42 Although the contours of how courts will enforce the Duty of Vigilance Law are still being defined, the law provides a preventive enforcement mechanism for injunctive relief to induce compliance with new requirements, notably including publication and adequate implementation of a “vigilance plan.”43 Under the law, vigilance plans should adequately identify risks and prevent serious human-rights violations and harm to the environment.44 They apply to the company, companies under its control, and suppliers with which it has an “established commercial relationship.”45
The first case under the Duty of Vigilance Law, filed in October 2019 against French oil giant Total, is ongoing. In that case, six nongovernmental organizations (NGOs) sought an order to compel Total to revise its vigilance plan, and implement an improved one, for a large oil project in a protected natural park in Uganda.46 The project’s initial activities allegedly displaced thousands of people who, according to the plaintiff NGOs, had not been adequately compensated.47
The outcome of that enforcement action will be a strong indicator of whether the Duty of Vigilance Law successfully requires companies to create and implement effective vigilance plans.48
3. Germany’s Supply Chain Act
Germany’s Supply Chain Act arose from a robust civil-society effort to regulate transnational corporate activity, but the strength of the bill was significantly diluted before passage. Taking effect in January 2023, the Act requires companies to use best efforts to conduct certain due-diligence activities—including managing risks, remedying violations, and establishing grievance mechanisms—in several risk areas.49 The law will initially apply only to German companies with more than 3,000 employees.50 After the first year, it will apply to companies with more than 1,000 employees.51 A company’s obligations under the law apply to its own business operations and to those of its direct and indirect suppliers (from raw materials to finished goods for consumers), although the company’s obligations extend to indirect suppliers only when the company has “substantiated knowledge” of human-rights or environmental violations.52
The law requires a company to terminate a business relationship with a supplier when a human-rights or environmental violation is serious, there is no feasible remedy, and there are no other mitigating measures available to the company.53 Companies that fail to comply with the Act’s due-diligence obligations can be fined and barred from public contracts.54 Significantly, the Act allows German trade unions and NGOs to represent claimants before German courts in cases related to violations of human-rights and environmental standards in German supply chains.55
The Supply Chain Act’s best-effort requirement is not precisely defined, and the Act does not require the company to be effective in preventing abuse.56 In other words, the entire focus is on the quality, rather than the effectiveness, of the companies’ efforts. Similarly, the “substantiated knowledge” standard that pertains to indirect suppliers could have the effect of limiting companies’ efforts to root out abuses in their supply chains. They might intentionally avoid knowledge of the activities of their indirect suppliers and thereby attempt to evade responsibility for human-rights violations arising from those activities.
German civil-society organizations have called the final version of the law “a good start” but far from a “model” supply-chain law.57 Strengths of the law include mechanisms for oversight and enforcement, the opportunity for NGOs to bring claims on behalf of impacted communities (through already-existing causes of action), and some environmental provisions based on international conventions.58 Weaknesses have been identified as the failure to extend obligations to indirect suppliers, an absence of a civil cause of action for failure to comply, and gaps in protecting against gender-based violence and recognizing Indigenous rights.59
4. The Netherlands’ Child Labor Legislation
In 2019, the Dutch Senate adopted a fairly narrow law establishing a corporate duty of care to prevent child labor.60 That law is still subject to modification as well as refinement through implementing decrees.61 Nevertheless, if the law is implemented more or less as currently formulated, it will require companies to investigate whether there is a “‘reasonable suspicion’ that child labour occurs in their operations or in their supply chain and to set out a plan of action to prevent or combat it.”62 In addition, companies would have to produce compliance statements to be made publicly available by the Dutch government.63
The child-labor law as adopted would apply to Dutch companies as well as foreign companies that deliver products or services to the Netherlands at least twice a year.64 Companies could be fined for failing to produce compliance statements or failing to comply with their due-diligence duties.65
Not only is the coverage of this new law very limited—it does not cover human-rights violations other than child labor—but liability flows only from failure to establish or articulate a plan, and the law does not confer a remedy on victims.66 The Dutch law is thus best characterized as a hesitant step in the direction of an effective human-rights compliance mechanism.
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Taken together, European efforts to regulate corporate behavior in global supply chains represent an important, if preliminary, step. Absent rules that create civil or criminal liability based on outcomes, and not just processes that may or may not function as advertised, some companies may invest more in the appearance of engagement than in preventing and remediating harm. The following section looks at the role of civil liability and import bans in changing corporate behavior across several jurisdictions.
B. Landmark Global-North Cases
The corporate world—especially in Global-North countries—has established a record that is replete with human-rights abuses in Global-South countries, both in exploiting mostly Black and brown workers for cheap labor and causing devastating environmental and economic harm. Thus, from the thousands of oil spills and attacks against Ogoni advocates in the Niger Delta67 to the internment of Uyghurs and other Turkic people in Chinese work camps,68 evidence suggests that corporations have extracted value from the poorest corners of the world at great cost and with few consequences.
We discuss in this Section how courts in some Global-North jurisdictions have embraced principles of law that expand the potential for corporate accountability for harms across international supply chains. We do not discuss such cases in the Global South, as civil litigation for human-rights harms has not been used there historically (although that appears to be changing).69 What follows is by no means an exhaustive list of the relevant Global-North cases. Rather, we have focused on cases that suggest the paths that appear most promising for transnational human-rights litigation.
1. The Supreme Court of Canada’s Landmark Nevsun Ruling
In 2020, the Supreme Court of Canada (SCC) decided Nevsun Resources Ltd. v. Araya,70 a case in which a Canadian company was sued for alleged violations of CIL in Eritrea. A 5-4 majority of the SCC held that CIL norms are actionable under Canadian tort law.71 This case shows that, unlike in jurisdictions where implementing legislation is thought necessary for a CIL norm to be actionable, litigants against Canadian companies can plead breaches of CIL directly.
The Eritrean plaintiffs alleged that they were indefinitely conscripted to work in the Bisha mine between 2008 and 2012 as part of the Eritrean government’s obligatory National Service Program, which places individuals in direct military service or on construction projects purportedly for the national interest.72 As a result, the plaintiffs sought damages for “forced labour; slavery; cruel, inhuman or degrading treatment; and crimes against humanity,” which CIL prohibits.73 The plaintiffs also sought damages for Canadian torts including conversion, battery, false imprisonment, conspiracy, and negligence.74
But the issue at the heart of the case was whether norms of CIL may form the basis of a tort claim under Canadian law. On that issue, the SCC held that the particular harms alleged likely rose to the level of jus cogens,75 which are violations of norms from which there can be no derogation (that is, no discretion for the court to excuse the violation and no weight given to any conflicting laws). The SCC wrote: “Canada has long followed the conventional path of automatically incorporating customary international law into domestic law via the doctrine of adoption, making it part of the law of Canada in the absence of conflicting legislation.”76 Although this suggests that the decision is consistent with preexisting Canadian jurisprudence, the decision remains highly significant because the plaintiffs pled violations based directly on international law without relying on any statute to incorporate CIL into domestic law.
While promising, Nevsun was ultimately settled, leaving numerous questions unanswered. Chief among these are whether the legal characteristics of torts based on CIL differ from those of ordinary torts and whether the principles of liability for corporations mirror those applied to individuals.77 The central holding in this case, however, opens the door for victims of transnational human-rights abuses to bring claims in Canadian courts based on violations of jus cogens norms.
2. Vedanta and Other Civil Litigation in the United Kingdom
In a seminal decision in April 2019 that demonstrated the growing willingness of U.K. courts to hold corporations accountable for human-rights violations, the U.K. Supreme Court decided in Vedanta Resources PLC v. Lungowe that English courts could hear a lawsuit against a Zambian mining company and its English parent, Vedanta Resources PLC, for environmental harm in Zambia.78 The Court determined that the English parent company’s liability for the harms associated with the negligence of the Zambian subsidiary would depend on various factors, including the extent to which the parent corporation controlled the actions of its subsidiary.79 This finding was based in significant part on Vedanta’s sustainability reports, through which, the Court found, the parent assumed responsibility for overseeing the subsidiary’s environmental compliance through training, monitoring, and enforcement.80
More recently, in February 2021, the U.K. Supreme Court ruled in Okpabi v. Royal Dutch Shell that two Nigerian communities could bring their legal claims in U.K. courts against Shell and its Nigerian subsidiary.81 This overturned a split decision by the Court of Appeal and led Shell to abandon its strategy of seeking to have the dispute resolved by Nigerian courts.
Expanding upon Vedanta, the court in Okpabi held that there is no presumption against a finding of liability against the corporate parent.82 Moreover, for a parent to be held liable for the activities of its subsidiary, it does not need to control its subsidiary.83 Rather, the central issue is the degree to which the parent took over, or shared in, the management of the commercial operation in question.84
Multinational companies have often benefited from a heavy presumption against finding a parent company liable for the negligence of its subsidiary.85 Vedanta and Okpabi, however, may represent a new era for parent-company accountability, by allowing claims against parent companies even where they are treated for other purposes as distinct from their foreign subsidiaries.
3. Civil Litigation in the Netherlands
Dutch courts have jurisdiction over transnational cases involving Dutch companies—as is the case across Europe. Unlike in the United States, there is no forum non conveniens principle in the Netherlands that might cause Dutch courts to refuse to hear such cases because a more appropriate forum is available.86 Dutch courts also have jurisdiction against foreign defendants if they have jurisdiction over another defendant and the cases are so tightly connected that judicial efficiency requires aggregating them.87 Companies can be held civilly liable where it is established that the tortious act—encompassing violation of the rights of another, acts or omissions in violation of law, and acts contrary to “proper social conduct”—is attributable to the perpetrator, and Dutch courts often look to soft-law provisions to determine what constitutes “proper social conduct” in relation to rightsholders.88
In 2017, widows of the executed Nigerian activists referenced in the introduction to this Essay sued Royal Dutch Shell in the Netherlands, claiming that the company aided the Nigerian government in violently repressing the 1993-1994 peaceful protests against oil exploitation in the Niger delta, which led to the extrajudicial killing of their husbands. The court accepted jurisdiction in May 2019 and ordered Shell to provide internal documents to the plaintiffs.89 In March 2022, however, the Hague District Court dismissed the case, citing insufficient evidence linking Shell to the bribing of witnesses to provide false testimony at the “trial” leading to the activists’ executions.90 It is noteworthy that this case was decided on the merits because, historically, many such cases have not made it to that stage of proceedings.91
In 2021, in a similar case alleging harms to land and livelihood arising from oil spills in the same region in 2006 and 2007, the Hague Court of Appeals ordered Shell to pay damages to three victims, accepting that Shell could be held liable for actions of its Nigerian subsidiary.92 Taken together, these cases indicate that Dutch courts may offer a plaintiff-friendly forum for transnational corporate human-rights cases, but the body of case law remains limited.
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The cases from Canada, the U.K., and the Netherlands discussed in this section—in contrast to the approaches taken by many U.S. courts, discussed below—are helping to establish a strong framework in which corporations can be held liable for transnational human-rights harms.
C. The United States: What Remains After Kiobel, Jesner, and Nestlé?
The approach in federal civil litigation taken by the U.S. Supreme Court to CIL violations is diametrically opposed to the approach taken by the SCC in Nevsun. The U.S. approach is, in some ways, the paradigmatic example of judicial efforts to restrict challenges to transnational corporate abuse. Victims will generally have to look elsewhere for relief.
1. The Alien Tort Statute
In the early 1990s, the ATS appeared to provide a promising basis for human-rights litigation, including against companies.93 Since then, however, the U.S. Supreme Court has repeatedly narrowed the possibilities for the assertion of jurisdiction under the ATS, based largely on the presumption, which can be rebutted by explicit statutory language, that U.S. federal statutes are not intended to govern extraterritorial conduct. First, in Kiobel v. Royal Dutch Petroleum Co.,94 the Court, applying this presumption, held that the ATS does not confer jurisdiction over violations that occur entirely outside of the United States.95In Jesner v. Arab Bank, PLC,96 the Court further limited the statute, finding that foreign corporations may not be defendants in ATS suits.97 Most recently, in Nestlé USA, Inc. v. Doe,98the Court did not find the alleged misconduct to be sufficiently connected to the territory of the United States to justify claims under the ATS, despite the fact that the defendant was a U.S. company.99 In the absence of statutory reform, the ATS has functionally become a dead letter as a tool to address transnational human-rights violations by companies.
2. Litigating Forced-Labor Claims in U.S. Courts
Despite some concerning lower-court decisions, the Trafficking Victims Protection Reauthorization Act (TVPRA)100 is currently the most promising avenue in the United States for imposing civil liability on corporations for forced labor and human trafficking. The TVPRA’s civil-liability provision does not include any territorial limitations,101 nor does it limit liability to natural persons or individuals, meaning that corporate defendants can be held liable for relying on trafficked labor outside the United States.102 To recover under this provision, one must show the defendant knowingly benefitted from “participation in a venture” that the defendant knew or should have known violated the TVPRA.103 The TVPRA also includes criminal provisions.104
In a case in which it upheld awards of $1 million in compensatory damages and $2 million in punitive damages105 to an Ethiopian national subjected to egregious forced labor and trafficking abuses in Yemen, the U.S. Court of Appeals for the Fourth Circuit observed that “[v]iewed as a whole, the TVP[R]A represents a far-reaching congressional effort to combat transnational human trafficking on numerous fronts, including by expanding the civil claims and remedies available to its victims.”106 The court went on to find that the conduct of the defendant, a U.S. national, met the requirements for a private right of action under the TVPRA.107 This marked the first time a U.S. appellate court has exercised extraterritorial jurisdiction in a federal civil trafficking case.108
Some federal courts, however, have narrowly construed the TVPRA, limiting its efficacy for transnational human-rights violations. For example, in the 2021 case John Doe v. Apple Inc., the District Court for the District of Columbia dismissed a complaint filed against several major technology companies on behalf of children who were victims of hazardous child labor in cobalt-mining activities in the Democratic Republic of the Congo.109 The court held that the plaintiffs could not bring their claims because they failed to adequately identify the defendants’ conduct that caused the injury.110 This was in spite of the fact that the defendants’ products were alleged to be manufactured under precisely the kinds of conditions that are proscribed by the TVPRA, including forced and trafficked child labor.111
This outlier decision was based on several findings which, if not overturned on appeal, could have significant negative implications for the future of TVPRA litigation. First, the court found that “a ‘global supply chain’ is not a ‘venture,’” despite allegations of a continuous business relationship between the defendant companies and the Congolese cobalt-mining companies.112 Second, the court held that the statute did not apply extraterritorially.113 Third, the court rejected the plaintiffs’ argument that, as minors, they could not consent to work.114
Restrictive interpretations of personal jurisdiction and related requirements can also present challenges to actions filed under the TVPRA. In Ratha v. Phatthana Seafood Co., Cambodian villagers alleged that they had been trafficked and forced into labor by foreign seafood-production companies working with a U.S. entity and its affiliate.115 The Ninth Circuit, however, held that the foreign seafood producers lacked minimum contacts with the U.S. forum sufficient to establish personal jurisdiction and that the plaintiffs did not show that the other defendant entities knowingly benefitted from the alleged labor violations.116 Despite the U.S.-based entity’s attempts to import the seafood, the court emphasized that the product had been rejected by the retail seller and was never sold in the United States.117
Unless Ratha is overturned, its reading of the TVPRA effectively eliminates attempt liability, meaning liability for attempting to benefit from forced labor. The TVPRA’s ability to serve as a robust deterrent for proscribed conduct would be substantially undermined if this kind of liability is unavailable. Moreover, the ruling in Ratha is out of step with various U.S. forced-labor laws, including the Tariff Act of 1930 (specifically section 307),118 the Uyghur Forced Labor Prevention Act (UFLPA),119 and the Countering America’s Adversaries Through Sanctions Act,120 which prevent the importation into the United States of goods produced with forced labor when fully enforced.
Despite these restrictive rulings, the TVPRA is still one of the few statutes with the potential to provide a civil remedy for transnational forced and trafficked labor violations, including violations committed by corporations. Because the referenced rulings may well be overturned on appeal, the TVPRA remains a promising, if uncertain, option for plaintiffs seeking a civil remedy for transnational human-rights violations.
While the civil provisions of the TVPRA are an important tool to redress forced labor, civil-society organizations and victims of transnational corporate abuse are increasingly also looking to section 307 of the Tariff Act to leverage the United States’s key role as an importer of goods and disrupt the flow of forced-labor products in the global economy. Although section 307 does not provide remedy to victims directly, it does raise the specter of a significant adverse commercial consequences for companies that import goods made with forced labor.121
The U.S. forced-labor import ban was recently strengthened by the UFLPA for certain goods.122 In contrast to the due-diligence requirements that govern internal policies and practices of companies, import bans are based on supply-chain realities and can apply even where a company’s internal processes are not faulty. This approach is beginning to gain traction in other jurisdictions.123
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We have noted some significant setbacks at the federal level in the United States for transnational corporate accountability. There are certain federal statutes, however, that offer promising opportunities, including the TVPRA, section 307 of the Tariff Act, and the UFLPA. In addition, as discussed in Part III, the corporate-accountability community is working to develop and test new approaches to address and remediate transnational human-rights violations.
III. new frontiers: supply-chain contracting and consumer-protection tools
Plaintiffs may have alternative, innovative ways to obtain relief or deter corporate misbehavior. Supply-chain contracting and consumer-protection litigation represent relatively new methods for improving human-rights conditions along supply chains, although their effectiveness cannot yet be fully evaluated.
A. Supply-Chain Contracting
Many companies that source goods internationally now use supplier codes of conduct and sustainability clauses in their supply-chain contracts.124 This follows a general trend toward contractualizing human rights through business arrangements.125 Supplier codes of conduct can address issues like forced and child labor, working hours, health standards, environmental and sustainability standards, discrimination, and freedom of association. Sustainability clauses often include similar social and environmental provisions. At least on paper, where supplier codes of conduct and sustainability clauses are incorporated into purchase orders or standing contracts with international suppliers, they create a legal obligation for suppliers to respect human rights.126 These contracts can, and often do, provide substantive rights that exceed those provided under local law. However, because only buying companies have historically been able to enforce these clauses and often have financial incentives not to do so, they are rarely enforced.
In a series of pilot projects with institutional buyers, Corporate Accountability Lab (CAL) is experimenting with inserting express “third-party-beneficiary” clauses into transnational supply-chain contracts.127 These clauses name workers as third-party beneficiaries, recognizing their own independent legal right to sue the supplier when the sustainability clauses in the contract are violated. Because intended third-party beneficiaries can sue for contract enforcement,128 workers can enforce such contract provisions without relying on any action by the buying company. New contracts in the most recent pilot, in which the City of San Francisco is considering the incorporation of third-party beneficiary language into apparel procurement contracts, will likely go into effect starting in 2023.129
Key challenges for this approach include incentivizing companies (and public buyers) to adopt third-party-beneficiary provisions, making workers aware of their status as beneficiaries, and ensuring that workers have the resources (including legal resources) and security necessary to vindicate their contract claims. Nevertheless, the possibility of worker enforceability could improve supplier compliance in regard to human rights terms, and it could enhance workers’ access to justice—particularly when local courts in the jurisdiction where the harm occurred are unable to remediate the harm.
B. Consumer-Protection Litigation
Plaintiffs in at least four recent cases have brought claims under state or local law alleging deceptive product labeling with respect to human-rights standards. Two of those cases relate to the West African chocolate industry, an industry in which hazardous child labor is widespread.130 In Walker v. Nestlé USA, Inc.,131 the plaintiff alleges under California state law that Nestlé mislabeled its chocolate products as produced in accordance with environmentally and socially responsible standards when Nestlé actually sourced its cocoa from plantations that rely on child labor and forced child labor, contributed to deforestation, and employed other practices harmful to the environment.132 Similarly, in a complaint filed in the District of Columbia Superior Court, CAL makes false-and-deceptive-advertising claims under the D.C. Consumer Protection Procedures Act against Hershey, as well as its social auditor Rainforest Alliance.133 If successful, these cases may result in greater transparency and more accurate public-facing information from companies. Even if they are not successful, the prospect of such litigation may deter corporate sustainability misrepresentations.
The weakness of this approach is that consumer-protection litigation was not designed to create remedies for the victims of human-rights abuses themselves. Indeed, companies could respond to such litigation by changing their representations rather than remedying the underlying practices. Despite that possibility, such litigation has the potential to create leverage for better supply-chain due diligence. Moreover, by addressing both false advertising and “greenwashing,” proactive litigation can foster competition among companies to improve performance with respect to human rights.134
In Global-North courts, much remains unsettled for those seeking to hold corporate actors responsible for supply-chain human-rights abuses. There are positive litigation developments in both Canada and Europe, as well as new European legislation that has the potential to require that companies address human-rights violations in their supply chains. Meanwhile, in the United States, there have been some litigation setbacks amidst promising regulatory developments. The key goals for advocates will be stronger civil-liability provisions against abuses, new and enhanced prohibitions on imports tainted by human-rights violations, and the establishment of an effective remedial mechanism for rightsholders. The legal environment can, and indeed must, be shaped to address these goals.
Advocates should continue to employ and expand upon existing mechanisms for imposing liability on corporate perpetrators of human-rights abuses, restricting companies' ability to trade in goods produced by means of such abuses, and requiring that companies exercise human-rights due diligence. In addition, newly adapted mechanisms such as private contractual language intended to benefit third-party rightsholders and consumer-protection litigation are available (or potentially available) to that end. All of these tools and more are needed to address what continues to be a very substantial gap in corporate accountability, which directly causes and contributes to dire circumstances faced by individuals and communities around the world.
Charity Ryerson is the Executive Director of Corporate Accountability Lab (CAL), a legal design lab that she co-founded after litigating complex human-rights cases in the United States under the Alien Tort Statute. Dean Pinkert is Special Advisor to CAL, and Avery Kelly is a Staff Attorney at CAL.