“So long as they incorporate (or act in the form of a trust), businesses will now be free to trade in or exploit slaves, employ mercenary armies to do dirty work for despots, perform genocides or operate torture prisons for a despot’s political opponents, or engage in piracy – all without civil liability to victims.”

In the words of Judge Pierre Leval, who disagreed with his colleagues, that is the result of today’s ruling by a panel of the U.S. Court of Appeals for the Second Circuit, which concluded that corporations could not be sued for human rights abuses under the Alien Tort Statute (ATS). The ATS generally allows suits in federal courts for violations of international law – but, according to the Second Circuit, not if the violation was committed by a corporation.

The decision in Kiobel v. Royal Dutch Petroleum marks the first time that any appellate court has rejected corporate liability under international law, and only the second time that any court has done so (the first was in a district court decision issued last week). Numerous courts have found that corporations are subject to the same liability as persons. The Kiobel decision is based on a radical misunderstanding of international law; the International Court of Justice has ruled that international law respects the corporate form, and this would be impossible without allowing corporate liability.

Kiobel was brought as a companion case to ERI’s own case Wiwa v. Royal Dutch Petroleum (Shell), which settled last year. Both cases involved Shell’s complicity in serious human rights abuses against the Ogoni people in Nigeria, including the executions of Ken Saro-Wiwa and eight other Ogoni leaders. The new decision will deny justice not just to these Ogoni families, but also to victims of corporate complicity in the Apartheid regime in South Africa, victims of medical experimentation in Nigeria, and possibly even victims of the September 11th attacks–all cases currently being litigated in the Second Circuit.

It’s possible, however, that this issue could reach the Supreme Court very soon. In the Presbyterian Church of Sudan v. Talisman Energy, which ERI and other groups have asked the Supreme Court to review, the main issue is the standard for aiding and abetting liability. But Talisman has also raised the question of corporate liability, and the decision in Kiobel might make the Supreme Court more likely to take up this issue. The Supreme Court could decided whether to hear Talisman as early as September 28th. In the meantime, ERI will assist with efforts to challenge the new decision in Kiobel.