Apr 21, 2016 | Op-Ed, Recent Developments
By Jisan Kim*
This year, the Asian Infrastructure Investment Bank (“AIIB”) will officially initiate its operations with $100 billion of capital. The AIIB aims to fund much-needed basic infrastructure projects in Asia, and it seeks to differentiate itself from existing multilateral development banks (“MDBs”) like the World Bank by not requiring privatization or deregulation as conditions for funding.
Some experts project that the AIIB will merely be a “symbolic institution with no real significance for the global financial system.” However, China has brought on board major U.S. allies, including France and the United Kingdom, as founding members of the new Bank. On the other hand, the United States and Japan, the largest shareholders of the World Bank and the Asian Development Bank respectively, declined to join the AIIB. The two countries likely view the new China-led Bank as “a lending rival that will reduce [their] leverage,” and they do not want to grant more power and credibility to the AIIB by joining it.
Even without the United States and Japan as members, the AIIB will have a significant impact on Asia and the world. However, whether that impact will be positive or negative is under debate. Although the AIIB will help fill the “massive infrastructure funding gap” in Asia, it may fund projects that do not meet the high international standards enforced by existing MDBs. If the AIIB does not operate under adequate standards, its projects may have negative consequences in many areas, including environment protection, human rights, and labor rights. China claims that the AIIB “will be rigorous in adopting the best practices of institutions such as the World Bank.” But critics are wary of this claim, given China’s track record with international standards.
No one can be certain until the new Bank decides which projects it will fund, but an assessment of the AIIB’s Operational Policies may shed some light on the direction toward which the AIIB is headed. Because the structure and function of the AIIB is similar to that of the International Finance Corporation (“IFC”), the private sector arm of the World Bank, the IFC Performance Standards on Environmental and Social Sustainability (“IFC Standards”) are the appropriate benchmark to evaluate the adequacy of the AIIB Environmental and Social Standards (“AIIB Standards”). Many parts of the AIIB Operational Policies mirror the text of the IFC Standards. But notable differences exist, and they may lead to distinct outcomes in practice. This feature will discuss some of the provisions pertaining to environmental and labor issues.
I. Environmental Standards
Many environmental provisions of the AIIB Standards are on par with that of the IFC Standards. For instance, in its pollution prevention section, the AIIB cites the World Bank Group’s Environmental, Health and Safety Guidelines (“EHSGs”) and ensures that its projects will follow the EHSGs. The AIIB in some areas (e.g. commercial logging operations) adopted “more progressive positions” than some of the other multilateral development banks. However, in other areas, AIIB Standards lack detail or are different in ways that may lead to arbitrary outcomes. The following are a few examples.
The IFC provides a detailed explanation on how adverse effects on the environment should be mitigated. Concepts such as “no net loss of biodiversity” and “set-asides” make the guidelines more specific and clear. On the other hand, the AIIB leaves out such details and simply requires “measures acceptable to the Bank.” Under this standard, if the AIIB is not rigorous in its evaluation of mitigation measures, recipients of funding may be able to get away with implementing measures that are superficial, cheap, and ineffective.
For projects in natural habitats, the AIIB requires a cost-benefit analysis whereas the IFC has no such requirement. Because the IFC does not have this requirement, the IFC may allow projects even if the overall benefit does not “substantially outweigh” environmental costs. However, cost-benefit analysis will not always lead to wise decisions. For example, the AIIB may allow projects that significantly destroy natural habitats by concluding that the overall benefit is higher than the cost. Also, because it is unclear how the AIIB will conduct cost-benefit analyses, the ultimate decision could be arbitrary. The cost-benefit analysis might be used to justify or defend AIIB’s decisions to value economic gain over environmental protection.
When critical habitats are involved, the IFC considers a project’s impact on “biodiversity values for which the critical habitat was designated” and the “ecological processes” supporting those values, whereas the AIIB focuses on the habitat’s “ability to function.” The IFC would not allow a project that would destroy biodiversity values, even if the habitat were able to function. On the other hand, the AIIB may allow a project by determining that a habitat may be able to function even if many of its biodiversity values are lost.
II. Labor Standards
The Core Labor Standards (“CLS”), which refer to a group of eight fundamental labor conventions, are regarded as the “international consensus on minimum best practices.” The CLS covers four general rights and principles of labor: child labor, forced labor, freedom of association and collective bargaining, and discrimination in employment and occupation. This feature will proceed to look at how the AIIB and IFC treat the four general issues of labor.
A. Child Labor
The Minimum Age Convention and the Worst Forms of Child Labour Convention (“Worst Forms Convention”) are the two “basic child labour Conventions” of the International Labor Organization (“ILO”). And complementing the two Conventions, the United Nations Convention on the Rights of the Child (“UNCRC”) “lays down a full range of children’s rights.”
The IFC Standards cover issues raised in all three of the instruments mentioned above. The opening sentence of the child labor section closely mirrors the language of Article 32 of the UNCRC:
“The client will not employ children in any manner that is economically exploitative, or is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral, or social development.” (para. 21, IFC Standards)
The following two IFC clauses on hazardous work incorporate language from the Worst Forms Convention and its supplemental Recommendation No. 190:
“Children under the age of 18 will not be employed in hazardous work.” (para. 21, IFC Standards)
“Examples of hazardous work activities include work (i) with exposure to physical, psychological, or sexual abuse; (ii) underground, underwater, working at heights, or in confined spaces; (iii) with dangerous machinery, equipment, or tools, or involving handling of heavy loads; (iv) in unhealthy environments exposing the worker to hazardous substances, agents, processes, temperatures, noise, or vibration damaging to health; or (v) under difficult conditions such as long hours, late night, or confinement by employer.” (n. 12, IFC Standards)
Unlike the IFC Standards described above, the AIIB Standards seem to be focused on only the Minimum Age Convention:
“[I]n conformity with the International Labour Organization’s Minimum Age Convention, 1973, [] children at least 16 years of age may be employed for such work on condition that their health, safety and morals are fully protected.” (sec. D, AIIB Standards)
The Worst Forms Convention and the UNCRC do not appear in the AIIB Standards. The two Conventions may seem superfluous, but they each play an important role.
Several scholars have voiced concern that the Minimum Age Convention, standing alone, may fail to achieve its objective. The Minimum Age Convention requires that specific industries, such as mining and electricity, should be regulated as a minimum. If only some industries are regulated, the supply of child labor could move into other unregulated sectors. The Worst Forms Convention does not have this loophole because it lists the types of hazardous work that should be prohibited, regardless of industry.
Although the two Conventions together seem to grant full protection, another loophole still exists. Children between the age of 16 to 18 will be allowed to work as long as their “health, safety and morals . . . are fully protected” (Minimum Age Convention) and the work is not categorized as “worst forms of child labor” (Worst Forms Convention). Without the protection offered by the UNCRC, these children are simply treated as “regular workers” under the two ILO Conventions. But because the IFC Standards incorporate language from the UNCRC, the IFC additionally protects the “education” and “health or physical, mental, spiritual, moral, or social development” (UNCRC) of these child workers. The AIIB Standards, on the other hand, offers no such protection.
The IFC, by embracing all three Conventions, provides a stronger protection for children than does the AIIB.
B. Forced Labor
The AIIB provides the same level of protection as the IFC when it comes to forced labor. The AIIB explicitly prohibits forced labor, which it defines as “work or service not voluntarily performed that is exacted from an individual under threat of force or penalty.” This language is similar to the IFC Standards on the subject. Additional details are substantially the same as well.
C. Freedom of Association and Collective Bargaining
As for collective bargaining, the AIIB requires that clients adhere only to national laws in the countries where they operate, while the IFC attempts to offer further protection. When “national law substantially restricts workers’ organizations,” the IFC prohibits employers from “[restricting] workers from developing alternative mechanisms to . . . protect their rights” and “[influencing] or [controlling] these mechanisms.” IFC also protects participants in workers’ organizations from discrimination, retaliation, or discouragement by employers.
The AIIB, however, urges clients only to “[comply] with national law relating to workers’ organizations and collective bargaining” and does not attempt to provide any further protection on this matter.
D. Discrimination
The AIIB’s provision against discrimination is limited: employers should ensure, “consistent with relevant national law, employment on the basis of the principle of equal opportunity, fair treatment and non-discrimination.” The AIIB does not provide any additional detail or explanation.
The IFC Standards, on the other hand, includes important details in addition to enumerating the basic principles of equal opportunity, fair treatment, and non-discrimination. The IFC prohibits “employment decisions on the basis of personal characteristics (Such as gender, race, nationality, ethnic, social and indigenous origin, religion or belief, disability, age, or sexual orientation)” and “harassment, intimidation, and/or exploitation.” The IFC Standards also emphasizes that women and migrant workers should be well-protected.
E. Additional Considerations
While the IFC’s labor standards cover both the public and private sector, the AIIB Standards do not offer protection of many important rights—including prompt payment, access to grievance mechanisms, equal opportunity, fair treatment, and non-discrimination—to public sector workers. In the third paragraph of Section D, the AIIB Standards requires employers to protect those rights only for “private sector Projects.”
The IFC, unlike the AIIB, provides additional protection regarding retrenchment and compensation. IFC demands “retrenchment [] based on the principle of non-discrimination and will reflect the client’s consultation with workers” and insists the payment of any outstanding back pay or benefits. The AIIB, mostly silent on this matter, mandates only a “timely” notice of termination.
The AIIB follows many of the high standards set by the IFC and other international organizations. However, in several important areas, AIIB Standards do not offer sufficient environmental and social protection. These shortcomings could become more problematic if coupled with ineffective implementation.
III. Implementation and Oversight
The recently elected President of the AIIB promised that the new Bank would be “lean, green, and clean.” Although a lean bank will reduce costs, it may have trouble operating effectively. Without “a resident staff involved in the day-to-day project oversight,” some critics doubt that the new Bank would be able to successfully enforce high standards.
In order to implement its labor standards, the IFC went through an intensive implementation process: hiring labor experts, establishing a Labor Advisory Group, providing specific training for thousands of staff, and conducting comprehensive labor audits and internal reviews. In fact, IFC is considered to have “one of the most comprehensive procedural frameworks” for implementing labor standards. But even with such effort, the IFC was not aware of violations in some on-going projects until other organizations reported them.
The ILO emphasizes that “legal prohibition, essential though it is, will not by itself suffice.” Especially in regulating child labor, inadequate implementation and oversight may lead to disastrous consequences. Prohibiting child labor may “[foster] illegal and hidden forms of [child] employment.” And without proper oversight, child labor will proliferate in the shadows. The AIIB must ensure that its operations are not only “lean” but also effective in protecting fundamental values.
IV. Going Forward
While basic environmental and social values should not be sacrificed for economic growth, rules and procedures have a tendency to become cumbersome. A former World Bank Director commented that many standards and procedures of existing MDBs are “frustratingly bureaucratic, costly and ill-suited to dealing with the real needs of client borrowers.” Improving rules and procedures to be more efficient does not necessarily lead to lower standards. The key is to find the right balance between efficiency and comprehensiveness.
The AIIB expressed its commitment to adopt the “highest possible standards.” Although the AIIB has much room for improvement, its efforts show that the new Bank has the potential to become an institution that sets, rather than follows, international standards.
* Jisan Kim is a 2017 J.D. candidate at Harvard Law School and an Executive Editor of the Harvard International Law Journal.
Apr 15, 2016 | Content, Op-Ed, Student Features
By Marissa Florio
On March 20, 2016, President Obama became the first sitting United States President to visit Cuba in 88 years. Over the last few years of his presidency, he has promoted a thaw in relations with Cuba, beginning with an announcement on December 17, 2014 that diplomatic relations would be restored. These developing relations have directly led to changes in international laws and regulations between the two nations.
Since the early 1960s, the United States and Cuba have had severed economic and diplomatic relations. The U.S. imposed a trade embargo on Cuba, the U.S. embassy in Havana closed, and Cuba was designated as a “state sponsor of terrorism” by the U.S. State Department. With the presidency of Barack Obama, tensions have cooled and relationships are being rebuilt. In 2015, the embassy reopened, and the “state sponsor of terrorism” designation was removed after a finding that there was “no evidence that the country provided training or weapons to terrorist groups.” In 2016, President Obama has called for Congress to lift the embargo.
I recently traveled to Cuba on a people-to-people educational program, one of the twelve categories of travel activities that allow Americans to enter Cuba while the embargo is in place. My trip was organized through Cuba Candela and comprised of nearly 140 Harvard students. While I was in Cuba, changes were happening in real time in U.S.-Cuba relations. On March 15, it was announced that individual people-to-people educational trips would be permitted; no longer do travelers need to organize their trip through a “sponsoring organization subject to U.S. jurisdiction.” On March 16, direct mail service resumed between the two countries. On March 17, the Cuban government eliminated the 10% penalty on conversions of the U.S. dollar. On March 21, President Obama and President Castro held a joint press conference where they elaborated upon the progress being made in relations.
As Cuba and the United States come together for discussions and open their doors to each other once again, there are major implications in international affairs, international law, and domestic law.
First, a number of bilateral agreements are being signed between President Obama and President Castro on numerous topics: counternarcotics, commerce, travel, and health. While the conversations on these topics are sure to be fruitful in getting both nations on the same page, any formal agreement must be taken with a gain of salt after President Castro’s statement on international instruments during his joint press conference with President Obama:
“There are 61 international instruments recognized. How many countries in the world comply with all the human rights and civil rights that have been included in these 61 instruments? What country complies with them all? Do you know how many? I do. None. None, whatsoever. Some countries comply some rights; others comply others. And we are among these countries. Out of these 61 instruments, Cuba has complied with 47 of these human rights instruments. There are countries that may comply with more, there’s those that comply with less.”
From this statement, President Castro does not appear to feel lawfully bound to abide by international instruments. Therefore, coming to agreements and making active efforts is likely to be more effective than, for example, signing theoretical documents on environmentalism. For more important agreements, the U.S. might want to ensure there is some sort of enforcement authority to ensure both parties abide by their promises.
Second, as economic barriers imposed by the U.S. are lessened, more money will flow freely into Cuba. Cubans can now open American bank accounts, and U.S. dollars can be converted into Cuban Convertible Pesos (CUCs; Cuba’s primary currency for tourism) without a 10% penalty. Obama traveled to Cuba along with “some of America’s top business leaders and entrepreneurs,” who have an interest in expanding to Cuba. As American business enters the Cuban economic system, Cuban domestic law will need to change in accordance. Only recently did Cuba begin allowing its people to buy and sell houses, and the opening of private businesses such as restaurants is also a new and relatively rare concept in the socialist state. More privatization and capitalistic components will likely become the norm in Cuba’s economy as the country is opened up to the world.
Third, Internet use will be opened up in Cuba. Internet access in Cuba is limited, and even where there is access there is content restrictions. While I was there, I attempted to log onto “Canvas,” the online platform where Harvard Law School course materials are posted. Upon logging in, I received an error message: “You are not authorized to access this site because you are located in a country subject to U.S. trade restrictions.” I learned that local Cubans access modern music, news, and movies by sharing USB drives that have information downloaded on them, called “paquetes.” While the local people are very entrepreneurial and are able to access information in roundabout ways, stronger ties with the U.S. will likely allow Internet access to become more widespread and more open. President Obama is encouraging this: “[W]e have said that it is no longer a restriction on U.S. companies to invest in helping to build Internet and broadband infrastructure inside of Cuba. It is not against U.S. law, as it’s been interpreted by the administration.” The phrasing here by President Obama is interesting: it seems as though it had previously been taken as against the law but a new interpretation has removed that restriction. Additional review of the interpretation of domestic laws might assist the growth in international affairs.
The relationship between Cuba and the United States is growing after a 50-year hiatus, and legal scholars will have much to write on how this relationship comes to affect international law, Cuban domestic law, and American domestic law in the months and years to come.
Marissa Florio is a 2016 J.D. candidate at Harvard Law School and a Feature Editor of the Harvard International Law Journal Online.
Apr 1, 2016 | Content, Op-Ed, Recent Developments, Student Features
By Josh Macfarlane
Tango 01—Argentina’s equivalent to Air Force One—hasn’t gotten much air time recently. The plane was grounded in 2013 by the country’s former President Cristina Kirchner, who was allegedly afraid that foreign creditors would seize the jet. Ms. Kirchner’s fears were not unfounded considering the country twice defaulted on its sovereign debt repayments and had failed to settle with its holdout creditors. The turbulence over the Tango 01 is one of the many consequences of Argentina’s prolonged debt crisis, a hallmark of Ms. Kirchner’s presidency. Earlier this year Tango 01 was retired by President Mauricio Macri, Ms. Kirchner’s successor, who has eschewed Ms. Kirchner’s intransigence in dealing with foreign holdouts in favor of a more conciliatory approach. This change of tact has largely paid off. But considering it has taken 15 years to resolve, one must ask: Could this mess not have been sorted out earlier? Maybe, had Argentina’s sovereign bonds included a novel contract provision known as a Collective Action Clause (CAC).
CACs are increasingly lauded as the ex-ante remedy to sovereigns on the precipice of default, as they facilitate meaningful debt restructuring. They are essentially contractual provisions that allow bond issuers to modify key terms of the bond at a later date, most commonly in the form of “haircuts,” which are reductions in the bond’s original value. Assuming a supermajority of bondholders agrees to the modified terms (because something is better than nothing), they become binding on all bondholders. This overcomes holdout problems where one recalcitrant bondholder is free to reject new terms and demand repayment in full (plus interest). In the case of Argentina’s bonds, which, notably, did not include a CAC, a U.S. federal judge ruled that the country could not pay interest on the restructured bonds until it settled with the holdouts; Ms. Kirchner’s failure to do so led to perpetuating default. (Note: Argentina’s bonds were issued under New York law, hence U.S. jurisdiction applied.) This legal precedent not only hurts the sovereign debtor by excluding it from international capital markets, but it also harms the supermajority of creditors who are enjoined from collecting interest and principal payments on their bonds. CACs are of particular importance in the aftermath of this ruling, as in their absence, a single bondholder can wreak havoc on debtors and fellow creditors.
The world has taken note as Argentina, Greece, and others have defaulted on bond payments with severe consequences. CACs have readily been adopted as the preventative remedy, becoming must-have provisions in sovereign debt offerings. Mexico was an early harbinger when, in 2003, it included an early CAC iteration in its sovereign bond offering. More recently, the EU mandated in 2012 that all Eurozone sovereign bonds must include standardized CAC provisions, lest the leaders of Europe be forced to fly commercial like Ms. Kirchner.
So, are CACs the panacea that debtors and creditors have been waiting for? Not necessarily. For debtors, CACs only offer a prospective benefit as they cannot be introduced retroactively. Hence, sovereigns with outstanding issuances remain liable to potential holdouts, e.g., Argentina. In future bond offerings, where CACs can be included, debtors on the verge of default must nevertheless persuade a supermajority of bondholders to assent to the restructured terms. This poses substantive and logistical problems. First, haircuts can’t be too drastic otherwise creditors will not agree to them. Second, bonds are issued across borders and in different currencies, which can create communication problems – apathetic bondholders may simply not reply to a foreign debtor’s solicitations. In such instances, bondholder silence may be misconstrued by the debtor as a demurral, which might result in the debtor either ignoring these bondholders or considering them to be holdouts and offering them unnecessarily favorable terms.
As for bondholders, some undeniably feel that that CACs swing the pendulum too far in the opposite direction, stripping them of their right to demand payment in full and, assuming supermajority approval, foisting new terms on them. One might expect this to be offset by higher bond yields because of the heightened risk that creditors assume; however, empirical evidence suggests otherwise. Some creditors, notably those who already agreed to the restructured terms, will be pleased that fellow bondholders cannot secure a better deal by simply digging in their heels. Look at Argentina, where the absence of a CAC resulted in some creditors incurring haircuts of around 70% compared to the holdouts’ 25%. Also, bondholders who are citizens of the issuing sovereign, and who are normally more inclined to agree to haircuts, like the fact that CACs prevent foreign holdouts from dragging their country into default.
While CACs are not perfect, they provide the best solution in the absence of international law governing sovereign default (a much talked about topic, but a seemingly impossible endeavor). Granted, CACs are utilitarian in nature, and the greater good seems to be allowing a country to restructure its debt, subject to supermajority approval, by depriving would-be holdouts the ability to derail the process and instigate economic turmoil. Moreover, CACs give sovereigns the tools to resolve their own debt crises, , making them less reliant on the International Monetary Fund – which often provides bailout funds in exchange for the adoption of damaging austerity measures.
Expect CACs to continue growing in popularity until they became integral provisions in all sovereign debt offerings. Perhaps Mr. Macri’s successors will be able to bring Tango 01 out of retirement, but in the meantime, he’s flying coach.
Josh Macfarlane is a 2017 J.D. candidate at Harvard Law School and a Feature Editor of the Harvard International Law Journal.
Nov 5, 2015 | Content, Op-Ed, Student Features
By Marissa Florio
Under international and U.S. law, individuals can be prosecuted for membership in criminal enterprises. But what do we mean by “criminal enterprise”? The FBI defines a criminal enterprise as “a group of individuals with an identified hierarchy, or comparable structure, engaged in significant criminal activity.” Typically, we think of drug cartels, racketeering enterprises, or even the Gestapo. But what about corporations? They have shown themselves to be capable of egregious and criminal behavior: insidiously evading regulations or instigating and carrying out violent acts. Corporations should likewise be eligible to be labelled as criminal enterprises, as they are groups of individuals with an identified hierarchy that can engage in significant criminal activity. Corporate directors and officials could thus then be found guilty for the corporation’s bad acts much more easily, which I find appropriate.
Both international law and U.S. domestic law provide for criminal liability for membership in a criminal enterprise. Simply being a member in such a group is enough to warrant prosecution, without further evidence that a specific individual committed any other crime. Domestically, membership in an enterprise that participates in racketeering activity is penalized under the Racketeer Influenced and Corrupt Organizations Act (RICO). Internationally, at the Nuremburg trials, the Gestapo was declared a criminal enterprise and all members were automatically penalized. Similarly, in the ICTR, a defendant can be found guilty for the acts of others under the theory of extended joint liability for a joint criminal enterprise. What would it take for a corporation to be deemed a “criminal enterprise”?
Domestic Law
In Doe I v. Unocal Corp., the Ninth Circuit assessed whether there was a genuine issue of material fact as to whether Unocal, as a corporation, aided and abetted the Myanmar military’s perpetration of forced labor, murder, and rape. The Myanmar military was providing security and other services for Unocal’s project of producing, transporting, and selling natural gas deposits off the nation’s coast. Allegedly, the military was committing human rights violations in connection with the project, forcing men to work on the project under threat of violence, killing those who tried to escape from the forced labor program, and torturing their families:
“For instance, Jane Doe I testified that after her husband, John Doe I, attempted to escape the forced labor program, he was shot at by soldiers, and in retaliation for his attempted escape, that she and her baby were thrown into a fire, resulting in injuries to her and the death of the child. Other witnesses described the summary execution of villagers who refused to participate in the forced labor program, or who grew too weak to work effectively. Several Plaintiffs testified that rapes occurred as part of the forced labor program. For instance, both Jane Does II and III testified that while conscripted to work on pipeline-related construction projects, they were raped at knife-point by Myanmar soldiers who were members of a battalion that was supervising the work.”
The Circuit court assessed Unocal’s knowledge that the Myanmar military was allegedly committing human rights violations in connection with this project. The court found there to be sufficient evidence of knowledge to withstand summary judgment. The court stated,
[E]ven before Unocal invested in the Project, Unocal was made aware – by its own consultants and by its partners in the Project – of this record that the Myanmar Military might also employ forced labor and commit other human rights violations in connection with the Project. And after Unocal invested in the Project, Unocal was made aware – by its own consultants and employees, its partners in the Project, and human rights organizations – of allegations that the Myanmar Military was actually committing such violations in connection with the project.
The parties in Unocal settled shortly after this ruling on summary judgment. However, had the case gone to trial, could plaintiffs have presented an argument that Unocal was a criminal enterprise?
In domestic cases, the answer is no. The Ninth Circuit held that RICO could not be argued, as the statute did not apply extraterritorially. (For more on the presumption against extraterritoriality in U.S. domestic law, see also EEOC v. Arabian American Oil Co.)
International Law
Could international law be applied in these types of cases to hold a corporation as a whole liable as a criminal enterprise, and therefore extending criminal liability to its officers without proving personal involvement in specific acts? Several international tribunals do just that.
The Nuremburg Charter provides: “At the trial of any individual member of any group or organisation the Tribunal may declare . . . that the group or organisation of which the individual was a member was a criminal organisation.” This declaration is final and cannot be challenged in subsequent cases against other members of the same organization: “In cases where a group or organisation is declared criminal by the Tribunal, the competent national authority of any Signatory shall have the right to bring individuals to trial for membership therein before national, military or occupation courts. In any such case the criminal nature of the group or organisation is considered proved and shall not be questioned.”
The Nuremburg Tribunal is not the only international tribunal that can find a group to be a criminal enterprise in this fashion. A recent International Criminal Tribunal for Rwanda (ICTR) ruling could lay the groundwork for the International Criminal Court (ICC) to similarly use the theory of a criminal enterprise to find greater liability for a corporation’s wrongdoing. (The ICTR rulings can have some precedential value for the ICC under the Rome Statute.)
In Edouard Karemera and Matthieu Ngirumpatse v. The Prosecutor, the ICTR found two politicians culpable under a seldom-used theory of liability, whereby the defendants were found guilty for the acts of others, because they participated in a scheme that had a plausible consequence of certain human rights violations. The ICTR found two high-ranking politicians from Rwanda’s 1994 interim government liable for human rights atrocities during the Rwandan genocide, specifically the mass rape, mutilation, and sexual assault of thousands of Tutsi women and girls. There was no evidence that either defendant personally perpetrated rape, mutilation, or sexual assault, or even that either politician ordered such acts to be committed. They were convicted on the grounds of extended liability for joint criminal enterprise. Id.
Under extended liability for joint criminal enterprise, a defendant must be found liable for participating in a “basic” joint criminal enterprise (here, the destruction of the Tutsi people) and significantly contributing therein. The defendant can then be found liable for a crime outside of the purpose of the basic joint criminal enterprise that was committed by another joint criminal enterprise member, so long as it was “foreseeable that the extended crime was a possible consequence of the implementation of the basic [joint criminal enterprise].” A defendant could similarly be found liable for the acts of a non-member of the original joint criminal enterprise if: (1) the non-member has the requisite intent to participate in and significantly contribute to the joint criminal enterprise, (2) it was foreseeable that the non-member would commit the extended crime in the execution of the common purpose of the joint criminal enterprise, and (3) the defendant knew the extended crime was a possible consequence of the implementation of the common purpose of the joint criminal enterprise and he willingly took the risk it would be committed.
Were this same theory to be applied to a corporation, a corporate official could be found liable for participating in such a joint criminal enterprise, such enterprise being the corporation. Therefore, even if a corporation were being prosecuted as a person/entity independent of its officers, as in Unocal, the corporate structure could still be used as a framework around which to build cases against individual officers, specifically in establishing duties to know and act, and knowledge of improper actions.
Moving Forward
International law thus appears to be better suited than U.S. domestic law to finding that a corporation is a criminal enterprise, since Ninth Circuit precedent now blocks RICO from applying in all cases where the bad acts occurred outside of the United States. If a case with facts similar to Unocal did emerge and the corporation therein was declared to be a criminal enterprise under an international tribunal, would this be a move in the right direction? Should the U.S. defer to the jurisdiction of international tribunals in cases like Unocal, making it possible to penalize corporate officers? Could the U.S. defer jurisdiction? How far could this theory go: could all employees of a corporation become criminally liable, regardless of their involvement or personal knowledge of the extent to which the corporation was involved in illegal activities? Is this just?
Marissa Florio is a 2016 J.D. candidate at Harvard Law School and a Feature Editor of the Harvard International Law Journal Online.
Sep 26, 2015 | Content, Op-Ed, Student Features
By Lucas Bento
At the heart of the current refugee crisis affecting Europe’s borders is the poor exercise of sovereign judgment. Sovereignty, as a fundamental principle of international law, implies that countries have absolute control over what happens within its borders, free from foreign interference. A state’s power to exclude people from crossing its borders flows directly from this power. Whether it is Hungary’s use of tear gas against asylum seekers, Slovakia’s decision to only accept Christian refugees, or Croatia’s separation of refugee families, the use of sovereign powers in this crisis raises important questions about the role and responsibilities of states as members of the international community.
Most legal scholars and political scientists trace the right to sovereignty to the Peace of Westphalia in 1648, which put an end to Europe’s brutal Thirty Years’ War and laid the foundations for respecting the territorial integrity of states. Europe has since been at the forefront of defining and refining the meaning and practice of “sovereignty,” with the fall of empires and independence of new states, the origination of two world wars, and ultimately the creation of a European Union that partly absorbed the sovereignty of individual member states.
In light of its historical role, Europe should be leading by example. The refugee crisis may be challenging established notions of sovereignty by forcing states to consider the extent to which they are bound by extraterritorial obligations. The right to sovereignty should not be taken for granted. A state cannot have its cake and eat it too. In practice, the right to sovereignty entails significant responsibilities, and must thus be counterbalanced by values such as respect for human rights and the protection of minorities.
Take, for example, the founding text of the European Union. Article 2 of the European Union Treaty proclaims that the European Union is “founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities.” Yet the refugee crisis has shown that many European states are failing to uphold these values.
The right to asylum is a basic “human right”, enshrined in international conventions and protocols, such as the 1951 Refugee Convention. Using violence on those fleeing persecution is also an infringement on the “human dignity” of the victims. Hungary’s enactment of a law allowing the army to use rubber bullets, tear gas grenades and net guns against refugees is a saddening example of democratically legitimizing bad policy. While a state’s right in using force to repel foreign invasion is well-established under international law, it was never designed to be unleashed on non-combatants, let alone asylum seekers looking for a safe haven. Cherry-picking which asylum seekers to let in based on their religious belief blatantly undermines any attempt to create a Europe that promotes “equality”.
Sadly, refugees flee violence and discrimination in their homeland only to encounter more of it in Europe.
Of course, Europe should not open its borders without controls. It should monitor, register, document and process all asylum seekers that come in to ensure that asylum applications are based on a well-founded fear of persecution, rather than on economic or as some have noted, more nefarious, reasons. But for some states to close their borders in the hopes that the crisis will go away or that someone else will collect the tab is preposterous. Europe needs a unified solution. As the United Nations High Commissioner for Refugees (UNHCR) noted, “individual measures taken by countries will make an already chaotic situation worse, furthering suffering and increasing tensions among States at a time when Europe needs solidarity.” The agreement for a relocation quota is a step in the right direction, though it has been criticized as insufficient by the UNHCR, and may face enforcement issues as some states, like Slovakia, have already vowed not to implement the measures.
Others should drop the xenophobic and hyperbolic rhetoric. Viktor Orban, Hungary’s Prime Minister, unhelpfully described the inflow of migrants as “breaking the doors” and “running over us.” Refugees are running away from harm, seeking safety abroad when there is none at home, hoping to receive an acknowledgment of their humanity where the alternative includes slavery, rape, and death.
In many ways, Europe’s approach to the refugee crisis demonstrates the poverty of philosophy in European political circles. Germany’s backpedaling from a message of absolute solidarity to one of controlled migration would make Immanuel Kant weep in disappointment. Kant believed in a cosmopolitan world, where individuals as “citizens of the earth” enjoyed rights of hospitality, and where states had no right to refuse visitors if it would lead to the latter’s demise. Europe cannot let the repercussions of ISIS brutality become a humanitarian tragedy for Europe. Enough with the violence and discrimination. This is the time for European leaders to demonstrate their commitment to “human dignity,” “human rights,” “equality,” and “the protection of minorities.” The true indicia of humanity comes not in how much we say we care (though compassion is necessary) but in how much we care to share: our time, our land, and our resources. Here, actions speak louder than words.
Europe should be doing more on a global level to form partnerships and alliances with others in the international community to find a coordinated solution to this crisis. It should reach out to Brazil, whose President has recently stated that the country is welcoming refugees “with open arms.” It should also leverage diplomatic channels to put pressure on the United States to take on more refugees, and demand greater support from countries in the Gulf that have been criticized for their “tepid” response to the crisis. It should also listen to its own citizens who are helping refugees at train stations, providing shelter and food to those in need, and even developing mobile applications á-la Airbnb to help good Samaritans share their homes with refugees.
Whereas ISIS preaches violence and discrimination, Europe should fight back, if only ideologically, by standing united in solidarity with those in need. Sovereignty should not be used as a weapon of oppression and exclusion, but as an emancipatory reminder that states are members of a community striving for a more peaceful world. Of course, the exercise of sovereign power will always trigger a division of opinions. But in a world where states are increasingly sharing power with non-state actors, the sword of sovereignty should be raised wisely, wielded responsibly, and seldom left to the discretion of political expediencies.
Lucas Bento is an associate at the New York office of Quinn Emanuel Urquhart & Sullivan, LLP.
Dec 31, 2013 | Op-Ed
In August 2013, President Obama advocated military intervention by the United States in response to President Bashar al-Assad’s alleged use of chemical weapons in Syria. President Obama further announced that he would seek congressional authorization for the attack and that he was comfortable pursuing this course of action without United Nations Security Council approval. While subsequent diplomatic developments have rendered U.S. military action against Syria less likely, the crisis in Syria remains a powerful example of situations that raise difficult questions about efforts arising under international law to curb states’ use of force abroad. Such unilateral action may have fallen under the International Criminal Court’s (“ICC”) working definition of the crime of aggression. To date, the United States has declined to join the ICC. The main tension in international law I note in this essay concerns the ramifications of the U.S. government ratifying the Rome Statute of the ICC (“Rome Statute”), the court’s underlying treaty. If subjected to ICC jurisdiction, then American political and military leaders, including the President, could become vulnerable to indictment, prosecution, and punishment by the court for interventions such as the one President Obama proposed. If it were a party to the Rome Statute, the U.S. government would expose its political and military commanders to such prosecutions. Those who support the United States joining the ICC, many of whom also support U.S. intervention in Syria, must acknowledge and resolve that tension.
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