A case involving U.S.-based multinational companies and South African victims of apartheid is making its way through the U.S. court system, weighing corporate responsibility and testing the reach of the American legal system.
Last month, a federal district court judge in New York allowed several claims by the South African Khulumani victims support group against international corporations to go forward. An appeal against that decision as well as the case itself are ongoing.
American Michael Hausfeld, the lead counsel for the Khulumani group, representing tens of thousands of victims and survivors, says the overall case is extremely important.
“It represents the first time post World War II where corporate accountability is clearly under scrutiny for not merely moral lapses but for legal obligations,” he said.
Among the corporations, U.S. automakers Ford and General Motors have been accused of providing armored military vehicles used to repress protests, as well as assist security forces torturing anti-apartheid leaders.
The U.S. based information technology firm IBM is accused of providing technology that allowed the apartheid government to enhance geographic segregation methods and track down activists.
Officials at Ford declined to be interviewed. Officials at General Motors said it is their policy not to make public comments about matters involving GM which are currently in litigation. IBM did not respond to an interview request.
In South Africa, editorial writers have wondered why the case cannot be tried in South Africa since the companies have offices there, the victims live there, and that is where the alleged abuses took place. The previous South African government was against the lawsuit, but the current government favors it.
Lawyer Paul Stephan, who filed a brief in the case on behalf of the U.S. National Foreign Trade Council, shared his own concerns about the case.
“It, I think, represents an example, if you will, of an entrepreneurial approach to the law, [where] people are bringing lawsuits to push the law in certain directions rather than applying established principles to facts that might be in dispute,” said Stephan.
Multinationals say they had nothing to do with the crimes of apartheid.
But the claims have been filed under the Alien Tort statute. This statute which remained almost completely unused for 200 years until the 1980s, has been utilized much more lately. It allows district courts to hear civil actions by foreigners for violations of international laws and U.S. treaties. But it remains unclear which types of case are being allowed to proceed, especially those implicating U.S. companies.
Stephan, who is also the co-chair of the U.S.-based International Law in Domestic Courts Interest Group, feels some American courts are going too far.
“I think a fairly open-ended mandate that some U.S. courts have claimed to do justice across the board, rather than in focused areas that our Congress has specifically addressed, like corruption, I have a problem with that,” Stephan said. “I have a problem with judges acting without the support of Congress or the president in international areas,” he added.
A former U.S. ambassador to South Africa, Princeton Lyman, recently wrote an opinion article in The New York Times in which he said the apartheid lawsuit interferes with the Truth and Reconciliation Commission which South Africa set up after apartheid, and from which reparation payments have yet to be completely resolved.
Lyman writes he does not believe a U.S. court forcing U.S. companies to pay compensation for victims of apartheid is a correct approach.
Hausfeld, the counsel for the Khulumani group, rejects these arguments.
“That is OK if you want to forget everything that occurred particularly when fundamental human rights are abused. It is not a good concept for general governance or citizenship rights,” he said.
Mark Drumbl, the director at the Washington and Lee Transnational Law Institute, says he believes the case having gone this far, after years by the multinationals trying to have it dismissed, sets an important precedent.
“We do not want to encourage foreign investment that in turn leads to either directly or indirectly human rights abuses. I think that is an important conversation,” said Drumbl. “Whether a U.S. court is the right place to have that conversation or not is debatable, but what I do not think is debatable is the fact that it is a useful conversation, and the extent to which the Alien Tort Statute litigation contributes to that, I do not think that intrinsically is a troublesome thing,” he said.
Drumbl says the lawsuit will also allow for a clearer picture of when multinational corporations can be brought to court. Generally, he says U.S. courts are looking very carefully at foreign-borne cases, and setting the bar of proof very high, so he is not worried of an impeding deluge of lawsuits.
“I do not buy into the alarmism that the cases are out of control, and that they are seriously undermining foreign relations or they are having a chilling effect on investment,” he said. “I think there clearly is a set of victims of human rights abuses out there for whom there is no recourse but the conversational, symbolic and expressive value of filing process in U.S. courts,” Drumbl concluded.
The case will also probably get attention during the upcoming World Cup in South Africa. Activists have already started planning protests against some of the multinational companies involved in the case which are also sponsoring national teams competing in the June and July competition.