LAWYERS from some of the most blue-blooded companies in the world got a nasty shock this week when a US appeal court reversed a decision of a lower court which had dismissed the claims brought by 32700 apartheid victims. Gossip is that the finding was a real shock too for the hot-shot lawyers employed by the group of companies, which includes BP, ExxonMobil, Citigroup, Deutsche Bank, UBS, IBM and General Motors , who apparently advised that the case did not stand a chance.
It?s worrying for the companies because a fair chunk of change is involved, about $400bn. It?s also a slap in the face of SA?s government and the US state department, which both oppose the action.
The case is far from over. The plaintiffs include the Khulumani Support Group which brought the case under the Alien Tort Claims Act (Atca). The court of first instance found aiding and abetting violations of customary international law cannot provide a basis for Atca jurisdiction. In other words, the judgment was founded on the notion that the action had no basis in law.
The three-judge appeal court found two to one that the trial court had applied the law incorrectly, and in fact there was a basis for the case to go forward. Consequently, the case goes back to the trial court to be heard on its merits rather than on jurisdictional grounds.
This is a big step forward for the plaintiffs, one of whose lawyers, Michael Hausfeld, described the ruling as ?a breakthrough and watershed in terms of international human rights?.
But the crucial thing is that they still have to prove there was a causal link between selling goods and services to the apartheid government and the suffering of the plaintiffs ? not an easy thing to do.
The companies will undoubtedly claim that merely selling something to the apartheid government does not demonstrate their actual involvement in the crimes of the apartheid government.
However, the case brought by Holocaust victims provides at least an example of how this might be achieved. In one case, the makers of the poison Zyklon B were found liable in the US despite its claims that it merely sold the product to the Nazi government.
There was apparently evidence, however, that the makers of the product actually encouraged its use.
It?s that kind of evidence that the plaintiffs will have to now produce. In the meantime, all companies that operate in global trouble spots, such as Burma and perhaps even Zimbabwe, for example, will doubtless have to sit up and take notice.