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TPP: Corporate Liability, Monsanto, and the Alien Tort Statute

— May 15, 2015


Now that the Trans-Pacific Partnership (TPP) has apparently survived a near coup d’etat led by Democratic Senators Harry Reid and Elizabeth Warren, pending a successful re-vote, the battle over the large-scale trade deal will soon be heading to the House of Representatives. The vote in the House may be even more troublesome for the president, as many isolationist Republicans may end up siding with House Democrats opposed to the deal, unlike the virtually unanimous support from Republicans in the Senate. The major sticking point in the House is the unamended provision regarding the Investor State Dispute Settlement (ISDS) system, which I outlined earlier this month. The main concern is that multinational corporations will have the power to sue host countries whose national policies affect their ability to thrive. That issue has been covered in depth by Legal Reader and many other publications, but little has been written or discussed about the other side of the coin. What happens when multinational corporations infringe on the rights of domestic citizens? More specifically, how does TPP threaten individual and class-action legal recourse for citizens wronged by these entities?

A U.S. Army helicopter sprays Agent Orange over a field during the Vietnam War
A U.S. Army helicopter sprays Agent Orange over a field during the Vietnam War

Because this is still theoretical, it is difficult to find concrete evidence on the impact of TPP on mass torts, but the closest parallel might be found in the much focused-upon potential TPP member, Vietnam. Still reeling from the health and environmental effects of Agent Orange, largely produced by multinational chemical giant Monsanto, Vietnam had the unenviable task of inviting the company back that has contributed to so many mass deaths and lingering health and environmental concerns as a consequence of jointing the World Trade Organization (WTO) in 2007. Controversially, the Vietnamese government allowed Monsanto to set up local offices, fearing that the WTO would consider Vietnam’s concern of past atrocities to be a violation of its “unfair trade barriers,” doctrine. The TPP’s criteria are likely to be roughly the same as the WTO’s, although it hasn’t been disclosed as yet. Two generations removed from the Agent Orange disaster; Monsanto is now selling Genetically Modified (GMO) seeds in the Vietnamese market. Research is controversial and inconclusive regarding the health effects of GMO agriculture, but it is likely that the move has cross-contaminated many of the diverse strains of agriculture, much like similar actions by Monsanto in Mexico under NAFTA protocol.

Filing an April lawsuit in France that is likely to include many additional defendants, Tran To Nga, a 72 year-old Franco-Vietnamese woman suffering from lingering health effects of Agent Orange while covering the Vietnam war as a journalist may become a test-tube for the issue. Similar measures have been attempted in the past with few successes, most notably in 1984, courts and especially U.S. courts have been reluctant to award compensation. The case is adjourned until June. Although being admittedly not well-enough versed in the subtleties between French and American law of this sort, if Nga’s suit is successful, it may pave the avenue for similar individual and class-action cases to be resolved. If the case was filed in the U.S., however, there are indications that it would be a very uphill battle, thanks in large part to the U.S. Supreme Court’s 2013 Kiobel vs. Royal Dutch Shell decision, and the ruling’s interpretation of the Alien Tort Statute in U.S. code. 

The Statute itself reads: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” Since the 2nd Circuit Court of Appeals “paved the way for a new conceptualization of the ATS” in a 1980 ruling, courts had interpreted this statute to allow foreign citizens to seek remedies in U.S. courts for human-rights violations for conduct committed outside the United States. A 2010 ruling by the same court on the Kiobel case stated, however, that “corporate liability is not a discernible—much less a universally recognized—norm of customary international law.” Furthermore, upon Supreme Court review, Justices ruled 5-4 that the statute does not apply outside of the United States.  As Lauren Carasik, writer for the journal, Foreign Policy, notes;”There are currently no enforceable mechanisms at the international level for those harmed by multinational corporations to seek redress.” This is noteworthy for TPP, as the ISDS process can only be initiated by the “Investor-State,” i.e. a company.

Although some countries in Europe do accept cases of this manner, and countries like France, who revamped their laws in 2013 to allow anyone with French citizenship to bring an extraterritorial tort to French courts may offer partial solutions, the Kiobel decision may mean that the U.S. court system is off-limits as a third-party mediator. This comes even though the president has touted the fact that the U.S. is “writing the rules of trade,” The president has also said that the TPP ISDS process has protections against “country-hopping,” but it remains unclear as to what the technicalities for such a distinction will be in relations to other sections of TPP. It also remains unclear as what degree a multinational company can “country hop” as a defendant. The United Nations has been working on developing a treaty on business and human rights with preliminary talks scheduled to get underway in Geneva in July. It is unlikely, however, that these talks will contain specific measures to define corporate liability in light of the ongoing international TPP negotiations. More likely than not, the UN negotiations may drag on for years if not scrapped due to lack of international consensus. The House of Representatives’ opposition may be the last opportunity to include consumer protection provisions a demand for passage. If not, issues will have to be addressed through individual modifications on an ongoing basis if TPP becomes law at best, or at worst, the lack of redress could lead to either open and even potentially violent hostility towards corporations, or trend towards complete acquiescence to their desires.


Centre for Research on Globalization – Desiree Hellegers

Foreign Policy (Blog) – Lauren Carasik

Legal Reader – Jay W. Belle Isle

Livemint – Sudeep Chakravarti


VOX – Danielle Kurtzleben


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