BulletProofBlog the blog on crisis communications

In this regular feature, Bulletproof interviews top plaintiffs' attorneys for their perspective on the crises likely to affect businesses in the near future. Today we talk to Maria LaHood, Senior Staff Attorney at the Center for Constitutional Rights (CCR). Ms. LaHood practices international human rights litigation, seeking to hold government officials and corporations accountable for torture, extrajudicial killings, and war crimes abroad.

In June 2009, the CCR scored a resounding victory when Royal Dutch Shell agreed to pay $15.5 million to settle Wiwa v. Royal Dutch Petroleum et al., a 13-year litigation alleging that Shell, its Nigerian subsidiary, and the head of its Nigerian operation, were complicit with the government of Nigeria in, among other crimes, the execution of environmental activist Ken Saro-Wiwa. Significantly, the cases were brought under the Alien Tort Statute (ATS), a 1789 statute that allows victims of human rights abuses from around the world to sue parties - including any company that does business in the United States - in U.S. courts for actions committed outside the U.S.

We asked Ms. LaHood about the implications of this outcome.

There' s anxiety in corporate circles that the Alien Tort Statute will generate significant new liability and future actions. How potent is this weapon?

Maria LaHood: I don' t think there' s "new" liability, but the ATS will continue to be viable especially since, in 2004, the Supreme Court affirmed its applicability to actions committed abroad that violate international law. While there may be heated disputes over whether specific cases meet the standard, the ATS is a proven tool in pursuing global wrongdoing in American courts.

And I wouldn' t limit the arsenal to just the ATS. It' s an evolving field on many levels. Corporations may face RICO actions for their behavior overseas, as well as actions under the Torture Victim Protection Act of 1991. They may also be liable for state law claims, such as negligence. The overall impact is that corporations are facing increasing accountability for their actions abroad. 

If the economy is global, so too is justice.

Do you think Wiwa will have an impact on how corporations behave?

Maria LaHood: I think it already has. If nothing else, in the 13 years since this case began, there' s growing awareness among global corporations of the liability they can incur when they abet government crimes and that they can be held accountable in U.S. courts for human rights violations abroad. More companies have adopted Voluntary Standards, in part because they' ve closely followed Wiwa just as they' re now following the Exxon case (involving violent crimes in Indonesia), among others. There is certainly not enough being done by a long shot, but the winds of change have begun to blow.  

What more would you advise them to do?

Maria LaHood: If you take a look at the immense costs Royal Dutch Shell incurred in Wiwa, including legal fees and high-end PR campaigns, would it not have been more cost-efficient to spend the money addressing the underlying issue - the environmental devastation that Ken Saro-Wiwa and the Ogoni people sought to remediate in the first place? Had they done so, there would have been no murders to sue over. Corporations can also do more to ensure that local people benefit from the extraction of their resources, another demand of the Ogoni.

I understand corporations are concerned about being too proactive or acknowledging responsibility for problems that arise from their business operations. But the final cost to Shell was also greater in reputational damage. Trying to drown out the noise over Nigeria with ad after ad about community development projects and environmental initiatives doesn' t address accusations that they were complicit in executions, and I don' t think the PR shellac helped. They settled on the eve of trial, after all, so they must not have been that confident their messages got through.           

In the last analysis, corporations also harm themselves by failing to comply with international human rights law abroad. Wiwa shows that victims of violations can take them to U.S. court to enforce the law, and the ante will be raised as future litigants take heart from this long-fought, successful battle.

Larry Smith is Senior Vice President of Levick Strategic Communications and a contributing author to Bulletproof Blog.